FOR IMMEDIATE RELEASE
TELEPHONE: (609) 561-9000
MEDIA CONTACT: JOANNE BRIGANDI x4240
INVESTOR CONTACT: STEPHEN CLARK x4260
OCTOBER 28, 2003
SJI Posts Strong Third Quarter Performance Improvement
Delivers Nine Month Record Earnings
Folsom, NJ-South Jersey Industries (NYSE:SJI) delivered a $0.14 per share
improvement in earnings from continuing operations for the third quarter.
Commenting on SJI's third quarter results, Charles Biscieglia, Chairman and CEO
of SJI, said, "Consistent execution of our strategy has enabled SJI to deliver
strong earnings performance for not only the third quarter and first nine months
of 2003, but the last five years as well.
The results of the first nine months of 2003 keep SJI on track to
deliver the earnings per share growth for the year of at least the 7% to 10 %
that we outlined previously," continued Biscieglia. SJI's earnings from
continuing operations for the first nine months of 2003 were a record $23.2
million or $1.87 per share compared with $17.2 million, or $1.44 per share for
2002.
Although SJI typically produces a loss in the third quarter when
natural gas usage is minimal, the company was able to minimize its third quarter
loss from continuing operations to $1.6 million, or $0.13 per share. This
compares favorably with a loss of $3.2 million, or $0.27 per share, for the same
period in 2002.
Third Quarter 2003 Highlights:
Non-Utility Operations Net Income Increases
o Net income contribution for the quarter from our non-utility business
increased to $2.2 million due to strong performance in our
wholesale energy marketing and on-site energy production
businesses. These results were partially offset by lower than
targeted comparative net income posted by our retail gas
marketing business.
o South Jersey Resources Group, SJI's wholesale energy marketing
business, increased its contribution to SJI's net income to
$1.2 million for the third quarter of 2003, a $1 million
increase over the prior year period. The profit increase
resulted from effectively managing storage and pipeline
capacity rights while serving the growing needs of our
wholesale customer base.
o Marina Energy, SJI's on-site energy production business,
contributed almost $700,000 to earnings for the quarter, due
in large part to the July commencement of full operations at
our thermal energy plant serving the Borgata Hotel Casino &
Spa in Atlantic City, N.J. Since start-up, operation of the
plant has exceeded our expectations for the facility.
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SJI Third Quarter 2003 Earnings Report-ADD 1
o South Jersey Energy, SJI's non-regulated energy supplier, had
90,300 residential, commercial and industrial customers at the
end of the third quarter of 2003 compared with 66,400 at the
end of the same period in 2002, a 36% increase. SJE added
almost 1,900 customers during the third quarter of 2003. Net
income performance for the quarter at our retail gas marketing
business was approximately $190,000 lower than the same period
last year. However, the large customer increase experienced
over the last year should significantly benefit fourth quarter
2003 results.
Utility Operations
Continued Strong Customer Growth Fuels Utility
o At South Jersey Gas Company, our regulated utility, a larger
customer base, lower interest expenses and a 10% performance
improvement from our appliance service business offset the
effects of increased administrative expenses that include
health and pension costs. Because natural gas usage for
heating is typically minimal in the third quarter, expenses
associated with serving customers exceed revenues earned from
those customers. The utility net loss for the quarter of $3.8
million mirrored third quarter 2002 results.
o Fueled by new construction and conversions from other energy
sources, SJG's customer total climbed to 299,600 at September
30, 2003, an increase of 7,900 over the same period last year.
The 2.7% customer growth is well above the industry average of
1.5%. We continue to project that customer growth will be
close to 3% for the full year based upon the strength of
development in our service territory. Customer growth
contributes significantly to annual profitability.
o SJG took advantage of historically low interest rates by
issuing $110 million of long-term debt during the quarter at
an average weighted interest rate of 4.97% and with an average
life of 17 years. Proceeds of the debt were used to repay
short-term borrowings outstanding under existing lines of
credit. Those short-term line borrowings were incurred to
temporarily finance the expansion of SJG's gas distribution
system and to redeem high rate debt. During the quarter we
called $32 million of 6.95% First Mortgage Bonds, the
refinancing of which will provide an earnings benefit for the
remainder of 2003, 2004 and beyond.
Webcast and Conference Call Details
South Jersey Industries President and COO, Edward J. Graham, will host an open
conference call and webcast to discuss the company's third quarter 2003 earnings
on Tuesday, October 28, 2003 at 11:00 a.m. EST. To participate in the conference
call, dial 1-800-360-9865 approximately 10 minutes ahead of the scheduled time.
To listen to the live webcast, simply visit the South Jersey Industries
website at http://www.sjindustries.com and click the webcast icon. A recorded
version of the webcast will be available at SJI's website following the call. A
rebroadcast of the conference call will also be available by calling
1-800-428-6051 and entering the code: 309287. SJI encourages shareholders, media
and members of the financial community to attend the conference call and/or
listen to the webcast.
South Jersey Industries (NYSE: SJI) is an energy services holding
company for South Jersey Gas, South Jersey Energy, South Jersey Resources Group
and Marina Energy. Visit http://www.sjindustries.com for more information about
SJI and its subsidiaries.
###
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SJI Third Quarter Earnings Report-ADD 2
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This release contains forward-looking statements about SJI's financial
performance. The statements are made in good faith and deemed reasonable at the
date of this release. SJI assumes no responsibility to update this information.
Actual results may vary and SJI encourages you to conduct your own research
before making any investment decisions including a review of SJI's second
quarter 2003 SEC Form 10Q for a discussion of risks and/or uncertainties that
may cause actual results to vary.
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Page 3
SOURCE: DAVID A. KINDLICK 609-561-9000
STEPHEN H. CLARK
COMPANY NAME: SOUTH JERSEY INDUSTRIES, INC.
MARKET: N
STOCK SYMBOL: SJI
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
COMPARATIVE EARNINGS STATEMENTS
(In Thousands Except for Per Share Data)
UNAUDITED
Three Months Ended
September 30,
2003 2002
Operating Revenues:
Utility $ 53,267 $ 48,939
Nonutility 36,868 20,127
Total Operating Revenues 90,135 69,066
Operating Expenses:
Cost of Gas Sold - Utility 34,910 31,584
Cost of Sales - Nonutility 30,332 18,202
Operation and Maintenance 20,764 18,191
Energy and Other Taxes 1,414 1,446
Operating Income (Loss) 2,715 (357)
Other Income and Expense:
Equity in Affiliated Companies 170 287
Other 6 (54)
Total Other Income and Expense 176 233
Interest Charges * 5,836 5,161
Income Taxes (1,327) (2,063)
Loss from Continuing Operations (1,618) (3,222)
Discontinued Operations - Net (426) (18)
Cumulative Effect of a Change in
Accounting Principle - Net 0 0
Net Loss Applicable to Common Stock $ (2,044) $ (3,240)
Basic Earnings Per Common Share (Based on
Average Basic Common Shares Outstanding):
Continuing Operations $ (0.13) $ (0.27)
Discontinued Operations - Net (0.03) 0.00
Cumulative Effect of a Change in
Accounting Principle - Net 0.00 0.00
Basic Earnings Per Common Share $ (0.16) $ (0.27)
Average Common Shares Outstanding - Basic 12,604 12,084
Diluted Earnings Per Common Share (Based on
Average Diluted Common Shares Outstanding):
Continuing Operations $ (0.13) $ (0.27)
Discontinued Operations - Net (0.03) 0.00
Cumulative Effect of a Change in
Accounting Principle - Net 0.00 0.00
Diluted Earnings Per Common Share $ (0.16) $ (0.27)
Average Common Shares Outstanding - Diluted 12,604 12,084
Nine Months Ended
September 30,
2003 2002
Operating Revenues:
Utility $ 337,571 $ 253,897
Nonutility 138,605 76,400
Total Operating Revenues 476,176 330,297
Operating Expenses:
Cost of Gas Sold - Utility 231,943 157,902
Cost of Sales - Nonutility 121,231 66,896
Operation and Maintenance 60,137 54,033
Energy and Other Taxes 8,734 7,408
Operating Income 54,131 44,058
Other Income and Expense:
Equity in Affiliated Companies 549 653
Other (45) 556
Total Other Income and Expense 504 1,209
Interest Charges * 15,115 15,729
Income Taxes 16,345 12,321
Income from Continuing Operations 23,175 17,217
Discontinued Operations - Net (728) (168)
Cumulative Effect of a Change in
Accounting Principle - Net (426) 0
Net Income Applicable to Common Stock 22,021 17,049
Basic Earnings Per Common Share (Based on
Average Basic Common Shares Outstanding):
Continuing Operations $ 1.87 $ 1.44
Discontinued Operations - Net (0.06) (0.02)
Cumulative Effect of a Change in
Accounting Principle - Net (0.04) 0.00
Basic Earnings Per Common Share $ 1.77 $ 1.42
Average Common Shares Outstanding - Basic 12,412 11,996
Diluted Earnings Per Common Share (Based on
Average Diluted Common Shares Outstanding):
Continuing Operations $ 1.85 $ 1.43
Discontinued Operations - Net (0.06) (0.02)
Cumulative Effect of a Change in
Accounting Principle - Net (0.03) 0.00
Diluted Earnings Per Common Share $ 1.76 $ 1.41
Average Common Shares Outstanding - Diluted 12,508 12,068
Twelve Months Ended
September 30,
2003 2002
Operating Revenues:
Utility $ 469,794 $ 361,759
Nonutility 181,211 98,406
Total Operating Revenues 651,005 460,165
Operating Expenses:
Cost of Gas Sold - Utility 317,381 223,996
Cost of Sales - Nonutility 159,577 86,881
Operation and Maintenance 82,767 74,090
Energy and Other Taxes 12,132 10,184
Operating Income 79,148 65,014
Other Income and Expense:
Equity in Affiliated Companies 837 461
Other (67) 621
Total Other Income and Expense 770 1,082
Interest Charges * 20,119 21,418
Income Taxes 24,429 18,394
Income from Continuing Operations 35,370 26,284
Discontinued Operations - Net (984) (303)
Cumulative Effect of a Change in
Accounting Principle - Net (426) 0
Net Income Applicable to Common Stock $ 33,960 $ 25,981
Basic Earnings Per Common Share (Based on
Average Basic Common Shares Outstanding):
Continuing Operations $ 2.86 $ 2.20
Discontinued Operations - Net (0.08) (0.03)
Cumulative Effect of a Change in
Accounting Principle - Net (0.03) 0.00
Basic Earnings Per Common Share $ 2.75 $ 2.17
Average Common Shares Outstanding - Basic 12,350 11,957
Diluted Earnings Per Common Share (Based on
Average Diluted Common Shares Outstanding):
Continuing Operations $ 2.84 $ 2.19
Discontinued Operations - Net (0.08) (0.03)
Cumulative Effect of a Change in
Accounting Principle - Net (0.03) 0.00
Diluted Earnings Per Common Share $ 2.73 $ 2.16
Average Common Shares Outstanding - Diluted 12,446 12,025
* Net of rate recovery of carrying costs on certain unrecovered fuel and
environmental remediation expenses.