LAS VEGAS, July 29 /PRNewswire-FirstCall/ -- Southwest Gas Corporation
(NYSE: SWX) recorded a net loss of $0.24 per share for the second quarter of
2004, a $0.12 decrease from the $0.12 per share loss reported for the second
quarter of 2003. Net loss for the second quarter of 2004 was $8.4 million
compared to the 2003 second quarter net loss of $4.1 million. Due to the
seasonal nature of the business, net losses during the second and third
quarters are normal and not generally indicative of earnings for a complete
12-month period.
According to Jeffrey W. Shaw, Chief Executive Officer, "Second quarter
results, although lower than last year, were in line with internal
expectations. The primary reason for the decline was higher operating costs
relative to the increase in operating margin. The Company added a record
74,000 customers, plus 9,000 from an acquisition, over the last 12 months.
Operating margin, however only increased modestly due to warmer-than-normal
temperatures experienced in April and May. Operating costs, on the other
hand, trended upward due to the combined impacts of customer growth,
inflation, and regulatory compliance." Shaw reiterated that "the long-term
success of Southwest Gas depends upon taking advantage of customer growth
opportunities."
For the twelve months ended June 30, 2004, consolidated net income was
$49.7 million, or $1.45 per basic share, compared to $43.1 million, or
$1.29 per basic share, during the twelve-month period ended June 30, 2003.
Natural Gas Operations Segment Results
Second Quarter
Operating margin, defined as operating revenues less the cost of gas sold,
increased approximately $3 million, or three percent, in the second quarter of
2004 compared to the second quarter of 2003. Customer growth contributed an
incremental $3 million in operating margin during the quarter. Rate relief in
California added $2 million in margin, while differences in heating demand
caused by weather variations between periods accounted for a $2 million
decrease. During the last 12 months, the Company added 74,000 customers, an
increase of five percent. Another 9,000 customers were added in October 2003
with the acquisition of Black Mountain Gas Company.
Operating expenses for the quarter increased $9.4 million, or nine
percent, compared to the second quarter of 2003 primarily due to incremental
costs associated with expanding and upgrading the gas system to accommodate
record customer growth. Additional factors include general cost increases and
higher employee-related and regulatory costs. Despite an increase in
outstanding debt, net financing costs were virtually unchanged between periods
due to interest savings generated from debt and preferred securities
instrument refinancings and a reduction in interest costs associated with the
purchased gas adjustment account balance.
Twelve Months to Date
Operating margin increased $43 million, or eight percent, between periods.
Differences in heating demand caused by weather variations between periods
resulted in a $20 million margin increase as warmer-than-normal temperatures
were experienced during both periods. During the current period, operating
margin was negatively impacted by $15 million, while in the prior period the
negative impact was $35 million. Customer growth contributed an incremental
$17 million and California rate relief added $9 million. Conservation, energy
efficiency and other factors partially offset these improvements.
Operating expenses increased $22.6 million, or five percent, primarily
reflecting incremental costs associated with servicing a growing customer
base. Net financing costs decreased $1.7 million, or two percent, primarily
due to interest savings generated from the refinancing of industrial
development revenue bonds and preferred securities instruments.
Other income decreased $10.5 million between periods. The prior period
reflected income of $13.6 million associated with the timing of merger-related
insurance recoveries, net of costs. The current period includes a
$2.3 million improvement in returns on long-term investments.
Southwest Gas Corporation provides natural gas service to approximately
1,560,000 customers in Arizona, Nevada and California. Its service territory
is centered in the fastest-growing region of the country.
This press release may contain statements which constitute
"forward-looking statements" within the meaning of the Securities Litigation
Reform Act of 1995 (Reform Act). All such forward-looking statements are
intended to be subject to the safe harbor protection provided by the Reform
Act. A number of important factors affecting the business and financial
results of the Company could cause actual results to differ materially from
those stated in the forward-looking statements. These factors include, but
are not limited to, the impact of weather variations on customer usage,
customer growth rates, natural gas prices, the effects of
regulation/deregulation, the timing and amount of rate relief, changes in gas
procurement practices, changes in capital requirements and funding, the impact
of conditions in the capital markets on financing costs, changes in
construction expenditures and financing, acquisitions, and competition.
SOUTHWEST GAS CONSOLIDATED EARNINGS DIGEST
(In thousands, except per share amounts)
QUARTER ENDED JUNE 30, 2004 2003
Consolidated Operating Revenues $278,697 $255,852
Net Loss $8,362 $4,104
Average Number of Common Shares Outstanding 34,741 33,665
Loss Per Share $0.24 $0.12
SIX MONTHS ENDED JUNE 30, 2004 2003
Consolidated Operating Revenues $752,097 $659,137
Net Income $32,682 $21,435
Average Number of Common Shares Outstanding 34,576 33,552
Basic Earnings Per Share $0.95 $0.64
Diluted Earnings Per Share $0.94 $0.63
TWELVE MONTHS ENDED JUNE 30, 2004 2003
Consolidated Operating Revenues $1,323,964 $1,219,422
Net Income $49,749 $43,114
Average Number of Common Shares Outstanding 34,269 33,346
Basic Earnings Per Share $1.45 $1.29
Diluted Earnings Per Share $1.44 $1.28
SOURCE Southwest Gas Corporation
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Related links:
http://www.swgas.com
CONTACT:
Media, Roger Buehrer, +1-702-876-7132, or
Shareholder Contact, Ken Kenny, +1-702-876-7237, both of
Southwest Gas Corporation
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