Middlesex Water Company Reports Third Quarter Financial Results
November 02 2018 - 3:35PM
QUARTER HIGHLIGHTS
Middlesex Water Company (the “Company” or “Middlesex”),
(Nasdaq:MSEX), a provider of water and wastewater services, today
reported third quarter consolidated operating revenues of $38.7
million as compared to $36.2 million for the same period in
2017. Net income for the quarter increased $4.6 million to
$12.3 million, compared to $7.6 million for the same period in
2017. Diluted earnings per share for the quarter ended
September 30, 2018 were $0.74 up from $0.46 for the same period in
2017.
“The favorable outcome of the Middlesex base rate case
settlement reached in March 2018 allows for the recognition of tax
benefits that propelled both Net Income and Earnings Per Share
upward for the quarter and the year. Higher demand from our
New Jersey contract customers, a base rate increase in our
Middlesex System and customer growth in Delaware also had a
favorable impact on third quarter results,” said Middlesex
Chairman, President and Chief Executive Officer Dennis W.
Doll. “We were pleased to announce a 7.3 % increase in the
common dividend in late October, demonstrating our ongoing
commitment to returning value to shareholders. The increase
represents our 46th year of consecutive dividend increases in our
company’s history,” added Doll.
Third Quarter Operating Results
Operating revenues for the quarter increased by $2.5 million
from the same period in 2017. $1.5 million of higher revenue
is due to the base rate increase in the Middlesex System which took
effect April 1, 2018. Higher demand from our New Jersey
contract customers added $0.6 million to revenues. In
Delaware, Tidewater Utilities, Inc., $0.4 million in higher
revenues was attributed to customer growth.
Operation and maintenance expenses for the third quarter
increased $1.7 million from the same period in 2017. The
increase was primarily attributable to $0.4 million of higher water
production costs related to weather-driven changes in raw water
quality as well as higher retiree healthcare insurance premium
costs of $0.7 million. Higher headcount and average labor
rates pushed labor costs up by $0.2 million. Rent expense
rose by $0.2 million due to increased leased commercial office
space required to accommodate various operational and
administrative needs.
Income Tax expense for the third quarter decreased $4.2 million
from the same period in 2017 due to the combined effect of the
approved regulatory accounting treatment of the adoption of
Internal Revenue Service (IRS) tangible property regulations and a
lower effective tax rate resulting from the Tax Cuts and Jobs Act
of 2017.
Nine Month Operating Results
Consolidated operating revenues for the nine months ended
September 30, 2018 were $104.8 million, an increase of $5.5 million
from the same period in 2017, primarily due to the base rate
increase and higher demand by contract customers in the Middlesex
System as well as increased revenues in our Tidewater system due to
customer growth. For the nine months ended September 30,
2018, net income increased $8.0 million to $25.5 million.
Diluted earnings per share were $1.54 as compared to $1.06 for the
same period in 2017.
Operation and maintenance expenses for the nine months ended
September 30, 2018 were higher by $3.6 million compared to the same
period in 2017, due to increased water production costs, higher
labor costs, higher net healthcare insurance policy premiums,
heightened main break repair activity and increased transportation
costs.
Income Tax expense for the nine months ended September 30, 2018
decreased $7.6 million from the same period in 2017, approved
regulatory accounting treatment of the adoption of IRS
tangible property regulations, as well as a lower effective tax
rate resulting from the Tax Cuts and Jobs Act of 2017.
Board of Directors Declares DividendThe
Company’s Board of Directors declared a quarterly cash dividend of
$0.24 per share, payable December 3, 2018 to common shareholders as
of November 15, 2018. Middlesex has paid cash dividends
continually since 1912.
About Middlesex Water CompanyMiddlesex 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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2018 |
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2017 |
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2018 |
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2017 |
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Operating Revenues |
$ |
38,713 |
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$ |
36,174 |
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$ |
104,809 |
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$ |
99,319 |
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Operating Expenses: |
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Operations and Maintenance |
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18,114 |
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16,383 |
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52,773 |
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49,178 |
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Depreciation |
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3,792 |
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3,587 |
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11,137 |
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10,280 |
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Other Taxes |
|
3,889 |
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3,603 |
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10,910 |
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10,327 |
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Total Operating
Expenses |
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25,795 |
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23,573 |
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74,820 |
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69,785 |
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Operating Income |
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12,918 |
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12,601 |
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29,989 |
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29,534 |
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Other Income (Expense): |
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Allowance for Funds Used During Construction |
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424 |
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174 |
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|
805 |
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473 |
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Other Income (Expense), net |
|
409 |
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248 |
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1,277 |
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684 |
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Total Other Income, net |
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833 |
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422 |
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2,082 |
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1,157 |
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Interest Charges |
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1,723 |
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1,493 |
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4,929 |
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3,965 |
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Income before Income Taxes |
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12,028 |
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11,530 |
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27,142 |
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26,726 |
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Income Taxes |
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(262 |
) |
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3,888 |
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1,683 |
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9,263 |
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Net Income |
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12,290 |
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7,642 |
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25,459 |
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17,463 |
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Preferred Stock Dividend Requirements |
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36 |
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36 |
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108 |
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108 |
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Earnings Applicable to Common Stock |
$ |
12,254 |
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$ |
7,606 |
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$ |
25,351 |
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$ |
17,355 |
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Earnings per share of Common Stock: |
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Basic |
$ |
0.75 |
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$ |
0.47 |
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$ |
1.55 |
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$ |
1.06 |
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Diluted |
$ |
0.74 |
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$ |
0.46 |
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$ |
1.54 |
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$ |
1.06 |
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Average Number of |
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Common Shares Outstanding: |
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Basic |
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16,394 |
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16,340 |
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16,379 |
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16,324 |
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Diluted |
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16,550 |
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16,496 |
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16,535 |
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16,480 |
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Cash Dividends Paid per Common Share |
$ |
0.2238 |
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$ |
0.2113 |
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$ |
0.6713 |
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$ |
0.6338 |
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