PUBLIC SERVICE COMPANY REPORTS FISCAL 1991 EARNINGS
GASTONIA, N.C., Nov. 7 /PRNewswire/ -- Public Service Company of North Carolina, Inc. (NASDAQ-NMS: PSNC), a natural gas utility, today reported operating results for its fiscal year ended Sept. 30, 1991. These operating results reflect the effect of weather which was 19 percent warmer than normal.
Total operating revenues for fiscal 1991 were $193,238,000, a decrease of $8,702,000 from fiscal 1990. Cost of gas was down $11,861,000 to $101,912,000. Gross margin of $91,326,000, up 4 percent from fiscal 1990, less other operating expenses and taxes of $67,167,000, up 3 percent from fiscal 1990, resulted in operating income of $24,159,000 which was up 4 percent from fiscal 1990. A decrease of $2,217,000 in other income and an increase of $417,000 in interest expense resulted in net income of $10,590,000. This was a 14 percent decline from $12,305,000 in fiscal 1990. Earnings per share were $1.05, down from $1.26 for fiscal 1990, based upon average common shares outstanding of 9,952,000 and 9,668,000, respectively.
Contributing to the increase in gross margin were the April implementation of a fixed gas cost rate mechanism which generally defers costs into the winter period, lower system gas losses, increased customer base, and increased industrial throughput. All of these were partially offset by reduced sales to higher-margin customers due to the warmer weather. Total volume throughput for fiscal 1991 was 50,473,000 DT as compared to 49,974,000 DT for fiscal 1990. The decrease in other income includes a loss incurred by the Company's propane distribution subsidiary which resulted from the warm weather experienced during the heating season and from initial costs associated with an acquisition in early fiscal 1991.
Management has responded to this earnings decline by implementing an aggressive operating expense reduction program throughout the Company and by carefully managing its capital expenditures. The capital expenditures budget for fiscal 1992 is $31,445,000, a 14 percent decrease as compared to actual capital expenditures of $36,461,000 for fiscal 1991. Additionally, the Company received a rate increase from the North Carolina Utilities Commission, effective Nov. 1, 1991. This order granted the Company increased annual revenues of $5,300,000 with a return on common equity of 12.9 percent and an overall return of 11.10 percent. The order also permits the company to utilize a weather normalization adjustment mechanism during the winter period, November through April. This mechanism adjusts the Company's weather-sensitive rates to offset the effects of abnormal weather on the higher-margin rates which contribute approximately two-thirds of the Company's gross margin.
Public Service Company distributes natural gas to over 240,000 customers in 87 cities, towns and communities in a 26-county service territory ranging from the Raleigh, Durham and Chapel Hill areas in the northeast; the Concord, Statesville, Gastonia and Forest City areas in the Piedmont; to the Asheville, Hendersonville and Brevard areas in the western part of the state. Public Service Company, through subsidiaries of its wholly-owned subsidiary, PSNC Natural Resources Corporation, also participates in oil and gas exploration and production, and retails propane gas.
(Amounts in Thousands, except Raleigh/Durham Degree Day
and Per Share Data)
Fourth Quarter Twelve Months
Periods Ending Sept. 30: 1991 1990 1991 1990
Normal degree days 18 18 3,356 3,356
Actual degree days 24 18 2,726 3,011
Percent of normal 133 100 81 90
Total volume throughput
(DT) 8,499 8,180 50,473 49,974
Revenues $24,444 $23,316 $193,238 $201,940
Gross margin $12,892 $10,557 $ 91,326 $ 88,167
Operating income $ 521 $ (553) $ 24,159 $ 23,240
Net income $(3,137) $(3,528) $ 10,590 $ 12,305
Earnings for common $(3,164) $(3,558) $ 10,479 $ 12,180
Average common shares 10,050 9,762 9,952 9,668
Earnings per share $ (.31) $ (.36) $ 1.05 $ 1.26
Cash dividends declared
per share $ .275 $ .275 $ 1.10 $ 1.085
/CONTACT: Charles E. Zeigler, Jr., President and Chief Executive Officer, Public Service Company of North Carolina, Inc., 704-864-6731/
(PSNC) CO: Public Service Company of North Carolina, Inc. ST: North Carolina IN: UTE SU: ERN CM -- CH010 -- 2239 11/07/91 12:47 EST