(Source: PRNewswire-FirstCall)
GREEN BAY, Wis., May 13 /PRNewswire-FirstCall/ -- At its Annual Meeting of Shareholders held today at the Weidner Center in Green Bay, Wisconsin, Integrys Energy Group, Inc. Executive Chairman Larry L. Weyers told the audience that despite a troubled economy that caused the company to rethink its overall strategies, Integrys has made the necessary changes to position it for future growth in the regulated natural gas and electric utility industry.
"It's been a tough year - tough for the world economy, tough for the United States economy, tough for U.S. corporations, tough for the U.S. workforce, tough for customers, tough for Integrys, and tough for investors," said Weyers. "We made it through a very difficult experience. We have embraced a strategy change that is leading us to divest or downsize our nonregulated subsidiary, Integrys Energy Services."
Weyers explained the decision by characterizing the issues Integrys faced regarding its Energy Services business unit. "Integrys Energy Services has experienced rapid growth in the past few years and is an attractive business," he said, pointing out that 2008 was the "best year ever in creating value" for the subsidiary. However, the financial requirements to support the unit were hampering Integrys Energy Group, given the current economic reality. "This subsidiary requires substantial credit facilities to support its operating model. The credit can be supplied by a parent company with a large balance sheet or more liquid financial markets."
Integrys expects to have additional information on the divestiture in the third or fourth quarter of 2009.
Weyers said, the new strategy and uncertainty around the announcement, as well as questions about the company's ability to sustain its current dividend led to a significant drop in Integrys Energy's stock price. Weyers said that as the company demonstrates the soundness of the strategy change, the affordability of the dividend, and the replacement of the lost earnings stream, the stock will rebound. "Partial recovery has already taken place," he said, noting the stock rebounded by around 50% since its 52-week low just a little more than two months earlier.
Weyers said that Integrys expects average annual earnings-per-share growth of 4% to 6% in the long term, with more rapid growth in the near term. He indicated that the company recently announced earnings guidance for 2011 of between $2.80 and $3.20 per share and indicated that the Board had approved payment of the second quarter dividend at a rate of 68 cents per share. The dividend rate was increased to 68 cents per share in the first quarter 2009, marking the 51st consecutive year of increasing dividends and the 69th consecutive year of paying dividends.
