Artesian Resources Corporation Reports First Quarter 2019 Results
May 08 2019 - 4:45PM
Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider
of water and wastewater services, and related services, on the
Delmarva Peninsula, today announced that net income for the first
quarter was $3.6 million, a $0.1 million, or 3.2%, increase
compared to net income recorded during the first quarter of
2018. Diluted net income per share increased 5.4% to $0.39
compared to $0.37 for the first quarter of 2018.
Revenues for the first quarter of 2019 were
$19.4 million, a $0.5 million, or 2.5%, increase from the $18.9
million recorded for the same three-month period of 2018.
Water sales revenue increased $0.3 million, or 1.7%, for the first
quarter of 2019, primarily due to an increase from customer growth
and an increase in Distribution System Improvement Charges (“DSIC”)
revenue. Effective January 1, 2019, the DSIC rate increased
from 4.71% to 5.55%.
The Delaware Public Service Commission approved
a reduction in Delaware water rates on January 31, 2019 to return
the savings from the Tax Cut and Jobs Act’s (“TCJA”) reduction in
the corporate tax rate to customers. Approximately $3.3
million was placed in reserve and not included in water sales
revenue in 2018. During the first quarter of 2019, an
additional $0.5 million was placed in reserve and not included in
water sales revenue. As of March 31, 2019, the total amount
reserved to be refunded to customers in the second quarter of 2019
is $3.8 million.
Other utility operating revenue increased 12.1%
to $1.1 million for the first quarter of 2019 compared to the same
period in 2018, primarily as a result of an increase in wastewater
customers served in new and existing developments in Sussex County,
Delaware.
Non-utility revenue increased 5.5% to $1.3
million for the first quarter of 2019 compared to the same period
in 2018, primarily due to an increase in the number enrolled in our
Service Line Protection Plans (“SLP Plans”). The SLP 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, increased $0.2 million, or 1.6%, for the three months
ended March 31, 2019 compared to the same period in 2018.
Non-utility operating expenses increased approximately $0.1
million, or 15.7%, for the first quarter of 2019 compared to the
same period in 2018, primarily due to an increase in payroll and
benefit costs as well as an increase in plumbing services related
to the SLP Plans.
Depreciation and amortization expense increased
$0.1 million, or 5.7%, for the three months ended March 31, 2019
compared to the same period in 2018, primarily due to continued
investment in utility plant providing supply, treatment, storage
and distribution of water to customers and service to our
wastewater customers.
Federal and state income tax expense decreased
$0.2 million, or 11.9%, for the three months ended March 31, 2019
compared to the same period in 2018, primarily due to the
amortization of the deferred tax regulatory liability related to
the reduction in federal corporate income tax rate associated with
the TCJA.
Interest expense increased $0.2 million during
the first quarter of 2019 compared to the same period in 2018,
primarily due to long-term debt interest associated with the $7.5
million wastewater loan issued in August 2018 and the $4.5 million
wastewater loan issued in December 2018.
“In 2018, we invested $49.1 million in water and
wastewater utility plant to service our customers, and we invested
another $9.1 million in the first quarter of 2019,” said Dian C.
Taylor, Chair, President and CEO. “These strategic investments in
water transmission and distribution facilities, replacement of
aging mains, rehabilitation of treatment facilities, and
redevelopment of wells and pumping equipment, along with new
state-of-the-art wastewater recycling and reuse facilities,
demonstrate that we as a company are primed for growth in 2019.
Artesian is well positioned to continue to vigorously expand
our provision of water and wastewater services to new customers and
communities that can be assured of the superior service for which
we have been known for nearly 115 years,” said Taylor.
About Artesian
ResourcesArtesian Resources Corporation operates as a
holding company of wholly-owned subsidiaries offering water and
wastewater services, and related services, on the Delmarva
Peninsula. Artesian Water Company, the principal subsidiary,
is the oldest and largest regulated water utility on the Delmarva
Peninsula and has been providing water service since 1905.
Artesian supplies 7.9 billion gallons of water per year through
1,311 miles of main to over 300,000 people.
Forward Looking StatementsThis
release contains forward looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 regarding,
among other things, our anticipated expansion of water and
wastewater services to new customers, our investment in
infrastructure projects and wastewater facilities, continued growth
in the number of customers served and our ability to continue to
increase shareholder value. These statements involve risks
and uncertainties that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements including: changes in weather, changes in our
contractual obligations, changes in government policies, the timing
and results of our rate requests, failure to receive regulatory
approval, changes in economic and market conditions generally, and
other matters discussed in our filings with the Securities and
Exchange Commission. While the Company may elect to update
forward-looking statements, we specifically disclaim any obligation
to do so and you should not rely on any forward-looking statement
as representation of the Company’s views as of any date subsequent
to the date of this release.
Artesian Resources Corporation |
|
Condensed Consolidated Statement of Operations |
|
(In thousands, except per share amounts) |
|
(Unaudited) |
|
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|
|
|
|
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|
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Three months ended |
|
|
|
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March 31, |
|
|
|
|
2019 |
|
|
2018 |
|
|
Operating
Revenues |
|
|
|
|
|
|
|
Water sales |
$ |
16,934 |
|
$ |
16,645 |
|
|
Other utility operating revenue |
|
1,120 |
|
|
999 |
|
|
Non-utility revenue |
|
1,332 |
|
|
1,262 |
|
|
|
|
19,386 |
|
|
18,906 |
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
Utility operating expenses |
|
9,121 |
|
|
9,083 |
|
|
Non-utility operating expenses |
|
767 |
|
|
663 |
|
|
Depreciation and amortization |
|
2,715 |
|
|
2,568 |
|
|
State and federal income taxes |
|
1,180 |
|
|
1,339 |
|
|
Property and other taxes |
|
1,319 |
|
|
1,282 |
|
|
|
|
15,102 |
|
|
14,935 |
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
4,284 |
|
|
3,971 |
|
|
|
|
|
|
|
|
|
|
Allowance for funds used during construction |
|
226 |
|
|
88 |
|
|
Miscellaneous |
|
800 |
|
|
918 |
|
|
|
|
|
|
|
|
|
|
Income Before Interest
Charges |
|
5,310 |
|
|
4,977 |
|
|
|
|
|
|
|
|
|
|
Interest
Charges |
|
1,720 |
|
|
1,499 |
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
3,590 |
|
$ |
3,478 |
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding - Basic |
|
9,258 |
|
|
9,223 |
|
|
Net Income per Common Share - Basic |
$ |
0.39 |
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding - Diluted |
|
9,314 |
|
|
9,281 |
|
|
Net Income per Common Share - Diluted |
$ |
0.39 |
|
$ |
0.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Artesian Resources Corporation |
|
Condensed Consolidated Balance Sheet |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
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|
March 31, |
|
December 31, |
|
|
|
2019 |
|
2018 |
|
. |
Assets |
|
|
|
|
|
|
|
Utility Plant, at original cost less |
|
|
|
|
|
|
|
accumulated depreciation |
$ |
504,801 |
|
$ |
498,678 |
|
|
Current Assets |
|
13,234 |
|
|
16,118 |
|
|
Regulatory and Other Assets |
|
15,755 |
|
|
15,034 |
|
|
|
$ |
533,790 |
|
$ |
529,830 |
|
|
|
|
|
|
|
|
|
|
Capitalization and
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
$ |
155,042 |
|
$ |
153,251 |
|
|
Long Term Debt, Net of Current Portion |
|
115,352 |
|
|
115,862 |
|
|
Current Liabilities |
|
40,491 |
|
|
37,731 |
|
|
Advances for Construction |
|
6,330 |
|
|
6,596 |
|
|
Contributions in Aid of Construction |
|
138,594 |
|
|
138,015 |
|
|
Other Liabilities |
|
77,981 |
|
|
78,375 |
|
|
|
$ |
533,790 |
|
$ |
529,830 |
|
|
|
|
|
|
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Contact:Nicki TaylorInvestor
Relations(302) 453-6900ntaylor@artesianwater.com
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