PORT HURON, Mich., Dec. 8 /PRNewswire/ -- SEMCO ENERGY, Inc.
(Nasdaq: SMGS) held an analyst conference call today indicating that operating
results for the fourth quarter are expected to be better than originally
expected with good growth anticipated for the year 2000.
William L. Johnson, SEMCO ENERGY Chairman and Chief Executive Officer,
stated that despite the warmer than normal weather for 1999, SEMCO ENERGY is
likely to report earnings higher than the $.95 per share analyst consensus for
the Company. This is being accomplished by cost cutting, revenue enhancements
and the acquisition of ENSTAR Natural Gas Company, the Anchorage-based natural
gas distribution company, which SEMCO ENERGY acquired on November 1, 1999. By
acquiring ENSTAR ahead of schedule, SEMCO ENERGY will benefit from two months
of the Alaskan heating season. Additionally, the construction business is
having a strong fourth quarter and will exceed management's expectations for
The year 2000 is anticipated to be an even better earnings year for SEMCO
ENERGY. The natural gas distribution business should experience continued
strong customer growth, a full year's benefit from the gas cost rate freeze,
and revenue and cost synergies from the ENSTAR acquisition. The non-regulated
businesses are expected to show improved results from continued selective and
accretive acquisitions, higher revenues from increased marketing and
significantly lower operating costs from implementation of a comprehensive
integration plan. In summary, the Company believes that the consensus
analysts' forecast of $1.15 for the year 2000 is very reasonable and could be
exceeded assuming normal weather.
The Company recently filed a $500 million shelf registration statement
with the Securities and Exchange Commission. The registration statement, when
declared effective, will permit the Company to issue various types of debt and
equity securities to the public for the purpose of financing acquisitions,
repaying short-term borrowings and funding general corporate purposes. The
size of the shelf registration is anticipated to meet the capital requirements
for the ENSTAR acquisition and other earnings-producing opportunities that the
Company may discover in the future. SEMCO ENERGY plans to finance
acquisitions with a prudent balance of debt and equity to maintain a
satisfactory credit rating. Stringent acquisition criteria ensure that future
acquisitions add stock value and not diminish it.
Mr. Johnson concluded by emphasizing that SEMCO ENERGY is focused on
enhancing shareholder value. "SEMCO ENERGY has a goal of growing earnings at
double the industry average which will come from improving the operations of
current businesses as well as completing future acquisitions. I feel
confident that our strategy is sound and our employee team will be successful
in its execution."
SEMCO ENERGY, Inc. is a diversified energy services and infrastructure
company with two regulated and one unregulated divisions. SEMCO ENERGY GAS
COMPANY and ENSTAR Natural Gas Co. are natural gas distribution companies with
a combined total of more than 350,000 customers in Michigan and Alaska. SEMCO
ENERGY VENTURES, the unregulated division, acquires and operates businesses
involved in gas engineering and quality assurance services, pipeline
construction services, propane distribution, intrastate pipelines and natural
gas storage in various regions of the United States.
The following is a "Safe-Harbor" statement under the Private Securities
Litigation Reform Act of 1995. This release contains forward-looking
statements that are based on current expectations, estimates and projections.
Statements that are not historical facts, including statements about SEMCO
ENERGY's belief and expectations, are forward-looking statements. These
statements are subject to potential risks and uncertainties and, therefore,
actual results may differ materially. SEMCO ENERGY undertakes no obligation
to update publicly any forward-looking statements whether as a result of new
information, future events or otherwise. Factors that may impact forward-
looking statements include, but are not limited to, the following: (i) the
effects of weather and other natural phenomena; (ii) the economic climate and
growth in the geographical areas where the Company does business; (iii) the
capital intensive nature of the business; (iv) increased competition within
the energy industry as well as from alternative forms of energy; (v) the
timing and extent of changes in commodity prices for natural gas and propane;
(vi) the effects of changes in governmental and regulatory policies, including
income taxes, environmental compliance and authorized rates; (vii) SEMCO
ENERGY's ability to bid on and win construction, engineering and quality
assurance contracts; (viii) the impact of energy prices on the amount of
projects and business available to the engineering business; (ix) the nature,
availability and projected profitability of potential investments available to
the Company; (x) SEMCO ENERGY's ability to operate acquired businesses in
accordance with its plans and (xi) SEMCO ENERGY's ability to accomplish its
financing objectives in a timely and cost-effective manner, including its
ability to accomplish the refinancing of the ENSTAR acquisition, in light of
changing conditions in the capital markets and equity markets.
SOURCE SEMCO ENERGY, Inc.
CONTACT: Analysts: Edric R. Mason, Jr., 810-989-4104, or fax, 810-989-4098, or Media: Francis R. Lieder, Jr., 810-987-2200, ext. 4186, or fax, 810-989-4098, both of SEMCO ENERGY, Inc.