Exhibit 99.1
PRESS
RELEASE
| | | | | | | |
| Date: | | June 4, 2004 | | | | |
| Contact: | | Stephen Conner | | or | | Headen Thomas |
| Telephone: | | 704/731-4205 | | | | 704/731-4438 |
Piedmont Reports Record Second Quarter Results
CHARLOTTE, N.C., June 4 /PRNewswire-FirstCall/ — Charlotte-based Piedmont Natural Gas (NYSE: PNY) announced record financial results for its second fiscal quarter ended April 30, 2004. For the quarter, the Company reported net income of $41.3 million and $1.08 diluted earnings per share, reflecting a 33% increase compared with $31.0 million and a 16% increase compared with $0.93 for the same period in 2003. For the six months ended April 30, 2004, net income was $115.9 million and diluted earnings per share were $3.20, reflecting a 30% increase compared with net income of $89.0 million and a 20% increase compared with $2.67 for the prior six-month period.
Average shares of stock for diluted earnings per share for the quarter and six months were up 14% and 8%, respectively, from the prior year comparable periods due primarily to the Company’s 4.25 million-share common stock offering completed January 20, 2004.
Operations and maintenance expenses increased from the prior-year quarter due to higher payroll, pension and other employee benefit costs associated with the addition of North Carolina Natural Gas Corporation (NCNG) on September 30, 2003, and the provision for uncollectibles. System throughput in the second quarter totaled 58.0 million dekatherms, compared with throughput of 42.9 million dekatherms for the previous year’s quarter due to the NCNG purchase and continued customer growth. Weather in the Company’s service areas during the second quarter was 1% colder than normal and 4% colder than in the prior-year quarter.
Income from non-utility activities was $7.7 million for the quarter, compared with $6.4 million for the second quarter of the prior year. The Company’s interest in SouthStar Energy Services LLC, which is primarily engaged in the unregulated retail gas market in Georgia, contributed $6.6 million to net income, or $0.17 per share, in the second quarter, compared with $3.5 million, or $0.11 per share, in the second quarter of the prior year. Two other joint ventures, Pine Needle LNG and Cardinal Pipeline, contributed combined earnings per share of $0.02 in the second quarters of 2004 and the prior year.
“The disciplined acquisition and integration strategy employed with NCNG and good internal customer growth combined with the complementary services offered by our joint venture investments is a straight-forward formula that is working well for our investors,” commented Chairman, President and Chief Executive Officer Thomas E. Skains.
Dividend Declared
At the Company’s regular quarterly meeting of its Board of Directors held today, a quarterly dividend on Common Stock of 43 cents per share was declared, payable July 15, 2004, to holders of record at the close of business on June 24, 2004.
Fiscal 2004 Earnings Guidance
Piedmont Natural Gas reaffirms its guidance for fiscal year 2004 earnings from continuing operations in the range of $2.35 to $2.45 per diluted share. Management is directing the earnings guidance towards the upper end of the range.
The Company’s fiscal year 2004 earnings guidance excludes non-recurring items related to the sale of its propane interests and the resolution of certain disproportionate sharing issues related to its SouthStar venture, both of which were reported in the first fiscal quarter. The fiscal year 2004 earnings-per-share impacts of these two items are expected to be increases of $0.08 and $0.04, respectively.
This earnings guidance includes the earnings-per-share accretion related to the NCNG acquisition, integration and permanent financing. Also included are rate case approvals for the NCNG and Nashville Gas divisions that became effective November 1, 2003, and management’s assessment of the negative impacts that high wholesale natural gas prices may have on earnings for the fiscal year.
Share Repurchase Plan Approved
At the Company’s regular quarterly meeting, the Board of Directors approved a share repurchase plan. Rather than issuing new shares, the Company plans to make open market purchases to fund needs generated by the dividend reinvestment and stock purchase plan, by the employee stock purchase plan and by stock-based incentive compensation plans. The Company projects annual open market purchases to total approximately 600,000 shares.
Conference Call
In conjunction with the second quarter earnings release, you are invited to listen to the conference call that will be broadcast live over the Internet on Monday, June 7, 2004, at 2:30 p.m. Eastern Daylight Time, hosted by Chairman, President and Chief Executive Officer Thomas E. Skains. Simply log on to the web at www.piedmontng.com and click on Investor Relations, then on Presentations. The conference call will be archived on the web site.
Piedmont Natural Gas
Summary of Operations
(in thousands except per share amounts)
| | | | | | | | | | | | | |
Three Months Ended
| | April 30
| | % Increase |
| | | 2004
| | 2003
| | (Decrease)
|
| | | (Unaudited) | | | | |
| Operating Revenues | | $ | 482,398 | | | $ | 407,774 | | | | 18 | % |
| Cost of Gas | | | 336,543 | | | | 297,760 | | | | 13 | % |
| Margin | | | 145,855 | | | | 110,014 | | | | 33 | % |
| Operations and Maintenance Expenses | | | 50,539 | | | | 37,881 | | | | 33 | % |
| Depreciation | | | 20,210 | | | | 15,309 | | | | 32 | % |
| General Taxes | | | 7,421 | | | | 6,367 | | | | 17 | % |
| Utility Income Taxes | | | 21,781 | | | | 15,865 | | | | 37 | % |
| Operating Income | | | 45,904 | | | | 34,592 | | | | 33 | % |
| Other Income (Expense), net | | | 7,713 | | | | 6,369 | | | | 21 | % |
| Utility Interest Charges | | | 12,324 | | | | 9,961 | | | | 24 | % |
| Income Before Minority Interest | | | 41,293 | | | | 31,000 | | | | 33 | % |
| Less Minority Interest | | | 34 | | | | — | | | | — | |
| Net Income | | $ | 41,259 | | | $ | 31,000 | | | | 33 | % |
| Average Shares of Common Stock: | | | | | | | | | | | | |
| Basic | | | 38,082 | | | | 33,333 | | | | 14 | % |
| Diluted | | | 38,167 | | | | 33,444 | | | | 14 | % |
| Earnings Per Share of Common Stock: | | | | | | | | | | | | |
| Basic | | $ | 1.08 | | | $ | 0.93 | | | | 16 | % |
| Diluted | | $ | 1.08 | | | $ | 0.93 | | | | 16 | % |
| System Throughput — Dekatherms | | | 57,953 | | | | 42,860 | | | | 35 | % |
| Gas Customers Billed in April | | | 879 | | | | 736 | | | | 19 | % |
| System Average Degree Days — Actual | | | 1,277 | | | | 1,228 | | | | 4 | % |
| System Average Degree Days — Normal | | | 1,259 | | | | 1,265 | | | | 0 | % |
| Percent Normal Degree Days | | | 101 | % | | | 97 | % | | | 4 | % |
| | | | | | | | | | | | | |
Six Months Ended
| | April 30
| | % Increase |
| | | 2004
| | 2003
| | (Decrease)
|
| | | (Unaudited) | | | | |
| Operating Revenues | | $ | 1,101,183 | | | $ | 901,265 | | | | 22 | % |
| Cost of Gas | | | 758,848 | | | | 629,557 | | | | 21 | % |
| Margin | | | 342,335 | | | | 271,708 | | | | 26 | % |
| Operations and Maintenance Expenses | | | 100,211 | | | | 76,376 | | | | 31 | % |
| Depreciation | | | 40,663 | | | | 30,559 | | | | 33 | % |
| General Taxes | | | 13,423 | | | | 12,747 | | | | 5 | % |
| Utility Income Taxes | | | 64,785 | | | | 51,779 | | | | 25 | % |
| Operating Income | | | 123,253 | | | | 100,247 | | | | 23 | % |
| Other Income (Expense), net | | | 16,208 | | | | 9,046 | | | | 79 | % |
| Utility Interest Charges | | | 23,535 | | | | 20,297 | | | | 16 | % |
| Income Before Minority Interest | | | 115,926 | | | | 88,996 | | | | 30 | % |
| Less Minority Interest | | | 45 | | | | — | | | | — | |
| Net Income | | $ | 115,881 | | | $ | 88,996 | | | | 30 | % |
| Average Shares of Common Stock: | | | | | | | | | | | | |
| Basic | | | 36,079 | | | | 33,258 | | | | 8 | % |
| Diluted | | | 36,173 | | | | 33,372 | | | | 8 | % |
| Earnings Per Share of Common Stock: | | | | | | | | | | | | |
| Basic | | $ | 3.21 | | | $ | 2.68 | | | | 20 | % |
| Diluted | | $ | 3.20 | | | $ | 2.67 | | | | 20 | % |
| System Throughput — Dekatherms | | | 131,445 | | | | 106,449 | | | | 23 | % |
| Gas Customers Billed in April | | | 879 | | | | 736 | | | | 19 | % |
| System Average Degree Days — Actual | | | 3,186 | | | | 3,381 | | | | -6 | % |
| System Average Degree Days — Normal | | | 3,234 | | | | 3,236 | | | | 0 | % |
| Percent Normal Degree Days | | | 99 | % | | | 104 | % | | | -5 | % |
Forward-Looking Statement
This press release contains forward-looking statements. These statements are based on management’s current expectations and information currently available and are believed to be reasonable and are made in good faith. However, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the statements. Factors that may make the actual results differ from anticipated results include, but are not limited to, economic conditions; competition from other providers of similar products; and other uncertainties, all
of which are difficult to predict and some of which are beyond our control. For these reasons, you should not rely on these forward-looking statements when making investment decisions. The words “expect,” “believe,” “project,” “anticipate,” “intend,” “should,” “could”, “will” and variations of such words and similar expressions are intended to identify forward-looking statements. We do not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise. More information about the risks and uncertainties relating to these forward-looking statements may be found in Piedmont’s filings with the SEC on Forms 10-K and Forms 10-Q, which are available on the SEC’s website at http://www.sec.gov.
About Piedmont Natural Gas
Piedmont Natural Gas is an energy services company primarily engaged in the distribution of natural gas to 940,000 residential, commercial and industrial utility customers in North Carolina, South Carolina and Tennessee, including 60,000 customers served by municipalities who are wholesale customers. Our subsidiaries are invested in joint venture, energy-related businesses, including unregulated retail natural gas marketing, interstate natural gas storage, intrastate natural gas transportation and regulated natural gas distribution. More information about Piedmont Natural Gas is available on the Internet at www.piedmontng.com.
