Exhibit 99.1
SJW CORP. (NYSE: SJW) ANNOUNCES
SECOND QUARTER FINANCIAL RESULTS
Board Declares Quarterly Dividend on Common Stock
SAN JOSE, CA, July 26, 2007 - SJW Corp. (NYSE: SJW) today reported net
income of $5,406,000 for the quarter ended June 30, 2007, or diluted earnings
per common share of $0.29, compared to $6,471,000 or $0.35 per share for the
same quarter in 2006.
Operating revenue for the second quarter was $55,135,000 versus $47,873,000
for the same period in 2006, representing an increase of $7,262,000.
Approximately $3,505,000 of the total revenue increase was attributable to
increased customer demand, $2,282,000 was from cumulative rate increases,
$1,086,000 was from new connections, and $389,000 was from other sources.
Total water production costs for the second quarter of 2007, consisting of
purchased water, energy and groundwater extraction charges increased $7,065,000.
Of this increase in production costs, $3,164,000 was attributable to decreases
in our surface water supply necessitating additional purchased water, $3,129,000
was due to higher customer demand and $772,000 was due to higher per unit costs
for groundwater extraction, purchased water and energy. Overall, water
production cost as a percentage of revenue increased from 36% in the second
quarter of 2006 to 44% in the second quarter of 2007. The increase in the water
production cost was the primary factor that produced operating income that
compares unfavorably with a year ago.
"In California we are in a period of below average rainfall and reduced
supply of our lowest-cost water, which is surface water," said W. Richard Roth,
President and Chief Executive Officer of SJW Corp. "The result is that in the
second quarter compared to a year ago, we delivered more purchased water and
groundwater, with their inherently higher costs. We believe our water resources
in California, however, are adequate to address our customers' needs for the
foreseeable future."
He added, "We see the impact on our results from fluctuating water
conditions in California as validation of our moves to diversify revenues, and
we are pleased with the performance of our real estate portfolio businesses."
Total quarterly maintenance expenses increased $672,000 in the second
quarter of 2007 from 2006 due to $388,000 which is attributable to higher leak
repairs and $165,000 in increased labor costs. Nonwater production cost
increases include a depreciation expense increase of $386,000, administrative
and general expense increase of $318,000, and taxes other than income and other
increase of $108,000. Income tax expense decreased $710,000 in the second
quarter of 2007 versus the second quarter of 2006.
Year-to-date diluted earnings per common share were $0.41 compared to $0.58
for the same period in 2006. The decrease in year-to-date earnings was
primarily due to the increase in water production costs which is attributable to
the lack of surface water supply and the sale of nonutility property in the
first quarter of 2006 which contributed approximately $0.08 per share to
earnings.
Year-to-date operating revenue increased $12,537,000 due to increased
customer demand of $4,958,000, cumulative rate increases of $4,566,000, new
customers of $2,451,000 and $562,000 from other sources.
Year-to-date water production costs increased by $11,518,000 and were
primarily attributable to $5,349,000 decreases in our surface water supply,
$5,050,000 was due to higher customer demand and $1,119,000 was spent on
higher costs for groundwater extraction, purchased water and energy. Nonwater
production costs increased $3,166,000 and were primarily attributable to
$1,159,000 in maintenance expenses, $1,017,000 in administrative and general
costs, $809,000 in depreciation expense and $181,000 in taxes other than income
and other expenses. Income tax expense decreased $1,198,000 for year-to-date.
Other comprehensive loss of $539,000 and $1,889,000, net of tax, for the
second quarter of 2007 and year-to-date, was due to a decrease in the market
value of the investment in California Water Service Group.
The Directors of SJW Corp. today declared a quarterly dividend on common
stock of $0.15125 per share. The dividend is payable on September 1, 2007 to
shareholders of record on August 6, 2007.
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 and SJW Land Company. Together, San Jose Water
Company and Canyon Lake Water Service Company 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
commercial buildings, has a majority interest in a real estate partnership, and
has properties in the states of California, Florida, Connecticut, Texas, Arizona
and Tennessee.
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 and per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
2007 2006 2007 2006
-----------------------------------------
OPERATING REVENUE $55,135 47,873 94,152 81,615
OPERATING EXPENSE:
Operation:
Purchased water 13,287 11,512 22,613 18,166
Power 2,264 1,162 3,176 1,722
Groundwater extraction charge 8,555 4,367 12,121 6,504
-----------------------------------------
Total production costs 24,106 17,041 37,910 26,392
Administrative and general 5,265 4,947 11,055 10,038
Other 3,628 3,715 7,249 7,375
Maintenance 2,995 2,323 5,787 4,628
Taxes, other than income 1,574 1,379 3,156 2,849
Depreciation & amortization 5,672 5,286 11,285 10,476
Income taxes 3,835 4,545 5,241 6,439
---------------------------------------
Total operating expense 47,075 39,236 81,683 68,197
---------------------------------------
OPERATING INCOME 8,060 8,637 12,469 13,418
Gain on sale of nonutility property,
net of taxes of $1,056 - - - 1,535
Interest on long-term debt
and other (2,654) (2,166) (4,941) (4,279)
---------------------------------------
NET INCOME $5,406 6,471 7,528 10,674
=======================================
Other comprehensive income
(loss), net (539) (6,042) (1,889) (1,616)
---------------------------------------
COMPREHENSIVE INCOME $4,867 429 5,639 9,058
=======================================
Earnings per share
-Basic $0.30 0.35 0.41 0.58
-Diluted $0.29 0.35 0.41 0.58
Dividend per share $0.15 0.14 0.30 0.28
Weighted average shares outstanding
- Basic 18,324,819 18,271,608 18,312,604 18,271,439
- Diluted 18,539,267 18,530,671 18,528,363 18,530,384
SJW Corp.
Condensed Consolidated Balance Sheets
(Unaudited)
(thousands of dollars, except share and per share data)
June 30 December 31
2007 2006
-------------------------
ASSETS
UTILITY PLANT:
Land $ 5,668 4,837
Depreciable plant and equipment 743,335 716,679
Construction in progress 15,864 10,863
Intangible assets 8,040 8,040
--------------------------
Total utility plant 772,907 740,419
Less accumulated depreciation and amortization 245,930 234,173
--------------------------
Net utility plant 526,977 506,246
NONUTILITY PROPERTY: 88,010 43,868
Less accumulated depreciation and amortization 2,921 3,303
Net nonutility property 85,089 40,565
--------------------------
CURRENT ASSETS:
Cash and cash equivalents 5,693 3,788
Accounts receivable and accrued
unbilled utility revenue 30,407 21,956
Sale proceeds held in trust account - 31,261
Prepaid expenses and other 1,975 2,470
--------------------------
Total current assets 38,075 59,475
OTHER ASSETS:
Investment in California Water Service Group 41,237 44,438
Unamortized debt issuance and
reacquisition costs 3,310 3,220
Regulatory assets 49,882 50,483
Other 1,353 1,437
--------------------------
95,782 99,578
--------------------------
$745,923 705,864
==========================
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock $ 9,549 9,522
Additional paid-in capital 17,780 16,267
Retained earnings 189,192 186,876
Accumulated other comprehensive income 13,629 15,517
--------------------------
Shareholders' equity 230,150 228,182
Long-term debt, less current portion 196,690 163,648
--------------------------
Total capitalization 426,840 391,830
CURRENT LIABILITIES:
Line of credit 3,500 15,500
Current portion of long-term debt 613 485
Accrued groundwater extraction charge and
purchased water 11,265 4,244
Purchased power 1,002 301
Accounts payable 5,082 7,267
Accrued interest 4,372 3,871
Accrued taxes 3,312 -
Other current liabilities 5,400 5,578
--------------------------
Total current liabilities 34,546 37,246
DEFERRED INCOME TAXES AND CREDITS 80,372 83,347
ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS
IN AID OF CONSTRUCTION 170,537 163,180
POSTRETIREMENT BENEFIT PLANS 28,045 26,298
OTHER NONCURRENT LIABILITIES 5,583 3,963
--------------------------
$745,923 705,864
==========================