Company Website:
http://www.empiredistrict.com
JOPLIN, Mo. -- (Business Wire)
At the Board of Directors meeting of The Empire District Electric
Company (NYSE:EDE) held today, the Directors declared a quarterly
dividend of $0.25 per share on common stock payable June 17, 2013, to
holders of record as of June 3, 2013. The Company, an operator of
regulated electric, gas and water utilities, announced today the results
for the quarter and twelve months ended March 31, 2013.
Highlights
-
The Company reported consolidated earnings for the first quarter of
2013 of $12.6 million, or $0.30 per share, compared to same quarter
2012 earnings of $9.8 million, or $0.23 per share. Earnings for the
twelve months ended March 31, 2013 were $58.5 million, or $1.38 per
share, compared to earnings of $52.9 million, or $1.26 per share, for
the 2012 twelve month period.
-
Weather was the primary driver of increased revenue and margin in the
electric and gas segments during the first quarter of 2013. A return
to near-normal winter weather (compared to record warm weather in the
first quarter of 2012), resulted in a 10% increase in kilowatt hour
sales quarter over quarter. The additional sales from the colder
weather added an estimated $9.3 million to electric margin for the
quarter. Partially offsetting the positive impact of weather was a
pre-tax write off of $2.4 million related to a construction prudency
disallowance for Iatan 2. This non-recurring, one-time charge resulted
from a March 6, 2013 order from the Missouri Public Service Commission
(MPSC) approving a settlement agreement related to the Company’s
request filed July 6, 2012 to increase electric rates for Missouri
customers. The rate case settlement also included an additional
non-recurring, one-time $1.2 million charge for the regulatory
reversal of a prior period gain related to the sale of our Asbury Unit
Train. This change is included in operating and maintenance expenses,
which also increased quarter over quarter. These higher costs were
somewhat offset by lower interest rates and increased Allowance for
Funds Used During Construction (AFUDC).
-
On April 1, 2013, the Company implemented increased rates for its
Missouri electric customers pursuant to the MPSC order mentioned
above. The increase was equivalent to an estimated $27.5 million of
additional annual revenue.
-
Our full-year earnings guidance range of $1.26 to $1.43 per share,
provided by the Company in February 2013, remains unchanged.
First Quarter Results
Electric segment revenue and gross margin (electric revenue less fuel
and purchased power costs) both increased approximately $9.0 million
during the first quarter of 2013 compared to the 2012 quarter. Increased
demand resulting from the colder first quarter 2013 weather compared to
the 2012 quarter drove a 10% increase in kilowatt hour sales and a
corresponding increase in electric operating revenues of approximately
$9.3 million. Higher average customer counts and other miscellaneous
revenues also positively impacted electric revenues and margin during
the quarter.
Gas segment gross margin (gas revenues less cost of gas sold and
transported) was also positively impacted by colder first quarter 2013
weather, increasing $1.5 million when compared to the 2012 quarter.
Electric segment operating expenses increased approximately $3.8 million
during the first quarter of 2013 compared to the 2012 quarter,
reflecting the regulatory reversal mentioned previously, as well as
increases in transmission, employee health and welfare, labor, and
uncollectable customer accounts expenses. These increased expenses were
partially offset by decreases in professional services and line of
credit fees. Electric segment maintenance expenses were relatively
unchanged compared to the 2012 quarter. As previously mentioned, the
$2.4 million write off resulting from the settlement of our Missouri
rate proceeding negatively impacted earnings for the quarter.
Depreciation expense increased approximately $1.2 million during the
quarter primarily due to increased levels of plant in service. Other
income and deductions were higher by $0.8 million during the quarter,
reflecting increases in the Allowance for Funds Used During Construction
(AFUDC) and interest income. Interest expense decreased approximately
$0.9 million during the 2013 quarter, due primarily to a decrease in
long-term debt interest expense resulting from the refinancing of debt
at more favorable interest rates.
Consolidated net income improved approximately $2.8 million during the
2013 quarter as compared to the 2012 quarter.
Twelve Month Ended Results
Electric segment gross margin increased approximately $16.4 million
during the twelve-month ended March 31, 2013 period. Positive drivers
include a full twelve months of increased Missouri electric rates that
were effective June 2011, a 2012 third quarter change in the estimate
for unbilled revenue, and increased electric customer counts. Both
periods were impacted favorably by above average warm temperatures
during the summer cooling months, however the colder 2013 first quarter
weather resulted in a small favorable margin impact in the 2013 period.
Gas segment gross margin increased approximately $0.9 million during the
2013 period on increased gas segment revenues of approximately $3.5
million.
Electric segment operating expenses increased $9.1 million during the
2013 twelve month period, impacted similarly by the regulatory reversal
and the other operating expense items cited in the quarterly discussion
above. Electric segment maintenance expenses increased slightly year
over year. The previously mentioned Iatan 2 disallowance also negatively
impacted 2013 twelve month ended earnings. Depreciation expense
increased approximately $0.5 million during the 2013 twelve month
period. Other taxes were $1.4 million higher during the period,
reflecting increased property tax expenses.
Other income and deductions increased earnings around $1.5 million.
Reduced interest expense contributed approximately $2.8 million to 2013
twelve month ended earnings compared to the 2012 period.
Consolidated net income increased approximately $5.7 million in the 2013
twelve month ended period compared to the 2012 period.
Selected unaudited consolidated financial data for the quarters and
twelve months ended March 31, 2013 and 2012 is presented in the
following table.
(dollars in millions, except Per Share data) |
|
| |
| |
| | Three Months Ended | | Twelve Months Ended |
| | March 31, | | March 31, |
| | 2013 |
| 2012 |
| Change* | | 2013 |
| 2012 |
| Change* |
| Electric Segment Revenues | |
$128.8
|
|
$119.7
|
|
$9.1
| |
$519.7
|
|
$515.6
|
|
$4.1
|
| Electric Fuel and Purchased Power | |
45.3
|
|
45.2
|
|
0.1
| |
179.0
|
|
191.3
|
|
(12.3)
|
| Electric Margin | |
83.5
| |
74.5
| |
9.0
| |
340.7
| |
324.3
| |
16.4
|
| | | | | | | | | | | |
|
| Gas Revenues | |
20.5
| |
15.7
| |
4.8
| |
44.7
| |
41.1
| |
3.6
|
| Cost of Gas Sold and Transported | |
11.9
|
|
8.6
|
|
3.3
| |
22.0
|
|
19.3
|
|
2.7
|
| Gas Margin | |
8.6
| |
7.1
| |
1.5
| |
22.7
| |
21.8
| |
0.9
|
| | | | | | | | | | | |
|
| Other Revenues | |
1.8
|
|
1.7
|
|
0.1
| |
6.7
|
|
6.6
|
|
0.1
|
| Gross Margin | | 93.9 |
|
83.3
|
|
10.6
| |
370.1
|
|
352.7
|
|
17.4
|
| | | | | | | | | | | |
|
| Operating and Maintenance Expenses | |
37.1
| |
33.1
| |
4.0
| |
141.5
| |
132.2
| |
9.3
|
| Loss on Plant Disallowance | |
2.4
| |
0.0
| |
2.4
| |
2.4
| |
0.2
| |
2.2
|
| Depreciation and Amortization | |
16.1
| |
14.9
| |
1.2
| |
61.6
| |
61.1
| |
0.5
|
| Taxes | |
16.5
| |
14.5
| |
2.0
| |
67.3
| |
63.3
| |
4.0
|
| Interest Expense and Other, net | |
9.2
|
|
11.0
|
|
(1.8)
| |
38.8
|
|
43.0
|
|
(4.2)
|
| Net Income | | $12.6 |
| $9.8 |
| $2.8 | | $58.5 |
| $52.9 |
| $5.6 |
| | | | | | | | | | | |
|
| Earnings Per Share | | $0.30 | | $0.23 | | $0.07 | | $1.38 | | $1.26 | | $0.12 |
| | | | | | | | | | | |
|
| | Three Months Ended | | Twelve Months Ended |
| | March 31, | | March 31, |
| | 2013 |
| 2012 |
| Change* | | 2013 |
| 2012 |
| Change* |
| Electric On-System kWh Sales (in millions): | | | | | | | | | | | | |
| Residential | |
571
| |
476
| |
20.0%
| |
1,945
| |
1,868
| |
4.1%
|
| Commercial/Industrial | |
600
| |
580
| |
3.4%
| |
2,607
| |
2,566
| |
1.6%
|
| Other | |
118
|
|
116
| |
1.7%
| |
480
|
|
488
| |
(1.6%)
|
| Total On-System Electric Sales | | 1,289 | | 1,172 | | 10.0% | | 5,032 | | 4,922 | | 2.2% |
| | | | | | | | | | | |
|
| Retail Gas Sales (billion cubic feet): | | | | | | | | | | | | |
| Residential | |
1.34
| |
0.96
| |
38.8%
| |
2.38
| |
2.13
| |
12.3%
|
| Commercial/Industrial | |
.63
| |
.48
| |
35.1%
| |
1.28
| |
1.16
| |
9.0%
|
| Other | |
.02
|
|
.01
| |
40.1%
| |
.03
|
|
.03
| |
11.2%
|
| Total Retail Gas Sales | | 1.99 | | 1.45 | | 37.6% | | 3.69 | | 3.32 | | 11.1% |
| | | | | | | | | | | |
|
* Slight differences from actual results may occur due to rounding.
|
Reconciliation of Earnings Per Share |
|
| |
| |
| | Quarter
Ended | | Twelve Months
Ended |
| | | |
|
| Basic Earnings Per Share – March 31, 2012 | | $ | 0.23 | | | $ | 1.26 | |
| Revenues | | | | |
|
Electric segment
| | |
0.13
| | | |
0.06
| |
|
Gas segment
| | |
0.07
| | | |
0.05
| |
|
Other segment
| |
| 0.00 |
| |
| 0.00 |
|
| Total Revenue | | |
0.20
| | | |
0.11
| |
| | | | | | | |
|
Electric fuel and purchased power
| | |
0.00
| | | |
0.18
| |
|
Cost of natural gas sold and transported
| |
| (0.05 | ) | |
| (0.04 | ) |
| Gross Margin | | |
0.15
| | | |
0.25
| |
| | | |
|
| Expenses | | | | |
|
Operating
| | |
(0.06
|
)
| | |
(0.15
|
)
|
|
Maintenance and repairs
| | |
0.00
| | | |
0.01
| |
|
Loss on plant disallowance
| | |
(0.03
|
)
| | |
(0.03
|
)
|
|
Depreciation and amortization
| | |
(0.02
|
)
| | |
(0.01
|
)
|
|
Change in effective income tax rates
| | |
0.01
| | | |
0.02
| |
|
Other taxes
| | |
(0.01
|
)
| | |
(0.02
|
)
|
|
Other income and deductions
| | |
0.01
| | | |
0.00
| |
|
Interest charges
| | |
0.01
| | | |
0.03
| |
|
AFUDC
| | |
0.01
| | | |
0.03
| |
|
Dilutive effect of additional shares
| |
| 0.00 |
| |
| (0.01 | ) |
| | | |
|
| Basic Earnings Per Share – March 31, 2013 | | $ | 0.30 |
| | $ | 1.38 |
|
| | | | | | | |
|
The reconciliation of basic earnings per share (EPS) presented above
compares the quarter and year ended March 31, 2013 versus March 31, 2012
and is a non-GAAP presentation. The economic substance behind our
non-GAAP EPS measure is to present the after tax impact of significant
items and components of the statement of income on a per share basis
before the impact of additional stock issuances. We believe this
presentation is useful to investors because the statement of income does
not readily show the EPS impact of the various components, including the
effect of new stock issuances. This could limit the readers’
understanding of the reasons for the EPS change from previous years.
This information is useful to management, and we believe useful to
investors, to better understand the reasons for the fluctuation in EPS
between the prior and current years on a per share basis.
In addition, although a non-GAAP presentation, we believe the
presentation of gross margin (reflected in the table above and elsewhere
in this press release) is useful to investors and others in
understanding and analyzing changes in our operating performance from
one period to the next, and have included the analysis as a complement
to the financial information we provide in accordance with GAAP. This
reconciliation and margin information may not be comparable to other
companies or more useful than the GAAP presentation included in the
statements of income. We also note that this presentation does not
purport to be an alternative to EPS determined in accordance with GAAP
as a measure of operating performance or any other measure of financial
performance presented in accordance with GAAP. Management compensates
for the limitations of using non-GAAP financial measures by using them
to supplement GAAP results to provide a more complete understanding of
the factors and trends affecting the business than GAAP results alone.
The dilutive effect of additional shares issued in this table reflects
the impact of all shares issued in the respective periods presented.
Earnings Conference Call
Brad Beecher, President and CEO, will host a conference call Friday,
April 26, 2013, at 1:00 p.m. Eastern Time to discuss earnings for the
first quarter and twelve months ended March 31, 2013. To phone in to the
conference call, parties in the United States should dial
1-800-762-8779, any time after 12:45 p.m. Eastern Time. The webcast
presentation and accompanying presentation slides can also be accessed
from Empire’s website at www.empiredistrict.com.
A replay of the call will be available for two weeks by dialing
1-800-406-7325 and entering passcode 4614060#. The webcast presentation
will be available for replay for one year from today’s date.
Forward-looking and other material information may be discussed during
the conference call.
Based in Joplin, Missouri, The Empire District Electric Company
(NYSE:EDE) is an investor-owned, regulated utility providing electric,
natural gas (through its wholly owned subsidiary The Empire District Gas
Company) and water service, with approximately 216,000 customers in
Missouri, Kansas, Oklahoma, and Arkansas. A subsidiary of the Company
also provides fiber optic services.
Certain matters discussed in this press release are “forward-looking
statements” intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of 1995.Such
statements address future plans, objectives, expectations, earnings, and
events or conditions concerning various matters.Actual results
in each case could differ materially from those currently anticipated in
such statements, by reason of the factors noted in our filings with the
SEC, including the most recent Forms 10-K.
Contacts:
The Empire District Electric Company
Media
Communications:
Amy Bass, 417-625-5114
Director of
Corporate Communications
abass@empiredistrict.com
or
Investor
Relations:
Jan Watson, 417-625-5108
Secretary –
Treasurer
jwatson@empiredistrict.com
Source: The Empire District Electric Company
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