Artesian Resources Corporation Reports 4th Quarter and 2016 Year-End Earnings
March 08 2017 - 7:23PM
Artesian Resources Corporation (NASDAQ:ARTNA), a leading provider
of water, wastewater services and related services on the Delmarva
Peninsula, today announced revenue and income for 2016.
Revenues were $79.1 million, up 2.7% from $77.0 million in
2015. Net income increased 14.6% to $13.0 million, compared
to $11.3 million in 2015. Diluted net income per common share
was up 11.9% at $1.41 for 2016 compared to $1.26 for 2015.
Water sales revenues increased 2.4% to $70.6
million, from $68.9 million in 2015. The increase in water
sales revenue is due to an overall increase in water consumption,
an increase in the number of customers served and two increases in
the Distribution System Improvement Charges (DSIC) placed into
effect in 2016.
Non-utility revenue was $4.7 million, up from
$4.4 million in 2015, a 6.5% increase, primarily from customer
enrollments in the Service Line Protection Plans. The Service
Line Protection Plans provide coverage for all material and labor
required to repair or replace participants’ leaking water service
or clogged sewer lines and internal plumbing lines.
Operating expenses, excluding depreciation and
income taxes, decreased $70,000, or 0.2%, for the year ended
December 31, 2016 compared to the year ended December 31,
2015. Utility operating expenses decreased $0.5 million, or
1.4%, for the year ended December 31, 2016 compared to the year
ended December 31, 2015. The decrease is primarily related to
decreased payroll, employee benefit costs and purchased power
expense. The ratio of operating expenses, excluding
depreciation and income taxes, to total revenues was 54.1% for 2016
compared to 55.6% for 2015. “We have vigilantly acted to
control expenses and to implement efficiencies. These efforts
have resulted in our ability to reduce utility operating expenses
in 2016,” said Dian C. Taylor, Chair, President and CEO.
Depreciation and amortization expense increased
$0.4 million, primarily due to continued investment in utility
plant in service providing supply, treatment, storage and
distribution of water. Income tax expense increased $0.5
million as a result of improved profitability compared to 2015.
Interest expense decreased $0.4 million,
primarily due to a reduction in the annual interest rate on the
Series S First Mortgage Bond from 6.73% to 4.45% effective March 1,
2016.
“We continued to take proactive measures in 2016
to control expenses while at the same time investing in
infrastructure improvements to continue to assure high quality and
reliable service to our customers. In 2016 we invested $28.2
million in improvements to enhance existing treatment facilities,
improve sources of supply, upgrade and automate meter reading
equipment, replace aging mains and upgrade computer hardware and
software, while seeking efficiencies whenever possible,” said Dian
Taylor.
Net income increased 48.6% to $2.7 million for
the three months ended December 31, 2016 compared to $1.8 million
for the same period in 2015. Diluted net income per common
share increased 42.9% to $0.30 for the three months ended December
31, 2016 compared to $0.21 for the same period in 2015.
For the three months ended December 31, 2016,
revenues were $19.4 million, an increase of 3.6% from the $18.8
million recorded for the same period in 2015. Water sales
revenue increased 3.4% to $17.1 million for the three months ended
December 31, 2016. The increase in water sales revenue is the
result of an increase in water consumption, an increase in the
number of customers served and two increases in the Distribution
System Improvement Charge.
Operating expenses, excluding income taxes and
depreciation, decreased by 6.8% to $10.9 million for the three
months ended December 31, 2016 compared to $11.6 million for the
same period in 2015. The decrease in operating expenses is
the result of decreases in payroll and employee benefits costs, and
in consulting and legal fees.
Interest expense decreased 5.4% from $1.7
million for the three months ended December 31, 2015 to $1.6
million for the three months ended December 31, 2016 primarily due
to the decrease in the Series S First Mortgage Bond interest
rate.
Other Highlights include:
- Completed 8 water main renewals in 2016 replacing nearly 6
miles of aging water mains, ranging in age from 45 to 74 years
old.
- Instituted a large meter replacement program in July 2016 to
replace obsolete customer meters with technology that detects low
flows not detected by the older meters. To date we have
replaced 1,699 meters.
- Partnered with Sussex County to interconnect our regional
wastewater systems in several locations and to share transmission
and treatment infrastructure to cost-effectively serve each of our
growing service areas.
- Entered into an agreement with Allen Harim Foods, LLC located
in Harbeson, Delaware to dispose of 1.5 million gallons per day of
treated process wastewater by means of spray irrigation.
- Granted the water franchise to serve the historic town of
Odessa and reached agreement with the Odessa Fire Company and the
Cantwell Water Company for purchase of their respective water
assets. We have provided service to the Odessa Fire Company’s
fire station since May 2013 and are excited that our partnership
with Odessa will now allow us to be able to provide reliable, high
quality water to the residents of Odessa who have previously relied
upon individual private wells.
About Artesian Resources
Artesian 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, Inc., 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 1,260 miles of water main to approximately 301,000
people.
Artesian Resources Corporation |
Condensed Consolidated Statement of Operations |
(In thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Operating
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Water
sales |
|
$ |
17,147 |
|
|
$ |
16,589 |
|
|
$ |
70,587 |
|
$ |
68,932 |
Other
utility operating revenue |
|
|
1,064 |
|
|
|
1,076 |
|
|
|
3,816 |
|
|
3,694 |
Non-utility operating revenue |
|
|
1,206 |
|
|
|
1,085 |
|
|
|
4,686 |
|
|
4,398 |
|
|
|
19,417 |
|
|
|
18,750 |
|
|
|
79,089 |
|
|
77,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Utility
operating expenses |
|
|
9,055 |
|
|
|
9,949 |
|
|
|
35,658 |
|
|
36,148 |
Non-utility operating expenses |
|
|
678 |
|
|
|
600 |
|
|
|
2,602 |
|
|
2,305 |
Depreciation and amortization |
|
|
2,353 |
|
|
|
2,239 |
|
|
|
9,188 |
|
|
8,837 |
State and
federal income taxes |
|
|
1,859 |
|
|
|
1,332 |
|
|
|
8,331 |
|
|
7,784 |
Property
and other taxes |
|
|
1,120 |
|
|
|
1,099 |
|
|
|
4,491 |
|
|
4,368 |
|
|
|
15,065 |
|
|
|
15,219 |
|
|
|
60,270 |
|
|
59,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
|
4,352 |
|
|
|
3,531 |
|
|
|
18,819 |
|
|
17,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for funds used during construction |
|
|
62 |
|
|
|
96 |
|
|
|
222 |
|
|
249 |
Miscellaneous |
|
|
(43 |
) |
|
|
(50 |
) |
|
|
557 |
|
|
472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before
Interest Charges |
|
|
4,371 |
|
|
|
3,577 |
|
|
|
19,598 |
|
|
18,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges |
|
|
1,648 |
|
|
|
1,742 |
|
|
|
6,644 |
|
|
6,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
|
$ |
2,723 |
|
|
$ |
1,835 |
|
|
$ |
12,954 |
|
$ |
11,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Basic |
|
|
9,122 |
|
|
|
9,035 |
|
|
|
9,098 |
|
|
8,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income per Common Share - Basic |
|
$ |
0.30 |
|
|
$ |
0.21 |
|
|
$ |
1.42 |
|
$ |
1.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Diluted |
|
|
9,187 |
|
|
|
9,095 |
|
|
|
9,161 |
|
|
9,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income per Common Share - Diluted |
|
$ |
0.30 |
|
|
$ |
0.21 |
|
|
$ |
1.41 |
|
$ |
1.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Artesian Resources Corporation |
Condensed Consolidated Balance Sheet |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
|
|
2016 |
|
2015 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Utility
Plant, at original cost less |
|
|
|
|
|
|
|
|
|
|
|
|
accumulated depreciation |
|
$ |
425,502 |
|
|
$ |
405,606 |
|
|
|
|
|
|
|
Current
Assets |
|
|
14,635 |
|
|
|
14,444 |
|
|
|
|
|
|
|
Regulatory and Other Assets |
|
|
10,839 |
|
|
|
11,576 |
|
|
|
|
|
|
|
|
|
$ |
450,976 |
|
|
$ |
431,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization
and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
$ |
139,023 |
|
|
$ |
132,331 |
|
|
|
|
|
|
|
Long Term
Debt, Net of Current Portion |
|
|
102,331 |
|
|
|
103,647 |
|
|
|
|
|
|
|
Current
Liabilities |
|
|
19,328 |
|
|
|
22,403 |
|
|
|
|
|
|
|
Net
Advances for Construction |
|
|
8,169 |
|
|
|
8,752 |
|
|
|
|
|
|
|
Contributions in Aid of Construction |
|
|
112,106 |
|
|
|
99,847 |
|
|
|
|
|
|
|
Other
Liabilities |
|
|
70,019 |
|
|
|
64,646 |
|
|
|
|
|
|
|
|
|
$ |
450,976 |
|
|
$ |
431,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact:
Nicholle Taylor
Investor Relations
(302) 453-6900
ntaylor@artesianwater.com
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