EXHIBIT 99.1
Published on October 28, 2004
EXHIBIT 99.1
[CALIFORNIA WATER [CWT
SERVICE GROUP LISTED
LOGO] NYSE LOGO]
NEWS RELEASE
CALIFORNIA WATER SERVICE GROUP
1720 North First Street
San Jose, CA 95112-4598 October 27, 2004
For Immediate Release
Contact: Richard D. Nye (408) 367-8216 (analysts)
Shannon Dean (310) 257-1435 (media)
CAL WATER ANNOUNCES THIRD QUARTER 2004 RESULTS;
BOARD DECLARES 240TH CONSECUTIVE QUARTERLY DIVIDEND
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SAN JOSE, CA - California Water Service Group (NYSE : CWT) today announced net
income of $10.8 million and earnings of $0.59 per share for the third quarter of
2004, compared to net income of $8.6 million and earnings of $0.53 per share in
the third quarter of 2003.
Revenue for the third quarter increased $8.9 million, or 10%, to $97.1
million. Rate increases added $9.9 million to revenue, while sales to new
customers added $1.3 million. Partially offsetting these higher revenues was a
3%, or $2.3 million, decrease in sales to existing customers compared to the
same period last year.
Total operating expenses for the third quarter increased 9%, or $6.9
million. Water production costs increased 3% due to rate increases by wholesale
water suppliers. Other operations expenses increased by 14%. For the quarter,
the Company experienced unexpected cost increases from higher claims for health
benefits and workers' compensation. Both of these programs are basically self
insured with stop loss insurance coverage for extraordinary claims. In addition,
costs increases were incurred to comply with the Sarbanes Oxley (SOX)
requirements on internal controls. SOX costs have increased more than originally
estimated. Areas of cost increases that were in line with internal expectations
were depreciation and property taxes due to capital investments, and higher
income taxes driven by the higher taxable income.
"Our third quarter results were good. Although we had some unexpected cost
increases for health benefits and workers' compensation claims, net income
increased 26% over last year," said President and Chief Executive Officer Peter
C. Nelson.
"Also, we are very pleased to announce that we have prevailed in our
efforts to stop the City of Selma from taking over our Selma water system,"
Nelson said.
At a public hearing on October 18, 2004, the Selma City Council voted
unanimously to abandon efforts to acquire Cal Water's Selma system. Hundreds of
customers made calls, signed petitions, wrote letters, and attended the public
hearing to speak on the Company's behalf.
The Company will also pay its 240th consecutive dividend. On October 27,
2004, Directors declared a dividend of $0.2825 on common stock. It is payable on
November 19, 2004, to stockholders of record on November 8, 2004. The regular
dividend on Series C preferred stock was also declared.
Investors are invited to listen to the Company's analyst teleconference,
which is scheduled for 4:00 p.m. EDT / 1:00 p.m. PDT on October 28, 2004. The
call-in number is 1-866-244-4742 and the ID No. is 558049. A replay is available
through January 26, 2005, by calling 1-888-266-2081 and entering pass code
558049.
California Water Service Group is the parent company of California Water
Service Company, Washington Water Service Company, New Mexico Water Service
Company, Hawaii Water Service Company, Inc., and CWS Utility Services. Together
these companies provide regulated and non-regulated water service to more than 2
million people in 100 California, Washington, New Mexico, and Hawaii
communities. Group's common stock trades on the New York Stock Exchange under
the symbol "CWT."
This news release contains forward-looking statements within the meaning
established by the Private Securities Litigation Reform Act of 1995 ("Act"). The
forward-looking statements are intended to qualify under provisions of the
federal securities laws for "safe harbor" treatment established by the Act.
Forward-looking statements are based on currently available information,
expectations, estimates, assumptions and projections, and management's judgment
about the Company, the water utility industry and general economic conditions.
Such words as expects, intends, plans, believes, estimates, assumes,
anticipates, projects, predicts, forecasts or variations of such words or
similar expressions are intended to identify forward-looking statements. The
forward-looking statements are not guarantees of future performance. They are
subject to uncertainty and changes in circumstances. Actual results may vary
materially from what is contained in a forward-looking statement. Factors that
may cause a result different than expected or anticipated include: governmental
and regulatory commissions' decisions; changes in regulatory commissions'
policies and procedures; the timeliness of regulatory commissions' actions
concerning rate relief; new legislation; the ability to satisfy requirements
related to the Sarbanes Oxley Act section 404 and other regulation on internal
controls; electric power interruptions; increases in suppliers' prices and the
availability of supplies including water and power; fluctuations in interest
rates; changes in environmental compliance and water quality requirements;
acquisitions and our ability to successfully integrate acquired companies; the
ability to successfully implement business plans; changes in customer water use
patterns; the impact of weather on water sales and operating results; access to
sufficient capital on satisfactory terms; civil disturbances or terrorist
threats or acts, or apprehension about the possible future occurrences of acts
of this type; the involvement of the United States in war or other hostilities;
restrictive covenants in or changes to the credit ratings on our current or
future debt that could increase our financing costs or affect our ability to
borrow, make payments on debt or pay dividends; and, other risks and unforeseen
events. When considering forward-looking statements, you should keep in mind the
cautionary statements included in this paragraph. The Company assumes no
obligation to provide public updates of forward-looking statements.
Additional information is available at our Web site at
www.calwatergroup.com.
Attachments (3).
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