Exhibit 99.1
SJW CORP. ANNOUNCES 2007 ANNUAL AND FOURTH QUARTER
FINANCIAL RESULTS
SAN JOSE, CA, February 20, 2008 - SJW Corp. (NYSE: SJW) today reported
operating revenue of $206,601,000 for the year ended December 31, 2007,
compared to operating revenue of $189,238,000 in 2006. Operating revenue for
2007 increased $17,363,000 over 2006 due to cumulative rate increases of
$10,409,000, revenue from new customers of $3,002,000, increased customer
usage of $2,784,000 and revenue from other sources of $1,168,000.
Net income was $19,323,000 for the year ended December 31, 2007.
Diluted earnings per common share for the year ended December 31, 2007 were
$1.04 compared to $2.08 in 2006. The change in diluted earnings was
primarily due to a $0.89 per share gain in 2006 from the sale of real estate
assets. The remainder of the change was due to increased water production
costs in 2007.
Operating expenses for the year ended December 31, 2007 were
$176,848,000 compared to $157,685,000 in 2006. The increase of $19,163,000
in operating expenses in 2007 versus 2006 was primarily attributable to
increases in water production costs.
Water production costs for the year ended December 31, 2007 were
$86,269,000 compared to $68,803,000 in 2006. The increase of $17,466,000 in
2007 versus 2006 was attributable to $8,685,000 in additional water
purchases necessitated by decreases in surface water supplies available in
the California service area, $4,814,000 due to higher per unit costs for
purchased water, groundwater extraction and energy and $3,967,000 due to
higher customer demand, including new customers added in 2007.
Nonwater production costs were $78,030,000 for the year ended December
31, 2007. The increase of $4,446,000 in 2007 versus 2006 was attributable
to an increase of $1,555,000 in depreciation expense, an increase of
$1,439,000 in maintenance expenses primarily due to a larger amount of leak
repairs, an increase of $1,226,000 in administrative and general costs
primarily due to higher benefit costs and increases in salaries and an
increase of $226,000 in other combined expenses. Income tax expense for the
year ended December 31, 2007 decreased $2,749,000 from $15,298,000 in 2006
to $12,549,000 in 2007.
Fourth Quarter Financial Results
- --------------------------------
Operating revenue for the fourth quarter ending December 31, 2007 was
$47,602,000 versus $44,504,000 in 2006, an increase of $3,098,000. The
increase in operating revenue was due to $2,686,000 of cumulative rate
increases, $291,000 from new connections and $249,000 from other sources,
partially offset by a $128,000 decrease in operating revenue due to lower
customer usage.
Net income was $3,784,000 and diluted earnings per common share were
$0.20 for the quarter ended December 31, 2007, compared to $1.03 per share
in 2006. On December 15, 2006, SJW Corp. sold nonutility investment
properties located in San Jose, California, for an aggregate purchase price
of $32,500,000, which resulted in recognizing a gain on the sale of real
estate investments of $14,820,000, net of taxes of $10,192,000, or $0.81 per
share. There was no corresponding sale of real estate investments in the
fourth quarter of 2007.
Water production costs for the fourth quarter of 2007 were $18,812,000
compared to $15,906,000 in 2006. The $2,906,000 difference consisted of
increases of $1,464,000 due to higher per unit cost for groundwater
extraction, purchased water and energy, $1,307,000 in additional purchased
water due to decreased surface water supply in 2007 and $135,000 due to
higher customer usage.
Nonwater production costs in the fourth quarter of 2007 were
$20,107,000 compared to $19,124,000 in 2006, due to increased depreciation
expense of $564,000 resulting from higher investment in plant, $266,000 of
additional administrative and general expense, $141,000 of additional
maintenance expense and $12,000 of other combined expenses. Income tax
expense decreased $610,000 from $2,740,000 in the fourth quarter of 2006 to
$2,130,000 in the fourth quarter of 2007.
Other comprehensive loss of $2,201,000 and $954,000, net of tax, in the
full year and fourth quarter of 2007, respectively, was primarily due to
changes in the market value of SJW Corp.'s investment in California Water
Service Group.
SJW Corp. management will discuss the annual and fourth quarter results
in a webcast presentation available to interested parties from the company's
home page, www.sjwater.com, at 10:00 A.M. Pacific time on Thursday, February 21,
2008. The webcast will be accessible until April 29, 2008.
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 in Canyon Lake, Texas. SJW
Land Company owns undeveloped land, has a majority interest in a real estate
partnership, and operates commercial buildings 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. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(UNAUDITED)
(In thousands, except share and per share data)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
2007 2006 2007 2006
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OPERATING REVENUE $47,602 44,504 $206,601 189,238
OPERATING EXPENSE:
Operation:
Purchased water 9,223 10,663 48,596 44,896
Power 1,791 1,033 7,532 5,170
Groundwater extraction
charge 7,798 4,210 30,141 18,737
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Total water production
costs 18,812 15,906 86,269 68,803
Administrative and general 5,704 5,438 22,334 21,108
Other 3,934 4,011 14,907 15,095
Maintenance 3,022 2,881 11,628 10,189
Property taxes and other
nonincome taxes 1,568 1,479 6,307 5,893
Depreciation and amortization 5,879 5,315 22,854 21,299
Income taxes 2,130 2,740 12,549 15,298
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Total operating expense 41,049 37,770 176,848 157,685
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OPERATING INCOME 6,553 6,734 29,753 31,553
Sale of real estate investments,
net of taxes of $10,192 and
$11,248 in the quarter and year
ended 2006 - 14,820 - 16,355
Interest on long-term debt (2,753) (2,455) (10,912) (9,292)
Dividend income 319 316 1,276 1,265
Other, net (335) (365) (794) (1,300)
------------------------------------------------
NET INCOME $ 3,784 19,050 $ 19,323 38,581
================================================
Other comprehensive income (loss):
Other comprehensive income
(loss) $(1,617) 10,016 $ (3,730) 8,586
Income taxes 663 (4,091) 1,529 (3,505)
------------------------------------------------
Other comprehensive income
(loss), net $ (954) 5,925 $ (2,201) 5,081
------------------------------------------------
COMPREHENSIVE INCOME $ 2,830 24,975 $ 17,122 43,662
================================================
Earnings per share
-Basic $ 0.21 1.04 $ 1.05 2.11
-Diluted 0.20 1.03 1.04 2.08
Dividends per share $ 0.15 0.14 $ 0.60 0.57
Weighted average shares outstanding
-Basic 18,361,479 18,281,285 18,334,352 18,275,505
-Diluted 18,581,051 18,497,186 18,552,228 18,528,896
SJW CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands)
DECEMBER 31 DECEMBER 31
ASSETS 2007 2006
-------------------------
UTILITY PLANT:
Land $ 5,695 4,837
Depreciable plant and equipment 778,277 716,679
Construction in progress 24,298 10,863
Intangible assets 8,040 8,040
----------------------
Total utility plant 816,310 740,419
Less accumulated depreciation and amortization 255,025 234,173
----------------------
Net utility plant 561,285 506,246
REAL ESTATE INVESTMENTS: 88,029 43,868
Less accumulated depreciation 3,834 3,303
----------------------
Net real estate investments 84,195 40,565
CURRENT ASSETS:
Cash and equivalents 2,354 3,788
Accounts receivable and accrued unbilled
utility revenue 26,823 22,634
Sale proceeds held in trust account - 31,261
Prepaid expenses and other 2,414 2,470
----------------------
Total current assets 31,591 60,153
OTHER ASSETS:
Investment in California Water Service Group 40,720 44,438
Unamortized debt issuance and reacquisition costs 3,345 3,220
Regulatory assets 44,712 50,483
Other 1,478 1,437
----------------------
Total other assets 90,255 99,578
----------------------
$767,326 $706,542
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CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock $ 9,564 $ 9,522
Additional paid-in capital 18,723 16,267
Retained earnings 195,331 186,876
Accumulated other comprehensive income 13,316 15,517
----------------------
Total shareholders' equity 236,934 228,182
Long-term debt, less current portion 216,312 163,648
----------------------
Total capitalization 453,246 391,830
CURRENT LIABILITIES:
Line of credit 5,000 15,500
Current portion of long-term debt 622 485
Accrued groundwater extraction charge and
purchased water 5,595 4,244
Purchased power 514 301
Accounts payable 9,268 7,267
Accrued interest 4,522 3,871
Other current liabilities 7,433 6,256
----------------------
Total current liabilities 32,954 37,924
DEFERRED INCOME TAXES 76,378 83,347
ADVANCES FOR AND CONTRIBUTIONS IN AID OF CONSTRUCTION 175,167 163,180
POSTRETIREMENT BENEFITS 23,357 26,298
OTHER NONCURRENT LIABILITIES 6,224 3,963
----------------------
$767,326 $706,542
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