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Energy, Inc. (EGAS) Reports 86.6% Increase in Net Income for First Quarter of 2010

Press Release Source: Energy, Inc. On Monday May 17, 2010, 6:55 am EDT

GREAT FALLS, Mont.,, May 17 /PRNewswire-FirstCall/ — Energy, Inc. (NYSE Amex: EGAS), a natural gas utility company serving approximately 62,000 customers in six states, today reported financial results for the first quarter ended March 31, 2010.  Reported results include the acquisitions of the parent companies of Orwell Natural Gas Company and Northeast Ohio Natural Gas Corp. (NEO), and Brainard Gas Corp., as well as Great Plains Land Development, LTD. (GPL), which Energy, Inc. completed on January 5, 2010.

First Quarter 2010 Consolidated Financial Results

Consolidated net income for the first quarter was $3.7 million, or $0.61 per diluted share, compared with net income of $2.0 million, or $0.46 per diluted share, for the same period in 2009.  Earnings growth was driven by strengthened operating performance and customer additions in the Company’s utilities in Maine and North Carolina combined with the acquisition of the Ohio utilities. Net income improved to 10.5% of operating revenues in the 2010 first quarter from 6.3% in the same period the prior year.

Operating income was $6.3 million for the 2010 first quarter, up $2.8 million, or 78%.  Approximately $2.3 million of the increase was related to the Ohio utilities acquisition.

Richard M. Osborne, Energy, Inc.’s chairman and chief executive officer, commented, “The results reflect our success at generating improved returns in our organic operations, expanding our customer base and the completion of the acquisition of the Ohio utilities. We believe we can continue to expand our earnings power and grow our customer base by focusing on earning fair returns in our utility operations, allocating our capital where we can capture the best returns and continuing to selectively acquire utilities that would benefit from our operational strength.”

Natural Gas Operations Segment

The Natural Gas Operations segment contributed net income of $3.7 million, or $0.62 per diluted share, in the 2010 first quarter compared with $1.5 million, or $0.36 per diluted share, for the same quarter of 2009. Operating income from this segment in 2010 was $5.9 million, or 49.9% of gross margin, compared with $2.8 million, or 41.3% of gross margin, in 2009.  The increased operating income was the result of improved operations in the organic utility businesses, specifically the Maine and North Carolina operations.  The Ohio operations had a net income of approximately $1.4 million for the first quarter.

The Natural Gas Operations segment continues to see customer growth as the Company expands its facilities to meet the strong demand for natural gas service.  Organic customer growth was approximately 4% in the 2010 first quarter, while the acquisition increased the Company’s customer base by over 50%.

Volumes in the Natural Gas Operations segment for the quarter were 9,770 million cubic feet (MMcf), an increase from 7,401MMcf for the same quarter in 2009.

Marketing and Production Segment

First quarter 2010 operating income for the Marketing and Production segment was $0.4 million, compared with $0.7 million in the first quarter of 2009.  The Marketing and Production segment had a first quarter net loss of $0.08 million compared with net income of $0.4 million for the same quarter of 2009.  The decline in net income was the result of a jury award of $0.5 million in litigation relating to a gas supply contract that expired in October of 2008.

Pipeline Operations Segment

The Pipeline Operations segment contributed net income of $36,235 for the 2010 first quarter compared with net income of $29,508 for the same quarter in 2009.

Balance Sheet and Cash Management

First quarter 2010 cash and marketable securities of $7.3 million increased 58% compared with the same quarter in 2009, and increased slightly from the December 31, 2009 balance of $7.2 million.  Cash provided by operating activities was $10.1 million compared with $14.9 million in the first quarter of 2009.  Total net increase in cash was $581,000 as compared with $354,000 in the first quarter of 2009.

For the first quarter ended March 31, 2010, capital expenditures were $1.3 million, compared with $1.9 million in 2009.  Capital spending was focused on expanding rate base in the Maine and North Carolina utility operations as the Company captures market share, and for maintenance of existing pipeline systems.

About Energy, Inc.

Energy, Inc. distributes and sells natural gas to end-use residential, commercial, and industrial customers. It distributes approximately 29 billion cubic feet of natural gas to approximately 62,000 customers through regulated utilities operating in Montana, Wyoming, North Carolina, Maine, Ohio and Pennsylvania. The Company markets approximately 2.4 billion cubic feet of natural gas to commercial and industrial customers in Montana and Wyoming on an unregulated basis. The company also has a majority ownership interest in 160 natural gas producing wells and gas gathering assets. In addition, the company owns the Shoshone interstate and the Glacier gathering pipelines located in Montana and Wyoming. The company’s Montana public utility was originally incorporated in 1909 and is headquartered in Great Falls, Montana.

The company’s toll-free number is 800-570-5688. The company’s address is 1 First Avenue South, Great Falls, Montana 59401 and its website is http://www.ewst.com/.

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, Energy, 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 successfully integrate the operations of the companies it has recently acquired and consummate additional acquisitions, the company’s continued ability to make dividend payments, the company’s ability to implement its business plan, 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. Energy, Inc. expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in Energy, Inc.’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Monday, May 17th, 2010 Uncategorized
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