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Crius Energy Reports Customer Growth, Higher Adjusted EBITDA

May 10, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Crius Energy reported net customer growth and higher Adjusted EBITDA in releasing earnings for the quarter ending March 31, 2017

Crius Energy saw its customer count increase organically by a net of 21,000 Residential Customer Equivalents (RCEs) from December 31, 2016 to March 31, 2017, which is in line with net growth over the past four quarters (including net growth of 20,000 from September 30, 2016 to December 31, 2016).

During the three months ending March 31, 2017, Crius added a gross of 156,000 RCEs from sales and marketing channels, representing an increase over the average in the prior four quarters of 97,000, with the increase primarily driven by a large contribution coming from municipal aggregations and default service auctions.

Crius Energy's expansion into default service auctions had been first reported by EnergyChoiceMatters.com

Gross customer drops during the three months ending March 31, 2017 were 135,000 RCEs, which was higher than the average in the prior four quarters of 75,000, primarily due to the non-renewal of several large commercial accounts. Crius said that, apart from the non-renewal of several large commercial accounts, "the underlying trend over the last several years of improving customer retention rates remains intact."

Crius Energy's total RCE count at March 31, 2017 was 1.003 million, versus 982,000 as of December, 31, 2016 and 916,000 a year ago.

Crius noted that, "strong growth in the commercial and municipal aggregation segments may cause our customer counts to experience increased quarterly volatility due to the size, either individually or in aggregate, of the customer contracts executed in these segments."

"This trend is expected to continue as we plan to continue growth in the commercial and municipal aggregation segments," Crius said

"We have been very successful in recent quarters, and see continued growth in the commercial and municipal aggregation business segment, and while these are typically lower margin customers, they provide diversification and generally have longer term contracts that provide value and stability to the portfolio. To counterbalance growth in the lower-margin commercial and municipal aggregation customer segments, which have been the predominant driver of growth in recent quarters as growth in the residential segment has moderated, we are launching several new sales initiatives in the direct-to-consumer segment that are aimed at enhancing growth in our residential customer portfolio," Crius said

Crius Energy Trust reported Adjusted EBITDA of $14.5 million during the first quarter of 2017, representing an increase from $13.0 million achieved in the first quarter of 2016. For the first quarter of 2017, Adjusted EBITDA has been adjusted for a legal reserve charge of $6.5 million related to pending litigation and regulatory matters, and associated legal fees incurred in the first quarter of 2017 of $2.5 million.

Gross margin for the first quarter of 2017 was $37.1 million, a decrease from $40.2 million of gross margin in the first quarter of 2016. "The reduced gross margin as a percentage of revenue reflects a continuation of recent trends and driven by the increased proportion of commercial and municipal aggregation customers that the Company now services following the acquisitions of TriEagle Energy LP ('TriEagle Energy') and Iron Energy, LLC d/b/a/ Kona Energy ('Kona Energy'). Commercial customers provide the benefit of diversification to the customer portfolio and have a higher retention profile than residential customers, although with lower average unit margins," Crius said

Revenue was $177.4 million in the first quarter of 2017, representing a 1.9% decrease from $180.8 million in the first quarter of 2016, partially due to a lower electricity price environment during the first quarter of 2017 in the company's core markets.

During the first quarter, Crius sold 271 solar systems, representing 1.8 MW of generating capacity, which is in line with management expectations.

Crius also highlighted its previously reported extension of its marketing agreement with Comcast, and its launch of the Energy Rewards Integrated Energy Platform jointly developed by Crius and Comcast, which will allow service providers to offer the energy and other services as a white-labeled bundle. See our original stories for more:

Crius Teams With Comcast To Offer Home Integrated Energy Platform To Service Providers

Crius Announces Rise Broadband To Offer Crius's Integrated Energy Platform

Crius Extends Partnership With Comcast Under Multi-year Agreement, Reports Customer Growth, Earnings

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