Avista Advantage, once a nonperforming stepchild in Avista Corp.s family of daughter companies, is contributing ever more impressive sums to its parents earnings, is enjoying a prolonged growth surge, and has taken on a new name.


The company, which manages and pays utility bills at thousands of outlets for mostly Fortune 500 companies, saw its revenues shoot up by 25 percent through the first six months this year, to $18.6 million. Meanwhile, it changed its name to Advantage IQ about a month ago, says Stu Stiles, its president and CEO.


The business has just literally taken off, Stiles says. Last year, we grew the business by 35 percent. Were just very pleased.


Advantage IQ contributed almost $3 million, or 6 cents a share, to Avista Corp.s earnings in the first six months of this year, up from $1.7 million, or 4 cents a share, in the first half of 2005. For all of 2005, Avista Advantage recorded net income of $3.9 million, or 8 cents a share, compared with $522,000, or 1 cent a share, in 2004. In 2005, annual revenue grew to $31.7 million from $23.4 million.


For 2006, Avista Corp. now expects that Advantage IQ will contribute between 10 cents and 12 cents a share to its earnings, upgraded from an earlier estimate of 8 cents to 12 cents a share. Either way, thats a significant slice of the companys projected overall earnings of $1.30 to $1.45 a share.


Such results are a far cry from the losses Avista Advantage racked up after it was launched a decade ago during the dot-com boom, when its mother company was given an ill-fated makeover as a technology concern. For years, Avista Advantage suffered lossesand was a wallflower in the business community herebefore it broke into the black just two years ago.


The subsidiary renamed itself recently because its old name was seen as being synonymous with that of Avista Utilities, Avista Corp.s regulated utility unit, even though Avista Advantage was an unregulated, technologically driven, entrepreneurial company, Stiles says. He says the company kept part of its old name because it had made its reputation for utility-invoice management and energy-expense management under that name.


Stiles says it took the IQ part of its new name from the Facility IQ name of its internal database, which enables it to monitor and pay more than $9.3 billion a year in utility billings from 192,000 sites, up from $6.5 billion in billings from 130,000 sites two years ago. Its Facility IQ system, which the company promotes in its marketing to attract new clients, runs an automated edit process on the more than 500,000 bills that the company receives either electronically or through the mail at its offices in the Rock Pointe East building, at 1313 N. Atlantic, each month.


It moves bills that look routine into a system that consolidates them, depending on their due date, for viewing by its clients designated personnel, who initiate availability of funds so Advantage IQ can pay the bills. When Facility IQ systems sees something unusual about a bill, it kicks the bill out for a closer look by Advantage IQs designated client-service teams, says company spokeswoman Kelly Conley. Everything thats flagged is seen by staff, she says. Bills could be flagged because of miscellaneous fees, late fees, conflicting or duplicate service dates, an overlap in the billing month, an account number change, if the dollar amount on the bill falls outside an acceptable range, or for other reasons.


Stiles says that the companys renaming was intended to establish its independence in the publics mind from both its parent and its siblings that still have the word Avista in their names. While Avista Corp. currently is researching new names for itself and its other subsidiaries, Stiles says Advantage IQ would have been renamed regardless.


Were going to pursue a direction that allows us to take off on our own, Stiles says.


Advantage IQ now has more than 350 clients. Pieces of art bearing the names of many of its clients hang in neat rows on a customer wall in its lobby. They include such well-known concerns as Best Buy, Wells Fargo, McDonalds, Office Depot, Starbucks, Frito-Lay, and Home Depot. Its really a Whos Who of Fortune 500 companies across the nation, Stiles says.


As energy prices have soared in recent months, and emphasis on energy cost control has grown, the market for Advantage IQs services has firmed up, Stiles says. In addition to utility bill analysis and payment, those services include rate analysis, documenting a companys energy usage at each of its sites, analytical comparison of such costs site-by-site, and help with energy budgeting and purchasing.


Customers are saying, Now, we need you to do more for us, Stiles says.


Its not very often that a business has a chance to grow in a climate thats tailor-made for its services, but for Advantage IQ, such an environment was created when President Bush said months ago that all federal agencies would have to cut energy usage by 20 percent over the next 10 years, Stiles says. The climate became even more favorable when energy prices stayed high.


It started at the highest level of government, he says of Bushs speech. Now, corporations need to benchmark their (energy) usage and expenses going forward, Stiles says. Every day, you pick up a paper and find what we provide as a service and value being highlighted as a real need.


With higher energy prices buffeting the rest of the world, Advantage IQ also will find strong opportunities in the international marketplace, Stiles believes. Many of the companys clients have international operations, and in some countries theyre paying far higher prices for energy than they are in the U.S.


Weve got a number of clients today that are asking us to look at this hard, he says. What we want to do is understand what are the needs in places like Europe, the Far East, and South America. You need to understand, what does the data look like, and benchmark it. We can present that data to our clients by country, by region, and by account.


Advantage IQ has no foreign offices yet, and Stiles declines to say when or where it might open one first, saying that would be premature.


With Advantage IQs sales in the U.S. market still growing rapidly, Stiles, who joined the company in early 2005 after working in the telecommunications industry, sees opportunity in many directions. For example, the company is doing more work with telecommunications invoices than it once did.


At the beginning of 2005, we bought a telecommunications company, he says, speaking of the companys acquisition of TelAssess Inc., of Denver. That was a springboard for us. There were folks there with 20, 30 years of telecom experience.


That also gave the company a Denver office, to go with its offices in New York City; Atlanta; Austin, Texas; and Charlotte, N.C.


Last year, the company was able to cut its average cost of processing a bill by 6 percent, and through 2005, it had an average three-year customer retention rate of 95 percent. Our goal, says Stiles, is to save our clients at least as much as, if not more, what were charging them in fees.


He says he expects Advantage IQ to remain for the foreseeable future in its 75,000 square feet of leased space near downtown Spokane. He adds that the company is happy with the quality of the work force in Spokane and the caliber of the people its been able to recruit.


With Advantage IQs revenue having soared over the last 18 months, the question of how much potential the company might have to grow over the long term is a fascinating one, Stiles says. Our board likes to ask questions like this, he says.


Contact Richard Ripley at (509) 344-1261 or via e-mail at editor@spokanejournal.com.