PRESS RELEASE EXHIBIT 99.1
Wire Release - National Circuit
For Release at 5:00 P.M. (Pacific Time)
Page 1 of 4
October 28, 2004 Richard Balocco (408) 279-7933
San Jose, California V.P. Corporate Communication
SJW CORP. ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
SAN JOSE, CA, October 28, 2004 - SJW Corp. (AMEX:SJW) basic
earnings per common share for the quarter ended September 30,
2004 were $0.61, compared to $0.66 for the same quarter in 2003.
Operating revenue for the third quarter was $52,297,000
versus $49,514,000 for the same period in 2003, representing an
increase of $2,783,000 or 6%. Approximately $3,050,000 of the
total revenue increase was attributable to cumulative customer
rate increases. Additionally, customer growth contributed
$176,000 to increased revenue and other revenues increased by
$163,000. The revenue increases were offset by a $606,000
decrease due to lower usage.
Water production costs for the third quarter of 2004
consisting of purchased water, power and pump taxes, increased
$1,754,000, or 4% from the third quarter of 2003. The increase
were due to the higher combined cost of purchased water and pump
taxes of $1,620,000 and reduced surface water availability of
$731,000, offset by a decrease in customer demand of $525,000 and
lower non-contract water and power costs of $72,000.
Quarterly operating expenses for the third quarter of 2004,
excluding water production costs and income taxes, increased
$1,291,000 or 3% from 2003. The increases consisted principally
of $309,000 in labor and labor related expenses, $858,000 in
depreciation expense on added utility plant and other nonutility
properties, and $124,000 in other costs. Income tax expense for
the third quarter of 2004 was lower than the same period in 2003
due to decreased earnings.
The year-to-date revenue increase of $13,335,000 was
attributable to higher water usage of $4,739,000, customer growth
of $337,000, rate increases of $7,318,000 and other revenue
increase of $941,000. The revenue increase was offset by
increases in production and operating expenses of $12,748,000,
consisting principally of $8,062,000 in water production costs,
$1,063,000 in wages, salaries and stock compensation, $1,230,000
in administrative and general expenses and $2,393,000 in
depreciation expense. Year-to-date basic earnings per common
share were $1.33 compared to $1.72 for the same period in 2003.
The decrease in year-to-date earnings was mainly due to the sale
of a SJW Land Company property in the first quarter of 2003,
which resulted in an after-tax gain of $3,030,000, or $0.33 per
share.
Other comprehensive income of $1,181,000 and $1,278,000, for
the three and nine months ended September 30, 2004, respectively,
was the result of changes in the market value of the investment
in California Water Service Group.
In January 2004, SJW Corp. adopted Interpretation No. 46(R),
"Consolidation of Variable Interest Entities" issued by the
Financial Accounting Standard Board. As a result, SJW Corp. has
restated its previously reported September 30, 2003 consolidated
financial statements.
At its meeting today, the Board of Directors of SJW Corp.
declared a quarterly dividend on common stock of $0.255 per
share. The dividend is payable on December 1, 2004 to
shareholders of record on November 8, 2004.
SJW Corp. is a publicly traded holding company headquartered
in San Jose, California. SJW Corp., through its subsidiary San
Jose Water Company, provides water service to a population of
approximately one million people in the City of San Jose and
nearby communities.
This press release may contain certain forward-looking statements
including but not limited to statements relating to SJW Corp.'s
plans, strategies, objectives, expectations and intentions, which
are made pursuant to the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These forward-
looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance
or achievements of SJW Corp. to be materially different from any
future results, performance or achievements expressed or implied
by such forward-looking statements. SJW Corp. undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events
or otherwise.
SJW Corp.
Condensed Consolidated Statements of Income and Comprehensive Income
(Unaudited)
(thousands of dollars, except share data)
Three Months Nine Months Twelve Months
Ended Sept 30 Ended Sept 30 Ended Sept 30
2004 2003 2004 2003 2004 2003
(Restated) (Restated) (Restated)
----------------- ----------------- -----------------
Operating revenue $52,297 49,514 $128,969 115,634 $163,787 148,719
Operating expense:
Operation:
Purchased Water 14,396 13,371 32,572 28,291 40,989 37,345
Power 2,108 2,147 4,519 4,260 5,555 5,568
Pump Tax 8,266 7,498 17,289 13,767 21,452 17,312
Other 7,570 7,323 22,900 21,567 30,119 27,890
Maintenance 2,216 2,069 6,503 5,745 8,482 7,801
Property taxes and
other nonincome
taxes 1,352 1,313 4,006 3,804 5,267 5,041
Depreciation and
amortization 4,689 3,831 13,789 11,396 17,618 14,902
Income taxes 3,960 4,024 8,556 8,496 10,584 10,482
---------------------------------------------------------
Total operating
expense 44,557 41,576 110,134 97,326 140,066 126,341
---------------------------------------------------------
Operating income 7,740 7,938 18,835 18,308 23,721 22,378
Other income (expense):
Gain on sale of non-
utility property, net - - - 3,030 - 3,030
Long-term debt interest
and other, net (2,210) (1,971) (6,724) (5,663) (8,608) (7,016)
---------------------------------------------------------
Net income $ 5,530 5,967 $12,111 15,675 $ 15,113 18,392
=========================================================
Other comprehensive
income (loss), net 1,181 (1,499) 1,278 1,402 1,911 (138)
---------------------------------------------------------
Comprehensive income $ 6,711 4,468 $ 13,389 17,077 $ 17,024 18,254
=========================================================
Earnings per share
- Basic $ 0.61 0.66 $ 1.33 1.72 $ 1.65 2.01
- Diluted $ 0.60 0.65 $ 1.32 1.71 $ 1.64 2.01
Comprehensive income
per share
- Basic $ 0.74 0.49 $ 1.47 1.87 $ 1.86 2.00
- Diluted $ 0.73 0.49 $ 1.46 1.87 $ 1.85 2.00
Dividends per share $ 0.25 0.24 $ 0.76 0.73 $ 1.01 0.96
Weighted average
shares outstanding
- Basic 9,137,433 9,135,441 9,136,986 9,135,441 9,136,599 9,135,441
- Diluted 9,198,718 9,152,832 9,193,627 9,141,237 9,188,266 9,139,788
SJW Corp. has restated its previously reported 2003 Consolidated Statements of
Income and Comprehensive Income as a result of adopting Interpretation No.
46(R), "Consolidation of Variable Interest Entities" (FIN46R). As a result of
the adoption of FIN46R, SJW Corp. has consolidated its limited partnership
interest in 444 West Santa Clara Street, L.P.
SJW Corp.
Condensed Consolidated Balance Sheets
(Unaudited)
(thousands of dollars)
Sept 30 Dec 31
2004 2003
(Restated)
ASSETS -------- --------
Utility Plant $615,592 $583,709
Less accumulated depreciation and amortization 188,441 174,985
-------- --------
Net utility plant 427,151 408,724
Nonutility property, net 32,336 32,569
Current assets:
Cash and equivalents 6,489 10,278
Accounts receivable and accrued utility revenue 24,096 15,043
Prepaid expenses and other 2,589 2,019
-------- ---------
Total current assets 33,174 27,340
Other assets:
Investment in California Water Service Group 32,306 30,139
Regulatory assets 8,409 7,976
Other 9,520 9,496
-------- -------
$542,896 $516,244
======== ========
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock and additional paid-in capital $ 23,512 $ 22,891
Retained earnings 143,240 138,058
Accumulated other comprehensive income 6,698 5,419
-------- -------
Shareholders? equity 173,450 166,368
Long-term debt 143,898 143,947
-------- -------
Total capitalization 317,348 310,315
Current Liabilities:
Line of credit - -
Accounts payable 14,062 5,441
Other current liabilities 14,541 9,635
-------- -------
Total current liabilities 28,603 15,076
Deferred income taxes and credits 42,715 38,207
Advances for and contributions in aid of construction 142,885 141,122
Other noncurrent liabilities 11,345 11,524
-------- -------
$542,896 $516,244
======== ========
SJW Corp. has restated its previously reported December 31, 2003 Consolidated
Balance Sheets as a result of adopting FIN46R. As a result of the adoption of
FIN46R, SJW Corp. has consolidated its limited partnership interest in 444
West Santa Clara Street, L.P.