Exhibit 1
FOR RELEASE - 4/24/03
Contact: Richard N. Hargraves (314) 342-0652
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THE LACLEDE GROUP ANNOUNCES IMPROVED
SECOND-QUARTER AND YEAR-TO-DATE EARNINGS
ST. LOUIS, MO, April 24, 2003 -- The Laclede Group (NYSE: LG) today
announced improved earnings for the second quarter of its fiscal year 2003
versus the same quarter last year. The Company also reported increased
earnings for the six-months ended March 31, 2003 versus last year's results.
Earnings for the quarter that ended March 31, 2003, were $1.14 per share,
compared with $1.10 per share earned during the same period last year.
Earnings for the quarter were primarily derived from the regulated
activities of the Company's largest subsidiary, Laclede Gas Company,
Missouri's largest natural gas distribution company. Those utility earnings
come primarily from the sale of heating energy, which has historically been
heavily influenced by weather.
The year-over-year quarterly earnings improvement is due to 13% higher sales
linked to a return to near-normal temperatures in Laclede Gas' service area
this year. Although essentially normal, temperatures this year were
approximately 17% colder than the same period last year. Earnings also
increased due to Laclede Gas Company's general rate increase, which became
effective November 9, 2002, and higher sales to customers outside of its
traditional service area.
Earnings for the six-month period ended March 31, 2003 were $1.93 per share,
compared with $1.51 per share for the same period last year. Temperatures
during this period were 23% colder than last year and, similar to the
recently completed quarter, were near normal. The general rate increase and
higher sales outside Laclede Gas' traditional service area also contributed
to the improved earnings.
As part of the 2002 rate case settlement, the Utility initiated an
innovative new weather mitigation rate design that lessens, beginning in the
winter of 2002-03, the impact of weather volatility on Laclede Gas customers
during cold winters and stabilizes the Company's earnings. This new rate
design provides Laclede Gas with the ability to recover its distribution
costs, which are essentially fixed, in a manner that is significantly less
sensitive to weather, while assuring that customers will pay no more than
the utility's authorized distribution costs. However, variations in
temperature still impact the amount of gas customers use, hence the higher
sales this period.
In addition to the effects described above, the new rate design also shifts
recovery of a greater portion of Laclede Gas' distribution costs from the
March quarter forward into the month of April, partially offsetting the
positive impacts described above. Further offsets during the periods related
to Utility operations were due to the impact of income recorded last year
under Laclede Gas' Price Stabilization Plan, which expired March 31, 2002,
and higher operating expenses.
SM&P Utility Resources Inc., the Group's facilities locating and marking
service company which was acquired January 28, 2002, normally experiences
losses during the slow winter construction season. However, this year SM&P
experienced a greater loss than last year, largely due to the full winter
season impact this year and the accrual of costs during the quarter related
to efforts to adjust operations to reflect the loss of two major customers.
Due to the seasonal nature of the gas utility's business, earnings are
typically concentrated in the November through April period, which generally
corresponds with the heating season. The Utility typically experiences
losses during the non-heating season. This seasonal effect on Laclede Group
is expected to be tempered somewhat by the impact of the weather mitigation
rate design implemented in November 2002, and the addition of SM&P, whose
operations tend to be counter-seasonal to those of Laclede Gas.
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 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 ended December 31, 2002, filed with the
Securities and Exchange Commission.
# # #
UNAUDITED
STATEMENTS OF CONSOLIDATED INCOME
THE LACLEDE GROUP, INC.
(Thousands, Except Per Share Amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
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2003 2002 2003 2002
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OPERATING REVENUES:
Regulated
Gas distribution . . . . . . . . . . . . . . . . . $ 357,456 $ 256,802 $ 574,621 $ 440,013
Non-Regulated
Services . . . . . . . . . . . . . . . . . . . . . 17,315 15,274 48,138 15,274
Other. . . . . . . . . . . . . . . . . . . . . . . 47,408 15,387 79,591 26,820
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Total operating revenues. . . . . . . 422,179 287,463 702,350 482,107
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OPERATING EXPENSES:
Regulated
Natural and propane gas . . . . . . . . . . . . . 247,918 156,115 381,761 271,709
Other operation expenses. . . . . . . . . . . . . 29,663 28,804 60,987 55,080
Maintenance . . . . . . . . . . . . . . . . . . . 4,950 4,318 9,394 8,632
Depreciation and amortization . . . . . . . . . . 5,596 6,053 11,089 12,635
Taxes, other than income taxes. . . . . . . . . . 22,579 18,437 36,707 31,336
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Total regulated operating expenses. . 310,706 213,727 499,938 379,392
Non-Regulated
Services . . . . . . . . . . . . . . . . . . . . . 22,735 18,180 53,360 18,180
Other. . . . . . . . . . . . . . . . . . . . . . . 45,850 15,097 76,931 26,760
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Total operating expenses. . . . . . . 379,291 247,004 630,229 424,332
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OPERATING INCOME . . . . . . . . . . . . . . . . . . . . 42,888 40,459 72,121 57,775
OTHER INCOME AND INCOME DEDUCTIONS - NET . . . . . . . . (591) (175) 457 749
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INCOME BEFORE INTEREST AND INCOME TAXES. . . . . . . . . 42,297 40,284 72,578 58,524
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INTEREST CHARGES:
Interest on long-term debt . . . . . . . . . . . . . 5,205 5,205 10,410 10,410
Preferred dividends and distributions of
subsidiary trust . . . . . . . . . . . . . . . . . 867 - 1,011 -
Other interest charges . . . . . . . . . . . . . . . 953 1,380 2,302 2,739
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Total interest charges . . . . . . . 7,025 6,585 13,723 13,149
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INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . . . 35,272 33,699 58,855 45,375
INCOME TAX EXPENSE . . . . . . . . . . . . . . . . . . . 13,687 12,946 22,159 16,882
DIVIDENDS ON REDEEMABLE PREFERRED STOCK - LACLEDE GAS. . 15 15 31 36
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NET INCOME APPLICABLE TO COMMON STOCK. . . . . . . . . . $ 21,570 $ 20,738 $ 36,665 $ 28,457
========= ========= ========= =========
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING. . . . . . . 19,002 18,878 18,981 18,878
BASIC AND DILUTED EARNINGS PER SHARE OF COMMON STOCK . . $ 1.14 $ 1.10 $ 1.93 $ 1.51
CERTAIN PRIOR-PERIOD AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM TO CURRENT-YEAR PRESENTATION