EXHIBIT 99.1
Contacts:
Financial Community: Media:
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Alan H. Oshiki, Assistant Vice President Brigid M. Smith, Assistant Vice President
and Assistant Treasurer Corporate Communications
(203) 614-5629 (203) 614-5042
aoshiki@czn.com bsmith@czn.com
CITIZENS UTILITIES REPORTS
SECOND QUARTER 1998 FINANCIAL RESULTS
Earnings per share increased 20%
Citizens Communications operating income up 62%
Citizens Public Services revenue grew 25%
Stamford, Connecticut, August 12, 1998 - Citizens Utilities (NYSE: CZN,CZNPr)
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announced today second quarter 1998 financial results. Robert J. DeSantis,
Citizens chief financial officer, reported that revenues for the three months
ended June 30, 1998 grew 11% to $366.3 million from the $329.6 million for the
corresponding 1997 quarter, excluding 1997 special items.
Net income for the second quarter 1998 increased 21% to $14.5 million
from $12 million for the prior year quarter, excluding 1997 special items.
Excluding the impact of Electric Lightwave losses, net income for the three
months ended June 30, 1998 increased 49% to $25.3 million from $17.0 million for
the second quarter 1997.
Earnings per share for the second quarter 1998 increased 20% to 6 cents
from 5 cents for the prior year quarter, excluding 1997 special items. Excluding
the impact of Electric Lightwave losses, earnings per share for the quarter
ended June 30, 1998 increased 43% to 10 cents from 7 cents for the prior year
period.
For the six months ended June 30, 1998, net income and earnings per
share were $43.6 million and 17 cents, respectively, as compared to $42.6
million and 17 cents, respectively, for the prior year period excluding special
items. Absent Electric Lightwave losses, net income for the six months ended
June 30, 1998 increased 21% to $64.8 million from $53.5 million for the prior
year period. Earnings per share for the six months ended June 30, 1998, absent
Electric Lightwave losses, increased 19% to 25 cents from 21 cents for the prior
year period.
Mr. DeSantis stated that "Citizens Communications second quarter
operating income of $39.6 million was up 62% over prior year and EBITDA margins
have improved from 34% for the prior year quarter to 42% for the second quarter
1998."
Commenting on Citizens Public Services, Mr. DeSantis noted that,
"Revenues grew 25% over the prior year quarter to $141.8 million driven
primarily by increases in gas revenues. Citizens Public Services second quarter
operating income decreased slightly to $18 million continuing to reflect the
impact of certain regulatory matters."
Mr. DeSantis stated that, "Electric Lightwave's 51% revenue growth over
prior year quarter was primarily due to increases in local dial tone services
and enhanced services revenue. Electric Lightwave's owned and leased gross
property, plant and equipment at quarter end totaled $504.6 million as compared
to $309.0 million a year earlier."
Citizens Utilities provides Telecommunications Services and Public
Services including natural gas distribution, electric distribution, water
distribution and wastewater treatment services to approximately 1.8 million
customers in 21 states. Citizens own 83% of Electric Lightwave, Inc., a leading
full-service, facilities-based integrated communications services provider, and
has a significant investment in Centennial Cellular Corp. (NASDAQ:CYCL), a
cellular telephone company. Citizens announced on May 18, 1998 that it intends
to separate its telecommunication businesses and public services businesses into
two stand-alone, publicly traded companies.
This news release contains forward-looking statements that are subject to risks
and uncertainties that could cause actual results to differ materially from
those expressed or implied in the statements. These and all forward-looking
statements are only predictions or statements of current plans that are
constantly under review by the company. All forward-looking statements may
differ from actual results because of, but not limited to, changes in the local
and overall economy, the nature and pace of technological changes, the number
and effectiveness of competitors in the company's markets, success in overall
strategy, weather conditions, changes in legal or regulatory policy, the
company's ability to identify future markets and successfully expand existing
ones and the mix of products and services offered in the company's target
markets. These important factors should be considered in evaluating any
statement contained herein and/or made by the company or on its behalf. The
foregoing information should be read in conjunction with the company's filings
with the U.S. Securities and Exchange Commission including, but not limited to,
reports on Forms 10K and 10Q. The company has no obligation to update or revise
these forward-looking statements to reflect the occurrence of future events or
circumstances.
(table follows)
Citizens Utilities Company and Subsidiaries
Consolidated Financial Data
(unaudited)
For the quarter ended For the six months ended
June 30, June 30,
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% %
(Dollars in thousands, except per share data) 1998 1997 Change 1998 1997 Change
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Income Statement Data
Revenues $ 366,347 $ 329,624 11% $ 770,210 $ 704,715 9%
Cost of services 80,695 74,557 8% 188,727 180,547 5%
Sales and marketing expenses 10,553 14,859 -29% 19,602 30,684 -36%
Depreciation and amortization 64,765 58,505 11% 128,362 115,520 11%
Other operating expenses 168,829 148,009 14% 335,736 281,439 19%
Operating income 41,505 33,694 23% 97,783 96,525 1%
Special items (1) - (191,090) - (191,090)
Operating income including special items 41,505 (157,396) 126% 97,783 (94,565) 203%
Investment and other income 10,736 11,198 -4% 23,847 23,348 2%
Interest expense 28,589 26,940 6% 55,395 53,949 3%
Special items (1) - (6,230) - (6,230)
Income taxes 7,638 (57,745) 113% 19,556 (41,909) 147%
Convertible preferred dividends 1,552 1,552 0% 3,104 3,104 0%
Income excluding cumulative effect of change in
accounting principle and special items (1) 14,462 11,989 21% 43,575 42,573 2%
Cumulative effect of change in accounting
principle for ELI, net of tax - - 2,334 -
Net income 14,462 (123,175) 112% 41,241 (92,591) 145%
Net income excluding ELI 25,331 17,004 49% 64,785 53,489 21%
Per-Share Data (2)
Basic and diluted net income per share of common
stock before cumulative effect of change in
accounting principle and excluding special items (1) $ .06 $ .05 20% $ .17 $ .17 0%
Basic and diluted net income per share of
common stock excluding special items (1) $ .06 $ .05 20% $ .16 $ .17 -6%
Basic net income per share of common stock
excluding ELI and special items (1) $ .10 $ .07 43% $ .25 $ .21 19%
Weighted average shares 255,768 256,691 0% 255,492 257,055 -1%
(1) In the second quarter 1997, the company recorded certain charges to earnings totaling approximately $197 million. The
charges relate primarily to certain assets deemed no longer recoverable, the effects of certain regulatory commission
orders and the cutback of certain long distance service operations.
(2) Adjusted for subsequent stock dividends and stock splits and used in the calculation of all per share data.