Central Vermont Public Service (NYSE: CV)
-- Consolidated earnings of $6.9 million, or 58 cents per diluted share
- $0.5 million decrease in operating revenue
- $1.3 million decrease in purchased power expense
- $0.4 million decrease in other operating expenses
- $0.3 million increase in equity in earnings of affiliates
- $0.6 million increase in other income, net
-- November 2008 stock issuance of 1,190,000 shares decreased earnings
by 7 cents per diluted share
-- Reaffirms guidance for 2009 at $1.40 to $1.60 per share
Central Vermont Public Service (NYSE: CV) reported first quarter
2009 consolidated earnings of $6.9 million, or 58 cents per diluted
share of common stock, compared to $5.9 million, or 56 cents per
diluted share of common stock, for the same period last year.
"We are pleased with the favorable results this quarter, keeping
in perspective that this is the first quarter under which we are
operating under our new alternative regulation plan," President Bob
Young said. "The plan provides quarterly power cost adjustments and
an annual earnings sharing mechanism. This quarter, our net power
costs were lower than what is currently in our rates, so rates will
be adjusted accordingly in the third quarter.
"One of the keys to our success in these difficult times and an
underlying strategy of the company is to cost-effectively provide
customers with top-notch service and meet or exceed their growing
expectations," Young said. "I'm particularly pleased that in the
first quarter, we met or exceeded all 17 of our service quality
standards. This continues a string of four straight years we've met
these standards, the best results of any utility in Vermont in that
time. In the months ahead, our capital investments and operations
strategies will be focused on continuing to improve service, to the
benefit of shareholders and customers alike."
First quarter 2009 results compared to 2008
Operating revenues decreased $0.5 million due to lower retail
sales volume from lower average usage by commercial and industrial
customers resulting from economic conditions, partially offset by
higher average retail rates and higher average prices from new
resale contracts. Other operating revenues increased from the sale
of transmission rights and an increase in wholesale rates.
Purchased power expense decreased $1.3 million due to a decrease
in required purchases and lower average prices from Independent
Power Producers ("IPPs"). The contract for one of the IPPs ended in
November 2008, resulting in fewer purchases from the Vermont
Electric Power Producers. This was partially offset by increased
short-term purchases and higher output from Hydro-Quebec.
Other operating expenses decreased $0.4 million, including $1.7
million of lower maintenance costs resulting from lower service
restoration costs, partially offset by a $0.3 million increase in
transmission expense resulting from higher rates, and higher costs
from Vermont Transco LLC ("Transco") for its capital projects,
partially offset by higher NOATT reimbursements. We also had $0.9
million of higher regulatory amortizations and deferrals. This
included the initial deferral of an over-collection of $0.6 million
of power, production and transmission costs as defined by the power
adjustment clause of our alternative regulation plan. The power
cost over collection will be returned by crediting retail
customers' bills in the third quarter of 2009, in accordance with
the plan.
Equity in earnings from affiliates increased $0.3 million due to
the $3.1 million investment that we made in Transco in December
2008. Other factors affecting first quarter 2009 results included a
$0.6 million increase in other income, net of other deductions,
largely due to an increase in the cash surrender value of variable
life insurance policies in trust to fund a supplemental employee
retirement plan, partially offset by a $0.1 million increase in
interest expense.
2008 Common Stock Issuance
Earnings per share for the first quarter of 2009 reflect the
impact of the November 2008 common stock issuance. On November 24,
2008, CV issued 1,190,000 shares, resulting in net proceeds of
approximately $21.3 million. The net proceeds of the offering were
used for general corporate purposes, including the repayment of
debt, capital expenditures, investments in Transco and working
capital requirements.
2009 Financial Guidance
CV previously issued 2009 earnings guidance in the range of
$1.40 to $1.60 per diluted share, which we reaffirm. As part of a
rate agreement approved by the Vermont Public Service Board, the
company's allowed rate of return is 9.77 percent.
Webcast
CV will host an earnings teleconference and webcast on May 8,
2009 beginning at 10 a.m. EDT. At that time, CV President and CEO
Robert Young and CV Chief Financial Officer Pamela Keefe will
discuss the company's financial results, as well as progress made
toward achieving its long-term strategy.
Interested parties may listen to the conference call live on the
Internet by selecting the "CVPS Q1 2009 Earnings Call" link on the
"Investor Relations" section of the company's website at
www.cvps.com. An audio archive of the call will be available later
that day at the same location or by dialing 1-877-660-6853 within
the U.S. or Internationally by dialing 1-201-612-7415 and entering
Account 286 and Conference ID 319623.
About CV
CV is Vermont's largest electric utility, serving approximately
159,000 customers statewide. CV's non-regulated subsidiary,
Catamount Resources Corporation, sells and rents electric water
heaters through a subsidiary, SmartEnergy Water Heating
Services.
Form 10-Q Today the company filed its first-quarter 2009 Form
10-Q with the Securities and Exchange Commission. A copy of that
report is available on our web site, www.cvps.com, under the
"Investor Relations" section. Please refer to it for additional
information regarding our condensed consolidated financial
statements, results of operations, capital resources and
liquidity.
Forward-Looking Statements
Statements contained in this press release that are not
historical fact are forward-looking statements intended to qualify
for the safe-harbors from the liability established by the Private
Securities Litigation Reform Act of 1995. Statements made that are
not historical facts are forward-looking and, accordingly, involve
estimates, assumptions, risks and uncertainties that could cause
actual results or outcomes to differ materially from those
expressed in the forward-looking statements. Actual results will
depend, among other things, upon the actions of regulators,
performance of the Vermont Yankee nuclear power plant, effects of
and changes in weather and economic conditions, volatility in
wholesale electric markets and our ability to maintain our current
credit ratings. These and other risk factors are detailed in CV's
Securities and Exchange Commission filings. CV cannot predict the
outcome of any of these matters; accordingly, there can be no
assurance that such indicated results will be realized. Readers are
cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date of this press release. CV
does not undertake any obligation to publicly release any revision
to these forward-looking statements to reflect events or
circumstances after the date of this press release.
Reconciliation of Earnings Per Diluted Share
First quarter 2009 versus first quarter 2008 (a)
2008 Earnings per diluted share $ 0.56
Lower purchased power expense 0.07
Lower other operating expenses 0.04
Higher equity in earnings of affiliates 0.02
Common stock issuance (Nov. 2008) - 1,190,000 additional
shares (0.07)
Lower operating revenues (0.03)
Higher transmission expense (0.02)
Higher interest expense (0.01)
Other 0.02
---------
2009 Earnings per diluted share $ 0.58
=========
(a) The additional shares from the Nov. 2008 stock issuance were excluded
from the 11,655,175 average shares of common stock - diluted for purposes
of computing the individual EPS variances shown above in order to provide
comparable information for 2009 vs. 2008.
Central Vermont Public Service Corporation - Consolidated
Earnings Release (unaudited)
(dollars in thousands, except per share amounts)
2009 2008
---------- ----------
Condensed income statement
Operating revenues:
Retail sales $ 74,083 $ 75,406
Resale sales 13,933 13,502
Other 2,711 2,316
---------- ----------
Total operating revenues 90,727 91,224
---------- ----------
Operating expenses:
Purchased power - affiliates and other 41,610 42,906
Other operating expenses 39,618 40,027
Income tax expense 2,876 1,859
---------- ----------
Total operating expense 84,104 84,792
---------- ----------
Utility operating income 6,623 6,432
---------- ----------
Other income:
Equity in earnings of affiliates 4,445 4,185
Other, net 113 (524)
Income tax expense (1,433) (1,425)
---------- ----------
Total other income 3,125 2,236
---------- ----------
Interest expense 2,876 2,760
---------- ----------
Net income 6,872 5,908
Dividends declared on preferred stock 92 92
---------- ----------
Earnings available for common stock $ 6,780 $ 5,816
========== ==========
Per common share data
Earnings per share of common stock - basic $ 0.58 $ 0.57
Earnings per share of common stock - diluted $ 0.58 $ 0.56
Average shares of common stock outstanding - basic 11,602,354 10,275,505
Average shares of common stock outstanding -
diluted 11,655,175 10,377,034
Dividends declared per share of common stock $ 0.46 $ 0.46
Dividends paid per share of common stock $ 0.23 $ 0.23
Supplemental financial statement data
Balance sheet
Investments in affiliates $ 104,158 $ 96,427
Total assets $ 627,496 $ 549,922
Notes Payable $ 10,827 $ 63,800
Common stock equity $ 221,647 $ 191,313
Long-term debt (excluding current portions) $ 167,500 $ 112,950
Cash Flows
Cash and cash equivalents at beginning of period $ 6,722 $ 3,803
Cash provided by operating activities 15,128 11,222
Cash used for investing activities (5,937) (7,282)
Cash used for financing activities (2,369) (1,378)
---------- ----------
Cash and cash equivalents at end of period $ 13,544 $ 6,365
========== ==========
Refer to our first-quarter 2009 Form 10-Q for additional
information.
Media Inquiries: Steve Costello Director of Public Affairs (802)
747-5427 (802) 742-3062 (pager) e-mail: Email Contact Contact:
Pamela Keefe Vice President, Chief Financial Officer and Treasurer
(802) 747-5435 e-mail: Email Contact
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