Gas Natural Inc. Aligns Dividend with Growth Plans

CLEVELAND, April 5, 2016 /PRNewswire/ -- Gas Natural Inc. (NYSE MKT: EGAS) (the "Company"), a holding company operating local natural gas utilities serving approximately 68,000 customers in four states, announced that its Board of Directors declared the first dividend of 2016 to be $0.075 per share.  The dividend will be payable on April 27, 2016 to shareholders of record as of April 15, 2016.  This corresponds to an annual dividend rate of $0.30 per share, with the Company's intentions to establish a regular quarterly dividend schedule going forward.

Mr. Gregory J. Osborne, Gas Natural's President and Chief Executive Officer, commented, "The impact of warmer than normal winter weather combined with ongoing cash requirements to address legacy regulatory and legal matters prompted the decision to revise our dividend policy at this time.  This change in our dividend produces a payout ratio more commensurate with our peers.  We have implemented significant operational changes over the last two years and believe we have established a solid foundation for the future.  While there are still some legacy issues with which to contend and challenges with the paper industry in Maine where we have lost a major customer, we believe we can now refocus on our growth strategy by allocating resources to drive improved earnings.  Accordingly, we are setting our dividend at a sustainable level, which we anticipate increasing as our earnings grow."

The Company's plans for growth include expanding its customer base and throughput with capital investments aimed at higher returns as well as finding strategic bolt-on or transformational acquisitions to supplement that organic growth.  Reducing the dividend enables investments in growth without overextending our borrowings.  The Company expects to be at a payout ratio of approximately 75% by the end of 2017.  Over the next several years, Gas Natural plans to drive its return on equity to the high single digits from its trailing five-year average of approximately 5%.

Mr. Osborne concluded, "The availability of capital resulting from this revised dividend policy supports our plans to measurably grow our earnings organically and to reward our shareholders along the way.  Ultimately, we expect to surpass the level of our past dividend while maintaining a payout ratio in line with our peers.  In addition, we will continue to actively seek and evaluate acquisitions that fit within our strategic growth plan and our goal to become a benchmark natural gas utility."  The Company's dividend was previously at an annual rate of $0.54 per share.

About Gas Natural Inc.
Gas Natural Inc., a holding company, distributes and sells natural gas to residential, commercial, and industrial customers.  It distributes approximately 21 billion cubic feet of natural gas to roughly 68,000 customers through regulated utilities operating in Montana, Ohio, Maine and North Carolina.  The Company's other operations include interstate pipeline, natural gas production, and natural gas marketing.  The Company's Montana public utility was originally incorporated in 1909.  Its strategy for growth is to expand throughput in its markets, while looking for acquisitions that are either adjacent to its existing utilities or in under served markets.  Gas Natural Inc. regularly posts information on its website at www.egas.net.

Safe Harbor Regarding Forward-Looking Statements
The Company is including the following cautionary statement in this release to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, Gas Natural Inc. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, those that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," "believes" and similar expressions. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Factors that may affect forward-looking statements and the Company's business generally include, but are not limited to the Company's ability to consummate the corporate reorganization and debt refinancing on terms that are acceptable to the Company, or at all; the Company's ability to successfully integrate the operations of the companies it has acquired and consummate additional acquisitions; the Company's continued ability to make  or increase dividend payments; the Company's ability to implement its business plan, grow earnings and improve returns on investment; fluctuating energy commodity prices; the possibility that regulators may not permit the Company to pass through all of its increased costs to its customers; changes in the utility regulatory environment; wholesale and retail competition; the Company's ability to satisfy its debt obligations, including compliance with financial covenants; weather conditions; litigation risks; and various other matters, many of which are beyond the Company's control; the risk factors and cautionary statements made in the Company's public filings with the Securities and Exchange Commission; and other factors that the Company is currently unable to identify or quantify, but may exist in the future. Gas Natural Inc. expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in Gas Natural Inc.'s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

SOURCE Gas Natural Inc.

Related Links

http://www.egas.net