EX-99 2 exhibit99-1.txt EXHIBIT EXHIBIT 99.1 PRESS RELEASE Wire Release - National Circuit For Release at 5:00 P.M. (Pacific Time) Page 1 of 4 July 29, 2004 Richard Balocco (408) 279-7933 San Jose, California V.P. Corporate Communication SJW CORP. (AMEX: SJW) ANNOUNCES SECOND QUARTER FINANCIAL RESULTS SAN JOSE, CA, July 29, 2004, SJW Corp.(AMEX:SJW) basic earnings per common share for the quarter ended June 30, 2004 were $0.53, compared to $0.48 for the same quarter in 2003. Operating revenue for the second quarter was $45,609,000 versus $38,149,000 for the same period in 2003, representing an increase of $7,460,000 or 20%. Approximately $4,571,000 of the total revenue increase was attributable to higher customer demand, which increased revenue by 12% as a result of warmer temperatures in April and May, 2004 and $2,535,000 increase was due to cumulative rate increases totaling 7%. Approximately $354,000 of the total revenue increase was contributed from parking, rental properties and other revenues. Water production costs for the second quarter of 2004 consisting of purchased water, power and pump taxes, increased $4,715,000, or 15% of total costs and expenses from the second quarter of 2003. The increase was due to the higher cost of purchased water and pump taxes of $1,263,000, reduced surface water availability of $411,000 and higher customer demand of $3,041,000. Quarterly operating expenses for the second quarter of 2004, excluding water production costs and income taxes, increased $1,644,000 or 5% of total costs and expenses from 2003. The increases consisted principally of: $168,000 in pension costs primarily as a result of the enhancement of pension plan benefits, $882,000 in depreciation expense on added utility plant and other nonutility properties, $209,000 in legal and professional fees, $124,000 in insurance elated costs, $202,000 in contracted work and $59,000 in other costs. Income tax expense for the second quarter of 2004 was higher than the same period of 2003 due to increased earnings. Year-to-date earnings per common share were $0.72 compared to $1.06 for the same period in 2003. The decrease in year-to-date earnings was mainly due to the sale of a SJW Land Company property in the first quarter of 2003, which resulted in an after-tax gain of $3,030,000, or $0.33 per share. Excluding the gain on sale of property in 2003, year-to-date increases in revenue were offset by increases in production and operating expenses. Other comprehensive loss of $481,000 and other comprehensive income of $97,000, for the three months and six months ended June 30, 2004, respectively, was the result of changes in the market value of the investment in California Water Service Group. In January 2004, SJW Corp. adopted Interpretation No. 46(R), "Consolidation of Variable Interest Entities" issued by the Financial Accounting Standard Board. In accordance with the interpretation, SJW Corp. has consolidated its limited partnership interest in 444 West Santa Clara Street, L.P. SJW Corp. has restated its previously reported June 30, 2003 consolidated financial statements to include the result of the consolidated partnership. At its meeting today, the Board of Directors of SJW Corp. declared a quarterly dividend on common stock of $0.255 per share. The dividend is payable on September 1, 2004 to shareholders of record on August 9, 2004. SJW Corp. is a publicly traded holding company headquartered in San Jose, California. SJW Corp., through its subsidiary San Jose Water Company, provides water service to a population of approximately one million people in the City of San Jose and nearby communities. This press release may contain certain forward-looking statements including but not limited to statements relating to SJW Corp.'s plans, strategies, objectives, expectations and intentions, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of SJW Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. SJW Corp. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. SJW Corp. Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (thousands of dollars, except share data) Three Months Six Months Twelve Months Ended June 30 Ended June 30 Ended June 30 2004 2003 2004 2003 2004 2003 (Restated) (Restated) (Restated) ----------------------------------------------------------- Operating revenue $45,609 38,149 $76,672 66,120 $161,366 145,718 Operating expense: Operation: Purchased Water 11,666 8,873 18,176 14,920 39,965 36,842 Power 1,597 1,376 2,411 2,113 5,593 5,730 Pump Tax 5,902 4,201 9,023 6,269 20,684 16,504 Other 7,771 7,388 15,330 14,244 30,128 27,421 Maintenance 2,179 1,903 4,287 3,676 8,335 7,567 Property taxes and other nonincome taxes 1,325 1,222 2,654 2,491 5,229 4,750 Depreciation and amortization 4,707 3,825 9,100 7,565 16,760 14,576 Income taxes 3,352 3,053 4,596 4,472 10,648 10,389 --------------------------------------------------------- Total operating expense 38,499 31,841 65,577 55,750 137,342 123,779 --------------------------------------------------------- Operating income 7,110 6,308 11,095 10,370 24,024 21,939 Other income (expense): Gain on sale of non- utility property, net - - - 3,030 - 3,030 Long-term debt interest and other, net (2,303) (1,882) (4,514) (3,692) (8,475) (6,768) ---------------------------------------------------------- Net income $ 4,807 4,426 $ 6,581 9,708 $ 15,549 18,201 ======================================================= Other comprehensive income (loss), net (481) 1,538 97 2,901 (769) 1,575 ---------------------------------------------------------- Comprehensive income $ 4,326 5,964 $ 6,678 12,609 $ 14,780 19,776 ========================================================== Earnings per share - Basic $ 0.53 0.48 $ 0.72 1.06 $ 1.70 1.99 - Diluted 0.53 0.48 0.72 1.06 1.69 1.99 Comprehensive income per share - Basic $ 0.47 0.65 $ 0.73 1.38 $ 1.62 2.16 - Diluted 0.47 0.65 0.73 1.38 1.61 2.16 Dividends per share $ 0.26 0.25 $ 0.51 0.49 $ 0.99 0.95 Weighted average shares outstanding - Basic 9,138,841 9,135,441 9,136,758 9,135,441 9,136,098 9,135,441 - Diluted 9,193,895 9,135,441 9,191,077 9,135,441 9,176,292 9,135,441 *SJW Corp. has restated its previously reported 2003 Consolidated Statements of Income and Comprehensive Income as a result of adopting Interpretation No.46(R), "Consolidation of Variable Interest Entities" (FIN46R). As a result of the adoption of FIN46R, SJW Corp. has consolidated its limited partnership interest in 444 West Santa Clara Street, L.P. SJW Corp. Condensed Consolidated Balance Sheets (Unaudited) (thousands of dollars) June 30 December 31 2004 2003 (Restated) ----------------------------- ASSETS Utility Plant $603,577 $583,709 Less: accumulated depreciation and amortization 184,074 174,985 ----------------------------- Net utility plant 419,503 408,724 Nonutility property, net 32,495 32,569 Current assets: Cash and equivalents 5,270 10,278 Accounts receivable and accrued utility revenue 22,492 15,043 Prepaid expenses and other 1,918 2,019 ----------------------------- Total current assets 29,680 27,340 Other assets: Investment in California Water Service Group 30,304 30,139 Regulatory assets 8,337 7,976 Other 9,159 9,496 ----------------------------- $529,478 $516,244 ============================= CAPITALIZATION AND LIABILITIES Capitalization: Common stock and additional paid-in capital $ 23,366 $ 22,891 Retained earnings 140,040 138,058 Accumulated other comprehensive income 5,516 5,419 ----------------------------- Shareholders' equity 168,922 166,368 Long-term debt 143,917 143,947 ----------------------------- Total capitalization 312,839 310,315 Current Liabilities: Line of credit - - Accounts payable 12,040 5,441 Other current liabilities 11,767 9,635 ----------------------------- Total current liabilities 23,807 15,076 Deferred income taxes and credits 40,767 38,207 Advances for and contributions in aid of construction 141,567 141,122 Other noncurrent liabilities 10,498 11,524 ----------------------------- $529,478 $516,244 ============================= *SJW Corp. has restated its previously reported December 31,2003 Consolidated Balance Sheets as a result of adopting FIN46R. As a result of the adoption of FIN46R, SJW Corp. has consolidated its limited partnership interest in 444 West Santa Clara Street, L.P.