Corporate Information
Corporate Info
FAQ


Printer Friendly Version Print Version
SEMCO Energy, Inc. Reports Third Quarter Results

PORT HURON, Mich., Nov. 12 /PRNewswire/ -- Noting that for the third consecutive quarter warmer than normal temperatures continue to affect earnings, SEMCO Energy, Inc. (Nasdaq: SMGS) reported a net loss of $2,762,000 or $.18 per share for the quarter ended September 30, 1998, compared to a loss of $3,148,000 or $.23 per share for the same period in 1997. On a weather- normalized basis, SEMCO Energy had a net loss of $2,112,000 or $.14 per share for the third quarter, compared to a loss of $2,848,000 or $.21 per share for the third quarter of 1997. The company typically has losses during the third quarter because its primary business of natural gas distribution relies on the winter heating season for most of its earnings.

"The gas distribution business typically incurs an operating loss for the third quarter due to its seasonal nature," said William L. Johnson, Chairman, President and Chief Executive Officer of SEMCO Energy. "I am happy to report that the loss has been reduced because of the strategic initiatives taken by our management team over the past 12 months. Cost reductions at the gas utility and profits from recent acquisitions and other business segments helped to reduce the operating loss. If the weather had cooperated, we would have shown more improvement in operating results. I am confident that our diversification strategy into areas where we have core competencies, will enhance long-term profitability."

The quarterly net loss from the company's regulated gas distribution business, on a weather-normalized basis, improved approximately $250,000 compared to the same period in 1997. The improvement is attributed primarily to reductions in operation and maintenance expenses and a favorable adjustment to the one-time charge related to the early retirement program recorded during the first quarter of 1998.

Net income from SEMCO Energy's non-regulated businesses increased by approximately $480,000 during the third quarter of 1998 compared to the same period in 1997. The increase in net income is due primarily to profits generated by the company's new construction and engineering businesses.

Net income for the nine months ended September 30, 1998 was $2,803,000 ($.19 per share) compared to $6,563,000 ($.48 per share) for the same period last year. On a weather-normalized basis, net income was $7,303,000 ($.50 per share) compared to $6,563,000 ($.48 per share) for the first nine months of 1997.

The net income for the company's regulated gas distribution business, on a weather-normalized basis was $3,395,000 higher during the first nine months of 1998 compared to the same period of 1997. The increase in net income for the gas distribution business is due primarily to increases in rates, reductions in operation and maintenance expenses and a change in the method of accounting for property taxes recorded during the first quarter of 1998.

The increase in weather-normalized net income for the company's gas distribution business is partially offset by a decrease in net income for the company's non-regulated businesses of approximately $2,600,000 due primarily to a reduction in gas marketing margins and volumes, increased interest expense and an extraordinary charge.

SEMCO Energy, Inc. is an energy-focused holding company with three subsidiaries: SEMCO Energy Gas Company, a regulated natural gas distributor with 240,000 customers in Michigan; SEMCO Energy Services, which markets gas in parts of the United States and Canada; and SEMCO Energy Ventures, an asset- based holding company that acquires and operates businesses in natural gas construction, energy engineering and retail propane distribution.

    Further detail is shown in the following table (unaudited):

                      SEMCO ENERGY, INC. & SUBSIDIARIES

                       Consolidated Statement of Income

                          Quarter Ended Sept. 30,  Nine Months Ended Sept. 30,
                              1998         1997          1998           1997
                                (unaudited)                 (unaudited)

    Financial Summary

    Operating Revenues $107,237,000  $123,848,000  $438,379,000  $498,064,000
    Operating Expenses $106,601,000  $123,753,000  $426,814,000  $482,230,000
    Operating Income       $636,000       $95,000   $11,565,000   $15,834,000
    Other Income
     (Loss), Net           $371,000      $(31,000)   $1,014,000       $15,000
    Income before
     Interest Expense    $1,007,000       $64,000   $12,579,000   $15,849,000
    Interest Expense     $3,769,000    $3,212,000   $11,061,000    $9,286,000
    Net Income (a) (b)  $(2,762,000)  $(3,148,000)   $2,803,000    $6,563,000
    Earnings Per
     Share (a) (b) (c)       $(0.18)       $(0.23)        $0.19         $0.48
    Cash Dividends
     Per Share (c)             0.19          0.19          0.57          0.56
    Average Number of Common Shares
     Outstanding (c)     15,356,000    13,705,000    14,520,000    13,677,000

(a) The nine months ended September 30, 1998 include income of $1,784,000 from a change in accounting method.

(b) The nine months ended September 30, 1998 include a charge of $499,000 from an early retirement of long-term debt.

(c) Adjusted to give retroactive effect to 5% stock dividends in May 1998 and May 1997.
SOURCE SEMCO Energy, Inc.
CONTACT: Edric R. Mason, Jr. of SEMCO Energy, 810-989-4104, or fax, 810-989-4098

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding SEMCO Energy's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

 
©2006 SEMCO ENERGY, Inc., All Rights Reserved.