EXHIBIT 99.1
SJW CORP. ANNOUNCES
THIRD QUARTER FINANCIAL RESULTS
Board Declares Quarterly Dividend on Common Stock
SAN JOSE, CA, October 24, 2012 – SJW Corp. (NYSE: SJW) today reported financial results for the third quarter ended September 30, 2012. Operating revenue was $82.4 million in the quarter compared to $73.9 million in 2011. The $8.5 million increase in revenue reflects cumulative rate increases of $6.3 million, $1.8 million in higher customer water usage and $406,000 from new customers compared to a year ago.
Net income was $10.1 million and diluted earnings per common share were $0.53, compared to $8.2 million and $0.44 per share, respectively, in the third quarter of 2011.
Water production costs for the quarter ended September 30, 2012 were $36.6 million compared to $32.0 million in 2011, an increase of $4.6 million. The increase in water production costs is primarily attributable to $2.6 million in higher per unit costs for purchased water and groundwater extraction charges, $1.7 million in higher costs due to a decrease in available surface water supply and $328,000 in higher customer water usage.
Operating expenses, excluding water production costs, for the third quarter were $24.9 million compared to $23.4 million in 2011. The increase of $1.5 million reflects an additional $891,000 of administrative and general expenses primarily due to higher payroll and benefit costs, $485,000 of higher depreciation expense and $80,000 higher maintenance expenses. The effective consolidated income tax rate was 41% and 39% for the three-month periods ended September 30, 2012 and 2011, respectively.
Year-to-date operating revenue increased by $22.5 million to $199.1 million from $176.6 million in the first nine months of 2012. The increase was attributable to $13.6 million in cumulative rate increases, $7.7 million in higher customer water usage and $907,000 in revenue from new customers. In addition, the Company earned $305,000 in higher revenue from real estate operations.
Year-to-date net income was $16.4 million, compared to $14.3 million in 2011. Diluted earnings per share were $0.87 in the first nine months of 2012, compared to $0.76 per diluted share for the same period in 2011.
Year-to-date water production costs increased to $84.1 million from $69.7 million in 2011. The $14.4 million increase was primarily attributable to $5.4 million in higher per unit costs for purchased water and groundwater extraction charges, $5.2 million in higher costs due to a decrease in available surface water supply and $3.8 million in higher customer water usage. Operating expenses, excluding water production costs, increased $4.8 million to $73.8 million from $69 million. The increase was due to an increase in administrative and general expenses of $2.9 million primarily due to higher payroll and benefit costs, $1.5 million of higher depreciation expense, $644,000 in higher taxes other than income taxes, partially offset by a decrease of $322,000 in maintenance expenses. The effective consolidated income tax rate was 41% and 40% for the nine-month periods ended September 30, 2012 and 2011, respectively.
The Directors of SJW Corp. today declared a quarterly dividend on common stock of $0.1775 per share. The dividend is payable on December 3, 2012 to shareholders of record on November 5, 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 September 30, | | Nine months ended September 30, |
| | 2012 | | 2011 | | 2012 | | 2011 |
| OPERATING REVENUE | $ | 82,374 |
| | 73,914 |
| | $ | 199,098 |
| | 176,617 |
|
| OPERATING EXPENSE: | | | | | | | |
| Production Costs: | | | | | | | |
| Purchased water | 22,768 |
| | 19,182 |
| | 54,128 |
| | 39,279 |
|
| Power | 2,274 |
| | 1,979 |
| | 4,442 |
| | 4,366 |
|
| Groundwater extraction charges | 8,672 |
| | 7,824 |
| | 17,057 |
| | 17,632 |
|
| Other production costs | 2,914 |
| | 3,030 |
| | 8,511 |
| | 8,442 |
|
| Total production costs | 36,628 |
| | 32,015 |
| | 84,138 |
| | 69,719 |
|
| Administrative and general | 10,773 |
| | 9,882 |
| | 32,067 |
| | 29,176 |
|
| Maintenance | 3,411 |
| | 3,331 |
| | 9,533 |
| | 9,855 |
|
| Property taxes and other non-income taxes | 2,397 |
| | 2,397 |
| | 7,251 |
| | 6,607 |
|
| Depreciation and amortization | 8,288 |
| | 7,803 |
| | 24,922 |
| | 23,389 |
|
| Total operating expense | 61,497 |
| | 55,428 |
| | 157,911 |
| | 138,746 |
|
| OPERATING INCOME | 20,877 |
| | 18,486 |
| | 41,187 |
| | 37,871 |
|
| Interest on long-term debt and other | (3,927 | ) | | (4,911 | ) | | (13,571 | ) | | (13,985 | ) |
| Income before income taxes | 16,950 |
| | 13,575 |
| | 27,616 |
| | 23,886 |
|
| Provision for income taxes | 6,866 |
| | 5,360 |
| | 11,222 |
| | 9,610 |
|
| NET INCOME | 10,084 |
| | 8,215 |
| | 16,394 |
| | 14,276 |
|
| Other comprehensive income, net | 41 |
| | (227 | ) | | 89 |
| | (210 | ) |
| COMPREHENSIVE INCOME | $ | 10,125 |
| | 7,988 |
| | $ | 16,483 |
| | 14,066 |
|
| | | | | | | | |
| EARNINGS PER SHARE | | | | | | | |
| Basic | $ | 0.54 |
| | 0.44 |
| | $ | 0.88 |
| | 0.77 |
|
| Diluted | $ | 0.53 |
| | 0.44 |
| | $ | 0.87 |
| | 0.76 |
|
| DIVIDENDS PER SHARE | $ | 0.18 |
| | 0.17 |
| | $ | 0.53 |
| | 0.52 |
|
| WEIGHTED AVERAGE SHARES OUTSTANDING | | | | | | | |
| Basic | 18,648 |
| | 18,587 |
| | 18,629 |
| | 18,578 |
|
| Diluted | 18,854 |
| | 18,803 |
| | 18,833 |
| | 18,788 |
|
SJW Corp.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
|
| | | | | | |
| | September 30,
2012 | | December 31,
2011 |
| ASSETS | | | |
| Utility plant: | | | |
| Land | $ | 8,993 |
| | 8,852 |
|
| Depreciable plant and equipment | 1,139,878 |
| | 1,070,016 |
|
| Construction in progress | 27,013 |
| | 18,527 |
|
| Intangible assets | 15,561 |
| | 14,732 |
|
| Total utility plant | 1,191,445 |
| | 1,112,127 |
|
| Less accumulated depreciation and amortization | 378,960 |
| | 355,914 |
|
| Net utility plant | 812,485 |
| | 756,213 |
|
| | | | |
| Real estate investments | 73,604 |
| | 89,099 |
|
| Less accumulated depreciation and amortization | 8,697 |
| | 10,557 |
|
| Net real estate investments | 64,907 |
| | 78,542 |
|
| CURRENT ASSETS: | | | |
| Cash and cash equivalents | 6,684 |
| | 26,734 |
|
| Accounts receivable and accrued unbilled utility revenue | 42,973 |
| | 33,853 |
|
| Long-lived assets held-for-sale | 7,768 |
| | — |
|
| Prepaid expenses and other | 4,650 |
| | 8,328 |
|
| Total current assets | 62,075 |
| | 68,915 |
|
| OTHER ASSETS: | | | |
| Investment in California Water Service Group | 7,182 |
| | 7,032 |
|
| Debt issuance costs, net of accumulated amortization | 5,015 |
| | 4,865 |
|
| Regulatory assets, net | 119,248 |
| | 119,248 |
|
| Other | 4,407 |
| | 3,995 |
|
| | 135,852 |
| | 135,140 |
|
| | $ | 1,075,319 |
| | 1,038,810 |
|
| | | | |
| CAPITALIZATION AND LIABILITIES | | | |
| CAPITALIZATION: | | | |
| Common stock | $ | 9,715 |
| | 9,684 |
|
| Additional paid-in capital | 25,708 |
| | 24,552 |
|
| Retained earnings | 233,870 |
| | 227,494 |
|
| Accumulated other comprehensive income | 2,362 |
| | 2,274 |
|
| Total shareholders' equity | 271,655 |
| | 264,004 |
|
| Long-term debt, less current portion | 335,779 |
| | 343,848 |
|
| Total capitalization | 607,434 |
| | 607,852 |
|
| CURRENT LIABILITIES: | | | |
| Current portion of long-term debt | 5,410 |
| | 838 |
|
| Accrued groundwater extraction charge, purchased water and purchased power | 10,710 |
| | 6,212 |
|
| Accounts payable | 17,566 |
| | 7,417 |
|
| Accrued interest | 5,534 |
| | 5,376 |
|
| Other current liabilities | 11,690 |
| | 8,445 |
|
| Total current liabilities | 50,910 |
| | 28,288 |
|
| | | | |
| DEFERRED INCOME TAXES AND CREDITS | 143,245 |
| | 135,036 |
|
| ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF | | | |
| CONSTRUCTION | 192,231 |
| | 190,668 |
|
| POSTRETIREMENT BENEFIT PLANS | 72,708 |
| | 68,855 |
|
| OTHER NONCURRENT LIABILITIES | 8,791 |
| | 8,111 |
|
| | $ | 1,075,319 |
| | 1,038,810 |
|
