CLEVELAND, Nov. 9, 2016 /PRNewswire/ -- Gas Natural
Inc. (NYSE MKT: EGAS) (the "Company"), a holding company operating
local natural gas utilities serving approximately 68,600 customers
in four states, reported financial results for the third quarter
ended September 30, 2016.
Results for the third quarter and first nine months of 2016 do not
include the results of the Kentucky and Pennsylvania utilities which were divested in
the fourth quarter of 2015 ("Divestitures").
Third Quarter 2016 Summary
- Full service distribution throughput increased modestly due to
the addition of approximately 400 new customers in the quarter
- Net loss from continuing operations improved to $0.17 per share
- Closed on $92 million debt
refinancing in early fourth quarter
- Signed merger agreement with First Reserve Energy
Infrastructure in early fourth quarter
Mr. Gregory J. Osborne, Gas
Natural's President and Chief Executive Officer, commented, "With
much of the costs and distractions of our prior legal and
regulatory matters behind us, we can now more acutely focus on
improving our cost structure and growing our operations. As
recently announced, early in the fourth quarter we completed the
refinancing of our debt that was supported by our new
organizational structure. Closure of those initiatives
positions us well to accelerate our progress as we strive to
achieve our vision of becoming a premier natural gas company
recognized as a benchmark in our industry."
He added, "We are working diligently through the merger process
with First Reserve, announced in early October, as we endeavor for
a seamless process that will prove favorable for our customers,
employees, regulators and shareholders."
Third Quarter and Year-to-date 2016 Operations
Review
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
(in
thousands)
|
September
30,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenue by
segment:
|
|
|
|
|
|
|
|
|
Natural Gas
Operations
|
$
10,543
|
|
$
11,355
|
|
$
60,213
|
|
$
77,403
|
|
Marketing &
Production
|
2,812
|
|
1,729
|
|
8,482
|
|
5,460
|
|
Consolidated
|
$
13,355
|
|
$
13,084
|
|
$
68,695
|
|
$
82,863
|
Revenue for the 2016 third quarter increased approximately 2%
over the prior-year quarter. The increase was driven by
higher sales in Marketing & Production to the Company's former
Wyoming operations which were
divested in the third quarter of 2015. Previously, such sales
were recorded as intercompany and eliminated from consolidated
revenue. The Natural Gas Operations segment, despite modestly
higher volume, realized lower natural gas prices as well as
$0.1 million less revenue from the
Divestitures.
Revenue for the first nine months of 2016 was down approximately
17% compared with the prior-year period. The increase in
Marketing & Production was for the same reason as described
above for the quarter. This was more than offset by the
Natural Gas Operations segment that was impacted by lower volume
due to warmer weather, lower gas prices, and a $1.4 million reduction from the Divestitures.
|
Changes in Gross
Margin
(in
thousands)
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2016
|
|
2015 Gross
Margin
|
$
6,815
|
|
$
31,954
|
|
Utilities
sold
|
85
|
|
(420)
|
|
Weather and other
volume changes
|
13
|
|
(1,963)
|
|
Impact of paper mill
closures
|
(626)
|
|
(1,701)
|
|
Gas cost
adjustment
|
-
|
|
693
|
|
New utility
customers
|
311
|
|
1,001
|
|
Natural Gas
Operations change
|
(217)
|
|
(2,390)
|
|
New marketing
customers
|
30
|
|
299
|
|
Pricing and
other
|
(52)
|
|
(109)
|
|
Marketing &
Production change
|
(22)
|
|
190
|
|
Consolidated gross
margin change
|
(239)
|
|
(2,200)
|
|
2016 Gross
Margin
|
$
6,576
|
|
$
29,754
|
Gross margin for the third quarter of 2016 decreased 4% compared
with the prior-year period primarily due to the impact of paper
mill closures in Maine, partially
offset by increased full service distribution throughput to new
customers. Customer count grew by approximately 400 in the
quarter to 68,600, compared with the end of the second quarter of
2016.
Gross margin for the first nine months of 2016 decreased 7%
compared with the prior-year period. The decrease was
primarily the result of warmer weather in each of the Company's
markets, the impact of closed paper mills in Maine, and the Divestitures, partially offset
by new customers and the effect of a gas cost adjustment recorded
last year.
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
(in
thousands)
|
September
30,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Operating (loss)
income by segment:
|
|
|
|
|
|
|
|
|
Natural Gas
Operations
|
$
(2,095)
|
|
$
(2,128)
|
|
$
2,687
|
|
$
5,995
|
|
Marketing &
Production
|
(106)
|
|
(68)
|
|
870
|
|
(36)
|
|
Corporate &
Other
|
(721)
|
|
(450)
|
|
(2,963)
|
|
(2,279)
|
|
Consolidated
|
$
(2,922)
|
|
$
(2,646)
|
|
$
594
|
|
$
3,680
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted
EBITDA*
|
$
(8)
|
|
$
460
|
|
$
9,277
|
|
$
12,627
|
|
|
*See the attached
tables for important disclosures regarding the Company's use of
earnings before interest, taxes, depreciation, amortization,
accretion, atypical expenses and discontinued operations ("Adjusted
EBITDA") as well as reconciliations of U.S. generally accepted
accounting principles ("GAAP") net (loss) income to non-GAAP
Adjusted EBITDA for the 2016 and 2015 third quarter and
year-to-date periods.
|
For the third quarter of 2016, the operating loss was
$0.3 million greater than the
prior-year's loss, primarily due to lower gross margin.
Comparing the year-to-date periods, 2016 operating income was
$3.1 million lower than 2015 on lower
gross margin and higher operating expenses.
Within the Natural Gas Operations segment, operating expenses
for the quarter decreased $0.3
million as legal and professional expenses were down
$0.4 million and $0.2 million of expenses were eliminated with the
Divestitures. Those reductions were partially offset by
increased investments in information technology.
On a year-to-date basis, the Natural Gas Operations' operating
expenses were $0.9 million higher
than the prior year, primarily due to increases in personnel costs
and investments in information technology, partially offset by
$0.9 million of expenses being
eliminated with the Divestitures. The Marketing &
Production segment comparison benefited from the favorable
settlement of a legal matter in the 2016 second quarter.
Litigation, settlement and proxy contest costs drove
increased expenses within the Corporate & Other segment.
Adjusted EBITDA, a non-GAAP financial measure, was down about
$0.5 million due to lower gross
margin in the 2016 third quarter and higher atypical expenses in
last year's third quarter. On a year-to-date basis, Adjusted
EBITDA was unfavorably impacted by lower gross margin and higher
information technology costs as well as differences in atypical
items. The Company believes that, when used in conjunction
with measures prepared in accordance with GAAP, Adjusted EBITDA,
which is a non-GAAP measure, helps in the understanding of its
financial performance.
Other income (loss), net increased by $0.2 million in the quarter due to recognition in
last-year's quarter of a $0.4 million
loss related to the sale of a building.
Compared with the prior-year quarter, the income tax benefit
increased by $0.5 million to
$1.8 million. Excluding
discreet items, the effective tax rates were 36.2% and 36.4% for
the 2016 and 2015 third quarters, respectively. Excluding
discreet items for the nine month year-to-date periods, the
effective tax rates were 31.5% and 37.6% for 2016 and 2015,
respectively. The improvements in the 2016 periods resulted
from the benefit of an R&D tax credit and a favorable change in
the Company's blended state tax rate.
Balance Sheet and Cash Management
Cash and cash equivalents as of September
30, 2016 grew to $3.8 million
from $2.7 million at December 31, 2015.
Cash provided by operating activities in the 2016 first nine
months was $10.5 million compared
with $12.2 million in the 2015
period, with the decrease primarily due to lower income from
continuing operations and lower working capital requirements
related to the lower price of natural gas.
Capital expenditures for the first nine months of 2016 were
$5.8 million compared with
$8.3 million in the prior-year
period. 2016 capital expenditures included approximately
$1.9 million for the Company's ERP
system that were not financed under a lease agreement.
Remaining capital expenditures for 2016 are expected to be
approximately $1.3 million. The
majority of capital is focused on growth of the Company's Natural
Gas Operations segment, including construction activities to
support expansion, maintenance and enhancements of its gas pipeline
systems.
Cash used in financing activities was $4.7 million in the 2016 first nine months
compared with $18.0 million in the
prior year period. Debt repayment was the primary use of cash
in both periods.
Webcast and Conference Call
Gas Natural will host a conference call and live webcast on
Wednesday, November 9, 2016 at
1:30 p.m. Eastern Time. During
the conference call and webcast, management will review the
financial and operating results for the 2016 third quarter and
discuss Gas Natural's corporate strategies and outlook. A
question-and-answer session will follow. The teleconference
can be accessed by calling (201) 493-6725. The webcast can be
monitored on the Company's website at investor.egas.net.
A telephonic replay will be available from 4:30 p.m. Eastern Time on the day of the
teleconference through Wednesday, November
16, 2016. To listen to a replay of the call, dial
(412) 317-6671 and enter the conference ID number 13647842.
An archive of the webcast will be available on the Company's
website at investor.egas.net/past events and will include a
transcript, once available.
About Gas Natural Inc.
Gas Natural Inc., a holding company, distributes and sells
natural gas to residential, commercial, and industrial
customers. It distributes approximately 21 billion cubic feet
of natural gas to roughly 68,600 customers through regulated
utilities operating in Montana,
Ohio, Maine and North Carolina. The Company's
other operations include intrastate pipeline, natural gas
production, and natural gas marketing. The Company's
Montana public utility was
originally incorporated in 1909. Its strategy for growth is
to expand throughput in its markets, while looking for acquisitions
that are either adjacent to its existing utilities or in
under-served markets. Further information is available on the
Company's website at www.egas.net.
Safe Harbor Regarding Forward-Looking
Statements
The Company is including the following cautionary statement
in this release to make applicable and to take advantage of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 for any forward-looking statements made by, or on
behalf of, Gas Natural Inc. Forward-looking statements are all
statements other than statements of historical fact, including,
without limitation, those that are identified by the use of the
words "anticipates," "estimates," "expects," "intends," "plans,"
"predicts," "believes" and similar expressions. Such statements are
inherently subject to a variety of risks and uncertainties that
could cause actual results to differ materially from those
expressed. Factors that may affect forward-looking statements and
the Company's business generally include, but are not limited to
the Company's ability to consummate the corporate reorganization
and debt refinancing on terms that are acceptable to the Company,
or at all; the Company's ability to successfully integrate the
operations of the companies it has acquired and consummate
additional acquisitions; the Company's continued ability to
make or increase dividend payments; the Company's ability to
implement its business plan, grow earnings and improve returns on
investment; fluctuating energy commodity prices; the possibility
that regulators may not permit the Company to pass through all of
its increased costs to its customers; changes in the utility
regulatory environment; wholesale and retail competition; the
Company's ability to satisfy its debt obligations, including
compliance with financial covenants; weather conditions; litigation
risks; and various other matters, many of which are beyond the
Company's control; the risk factors and cautionary statements made
in the Company's public filings with the Securities and Exchange
Commission; and other factors that the Company is currently unable
to identify or quantify, but may exist in the future. Gas Natural
Inc. expressly undertakes no obligation to update or revise any
forward-looking statement contained herein to reflect any change in
Gas Natural Inc.'s expectations with regard thereto or any change
in events, conditions or circumstances on which any such statement
is based.
|
For more
information, contact:
|
|
|
|
Gas Natural
Inc.
|
Investor
Relations
|
|
James E. Sprague,
Chief Financial Officer
|
Deborah K. Pawlowski
or Karen L. Howard, Kei Advisors LLC
|
|
Phone: (216)
202-1564
|
Phone: (716)
843-3908 / (716) 843-3942
|
|
Email:
jsprague@egas.net
|
Email:
dpawlowski@keiadvisors.com / khoward@keiadvisors.com
|
FINANCIAL TABLES FOLLOW.
|
Gas Natural Inc.
and Subsidiaries
|
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
|
(in thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
REVENUE
|
|
|
|
|
|
|
|
|
Natural gas
operations
|
$
10,543
|
|
$
11,355
|
|
$
60,213
|
|
$
77,403
|
|
Marketing and
production
|
2,812
|
|
1,729
|
|
8,482
|
|
5,460
|
|
Total
revenue
|
13,355
|
|
13,084
|
|
68,695
|
|
82,863
|
|
|
|
|
|
|
|
|
|
COST OF
SALES
|
|
|
|
|
|
|
|
|
Natural gas
purchased
|
4,019
|
|
4,614
|
|
31,210
|
|
46,010
|
|
Marketing and
production
|
2,760
|
|
1,655
|
|
7,731
|
|
4,899
|
|
Total cost of
sales
|
6,779
|
|
6,269
|
|
38,941
|
|
50,909
|
|
|
|
|
|
|
|
|
|
GROSS
MARGIN
|
6,576
|
|
6,815
|
|
29,754
|
|
31,954
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Distribution,
general, and administrative
|
6,227
|
|
6,365
|
|
19,323
|
|
18,898
|
|
Maintenance
|
211
|
|
256
|
|
715
|
|
871
|
|
Depreciation,
amortization and accretion
|
2,014
|
|
1,790
|
|
5,981
|
|
5,348
|
|
Taxes other than
income
|
1,024
|
|
1,015
|
|
3,042
|
|
3,023
|
|
Provision for
doubtful accounts
|
22
|
|
35
|
|
99
|
|
134
|
|
Total operating
expenses
|
9,498
|
|
9,461
|
|
29,160
|
|
28,274
|
|
|
|
|
|
|
|
|
|
OPERATING (LOSS)
INCOME
|
(2,922)
|
|
(2,646)
|
|
594
|
|
3,680
|
|
|
|
|
|
|
|
|
|
Other income (loss),
net
|
116
|
|
(118)
|
|
(148)
|
|
(330)
|
|
Interest
expense
|
(798)
|
|
(812)
|
|
(2,313)
|
|
(2,567)
|
|
(Loss) income before
income taxes
|
(3,604)
|
|
(3,576)
|
|
(1,867)
|
|
783
|
|
Income tax (benefit)
expense
|
(1,778)
|
|
(1,312)
|
|
(1,072)
|
|
343
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS
|
(1,826)
|
|
(2,264)
|
|
(795)
|
|
440
|
|
|
|
|
|
|
|
|
|
Discontinued
operations, net of income taxes
|
2
|
|
3,395
|
|
(7)
|
|
4,045
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME
|
$
(1,824)
|
|
$
1,131
|
|
$
(802)
|
|
$
4,485
|
|
|
|
|
|
|
|
|
|
Basic weighted shares
outstanding
|
10,512,680
|
|
10,494,130
|
|
10,508,154
|
|
10,490,736
|
|
Dilutive effect of
restricted stock awards
|
-
|
|
1,134
|
|
-
|
|
1,173
|
|
Diluted weighted
shares outstanding
|
10,512,680
|
|
10,495,264
|
|
10,508,154
|
|
10,491,909
|
|
|
|
|
|
|
|
|
|
BASIC & DILUTED
(LOSS) EARNINGS PER SHARE:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(0.17)
|
|
$
(0.22)
|
|
$
(0.08)
|
|
$
0.04
|
|
Discontinued
operations
|
-
|
|
0.32
|
|
-
|
|
0.39
|
|
Net (loss) income per
share
|
$
(0.17)
|
|
$
0.10
|
|
$
(0.08)
|
|
$
0.43
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
0.075
|
|
$
0.135
|
|
$
0.225
|
|
$
0.270
|
|
Gas Natural Inc.
and Subsidiaries
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(in
thousands)
|
|
September
30,
|
|
December 31,
|
|
2016
|
|
2015
|
|
|
|
|
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
3,833
|
|
$
2,728
|
|
Accounts receivable,
less allowance for doubtful accounts of $396 and $506, respectively
|
5,436
|
|
10,635
|
|
Accounts receivable
due from related parties
|
14
|
|
188
|
|
Unbilled
gas
|
1,991
|
|
6,995
|
|
Inventory
|
|
|
|
|
Natural
gas
|
5,266
|
|
4,063
|
|
Materials and
supplies
|
2,224
|
|
2,271
|
|
Regulatory assets,
current
|
2,340
|
|
2,469
|
|
Restricted
cash
|
948
|
|
-
|
|
Other current
assets
|
3,228
|
|
2,174
|
|
Total current
assets
|
25,280
|
|
31,523
|
|
|
|
|
|
PROPERTY, PLANT,
& EQUIPMENT, NET
|
139,980
|
|
142,416
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
Regulatory assets,
non-current
|
1,154
|
|
1,523
|
|
Goodwill
|
15,872
|
|
15,872
|
|
Customer
relationships, net of amortization
|
2,398
|
|
2,625
|
|
Restricted
cash
|
-
|
|
1,898
|
|
Other non-current
assets
|
1,695
|
|
1,530
|
|
Total other
assets
|
21,119
|
|
23,448
|
|
TOTAL
ASSETS
|
$
186,379
|
|
$
197,387
|
|
Gas Natural Inc.
and Subsidiaries
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(in thousands,
except share and per share data)
|
|
September
30,
|
|
December
31,
|
|
2016
|
|
2015
|
|
|
|
|
|
LIABILITIES AND
CAPITALIZATION
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Line of
credit
|
$
7,086
|
|
$
15,750
|
|
Accounts
payable
|
5,015
|
|
8,784
|
|
Accounts payable to
related parties
|
47
|
|
192
|
|
Notes payable,
current portion
|
-
|
|
5,012
|
|
Note payable to
related party
|
-
|
|
1,980
|
|
Accrued
liabilities
|
2,211
|
|
2,560
|
|
Accrued liabilities
payable to related party
|
87
|
|
170
|
|
Regulatory liability,
current
|
725
|
|
487
|
|
Build-to-suit
liability
|
-
|
|
2,041
|
|
Capital lease
liability, current
|
3,588
|
|
2,876
|
|
Deferred payment
received from levelized billing
|
2,811
|
|
3,107
|
|
Other current
liabilities
|
3,888
|
|
2,503
|
|
Total current
liabilities
|
25,458
|
|
45,462
|
|
|
|
|
|
OTHER
LIABILITIES
|
|
|
|
|
Deferred tax
liability
|
10,526
|
|
12,295
|
|
Regulatory liability,
non-current
|
1,375
|
|
1,251
|
|
Capital lease
liability, non-current
|
3,643
|
|
5,177
|
|
Other long-term
liabilities
|
3,126
|
|
3,286
|
|
Total other
liabilities
|
18,670
|
|
22,009
|
|
|
|
|
|
NOTES PAYABLE, less
current portion
|
49,825
|
|
34,427
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
Preferred stock;
$0.15 par value; 1,500,000 shares authorized, no shares issued or
outstanding
|
-
|
|
-
|
|
Common stock; $0.15
par value; Authorized: 30,000,000 shares; Issued and outstanding:
10,515,834 and 10,504,734 shares as of September 30, 2016 and
December 31, 2015, respectively
|
1,577
|
|
1,575
|
|
Capital in excess of
par value
|
64,088
|
|
63,985
|
|
Retained
earnings
|
26,761
|
|
29,929
|
|
Total stockholders'
equity
|
92,426
|
|
95,489
|
|
TOTAL
CAPITALIZATION
|
142,251
|
|
129,916
|
|
TOTAL LIABILITIES AND
CAPITALIZATION
|
$
186,379
|
|
$
197,387
|
|
Gas Natural Inc.
and Subsidiaries
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
(in
thousands)
|
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net (loss)
income
|
$
(802)
|
|
$ 4,485
|
|
Less (loss) income
from discontinued operations
|
(7)
|
|
4,045
|
|
(Loss) income from
continuing operations
|
(795)
|
|
440
|
|
Adjustments to
reconcile (loss) income from continuing operations to net cash
provided by operating activities:
|
|
|
|
|
Depreciation and
amortization
|
5,981
|
|
5,327
|
|
Accretion
|
-
|
|
21
|
|
Amortization of debt
issuance costs
|
323
|
|
517
|
|
Provision for
doubtful accounts
|
99
|
|
134
|
|
Amortization of
deferred loss on sale-leaseback
|
733
|
|
-
|
|
Stock based
compensation
|
104
|
|
135
|
|
Loss on sale of
assets
|
548
|
|
769
|
|
Unrealized holding
gain on contingent consideration
|
(672)
|
|
(75)
|
|
Change in fair value
of derivative financial instruments
|
(120)
|
|
(120)
|
|
Investment tax
credit
|
(16)
|
|
(16)
|
|
Deferred income
taxes
|
(1,046)
|
|
2,686
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Accounts receivable,
including related parties
|
5,275
|
|
7,533
|
|
Unbilled
gas
|
5,004
|
|
5,361
|
|
Natural gas
inventory
|
(1,203)
|
|
(432)
|
|
Accounts payable,
including related parties
|
(2,700)
|
|
(7,572)
|
|
Regulatory assets and
liabilities
|
367
|
|
(961)
|
|
Prepayments and
other
|
(1,393)
|
|
(1,102)
|
|
Other
assets
|
1,039
|
|
(453)
|
|
Other
liabilities
|
(1,016)
|
|
57
|
|
Net cash provided by
operating activities
|
10,512
|
|
12,249
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Capital
expenditures
|
(5,785)
|
|
(8,325)
|
|
Proceeds from sale of
fixed assets
|
2
|
|
66
|
|
Proceeds from note
receivable
|
-
|
|
59
|
|
Customer advances for
construction
|
94
|
|
33
|
|
Contributions in aid
of construction
|
960
|
|
606
|
|
Net cash used in
investing activities
|
(4,729)
|
|
(7,561)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from lines
of credit
|
9,300
|
|
13,750
|
|
Repayments of lines
of credit
|
(6,800)
|
|
(26,761)
|
|
Repayments of notes
payable, including related parties
|
(6,886)
|
|
(5,407)
|
|
Proceeds from notes
payable, including related parties
|
4,000
|
|
5,000
|
|
Repayments of capital
lease obligations
|
(2,495)
|
|
(1,560)
|
|
Debt issuance costs
paid
|
(213)
|
|
(151)
|
|
Dividends
paid
|
(1,577)
|
|
(2,834)
|
|
Net cash used in
financing activities
|
(4,671)
|
|
(17,963)
|
|
|
|
|
|
DISCONTINUED
OPERATIONS
|
|
|
|
|
Operating cash
flows
|
(7)
|
|
1,288
|
|
Investing cash
flows
|
-
|
|
14,305
|
|
Net cash (used in)
provided by discontinued operations
|
(7)
|
|
15,593
|
|
|
|
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
1,105
|
|
2,318
|
|
Cash and cash
equivalents, beginning of period
|
2,728
|
|
1,586
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD
|
$3,833
|
|
$ 3,904
|
|
Gas Natural Inc.
and Subsidiaries
Natural Gas
Operations
|
|
|
|
|
|
|
|
|
|
Utility
Throughput
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(in million cubic
feet (MMcf))
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Full service
distribution:
|
|
|
|
|
|
|
|
|
Energy West Montana
(MT)
|
253
|
|
238
|
|
2,016
|
|
2,039
|
|
Frontier Natural Gas
(NC)
|
153
|
|
152
|
|
726
|
|
668
|
|
Bangor Gas
(ME)
|
122
|
|
124
|
|
998
|
|
1,254
|
|
Ohio Companies
(OH)
|
302
|
|
299
|
|
2,256
|
|
2,592
|
|
Public Gas
(KY)
|
-
|
|
4
|
|
-
|
|
92
|
|
Total full service
distribution
|
830
|
|
817
|
|
5,996
|
|
6,645
|
|
|
|
|
|
|
|
|
|
Transportation
|
2,492
|
|
2,342
|
|
8,565
|
|
8,106
|
|
Bucksport
|
60
|
|
124
|
|
134
|
|
537
|
|
|
|
|
|
|
|
|
|
Total
volumes
|
3,382
|
|
3,283
|
|
14,695
|
|
15,288
|
|
Heating Degree
Days
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Percent Colder
(Warmer)
|
|
|
|
|
September
30,
|
|
2016 Compared
to
|
|
|
Normal
|
|
2016
|
|
2015
|
|
Normal
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Great Falls,
MT
|
225
|
|
384
|
|
319
|
|
70.67%
|
|
20.38%
|
|
Bangor, ME
|
222
|
|
88
|
|
134
|
|
(60.36%)
|
|
(34.33%)
|
|
Elkin, NC
|
41
|
|
16
|
|
48
|
|
(60.98%)
|
|
(66.67%)
|
|
Ohio weighted
average
|
114
|
|
26
|
|
44
|
|
(77.19%)
|
|
(40.91%)
|
|
Total Weighted
Average
|
151
|
|
204
|
|
186
|
|
35.10%
|
|
9.68%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months
|
|
Percent Colder
(Warmer)
|
|
|
|
|
September
30,
|
|
2016 Compared
to
|
|
|
Normal
|
|
2016
|
|
2015
|
|
Normal
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Great Falls,
MT
|
4,358
|
|
4,177
|
|
4,233
|
|
(4.15%)
|
|
(1.32%)
|
|
Bangor, ME
|
4,957
|
|
4,536
|
|
5,737
|
|
(8.49%)
|
|
(20.93%)
|
|
Elkin, NC
|
2,368
|
|
2,599
|
|
2,657
|
|
9.76%
|
|
(2.18%)
|
|
OH weighted
average
|
3,487
|
|
3,200
|
|
3,819
|
|
(8.23%)
|
|
(16.21%)
|
|
Total Weighted
Average
|
4,028
|
|
3,813
|
|
4,208
|
|
(5.34%)
|
|
(9.39%)
|
|
Gas Natural Inc.
and Subsidiaries
Reconciliation of
GAAP Net (Loss) Income to Non-GAAP Adjusted Net (Loss)
Income(2)
|
|
|
|
|
|
(in thousands,
except per share data)
|
Three Months
Ended
|
|
NIne Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
GAAP net (loss)
income
|
$(1,824)
|
|
$
1,131
|
|
$
(802)
|
|
$ 4,485
|
|
Add back,
pre-tax:
|
|
|
|
|
|
|
|
|
Non-recurring legal,
professional and settlement costs
|
784
|
|
644
|
|
2,991
|
|
2,014
|
|
Non-recurring
regulatory and other expenses
|
-
|
|
380
|
|
-
|
|
1,111
|
|
Gain on cancellation
of contingent consideration liability
|
-
|
|
-
|
|
(672)
|
|
-
|
|
Loss on disposal of
assets
|
-
|
|
410
|
|
531
|
|
804
|
|
Tax effect of
non-GAAP continuing operations items(1)
|
(284)
|
|
(525)
|
|
(898)
|
|
(1,717)
|
|
Discontinued
operations
|
(2)
|
|
(3,395)
|
|
7
|
|
(4,045)
|
|
Non-GAAP Adjusted net
(loss) income(2)
|
$(1,326)
|
|
$(1,355)
|
|
$ 1,157
|
|
$ 2,652
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted net
(loss) income per diluted share(2)
|
$
(0.13)
|
|
$
(0.13)
|
|
$
0.11
|
|
$
0.25
|
|
|
|
(1)
|
Applies an
effective tax rate of 36%, 36%, 32% and 38% to the non-GAAP pre-tax
adjustments for the periods presented above, respectively,
consistent with the actual effective tax rates for those periods
excluding nonrecurring tax items.
|
|
|
|
(2)
|
Non-GAAP
Financial Measures:
|
|
The Company
believes that, when used in conjunction with GAAP measures,
Adjusted Net (Loss) Income and Adjusted EBITDA, or earnings before
interest, taxes, depreciation, amortization, accretion, atypical
charges and discontinued operations, which are non-GAAP measures,
allow investors to view its performance in a manner similar to the
methods used by management and provides additional insight into its
operating results. Adjusted Net (Loss) Income and Adjusted
EBITDA are not calculated through the application of GAAP and are
not the required form of disclosure by the Securities and Exchange
Commission. As such, these measures should not be considered
as a substitute for the GAAP measure of net income and, therefore,
should not be used in isolation of, but in conjunction with, the
GAAP measure. The use of any non-GAAP measure may produce
results that vary from the GAAP measure and may not be comparable
to a similarly defined non-GAAP measure used by other
companies.
|
|
Gas Natural Inc.
and Subsidiaries
Reconciliation of
GAAP Net (Loss) Income to Non-GAAP Adjusted
EBITDA(2)
|
|
|
|
|
|
(in
thousands)
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
GAAP net (loss)
income
|
$(1,824)
|
|
$ 1,131
|
|
$
(802)
|
|
$
4,485
|
|
Add back:
|
|
|
|
|
|
|
|
|
Net interest
expense
|
798
|
|
812
|
|
2,313
|
|
2,567
|
|
Income tax (benefit)
expense
|
(1,778)
|
|
(1,312)
|
|
(1,072)
|
|
343
|
|
Depreciation,
amortization and accretion
|
2,014
|
|
1,790
|
|
5,981
|
|
5,348
|
|
Non-recurring legal,
professional and settlement costs
|
784
|
|
644
|
|
2,991
|
|
2,014
|
|
Non-recurring
regulatory and other expenses
|
-
|
|
380
|
|
-
|
|
1,111
|
|
Gain on cancellation
of contingent consideration liability
|
-
|
|
-
|
|
(672)
|
|
-
|
|
Loss on disposal of
assets
|
-
|
|
410
|
|
531
|
|
804
|
|
Discontinued
operations
|
(2)
|
|
(3,395)
|
|
7
|
|
(4,045)
|
|
Non-GAAP Adjusted
EBITDA(2)
|
$
(8)
|
|
$
460
|
|
$ 9,277
|
|
$ 12,627
|
|
|
|
(2)
|
Non-GAAP
Financial Measures:
|
|
The Company
believes that, when used in conjunction with GAAP measures,
Adjusted Net (Loss) Income and Adjusted EBITDA, or earnings before
interest, taxes, depreciation, amortization, accretion, atypical
charges and discontinued operations, which are non-GAAP measures,
allow investors to view its performance in a manner similar to the
methods used by management and provide additional insight into its
operating results. Adjusted Net (Loss) Income and Adjusted
EBITDA are not calculated through the application of GAAP and are
not the required form of disclosure by the Securities and Exchange
Commission. As such, these measures should not be considered
as a substitute for the GAAP measure of net income and, therefore,
should not be used in isolation of, but in conjunction with, the
GAAP measure. The use of any non-GAAP measure may produce
results that vary from the GAAP measure and may not be comparable
to a similarly defined non-GAAP measure used by other
companies.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/gas-natural-inc-reports-2016-third-quarter-results-300359557.html
SOURCE Gas Natural Inc.