ST. LOUIS, April 28 /PRNewswire-FirstCall/ -- The Laclede Group today released its earnings report for the second quarter of its fiscal year 2006 and declared a quarterly dividend of 35 1/2 cents per share on its common stock, payable July 3, 2006, to shareholders of record on June 9, 2006.
Net income for the quarter ended March 31, 2006, was $20.9 million this year, or $1.5 million lower than the same period last year. On an earnings-per-share basis, second quarter earnings for fiscal 2006 -- which reflected a 7 cent charge related to an agreement in principle to settle a previously reported lawsuit involving SM&P Utility Resources, Inc. (SM&P) -- were $.99 per share, compared to $1.07 last year.
Earnings from The Laclede Group's core subsidiary, Laclede Gas Company, Missouri's largest natural gas distribution utility, were down $3.5 million this year compared to the second quarter of fiscal 2005. Utility earnings were reduced by lower system sales volumes reflecting weather that was 9% warmer than last year, reduced sales of natural gas and upstream pipeline capacity outside the utility's service area, and higher operating expenses. These decreases were partially offset by the net benefit of rate changes implemented at the utility October 1, 2005.
Net results for the second quarter of fiscal year 2006 for SM&P, Laclede Group's unregulated underground facility locating and marking business, trailed the same period last year by $1.7 million, due primarily to a $2.5 million pre-tax charge ($1.5 million after-tax) related to the agreement in principle to settle a previously reported collective action lawsuit regarding certain employment-related claims. Excluding the effect of this charge, SM&P's results were $.2 million less than the same quarter last year.
Laclede Energy Resources, Laclede Group's other principal unregulated subsidiary, offers natural gas commodity services to customers within and outside of the St. Louis area. Laclede Energy Resources posted a $3.7 million increase over the same period last year as a result of increased margins caused by higher price volatility and hurricane-related regional supply/demand imbalances, as well as higher wholesale sales volumes.
Laclede Group's net income for the six-month period ended March 31, 2006, was $47.1 million, or $8.0 million more than the same period last year. Earnings per share for the six-month period increased to $2.22 compared to $1.86 for the same period last year.
The increase in net income during the six-month period reflects improved results at both Laclede Gas Company and Laclede Energy Resources. Laclede Gas Company's results improved due to the October 1, 2005 rate changes and increased earnings from the sale of natural gas and upstream pipeline capacity to entities outside of its traditional service area, partially offset by higher operating expenses. Laclede Energy Resources' results for the six-month period, improved due to the same factors mentioned above. These increases were somewhat offset by the SM&P settlement charge.
Due to the seasonal nature of Laclede Gas' business, its earnings are typically concentrated in the November through April period, which generally corresponds with the heating season. Losses typically are experienced during the non-heating season. The seasonal effect on The Laclede Group is expected to be tempered somewhat by earnings from its non-regulated subsidiaries, particularly SM&P, whose operations tend to be counter-seasonal to those of Laclede Gas.
In addition, Laclede Gas Company declared a quarterly dividend of 31 1/4 cents per share on Preferred Stock, Series B, and a quarterly dividend of 28 1/2 cents per share on Preferred Stock, Series C, payable June 30, 2006, to shareholders of record June 9, 2006.
Note: This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The Company's future operating results may be affected by various uncertainties and risk factors, many of which are beyond the Company's control, including weather conditions, governmental and regulatory policy and action, the competitive environment and economic factors. For a more complete description of these uncertainties and risk factors, see the Company's Form 10-Q for the quarter ended March 31, 2006, filed with the Securities and Exchange Commission.
UNAUDITED
STATEMENTS OF CONSOLIDATED INCOME
THE LACLEDE GROUP, INC.
(Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
March 31, March 31,
2006 2005 2006 2005
OPERATING REVENUES
Regulated
Gas distribution $489,283 $434,996 $900,684 $726,249
Non-Regulated
Services 30,559 23,806 66,017 51,792
Gas marketing 187,733 116,607 429,065 234,786
Other 1,205 1,146 2,249 6,213
Total operating
revenues 708,780 576,555 1,398,015 1,019,040
OPERATING EXPENSES
Regulated
Natural and
propane gas 371,388 321,228 683,427 527,652
Other operation
expenses 37,764 34,675 70,869 65,600
Maintenance 5,267 4,680 10,255 8,894
Depreciation and
amortization 8,178 5,667 14,261 10,972
Taxes, other than
income taxes 29,258 26,477 48,897 42,300
Total regulated
operating
expenses 451,855 392,727 827,709 655,418
Non-Regulated
Services 35,991 26,303 69,910 53,175
Gas marketing 178,872 113,705 411,346 229,491
Other 851 846 1,702 6,017
Total operating
expenses 667,569 533,581 1,310,667 944,101
Operating Income 41,211 42,974 87,348 74,939
Other Income and
(Income Deductions) -
Net 1,179 (94) 2,464 1,480
Interest Charges:
Interest on long-term
debt 5,643 5,643 11,286 11,551
Interest on long-term
debt to
unconsolidated
affiliate trust 893 893 1,786 1,786
Other interest charges 3,041 1,318 5,164 2,288
Total interest
charges 9,577 7,854 18,236 15,625
Income Before Income
Taxes 32,813 35,026 71,576 60,794
Income Tax Expense 11,871 12,568 24,454 21,704
Net Income 20,942 22,458 47,122 39,090
Dividends on Redeemable
Preferred Stock -
Laclede Gas 13 15 25 30
Net Income Applicable
to Common Stock $20,929 $22,443 $47,097 $39,060
Average Number of
Common Shares
Outstanding 21,231 21,060 21,211 21,038
Basic Earnings Per
Share of Common Stock $0.99 $1.07 $2.22 $1.86
Diluted Earnings Per
Share of Common Stock $0.98 $1.06 $2.22 $1.85
