At Company's Annual Meeting, Chairman John Hinton and President/CEO
George Schreiber Describe Actions to Sharpen Company's Strategic Focus,
Strengthen its Capital Position, Build Shareholder Value
FARMINGTON HILLS, Mich., May 25 /PRNewswire-FirstCall/ -- The new
non-executive Chairman, and the new President and Chief Executive Officer, of
SEMCO ENERGY, Inc. (NYSE: SEN), John Hinton and George A. Schreiber, Jr.,
respectively, yesterday provided SEMCO ENERGY shareholders with an update on
the Company's strategic, operational and financial progress.
Speaking at the Company's Annual Meeting of Shareholders at the McMorran
Auditorium in Port Huron, Mich., Messrs. Hinton and Schreiber described recent
steps to sharpen the Company's strategic focus, strengthen its capital
position, improve its financial performance, and build value for SEMCO ENERGY
shareholders. They also noted the Company's continued top-tier performance in
meeting the gas distribution needs of its nearly 393,000 customers in Michigan
Mr. Hinton, a SEMCO ENERGY board member since 2002 whose appointment as
the Company's non-executive Chairman took effect in December 2003,
acknowledged that the Company's cumulative investment performance over the
past five years had trailed both its peer group and the S&P 500 index. "By
far the most significant factor in this underperformance was the Company's
decision to acquire several construction businesses between 1997 and 2000,"
Mr. Hinton said. "The performance of these businesses, in combination with
the debt load incurred to purchase them, dragged down the results of the
"It is important to note, however," Mr. Hinton continued, "that in spite
of warmer-than-normal weather throughout this period, our core gas
distribution businesses performed strongly in both Michigan and Alaska." He
pointed to several major initiatives currently under way aimed at improving
the Company's strategic focus and financial strength, including the previously
announced decision to divest the Company's Construction Services business, the
pending sale of its Alaskan pipeline, and its issuance of $50 million of
convertible preference stock.
At the Annual Meeting, Mr. Schreiber, whose appointment as President and
CEO was announced on March 10, provided his view of SEMCO ENERGY's strategic
direction, operational strength, and financial outlook. He praised the
continued strong performance of SEMCO ENERGY's gas distribution operations,
expressed confidence in the Company's management team, and emphasized his
determination to restore the Company's credibility with investors and to
enhance shareholder value.
Summarizing his Annual Meeting remarks, Mr. Schreiber said, "SEMCO
ENERGY's gas distribution operations have been, and continue to be,
operationally and financially strong. As we take the steps necessary, in the
months ahead, to divest our Construction business, complete our transformation
into a gas distribution company, and improve our capital structure, we will be
increasingly well positioned to achieve earnings growth and build SEMCO
ENERGY's value for our shareholders.
These steps include:
-- Moving forward on the previously announced sale of Alaska Pipeline
Company, a $95 million transaction.
-- Achieving the sale of our Construction Services business. We have
already held discussions with several potential purchasers and are currently
in advanced discussions. We hope to announce a definitive agreement in the
near future and to close a transaction before year end.
-- Completing the previously announced issuance of $50 million of
preference stock. In March 2004 we issued $31 million of that amount to an
affiliate of k1 Ventures Limited. Having now received the necessary
shareholder approval, we plan to issue the remaining $19 million in the near
At the Annual Meeting, Mr. Schreiber said that SEMCO ENERGY currently has,
and is committed to maintain, excellent customer service -- as well as
outstanding relationships with its regulators in Michigan and Alaska. SEMCO
ENERGY's operational performance, as measured by such standard industry
benchmarks as customers per employee and operation and maintenance cost per
customer, places the Company near the top of comparisons with its industry
Mr. Schreiber told the Company's shareholders that SEMCO ENERGY is, and
will continue to be, an organization committed to maintaining a safe
workplace, where employees are challenged and rewarded for their efforts.
He also said that the Company will continue to explore, in a focused and
disciplined manner, opportunities to grow the Company's businesses. Such
opportunities will complement those SEMCO ENERGY already has and position the
Company to grow shareholder value.
SEMCO ENERGY, Inc. is a diversified energy and infrastructure company that
distributes natural gas to more than 391,000 customers in Michigan and Alaska.
It also owns and operates businesses involved in natural gas pipeline
construction services, propane distribution, intrastate pipelines and natural
gas storage in various regions of the United States. In addition, it provides
information technology and outsourcing services, specializing in the mid-range
The following is a "Safe-Harbor" statement under the Private Securities
Litigation Reform Act of 1995. This release contains forward-looking
statements that involve risks and uncertainties. Statements that are not
historic facts, including statements about the Company's outlook, beliefs,
plans, goals and expectations, are forward-looking statements. Factors that
may impact these forward-looking statements include, but are not limited to,
the effects of weather, the economic climate, competition, commodity prices,
Changing conditions in the capital markets, regulatory approval processes,
success in obtaining new business, the Company's ability to implement its
strategic, operational and financial initiatives, management performance and
other risks detailed from time to time in the Company's Securities and
Exchange Commission filings.
SOURCE SEMCO ENERGY, Inc.
/CONTACT: Analysts Contact: Thomas Connelly, Director of Investor
Relations, +1-248-702-6000, ext. 6240, Media Contact: Laurie Owens,
Director of Customer Service, +1-810-985-7900, ext. 2023, E-mail:
firstname.lastname@example.org , both of SEMCO ENERGY, Inc./
/Web site: http://www.semcoenergy.com /
CO: SEMCO ENERGY, Inc.
ST: Michigan, Alaska
IN: OIL UTI
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2145 05/25/2004 14:30 EDT http://www.prnewswire.com