Leading electricity and natural gas marketing company Commerce Energy Group Inc. (AMEX: EGR) recently released its third-quarter financial results and news on a multi-million dollar settlement of its arbitration with American Communications Network Inc. (ACN).The company reported its net income for the third-quarter ended April 30, 2007, increased to $1.5 million, up from $1 million for the same period last year; gross profit rose to $17.6 million from $8.1 million the same period last year, including income that resulted from a $5.1 million settlement payment from APX Inc.
“Our third-quarter operating performance, excluding the impact of the APX and ACN legal proceedings, was in line with expectations,” Steven S. Boss, CEO of Commerce Energy, said in a recent release. “We achieved another good quarter of positive bottom-line results and significantly added to our customer base. Total customers at the end of the third quarter increased to 185,000, a 48 percent increase over the comparable quarter last year.”
Net revenues climbed 74 percent to $100.6 million, up from $57.8 million for the same period the year prior. The company said the numbers were driven by higher retail electricity sales to customers in Texas and Maryland, as well as higher natural gas revenues from the acquisition of about 300 commercial and industrial natural gas customers in September, as well as revenue from the APX settlement.
However, the news wasn’t enough to offset the loss the company endured as a result of the settlement in its arbitration with ACN regarding a breach of contract claim which resulted in $0.5 million in legal expenses.
On June 11, 2007, the Commerce entered into an agreement with ACN, settling their pending arbitration proceedings and all disputes between the companies. Per the settlement, Commerce paid $3.9 million to ACN to dismiss the arbitration, reflecting the company’s loss in the third quarter.