Cap Rock Energy Corporation Announces 2003 Third Quarter Results

Cap Rock Energy Corporation Announces 2003 Third Quarter Results 


MIDLAND, Texas, Nov. 14  /PRNewswire-FirstCall/ -- Cap Rock Energy Corporation 
today reported net income of $4.6 million, or $2.86 per common share, diluted,
in the third quarter of 2003, compared to $4.4 million, or $3.43 per common
share, diluted, for the same quarter in 2002.  For the nine months ended
September 30, 2003, net income was $10.3 million, or $7.13 per common share,
diluted, as compared to $8.1 million, or $6.28 per common share, diluted, for
the comparable period in 2002.

"Our 2003 third quarter has seen major accomplishments in several areas that are
important to our future business plans.  First and foremost, we received
approval for the transfer of our CCN to Cap Rock Energy from our predecessor,
thus ending a lengthy PUCT proceeding and completing our conversion process.  We
have made substantial progress toward our goal of selling assets that are not
directly related to our core business of providing quality electric service, and
we have seen closure on various concerns.  As a result, we are now better
positioned to take advantage of new opportunities and face the challenges
ahead," stated David W. Pruitt, President and Chief Executive Officer.

Detailed below are unaudited financial highlights for Cap Rock Energy
Corporation and subsidiaries for the three and nine months ended September 30,
2003 and 2002:

                       Cap Rock Energy Corporation
                         (unaudited in thousands)
               ($ in thousands except share and per share)

                          Three Months Ended        Nine Months Ended
                             September 30,             September 30,
                           2003         2002         2003         2002

  Operating revenues     $23,343      $20,774      $64,937      $57,193
  Operating income        $6,747       $5,584      $16,555      $12,319
  Net income              $4,638       $4,468      $10,304       $8,175
  Earnings per share:
    Basic                  $2.96        $3.43        $7.41        $6.28
    Diluted                $2.86        $3.43        $7.13        $6.28
  Weighted average
   shares of Common
   stock outstanding:
    Basic              1,568,498    1,302,355    1,390,636    1,302,355
    Diluted            1,623,796    1,302,355    1,445,934    1,302,355




The consumption and demand for electricity within the Company's service areas is
greatly impacted by weather conditions and temperatures.  Weather conditions and
the cost of fuel used to generate electricity are the major factors affecting
operating expenses.  Purchased power expense normally moves in relation to
electric demand and consumption.

Operating revenue for the comparable three and nine month periods increased
primarily as a result of the change in the method of revenue recognition in
accordance with the Company's change in rate-making policy, and regulatory
surcharges.  The majority of the increase for operations and maintenance expense
is because personnel devoted more time to maintaining the distribution and
transmission systems which resulted in current expense as opposed to engaging in
construction activities that would have resulted in capitalized costs. 
Decreased costs for legal fees and outside services contributed to the reduction
of general and administrative expenses for the nine month period, which related
to the PUCT proceedings concerning the application to transfer certified
territory to the Company.  Noncash stock awards to employees, officers and
directors is also reflected as a reduction of operating income for the 2003
periods.  In its effort to focus all of its resources on its core business by
divesting itself of assets and investments which are unrelated to providing
quality electric service, the Company agreed to sell its interest in an oil and
gas company, and as a result has recorded a book loss on equity method
investment value of $1,056,000 during the third quarter of 2003, although the
original cash investment was recouped.  The effective tax rate for both the
three and nine month periods in 2003 is less than the statutory rate because of
the availability and expected utilization of net operating loss carryforwards,
as well as significant book/tax timing differences.  No income tax expense was
recorded for the same periods in 2002 because net operating loss carryforwards
were available to reduce taxable income for those periods.

Cap Rock Energy provides electric distribution services to over 35,000 meters in
28 counties in Texas.  Its corporate office is located in Midland, Texas, with
service divisions in Stanton, Colorado City, Brady and Celeste, Texas.  The
Company also provides management services to the Farmersville Municipal Electric
System.  The Company's predecessor, Cap Rock Electric Cooperative, Inc., was
incorporated as an electric cooperative in the State of Texas in 1939.  Cap Rock
Energy Corporation is the first electric cooperative to convert to a publicly
held corporation and the first electric utility to become a public company in
over 60 years.

All statements, other than statements of historical fact included in this news
release are forward looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995.  Any such forward looking statements
involve risks and uncertainties and actual results, performance or achievements
of Cap Rock Energy may be different from those expressed or implied in the
forward looking statements. 

DATASOURCE: Cap Rock Energy Corporation



CONTACT:  Valerie Newsom of Cap Rock Energy Corporation, [phone],

or  

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