PORT HURON, Mich., April 20 /PRNewswire/ -- The Board of Directors of
SEMCO ENERGY, Inc. (Nasdaq: SMGS) today declared a 2.5% increase in its
regular quarterly cash dividend and a special $.05 per share cash dividend on
the outstanding Common stock of the Company. The Board also discontinued the
practice of declaring a 5% stock dividend.
Specifically, the Board increased the quarterly dividend rate to $.205 per
share on the Common Stock of the Corporation, a 2.5% increase from the
previous quarterly cash dividend of $.20 per share.
In addition, the Board declared a special cash dividend of $.05 per share
on the Common Stock of the Corporation, which represents a 6.3% one-time
payment over the current dividend.
The Company also announced the regular quarterly dividend of $.578125 per
share on the outstanding $2.3125, Series A, Convertible Cumulative Preferred
Stock of the Corporation.
All three dividends are payable on the 15th day of May 1999 to
stockholders of record at the close of business on May 5, 1999.
"I am very pleased to announce the 2.5% increase in the cash dividend, our
first increase in the cash dividend rate since 1988, and the special cash
dividend of $.05 per share," said William L. Johnson, Chairman, President and
Chief Executive Officer of SEMCO ENERGY, Inc.
According to Johnson, "The Company has paid an annual stock dividend since
1983. This year, the Board decided not to declare a stock dividend but
instead modified the dividend policy by increasing the cash dividend. The
Board's reasoning for this positive change in the dividend policy is that
stock dividends create more shares outstanding with no compensating additional
earnings, therefore, reducing earnings per share growth and limiting stock
price appreciation. In fact, there are very few companies left which still
pay a stock dividend. We believe that cash dividend increases, instead of a
stock dividend, make the stock more appealing to a greater number of
Johnson concluded, "Our management team has made significant progress in
positioning the Company to be successful. Our goal is to produce long-term
earnings per share growth at about twice the industry average.
"With our new dividend policy we intend to share the growth of the Company
with periodic increases in the cash dividend, as long as the Company is
financially sound and it is in the best interests of our shareholders. We
also are mindful of the fact that, as we grow, a larger portion of earnings
should be retained and reinvested in the business.
"With our new business strategy and this dividend policy, it is our
objective to provide to shareholders a more competitive total return with a
larger portion of the return coming from stock appreciation."
SEMCO ENERGY, Inc. is a diversified energy services and infrastructure
company organized into two major segments: Natural gas distribution and
SEMCO ENERGY GAS COMPANY distributes natural gas to 250,000 residential,
industrial and commercial customers in Michigan's Upper and Lower Peninsulas.
SEMCO ENERGY VENTURES acquires and operates businesses involved in gas
engineering and quality assurance services, pipeline construction services,
propane distribution, intrastate pipelines and natural gas storage in Iowa,
Kansas, Louisiana, Michigan, New Jersey, Tennessee, Texas and Wisconsin.
SOURCE SEMCO ENERGY, Inc.
CONTACT: Edric R. Mason, Jr. of SEMCO, 810-989-4104, or fax, 810-987-4098