Cap Rock Energy Corporation Announces 2004 First Quarter Results

Cap Rock Energy Corporation Announces 2004 First Quarter Results



MIDLAND, Texas, May 17  /PRNewswire-FirstCall/ -- Cap Rock Energy Corporation 
today reported net income of $2.1 million, or $1.27 per common share, diluted,
in the first quarter of 2004, compared to $3.1 million, or $2.25 per common
share, diluted, for the same quarter in 2003.

Detailed below are unaudited financial highlights for Cap Rock Energy
Corporation and subsidiaries for the three months ended March 31, 2004 and
2003:

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

                                               Three Months Ended
                                                    March 31,
                                              2004               2003
    Operating revenues                      $20,288            $22,344
    Operating income                         $3,993             $5,180
    Net income                               $2,062             $3,061
    Earnings per share:
       Basic                                  $1.32              $2.35
       Diluted                                $1.27              $2.25
    Weighted average shares of
     Common stock outstanding:
       Basic                              1,567,725          1,302,355
       Diluted                            1,624,040          1,357,653



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 between the comparable three month periods decreased
primarily because of a one time change in the method of revenue recognition in
2003, as well as recognition of deferred revenue in the 2003 period. Purchased
power costs also decreased primarily because of the conclusion in 2003 of the
rate making treatment of the capital lease payments associated with the
transmission system.  The expensing of noncash stock awards to officers and
directors caused general and administrative expense to increase for 2004.  The
Company anticipates property tax expense for 2004 will materially increase, and
therefore has increased its projection for property tax expense for 2004 as
compared to 2003.  Income tax expense decreased for 2004 because of the
decrease in net taxable income between the two periods.

The Company was able to sell its investments in real estate partnerships in
February 2004 at book value with no resulting gain or loss.  In March 2004, the
Company sold its investment in United Fuel for $1.3 million in exchange for a
note receivable.  The gain of $940,000 has been deferred and will be recognized
as cash receipts are received on the note.

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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