EXHIBIT 99.1
SJW CORP. ANNOUNCES
SECOND QUARTER FINANCIAL RESULTS
Board Declares Quarterly Dividend on Common Stock
SAN JOSE, CA, July 25, 2012 – SJW Corp. (NYSE: SJW) today reported financial results for the second quarter ended June 30, 2012. Operating revenue was $65.6 million in the quarter compared to $59.0 million in 2011. The $6.6 million increase in revenue reflects cumulative rate increases of $4.9 million, $1.2 million in higher customer water usage and $323,000 from new customers compared to a year ago. In addition, the Company earned $172,000 in higher revenue from real estate operations.
Net income was $5.2 million and diluted earnings per common share were $0.28, compared to $5.5 million and $0.29 per share, respectively, in the second quarter of 2011.
Water production costs for the quarter ended June 30, 2012 were $27.4 million compared to $22.2 million in 2011, an increase of $5.2 million. The increase in water production costs is primarily attributable to $2.5 million in higher costs due to a decrease in available surface water supply, $1.5 million in higher per unit costs for purchased water and groundwater extraction charges and $1.2 million in higher customer water usage.
Operating expenses, excluding water production costs, for the second quarter were $24.6 million compared to $23.0 million in 2011. The increase of $1.6 million reflects an additional $1.1 million of administrative and general expenses, $534,000 of depreciation expense and $296,000 more in taxes other than income tax, partially offset by a decrease of $343,000 in maintenance expenses. The effective consolidated income tax rates were 41% for the three-month periods ended June 30, 2012 and 2011.
Year-to-date operating revenue increased by $14.0 million to $116.7 million from $102.7 million in the first six months of 2012. The increase was attributable to $7.3 million in cumulative rate increases, $5.9 million in higher customer water usage and $501,000 in revenue from new customers. In addition, the Company earned $316,000 in higher revenue from real estate operations.
Year-to-date net income was $6.3 million, compared to $6.1 million in 2011. Diluted earnings per share were $0.34 in the first six months of 2012, compared to $0.32 per diluted share for the same period in 2011.
Year-to-date water production costs increased to $47.5 million from $37.7 million in 2011. The $9.8 million increase was primarily attributable to $3.5 million in higher costs due to a decrease in available surface water supply, $3.4 million in higher customer water usage and $2.9 million in higher per unit costs for purchased water and groundwater extraction charges. Operating expenses, excluding water production costs, increased $3.3 million to $48.9 million from $45.6 million. The increase was due to an increase in administrative and general expenses of $2.0 million, $1.0 million of depreciation expense, $644,000 in taxes other than income taxes, partially offset by a decrease of $402,000 in maintenance expenses. The effective consolidated income tax rates were 41% for the six-month periods ended June 30, 2012 and 2011.
The Directors of SJW Corp. today declared a quarterly dividend on common stock of $0.1775 per share. The dividend is payable on September 4, 2012 to shareholders of record on August 6, 2012.
SJW Corp. is a publicly traded holding company headquartered in San Jose, California. SJW Corp. is the parent company of San Jose Water Company, SJWTX, Inc., Texas Water Alliance Limited, and SJW Land Company. Together, San Jose Water Company and SJWTX, Inc. provide regulated and nonregulated water service to more than one million people in San Jose, California and nearby communities and in Canyon Lake, Texas and nearby communities. SJW Land Company owns and operates commercial real estate investments.
This press release may contain certain forward-looking statements including but not limited to statements relating to SJW Corp.'s plans, strategies, objectives, expectations and intentions, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of SJW Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The results for a quarter are not indicative of results for a full year due to seasonality and other factors. Certain factors that may cause actual results, performance or achievements to materially differ are described in SJW Corp.'s most recent reports on Form 10-K, Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. SJW Corp. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SJW Corp.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands, except per share data)
|
| | | | | | | | | |
| |
THREE MONTHS ENDED |
SIX MONTHS ENDED |
| | JUNE 30, | JUNE 30, |
| | 2012 | 2011 | 2012 | 2011 |
| | | | | |
| OPERATING REVENUE | $ | 65,575 |
| 59,007 |
| 116,724 |
| 102,703 |
|
| OPERATING EXPENSE: | | | | |
| Production Costs: | | | | |
| Purchased water | 17,783 |
| 12,681 |
| 31,360 |
| 20,097 |
|
| Power | 1,303 |
| 1,373 |
| 2,168 |
| 2,387 |
|
| Groundwater extraction charge | 5,439 |
| 5,300 |
| 8,385 |
| 9,808 |
|
| Other production costs | 2,841 |
| 2,820 |
| 5,597 |
| 5,412 |
|
| Total production costs | 27,366 |
| 22,174 |
| 47,510 |
| 37,704 |
|
| | | | | |
| Administrative and general | 10,746 |
| 9,658 |
| 21,294 |
| 19,294 |
|
| Maintenance | 3,133 |
| 3,476 |
| 6,122 |
| 6,524 |
|
| Taxes other than income | 2,419 |
| 2,123 |
| 4,854 |
| 4,210 |
|
| Depreciation and amortization | 8,326 |
| 7,792 |
| 16,634 |
| 15,586 |
|
| Total operating expense | 51,990 |
| 45,223 |
| 96,414 |
| 83,318 |
|
| | | | | |
| OPERATING INCOME | 13,585 |
| 13,784 |
| 20,310 |
| 19,385 |
|
| | | | | |
| Interest on long-term debt and other | (4,827 | ) | (4,516 | ) | (9,644 | ) | (9,074 | ) |
| | | | | |
| Income before income taxes | $ | 8,758 |
| 9,268 |
| 10,666 |
| 10,311 |
|
| | | | | |
| Provision for income taxes | 3,557 |
| 3,817 |
| 4,356 |
| 4,250 |
|
| | | | | |
| NET INCOME | $ | 5,201 |
| 5,451 |
| 6,310 |
| 6,061 |
|
| | | | | |
| Other comprehensive income (loss), net | 59 |
| 28 |
| 48 |
| 17 |
|
| | | | | |
| COMPREHENSIVE INCOME | $ | 5,260 |
| 5,479 |
| 6,358 |
| 6,078 |
|
| | | | | |
| Earnings per share | | | | |
| -Basic | $ | 0.28 |
| 0.29 |
| 0.34 |
| 0.33 |
|
| -Diluted | $ | 0.28 |
| 0.29 |
| 0.34 |
| 0.32 |
|
| | | | | |
| Dividend per share | $ | 0.18 |
| 0.17 |
| 0.36 |
| 0.34 |
|
| | | | | |
| Weighted average shares outstanding | | | | |
| -Basic | 18,627 |
| 18,577 |
| 18,619 |
| 18,574 |
|
| -Diluted | 18,824 |
| 18,785 |
| 18,823 |
| 18,780 |
|
SJW Corp.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
|
| | | | | |
| | June 30, | December 31, |
| | 2012 | 2011 |
| ASSETS | | |
| UTILITY PLANT: | | |
| Land | $ | 8,987 |
| 8,852 |
|
| Depreciable plant and equipment | 1,109,973 |
| 1,070,016 |
|
| Construction in progress | 25,532 |
| 18,527 |
|
| Intangible assets | 15,559 |
| 14,732 |
|
| Total utility plant | 1,160,051 |
| 1,112,127 |
|
| Less accumulated depreciation and amortization | 371,496 |
| 355,914 |
|
| Net utility plant | 788,555 |
| 756,213 |
|
| | | |
| REAL ESTATE INVESTMENT: | 83,486 |
| 89,099 |
|
| Less accumulated depreciation and amortization | 10,408 |
| 10,557 |
|
| Net real estate investment | 73,078 |
| 78,542 |
|
| CURRENT ASSETS: | | |
| Cash and equivalents | 9,258 |
| 26,734 |
|
| Accounts receivable and accrued unbilled utility revenue | 37,976 |
| 33,853 |
|
| Long-lived assets held-for-sale | 4,608 |
| - |
|
| Prepaid expenses and other | 6,437 |
| 8,328 |
|
| Total current assets | 58,279 |
| 68,915 |
|
| OTHER ASSETS: | | |
| Investment in California Water Service Group | 7,113 |
| 7,032 |
|
| Debt issuance costs, net of accumulated amortization | 4,724 |
| 4,865 |
|
| Regulatory assets, net | 119,248 |
| 119,248 |
|
| Other | 4,250 |
| 3,995 |
|
| | 135,335 |
| 135,140 |
|
| | $ | 1,055,247 |
| 1,038,810 |
|
| CAPITALIZATION AND LIABILITIES | | |
| CAPITALIZATION: | | |
| Common stock | $ | 9,707 |
| 9,684 |
|
| Additional paid-in capital | 25,222 |
| 24,552 |
|
| Retained earnings | 227,129 |
| 227,494 |
|
| Accumulated other comprehensive income | 2,322 |
| 2,274 |
|
| Total shareholders’ equity | 264,380 |
| 264,004 |
|
| Long-term debt, less current portion | 335,886 |
| 343,848 |
|
| Total capitalization | 600,266 |
| 607,852 |
|
| CURRENT LIABILITIES: | | |
| Current portion of long-term debt | 8,340 |
| 838 |
|
| Accrued groundwater extraction charge, | | |
| purchased water and purchased power | 9,955 |
| 6,212 |
|
| Accounts payable | 14,302 |
| 7,417 |
|
| Accrued interest | 5,359 |
| 5,376 |
|
| Other current liabilities | 7,962 |
| 8,445 |
|
| Total current liabilities | 45,918 |
| 28,288 |
|
| | | |
| DEFERRED INCOME TAXES AND CREDITS | 138,131 |
| 135,036 |
|
| ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS | | |
|
| | | | | |
| IN AID OF CONSTRUCTION | 190,798 |
| 190,668 |
|
| POSTRETIREMENT BENEFIT PLANS | 71,522 |
| 68,855 |
|
| OTHER NONCURRENT LIABILITIES | 8,612 |
| 8,111 |
|
| | $ | 1,055,247 |
| 1,038,810 |
|
