For Immediate Release
April 27, 2004
Telephone: 609-561-9000
Investor Relations Contact: Stephen Clark x4260
Public Relations Contact: Joanne Brigandi x4240
SJI Announces Record Earnings
Produces 7% Increase in Income from Continuing Operations
Reports Substantially Strengthened Balance Sheet
[Folsom, NJ] --South Jersey Industries (NYSE: SJI) today reported record
earnings from continuing operations for the first quarter of 2004 of $24.5
million up from first quarter 2003 results of $22.8 million. "Strong first
quarter performance confirms the effectiveness of our strategies and the
commitment of our employees," said SJI CEO Edward Graham. "The consistent,
sustained improvement of SJI's operating performance has enabled us to
substantially strengthen our balance sheet, ensuring the strength, safety and
reliability that our investors and our customers expect." The equity added to
SJI's balance sheet from additional shares of common stock sold over the past
year resulted in earnings per share of $1.82 from continuing operations for the
first quarter of 2004 compared with $1.85 for the first quarter of 2003.
"Following a strong first quarter SJI is well positioned to meet its goal of
producing 6% to 7% earnings per share growth for 2004," noted Graham.
Highlights For First Quarter 2004 Include:
Non-Utility Income Contribution Up 10% Percent: Earnings from non-utility
operations increased to $3.8 million for the first quarter of 2004, up from $3.4
million in the same quarter last year. Performance benefited from the following:
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o Marina Energy delivered $900,000 to SJI's bottom line. This represents
an $800,000 increase compared with the first quarter of 2003. Marina's
thermal energy plant serving the Borgata Resort in Atlantic City, N.J.,
accounted for most of the improvement. That facility became operational
in the third quarter of last year. Marina currently operates three
other projects and all were positive contributors to the earnings
improvement.
o South Jersey Energy's income rose 25%. SJE benefited from:
>> Strong customer growth in its retail gas marketing activities
during the past year. Total customers rose 14% to almost 94,000
as of March 31, 2004 from 83,000 at the comparable point in
2003.
>> Retail electric marketing activities that began in the second
quarter of last year contributed over $350,000 in the first
quarter of 2004.
In both its gas and electric marketing businesses, SJE fully hedges its
transactions to avoid commodity price risk.
o South Jersey Resources Group posts a first quarter profit and remains
on pace to meet its 2004 performance target. Existing gas contracts
will add significantly to income in the second and third quarters of
2004. First quarter comparative result were impacted by a change in
accounting requirements, resulting from FASB's rescission of EITF 98-10
that dealt with the accounting treatment of energy contracts. The
change provided a $400,000 expense reduction in the first quarter of
2003 that was treated as a cumulative effect of an accounting change.
Like SJE, SJRG fully hedges its gas transactions to avoid commodity
price risk.
Utility Business Produces Strong Performance: Income at South Jersey Gas rose
$1.3 million, or 7%, to $20.7 million in the first quarter compared with $19.4
million in 2003.
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Key contributing factors were:
o SJG added 8,277 customers to its customer base since March 2003. Our
2.8% customer growth rate continues to be well above the national
average of 1.8%. We continue to believe that customer growth will
approach 3% for the full year 2004.
o Interest expense decreases by $460,000. SJG benefited in the first
quarter of 2004 from actions taken in 2003 to refinance $75 million of
interest bearing securities with lower-cost debt. Also helping were
lower short-term interest rates and lower outstanding total debt.
SJI Completes Actions to Strengthen Balance Sheet: Year-to-date SJI has raised a
total of $18.4 million of equity through its dividend reinvestment plan (DRP).
Of that total, $11.7 million was raised in the first quarter of 2004 and the
remainder was added to equity at the beginning of April 2004. This was in
addition to $36.2 million raised through the DRP in 2003. Consequently, SJI's
equity ratio (the percentage of equity capital to total capital) improved from
41% at March 31, 2003 to 49% at March 31, 2004. We took this step to ensure that
SJI remains the safe, strong and reliable investment that our shareholders
expect and to maintain the financial flexibility necessary to seize the many
growth opportunities present at SJI's utility and non-utility operations. The
impact of increasing the number of SJI shares outstanding by 1,263,000 over the
last year is evident in the comparison of first quarter 2004 and 2003 earnings
per share results. As of April 2004, SJI is at our target equity capitalization
level.
Webcast and Conference Call Details
South Jersey Industries President and CEO, Edward J. Graham, will be
hosting an open conference call and webcast to discuss the company's first
quarter 2004 earnings on Tuesday, April 27, 2004 at 11:00 a.m. EDT. To
participate in the conference call,
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dial 1-800-901-5213, approximately 10 minutes ahead of the scheduled time,
provide the pass code of 44433970.
To listen to a live webcast, simply visit the South Jersey Industries
website at HTTP://WWW.SJINDUSTRIES.COM, click Investors and then 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 1-888-286-8010 and entering the code: 15048766. SJI
encourages shareholders, media and members of the financial community to attend
the conference call and/or listen to the webcast.
Forward-Looking Statements
This news release contains forward-looking statements. While these
statements represent our current judgment on what the future may hold, and we
believe these judgments are reasonable, actual results may differ materially due
to numerous important factors that are described in SJI's most recent report on
SEC Form 10-K. SJI assumes no duty to update these statements should actual
events differ from expectations.
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.
###
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
March 31,
------------------------------
2004 2003
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Operating Revenues:
Utility $ 195,278 $ 216,139
Nonutility 110,196 63,686
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Total Operating Revenues 305,474 279,825
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Operating Expenses:
Cost of Gas Sold - Utility 131,391 155,068
Cost of Sales - Nonutility 100,989 56,216
Operation and Maintenance 22,769 19,533
Energy and Other Taxes 4,872 5,114
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Operating Income 45,453 43,894
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Other Income and Expense:
Equity in Affiliated Companies 156 187
Other 721 (116)
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Total Other Income and Expense 877 71
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Interest Charges * 4,961 4,749
Income Taxes 16,910 16,379
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Income from Continuing Operations 24,459 22,837
Discontinued Operations - Net (140) (149)
Cumulative Effect of a Change in
Accounting Principle - Net - (426)
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Net Income Applicable to Common Stock $ 24,319 $ 22,262
============== ==============
Basic Earnings Per Common Share (Based on
Average Basic Common Shares Outstanding):
Continuing Operations $ 1.83 $ 1.86
Discontinued Operations - Net (0.01) (0.01)
Cumulative Effect of a Change in
Accounting Principle - Net - (0.03)
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Basic Earnings Per Common Share $ 1.82 $ 1.82
============== ==============
Average Common Shares Outstanding - Basic 13,392 12,245
Diluted Earnings Per Common Share (Based on
Average Diluted Common Shares Outstanding):
Continuing Operations $ 1.82 $ 1.85
Discontinued Operations - Net (0.01) (0.01)
Cumulative Effect of a Change in
Accounting Principle - Net - (0.03)
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Diluted Earnings Per Common Share $ 1.81 $ 1.81
============== ==============
Average Common Shares Outstanding - Diluted 13,461 12,327
Twelve Months Ended
March 31,
------------------------------
2004 2003
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Operating Revenues:
Utility $ 466,817 $ 460,078
Nonutility 255,652 147,842
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Total Operating Revenues 722,469 607,920
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Operating Expenses:
Cost of Gas Sold - Utility 308,786 310,966
Cost of Sales - Nonutility 229,765 132,110
Operation and Maintenance 92,728 78,887
Energy and Other Taxes 11,788 12,077
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Operating Income 79,402 73,880
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Other Income and Expense:
Equity in Affiliated Companies 755 964
Other 973 492
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Total Other Income and Expense 1,728 1,456
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Interest Charges * 20,828 20,071
Income Taxes 24,127 22,734
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Income from Continuing Operations 36,175 32,531
Discontinued Operations - Net (765) (541)
Cumulative Effect of a Change in
Accounting Principle - Net - (426)
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Net Income Applicable to Common Stock $ 35,410 $ 31,564
============== ==============
Basic Earnings Per Common Share (Based on
Average Basic Common Shares Outstanding):
Continuing Operations $ 2.82 $ 2.68
Discontinued Operations - Net (0.06) (0.05)
Cumulative Effect of a Change in
Accounting Principle - Net - (0.03)
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Basic Earnings Per Common Share $ 2.76 $ 2.60
============== ==============
Average Common Shares Outstanding - Basic 12,846 12,121
Diluted Earnings Per Common Share (Based on
Average Diluted Common Shares Outstanding):
Continuing Operations $ 2.80 $ 2.66
Discontinued Operations - Net (0.06) (0.04)
Cumulative Effect of a Change in
Accounting Principle - Net - (0.03)
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Diluted Earnings Per Common Share $ 2.74 $ 2.59
============== ==============
Average Common Shares Outstanding - Diluted 12,942 12,211
* Net of rate recovery of carrying costs on certain
unrecovered fuel and environmental remediation
expenses.