Artesian Resources Corporation Reports 2016 Third Quarter and Year-to-Date Results
November 02 2016 - 4:05PM
Artesian Resources Corporation (Nasdaq:ARTNA), a leading provider
of water, wastewater services and related services on the Delmarva
Peninsula, announced today that net income for the third quarter of
2016 was $4.4 million, an increase of $0.7 million, or 17.9%,
compared to the $3.7 million in net income reported during the
third quarter of 2015. Diluted net income per share increased
17.1% to $0.48 compared to $0.41 for the third quarter of 2015.
Revenues for the third quarter of 2016 were
$21.8 million, a $1.0 million, or 5.1%, increase over the same
quarter of 2015. Water sales revenue increased $0.8 million,
or 4.5%, to $19.7 million for the third quarter of 2015 compared to
$18.8 million for the third quarter of 2015. The increase is
due primarily to an increase in the Distribution System Improvement
Charge, or DSIC, and overall greater water consumption.
Excluding depreciation and income taxes,
operating expenses increased $0.4 million, or 4.0%, to $11.1
million for the third quarter of 2016 compared to $10.7 million for
the same period in 2015. Utility operating expenses for the
third quarter of 2016 were $9.3 million, a $0.3 million, or 2.8%,
increase from the $9.0 million recorded for the same period in
2015. The increase is primarily the result of increased legal
costs and increased purchased water expense due to the timing of
purchases.
Interest expenses decreased $0.1 million, or
6.1%, to $1.7 million for the third quarter of 2016 compared to
$1.8 million for the same period of 2015 primarily due to a
decrease in the Series S First Mortgage Bond interest rate from
6.73% to 4.45%, effective March 1, 2016, and a decrease in
short-term debt outstanding.
Through the first nine months of 2016, Artesian
had net income of $10.2 million, an increase of 8.0% compared to
net income of $9.5 million recorded for the same period of
2015. Diluted net income per share increased 5.7% to $1.12
for the nine months ended September 30, 2016 from $1.06 for the
same period of 2015.
Revenues during the first nine months of 2016
increased $1.4 million, or 2.4%, to $59.7 million. Water
sales revenue increased $1.1 million, or 2.1%, for the nine months
ended September 30, 2016 from the corresponding period in
2015. The increase in water sales revenue is primarily due to
an increase in the DSIC and an increase in the number of customers
served and resulting fixed customer and fire protection
charges.
Excluding depreciation and income taxes,
operating expenses increased $0.7 million, or 2.3%, to $31.9
million for the nine months ended September 30, 2016 compared to
$31.2 million for the same period of 2015. Utility operating
expenses for the nine months ended September 30, 2016 were $26.6
million, a $0.4 million, or 1.5%, increase from the $26.2 million
recorded for the same period of 2015. The increase is
primarily the result of increased legal, payroll and employee
benefit expenses, somewhat offset by lower purchased power costs
under a new three-year electric generation supply contract
effective May 2016.
Interest expenses decreased $0.3 million, or
4.9%, to $5.0 million for the nine months ended September 30, 2016
compared to $5.3 million for the same period of 2015 primarily due
to a decrease in the Series S First Mortgage Bond interest rate
from 6.73% to 4.45%, effective March 1, 2016, and a decrease in
short-term debt outstanding.
The Company invested $20.0 million in
infrastructure improvements during the first nine months of 2016 to
ensure high quality and reliable service to customers.
Significant infrastructure improvements included the replacement of
aging water mains, upgrade of meter equipment, enhancement of water
treatment facilities, rehabilitation of pumping equipment and the
relocation of mains as mandated by state highway
projects.
“Our ability to continue to control expenses
coupled with increased water consumption during the third quarter
of 2016 contributed to our overall positive results. We are
also able to obtain timely recovery through the Distribution System
Improvement Charge on a portion of our investments made in
infrastructure so that our customers receive reliable and safe
water,” said Dian C. Taylor, Chair, President and CEO.
About Artesian
ResourcesArtesian Resources Corporation operates as a
holding company of wholly-owned subsidiaries offering water,
wastewater services and related services on the Delmarva
Peninsula. Artesian Water Company, the principal subsidiary,
is the oldest and largest investor-owned water utility on the
Delmarva Peninsula and has been providing water service since
1905. Artesian supplies 7.6 billion gallons of water per year
through 1,218 miles of water main to approximately 301,000
people.
Artesian Resources Corporation |
|
Condensed Consolidated Statement of Operations |
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(In thousands, except per share amounts) |
|
(Unaudited) |
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Three months ended |
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Nine months ended |
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September 30, |
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|
September 30, |
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2016 |
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|
|
2015 |
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|
2016 |
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|
2015 |
|
Operating
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Water
sales |
$ |
|
19,680 |
|
|
$ |
|
18,831 |
|
|
$ |
53,440 |
|
$ |
52,343 |
|
Other
utility operating revenue |
|
|
976 |
|
|
|
|
861 |
|
|
|
2,752 |
|
|
2,618 |
|
Non-utility
operating revenue |
|
|
1,172 |
|
|
|
|
1,084 |
|
|
|
3,480 |
|
|
3,313 |
|
|
|
|
21,828 |
|
|
|
|
20,776 |
|
|
|
59,672 |
|
|
58,274 |
|
|
|
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|
|
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|
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|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Utility
operating expenses |
|
|
9,292 |
|
|
|
|
9,036 |
|
|
|
26,603 |
|
|
26,198 |
|
Non-utility
operating expenses |
|
|
698 |
|
|
|
|
578 |
|
|
|
1,924 |
|
|
1,705 |
|
Depreciation
and amortization |
|
|
2,270 |
|
|
|
|
2,196 |
|
|
|
6,835 |
|
|
6,597 |
|
State and
federal income taxes |
|
|
2,498 |
|
|
|
|
2,497 |
|
|
|
6,473 |
|
|
6,452 |
|
Property and
other taxes |
|
|
1,125 |
|
|
|
|
1,075 |
|
|
|
3,371 |
|
|
3,270 |
|
|
|
|
15,883 |
|
|
|
|
15,382 |
|
|
|
45,206 |
|
|
44,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
|
5,945 |
|
|
|
|
5,394 |
|
|
|
14,466 |
|
|
14,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for funds used during construction |
|
|
87 |
|
|
|
|
86 |
|
|
|
160 |
|
|
153 |
|
Miscellaneous |
|
|
(26 |
) |
|
|
|
(28 |
) |
|
|
598 |
|
|
521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before
Interest Charges |
|
|
6,006 |
|
|
|
|
5,452 |
|
|
|
15,224 |
|
|
14,726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges |
|
|
1,646 |
|
|
|
|
1,753 |
|
|
|
4,996 |
|
|
5,256 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net
Income |
$ |
|
4,360 |
|
|
$ |
|
3,699 |
|
|
$ |
10,228 |
|
$ |
9,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Basic |
|
|
9,112 |
|
|
|
|
8,960 |
|
|
|
9,090 |
|
|
8,935 |
|
Net Income
per Common Share - Basic |
$ |
|
0.48 |
|
|
$ |
|
0.41 |
|
|
$ |
1.13 |
|
$ |
1.06 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
Weighted
Average Common Shares Outstanding - Diluted |
|
|
9,177 |
|
|
|
|
9,000 |
|
|
|
9,154 |
|
|
8,972 |
|
Net Income
per Common Share - Diluted |
$ |
|
0.48 |
|
|
$ |
|
0.41 |
|
|
$ |
1.12 |
|
$ |
1.06 |
|
|
|
|
|
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|
|
|
|
|
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Artesian Resources Corporation |
|
Condensed Consolidated Balance Sheet |
|
(In thousands) |
|
(Unaudited) |
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September 30, |
|
December 31, |
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2016 |
|
2015 |
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Assets |
|
|
|
|
|
|
|
|
|
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|
|
Utility
Plant, at original cost less |
|
|
|
|
|
|
|
|
|
|
|
|
accumulated
depreciation |
$ |
|
419,952 |
|
|
$ |
|
405,606 |
|
|
|
|
|
|
|
|
Current
Assets |
|
|
15,879 |
|
|
|
|
14,444 |
|
|
|
|
|
|
|
|
Regulatory
and Other Assets |
|
|
11,108 |
|
|
|
|
11,576 |
|
|
|
|
|
|
|
|
|
$ |
|
446,939 |
|
|
$ |
|
431,626 |
|
|
|
|
|
|
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Capitalization and
Liabilities |
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
|
Stockholders' Equity |
$ |
|
135,877 |
|
|
$ |
|
132,331 |
|
|
|
|
|
|
|
|
Long Term
Debt, Net of Current Portion |
|
|
102,599 |
|
|
|
|
103,647 |
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
20,893 |
|
|
|
|
22,403 |
|
|
|
|
|
|
|
|
Net Advances
for Construction |
|
|
8,542 |
|
|
|
|
8,752 |
|
|
|
|
|
|
|
|
Contributions in Aid of Construction |
|
|
110,868 |
|
|
|
|
99,847 |
|
|
|
|
|
|
|
|
Other
Liabilities |
|
|
68,160 |
|
|
|
|
64,646 |
|
|
|
|
|
|
|
|
|
$ |
|
446,939 |
|
|
$ |
|
431,626 |
|
|
|
|
|
|
|
|
|
|
|
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Contact:
Nicki Taylor
Investor Relations
(302) 453-6900
ntaylor@artesianwater.com
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