Otter Tail Corporation Reports 5 Percent First Quarter Earnings Increase

Apr 23, 2001, 01:00 ET from Otter Tail Corporation

    FERGUS FALLS, Minn., April 23 /PRNewswire Interactive News Release/ --
     Otter Tail Corporation (Nasdaq:   OTTR) announced first quarter diluted
 earnings per share of 45 cents for the quarter ended March 31, 2001, a
 5 percent increase over the 43 cents per share for the first quarter ended
 March 31, 2000.  Total revenues were $155.5 million, up from $140.3 million,
 and net income increased to $11.5 million from $10.9 million in the comparable
 period a year ago.  The consolidated financial statements for prior periods
 have been restated to include the results of T.O. Plastics, Inc., acquired in
 February 2001, as the acquisition was recorded under the pooling-of-interests
 method of accounting.
     "Overall, we are pleased with the results for the first quarter," said
 John MacFarlane, chief executive officer of Otter Tail Corporation.
 "Outstanding results from the electric segment combined with growth in the
 manufacturing and health services segments helped to offset losses in the
 plastics and other business operations segments. Our diversification strategy
 continues to allow us to achieve continued revenue and earnings growth."
     Net income for the electric segment increased 55 percent to $11.6 million
 for the quarter ended March 31, 2001, compared with $7.4 million for the
 quarter ended March 31, 2000.  This increase comes from a $5.5 million
 increase in retail revenues and a $1.7 million increase in gross margins on
 wholesale power sales.  Retail revenues increased due to an 8 percent increase
 in retail kilowatt-hour sales as a result of a 15 percent increase in heating
 degree days between the periods.  Wholesale power sales gross margins
 increased primarily as a result of increases in wholesale kilowatt-hour sales.
 This year's colder weather along with higher fossil-fuel prices helped to
 drive both retail and wholesale power kilowatt-hour sales.
     The plastics segment had a net loss of $933,000 for the quarter ended
 March 31, 2001, compared with net income of $2.6 million for the quarter ended
 March 31, 2000.  This decrease is due to a 24 percent reduction in pounds of
 PVC pipe sold and a 30 percent decrease in average sales price per pound
 between the quarters.  As initially reported in the last half of 2000, demand
 for these products has softened and gross margins have dropped.  These trends
 have continued through the quarter ended March 31, 2001.  The slowdown in the
 general economy, particularly in the construction industry, has continued to
 have an adverse impact on this segment's performance.
     Net income for the manufacturing segment increased 23 percent to $972,000
 for the quarter ended March 31, 2001, compared with $793,000 for the quarter
 ended March 31, 2000.  This increase primarily was due to more favorable
 results from Otter Tail Corporation's subsidiary that produces wind towers.
     Net income for the health services segment was $981,000 for the quarter
 ended March 31, 2001, compared with $505,000 for the quarter ended March 31,
 2000.  This increase is due to a 6 percent increase in the number of medical
 imaging scans completed, combined with an increase in revenues for equipment
 sales, service and supplies.
     Net income for the other business operations segment declined $717,000,
 primarily because the cold weather and the slowed economy adversely impacted
 work for the construction companies.  The economy also affected freight
 volumes for the transportation company.  In addition, higher diesel fuel costs
 affected the results.
     Otter Tail Corporation is headquartered in Fergus Falls, Minn., and Fargo,
 N.D.  Its utility operation, Otter Tail Power Company, provides electricity
 and energy services to nearly a quarter million people in Minnesota, North
 Dakota, and South Dakota.  Varistar Corporation manages investments in
 manufacturing, plastics, health services, construction, entertainment,
 telecommunications, and transportation businesses with customers across the
 United States and Canada.  To learn more visit Otter Tail Corporation's web
 site at http://www.ottertail.com .  Otter Tail's common stock trades on The
 Nasdaq Stock Market(R) under the symbol OTTR.
     Forward-looking statements in this news release, if any, are made under
 the Safe Harbor provisions of the Private Securities Litigation Reform Act of
 1995.  Certain important factors could cause results to differ materially from
 those anticipated by any forward-looking statements.  These factors include
 governmental and regulatory action, the competitive environment, economic
 considerations, weather conditions, and other factors discussed from time to
 time in reports the company files with the Securities and Exchange Commission.
     See Otter Tail Corporation's results for the quarter ended March 31, 2001,
 below.
 
                       Consolidated Statements of Income
               For the three months ended March 31, 2001 and 2000
                In thousands, except share and per share amounts
                                   Unaudited
                                                           Year to date
                                                        2001           2000
     Operating revenues by segment:                                 (Restated)
       Electric                                       $82,631        $61,302
       Plastics                                        13,961         26,363
       Manufacturing                                   24,120         19,530
       Health services                                 17,900         16,645
       Other business operations                       16,897         16,505
         Total operating revenues                     155,509        140,345
 
     Operating expenses:
       Fuel and purchase power                         37,895         22,342
       Nonelectric cost of goods sold                  53,802         53,659
       Electric operating and maintenance expense      18,745         19,894
       Nonelectric operating and maintenance expense   13,830         14,163
       Depreciation and amortization                    9,698          9,516
         Total operating expenses                     133,970        119,574
 
     Operating income (loss) by segment:
       Electric                                        20,372         13,543
       Plastics                                        (1,162)         4,750
       Manufacturing                                    2,125          1,674
       Health services                                  1,754          1,048
       Other business operations                       (1,550)          (244)
         Total operating income                        21,539         20,771
 
     Interest charges                                   4,085          4,081
     Other income and deductions--net                     318            684
     Income taxes                                       6,301          6,435
 
     Net income (loss) by segment:
       Electric                                        11,558          7,443
       Plastics                                          (933)         2,588
       Manufacturing                                      972            793
       Health services                                    981            505
       Other business operations                       (1,107)          (390)
         Total net income                              11,471         10,939
 
     Preferred stock dividend                             469            469
 
     Balance for common:                              $11,002        $10,470
 
     Average common shares outstanding
       Basic                                       24,306,438     24,301,040
       Diluted                                     24,505,664     24,304,450
 
     Earnings per share:
       Basic                                            $0.45          $0.43
       Diluted                                          $0.45          $0.43
 
     On February 28, 2001, Otter Tail Corporation acquired T.O. Plastics, Inc.
     in a pooling-of-interests transaction.  Otter Tail Corporation's 2000
     results have been restated to reflect this transaction.
 
 
                          Consolidated Balance Sheets
                                     Assets
                                  In thousands
 
                                                     March 31,     December 31,
                                                       2001           2000
                                                    (Unaudited)    (Restated)
     Current assets:
     Cash and cash equivalents                        $9,173         $1,259
     Accounts receivable:
       Trade - net                                    71,643         58,800
       Other                                           6,013          6,037
     Inventory, fuel, materials, and supplies         45,740         41,815
     Deferred income taxes                             3,679          3,695
     Accrued utility revenues                          9,402         11,315
     Other                                             7,157          6,703
       Total current assets                          152,807        129,624
 
     Investments                                      19,429         19,073
     Intangibles--net                                 42,724         43,532
     Other assets                                     11,594         10,126
 
     Deferred debits:
     Unamortized debt expense and reacquisition
      premiums                                         2,661          2,778
     Regulatory assets                                 5,412          5,517
     Other                                             1,381          1,183
       Total deferred debits                           9,454          9,478
 
     Plant:
     Electric plant in service                       796,721        795,357
     Diversified operations                          128,931        127,219
       Total                                         925,652        922,576
     Less accumulated depreciation and amortization  421,113        414,892
                                                     504,539        507,684
     Construction work in progress                    16,363         13,117
       Net plant                                     520,902        520,801
 
         Total                                      $756,910       $732,634
 
     On February 28, 2001, Otter Tail Corporation acquired T.O. Plastics, Inc.
     in a pooling-of-interests transaction.  Otter Tail Corporation's 2000
     results have been restated to reflect this transaction.
 
 
                          Consolidated Balance Sheets
                             Liabilities and Equity
                                  In thousands
 
                                                     March 31,     December 31,
                                                       2001           2000
                                                    (Unaudited)    (Restated)
     Current liabilities
     Short-term debt                                  $20,680            $--
     Sinking fund requirements and current maturities  10,848         13,576
     Accounts payable                                  53,213         51,620
     Accrued salaries and wages                         4,727          9,476
     Federal and state income taxes accrued             7,369          3,243
     Other taxes accrued                               11,334         10,585
     Other accrued liabilities                          5,850          6,524
       Total current liabilities                      114,021         95,024
 
     Noncurrent liabilities                            30,801         30,181
 
     Deferred credits
     Accumulated deferred income taxes                 86,199         86,327
     Accumulated deferred investment tax credit        14,824         15,112
     Regulatory liabilities                            10,532         10,618
     Other                                              8,544          6,850
       Total deferred credits                         120,099        118,907
 
     Capitalization
     Common shares, par value $5 per share            121,544        121,520
     Premium on common shares                              27             49
     Unearned compensation                               (151)          (226)
     Retained earnings                                143,908        139,276
     Accumulated other comprehensive income              (220)          (220)
       Total                                          265,108        260,399
 
     Cumulative preferred shares
       Subject to mandatory redemption                 18,000         18,000
       Other                                           15,500         15,500
 
     Cumulative preference shares - authorized
      1,000,000 shares without par value;
      outstanding - none                                   --             --
 
     Long-term debt                                   193,381        194,623
       Total capitalization                           491,989        488,522
 
       Total                                         $756,910       $732,634
 
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                http://tbutton.prnewswire.com/prn/11690X22534842
 
 

SOURCE Otter Tail Corporation
    FERGUS FALLS, Minn., April 23 /PRNewswire Interactive News Release/ --
     Otter Tail Corporation (Nasdaq:   OTTR) announced first quarter diluted
 earnings per share of 45 cents for the quarter ended March 31, 2001, a
 5 percent increase over the 43 cents per share for the first quarter ended
 March 31, 2000.  Total revenues were $155.5 million, up from $140.3 million,
 and net income increased to $11.5 million from $10.9 million in the comparable
 period a year ago.  The consolidated financial statements for prior periods
 have been restated to include the results of T.O. Plastics, Inc., acquired in
 February 2001, as the acquisition was recorded under the pooling-of-interests
 method of accounting.
     "Overall, we are pleased with the results for the first quarter," said
 John MacFarlane, chief executive officer of Otter Tail Corporation.
 "Outstanding results from the electric segment combined with growth in the
 manufacturing and health services segments helped to offset losses in the
 plastics and other business operations segments. Our diversification strategy
 continues to allow us to achieve continued revenue and earnings growth."
     Net income for the electric segment increased 55 percent to $11.6 million
 for the quarter ended March 31, 2001, compared with $7.4 million for the
 quarter ended March 31, 2000.  This increase comes from a $5.5 million
 increase in retail revenues and a $1.7 million increase in gross margins on
 wholesale power sales.  Retail revenues increased due to an 8 percent increase
 in retail kilowatt-hour sales as a result of a 15 percent increase in heating
 degree days between the periods.  Wholesale power sales gross margins
 increased primarily as a result of increases in wholesale kilowatt-hour sales.
 This year's colder weather along with higher fossil-fuel prices helped to
 drive both retail and wholesale power kilowatt-hour sales.
     The plastics segment had a net loss of $933,000 for the quarter ended
 March 31, 2001, compared with net income of $2.6 million for the quarter ended
 March 31, 2000.  This decrease is due to a 24 percent reduction in pounds of
 PVC pipe sold and a 30 percent decrease in average sales price per pound
 between the quarters.  As initially reported in the last half of 2000, demand
 for these products has softened and gross margins have dropped.  These trends
 have continued through the quarter ended March 31, 2001.  The slowdown in the
 general economy, particularly in the construction industry, has continued to
 have an adverse impact on this segment's performance.
     Net income for the manufacturing segment increased 23 percent to $972,000
 for the quarter ended March 31, 2001, compared with $793,000 for the quarter
 ended March 31, 2000.  This increase primarily was due to more favorable
 results from Otter Tail Corporation's subsidiary that produces wind towers.
     Net income for the health services segment was $981,000 for the quarter
 ended March 31, 2001, compared with $505,000 for the quarter ended March 31,
 2000.  This increase is due to a 6 percent increase in the number of medical
 imaging scans completed, combined with an increase in revenues for equipment
 sales, service and supplies.
     Net income for the other business operations segment declined $717,000,
 primarily because the cold weather and the slowed economy adversely impacted
 work for the construction companies.  The economy also affected freight
 volumes for the transportation company.  In addition, higher diesel fuel costs
 affected the results.
     Otter Tail Corporation is headquartered in Fergus Falls, Minn., and Fargo,
 N.D.  Its utility operation, Otter Tail Power Company, provides electricity
 and energy services to nearly a quarter million people in Minnesota, North
 Dakota, and South Dakota.  Varistar Corporation manages investments in
 manufacturing, plastics, health services, construction, entertainment,
 telecommunications, and transportation businesses with customers across the
 United States and Canada.  To learn more visit Otter Tail Corporation's web
 site at http://www.ottertail.com .  Otter Tail's common stock trades on The
 Nasdaq Stock Market(R) under the symbol OTTR.
     Forward-looking statements in this news release, if any, are made under
 the Safe Harbor provisions of the Private Securities Litigation Reform Act of
 1995.  Certain important factors could cause results to differ materially from
 those anticipated by any forward-looking statements.  These factors include
 governmental and regulatory action, the competitive environment, economic
 considerations, weather conditions, and other factors discussed from time to
 time in reports the company files with the Securities and Exchange Commission.
     See Otter Tail Corporation's results for the quarter ended March 31, 2001,
 below.
 
                       Consolidated Statements of Income
               For the three months ended March 31, 2001 and 2000
                In thousands, except share and per share amounts
                                   Unaudited
                                                           Year to date
                                                        2001           2000
     Operating revenues by segment:                                 (Restated)
       Electric                                       $82,631        $61,302
       Plastics                                        13,961         26,363
       Manufacturing                                   24,120         19,530
       Health services                                 17,900         16,645
       Other business operations                       16,897         16,505
         Total operating revenues                     155,509        140,345
 
     Operating expenses:
       Fuel and purchase power                         37,895         22,342
       Nonelectric cost of goods sold                  53,802         53,659
       Electric operating and maintenance expense      18,745         19,894
       Nonelectric operating and maintenance expense   13,830         14,163
       Depreciation and amortization                    9,698          9,516
         Total operating expenses                     133,970        119,574
 
     Operating income (loss) by segment:
       Electric                                        20,372         13,543
       Plastics                                        (1,162)         4,750
       Manufacturing                                    2,125          1,674
       Health services                                  1,754          1,048
       Other business operations                       (1,550)          (244)
         Total operating income                        21,539         20,771
 
     Interest charges                                   4,085          4,081
     Other income and deductions--net                     318            684
     Income taxes                                       6,301          6,435
 
     Net income (loss) by segment:
       Electric                                        11,558          7,443
       Plastics                                          (933)         2,588
       Manufacturing                                      972            793
       Health services                                    981            505
       Other business operations                       (1,107)          (390)
         Total net income                              11,471         10,939
 
     Preferred stock dividend                             469            469
 
     Balance for common:                              $11,002        $10,470
 
     Average common shares outstanding
       Basic                                       24,306,438     24,301,040
       Diluted                                     24,505,664     24,304,450
 
     Earnings per share:
       Basic                                            $0.45          $0.43
       Diluted                                          $0.45          $0.43
 
     On February 28, 2001, Otter Tail Corporation acquired T.O. Plastics, Inc.
     in a pooling-of-interests transaction.  Otter Tail Corporation's 2000
     results have been restated to reflect this transaction.
 
 
                          Consolidated Balance Sheets
                                     Assets
                                  In thousands
 
                                                     March 31,     December 31,
                                                       2001           2000
                                                    (Unaudited)    (Restated)
     Current assets:
     Cash and cash equivalents                        $9,173         $1,259
     Accounts receivable:
       Trade - net                                    71,643         58,800
       Other                                           6,013          6,037
     Inventory, fuel, materials, and supplies         45,740         41,815
     Deferred income taxes                             3,679          3,695
     Accrued utility revenues                          9,402         11,315
     Other                                             7,157          6,703
       Total current assets                          152,807        129,624
 
     Investments                                      19,429         19,073
     Intangibles--net                                 42,724         43,532
     Other assets                                     11,594         10,126
 
     Deferred debits:
     Unamortized debt expense and reacquisition
      premiums                                         2,661          2,778
     Regulatory assets                                 5,412          5,517
     Other                                             1,381          1,183
       Total deferred debits                           9,454          9,478
 
     Plant:
     Electric plant in service                       796,721        795,357
     Diversified operations                          128,931        127,219
       Total                                         925,652        922,576
     Less accumulated depreciation and amortization  421,113        414,892
                                                     504,539        507,684
     Construction work in progress                    16,363         13,117
       Net plant                                     520,902        520,801
 
         Total                                      $756,910       $732,634
 
     On February 28, 2001, Otter Tail Corporation acquired T.O. Plastics, Inc.
     in a pooling-of-interests transaction.  Otter Tail Corporation's 2000
     results have been restated to reflect this transaction.
 
 
                          Consolidated Balance Sheets
                             Liabilities and Equity
                                  In thousands
 
                                                     March 31,     December 31,
                                                       2001           2000
                                                    (Unaudited)    (Restated)
     Current liabilities
     Short-term debt                                  $20,680            $--
     Sinking fund requirements and current maturities  10,848         13,576
     Accounts payable                                  53,213         51,620
     Accrued salaries and wages                         4,727          9,476
     Federal and state income taxes accrued             7,369          3,243
     Other taxes accrued                               11,334         10,585
     Other accrued liabilities                          5,850          6,524
       Total current liabilities                      114,021         95,024
 
     Noncurrent liabilities                            30,801         30,181
 
     Deferred credits
     Accumulated deferred income taxes                 86,199         86,327
     Accumulated deferred investment tax credit        14,824         15,112
     Regulatory liabilities                            10,532         10,618
     Other                                              8,544          6,850
       Total deferred credits                         120,099        118,907
 
     Capitalization
     Common shares, par value $5 per share            121,544        121,520
     Premium on common shares                              27             49
     Unearned compensation                               (151)          (226)
     Retained earnings                                143,908        139,276
     Accumulated other comprehensive income              (220)          (220)
       Total                                          265,108        260,399
 
     Cumulative preferred shares
       Subject to mandatory redemption                 18,000         18,000
       Other                                           15,500         15,500
 
     Cumulative preference shares - authorized
      1,000,000 shares without par value;
      outstanding - none                                   --             --
 
     Long-term debt                                   193,381        194,623
       Total capitalization                           491,989        488,522
 
       Total                                         $756,910       $732,634
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X22534842
 
 SOURCE  Otter Tail Corporation