IDT Energy Sees Increased Customer Growth

IDT Energy reported higher customer growth during the three months ended September 30, 2012 (third quarter), versus the three months ended June 30, 2012.

From June 30, 2012 to September 30, 2012, IDT Energy saw its customer count increase by a net of 28,000 meters. This compares to net growth of 20,000 meters from March 31, 2012 to June 30, 2012; growth of 37,000 meters from December 31, 2011 to March 31, 2012; and 8,000 meters from September 30, 2011 to December 31, 2011.

As of September 30, 2012, IDT Energy was serving 523,000 meters, up from 495,000 as of June 30, 2012 and 430,000 a year ago.

During the third quarter, IDT continued to focus customer acquisition programs on electric-only and dual meter residences.

Electric meters as of September 30, 2012 were 343,000, versus 313,000 as of June 30, 2012 and 247,000 a year ago.

Natural gas meters as of September 30, 2012 were 180,000, versus 182,000 as of June 30, 2012 and 183,000 a year ago

As previously reported, IDT Energy began marketing in Maryland and an additional territory in Pennsylvania during the three months ended September 30, 2012

Total IDT Energy Residential Customer Equivalents were 322,000 as of September 30, 2012, versus 292,000 as of June 30, 2012, and 242,000 a year ago.

Average monthly churn was 6.6% in 3Q12, compared to 5.6% in 3Q11 and 6.6% in 2Q12. Churn rates are significantly higher than a year ago, primarily due to the expansion of the customer base, as churn rates tend to be highest during the first 18 months following enrollment, IDT said. Notwithstanding the year over year increase, churn rates have been "relatively stable" in the last three quarters, reflecting the impact of IDT Energy's rebate programs keyed to new customer acquisition and retention, and the relatively mild weather and low commodity prices in recent quarters, the company said.

IDT Energy generated $8.7 million in income from operations during 3Q12, compared to $6.4 million in 3Q11. The increase was substantially the result of a tax accrual reflected in the 3Q11 results, and increased gross profit compared to the year ago quarter, partially offset by higher SG&A expense, including customer acquisition costs.

Gross profit increased to $21.4 million in 3Q12, compared to $19.0 million in 3Q11, driven primarily by an increase in kWh sold.

Gross margin during 3Q12 was 33.6%, versus 36.4% a year ago, as IDT Energy decreased rates more than the cost of electricity per kWh declined, reflecting the impact of discounts and promotional rates for new customers, as well as "intensifying competition in some utility territories."

IDT Energy's revenues during 3Q12 increased 22.2% to $63.7 million from $52.2 million in the year ago quarter.