|SEMCO ENERGY Reports Results for the Quarter and Nine Months Ended September 30, 2007|
PORT HURON, Mich., Nov. 8 /PRNewswire-FirstCall/ -- SEMCO ENERGY, Inc. (NYSE: SEN) today announced its financial results for the quarter and nine months ended September 30, 2007. For the quarter ended September 30, 2007, the Company reported a net loss available to common shareholders of $8.9 million (or $0.25 per basic and diluted share) compared to a net loss available to common shareholders of $6.5 million (or $0.18 per basic and diluted share) for the quarter ended September 30, 2006. The net loss available to common shareholders for the third quarter of 2007 includes costs associated with the pending sale of the Company of $0.2 million, net of income taxes (or $0.01 per basic and diluted share). For the nine months ended September 30, 2007, the Company reported net income available to common shareholders of $3.2 million (or $0.09 per basic share and diluted share) compared to net income available to common shareholders of $1.2 million (or $0.03 per basic share and diluted share) for the nine months ended September 30, 2006. Net income available to common shareholders for the first nine months of 2007 includes costs associated with the pending sale of the Company of $2.4 million, net of income taxes (or $0.07 per basic share and diluted share).
The primary factors contributing to the increased net loss for the third quarter of 2007 compared to the third quarter of 2006 were (on an after-tax basis) an increase of $1.2 million in operations and maintenance expense at the Gas Distribution Business, costs of $0.2 million incurred in connection with the pending sale of the Company, a decrease of $0.2 million in gas distribution margin, an increase of $0.6 million in depreciation and property tax expense, and an inventory valuation adjustment of $0.3 million in the third quarter of 2006, offset partially by a $0.4 million decrease in financing-related costs. The primary factors contributing to the increase in net income available to common shareholders when comparing the results for the nine months ended September 30, 2007, to the results for the nine months ended September 30, 2006, include (on an after-tax basis) a $6.3 million increase in gas distribution margin, profits of $0.4 million earned by one of the Company's non-regulated businesses from the sale of natural gas, a decrease of $1.3 million in financing-related costs and a $0.4 million increase in non- operating income, offset partially by a $2.3 million increase in operations and maintenance expense at the Gas Distribution Business, costs of $2.4 million incurred in connection with the pending sale of the Company, and a $1.4 million increase in depreciation and property tax expense.
George A. Schreiber, Jr., the Company's President and Chief Executive Officer, said, "The Company's 2007 third quarter financial results were in line with our expectations. 2007 year-to-date results show a strong improvement over the same period of the last year. Significant progress was made during the past few months towards finalizing the pending sale of the Company to Cap Rock Holding Corporation. We currently expect the sale to close on or about November 9, 2007."
SEMCO ENERGY, Inc. distributes natural gas to more than 400,000 customers combined in Michigan, as SEMCO ENERGY GAS COMPANY, and in Alaska, as ENSTAR Natural Gas Company. It also owns and operates businesses involved in propane distribution, intrastate pipelines and natural gas storage.
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 outcome of the pending transaction to sell the Company, the effects of weather, the economic climate, competition, rising commodity prices and resulting increases in working capital requirements, changing conditions in the capital markets, regulatory approval processes and rate recovery mechanisms, gas procurement opportunities, compliance with covenants and success in accomplishing financing objectives, maintaining an effective system of internal controls, success in obtaining new business, success in defending claims against the Company, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
SEMCO ENERGY, INC. News Release Statistics (Unaudited) (in thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, 2007 2006 2007 2006 Statement of Operations data Operating revenues $71,201 $64,192 $503,003 $432,703 Cost of gas sold 44,342 36,637 370,560 312,756 Operations and maintenance 20,416 17,713 67,015 56,911 Depreciation and amortization 7,501 7,201 22,452 21,568 Property and other taxes 3,094 2,505 9,145 7,735 Operating income (loss) (4,152) 136 33,831 33,733 Other income and (deductions) Interest expense (9,664) (10,270) (29,188) (31,000) Other 655 664 2,730 2,027 Total other income and (deductions) (9,009) (9,606) (26,458) (28,973) Income tax (expense) benefit 4,904 3,582 (2,229) (1,486) Net income (loss) (8,257) (5,888) 5,144 3,274 Dividends on convertible cumulative preferred stock 652 649 1,954 2,103 Net income (loss) available to common shareholders $(8,909) $(6,537) $3,190 $1,171 Earnings (loss) per share - basic Basic $(0.25) $(0.18) $0.09 $0.03 Diluted $(0.25) $(0.18) $0.09 $0.03 Average number of common shares outstanding Basic 35,820 35,341 35,600 34,526 Diluted 35,820 35,341 35,966 34,764 SEMCO ENERGY, INC. News Release Statistics (Unaudited) (dollars in thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, 2007 2006 2007 2006 Business Segment Information Operating revenues Gas Distribution $69,777 $62,394 $494,624 $426,822 Corporate and Other 3,619 4,049 14,381 12,064 Reconciliation to Consolidated Financial Statements Intercompany eliminations (2,195) (2,251) (6,002) (6,183) Consolidated operating revenues $71,201 $64,192 $503,003 $432,703 Operating income (loss) Gas Distribution $(4,031) $(931) $35,890 $31,941 Corporate and Other (121) 1,067 (2,059) 1,792 Consolidated operating income (loss) $(4,152) $136 $33,831 $33,733 Depreciation and amortization expense Gas Distribution $7,200 $6,874 $21,532 $20,578 Corporate and Other 301 327 920 990 Consolidated depreciation and amortization expense $7,501 $7,201 $22,452 $21,568 Gas Distribution Operating Statistics Volumes sold (MMcf) 5,684 5,392 47,468 41,440 Volumes transported (MMcf) 10,412 12,767 31,111 40,042 Number of customers at end of period 409,005 408,405 409,005 408,405 Weather statistics: Degree days Alaska 819 1,010 6,765 6,841 Michigan 130 166 4,107 3,858 Percent colder (warmer) than normal Alaska 3.4% 13.9% 10.9% 7.1% Michigan (26.6)% (7.2)% (6.2)% (12.4)%
SOURCE SEMCO ENERGY, Inc. -0- 11/08/2007 /CONTACT: Analysts, Thomas Connelly, Director of Investor Relations, +1-248-458-6163, or Media, Timothy Lubbers, Director of Marketing and Corporate Communications, +1-810-887-4208, both of SEMCO ENERGY, Inc. / /Web site: http://www.semcoenergy.com / (SEN) CO: SEMCO ENERGY, Inc.; Cap Rock Holding Corporation ST: Michigan, Alaska IN: OIL UTI SU: ERN LG-LA -- CLTH084 -- 6742 11/08/2007 16:15 EST http://www.prnewswire.com
|"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.|