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: March 2, 2004
Date of earliest event reported: March 2, 2004
MAINE & MARITIMES CORPORATION
(Exact name of registrant as specified in its charter)
Maine
(State or other jurisdiction of
incorporation or organization)
333-103749
(Commission File No.)
30-0155348
(I.R.S. Employer Identification No.)
209 State Street, Presque Isle, Maine 04769
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: 207-760-2499
Item 12. Results of Operations and Financial Condition
Maine & Maritimes Corporation Releases Fourth Quarter 2003 Results
PRESQUE ISLE, Maine--(BUSINESS WIRE)--March 2, 2004--Maine &
Maritimes Corporation's (MAM's)(AMEX:MAM) consolidated results for the
fourth quarter of 2003 outperformed the same quarter in 2002 by $0.20
per share, an increase of 60.6%. Fourth quarter 2003 earnings were
$0.53 per share compared to $0.33 per share during the same quarter in
2002. According to J. Nick Bayne, President & CEO of MAM, "Our fourth
quarter results are attributable to a combination of factors including
our progress in controlling costs within our regulated utility
subsidiary, as well as regulatory rulings allowing it to increase
transmission and distribution rates and to amortize costs associated
with Maine Public Service's 2002 Voluntary Early Retirement Program
over a period of seven years."
On a year-to-date basis, Maine Public Service Company increased
its 2003 net income by 9% over 2002, resulting in a $0.18 net increase
in its earnings per share contribution compared to 2002. Maine &
Maritimes Corporation's 2003 unaudited consolidated earnings were
$1.78 per share, compared to $4.16 per share in 2002. Approximately
ninety-five percent of the variance, or $2.26 per share, is directly
attributable to a decline in the 2002 earnings of Energy Atlantic, the
Corporation's unregulated subsidiary. As previously reported, Energy
Atlantic experienced a one-time final account settlement of its
Standard Offer Service contract within Central Maine Power's service
area, which accounted for its significant 2002 earnings contribution.
Bayne noted that, "Given costs associated with our transformation to a
holding company structure, as well as increased regulatory activity
related to rate filings; increased costs related to insurances and
benefits; and increased corporate compliance costs, our 2003 annual
earnings exceeded management's internal expectations. As we continue
our transition post-deregulation and generation divestiture, we are
focused on controlling costs within our regulated subsidiary, while
conservatively implementing our growth strategy to increase long-term
shareholder value."
Maine & Maritimes Corporation's unaudited financial results for
the twelve months ended December 31, 2003, report consolidated
revenues of $37.9 million, compared with $44.1 million for the twelve
months ended December 31, 2002. Consolidated earnings were $2.8
million compared with $6.5 million for the same period last year, and
earnings per share were $1.78 compared with $4.16 a year ago. The
corporation had net income of $0.84 million or $0.53 per share for the
quarter ended December 31, 2003, as compared to net income of $0.52
million or $0.33 per share for the fourth quarter of 2002. Amounts
shown for 2002 were reported by Maine Public Service Company.
As referenced, continuing efforts to contain costs positively
impacted the transmission and distribution utility (Maine Public
Service Company), resulting in an increase in earnings of $.30 per
share for the twelve months ending 2003. An additional $0.24 per share
was realized during 2003, pursuant to an accounting order by the Maine
Public Utilities Commission allowing the amortization of costs
associated with Maine Public Service's 2002 Voluntary Early Retirement
Program over a period of seven years. Also positively impacting
earnings for 2003, by $0.12 per share, were net interest savings and
carrying charges on stranded costs, as well as an increase in retail,
wheeling and flexible pricing revenues of $0.13 per share.
The year-end 2003 earnings, as compared to the same period in
2002, decreased by $2.38 per share, as previously mentioned,
principally due to Energy Atlantic's one-time Standard Offer Service
final account settlement of $1.89 per share, as well as $0.37 per
share decrease in its operating costs. Increased costs associated with
rate filings with the Maine Public Utilities Commission and the
Federal Energy Regulatory Commission, as well as advisory services
concerning the Corporation's long-term financial strategies and
ongoing costs associated with Sarbanes-Oxley compliance, decreased
earnings by $0.38 per share for the twelve months ending 2003, as
compared to 2002. As anticipated, one-time expenses associated with
seeking necessary regulatory approvals, as well as incremental
organizational costs associated with the new corporate structure,
offset earnings by $.41 per share for 2003.
Energy Atlantic experienced an increase in normal operation
earnings of $0.05 per share during the fourth quarter of 2003,
compared to the fourth quarter of 2002. However, as noted, the
subsidiary experienced a $2.26 per share decrease in earnings for the
twelve months of 2003, compared to the same periods in 2002. The
fourth quarter results are attributed to reduced salary and benefits
expenses. The twelve month results are affected by the expiration of
retail contracts associated with the Company's decision to withdraw
from the northern Maine Competitive Electricity Supply market, as well
as the loss of Standard Offer Service within Central Maine Power
Company's territory, effective March 1, 2002. Current retail market
illiquidity within northern Maine; Atlantic Canada's and northern
Maine's shortage of generation capacity; increased credit requirements
associated with acquiring wholesale supply; increased risks; and other
market factors have led the Corporation to restrict operations.
Due to factors listed above, the Corporation is continuing to
evaluate alternative strategies pertaining to Energy Atlantic. A final
decision concerning Energy Atlantic is dependent upon the outcomes of
specific initiatives now underway. At this time, management cannot
predict the outcome of these initiatives, which include, but are not
limited to, selling the enterprise or retaining the option to reenter
the market should overall market and liquidity conditions change.
Maine & Maritimes Corporation and Subsidiaries Earnings Report for
the three months and twelve months ended December 31, 2003 and 2002
are as follows:
Three Months Ended December 31,
(Unaudited)
2003 2002
Maine Public Service Co. Operating Revenues $ 9,014,724 $ 8,818,860
Unregulated, Principally Energy Atlantic,
LLC Operating Revenues $ 1,346,041 $ 1,690,579
Total Operating Revenues $10,360,765 $10,509,439
Net Income Available for Common
Shareholders $ 836,510 $ 518,905
Basic & Diluted Earnings Per Common Share $ 0.53 $ .33
Average Shares Outstanding 1,576,706 1,573,865
Twelve Months Ended December 31,
(Unaudited)
2003 2002
Maine Public Service Co. Operating Revenues $31,739,240 $31,401,081
Unregulated, Principally Energy Atlantic,
LLC Operating Revenues $ 6,121,269 $12,703,052
Total Operating Revenues $37,860,509 $44,104,133
Net Income Available for Common
Shareholders $ 2,805,601 $ 6,543,421
Basic & Diluted Earnings Per Common Share $ 1.78 $ 4.16
Average Shares Outstanding 1,575,066 1,573,865
Cautionary Statement Regarding Forward-Looking Information
NOTE: This presentation contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, as amended. Although Maine
& Maritimes Corporation (MAM) believes that in making such statements,
its expectations are based on reasonable assumptions, any such
statement involves uncertainties and risks. MAM cautions that there
are certain factors that can cause actual results to differ materially
from the forward-looking information that has been provided. The
reader is cautioned not to put undue reliance on this forward-looking
information, which is not a guarantee of future performance and is
subject to a number of uncertainties and other factors, many of which
are outside the control of MAM; accordingly, there can be no assurance
that such indicated results or events will be realized.
The information herein is qualified in its entirety by reference
to factors contained in the Forward-Looking Statement of the
Management's Discussion and Analysis of Financial Condition and
Results of Operation in Maine Public Service Company's 10-K for the
year ended December 31, 2002, and subsequent securities filings, as
well as, but not necessarily limited to the following factors: the
impact of recent and future federal and state regulatory changes in
environmental and other laws and regulations to which MAM and its
subsidiaries are subject, as well as changes in application of
existing laws and regulations; current and future litigation; interest
rates; general economic conditions; the performance of projects
undertaken by unregulated businesses; the success of efforts to invest
in and develop new opportunities; internal restructuring or other
restructuring options that may be pursued by MAM or its subsidiaries,
including acquisitions or dispositions of assets or businesses, which
cannot be assured to be completed or beneficial to MAM or its
subsidiaries; financial market conditions; the effects of terrorist
incidents; weather; the timing and acceptance of new product and
service offerings; general industry trends; changes in business
strategy and development plans; capital market conditions and the
ability to raise capital; competition; and rating agency actions,
among others.
CONTACT: Maine & Maritimes Corporation
Annette N. Arribas, 207-760-2402
aarribas@maineandmaritimes.com
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, hereunto duly authorized.
MAINE & MARITIMES CORPORATION
Date: March 2, 2004
By: /S/ J. Nicholas Bayne
President & CEO