Exhibit 99-1
SJW CORP. (NYSE: SJW) ANNOUNCES THIRD QUARTER 2006
FINANCIAL RESULTS
SAN JOSE, CA, October 26, 2006 - SJW Corp. (NYSE:SJW) diluted earnings per
common share for the quarter ended September 30, 2006 were $0.48, compared to
$0.50 for the same quarter in 2005. The decrease is due to the inclusion of the
net of tax gain on the sale of nonutility property of $1,095,000, or $0.06
per share, in the third quarter of 2005.
Operating revenue for the third quarter was $63,119,000 versus $58,469,000
for the same period in 2005, representing an increase of $4,650,000 or 8%.
Revenues increased $1,825,000 due to new customers, of which approximately
$1,500,000 is attributable to SJW Corp.'s acquisition of a Texas water system
known as Canyon Lake Water Service Company. In addition, revenues increased
$1,572,000 in higher customer usage, $1,019,000 in cumulative rate increases
and $234,000 in other revenues.
Water production costs for the third quarter of 2006 increased $1,836,000
from the third quarter of 2005. The increase in production costs was primarily
attributable to $941,000 increase in the cost of purchased water and pump tax
from Santa Clara Valley Water District, $987,000 increase in usage and new
customers, including purchased water for Canyon Lake Water Service Company and
an increase in other costs of $208,000, partially offset by a decrease of
$300,000 as a result of greater availability of the least expensive source of
water which is surface water.
Quarterly operating expenses for the third quarter of 2006, excluding water
production costs and income taxes, increased $1,312,000 from 2005. The increase
consisted principally of $321,000 in general and administrative costs,
primarily as a result of the operations of Canyon Lake Water Service Company
included in the third quarter of 2006. In addition, depreciation expense
increased $466,000 as a result of growth in utility plant, other operating and
maintenance expenses increased $436,000 and taxes other than income taxes
increased $89,000. Included in the earnings of the third quarter of 2005 was
the net of tax gain on the sale of nonutility property of $1,095,000. Income
tax expense increased $364,000 for the third quarter in 2006 due to increased
pre-tax earnings.
Year-to-date diluted earnings per common share were $1.05 compared to $0.96
for the same period in 2005. The increase in year-to-date earnings was
primarily due to higher customer demand and an increase in new customers, which
is primarily attributable to Canyon Lake Water Service Company. Year-to-date
operating revenue increased $8,159,000 or 6%, due to new customers of
$2,798,000, higher customer demand of $2,660,000, cumulative rate increases of
$1,989,000 and $712,000 in real estate and other revenues.
Year-to-date water production costs increased by $1,929,000 and were
primarily attributable to $1,777,000 increase in the cost of purchased water
and pump tax, $1,795,000 increase in usage, and other costs of $287,000,
partially offset by a decrease of $1,930,000 as a result of greater
availability of surface water. Non-water production costs increased $3,454,000
and were primarily attributable to $776,000 in other expenses, which included
an increase in employees and operating expenses, largely attributable to Canyon
Lake Water Service Company. In addition, depreciation expense increased
$1,056,000, general and administrative costs increased $771,000, maintenance
costs increased $675,000 and taxes other than income taxes increased $176,000.
Income tax expense increased by $936,000 due to increased pre-tax earnings.
Other comprehensive income of $772,000 and other comprehensive loss of
$844,000, net of tax, for the third quarter of 2006 and year-to-date,
respectively, were the result of changes in the market value of the investment
in California Water Service Group.
At its meeting today, the Board of Directors of SJW Corp. declared a
quarterly dividend on common stock of $0.14125 per share. The dividend is
payable on December 1, 2006 to shareholders of record on November 6, 2006.
SJW Corp. is a publicly traded holding company headquartered in San Jose,
California. SJW Corp. is the parent company of San Jose Water Company, Canyon
Lake Water Service Company, SJW Land Company and Crystal Choice Water Service,
LLC. Together these companies provide regulated and nonregulated water service
to more than one million people in San Jose, California and nearby communities
and Canyon Lake, Texas. SJW Land Company owns and operates parking facilities,
commercial buildings, undeveloped land, has a majority interest in a real
estate partnership and has properties in the states of California, Florida,
Connecticut, Texas and Arizona.
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. Certain factors that may cause actual results, performance or
achievements to materially differ are described in SJW Corp.'s most recent
reports on Form 10-K, Form 10-Q and Form 8-K filed with the Securities and
Exchange Commission. 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
2006 2005 2006 2005 2006 2005
---------------------------------------------------------
Operating revenue $63,119 58,469 $144,734 136,575 $188,264 174,516
Operating expense:
Operation:
Purchased water 16,067 15,512 34,233 34,431 44,755 43,080
Power 2,415 1,872 4,137 3,392 5,063 4,383
Pump taxes 8,023 7,285 14,527 13,145 18,744 17,629
---------------------------------------------------------
Total production
costs 26,505 24,669 52,897 50,968 68,562 65,092
Administrative
and general 5,632 5,311 15,670 14,899 21,468 18,928
Other 3,709 3,701 11,084 10,308 14,959 13,556
Maintenance 2,680 2,252 7,308 6,633 10,151 8,803
Taxes, other than
income taxes 1,565 1,476 4,414 4,238 5,849 5,547
Depreciation and
amortization 5,508 5,042 15,984 14,928 20,710 19,619
Income taxes 6,119 5,755 12,558 11,622 15,709 14,710
---------------------------------------------------------
Total operating
expense 51,718 48,206 119,915 113,596 157,408 146,255
---------------------------------------------------------
Operating income 11,401 10,263 24,819 22,979 30,856 28,261
Sale of nonutility
property, net of
taxes of $761 for
2005 and $1,056
for 2006 - 1,095 1,535 1,095 1,535 4,870
Long-term debt interest
and other, net (2,543) (2,131) (6,822) (6,451) (8,643) (7,833)
---------------------------------------------------------
Net income $8,858 9,227 $19,532 17,623 $23,748 25,298
=========================================================
Other comprehensive
income (loss), net 772 2,375 (844) 2,304 (5,055) 7,950
----------------------------------------------------------
Comprehensive income $9,630 11,602 $18,688 19,927 $18,693 33,248
==========================================================
Earnings per share
- Basic $ 0.48 0.51 $ 1.07 0.97 $ 1.30 1.39
- Diluted 0.48 0.50 1.05 0.96 1.28 1.37
Dividends per share $ 0.14 0.13 $ 0.42 0.40 $ 0.55 0.53
Weighted average shares
outstanding
- Basic 18,277,728 18,270,882 18,273,558 18,271,420 18,272,883 18,271,280
- Diluted 18,558,508 18,500,982 18,539,781 18,469,448 18,532,959 18,456,484
SJW Corp.
Condensed Consolidated Balance Sheets
(Unaudited)
(thousands of dollars)
September 30 December 31
2006 2005
----------------------------
ASSETS
Utility Plant $730,901 $664,117
Less: accumulated depreciation and amortization 231,641 208,909
----------------------------
Net utility plant 499,260 455,208
Nonutility property, net 44,042 34,850
Current assets:
Cash and equivalents 2,896 9,398
Accounts receivable and accrued utility revenue 32,737 19,851
Long-lived assets held-for-sale 2,738 149
Prepaid expenses and other 2,639 2,294
----------------------------
Total current assets 41,010 31,692
Other assets:
Investment in California Water Service Group 40,621 42,051
Debt issuance costs 3,007 3,131
Regulatory assets 13,119 13,037
Other 7,327 7,740
----------------------------
64,074 65,959
----------------------------
$648,386 $587,709
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CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock $ 9,521 $ 9,516
Additional paid-in capital 16,166 15,368
Retained earnings 172,208 160,588
Accumulated other comprehensive income 9,592 10,436
----------------------------
Shareholders' equity 207,487 195,908
Long-term debt 148,692 145,281
----------------------------
Total capitalization 356,179 341,189
Current Liabilities:
Line of credit 28,000 -
Current portion of long-term debt 494 332
Pump tax and purchased water 7,424 3,985
Purchased power 880 804
Accounts payable 9,374 5,120
Accrued interest 2,429 3,618
Accrued taxes 5,181 1,619
Other current liabilities 6,446 5,466
----------------------------
Total current liabilities 60,228 20,944
Deferred income taxes and credits 53,603 54,100
Advances and contributions 162,278 154,235
Other noncurrent liabilities 16,098 17,241
----------------------------
$648,386 $587,709
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