With Another Quarter of Vortex-Driven Churn, Retail Supplier's Customer Base Decreases to 25% of Year-Ago Level

Although IDT Energy saw its net loss of customer accounts slow during the three months ended June 30, 2014, it still saw an elevated level of churn, and its customer base as of June 30, 2014 is 25% lower than its total as of June 30, 2013

As of June 30, 2014, IDT Energy was serving 364,000 meters, versus 391,000 as of March 31, 2014, and 475,000 a year ago.

The net loss of 27,000 meters from March 31, 2014 to June 30, 2014 is an improvement versus the loss of 36,000 meters from December 31, 2013 to March 31, 2014.

On a Residential Customer Equivalent basis, IDT Energy was serving 260,000 RCEs as of June 30, 2014, versus 288,000 RCEs as of March 31, 2014.

Although IDT Energy customer churn peaked in March, average monthly churn in 2Q14 increased to 8.1% from 7.2% during 1Q14, reflecting gross churn of approximately 82,000 meters. IDT Energy expects churn to return to a normalized range of between 5% and 7% in the third quarter.

During 2Q14, IDT Energy accelerated acquisitions of new customers in Illinois, and re-engaged its marketing efforts in certain Pennsylvania utility territories where it had suspended activities in the prior quarter. Gross meter acquisitions were 55,000 in 2Q14, compared to 47,000 in 1Q14 and 71,000 in 2Q13. IDT Energy did not enter any new utility territories during the second quarter, but expects to soon expand natural gas offerings in Pennsylvania, Maryland, and the District of Columbia.

IDT Energy confirmed that its new brand, Residents Energy (fist reported by EnergyChoiceMatters.com, click here), will focus on marketing and sales of guaranteed rate offerings, and said that it expects that Residents Energy and its Epiq Energy network marketing channel will, "contribute meaningfully to gross meter additions by year end."

IDT Energy generated Adjusted EBITDA of $1.1 million in 2Q14 compared to $751,000 in the year-ago quarter, driven primarily by improved gross margins on electricity sales.

Quarterly gross profit at IDT Energy increased to $11.5 million from $10.0 million a year ago. Gross margin was 23.5% compared to 18.1% in the year-ago quarter. The gross margin on electric sales increased 1,070 basis points to 25.6% as the increase in revenue per kWh outstripped a modest increase in the cost of supply.