Middlesex Water Company Reports Third Quarter Financial Results
November 01 2019 - 12:33PM
Middlesex Water Company (the “Company” or “Middlesex”), (Nasdaq:
MSEX), a provider of water and wastewater services, today reported
financial results for the quarter ended September 30, 2019.
Third Quarter Operating Results
Consolidated net income for the quarter was $11.1 million, a
decrease of $1.2 million from $12.3 million for the same period in
2018. Diluted earnings per share for the quarter were $0.66,
down from $0.74 for the same period in 2018.
Operating revenues decreased $0.9 million to $37.8 million as
compared to $38.7 million for the same period in 2018 with
unfavorable weather patterns in the mid-Atlantic region reducing
customer demand for water. We continued to add customers in our
Delaware system, Tidewater Utilities, Inc. (“Tidewater”), which
offset a portion of the decline in water consumption.
Non-regulated revenues decreased $1.3 million. As previously
described in other communications, we changed the structure of the
wastewater component relative to our new 10-year contract
(effective January 1, 2019) to operate the City of Perth Amboy, New
Jersey’s (Perth Amboy) water and wastewater systems. This change
also resulted in a related decrease in operating expenses for the
quarter. On an annual basis, this amounts to $5.6 million in lower
revenue.
Middlesex Chairman, President and Chief Executive Officer Dennis
W. Doll said, “While unfavorable weather impacted consumption in
the third quarter, we remained focused on strategic growth and
increasing reliability and resiliency throughout our various
systems. We announced the acquisition of approximately 1,000
new customer connections in Delaware. We raised $60 million through
the New Jersey Economic Development Authority by issuing tax-exempt
first mortgage bonds to help fund the recently commenced $70
million upgrade to our largest treatment plant in New Jersey.
In addition, we were pleased to announce a 6.7 % increase in the
common dividend in late October, demonstrating our ongoing
commitment to returning value to shareholders. This increase
represents our 47th year of consecutive dividend increases in our
company’s history,” added Doll.
Operation and maintenance expenses were $17.7
million, down $0.4 million from the same period in 2018. The
lower expenses attributable to the Perth Amboy contract change
partially mitigated increased labor related costs. We have added
personnel in selected areas to meet increasing regulatory
requirements as well as to meet the demands related to customer
growth in a competitive job market.
Nine Month Operating Results
Consolidated net income for the nine months ended September 30,
2019 increased $0.4 million to $25.8 million. Diluted earnings per
share were $1.55 compared to $1.54 for the same period in
2018.
Consolidated operating revenues for the nine months ended
September 30, 2019 were $101.9 million, a decrease of $3.0 million
from the same period in 2018. Unfavorable weather reduced
customer demand for water and non-regulated revenues decreased due
to changes in our Perth Amboy contract. Partially offsetting
these decreases was an April 1, 2018 base rate increase in our
Middlesex System in New Jersey and Tidewater customer
growth.
Operation and maintenance expenses for the nine months ended
September 30, 2019 decreased by $2.2 million as compared to the
same period in 2018, due to reduced expenses associated with our
new Perth Amboy operating contract offset by higher labor
costs.
Income Tax expense for the nine months ended September 30, 2019
decreased $2.6 million as compared with the same period in 2018,
primarily due to the regulatory accounting treatment of tangible
property regulations related expense deductions, lower-pre-tax
income and a lower Tidewater effective income tax rate resulting
from a March 2019 tariff rate reduction.
Board of Directors Declares Dividend
The Company’s Board of Directors declared a quarterly cash
dividend of $0.25625 per share, payable December 2, 2019 to common
shareholders as of November 15, 2019. Middlesex has paid cash
dividends continually since 1912.
About Middlesex Water Company
Middlesex Water Company, organized in 1897, is an investor-owned
water and wastewater utility, serving customers primarily in
central and southern New Jersey and Delaware. Information
about Middlesex’s Direct Share Purchase and Sale and Dividend
Reinvestment Plan can be found on our website.
This release contains forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including, among others, our long-term strategy and
expectations, the status of our acquisition program, the impact of
our acquisitions, the impact of current and projected rate requests
and the impact of our capital program on our environmental
compliance. There are important factors that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements including: general economic
business conditions, unfavorable weather conditions, the success of
certain cost containment initiatives, changes in regulations or
regulatory treatment, availability and the cost of capital, the
success of growth initiatives and other factors discussed in our
filings with the United States Securities and Exchange
Commission.
Contact: Bernadette Sohler, Vice
President – Corporate AffairsMiddlesex Water Company
(732) 638-7549 www.middlesexwater.com
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MIDDLESEX WATER COMPANY |
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
(In
thousands except per share amounts) |
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Three
Months Ended September 30, |
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Nine
Months Ended September 30, |
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2019 |
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2018 |
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2019 |
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2018 |
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Operating Revenues |
$ |
37,769 |
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$ |
38,713 |
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$ |
101,859 |
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$ |
104,809 |
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Operating Expenses: |
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Operations
and Maintenance |
17,669 |
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18,114 |
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50,569 |
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52,773 |
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Depreciation |
4,246 |
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3,792 |
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12,415 |
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11,137 |
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Other Taxes |
3,871 |
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3,889 |
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10,913 |
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10,910 |
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Total Operating Expenses |
25,786 |
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25,795 |
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73,897 |
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74,820 |
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Operating Income |
11,983 |
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12,918 |
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27,962 |
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29,989 |
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Other Income (Expense): |
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Allowance
for Funds Used During Construction |
871 |
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424 |
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2,030 |
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805 |
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Other Income (Expense), net |
(4) |
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409 |
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(142) |
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1,277 |
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Total Other Income, net |
867 |
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833 |
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1,888 |
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2,082 |
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Interest Charges |
1,996 |
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1,723 |
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4,984 |
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4,929 |
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Income before Income Taxes |
10,854 |
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12,028 |
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24,866 |
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27,142 |
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Income Taxes |
(265) |
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(262) |
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(952) |
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1,683 |
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Net Income |
11,119 |
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12,290 |
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25,818 |
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25,459 |
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Preferred Stock Dividend Requirements |
30 |
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36 |
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102 |
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108 |
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Earnings Applicable to Common Stock |
$ |
11,089 |
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$ |
12,254 |
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$ |
25,716 |
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$ |
25,351 |
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Earnings per share of Common Stock: |
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Basic |
$ |
0.67 |
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$ |
0.75 |
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$ |
1.56 |
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$ |
1.55 |
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Diluted |
$ |
0.66 |
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$ |
0.74 |
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$ |
1.55 |
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$ |
1.54 |
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Average Number of |
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Common
Shares Outstanding : |
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Basic |
16,610 |
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16,394 |
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16,520 |
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16,379 |
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Diluted |
16,757 |
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16,550 |
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16,673 |
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16,535 |
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Cash Dividends Paid per Common Share |
$ |
0.2400 |
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$ |
0.2238 |
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$ |
0.7200 |
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$ |
0.6713 |
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