Exhibit 1
NEWS RELEASE
THE LACLEDE GROUP
- ----------------------------------------------------------------------------
720 OLIVE STREET, ST. LOUIS, MO 63101
CONTACT: Richard N. Hargraves
(314) 342-0652
LACLEDE GROUP'S NEW SM&P SUBSIDIARY
HAS A POSITIVE IMPACT ON 3RD QUARTER EARNINGS
ST. LOUIS, MO (July 25, 2002) -- The Laclede Group (NYSE: LG) today
announced that earnings from its new subsidiary, Indiana-based SM&P Utility
Resources, Inc., acquired in January 2002, had a major impact on the Group's
improved third quarter period-to-period results.
For the quarter ended June 30, 2002, the third quarter of its
fiscal year, The Laclede Group reported a loss of $.05 per share compared
with a loss of $.20 per share for the same period last year.
Earnings from SM&P, one of the nation's largest underground utility
locating services, accounted for more than two-thirds of the
quarter-over-quarter improvement. One of the features that attracted The
Laclede Group to SM&P was its revenue stream, which runs counter-seasonal to
the natural gas sales of Laclede Gas Company, the Group's primary
subsidiary. Laclede Gas' regulated utility operations also reported modest
improvement this quarter over last year, primarily from higher natural gas
sales resulting from cooler weather and revenues from a general rate
increase implemented last December. However, the elimination of the
utility's highly successful Gas Supply Incentive Program (GSIP) by state
regulators at the end of Fiscal 2001 continues to deny
significant benefits to the company and its customers and is having a
significant offsetting impact on quarterly and fiscal 2002 year-to-date
earnings.
Although this year's third quarter was cooler than last year,
weather overall for the first three quarters of fiscal year 2002 was 22%
warmer than the same period last year. The resulting lower gas sales,
combined with the loss of GSIP earnings, were only partially offset by
revenues from the general rate increase, producing earnings for the first
nine months of the fiscal year of $1.46 per share, compared with $1.88 per
share for the same period last year.
The utility is taking steps to mitigate these factors, including
working within the regulated environment to address both earnings levels,
through rates that more appropriately reflect its costs, and earnings
volatility, by designing a method to mitigate the significant impact weather
can have on the utility's earnings. Similarly, Laclede Gas has sought
judicial review of the Missouri Public Service Commission's GSIP decision.
The results of these efforts are yet to be determined.
Due to the seasonal nature of the gas utility's business, The
Laclede Group's earnings are typically concentrated in the first six months
of the fiscal year, which corresponds with the heating season. SM&P should
continue to produce results that are accretive to earnings in the fourth
quarter, but the scope of its contribution is expected to be more than
offset by the costs of operating and maintaining the core utility's
15,000-mile natural gas distribution and storage system, which the utility
must continue to incur through these warm-weather months, typically without
generating significant revenue.
The Company stands by its earlier statement that fiscal 2002
earnings are expected to be in the range of $1.17 to $1.22.
Note: This news release contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended. The Company's future operating results may be affected
by various uncertainties and risk factors, many of which
2
are beyond the Company's control, including weather conditions,
governmental and regulatory policy and action, the competitive
environment and economic factors. For a more complete description
of these uncertainties and risk factors, see the Company's Form
10-Q for the quarter ending June 30, 2002, to be filed with the
Securities and Exchange Commission.
UNAUDITED
STATEMENTS OF CONSOLIDATED INCOME
THE LACLEDE GROUP, INC.
(In Thousands Except Per Share Amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ---------------------
2002 2001 2002 2001
---- ---- ---- ----
OPERATING REVENUES:
Utility operating revenues $ 87,284 $ 104,195 $ 527,297 $ 844,143
Non-utility operating revenues 59,997 18,706 102,091 66,525
--------- --------- --------- ---------
Total operating revenues 147,281 122,901 629,388 910,668
--------- --------- --------- ---------
OPERATING EXPENSES:
Utility operating expenses
Natural and propane gas 41,565 57,611 313,274 600,524
Other operation expenses 25,497 24,784 80,577 78,617
Maintenance 4,547 4,827 13,179 14,373
Depreciation and amortization 6,106 6,560 18,741 19,603
Taxes, other than income taxes 9,752 11,553 41,088 56,831
--------- --------- --------- ---------
Total utility operating expenses 87,467 105,335 466,859 769,948
Non-utility operating expenses 55,830 18,316 100,770 64,751
--------- --------- --------- ---------
Total operating expenses 143,297 123,651 567,629 834,699
--------- --------- --------- ---------
OPERATING INCOME (LOSS) 3,984 (750) 61,759 75,969
OTHER INCOME AND INCOME DEDUCTIONS - NET (76) (100) 673 1,456
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INTEREST AND INCOME TAXES 3,908 (850) 62,432 77,425
--------- --------- --------- ---------
INTEREST CHARGES:
Interest on long-term debt 5,205 4,414 15,615 13,168
Other interest charges 1,129 2,361 3,868 9,080
--------- --------- --------- ---------
Total interest charges 6,334 6,775 19,483 22,248
--------- --------- --------- ---------
DIVIDENDS ON PREFERRED STOCK - LACLEDE GAS 16 22 52 66
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES (2,442) (7,647) 42,897 55,111
INCOME TAX EXPENSE (BENEFIT) (1,532) (3,952) 15,350 19,626
--------- --------- --------- ---------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCK $ (910) $ (3,695) $ 27,547 $ 35,485
========= ========= ========= =========
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 18,878 18,878 18,878 18,878
EARNINGS (LOSS) PER SHARE OF COMMON STOCK $ (0.05) $ (0.20) $ 1.46 $ 1.88
NOTE: CERTAIN PRIOR-PERIOD AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM TO CURRENT-YEAR PRESENTATION.
3