LAS VEGAS, Oct. 29 /PRNewswire-FirstCall/ -- Southwest Gas Corporation
(NYSE: SWX) recorded a net loss of $0.51 per share for the third quarter of
2003, a $0.02 decline from the $0.49 per share loss reported for the third
quarter of 2002. Net loss for the third quarter of 2003 was $17.4 million
compared to the 2002 third quarter net loss of $16.1 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
twelve-month period.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010823/SWXLOGO )
According to Michael O. Maffie, Chief Executive Officer, "The reduction in
third quarter earnings reflects slightly lower operating margin coupled with
modestly higher operating expenses and financing costs. We've continued to
emphasize cost-curbing initiatives to stay relatively on track with last
year's results. With cautious optimism, we now look forward to the fourth
quarter and the beginning of the winter heating season."
For the twelve months ended September 30, 2003, consolidated net income
was $41.8 million, or $1.25 per share, compared to $37.1 million, or $1.13 per
share, during the twelve-month period ended September 30, 2002. The impact of
weather and certain non-recurring items, as discussed in more detail below,
greatly influenced the results of both periods.
Natural Gas Operations Segment Results
Third Quarter
Operating margin, defined as operating revenues less the cost of gas sold,
decreased $1.7 million, or two percent, in the third quarter of 2003 compared
to the third quarter of 2002. Customer growth contributed $2 million of
incremental margin during the period. However, this was more than offset by a
number of factors including reductions in gas procurement, transportation and
gas storage services. Margin from these services can vary from period to
period. During the last twelve months the Company has added nearly 64,000
customers, an increase of four percent.
Operating expenses for the quarter increased $1.8 million, or two percent,
compared to the third quarter of 2002. The impacts of general cost increases
and costs associated with the continued expansion and upgrading of the gas
system to accommodate customer growth were mitigated by cost-curbing measures
implemented during the past year. Net financing costs increased $224,000, or
one percent, between periods. In August, the Company, through a wholly owned
financing trust, issued $100 million of 7.70% preferred securities of which
$60 million was utilized in September to redeem 9.125% preferred securities.
Lower interest rates on variable-rate and refinanced debt partially offset the
increased financing costs associated with the preferred securities.
Other income/expense improved $3.6 million, before tax, between quarters
primarily due to non-recurring costs recognized in 2002. In the third quarter
of 2002, costs associated with merger litigation and a regulatory disallowance
in California totaled $2.1 million. In addition, revenues from long-term
investments improved between quarters.
Twelve Months to Date
Operating margin decreased $5.5 million between periods. Differences in
heating demand caused by weather variations between periods resulted in a
$22 million margin decrease as warmer-than-normal temperatures were
experienced during both periods. During the current twelve-month period,
operating margin was negatively impacted by $35 million, and in the prior
period, the negative impact was $13 million. Customer growth and rate relief,
partially offset by conservation, energy efficiencies, and other factors,
contributed a net $16.5 million in incremental margin.
Operating expenses increased $11.9 million, or three percent, reflecting
incremental costs associated with servicing additional customers, mitigated by
cost-curbing measures. Net financing costs increased less than one percent
between periods as the impacts of incremental borrowings and additional
preferred securities to finance construction expenditures were offset by lower
interest rates on variable-rate and refinanced debt.
Other income/expense improved $24.3 million, before tax, between periods.
The timing of merger-related litigation settlements, merger litigation costs
and the associated insurance recoveries resulted in $14.6 million of income in
the current period and $18.9 million of costs in the prior period.
Prior-period results also included $11.9 million in gains on the sale of
property and other assets recognized during the fourth quarter of 2001 and
first quarter of 2002. In addition, a California regulatory disallowance
recorded during the second and third quarters of 2002 totaled $2.7 million.
At September 30, 2003, Southwest Gas Corporation provided natural gas
service to approximately 1,491,000 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, acquisitions, and
competition.
SOUTHWEST GAS CONSOLIDATED EARNINGS DIGEST
(In thousands, except per share amounts)
QUARTER ENDED SEPTEMBER 30, 2003 2002
Consolidated Operating Revenues $220,162 $223,863
Net Loss $17,407 $16,136
Average Number of Common Shares Outstanding 33,852 33,065
Loss Per Share $0.51 $0.49
NINE MONTHS ENDED SEPTEMBER 30, 2003 2002
Consolidated Operating Revenues $879,299 $984,487
Net Income $4,028 $6,150
Average Number of Common Shares Outstanding 33,653 32,862
Basic Earnings Per Share $0.12 $0.19
Diluted Earnings Per Share $0.12 $0.19
TWELVE MONTHS ENDED SEPTEMBER 30, 2003 2002
Consolidated Operating Revenues $1,215,721 $1,368,623
Net Income $41,843 $37,125
Average Number of Common Shares Outstanding 33,545 32,752
Basic Earnings Per Share $1.25 $1.13
Diluted Earnings Per Share $1.24 $1.12
SOURCE Southwest Gas Corporation
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Related links:
http://www.swgas.com
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/20010823/SWXLOGO
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PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Media, Roger Buehrer, Las Vegas, NV,
+1-702-876-7132, or Shareholder Ken Kenny, Las Vegas, NV,
+1-702-876-7237, both of Southwest Gas Corporation
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