NUI Announces Third Quarter Earnings for Fiscal Year 2004.BEDMINSTER, N.J. -- NUI (1) (Network User Interface) A user interface for a computer attached to the network. The NUI is designed to work with remote applications and files as easily as local files. Corporation (NYSE NYSE See: New York Stock Exchange :NUI) today reported a $12.3 million reduction in net loss for the third quarter of fiscal 2004, as compared to the third quarter of last year. NUI's net loss for the third quarter ended June 30, 2004, was $12.8 million, or $0.80 per share, compared to a net loss of $25.1 million, or $1.57 per share, for the third quarter last year. The net loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $11.5 million, or $0.72 per share, compared to a net loss of $3.6 million, $0.23 per share, in the third quarter of fiscal 2003. The $7.9 million increased loss from continuing operations was primarily the result of (1) reduced operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of approximately $2.2 million, primarily due to exiting the retail energy marketing and wholesale energy trading businesses; (2) increased operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of approximately $4.0 million for the reasons described below; and (3) increased net interest expense of approximately $5.3 million, which resulted from both higher weighted average indebtedness and increased interest rates during the third quarter of fiscal 2004. The $4.0 million increase in operating expenses was due primarily to higher operation and maintenance expenses of $1.3 million; higher restructuring costs of $0.6 million; higher depreciation and amortization of $1.3 million; and higher general taxes of $0.8 million. The decrease in income from continuing operations was partially offset by higher other income of $1.0 million and a reduction in income taxes of $2.4 million as compared to the same period last year. The company's net loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. decreased by approximately $20.2 million to $1.2 million, or $0.08 per share, in the third quarter of fiscal 2004, compared to a net loss of $21.4 million, or $1.34 per share, in the third quarter of fiscal 2003. The fiscal 2003 quarterly results included a $20.3 million impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge related to the company's decision to seek a buyer for its NUI Telecom subsidiary in June 2003. For the nine months ended June 30, 2004, NUI recorded a net loss of $17.1 million, or $1.07 per share, compared to a net loss of $5.8 million, or $0.36 per share for the nine months ended June 30, 2003. The fiscal 2003 third quarter loss includes a $5.9 million after-tax charge for the effect of a change in accounting. The net loss from continuing operations was $14.8 million, or $0.93 per share, for the nine months ended June 30, 2004, compared to net income of $22.1 million, $1.38 per share, in the same period of fiscal 2003. The $37.0 million reduction in income from continuing operations was primarily the result of (1) reduced operating margins of approximately $13.6 million, primarily due to winding down the company's wholesale energy trading subsidiary; (2) increased operation and maintenance expenses of $19.2 million for the reasons described below; (3) restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of approximately $2.7 million related to employee severance costs; (4) a prepayment penalty Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. of approximately $9.9 million for the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt; and (5) increased net interest charges of approximately $13.8 million, which resulted from both higher weighted average indebtedness and increased interest rates during the nine month period of fiscal 2004. A reduction in income tax expense of $22.0 million partially offset the increase in the year-to-date loss as compared to last year. The $19.2 million increase in operation and maintenance expense in the nine month period was due primarily to (1) increased legal and professional fees of $13.7 million related to the Focused Audit conducted by the New Jersey Board of Public Utilities The New Jersey Board of Public Utilities (NJBPU) is a regulatory authority in New Jersey charged with the responsibility of seeing that "safe, adequate, and proper utility services are provided at reasonable rates for customers in New Jersey. (which has concluded), the cost of an internal investigation into the company's wholesale energy trading subsidiary, and costs associated with finding a buyer for the company and (2) bank fees of approximately $11.2 million. These increases were partially offset by reduced bad debt expense of approximately $6.0 million, mainly as a result of winding down the company's retail energy marketing business during fiscal 2003. Net loss from discontinued operations decreased by approximately $19.7 million during the current nine-month period to $2.3 million, or $0.14 per share, as compared to a net loss of $22.0 million, or $1.38 per share, for the same period of fiscal 2003. As discussed earlier, the NUI Telecom impairment charge in June 2003 was the major factor for the change in comparative loss from discontinued operations, as well as the costs of winding down the operations of TIC Enterprises, the company's sales outsourcing Sales Outsourcing is the practice of having an external company become a virtual sales force for you. It is differentiated from value added resale in the usage of a "shared risk" model -- that financing model requires both the client and the sales entity to invest in the actual subsidiary. Sale Update On July 15, 2004, NUI announced that it had entered into an Agreement and Plan of Merger (Merger Agreement) with AGL Resources AGL Resources, Inc. is a Fortune 1000, Forbes 2000 energy services holding company. Their principal business is distribution of natural gas in Florida, Georgia, Maryland, New Jersey, Tennessee and Virginia, providing gas for more than 2.2 million customers. Inc. (AGL (programming) AGL - (Atelier de Genie Logiciel) French for IPSE. ), for AGL to acquire all of the outstanding shares of common stock of NUI for $13.70 per share in cash. State regulatory approvals are needed in New Jersey, Maryland, and Virginia. In Florida, AGL is required to file within 10 days of the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the merger a notice with the Florida Public Service Commission Florida Public Service Commission (FPSC) is an independent regulatory agency serving the public of Florida by managing its public utilities such as telecommunications, electricity, natural gas, water, and wastewater. (FLPSC) stating that the tariffs charged by City Gas Company of Florida will continue to remain in effect. NUI expects to receive a waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. of the closing condition from AGL related to the approval of the FLPSC. On July 30, 2004, NUI and AGL made a joint filing with the New Jersey Board of Public Utilities (NJPBU) to obtain merger approval. The NJBPU NJBPU New Jersey Board of Public Utilities has committed to expedite ex·pe·dite tr.v. ex·pe·dit·ed, ex·pe·dit·ing, ex·pe·dites 1. To speed up the progress of; accelerate. 2. its review of the transaction. On August 10, 2004, NUI and AGL made a joint filing with the Virginia State Corporation Commission to obtain merger approval. NUI and AGL expect to file for merger approval with the Maryland Public Service Commission in the near future. On August 5, 2004, NUI and AGL filed pre-merger notifications with the U.S. antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. authorities pursuant to the Hart-Scott-Rodino Act Hart-Scott-Rodino Act Often used in risk arbitrage. Antitrust act administered by U.S. Department of Justice and the FTC that requires an investor to file a form with the government before he acquires an economic interest in the lesser amount of $15 million or 15% of the . Unless the antitrust authorities request additional information, the waiting period will expire on or before September 7, 2004. On August 13, 2004, NUI filed its preliminary Proxy Statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. with the Securities and Exchange Commission (SEC) and anticipates holding its shareholders meeting in October. AGL does not need shareholder approval. Under the Public Utility Holding Company Act Public Utility Holding Company Act The 1935 act that gives the SEC authority over the security issues, the accounting systems, the corporate structures, and the intercompany transactions of public utilities. (PUHCA PUHCA Public Utility Holding Company Act ), AGL must obtain approval of the SEC for the merger. Upon closing, which the company currently anticipates will occur between December 2004 and March 2005, NUI will become a wholly-owned subsidiary of AGL. Credit Facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities Update NUI and NUI Utilities previously announced that they have received a commitment from an affiliate of Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. for an aggregate of $95 million in additional credit facilities intended to provide additional liquidity through the close of the sale of the company. NUI and NUI Utilities have reached agreement with Credit Suisse First Boston and the company's existing lenders on the form of the credit agreements and amendments to their existing credit facilities required to document the proposed new financing. In addition, NUI has submitted the documents to the New Jersey Board of Public Utilities for its approval. Conference Call Information NUI will hold a live teleconference on Wednesday, August 18, 2004, at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The dial-in number for domestic callers is 1-800-289-0436 and 1-913-981-5507 for international callers. Participants should dial in five minutes prior to the scheduled start time. A taped replay of the call will be available on Thursday, August 19, 2004, and ending on Thursday, August 26, 2004, at 11:59 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . The dial-in number for the replay is 1-888-203-1112 for domestic callers and 1-719-457-0820 for international callers. The pass code for the replay is 351863. A live webcast of the call will be available on the company's website at www.nui.com. Choose "Investor Relations Investor relations The process by which the corporation communicates with its investors. " and then select the webcast icon on the Corporate Overview page. Shortly following the live call, a replay will be archived on NUI's corporate website. About NUI NUI Corporation, based in Bedminster, NJ, is an energy company that operates natural gas utilities and businesses involved in natural gas storage and pipeline activities. NUI Utilities' divisions include Elizabethtown Gas in New Jersey, City Gas Company of Florida and Elkton Gas in Maryland. For more information, visit www.nui.com. Additional Information and Where to Find It This press release may be deemed to be solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual material in respect of the proposed merger. In connection with the proposed transaction, on August 13, 2004, NUI filed with the Securities and Exchange Commission (SEC) a preliminary proxy statement regarding the proposed merger transaction on Schedule 14A. The information contained in such preliminary filing is not complete and may change. Investors are urged to read the definitive proxy statement when it becomes available and any other relevant documents filed with the SEC because they will contain important information. The definitive proxy statement will be sent to the stockholders of NUI seeking their approval of the proposed transaction. In addition, you may obtain these documents free of charge at the website maintained by the SEC at www.sec.gov. Also, you may obtain documents filed with the SEC by NUI free of charge by requesting them in writing from NUI Corporation, P.O. Box 760, Bedminster, NJ 07921, Attention: Investor Relations, or by telephone at (908) 719-4223. Participants in Solicitation NUI and its directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the stockholders of NUI in connection with the merger. Information about NUI's directors and executive officers and their ownership of NUI's common stock is included in NUI's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , filed with the SEC on May 13, 2004. Additional information about the interests of NUI's participants in the solicitation of proxies in respect of the proposed transaction will be included in the proxy statement when it becomes available. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements, including statements related to the sale of NUI Corporation and the anticipated additional financing. These statements are based on management's current expectations and information currently available and are believed to be reasonable and are made in good faith. However, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the statements. Factors that may make the actual results differ from anticipated results include, but are not limited to, those factors set forth in NUI Corporation's Form 10-K, Form 10-Q Form 10-Q See 10-Q. and its other filings with the Securities and Exchange Commission; NUI's ability to consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. the sale in the time period anticipated or at all; the ability to obtain the regulatory and other approvals required for the transaction on the terms expected or on the anticipated schedule; the ability of NUI and NUI Utilities to satisfy the conditions precedent to obtaining the $95 million of financing committed to by an affiliate of Credit Suisse First Boston; the ability of NUI and NUI Utilities to amend and extend their respective credit facilities; the ability of NUI and NUI Utilities to receive the waivers and amendments discussed herein; the timing of NUI's shareholders' meeting shareholders' meeting n. a meeting, usually annual, of all shareholders of a corporation (although in large corporations only a small percentage attend) to elect the Board of Directors and hear reports on the company's business situation. ; and other uncertainties, all of which are difficult to predict and some of which are beyond NUI Corporation's control. For these reasons, you should not rely on these forward-looking statements when making investment decisions. The words "expect," "believe," "project," "anticipate," "intend," "should," "could," "will," and variations of such words and similar expressions, are intended to identify forward-looking statements. NUI Corporation does not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise.
NUI Corporation (NYSE:NUI)
Summarized Consolidated Financial Information
for the Periods Ended June 30
(amounts in thousands, except per share amounts)
Three Months Nine Months
2004 2003 2004 2003
-----------------------------------------------
Operating Revenues 98,944 135,293 508,803 556,839
----------- ----------- ----------- -----------
Total Operating Margins 41,715 43,903 169,513 183,076
----------- ----------- ----------- -----------
Operation & Maint.
Expenses 36,328 35,032 117,813 98,618
Restructuring Charges 587 --- 2,723 ---
Depreciation and
Amortization 9,125 7,844 26,721 25,524
Other taxes 1,778 933 6,565 5,500
----------- ----------- ----------- -----------
Operating Expenses 47,818 43,809 153,822 129,642
----------- ----------- ----------- -----------
Equity in Earnings of
Saltville Gas Storage
Company, LLC 156 --- 801 ---
Other Income 1,238 200 2,555 862
----------- ----------- ----------- -----------
Earnings (Loss) Before
Interest and Taxes
(EBIT) (4,709) 294 19,047 54,296
Loss on Extinguishment
of Debt --- --- 9,940 ---
Net Interest Charges 11,235 5,979 29,971 16,212
Income Tax Expense
(Benefit) (4,395) (2,036) (6,014) 15,936
----------- ----------- ----------- -----------
Income (Loss) from
Continuing Operations (11,549) (3,649) (14,850) 22,148
Loss from Discontinued
Operations, After Tax (1,212) (21,421) (2,276) (22,040)
Effect of Change in
Accounting, After Tax --- --- --- (5,870)
----------- ----------- ----------- -----------
Net Loss (12,761) (25,070) (17,126) (5,762)
=========== =========== =========== ===========
Earnings (Loss) Per
Share:
Basic and Diluted
Income (Loss) from
Continuing Operations (0.72) (0.23) (0.93) 1.38
Loss from Discontinued
Operations, After Tax (0.08) (1.34) (0.14) (1.38)
Effect of Change in
Accounting, After Tax --- --- --- (0.36)
----------- ----------- ----------- -----------
Basic and Diluted Net
Loss Per Share (0.80) (1.57) (1.07) (0.36)
=========== =========== =========== ===========
Weighted Average
Number of Shares 15,968,692 16,021,477 15,976,128 16,039,573
=========== =========== =========== ===========
Certain reclassifications were made to conform to current year
presentation.
OPERATING DATA FOR THE FOR THE PERIODS ENDED JUNE 30
Three Months Nine Months
----------------------------------------------------------------------
2004 2003 2004 2003
---------------- -----------------
Total Employees (at period end) 936 1,095
NJ Degree Days - Actual 436 712 4,858 5,400
Overall Degree Day Variance from 21% 29% 1% 13%
NJ 20-Year Average warmer colder colder colder
Total Average Utility Customers
Served by Continuing Operations 370,835 367,818 370,900 367,755
Total Gas Sold or Transported
(Bcf's) 15.9 33.0 73.5 145.0
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