TORONTO, ONTARIO--(CCNMatthews - April 6, 2006) - Energy Savings (the "Company"), (TSX:SIF.UN) the Toronto-based marketer of long term, fixed price natural gas and electricity contracts, announced today the following management resignations:
Chris Gaffney, a VP and one of the senior members of the Company's legal department announced on March 31 his intent to resign and Dave Ellis, Chief Operations Officer advised on April 3 of his intent to resign.
Both Mr. Ellis and Mr. Gaffney were nearing the end of five year contracts (the "Agreements") entered into on their joining Energy Savings. Negotiations on a new contract were undertaken and both Mssrs. Ellis and Gaffney concluded that they did not wish to commit to a new agreement and, accordingly, tendered their resignations.
The Agreements (as well as the agreement of recently resigned President Paul DeVries) contain detailed non competition, non solicitation and confidentiality clauses which would preclude the parties from competing with Energy Savings in the sale of natural gas or electricity to small business and residential customers for a period of three years in any market in which Energy Savings operates. Energy Savings intends to vigorously monitor and enforce these clauses.
Because Mr. Ellis and Mr. DeVries were actively involved in Energy Savings commodity procurement, the Energy Savings Board of Directors requested and management has undertaken a detailed review of the Company's long term supply and customer demand match position. This review has been completed by Energy Savings' operations and risk management team. The review showed that both natural gas and electricity positions were balanced within the stringent requirements of the Board's risk management guidelines.
The completion of this review allows management to update and reaffirm its published guidance with respect to the year ended March 31, 2006. While there are likely to be some year end adjustments through the audit process, managements' expectation is as follows. As previously disclosed:
Gross margin is expected to increase by slightly less than 15% year over year.
Distributable cash is expected to increase slightly more than 20% year over year.
In addition, management also announced that customer additions for the year will substantially exceed published targets on both a gross (350,000 customers) and net (214,000 customers) basis.
Brennan Mulcahy CEO added: "We have a team of more than 350 at Energy Savings. There are many young and talented professionals who are ready, willing and able to step into these roles on a go forward basis. Under President Ken Hartwick, our operations team will continue to provide solid, conservative support for our aggressive customer base expansion."
Executive Chair Rebecca MacDonald stated: "Energy Savings remains on a solid footing. We have realized and continue to realize substantial and profitable growth year after year. Our Unitholders have been the benefactors of this growth and we see this continuing in future years."
Energy Savings' business, which is conducted in Ontario, Manitoba, Alberta, Quebec, British Columbia, Illinois, and New York, involves the sale of natural gas to residential, small to mid-size commercial and small industrial customers under long term, irrevocable fixed price contracts. Energy Savings also supplies electricity to Ontario, Alberta and New York customers. By fixing the price of natural gas or electricity under its fixed price contracts for a period of up to five years, Energy Savings' customers offset their exposure to changes in the price of these essential commodities. Energy Savings, which commenced business in July of 1997, derives its margin or gross profit from the difference between the fixed price at which it is able to sell the commodities to its customers and the fixed price at which it purchases the matching volumes from its suppliers.
The Fund's press releases may contain forward-looking statements including statements pertaining to customer revenues and margins, customer additions and renewals, customer consumption levels, distributable cash and treatment under governmental regulatory regimes. These statements are based on current expectations that involve a number of risks and uncertainties which could cause actual results to differ from those anticipated. These risks include, but are not limited to, levels of customer natural gas and electricity consumption, rates of customer additions and renewals, fluctuations in natural gas and electricity prices, changes in regulatory regimes and decisions by regulatory authorities, competition and dependence on certain suppliers. Additional information on these and other factors that could affect the Fund's operations, financial results or distribution levels are included in the Fund's annual information form and other reports on file with Canadian securities regulatory authorities which can be accessed through the SEDAR website at www.sedar.com or through the Fund's website at www.esif.ca
FOR FURTHER INFORMATION PLEASE CONTACT:
Energy Savings Income Fund
Ms. Rebecca MacDonald
Energy Savings Income Fund
Mr. Brennan Mulcahy
Chief Executive Officer
Energy Savings Income Fund
Mr. Ken Hartwick C.A.