Parent of Texas REP Doubles Revenues

Summer Energy Holdings, Inc., the parent of Texas retail provider Summer Energy, doubled its revenues in 2014.

Summer Energy Holdings doubled annual revenues to $50.0 million for 2014, from $26 million a year ago. The 2014 revenue includes $1.5 million in contract cancellation fees, disconnection fess and late fees, versus $1.0 million in contract cancellation fees, disconnection fess and late fees in 2013.

Gross Profit was $5.8 million for 2014, up from $2.6 million a year ago.

Operating expenses for 2014 were higher at $7.9 million, versus $4.8 million a year ago.

Summer Energy Holdings, Inc. reported a net loss for the year 2014 of $3.8 million. That compares to a 2013 net loss of $2.4 million.

The company attributed the losses to operating expenses and cost of goods sold incurred in excess of revenue as the company attempts to obtain economies of scale.

In a 10-K, Summer Energy affirmed that management plans to continue to execute on its sales and marketing program to solicit individual commercial and residential customers. Management also plans to continue to acquire portfolios of commercial and residential customers when offered at reasonable prices.

"We continue to evaluate opportunities to expand our areas of operations within Texas as certain market regions elect to opt-in to deregulation. In addition, we continue to evaluate and pursue opportunities to acquire other REPs to the extent these acquisitions would provide value to us," Summer Energy said.

Summer Energy said that it is in the process of implementing a multi-tiered marketing and sales strategy. "The short-term emphasis is on controlled growth, utilizing indirect marketing through third-party relationships," the company said.

Summer Energy said that indirect marketing efforts, including the channels listed below, allow the company to facilitate growth while keeping expenses low by avoiding the expense associated with creating and managing a full sales team:

• Aggregators, Brokers, Consultants

• Affinity Programs - airline miles, credit card points, and participating gift cards;

• Multifamily Housing Programs - incentivizing property management companies based on referrals to their tenants;

• Referrals - reaching out to individuals connected to the community and providing incentives for sign-ups; and

• Charitable Programs - enhancing referral programs and offering customers the chance to donate referral fees to local charitable organizations.

"As the Company grows, we expect to achieve long-term growth by building our in-house sales team to manage our third-party, as well as our direct marketing efforts," Summer Energy said.

Such direct marketing efforts include, or will include, without limitation:

• In-house sales staff focused on small to medium sized commercial sales;

• Face-to-face marketing, including presentations, customer meetings, and business development through newly-formed relationships with consumers (a/k/a cold calling);

• Direct sales using independent sales associates;

• Responding to website inquiries from commercial businesses;

• Identifying opportunities in underserved markets (e.g. South Texas and West Texas); and

• Community Involvement - establishing the company's brand throughout the community by giving back and volunteering time and assistance.

"Relationship marketing will play a key role in both channels and should facilitate growth in the marketplace," the company said.