Unitil Corporation (NYSE: UTL) (unitil.com) today announced Net
Income of $1.4 million, or $0.09 in Earnings Per Share (EPS) for
the third quarter of 2023, an increase of $0.9 million in Net
Income, or $0.06 in EPS, compared to the third quarter of 2022. For
the nine months ended September 30, 2023, the Company reported Net
Income of $29.7 million, or $1.85 in EPS, an increase of $2.8
million in Net Income, or $0.17 in EPS, compared to the first nine
months of 2022. The Company’s Electric and Gas GAAP Gross Margins
for the third quarter of 2023 were $22.6 million and $12.3 million,
respectively. For the nine months ended September 30, 2023, the
Company’s Electric and Gas GAAP Gross Margins were $60.6 million
and $76.6 million, respectively.
“Through the first nine months of 2023 we continued our strong
execution, both operationally and financially, as reflected in our
solid year-to-date results,” said Thomas P. Meissner, Jr., Unitil’s
Chairman and Chief Executive Officer. “We remain laser-focused on
our strategic initiatives and recently issued our 2023 Corporate
Sustainability and Responsibility Report, which describes our
commitment to sustainable practices and the steps we are taking to
create long-term sustainable value for our customers, our
investors, our employees, and the communities we serve.”
Electric GAAP Gross Margin was $22.6 million in the three months
ended September 30, 2023, an increase of $1.1 million compared
to the same period in 2022. Electric GAAP Gross Margin was $60.6
million in the nine months ended September 30, 2023, an
increase of $3.3 million compared to the same period in 2022. The
increase in the three month period was driven by higher rates and
customer growth of $0.8 million and lower depreciation and
amortization expense of $0.3 million. The increase in the nine
month period was driven by higher rates and customer growth of $3.5
million, partially offset by higher depreciation and amortization
expense of $0.2 million.
Electric Adjusted Gross Margin (a non-GAAP financial measure1)
was $29.2 million and $80.1 million in the three and nine
months ended September 30, 2023, respectively, increases of $0.8
million and $3.5 million, respectively, compared to the same
periods in 2022. These increases reflect higher rates and customer
growth.
____________________1 The accompanying Supplemental Information
more fully describes the non-GAAP financial measures used in this
press release and includes a reconciliation of the non-GAAP
financial measures to the financial measures that the Company’s
management believes are the most comparable GAAP financial
measures. The Supplemental Information also includes a discussion
of the changes in the most comparable GAAP financial measures for
the periods presented. ____________________
Total electric kilowatt-hour (kWh) sales decreased 4.9% and 5.0%
in the three and nine months ended September 30, 2023,
respectively, compared to the same periods in 2022. Sales to
Residential and C&I customers decreased 7.3% and 3.1%,
respectively, in the three months ended September 30, 2023,
compared to the same period in 2022, reflecting milder summer
weather in the third quarter of 2023 compared to the same period in
2022, partially offset by customer growth. Sales to Residential and
C&I customers decreased 6.8% and 3.7%, respectively, in the
nine months ended September 30, 2023, compared to the same period
in 2022, reflecting warmer winter weather and milder summer weather
in 2023 compared to 2022 and lower average usage, partially offset
by customer growth. Based on weather data collected in the
Company’s electric service areas, on average there were 12.2% fewer
Cooling Degree Days (CDD) in the third quarter of 2023 compared to
the same period in 2022. As of September 30, 2023, the number of
electric customers increased by approximately 50 over the previous
year.
Gas GAAP Gross Margin was $12.3 million in the three months
ended September 30, 2023, an increase of $1.4 million compared
to the same period in 2022. Gas GAAP Gross Margin was $76.6 million
in the nine months ended September 30, 2023, an increase of
$2.9 million compared to the same period in 2022. The increase in
the three month period was driven by higher rates and customer
growth of $1.8 million, partially offset by higher depreciation and
amortization of $0.4 million. The increase in the nine month period
was driven by higher rates and customer growth of $9.3 million,
partially offset by the unfavorable effects of warmer winter
weather in 2023 of $1.1 million, higher depreciation and
amortization of $2.9 million, and the recognition, in the second
quarter of 2022, of $2.4 million in higher rates resulting from the
Company's base rate case in New Hampshire.
Gas Adjusted Gross Margin (a non-GAAP financial measure1) was
$22.2 million and $106.4 million in the three and nine months ended
September 30, 2023, respectively, increases of $1.8 million and
$5.8 million, respectively, compared to the same periods in 2022.
These increases reflect higher rates and customer growth of $1.8
million and $9.3 million for the three and nine month periods,
respectively, and, for the nine month period, the unfavorable
effects of warmer winter weather in 2023 of $1.1 million and the
recognition, in the second quarter of 2022, of $2.4 million in
higher rates resulting from the Company's base rate case in New
Hampshire.
Gas therm sales increased 3.7% and decreased 3.7% in the three
and nine months ended September 30, 2023, respectively, compared to
the same periods in 2022. In the third quarter of 2023, sales to
Residential customers were essentially unchanged and sales to
C&I customers increased 4.1%, compared to the same period in
2022. In the first nine months of 2023, sales to Residential and
C&I customers decreased 7.1% and 2.9%, respectively, compared
to the same period in 2022, reflecting warmer winter weather in
2023 compared to 2022, partially offset by customer growth. Based
on weather data collected in the Company’s gas service areas, on
average there were 9.2% fewer Effective Degree Days (EDD) in the
first nine months of 2023 compared to the same period in 2022. The
Company estimates weather-normalized gas therm sales for Northern
Utilities’ Maine division, the Company’s only non-decoupled gas
service area, increased 3.0% in the first nine months of 2023
compared to the same period in 2022. As of September 30, 2023, the
number of gas customers increased by approximately 800 over the
previous year.
Operation and Maintenance expenses increased $1.0 million and
$0.5 million in the three and nine months ended September 30, 2023,
respectively, compared to the same periods in 2022. The increase in
the three month period reflects higher labor costs of $0.7 million,
higher utility operating costs of $0.2 million and higher
professional fees of $0.1 million. The increase in the nine month
period reflects higher utility operating costs of $0.8 million,
partially offset by lower labor costs of $0.3 million. The lower
labor costs in the nine month period primarily reflect lower
service costs for retirement benefits and lower restricted stock
compensation.
Depreciation and Amortization expense increased $0.2 million and
$3.2 million in the three and nine months ended September 30, 2023,
respectively, compared to the same periods in 2022. The increase in
the three month period reflects additional depreciation associated
with higher levels of utility plant in service, partially offset by
lower amortization of rate case costs. The increase in the nine
month period reflects additional depreciation associated with
higher levels of utility plant in service and higher amortization
of rate case and other deferred costs.
Taxes Other Than Income Taxes increased $0.6 million and $1.2
million in the three and nine months ended September 30, 2023,
respectively, compared to the same periods in 2022, reflecting
higher local property taxes on higher utility plant in service and
higher payroll taxes.
Interest Expense, Net increased $0.4 million and $2.0 million,
in the three and nine months ended September 30, 2023,
respectively, compared to the same periods in 2022, primarily
reflecting higher interest expense on short-term borrowings,
partially offset by higher interest income on regulatory assets and
other, and for the nine month period, lower interest on long-term
debt.
Other Expense (Income), Net decreased $0.6 million and $2.0
million, in the three and nine months ended September 30, 2023,
respectively, compared to the same periods in 2022, reflecting
lower retirement benefit costs.
Federal and State Income Taxes for the three and nine months
ended September 30, 2023 increased $0.1 million and $1.6 million,
respectively, compared with the same periods in 2022, reflecting
higher pre-tax earnings in 2023 and higher flow back, in 2022, of
excess Accumulated Deferred Income Taxes per regulatory orders in
New Hampshire.
In January 2023, April 2023, July 2023 and October 2023, the
Unitil Corporation Board of Directors declared quarterly dividends
on the Company’s common stock of $0.405 per share. These quarterly
dividends result in a current effective annualized dividend rate of
$1.62 per share, representing an unbroken record of quarterly
dividend payments since trading began in Unitil’s common stock.
The Company’s earnings historically have been seasonal and
typically have been higher in the first and fourth quarters when
customers use natural gas for heating purposes.
The Company will hold a quarterly conference call to discuss
third quarter 2023 results on Tuesday, November 7, 2023, at 10:00
a.m. Eastern Time. This call is being webcast. This call, financial
and other statistical information contained in the Company’s
presentation on this call, and information required by Regulation G
regarding non-GAAP financial measures can be accessed in the
Investor Relations section of Unitil’s website, unitil.com.
About Unitil Corporation
Unitil Corporation provides energy for life by safely and
reliably delivering electricity and natural gas in New England. We
are committed to the communities we serve and to developing people,
business practices, and technologies that lead to the delivery of
dependable, more efficient energy. Unitil Corporation is a public
utility holding company with operations in Maine, New Hampshire and
Massachusetts. Together, Unitil’s operating utilities serve
approximately 108,100 electric customers and 87,500 natural gas
customers. For more information about our people, technologies, and
community involvement please visit unitil.com.
Forward-Looking Statements
This press release may contain forward-looking statements. All
statements, other than statements of historical fact, included in
this press release are forward-looking statements. Forward-looking
statements include declarations regarding Unitil’s beliefs and
current expectations. These forward-looking statements are subject
to the inherent risks and uncertainties in predicting future
results and conditions that could cause the actual results to
differ materially from those projected in these forward-looking
statements. Some, but not all, of the risks and uncertainties
include the following: Unitil’s regulatory environment (including
regulations relating to climate change, greenhouse gas emissions
and other environmental matters); fluctuations in the supply of,
the demand for, and the prices of, energy commodities and
transmission and transportation capacity and Unitil’s ability to
recover energy commodity costs in its rates; customers’ preferred
energy sources; severe storms and Unitil’s ability to recover storm
costs in its rates; general economic conditions; variations in
weather; long-term global climate change; unforeseen or changing
circumstances, which could adversely affect the reduction of
company-wide direct greenhouse gas emissions; Unitil’s ability to
retain its existing customers and attract new customers; increased
competition; and other risks detailed in Unitil's filings with the
Securities and Exchange Commission. These forward looking
statements speak only as of the date they are made. Unitil
undertakes no obligation, and does not intend, to update these
forward-looking statements except as required by law.
For more information please contact:
Todd Diggins – Investor Relations |
|
Alec O’Meara – External Affairs |
Phone: 603-773-6504 |
|
Phone: 603-773-6404 |
|
|
|
Email: diggins@unitil.com |
|
Email: omeara@unitil.com |
|
|
|
Supplemental Information; Non-GAAP Financial Measures
The Company analyzes operating results using Electric and Gas
Adjusted Gross Margins, which are non-GAAP financial measures.
Electric Adjusted Gross Margin is calculated as Total Electric
Operating Revenue less Cost of Electric Sales. Gas Adjusted Gross
Margin is calculated as Total Gas Operating Revenues less Cost of
Gas Sales. The Company’s management believes Electric and Gas
Adjusted Gross Margins provide useful information to investors
regarding profitability. Also, the Company’s management believes
Electric and Gas Adjusted Gross Margins are important measures to
analyze revenue from the Company’s ongoing operations because the
approved cost of electric and gas sales are tracked, reconciled and
passed through directly to customers in electric and gas tariff
rates, resulting in an equal and offsetting amount reflected in
Total Electric and Gas Operating Revenue.
In the following tables the Company has reconciled Electric and
Gas Adjusted Gross Margin to GAAP Gross Margin, which we believe to
be the most comparable GAAP financial measure. GAAP Gross Margin is
calculated as Revenue less Cost of Sales, and Depreciation and
Amortization. The Company calculates Electric and Gas Adjusted
Gross Margin as Revenue less Cost of Sales. The Company believes
excluding Depreciation and Amortization, which are period costs and
not related to volumetric sales, is a meaningful measure to inform
investors of the Company’s profitability from electric and gas
sales in the period.
Three Months Ended September 30, 2023 ($
millions) |
|
|
|
|
|
|
Electric |
Gas |
Other |
Total |
Total Operating Revenue |
$ |
72.1 |
|
$ |
31.8 |
|
$ |
--- |
|
$ |
103.9 |
|
Less: Cost of Sales |
|
(42.9 |
) |
|
(9.6 |
) |
|
--- |
|
|
(52.5 |
) |
Less: Depreciation and
Amortization |
|
(6.6 |
) |
|
(9.9 |
) |
|
(0.3 |
) |
|
(16.8 |
) |
GAAP Gross Margin |
|
22.6 |
|
|
12.3 |
|
|
(0.3 |
) |
|
34.6 |
|
Depreciation and
Amortization |
|
6.6 |
|
|
9.9 |
|
|
0.3 |
|
|
16.8 |
|
Adjusted Gross Margin |
$ |
29.2 |
|
$ |
22.2 |
|
$ |
--- |
|
$ |
51.4 |
|
Three Months Ended September 30, 2022 ($
millions) |
|
|
|
|
|
|
Electric |
Gas |
Other |
Total |
Total Operating Revenue |
$ |
75.7 |
|
$ |
34.5 |
|
$ |
--- |
|
$ |
110.2 |
|
Less: Cost of Sales |
|
(47.3 |
) |
|
(14.1 |
) |
|
--- |
|
|
(61.4 |
) |
Less: Depreciation and
Amortization |
|
(6.9 |
) |
|
(9.5 |
) |
|
(0.2 |
) |
|
(16.6 |
) |
GAAP Gross Margin |
|
21.5 |
|
|
10.9 |
|
|
(0.2 |
) |
|
32.2 |
|
Depreciation and
Amortization |
|
6.9 |
|
|
9.5 |
|
|
0.2 |
|
|
16.6 |
|
Adjusted Gross Margin |
$ |
28.4 |
|
$ |
20.4 |
|
$ |
--- |
|
$ |
48.8 |
|
Nine Months Ended September 30, 2023 ($
millions) |
|
|
|
|
|
|
Electric |
Gas |
Other |
Total |
Total Operating Revenue |
$ |
244.8 |
|
$ |
182.7 |
|
$ |
--- |
|
$ |
427.5 |
|
Less: Cost of Sales |
|
(164.7 |
) |
|
(76.3 |
) |
|
--- |
|
|
(241.0 |
) |
Less: Depreciation and
Amortization |
|
(19.5 |
) |
|
(29.8 |
) |
|
(0.8 |
) |
|
(50.1 |
) |
GAAP Gross Margin |
|
60.6 |
|
|
76.6 |
|
|
(0.8 |
) |
|
136.4 |
|
Depreciation and
Amortization |
|
19.5 |
|
|
29.8 |
|
|
0.8 |
|
|
50.1 |
|
Adjusted Gross Margin |
$ |
80.1 |
|
$ |
106.4 |
|
$ |
--- |
|
$ |
186.5 |
|
Nine Months Ended September 30, 2022 ($
millions) |
|
|
|
|
|
|
Electric |
Gas |
Other |
Total |
Total Operating Revenue |
$ |
219.2 |
|
$ |
182.5 |
|
$ |
--- |
|
$ |
401.7 |
|
Less: Cost of Sales |
|
(142.6 |
) |
|
(81.9 |
) |
|
--- |
|
|
(224.5 |
) |
Less: Depreciation and
Amortization |
|
(19.3 |
) |
|
(26.9 |
) |
|
(0.7 |
) |
|
(46.9 |
) |
GAAP Gross Margin |
|
57.3 |
|
|
73.7 |
|
|
(0.7 |
) |
|
130.3 |
|
Depreciation and
Amortization |
|
19.3 |
|
|
26.9 |
|
|
0.7 |
|
|
46.9 |
|
Adjusted Gross Margin |
$ |
76.6 |
|
$ |
100.6 |
|
$ |
--- |
|
$ |
177.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected financial data for 2023 and 2022 is presented in the
following table:
|
Unitil Corporation – Condensed Consolidated Financial
Data |
(Millions, except Per Share data)(Unaudited) |
|
|
Three Months Ended Sept. 30, |
|
Nine Months Ended Sept. 30, |
|
2023 |
2022 |
Change |
|
2023 |
2022 |
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric kWh Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
187.0 |
|
|
|
201.7 |
|
|
|
(7.3 |
%) |
|
|
|
501.7 |
|
|
|
538.2 |
|
|
(6.8 |
%) |
Commercial/Industrial |
|
|
253.2 |
|
|
|
261.4 |
|
|
|
(3.1 |
%) |
|
|
|
696.0 |
|
|
|
722.6 |
|
|
(3.7 |
%) |
Total Electric kWh Sales |
|
|
440.2 |
|
|
|
463.1 |
|
|
|
(4.9 |
%) |
|
|
|
1,197.7 |
|
|
|
1,260.8 |
|
|
(5.0 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Therm Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
2.5 |
|
|
|
2.5 |
|
|
|
--- |
|
|
|
|
32.6 |
|
|
|
35.1 |
|
|
(7.1 |
%) |
Commercial/Industrial |
|
|
25.3 |
|
|
|
24.3 |
|
|
|
4.1 |
% |
|
|
|
132.1 |
|
|
|
136.0 |
|
|
(2.9 |
%) |
Total Gas Therm Sales |
|
|
27.8 |
|
|
|
26.8 |
|
|
|
3.7 |
% |
|
|
|
164.7 |
|
|
|
171.1 |
|
|
(3.7 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric
Revenues |
|
$ |
72.1 |
|
|
$ |
75.7 |
|
|
$ |
(3.6 |
) |
|
|
$ |
244.8 |
|
|
$ |
219.2 |
|
$ |
25.6 |
|
Cost of Electric Sales |
|
|
42.9 |
|
|
|
47.3 |
|
|
|
(4.4 |
) |
|
|
|
164.7 |
|
|
|
142.6 |
|
|
22.1 |
|
Electric Adjusted Gross Margin(a non-GAAP
financial
measure1): |
|
|
29.2 |
|
|
|
28.4 |
|
|
|
0.8 |
|
|
|
|
80.1 |
|
|
|
76.6 |
|
|
3.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
Revenues |
|
|
31.8 |
|
|
|
34.5 |
|
|
|
(2.7 |
) |
|
|
|
182.7 |
|
|
|
182.5 |
|
|
0.2 |
|
Cost of Gas Sales |
|
|
9.6 |
|
|
|
14.1 |
|
|
|
(4.5 |
) |
|
|
|
76.3 |
|
|
|
81.9 |
|
|
(5.6 |
) |
Gas Adjusted Gross Margin (a non-GAAP
financial
measure1): |
|
|
22.2 |
|
|
|
20.4 |
|
|
|
1.8 |
|
|
|
|
106.4 |
|
|
|
100.6 |
|
|
5.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjusted Gross Margin(a non-GAAP
financial
measure1): |
|
|
51.4 |
|
|
|
48.8 |
|
|
|
2.6 |
|
|
|
|
186.5 |
|
|
|
177.2 |
|
|
9.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operation & Maintenance Expenses |
|
|
19.6 |
|
|
|
18.6 |
|
|
|
1.0 |
|
|
|
|
56.0 |
|
|
|
55.5 |
|
|
0.5 |
|
Depreciation & Amortization |
|
|
16.8 |
|
|
|
16.6 |
|
|
|
0.2 |
|
|
|
|
50.1 |
|
|
|
46.9 |
|
|
3.2 |
|
Taxes Other Than Income Taxes |
|
|
7.0 |
|
|
|
6.4 |
|
|
|
0.6 |
|
|
|
|
21.1 |
|
|
|
19.9 |
|
|
1.2 |
|
Other (Income) Expense, Net |
|
|
--- |
|
|
|
0.6 |
|
|
|
(0.6 |
) |
|
|
|
(0.1 |
) |
|
|
1.9 |
|
|
(2.0 |
) |
Interest Expense, Net |
|
|
7.0 |
|
|
|
6.6 |
|
|
|
0.4 |
|
|
|
|
21.1 |
|
|
|
19.1 |
|
|
2.0 |
|
Income Before Income
Taxes |
|
|
1.0 |
|
|
|
--- |
|
|
|
1.0 |
|
|
|
|
38.3 |
|
|
|
33.9 |
|
|
4.4 |
|
Provision for Income
Taxes |
|
|
(0.4 |
) |
|
|
(0.5 |
) |
|
|
0.1 |
|
|
|
|
8.6 |
|
|
|
7.0 |
|
|
1.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
1.4 |
|
|
$ |
0.5 |
|
|
$ |
0.9 |
|
|
|
$ |
29.7 |
|
|
$ |
26.9 |
|
$ |
2.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share |
|
$ |
0.09 |
|
|
$ |
0.03 |
|
|
$ |
0.06 |
|
|
|
$ |
1.85 |
|
|
$ |
1.68 |
|
$ |
0.17 |
|
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