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Otter Tail Corporation Announces Strong First Quarter Results Driven by Improvement in Nonelectric Operations, Raises Total Guidance.

Article Excerpt
FERGUS FALLS, Minn., May 2 /PRNewswire-FirstCall/ -- Otter Tail Corporation announced financial results for the quarter ended March 31, 2005 with the following highlights:



-- Consolidated net income from continuing operations increased to $11.0 million for the first quarter of 2005 compared with $8.2 million for the first quarter of 2004. -- Total consolidated net income, which includes discontinued operations, increased to $10.0 million for the first quarter of 2005 compared with $8.3 million for the first quarter of 2004. -- Diluted earnings per share from continuing operations increased to $0.37 for the first quarter of 2005 compared with $0.31 for the first quarter of 2004. -- Total diluted earnings per share, which includes discontinued operations, increased to $0.33 for the first quarter of 2005 compared with $0.31 for the first quarter of 2004. First quarter 2005 discontinued operations include a $1.6 million after-tax charge related to the expected sale of St. George Steel (SGS) Fabrication, Inc. Announcements: -- On April 11, 2005 the Board of Directors declared a quarterly common stock dividend of 28 cents per share. -- On April 27, 2005 the corporation renewed its line of credit and increased the amount available under the line from $70 million to $100 million. The renewed agreement expires on April 26, 2006. -- The corporation has signed a definitive agreement with Arvig Enterprises, Inc. to sell Midwest Information Systems, Inc. (MIS). The transaction is currently awaiting approval from regulatory agencies and closing is expected to occur by the end of June 2005. MIS results of operations are included in discontinued operations. -- The corporation is reaffirming its 2005 diluted earnings per share guidance from continuing operations to be in the range of $1.50 to $1.70 and increasing its total diluted earnings per share guidance to be in the range from $1.80 to $2.00, which includes expected gains and losses from discontinued operations.

"We are very pleased with our strong first quarter operating results for 2005," said John Erickson, president and chief executive officer of Otter Tail Corporation. "Bolstered by growth in the nonelectric segments, consolidated earnings grew by $1.7 million over the first quarter of 2004 despite the fact that earnings from the electric segment declined." Erickson said the electric results were in line with the corporation's previously stated outlook for 2005, which anticipated a reduction in wholesale electric margins primarily because of uncertainty in wholesale electric markets with the introduction of the Midwest Independent Transmission System Operator (MISO) markets. "The results from this quarter show the value of our strategy, which couples a diversified group of nonelectric companies with the relatively stable and solid performance from the electric segment."

"We are encouraged by the strong performance of our nonelectric business segments, which, in aggregate, produced a $5.0 million increase in net income from continuing operations in the first quarter of 2005 compared to the first quarter of 2004," Erickson said. "These results were led by record performance for the...