SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 6, 1997
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CTG RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
Connecticut
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(State or other jurisdiction of incorporation)
1-12859 06-1466463
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(Commission (I.R.S. Employer
File Number) Identification No.)
100 Columbus Boulevard, Hartford, Connecticut 06103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(860) 727-3010
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Item 5. Other Information
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(a) Press Release
Fiscal Year 1997 Earnings
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CONTACT: Mary Hart
(860) 727-3155
CTG RESOURCES, INC. ANNOUNCES FOURTH QUARTER RESULTS
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HARTFORD, Connecticut, November 6, 1997 --- CTG Resources, Inc. announced a
fourth quarter loss today of $.28 per share versus a loss of $.24 per share
for the prior year. The Company's fourth quarter is generally a loss due
to the lack of gas sales for heating in the summer months. Victor H.
Frauenhofer, Chairman and Chief Executive Officer said, "The loss for the
quarter met our projections and was in line with last year which contained
a one time gain of $.05 for the sale of a building in Greenwich." For the
year ended September 30, 1997 earnings were $1.60 per share on revenues of
$305,565,000 versus $1.87 and $315,363,000 a year ago. Mr. Frauenhofer
continued with "The earnings are in line with our revised projections after
the heating season due to the warmer than normal weather and the warmer
than last year's heating season." The 1997 winter heating months of
December through March were 8.5% warmer than normal and 16.1% warmer than
the past year.
Other factors impacting the Company's 1997 earnings versus 1996 were the
one time gain on the sale of the building in Greenwich in 1996 and higher
1997 income taxes, due to the turn around of book tax depreciation
differences from prior years flow-through, an increase in the tax reserves
related to state tax issues and the lack of special tax credits from last
year. Also reducing the earnings per share was the higher average shares
outstanding due to the full effect of the equity issue in June 1996.
Mitigating these were a full year's income from the Company's increased
investment in the Iroquois Pipeline, lower uncollectible accruals,
operating expenses and lower interest expenses due to the lower levels of
debt outstanding due to the equity infusion in June of 1996.
more...
CTG Resources, Inc. - News Release
November 6, 1997
Page 2
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Mr. Frauenhofer concluded by saying "With the return of normal weather
during the heating season and the reduced number of shares outstanding due
to the successful conclusion of the Company's recent tender offer, the
Company expects earnings to bounce back to higher levels in 1998."
The projection of increased future earnings is a forward-looking statement
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. There are a number of factors which could
cause actual results to differ materially from those expressed here. Some
of the most important factors include, but are not limited to, fluctuations
in customer growth and demand, competitive conditions, weather, fuel costs
and availability, regulatory action, federal and state legislation,
interest rates, labor actions, maintenance and capital expenditures and
local economic conditions.
CTG Resources, Inc. is the holding company of Connecticut Natural Gas
Corporation and its unregulated subsidiary, The Energy Network, Inc. CTG is
the largest transporter of natural gas in Connecticut and is engaged in a
number of energy-related businesses under The Energy Network, Inc. CTG's
home page on the Internet is www.ctgcorp.com.
more...
CTG Resources, Inc. - News Release
November 6, 1997
Page 3
CTG RESOURCES, INC.
Period Ending September 30, 1997
(dollars in thousands except per share data)
Twelve Months Ended Three Months Ended
September 30, September 30,
1997 1996 1997 1996
Consolidated Gross Revenues $ 305,565 $ 315,363 $ 38,381 $ 40,341
Consolidated Net Income/(Loss) $ 17,075 $ 18,995 $ (2,988) $ (2,505)
Balance Available
for Common Stock $ 17,013 $ 18,932 $ (2,004) $ (2,521)
Consolidated Net Income/(Loss)
per Common Share $ 1.60 $ 1.87 $ (.28) $ (.24)
Average Common
Shares Outstanding 10,632,001 10,146,932 10,635,955 10,630,370
Dividends Per Common Share $ 1.52 $ 1.50 $ .38 $ .38
#
(b) Unaudited financial statements for the fiscal year ending September
30, 1997
"UNAUDITED"
Consolidated Balance Sheets
September 30, 1997 and 1996
(Thousands of Dollars)
Assets 1997 1996
---- ----
Plant and Equipment:
Plant in service $ 484,250 $ 464,377
Construction work in progress 7,703 6,417
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491,953 470,794
Less-Allowance for depreciation 160,313 145,042
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331,640 325,752
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Investments, at equity 11,530 9,914
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Current Assets:
Cash and cash equivalents 4,458 8,515
Accounts receivable (less allowance for
doubtful accounts of $3,439 in 1997
and $4,819 in 1996) 25,287 25,033
Accrued utility revenue 4,624 4,180
Inventories 17,584 15,968
Prepaid expenses 8,903 10,920
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Total Current Assets 60,856 64,616
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Other Assets:
Unrecovered future taxes 37,177 44,812
Recoverable transition costs 839 2,858
Other assets 22,245 19,027
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Total Other Assets 60,261 66,697
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$ 464,287 $ 466,979
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Balance Sheets (Concluded)
September 30, 1997 and 1996
(Thousands of Dollars)
Capitalization and Liabilities 1997 1996
---- ----
Capitalization (see accompanying statements):
Common stock equity $ 169,299 $ 168,882
Preferred stock, not subject to
mandatory redemption 884 899
Long-term debt 126,787 136,432
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296,970 306,213
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Current Liabilities:
Current portion of long-term debt 1,487 13,968
Notes payable and commercial paper 27,500 -
Accounts payable and accrued expenses 36,968 40,721
Refundable purchased gas costs 4,714 6,012
Accrued taxes 484 -
Accrued interest 4,047 4,479
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Total Current Liabilities 75,200 65,180
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Deferred Credits:
Deferred income taxes 44,302 40,011
Unfunded deferred income taxes 37,177 44,812
Investment tax credits 2,982 3,203
Refundable taxes 3,491 3,445
Other 4,165 4,115
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Total Deferred Credits 92,117 95,586
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Commitments and Contingencies
--------- ---------
$ 464,287 $ 466,979
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Statements of Income
For the Years Ended September 30, 1997, 1996 and 1995
(Thousands of Dollars Except for Per Share Data)
1997 1996 1995
---- ---- ----
Operating Revenues $ 305,565 $ 315,363 $ 275,185
Less: Cost of energy 169,188 175,175 147,764
State gross revenues tax 11,107 11,710 11,296
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Operating Margin 125,270 128,478 116,125
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Operating Expenses:
Operations 45,838 49,640 45,311
Maintenance 8,682 8,615 7,917
Depreciation and amortization 18,184 17,765 16,977
Income taxes 16,959 14,364 9,430
Local property taxes 5,323 5,277 5,148
Other taxes 2,400 2,313 2,183
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97,386 97,974 86,966
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Operating Income 27,884 30,504 29,159
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Other Income/(Deductions),
net of income taxes:
Allowance for equity funds used
during construction 125 144 106
Equity in partnership earnings 2,910 2,037 1,032
Other income/(deductions) (338) 248 (872)
Nonrecurring items - 892 3,624
Income taxes (665) (1,115) (1,839)
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2,032 2,206 2,051
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Interest and Debt Expense, net:
Interest on long-term debt 11,345 11,825 12,158
Other interest 1,200 1,585 1,650
Allowance for borrowed funds used
during construction (84) (96) (70)
Amortization of debt expense 380 401 453
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12,841 13,715 14,191
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Net Income 17,075 18,995 17,019
Less-Dividends on Preferred Stock 62 63 62
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Net Income Applicable to Common Stock $ 17,013 $ 18,932 $ 16,957
========= ========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Statements of Income (Concluded)
For the Years Ended September 30, 1997, 1996 and 1995
(Thousands of Dollars Except for Per Share Data)
1997 1996 1995
---- ---- ----
Net Income Applicable to Common Stock $ 17,013 $ 18,932 $ 16,957
========= ========= =========
Average Common Shares Outstanding
During the Period 10,632,001 10,146,932 9,926,980
========== ========== =========
Income Per Average Share of
Common Stock $ 1.60 $ 1.87 $ 1.71
========= ========= =========
Dividend Per Share of Common Stock $ 1.52 $ 1.50 $ 1.48
========= ========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Statements of Cash Flows
For the Years Ended September 30, 1997, 1996 and 1995
(Thousands of Dollars)
1997 1996 1995
---- ---- ----
Cash Flows from Operations:
Income $ 17,075 $ 18,995 $ 17,019
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Cash Flows from Investing Activities:
Capital expenditures (24,593) (24,281) (26,839)
Other investing activities 54 (1,338) (395)
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Net cash used in investing activities (24,539) (25,619) (27,234)
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Cash Flows from Financing Activities:
Dividends paid (16,177) (15,491) (14,761)
Issuance of common stock 622 15,557 8,474
Other stock activity, net (652) (38) (5)
Issuance of long-term debt - - -
Principal retired on long-term debt (22,126) (3,911) (3,673)
Short-term debt 27,500 (4,200) (14,300)
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Net cash provided (used) by
financing activities (10,833) (8,083) (24,265)
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Increase (Decrease) in Cash and
Cash Equivalents (4,057) 5,473 1,916
Cash and Cash Equivalents at
Beginning of Year 8,515 3,042 1,126
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Cash and Cash Equivalents at
End of Year $ 4,458 $ 8,515 $ 3,042
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The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Statements of Cash Flows (Concluded)
For the Years Ended September 30, 1997, 1996 and 1995
(Thousands of Dollars)
1997 1996 1995
---- ---- ----
Schedule Reconciling Earnings to
Cash Flows from Operations:
Income $ 17,075 $ 18,995 $ 17,019
-------- -------- --------
Adjustments to reconcile income
to net cash:
Depreciation and amortization 18,098 17,909 17,216
Provision for uncollectible
accounts 3,855 4,600 4,886
Deferred income taxes, net 4,115 1,886 897
Equity in partnership earnings (2,910) (2,037) (1,032)
Cash distributions received from
investments 1,761 2,061 336
Changes in assets and liabilities:
Accounts receivable (3,873) (1,640) (5,571)
Accrued utility revenue (444) 913 (1,379)
Inventories (1,616) (1,457) 3,815
Purchased gas costs (1,298) 3,712 6,069
Prepaid expenses 2,017 (4,825) 4,012
Accounts payable and accrued expenses (1,682) (5,902) 7,671
Other assets/liabilities (3,783) 4,960 (524)
-------- -------- --------
Total adjustments 14,240 20,180 36,396
-------- -------- --------
Net cash provided by
operations $ 31,315 $ 39,175 $ 53,415
======== ======== ========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Year for:
Interest $ 13,058 $ 12,193 $ 12,446
======== ======== ========
Income taxes $ 8,261 $ 17,633 $ 8,967
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The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Statements of Capitalization
September 30, 1997 and 1996
(Thousands of Dollars)
1997 1996
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Common Stock Equity:
Common stock, no par, authorized 20,000,000
shares, issued 10,663,641 shares in 1997 and
10,634,496 shares in 1996, outstanding
10,652,169 shares in 1997 and 10,620,439
shares in 1996 $120,734 $120,620
Retained earnings 49,924 49,026
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170,658 169,646
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Less: Unearned compensation - restricted
stock awards (1,034) (312)
Treasury stock, 11,472 shares in 1997
and 14,057 shares in 1996 (325) (452)
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169,299 168,882
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Preferred Stock, Not Subject to Mandatory
Redemption:
$3.125 par value, 8%, noncallable, authorized
909,898 shares in 1997 and 913,832 shares
in 1996, issued and outstanding 134,426 shares
in 1997 and 138,360 shares in 1996, entitled to
preference on liquidation at $6.25 per share 420 432
$100 par value, callable, authorized 9,999,602
shares in 1997 and 9,999,631 shares in 1996
6% Series B, issued and outstanding 4,638
shares in 1997 and 4,667 shares in 1996 464 467
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884 899
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Long-Term Debt:
First Mortgage Bonds -
8.8%, due 2001 - 10,000
9.16%, due 2004 18,000 18,000
Industrial Revenue Demand Bonds -
1986 and 1988 series,
weighted average interest rate of
3.66% in 1997 and 3.589% in 1996, due 2006 11,400 12,100
First Mortgage Notes -
10.5%, due 2010 963 999
Secured Notes -
9.32%, due 1999 6 10
6.89%, due 2010 12,905 13,510
Secured Term Note, 10.72%, due 1997 - 781
Unsecured Medium Term Notes -
6.48%, due 1997 - 10,000
7.61% to 7.82%, due 2002 to 2004 20,000 20,000
6.85% to 9.1%, due 2012 to 2016 40,000 30,000
8.96%, due 2017 20,000 30,000
8.49%, due 2024 5,000 5,000
Less - Current Maturities (1,487) (13,968)
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126,787 136,432
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$296,970 $306,213
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Statements of Common Stock Equity
For the Years Ended September 30, 1997, 1996 and 1995
(Thousands of Dollars Except for Number of Shares)
Common Stock
-------------------- Treasury Unearned Retained
Shares Amount Stock Compensation Earnings
---------- ---------- -------- ------------ ---------
Balance at September 30,
1994 9,539,079 $ 96,477 $ (103) $ (157) $ 43,264
Public offering 392,200 8,474 - - -
Net income after
preferred dividends - - - - 16,957
Amortization and
adjustment of
restricted shares - 112 - (214) -
Dividends - - - - (14,699)
---------- -------- ------ ------ --------
Balance at September 30,
1995 9,931,279 105,063 (103) (371) 45,522
Public offering 700,000 15,557 - - -
Net income after
preferred dividends - - - - 18,932
Purchase of restricted
stock awards - - - (33) -
Amortization and
adjustment of
restricted shares (10,840) - (349) 92 -
Dividends - - - - (15,428)
---------- -------- ------ ------ --------
Balance at September 30,
1996 10,620,439 120,620 (452) (312) 49,026
Issues to dividend
reinvestment and
employee benefit plans 29,145 622 - - -
Establish holding - (508) - - -
company
Net income after
preferred dividends - - - - 17,013
Purchase of restricted
stock awards 16,078 - 501 (1,131) -
Amortization and
adjustment of
restricted shares (13,493) - (374) 409 -
Dividends - - - - (16,115)
---------- -------- ------ ------ --------
Balance at September 30,
1997 10,652,169 $120,734 $ (325) $ (1,034) $ 49,924
========== ======== ====== ====== ========
The accompanying notes are an integral part of these consolidated financial
statements.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CTG RESOURCES, INC.
Date 11/6/97 S/ Andrew H. Johnson
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(Andrew H. Johnson)
Treasurer and Chief Accounting Officer
(On behalf of the registrant and as Chief
Accounting Officer)