Commerce Energy Group Inc · OTC:CMNR
Commerce Energy — Shareholder Meeting (January 2006)
38 slides from Commerce Energy's shareholder meeting presentation, Jan 26, 2006
Slide 1: 2006 Shareholder Meeting: Charting a New Course
2006 Shareholder Meeting Charting a New Course
Slide 2: Forward-Looking Statements
Forward-Looking Statements The Company's presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are based upon management's belief and assumptions made by, and information currently available to, management. Our actual results c
Slide 3: Moving Toward the Goal: Higher Stock Price
Moving Toward the Goal Higher Stock Price
Slide 4: The Year in Review
The Year in Review Management Team Improved Financial Results Record Increase In Energy Prices Price Restructuring of Customer Contracts Diversification of Market Presence
Slide 5: Your Management Team
Your Management Team Senior Management Steven S. Boss - CEO Lawrence Clayton, Jr. - CFO Andrew V. Coppola - Energy Supply Thomas L. Ulry - Sales and Operations Skipping Stone Gregory M. Lander - Principal Bruno R. Kvetinskas -Principal Vice Presidents John M. Carpenter - Retail Markets Rubin N. Ciol
Slide 6: The Year in Review
The Year in Review Management Team Improved Financial Results Record Increase In Energy Prices Price Restructuring of Customer Contracts Diversification of Market Presence
Slide 7: Financial Highlights
Financial Highlights FISCAL 2005 Net Loss Down Significantly from Prior Year Summit Energy Ventures - Prior Year Loss Impact of $10.4M Gain on Sale of Pennsylvania Electricity Supply - January, 2005 Impact of ACN Energy Assets - February, 2005 Severance Cost - Increase of $2.6M from Last Year FISCAL
Slide 8: Fiscal 2005 Results
Fiscal 2005 Results 2005 2004 Net Revenues $ 253,853 $ 210,623 Electric $228,377 $210,623 Gas $25,476 $ - Gross Profit $ 28,182 $ 19,443 Operating Costs and Expenses (35,585) (33,313) Other Income and Expenses 1,289 (7,850) Net (Loss) $ (6,114) $ (21,720) Fiscal Year Ended July 31 2005 2004 Signific
Slide 9: Fiscal 2006 First Quarter Results
Fiscal 2006 First Quarter Results 2006 2005 Net Revenues $ 64,368 $ 58,496 Electric $55,438 $58,496 Gas $8,930 $ - Gross Profit $ 8,240 $ 7,161 Operating Costs and Expenses (8,307) (5,960) Other Income and Expenses 287 (1,249) Net Income (Loss) $ 220 $ (48) Quarter Ended October 31 Revenue and Gross
Slide 10: Net Income Summary
Net Income Summary FY July 31 1st Qtr Oct 31 Fiscal 2004 & Q1 2005 $ (21,720) $ (48) Summit Energy Ventures 12,343 - PG&E Bankruptcy Recovery (2,150) - Gain on Sale of Electricity Supply 7,201 - ACN Energy Assets - direct earnings 2,056 (10) Traditional Electricity Markets Gross Profit (3,651) (846)
Slide 11: Net Revenue
Net Revenue FY July 31 1st Qtr Oct 31 Fiscal 2004 & Q1 2005 $ 210,623 $ 58,496 New Natural Gas & Electric Customers 39,372 15,158 Lower Electricity Sales Volumes (32,153) (20,914) Increase in Electricity Sales Prices 1,545 11,172 Wholesale Electricity Sales 34,466 456 Fiscal 2005 & Q1 2006 $ 253,853
Slide 12: Operating Expenses
Operating Expenses FY July 31 1st Qtr Oct 31 Fiscal 2004 & Q1 2005 $ 33,313 $ 5,960 Summit Energy Ventures (3,058) - Initial Public Listing & Related (3,393) - Addition of ACN Energy Assets 5,283 1,935 Severance & Related Costs 2,645 550 All Other 795 (138) Fiscal 2005 & Q1 2006 $ 35,585 $ 8,307 Add
Slide 13: Quarterly Operating Results
Quarterly Operating Results Q1 2006 FISCAL YEAR 2005 FISCAL YEAR 2005 FISCAL YEAR 2005 FISCAL YEAR 2005 10/31/2005 7/31/2005 4/30/2005 1/31/2005 10/31/2004 Net Revenues $64,368 $65,831 $68,478 $61,048 $58,496 Electric $55,438 $58,384 $50,449 $61,048 $58,496 Gas $8,930 $7,447 $18,029 $ - $- Gross Pro
Slide 14: Balance Sheet Summary
Balance Sheet Summary Assets 10/31/2005 7/31/2005 7/31/2004 Unrestricted Cash & Equivalents $ 21,233 $ 33,344 $ 54,065 Accounts Receivable 27,565 27,843 31,119 Other Current Assets 15,848 8,103 9,638 Restricted Cash and Deposits 21,514 19,569 9,453 Goodwill, intangible and other assets 13,740 13,773
Slide 15: The Year in Review
The Year in Review Management Team Improved Financial Results Record Increase In Energy Prices Price Restructuring of Customer Contracts Diversification of Market Presence
Slide 16: 2005 - A Year of Extremes!
2005 - A Year of Extremes! Prices increased 160% from May to December 13 (record high) Prices have declined 40% in the past 30 days - Silver Lining Source: NYMEX Gas Pricing
Slide 17: Fixed Price Value Proposition
Fixed Price Value Proposition Power prices follow natural gas prices Most states allow Utilities to reset prices to recover fuel costs Utilities in our target markets have increased rates at every opportunity for last 2 years Our Price Stopper Product Pricing for CenterPoint
Slide 18: The Year in Review
The Year in Review Management Team Improved Financial Results Record Increase In Energy Prices Price Restructuring of Customer Contracts Diversification of Market Presence
Slide 19: Our Customers and Markets
Our Customers and Markets PECO load shed, DTE rule change PECO load shed CA rate hikes Targeted Commercial Sales Focus ACN Acquisition Residential Customers Q1 FY2005 53,883 Q3 FY 2005 116,490 Q1 FY2006 92,313 Q2 FY2006 93,076 Commercial Customers Q1 FY2005 48,693 Q3 FY2005 48,321 Q1 FY2006 34,172 Q
Slide 20: Focus on Volumes
Focus on Volumes 10,000 kWh/year Residential Customer Alternate Channel Focus 1 small commercial 40-80,000 kWh/yr 4-8 residentials 1 large commercial 2,000,000+ kWh/yr 200+ residentials Small Commercial Customer Large Commercial Customer, Retail Chain Inside Sales, Outsourced Call Center Focus C&I S
Slide 21: The Year in Review
The Year in Review Management Team Improved Financial Results Record Increase In Energy Prices Price Restructuring of Customer Contracts Diversification of Market Presence
Slide 22: Diversification of Market Presence
Diversification of Market Presence 130,000 Electricity & Natural Gas Customers 9 States and 17 Markets Significant Market Growth Opportunities January 2005 California New Jersey Michigan Pennsylvania January 2006 California Georgia Ohio New Jersey New York Maryland Michigan Pennsylvania Texas Power
Slide 23: Commerce Energy's Market Presence January 2005
Commerce Energy's Market Presence January 2005 4 States, 6 Markets Power Only
Slide 24: Commerce Energy's Market Presence January 2006
Commerce Energy's Market Presence January 2006 9 States, 17 Markets Power and Gas
Slide 25: Commerce Energy's Market Presence: Target Markets
Commerce Energy's Market Presence Target Markets Impending Target Market Steady State Markets Licensed - Not Active
Slide 26: The California Markets
The California Markets CAISO Power PGE SCE SDGE California Gas PGE Core Non-core California Gas SoCal Gas Core Non-core 31% of 2005 Revenue 50% of Current Customers We are a California Company. Electric Market Suspended. Major Gas Initiative underway in the large gas customer market. Proposition 80,
Slide 27: The Michigan Market
The Michigan Market MISO Power DTE Small/Medium Commercial Large Commercial 14% of 2005 Revenue 2% of Current Customers We have an established name in Michigan, with a proven track record. State de-regulation laws have allowed the utility (DTE) the power to aggressively battle competition, effective
Slide 28: The PJM Markets
The PJM Markets New Jersey PJM PSEG Pennsylvania PJM PECO 40% of 2005 Revenue 24% of Current Customers The state Commissions have put a ceiling on the utility prices, effectively eliminating residential competition from retailers for the present. The ceiling's expiration is a few years away; however
Slide 29: The Ohio Markets
The Ohio Markets Ohio Gas COH Non-GTS GTS DEO Non-GTS GTS Commerce C&I has entered the lucrative Dominion (DEO) and Columbia (COH) GTS (over 20,000 mcf annually) markets, leveraging off the small commercial and residential markets we serve. Increased volume throughput will allow us to better leverag
Slide 30: ERCOT and the Texas Markets
ERCOT and the Texas Markets ERCOT Power CenterPoint All customers TXU All customers AEP North All customers AEP Central All customers TNMP All customers Utility's "price to beat", while adjusted twice a year, reflects market conditions, providing reasonable gross margin opportunities. High awareness
Slide 31: Timetable for New Markets
Timetable for New Markets New York Gas NIMO O&R NYISO Power NIMO O&R New York Gas Keyspan Residential/Sm Comm In Progress Commerce Energy holds licenses in New York and has monitored the market to determine the best time and the best markets to enter. March 2006 has been set as the targeted start da
Slide 32: Steady State Markets
Steady State Markets Georgia Gas AGL All Customers MISO Power DTE Small/Medium Commercial Large Commercial MD Gas BG&E Res/Small Comm PJM PSEG PJM PECO Market conditions and the regulatory environment make growth difficult in these states. We will continue to serve our customers in these states prof
Slide 33: Sales and Marketing
Sales and Marketing
Slide 34: Product Offers
Product Offers C&I Focus Residential and Small Businesses Structured Deals Standard Products Negotiated Agreements Pre-packaged, No Negotiations Deals structured around specific needs of customer Price points offered differ by customer size Trigger Price Stopper l2 Months Index Price Stopper 24 Mont
Slide 35: Professional Sales Force Focused on Commercial and Industrial Customers
Professional Sales Force Focused on Commercial and Industrial Customers Sales Channels C&I Outbound Call Center Internal Sales Outsourced Sales Inbound Call Center Direct Mail Broadcast Media Web site Telesales Door-to-Door Residential Independent Agents Commercial Community Aggregation Commercial R
Slide 36: Going Forward
Going Forward
Slide 37: 2006 Goals
2006 Goals Focused Growth in Market Presence Minimize Customer Exposure to Volatile Energy Prices Develop Strategic Energy Supply Partners Build Technology-Focused Operational Support Capabilities Growth in Price of Our Common Shares
Slide 38: Daily EGR Closing Price
Daily EGR Closing Price 7112104 - 1148/06 PES MBL LS $6 wees Se gh gh PPP LOL EEE
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