Energy West, Incorporated Announces Earnings for the Quarter Ended March 31, 2009 and Its Monthly Dividend of $0.045 per Share

GREAT FALLS, Mont., May 15 /PRNewswire-FirstCall/ — Energy West, Incorporated (Nasdaq: EWST), a natural gas utility and energy marketing company, today filed its Form 10-Q with the Securities and Exchange Commission for the quarter ended March 31, 2009. Net income for the quarter ended March 31, 2009 was $2.0 million, or $0.46 per diluted share, compared to net income of $2.3 million, or $0.53 per diluted share, for the same period in 2008. The Natural Gas Operations segment contributed net income of $1.5 million for the first quarter compared to $1.6 million for the same quarter of 2008. The Marketing and Productions segment contributed net income of $422,915 compared to $671,125 for the same quarter of 2008. The Pipeline Operations segment contributed net income of $29,508 for the first quarter of 2009 compared to $21,805 for the same quarter in 2008. Operating revenue for the three months ended March 31, 2009 was $31.3 million compared to $30.9 million for the same period in 2008 primarily attributable to an increase in the operating revenue of the Natural Gas Operations segment as a result of sales growth in the Maine market. Net income for the quarter ended March 31, 2009 was impacted by an increase in interest expense of $58,204 from the same period in 2008 due to an increase in borrowings resulting from higher natural gas prices during the summer and fall of 2008 and an increase in income tax expense of $223,647 from the same period in 2008.

In August 2008, the Company changed its fiscal year end from June 30 to December 31. The Form 10-Q covers the first quarter of calendar year 2009.

The Company’s Board of Directors approved the monthly dividend of $0.045 per share. The dividend will be payable on May 29, 2009 to shareholders of record as of May 13, 2009.

“Energy West continues to provide consistent earnings and a solid dividend during a quarter when customers focused on conservation and companies experienced cut backs,” said Richard M. Osborne, Chairman and CEO of Energy West. “We are pleased to report that our operating revenue in our Natural Gas Operations segment increased as a result of sales growth in our newly-acquired Maine market. This increase in operating revenue validates our acquisition decision in the Maine market as we look forward to continued future growth. We continue to do all the necessary work to make our gas utilities even more efficient and customer focused going forward.”

About Energy West

Energy West, Incorporated distributes and sells natural gas to end-use residential, commercial, and industrial customers. It distributes approximately 26 billion cubic feet of natural gas to approximately 37,000 customers through regulated utilities operating in Montana, Wyoming, North Carolina and Maine. The company markets approximately 2.3 billion cubic feet of natural gas to commercial and industrial customers in Montana and Wyoming on an unregulated basis. The company also has a majority ownership interest in 160 natural gas producing wells and gas gathering assets. In addition, the company owns the Shoshone interstate and the Glacier gathering pipelines located in Montana and Wyoming. The company’s Montana public utility was originally incorporated in 1909 and is headquartered in Great Falls, Montana.

Safe Harbor Regarding Forward-Looking Statements

The company is including the following cautionary statement in this release to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, Energy West. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, those that are identified by the use of the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “believes” and similar expressions. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Factors that may affect forward-looking statements and the company’s business generally include but are not limited to the company’s continued ability to make dividend payments, the company’s ability to implement its business plan, fluctuating energy commodity prices, the possibility that regulators may not permit the company to pass through all of its increased costs to its customers, changes in the utility regulatory environment, wholesale and retail competition, weather conditions, litigation risks, and various other matters, many of which are beyond the company’s control, the risk factors and cautionary statements made in the company’s public filings with the Securities and Exchange Commission, and other factors that the company is currently unable to identify or quantify, but may exist in the future. Energy West expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in Energy West’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

For additional information or clarification regarding Energy West, please contact: Kevin Degenstein, President and Chief Operating Officer.

The company’s toll-free number is (800) 570-5688. The company’s web site is www.ewst.com. The company’s address is 1 First Avenue South, Great Falls, Montana 59401.

    ENERGY WEST, INCORPORATED AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF INCOME
                                                     Three Months Ended
                                                           March 31,
                                                          (unaudited)
                                                     2009           2008
    REVENUES:
      Natural gas operations                     $26,141,570    $24,167,479
      Gas and electric-wholesale                   5,079,587      6,620,996
      Pipeline operations                            112,666         89,797
          Total revenues                          31,333,823     30,878,272
    EXPENSES:
      Gas purchased                               19,434,852     17,709,457
      Gas and electric-wholesale                   4,124,894      5,529,655
          Total cost of sales                     23,559,746     23,239,112
    GROSS MARGIN                                   7,774,077      7,639,160
      Distribution, general, and administrative    2,895,554      2,750,428
      Maintenance                                    171,407        203,190
      Depreciation and amortization                  513,674        487,248
      Taxes other than income                        629,580        644,844
          Total expenses                           4,210,215      4,085,710
    OPERATING INCOME                               3,563,862      3,553,450
    OTHER (LOSS) INCOME                              (24,979)        48,157
    INTEREST EXPENSE                                (345,952)      (287,748)
    INCOME FROM OPERATIONS BEFORE INCOME TAX
     EXPENSE                                       3,192,931      3,313,859
    INCOME TAX EXPENSE                            (1,230,208)    (1,006,561)
    NET INCOME                                    $1,962,723     $2,307,298
    BASIC INCOME PER COMMON SHARE:
        Income from continuing operations              $0.46          $0.53

    DILUTED INCOME PER COMMON SHARE:
        Income from continuing operations              $0.46          $0.53

    DIVIDENDS DECLARED PER COMMON SHARE:               $0.12          $0.11

    WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
      Basic                                        4,298,092      4,337,363
      Diluted                                      4,301,522      4,342,462

    Please refer to the notes as filed on Form 10-Q  that are an integral
    part of these condensed financial statements.

    CONSOLIDATED BALANCE SHEETS

                                                March 31,        December 31,
                                               (unaudited)        (audited)
                                             2009      2008          2008
    ASSETS
    Current Assets:
      Cash                               $1,419,502  $2,264,078   $1,065,529
      Marketable securities               3,158,289     301,989    3,376,875
      Accounts and notes receivable
       less $279,033, $195,384,
       and $207,942, respectively,
       allowance for bad debt             7,719,238   7,261,014    7,430,694
      Unbilled gas                        3,090,245   2,783,185    4,839,138
      Derivative assets                           -      92,258            -
      Natural gas and propane
       inventories                          308,719     442,069    9,891,802
      Materials and supplies              1,178,781     972,792    1,175,596
      Prepayments and other                 592,877     565,366      422,514
      Income tax receivable                       -   1,005,762    1,014,806
      Recoverable cost of gas purchases     920,872   2,158,343    2,041,280
      Deferred tax asset                  1,041,679           -      225,953
        Total current assets             19,430,202  17,846,856   31,484,187

    Property, Plant and Equipment, Net   35,922,043  30,119,485   34,904,442

    Deferred Tax Assets - Long-Term       5,238,266   7,095,185    5,693,310
    Deferred Charges                      2,422,311   2,820,116    2,558,156
    Other Investments                     1,323,298     597,792    1,081,423
    Other Assets                             94,646     405,046       97,447
    TOTAL ASSETS                        $64,430,766 $58,884,480  $75,818,965

    LIABILITIES AND CAPITALIZATION
    Current Liabilities:
      Bank overdraft                       $463,700          $-     $773,199
      Accounts payable                    5,092,863   6,035,241    5,783,927
      Line of credit                      5,595,000           -   17,551,276
      Derivative liabilities                      -      92,423            -
      Accrued taxes                         478,818           -            -
      Deferred income taxes                       -      73,711            -
      Accrued and other current
       liabilities                        4,339,533   4,214,539    4,982,684
      Overrecovered gas purchases         1,435,172   1,513,240    1,022,853
        Total current liabilities        17,405,086  11,929,154   30,113,939

    Other Obligations:
      Deferred investment tax credits       234,300     255,362      239,565
      Other long-term liabilities         2,398,502   2,515,564    2,383,323
        Total                             2,632,802   2,770,926    2,622,888
    Long-Term Debt                       13,000,000  13,000,000   13,000,000

    Commitments and Contingencies
     (see note 11)

    Stockholders' Equity:
      Preferred stock; $.15 par value,
       1,500,000 shares authorized,
       no shares outstanding                      -           -            -
      Common stock; $.15 par value,
       5,000,000 shares authorized,
       4,299,536, 4,346,644 and
       4,296,603 shares outstanding
       at March 31, 2009 and 2008,
       and December 31, 2008
       respectively                         652,943     651,997      652,503
      Treasury stock                         (8,012)          -       (8,012)
      Capital in excess of par value      5,952,168   6,192,241    5,926,028
      Accumulated other comprehensive
       income                              (453,665)          -     (319,147)
      Retained earnings                  25,249,444  24,340,162   23,830,766
        Total stockholders' equity       31,392,878  31,184,400   30,082,138
    TOTAL CAPITALIZATION                 44,392,878  44,184,400   43,082,138
    TOTAL LIABILITIES AND
     CAPITALIZATION                     $64,430,766 $58,884,480  $75,818,965

    Please refer to the notes as filed on Form 10-Q that are an integral part
    of these condensed financial statements.

SOURCE Energy West, Incorporated