Artesian Resources Corporation (Nasdaq:ARTNA), a leading provider
of water and wastewater services, and related services on the
Delmarva Peninsula, today announced that net income for the second
quarter of 2017 was $3.3 million, an increase of $0.2 million, or
6.9%, compared to the second quarter of 2016. Diluted net
income per share increased to $0.35 compared to $0.33 for the
second quarter of 2016.
“We are pleased to report continued solid
financial results in 2017,” said Dian C. Taylor, Chair, President
and CEO. “During the first six months of 2017, we made
significant investments in treatment facilities, pumping equipment,
transmission and distribution facilities and mains totaling $17.1
million, consistent with our continued effort to ensure high
quality reliable service to our customers. We also continue
to build upon public and private partnerships such as those with
the Fort DuPont Redevelopment and Preservation Corporation, the
Town of Odessa and Allen Harim Foods that are important to the
continued economic vitality of Delaware and the sustained growth of
Artesian,” said Taylor.
Revenues for the second quarter of 2017 were
$20.5 million, a $1.1 million, or 5.7%, increase from the $19.4
million in revenues recorded for the same three month period of
2016. Water sales revenues increased $0.9 million, or 5.3%,
for the three months ended June 30, 2017 compared to the same
period a year ago, primarily as a result of an increase in the
Distribution System Improvement Charge, or DSIC, applied to
customer bills and an increase in overall water consumption.
The Distribution System Improvement Charge allows Delaware water
utilities to place into effect interim rate increases for timely
recovery of investments made in certain infrastructure
improvements. Other utility operating revenue increased $0.1
million, or 11.8%, for the three months ended June 30, 2017
compared to the same period a year ago as a result of an increase
in the number of wastewater customers and new development
inspection fees.
Excluding depreciation and income taxes,
operating expenses increased $1.0 million, or 9.2%, to $11.4
million for the second quarter of 2017. Utility operating
expenses increased $0.8 million, or 9.4%, for the three months
ended June 30, 2017 compared to the same period in 2016, mainly the
result of increases in payroll, employee benefit, purchased water
and water treatment equipment maintenance expenses.
Miscellaneous income decreased $0.3 million for
the three months ended June 30, 2017 compared to the same period a
year ago as a result of a pledge made to a non-profit entity in
Delaware being organized to support the State’s economic
development efforts.
Interest expense decreased $0.1 million, or
7.4%, to $1.5 million for the second quarter of 2017, compared to
$1.6 million for the same period in 2016. The decrease
reflects the refinancing of the Series O and Series Q First
Mortgage Bonds in January 2017, reducing interest rates from 8.17%
and 4.75%, respectively, to 4.24%.
Income tax expense decreased $0.3 million, or
12.9%, for the three months ended June 30, 2017 compared to the
same period a year ago as a result of a decrease in our effective
tax rate arising as a consequence of the adoption of amended
guidance issued by the Financial Accounting Standards Board in 2017
that impacted accounting for stock compensation activities and the
impact of the federal Qualified Domestic Production Activities
Deduction.
Year to Date Results
Through the first six months of 2017, net income
was $6.3 million, a $0.5 million, or 8.0%, increase compared to the
same period a year ago. Diluted earnings per share was $0.69
for the six months ended June 30, 2017 compared to $0.64 for six
months ended June 30, 2016.
Revenues during the first six months of 2017
were $39.7 million, a $1.9 million, or 4.9%, increase from the
$37.8 million in revenues recorded for the same six month period in
2016. Water sales revenues increased $1.4 million, or 4.2%,
for the six months ended June 30, 2017 compared to the same period
a year ago, primarily as a result of an increase in the DSIC
applied to customer bills and an overall increase in water
consumption. Other utility operating revenue increased $0.3
million, or 14.8%, for the six months ended June 30, 2017 compared
to the same period a year ago as a result of growth in the number
of wastewater customers and new development inspection
fees.
Excluding depreciation and income taxes,
operating expenses increased $1.4 million, or 6.8%, to $22.2
million for the six months ended June 30, 2017, compared to $20.8
million for the same period in 2016. Utility operating
expenses for the six months ended June 30, 2017 were $18.5 million,
a $1.2 million, or 6.8%, increase from the same period a year ago,
mainly the result of increases in payroll, employee benefit,
purchased water and water treatment equipment maintenance
expenses.
Miscellaneous income decreased $0.3 million for
the first six months of 2017 compared to the same period a year ago
as a result of a pledge made to a non-profit entity in Delaware
being organized to support the State’s economic development
efforts.
Interest expense decreased $0.3 million, or
8.0%, to $3.1 million for the first six months of 2017 due to the
refinancing of the Series O and Series Q First Mortgage Bonds in
January 2017, reducing interest rates from 8.17% and 4.75%,
respectively, to 4.24%. The decrease in interest expense also
reflects the reduction in the Series S First Mortgage Bond annual
interest rate from 6.73% to 4.45%, which became effective March 1,
2016.
Income tax expense decreased $0.1 million, or
3.0%, for the six months ended June 30, 2017 compared to the same
period a year ago as a result of a decrease in our effective tax
rate arising as a consequence of the adoption of amended guidance
issued by the Financial Accounting Standards Board in 2017 that
impacted accounting for stock compensation activities and the
impact of the federal Qualified Domestic Production Activities
Deduction.
Declaration of Quarterly Dividend
Artesian Resources Corporation also announced
today that its Board of Directors has declared a regular quarterly
dividend on the company’s Class A and Class B Common Stock.
The quarterly dividend of $0.2317 is payable August 25, 2017 to
shareholders of record at the close of business on August 14,
2017. This is the 99th consecutive quarterly dividend paid to
shareholders.
Other Second Quarter
Highlights
- Closed on the purchase of water assets in the Fort DuPont
Historic District in New Castle County, Delaware. The
acquisition was the culmination of a public-private partnership
between Fort DuPont Redevelopment and Preservation Corporation and
state and local governments to redevelop and revitalize the 325
acre historic waterfront community located on the Delaware
River.
- Acquired the water assets of the Cantwell Water Company of
Odessa and expanded water service to the residents of the Town of
Odessa in southern New Castle County, Delaware through its
regionalized integrated system.
- Increased dividends to common shareholders for the 21st
consecutive year in May 2017. The 1.5% increase raised the
quarterly common stock dividend per share to $0.2317.
About Artesian
ResourcesArtesian Resources Corporation operates as a
holding company of wholly-owned subsidiaries offering water and
wastewater services, and related services on the Delmarva
Peninsula. Artesian Water Company, the principal subsidiary,
is the oldest and largest regulated water utility on the Delmarva
Peninsula and has been providing water service since 1905.
Artesian supplies 7.6 billion gallons of water per year through
1,260 miles of water main to approximately 301,000 people.
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Artesian Resources Corporation |
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Condensed Consolidated Statement of Operations |
|
(In thousands, except per share amounts) |
|
(Unaudited) |
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Three months ended |
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Six months ended |
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June 30, |
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June 30, |
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2017 |
|
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|
2016 |
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|
|
2017 |
|
|
2016 |
|
Operating
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Water
sales |
|
$ |
18,248 |
|
|
$ |
17,323 |
|
|
|
|
$ |
35,183 |
|
$ |
33,760 |
|
Other
utility operating revenue |
|
|
1,020 |
|
|
|
912 |
|
|
|
|
|
2,039 |
|
|
1,777 |
|
Non-utility operating revenue |
|
|
1,234 |
|
|
|
1,160 |
|
|
|
|
|
2,469 |
|
|
2,308 |
|
|
|
|
20,502 |
|
|
|
19,395 |
|
|
|
|
|
39,691 |
|
|
37,845 |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility
operating expenses |
|
|
9,588 |
|
|
|
8,766 |
|
|
|
|
|
18,494 |
|
|
17,312 |
|
Non-utility operating expenses |
|
|
662 |
|
|
|
590 |
|
|
|
|
|
1,349 |
|
|
1,226 |
|
Depreciation and amortization |
|
|
2,329 |
|
|
|
2,249 |
|
|
|
|
|
4,648 |
|
|
4,564 |
|
State and
federal income taxes |
|
|
1,763 |
|
|
|
2,023 |
|
|
|
|
|
3,857 |
|
|
3,975 |
|
Property
and other taxes |
|
|
1,170 |
|
|
|
1,098 |
|
|
|
|
|
2,364 |
|
|
2,246 |
|
|
|
|
15,512 |
|
|
|
14,726 |
|
|
|
|
|
30,712 |
|
|
29,323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
|
4,990 |
|
|
|
4,669 |
|
|
|
|
|
8,979 |
|
|
8,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for funds used during construction |
|
|
76 |
|
|
|
49 |
|
|
|
|
|
146 |
|
|
72 |
|
Miscellaneous |
|
|
(290 |
) |
|
|
(31 |
) |
|
|
|
|
293 |
|
|
625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before
Interest Charges |
|
|
4,776 |
|
|
|
4,687 |
|
|
|
|
|
9,418 |
|
|
9,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges |
|
|
1,525 |
|
|
|
1,646 |
|
|
|
|
|
3,081 |
|
|
3,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
|
$ |
3,251 |
|
|
$ |
3,041 |
|
|
|
|
$ |
6,337 |
|
$ |
5,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Basic |
|
|
9,163 |
|
|
|
9,092 |
|
|
|
|
|
9,149 |
|
|
9,079 |
|
Net
Income per Common Share - Basic |
|
$ |
0.35 |
|
|
$ |
0.33 |
|
|
|
|
$ |
0.69 |
|
$ |
0.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Diluted |
|
|
9,235 |
|
|
|
9,155 |
|
|
|
|
|
9,220 |
|
|
9,142 |
|
Net
Income per Common Share - Diluted |
|
$ |
0.35 |
|
|
$ |
0.33 |
|
|
|
|
$ |
0.69 |
|
$ |
0.64 |
|
|
|
|
|
|
|
|
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|
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|
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Artesian Resources Corporation |
|
Condensed Consolidated Balance Sheet |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
|
|
|
|
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|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility
Plant, at original cost less |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accumulated depreciation |
|
$ |
438,259 |
|
|
$ |
425,502 |
|
|
|
|
|
|
|
|
|
|
Current
Assets |
|
|
12,907 |
|
|
|
14,635 |
|
|
|
|
|
|
|
|
|
|
Regulatory and Other Assets |
|
|
15,467 |
|
|
|
10,839 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
466,633 |
|
|
$ |
450,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization
and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
$ |
142,539 |
|
|
$ |
139,023 |
|
|
|
|
|
|
|
|
|
|
Long Term
Debt, Net of Current Portion |
|
|
81,262 |
|
|
|
102,331 |
|
|
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
44,210 |
|
|
|
19,328 |
|
|
|
|
|
|
|
|
|
|
Net
Advances for Construction |
|
|
7,844 |
|
|
|
8,169 |
|
|
|
|
|
|
|
|
|
|
Contributions in Aid of Construction |
|
|
118,679 |
|
|
|
112,106 |
|
|
|
|
|
|
|
|
|
|
Other
Liabilities |
|
|
72,099 |
|
|
|
70,019 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
466,633 |
|
|
$ |
450,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact:
Nicki Taylor
Investor Relations
(302) 453-6900
ntaylor@artesianwater.com
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