Cap Rock Energy Corporation Announces 2003 Third Quarter Results
November 14 2003 - 5:49PM
PR Newswire (US)
Cap Rock Energy Corporation Announces 2003 Third Quarter Results
MIDLAND, Texas, Nov. 14 /PRNewswire-FirstCall/ -- Cap Rock Energy
Corporation today reported net income of $4.6 million, or $2.86 per
common share, diluted, in the third quarter of 2003, compared to
$4.4 million, or $3.43 per common share, diluted, for the same
quarter in 2002. For the nine months ended September 30, 2003, net
income was $10.3 million, or $7.13 per common share, diluted, as
compared to $8.1 million, or $6.28 per common share, diluted, for
the comparable period in 2002. "Our 2003 third quarter has seen
major accomplishments in several areas that are important to our
future business plans. First and foremost, we received approval for
the transfer of our CCN to Cap Rock Energy from our predecessor,
thus ending a lengthy PUCT proceeding and completing our conversion
process. We have made substantial progress toward our goal of
selling assets that are not directly related to our core business
of providing quality electric service, and we have seen closure on
various concerns. As a result, we are now better positioned to take
advantage of new opportunities and face the challenges ahead,"
stated David W. Pruitt, President and Chief Executive Officer.
Detailed below are unaudited financial highlights for Cap Rock
Energy Corporation and subsidiaries for the three and nine months
ended September 30, 2003 and 2002: Cap Rock Energy Corporation
(unaudited in thousands) ($ in thousands except share and per
share) Three Months Ended Nine Months Ended September 30, September
30, 2003 2002 2003 2002 Operating revenues $23,343 $20,774 $64,937
$57,193 Operating income $6,747 $5,584 $16,555 $12,319 Net income
$4,638 $4,468 $10,304 $8,175 Earnings per share: Basic $2.96 $3.43
$7.41 $6.28 Diluted $2.86 $3.43 $7.13 $6.28 Weighted average shares
of Common stock outstanding: Basic 1,568,498 1,302,355 1,390,636
1,302,355 Diluted 1,623,796 1,302,355 1,445,934 1,302,355 The
consumption and demand for electricity within the Company's service
areas is greatly impacted by weather conditions and temperatures.
Weather conditions and the cost of fuel used to generate
electricity are the major factors affecting operating expenses.
Purchased power expense normally moves in relation to electric
demand and consumption. Operating revenue for the comparable three
and nine month periods increased primarily as a result of the
change in the method of revenue recognition in accordance with the
Company's change in rate-making policy, and regulatory surcharges.
The majority of the increase for operations and maintenance expense
is because personnel devoted more time to maintaining the
distribution and transmission systems which resulted in current
expense as opposed to engaging in construction activities that
would have resulted in capitalized costs. Decreased costs for legal
fees and outside services contributed to the reduction of general
and administrative expenses for the nine month period, which
related to the PUCT proceedings concerning the application to
transfer certified territory to the Company. Noncash stock awards
to employees, officers and directors is also reflected as a
reduction of operating income for the 2003 periods. In its effort
to focus all of its resources on its core business by divesting
itself of assets and investments which are unrelated to providing
quality electric service, the Company agreed to sell its interest
in an oil and gas company, and as a result has recorded a book loss
on equity method investment value of $1,056,000 during the third
quarter of 2003, although the original cash investment was
recouped. The effective tax rate for both the three and nine month
periods in 2003 is less than the statutory rate because of the
availability and expected utilization of net operating loss
carryforwards, as well as significant book/tax timing differences.
No income tax expense was recorded for the same periods in 2002
because net operating loss carryforwards were available to reduce
taxable income for those periods. Cap Rock Energy provides electric
distribution services to over 35,000 meters in 28 counties in
Texas. Its corporate office is located in Midland, Texas, with
service divisions in Stanton, Colorado City, Brady and Celeste,
Texas. The Company also provides management services to the
Farmersville Municipal Electric System. The Company's predecessor,
Cap Rock Electric Cooperative, Inc., was incorporated as an
electric cooperative in the State of Texas in 1939. Cap Rock Energy
Corporation is the first electric cooperative to convert to a
publicly held corporation and the first electric utility to become
a public company in over 60 years. All statements, other than
statements of historical fact included in this news release are
forward looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Any such forward looking
statements involve risks and uncertainties and actual results,
performance or achievements of Cap Rock Energy may be different
from those expressed or implied in the forward looking statements.
DATASOURCE: Cap Rock Energy Corporation CONTACT: Valerie Newsom of
Cap Rock Energy Corporation, +1-432-684-0301, or
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