FARMINGTON HILLS, Mich., June 24 /PRNewswire-FirstCall/ -- SEMCO ENERGY,
Inc. (NYSE: SEN) today announced that its Board of Directors voted to suspend
the Company's quarterly Common Stock dividend of $0.075 per share, effective
immediately. This action reflects the Board's conclusion after a
comprehensive review of the Company's current financial situation. The
decision focused primarily on the need to retain cash in the Company to
strengthen its balance sheet and to be better positioned to grow its regulated
gas distribution businesses in the future.
George A. Schreiber, Jr., the Company's President and Chief Executive
Officer, said: "SEMCO remains strategically focused on the gas distribution
business and operationally very strong in the markets served. Focusing solely
on the gas distribution business is where long-term value will be created.
Growth in Alaska and Michigan markets continues to be above the national
average. As a result of this situation, SEMCO has historically realized
substantial increases in operating profits and favorable returns on
investment. From an operating perspective, American Gas Association
statistics comparing operating performance of SEMCO and ENSTAR indicate that
these businesses continue to rank favorably when compared with their peers.
As part of the transition to being only a gas distribution company, the sale
process relating to the construction business is moving forward and is on
schedule. SEMCO has made progress improving its financial condition and is
determined to make further improvements. Although the Company's outstanding
debt continues to be rated "non-investment grade" by the major credit rating
agencies, today's action is designed to accelerate progress toward improved
financial integrity notwithstanding the challenges, including the status of
the APC sale, confronting the Company. Management and the Board recognize the
importance of the dividend to many of our shareholders. However, our top
financial priority must be to substantially improve the Company's financial
health in order to protect shareholders' current investment and to be better
positioned to grow earnings in the future. This decision, while difficult, is
consistent with that responsibility."
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 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, +1-248-702-6240, or Media Contact: Laurie Owens, Director of
Customer Service, +1-810-987-2200, Ext. 2023, both of SEMCO ENERGY, Inc/
/Web site: http://www.semcoenergy.com /
CO: SEMCO ENERGY, Inc.
IN: OIL UTI
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6016 06/24/2004 14:19 EDT http://www.prnewswire.com