For Immediate Release
April 20, 2005
Telephone: 609-561-9000
Investor Relations Contact: Stephen Clark x4260
Public Relations Contact: Joanne Brigandi x4240
SJI Reports Record First Quarter 2005 Results
Income from Continuing Operations Jumps 10%
Earnings per Share from Continuing Operations Rises 5.5%
[Folsom, NJ] --South Jersey Industries (NYSE: SJI) today reported record
earnings from continuing operations for the first quarter of 2005 of $26.9
million, a 10% increase over first quarter 2004 results of $24.5 million.
Earnings per share from continuing operations rose 5.5% to $1.92 as compared
with $1.82 for the prior year period. SJI's utility and non-utility operations
were both significant contributors to the performance improvement. "I am pleased
to report that SJI continues to deliver the strong performance that our
shareholders have come to expect," said SJI CEO Edward Graham. "Performance such
as that achieved in this record first quarter, combined with a number of actions
and initiatives that provide long-range benefits, position SJI to meet its goal
of producing 6-7% average long-term earnings per share growth," stated Graham.
Highlights For First Quarter 2005 Include:
Utility Business Income Contribution Increases 9%: Income at South Jersey Gas
rose $1.9 million to $22.6 million in the first quarter compared with $20.7
million for the same period in 2004. Key contributing factors were:
Cover Page
o SJG added 9,054 customers since March 2004. Our 3% customer growth rate
is almost double the national average for gas utilities. Our
expectation is that customer growth will remain at this pace for the
remainder of 2005. Customer additions added $850,000 to income for the
quarter.
o Utility margins continue to benefit from rate case. SJG continued to
benefit in the first quarter of 2005 from the July 2004 base rate case
settlement. Restructured rates added $3.9 million to income for the
quarter. The case was also responsible for a reduction in depreciation
expense recorded by SJG that contributed $650,000 to net income for the
period. While base rates increased as a result of the settlement,
customer bills actually declined as certain cost recovery clauses were
revised or eliminated to reflect current conditions.
o Weather negatively impacted quarterly comparisons. Degree days that
were 1.5% warmer than last year combined with less favorable use
factors to reduce net income by $600,000. SJG has a weather
normalization clause in its rates that protects both the company and
its customers from the impacts of temperatures that vary significantly
from normal.
Non-Utility Income Contribution Up 15%: Earnings from non-utility operations
increased to $4.3 million for the first quarter of 2005, up from $3.8 million in
the same quarter last year. Performance benefited from the following:
o Commodity marketing results up 15%. Commodity marketing added $3.2
million to SJI's bottom line during the first quarter of 2005, up from
$2.8 million for the same period in 2004. The improved performance was
due to higher margins produced by SJI's wholesale activities. That
performance offset declines in retail commodity marketing that resulted
from lower customer levels. Market conditions for gas prices made it
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more economical for consumers to purchase gas from the utility, rather
than marketers. Also, a reserve established for receivables from a
customer that filed for Chapter 11 bankruptcy protection resulted in a
$650,000 after-tax charge.
o On-site energy production adds one new facility and signs two more. In
March 2005, commercial operations commenced at our landfill gas-fired
electric generation facility in Atlantic County, NJ. We also recently
signed contracts for two additional projects. In March 2005, we reached
an agreement with the Borgata Casino, Hotel & Spa to provide for all of
the energy needs for their previously announced 500,000 sq. ft.
expansion project into 2026. We will expand our existing thermal energy
facility to provide this service and expect this project to be
operational by mid-2006. In April 2005, we entered into an agreement
with the Pollution Control Financing Authority of Warren County (NJ) to
develop and operate another landfill gas generation facility, similar
to the project we just completed in Atlantic County. These contracts
bring our total number of projects in development to three, including
the energy facility being developed for Seneca Gaming's Niagara Falls
casino. Marina currently has four operating projects. This business
line delivered $640,000 to SJI's bottom line for the quarter.
Contribution to net income declined by about $270,000 compared with the
first quarter of 2004, primarily due to the non-recurrence of a State
of New Jersey thermal energy credit received in the first quarter of
2004.
o Appliance Service contribution jumps 54%. Higher levels of appliance
service contracts, price increases implemented in the fall of 2004, an
expanding installation business, and productivity initiatives combined
to boost income from our appliance service business to $420,000 for the
quarter.
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Balance Sheet Improvement Continues: The strength of SJI's financial position,
as measured by the equity-to-total capitalization ratio, continued to improve
during the first quarter of 2005. The combination of strong earnings and new
equity, raised primarily during 2004, resulted in an equity ratio of 51% at
March 31, 2005, compared with 48% at the same point in 2004. Our target is to
maintain an average annual equity ratio of close to 50%. Management remains
committed to maintaining SJI's current low-to-moderate risk profile, even while
taking advantage of the many growth opportunities present for both SJI's utility
and non-utility operations. SJI is particularly focused on managing risk at our
non-utility operations. Examples include our plan to maintain fully hedged
positions in our commodity marketing businesses and ensuring project revenue
streams with long-term contracts.
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 2005 earnings on Wednesday, April 20, 2005 at 11:00 a.m. EDT. To
participate in the conference call, dial 1-800-599-9829, approximately 10
minutes ahead of the scheduled time, provide the pass code of 37048398.
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: 91370915. SJI
encourages shareholders, media and members of the financial community to attend
the conference call and/or listen to the webcast.
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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,
Marina Energy, and South Jersey Energy Service Plus. SJI markets an array of
retail and wholesale energy products and services throughout the mid-Atlantic
and southeastern United States.Visit http://www.sjindustries.com for more
information about SJI and its subsidiaries.
###
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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,
----------------------------
2005 2004
------------ -------------
Operating Revenues:
Utility $ 212,167 $ 197,414
Nonutility 116,403 110,196
------------ -------------
Total Operating Revenues 328,570 307,610
------------ -------------
Operating Expenses:
Cost of Sales - Utility 141,975 132,250
Cost of Sales - Nonutility 103,141 100,989
Operation and Maintenance 27,563 24,046
Energy and Other Taxes 5,158 4,872
------------ -------------
Operating Income 50,733 45,453
------------ -------------
Other Income and Expense:
Equity in Affiliated Companies 194 156
Other 384 721
------------ -------------
Total Other Income and Expense 578 877
------------ -------------
Interest Charges * 5,305 4,960
Income Taxes 19,114 16,911
------------ -------------
Income from Continuing Operations 26,892 24,459
Discontinued Operations - Net (144) (140)
------------ -------------
Net Income Applicable to Common Stock $ 26,748 $ 24,319
============ =============
Basic Earnings Per Common Share (Based on
Average Basic Common Shares Outstanding):
Continuing Operations $ 1.93 $ 1.83
Discontinued Operations - Net (0.01) (0.01)
------------ -------------
Basic Earnings Per Common Share $ 1.92 $ 1.82
============ =============
Average Common Shares Outstanding - Basic 13,900 13,392
Diluted Earnings Per Common Share (Based on
Average Diluted Common Shares Outstanding):
Continuing Operations $ 1.92 $ 1.82
Discontinued Operations - Net (0.01) (0.01)
------------ -------------
Diluted Earnings Per Common Share $ 1.91 $ 1.81
============ =============
Average Common Shares Outstanding - Diluted 14,000 13,461
Twelve Months Ended
March 31,
----------------------------
2005 2004
------------ -------------
Operating Revenues:
Utility $ 509,701 $ 475,310
Nonutility 330,335 255,652
------------ -------------
Total Operating Revenues 840,036 730,962
------------ -------------
Operating Expenses:
Cost of Sales - Utility 336,706 311,781
Cost of Sales - Nonutility 289,866 229,766
Operation and Maintenance 105,160 98,226
Energy and Other Taxes 12,285 11,787
------------ -------------
Operating Income 96,019 79,402
------------ -------------
Other Income and Expense:
Equity in Affiliated Companies 939 755
Other 648 973
------------ -------------
Total Other Income and Expense 1,587 1,728
------------ -------------
Interest Charges * 20,918 20,827
Income Taxes 31,282 24,127
------------ -------------
Income from Continuing Operations 45,406 36,176
Discontinued Operations - Net (684) (766)
------------ -------------
Net Income Applicable to Common Stock $ 44,722 $ 35,410
============ =============
Basic Earnings Per Common Share (Based on
Average Basic Common Shares Outstanding):
Continuing Operations $ 3.29 $ 2.82
Discontinued Operations - Net (0.05) (0.06)
------------ -------------
Basic Earnings Per Common Share $ 3.24 $ 2.76
============ =============
Average Common Shares Outstanding - Basic 13,818 12,846
Diluted Earnings Per Common Share (Based on
Average Diluted Common Shares Outstanding):
Continuing Operations $ 3.26 $ 2.80
Discontinued Operations - Net (0.05) (0.06)
------------ -------------
Diluted Earnings Per Common Share $ 3.21 $ 2.74
============ =============
Average Common Shares Outstanding - Diluted 13,936 12,942
* Net of rate recovery of carrying costs on certain unrecovered fuel and
environmental remediation expenses.
FOR IMMEDIATE RELEASE