• 36.8% increase in consolidated diluted EPS
over first quarter of 2020 (20.9% increase over adjusted first
quarter 2020 diluted EPS)
• Increased earnings per share in all
business segments
American States Water Company (NYSE:AWR) today reported basic
and fully diluted earnings per share of $0.52 for the quarter ended
March 31, 2021, as compared to basic and fully diluted earnings per
share of $0.38 for the quarter ended March 31, 2020, a 36.8%
increase. Included in the results for the first quarter of 2020
were losses totaling $2.4 million, or approximately $0.05 per
share, incurred on investments held to fund one of the company's
retirement plans that resulted from the negative effects at the
start of the COVID-19 pandemic early last year on the financial
markets. Excluding this item from the results for the first quarter
of 2020, consolidated diluted earnings for the first quarter of
2021 increased by $0.09 per share, or 20.9%, as compared to the
same period in 2020.
First Quarter 2021 Results
The table below sets forth a comparison of the first quarter
2021 diluted earnings per share by business segment with the same
period in 2020.
Diluted Earnings per
Share
Three Months Ended
3/31/2021
3/31/2020
CHANGE
Water
$
0.33
$
0.24
$
0.09
Electric
0.07
0.06
0.01
Contracted services
0.12
0.08
0.04
Consolidated diluted earnings per
share
$
0.52
$
0.38
$
0.14
Water Segment:
Diluted earnings per share from AWR’s water utility segment,
Golden State Water Company ("GSWC"), for the three months ended
March 31, 2021 increased by $0.09 per share as compared to the same
period in 2020. Excluding the $2.4 million of losses incurred on
investments from the results for the first quarter of 2020, diluted
earnings for the water segment during the first quarter of 2021
increased by $0.04 per share due to the following items (excluding
the impact of billed surcharges, which have no effect on net
earnings):
- An increase in the water gross margin of $2.5 million, or
approximately $0.05 per share, as a result of new rates authorized
by the California Public Utilities Commission ("CPUC"). Effective
January 1, 2021, GSWC received its full third-year step increase,
which it achieved as a result of passing an earnings test. The full
step increase is expected to generate an additional $11.1 million
in water gross margin for 2021.
- An overall increase in operating expenses (excluding supply
costs), which negatively impacted earnings by $0.01 per share
mainly due to increases in depreciation expense and property and
other non-income taxes, partially offset by a decrease in
maintenance expense.
An increase in interest expense (net of interest income) was
mostly offset by an overall increase in other income primarily from
gains earned during the first quarter of 2021 on investments held
to fund one of the company's retirement plans.
Electric Segment:
Diluted earnings per share from the electric utility segment for
the three months ended March 31, 2021 increased $0.01 per share due
to an increase in the electric gross margin resulting from higher
customer rates for 2021 approved by the CPUC in August 2019, and a
decrease in interest expense as compared to the same period in
2020.
Contracted Services Segment:
For the three months ended March 31, 2021, diluted earnings from
the contracted services segment were $0.12 per share as compared to
$0.08 per share for the same period in 2020, a $0.04 per share
increase primarily due to an overall increase in construction
activity, as well as lower legal and other outside services costs.
The increase in construction activity was largely due to timing
differences of when work was performed as compared to the first
quarter of 2020. We expect the contracted services segment to
contribute $0.45 to $0.49 per share for the year 2021.
Notice of Redemption of Long-Term Debt
GSWC's 9.56% private placement notes issued in the amount of
$28.0 million and due in 2031 can be redeemed, in whole or in part,
at the option of GSWC subject to redemption schedules embedded in
the agreement. The 9.56% notes are subject to a make-whole premium
based on 55 basis points above the applicable Treasury Yield if
redeemed prior to May 15, 2021. After May 15, 2021, the maximum
redemption premium is 3.0% of par value. On April 23, 2021, GSWC
notified the note holders of its intent to redeem the notes on May
24, 2021. Pursuant to the agreement, the prepayment of the notes
will include the redemption premium of 3.0% on par value, or
$840,000. GSWC recovers redemption premiums in its embedded cost of
debt as filed in cost of capital proceedings where the cost savings
from redeeming high interest rate debt are passed on to
customers.
Dividends
On April 30, 2021, AWR's Board of Directors approved a second
quarter dividend of $0.335 per share on AWR's Common Shares.
Dividends on the Common Shares will be paid on June 2, 2021 to
shareholders of record at the close of business on May 17, 2021.
AWR has paid common dividends every year since 1931, and has
increased the dividends received by shareholders each calendar year
for 66 consecutive years, which places it in an exclusive group of
companies on the New York Stock Exchange that have achieved that
result. AWR's current policy is to achieve a compound annual growth
rate in the dividend of more than 7% over the long-term.
Non-GAAP Financial Measures
This press release includes a discussion on the water and
electric gross margins for various periods, which are computed by
subtracting total supply costs from total revenues. The discussion
also includes AWR’s operations in terms of diluted earnings per
share by business segment, which is each business segment’s
earnings divided by the company’s weighted average number of
diluted common shares. Furthermore, the losses incurred during the
first quarter of 2020 on the investments held to fund one of the
company's retirement plans resulting from the negative effects on
the financial markets at the start of the COVID-19 pandemic have
been excluded when communicating the results to help facilitate
comparisons of the company’s performance from period to period.
These items are derived from consolidated financial information but
are not presented in our financial statements that are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) in
the United States. These items constitute "non-GAAP financial
measures" under Securities and Exchange Commission rules.
The non-GAAP financial measures supplement our GAAP disclosures
and should not be considered as alternatives to the GAAP measures.
Furthermore, the non-GAAP financial measures may not be comparable
to similarly titled non-GAAP financial measures of other
registrants. The company uses the water and electric gross margins,
and earnings per share by business segment as important measures in
evaluating its operating results and believes these measures are
useful internal benchmarks in evaluating the performance of its
operating segments. The company reviews these measurements
regularly and compares them to historical periods and to the
operating budget.
Forward-Looking Statements
Certain matters discussed in this press release with regard to
the company’s expectations may be forward-looking statements that
involve risks and uncertainties. The assumptions and risk factors
that could cause actual results to differ materially include those
described in the company’s most recent Form 10-Q and Form 10-K
filed with the Securities and Exchange Commission.
Conference Call
Robert Sprowls, president and chief executive officer, and Eva
Tang, senior vice president and chief financial officer, will host
a conference call to discuss these results at 2:00 p.m. Eastern
Time (11:00 a.m. Pacific Time) on Tuesday, May 4. There will be a
question and answer session as part of the call. Interested parties
can listen to the live conference call and view accompanying slides
on the internet at www.aswater.com. The call will be archived on
the website and available for replay beginning May 4, 2021 at 5:00
p.m. Eastern Time (2:00 p.m. Pacific Time) through May 11,
2021.
About American States Water Company
American States Water Company is the parent of Golden State
Water Company, Bear Valley Electric Service, Inc. and American
States Utility Services, Inc., serving over one million people in
nine states. Through its water utility subsidiary, Golden State
Water Company, the company provides water service to approximately
262,000 customer connections located within more than 80
communities in Northern, Coastal and Southern California. Through
its electric utility subsidiary, Bear Valley Electric Service,
Inc., the company distributes electricity to approximately 24,500
customer connections in the City of Big Bear Lake and surrounding
areas in San Bernardino County, California. Through its contracted
services subsidiary, American States Utility Services, Inc., the
company provides operations, maintenance and construction
management services for water distribution and wastewater
collection and treatment facilities located on 11 military bases
throughout the country under 50-year privatization contracts with
the U.S. government.
American States Water
Company
Consolidated
Comparative Condensed Balance
Sheets (Unaudited)
(in thousands)
March 31, 2021
December 31, 2020
Assets
Net Property, Plant and Equipment
$1,542,423
$1,512,043
Goodwill
1,116
1,116
Other Property and Investments
35,811
35,318
Current Assets
118,912
157,115
Other Assets
94,559
86,011
Total Assets
$1,792,821
$1,791,603
Capitalization and Liabilities
Capitalization
$1,089,719
$1,082,021
Current Liabilities
113,010
118,572
Other Credits
590,092
591,010
Total Capitalization and
Liabilities
$1,792,821
$1,791,603
Condensed Statements of Income
(Unaudited)
(in thousands, except per share
amounts)
Three months ended March
31,
2021
2020
Operating Revenues
Water
$
75,029
$
71,424
Electric
11,539
10,968
Contracted services
30,492
26,685
Total operating revenues
117,060
109,077
Operating Expenses
Water purchased
15,239
14,092
Power purchased for pumping
2,145
1,859
Groundwater production assessment
4,440
4,148
Power purchased for resale
3,198
3,043
Supply cost balancing accounts
(2,427
)
(2,165
)
Other operation
8,217
8,486
Administrative and general
22,053
22,950
Depreciation and amortization
9,560
8,811
Maintenance
2,662
3,884
Property and other taxes
5,940
5,159
ASUS construction
15,704
13,111
Total operating expenses
86,731
83,378
Operating income
30,329
25,699
Other Income and Expenses
Interest expense
(6,258
)
(6,050
)
Interest income
455
558
Other, net
656
(2,234
)
Total other income and expenses,
net
(5,147
)
(7,726
)
Income Before Income Tax
Expense
25,182
17,973
Income tax expense
5,914
3,901
Net Income
$
19,268
$
14,072
Weighted average shares outstanding
36,898
36,860
Basic earnings per Common Share
$
0.52
$
0.38
Weighted average diluted shares
36,993
36,969
Fully diluted earnings per Common
Share
$
0.52
$
0.38
Dividends paid per Common Share
$
0.335
$
0.305
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210503005623/en/
Eva G. Tang Senior Vice President-Finance, Chief Financial
Officer, Corporate Secretary and Treasurer Telephone: (909)
394-3600, ext. 707
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