Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider
of water and wastewater services, and related services, on the
Delmarva Peninsula, today announced year-to-date and third quarter
results for 2018. For the first nine months of 2018, net income was
$11.3 million, a $1.0 million, or 10.3%, increase compared to the
same period a year ago. Diluted earnings per share was $1.22
for the nine months ended September 30, 2018, an increase of 9.9%
compared to $1.11 for the nine months ended September 30,
2017.
Revenues for the nine months ended September 30,
2018, totaled $61.1 million, 1.6% less than the $62.0 million in
revenues recorded for the same nine month period in 2017.
Water sales revenues decreased $1.2 million, or 2.3%, for the nine
months ended September 30, 2018 compared to the same period a year
ago, primarily due to approximately $2.2 million held in reserve
pending the final determination of the potential rate relief due to
customers as a result of the Tax Cuts and Jobs Act of 2017
(“TCJA”). This decrease is partially offset by an increase in
the number of customers served and increased water consumption.
Other utility operating revenue increased $0.2
million, or 6.4%, for the nine months ended September 30, 2018
compared to the same period in 2017 primarily due to an increase in
wastewater revenue from growth in the number of customers
served.
Non-utility operating revenue increased
approximately $0.1 million, or 1.8%, for the nine months ended
September 30, 2018 compared to the same period in 2017. The
increase is primarily due to an increase in Service Line Protection
Plan revenue that covers the cost of materials and labor to repair
or replace participants’ leaking water services or clogged sewer
lines.
“Our focus in 2018 has been on controlling
operating and maintenance expenses while we continue to develop and
enhance efficiencies in our core businesses,” said Dian C. Taylor,
Chair, President and CEO. Excluding depreciation and income taxes,
operating expenses increased $0.1 million, or 0.2%, to $34.3
million for the nine months ended September 30, 2018, compared to
$34.2 million for the same period in 2017. Utility operating
expenses for the nine months ended September 30, 2018 were $28.5
million, a $0.1 million, or 0.4%, decrease from the same period a
year ago, mainly the result of decreases in payroll and employee
benefit expenses, as well as in purchased water expense, offset by
increases in power expense and water treatment expenses.
Property and other taxes increased $0.2 million, or 5.5%, due to an
increase in utility plant subject to taxation.
“In addition to exercising sound financial
management in our control of expenses, we have simultaneously moved
ahead with making important investments in infrastructure to ensure
we continue delivering safe, high-quality drinking water and
reliable water and wastewater services to our current and future
customers,” said Taylor. Consistent with the continued
efforts to ensure high quality reliable service to customers, $35.0
million has been invested in the first nine months of 2018, a 23.7%
increase compared to $28.3 million from the same period a year ago,
in water and wastewater infrastructure projects including
installation of transmission and distribution facilities,
replacement of aging mains, rehabilitation of treatment facilities,
and redevelopment of wells and pumping equipment.
Depreciation and amortization expense increased
$0.6 million, or 8.5%, primarily due to continued investment in
utility plant providing supply, treatment, storage and distribution
of water to customers and service to our wastewater customers.
Miscellaneous income increased $0.8 million for
the first nine months of 2018 compared to the same period a year
ago as a result of additional refunded patronage in 2018 on First
Mortgage Bonds held by CoBank, ACB and a one-time pledge made in
2017 to a non-profit entity in Delaware organized to support the
state’s economic development efforts.
Interest expense decreased $0.1 million for the
nine months ended September 30, 2018 compared to the same period a
year ago primarily due to the refinancing of the Series P First
Mortgage bond in January 2018, reducing the interest rate from
6.58% to 4.71%.
Federal and state income tax expense decreased
$1.7 million, or 26.0%, for the nine months ended September 30,
2018 compared to the same period a year ago, primarily due to the
reduction in the Federal corporate income tax rate by the TCJA
signed into law on December 22, 2017.
Third Quarter Results
Net income for the third quarter of 2018 was
$3.9 million and diluted net income per share was $0.42, each the
same as for the third quarter of 2017.
Revenues for the third quarter of 2018 were
$21.9 million, $0.4 million, or 1.9%, less than revenues recorded
for the same three month period of 2017. Water sales
decreased $0.6 million, or 2.9%, for the three months ended
September 30, 2018 from the corresponding period in 2017, primarily
due to $0.7 million held in reserve pending the final determination
of the potential rate relief due to customers as a result of the
TCJA. This decrease is partially offset by an increase in
overall water consumption and an increase in the number of
customers served.
Other utility operating revenue increased $0.2
million, or 14.8%, for the third quarter of 2018 compared to the
same period in 2017 primarily due to an increase in wastewater
revenue from growth in the number of customers served.
Excluding depreciation and income taxes,
operating expenses increased $0.4 million, or 2.9%, to $12.3
million for the third quarter of 2018. Utility operating
expenses increased $0.3 million, or 2.6%, for the three months
ended September 30, 2018 compared to the same period in 2017,
mainly the result of increases in payroll, employee benefit and
purchased water expenses. Property and other taxes increased
$0.1 million, or 7.8%, due to an increase in utility plant subject
to taxation.
Depreciation and amortization expense increased
$0.1 million, or 5.7%, primarily due to continued investment in
utility plant providing supply, treatment, storage and distribution
of water to customers and service to our wastewater customers.
Federal and state income tax expense decreased
$0.7 million, or 28.0%, for the three months ended September 30,
2018 compared to the same period a year ago primarily due to the
reduction in federal corporate income tax rate by the TCJA signed
into law on December 22, 2017.
Miscellaneous income increased $0.1 million for
the three months ended September 30, 2018 compared to the same
period a year ago due to a one-time additional patronage payment in
2018 from CoBank, ACB.
Other Highlights
- Completed installation of the protective liner for a 90 million
gallon storage lagoon at the Sussex Regional Recharge Facility near
Milton, Delaware, along with three 300 horsepower pumps that will
draw wastewater from the lagoon and pressurize the newly
constructed 12.5 miles of effluent discharge pipe for disposal in
fields and wooded areas. Once in service, the current stream
discharge of wastewater by Allen Harim Foods LLC will cease and the
treated water will be used for spray irrigation of cropland and
protected open space, a much more environmentally sensitive
solution.
- Broke ground on the Island Farm Elevated Water Storage Tank,
which will provide one million gallons of water storage to serve
our growing northern Sussex County, Delaware water system. Artesian
anticipates serving a population of 15,000 people within this
regional water system. The tank is anticipated to be completed
during the summer of 2019 and will increase storage capacity and
improve reliability and fire protection for current and future
customers.
- Invested $7.8 million in the first nine months of 2018, as part
of our rehabilitation program for transmission and distribution
facilities, replacing aging or deteriorating mains, and for new
transmission and distribution facilities, which included 12 water
main renewal projects and installation of 7.6 miles of water main
in northern New Castle County, Delaware
- Increased dividends to shareholders for the 22nd consecutive
year in 2018. The quarterly common stock dividend per share
of $0.2423 that will be paid on November 21, 2018 to shareholders
of record at the close of business on November 14, 2018 represents
a 3% increase from a year ago.
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 7.9 billion gallons of water per year through
1,293 miles of water main to nearly a third of Delaware
residents.
Forward Looking StatementsThis
release contains forward looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 regarding,
among other things, our planned Island Farm Elevated Water Storage
Tank and anticipated expansion of service in northern Sussex
County, Delaware. These statements involve risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements including:
changes in weather, changes in our contractual obligations, changes
in government policies, the timing and results of our rate
requests, failure to receive regulatory approval, changes in
economic and market conditions generally, and other matters
discussed in our filings with the Securities and Exchange
Commission. While the Company may elect to update forward-looking
statements, we specifically disclaim any obligation to do so and
you should not rely on any forward-looking statement as
representation of the Company’s views as of any date subsequent to
the date of this release.
Contact:Nicki TaylorInvestor
Relations(302) 453-6900ntaylor@artesianwater.com
|
Artesian Resources Corporation |
Condensed Consolidated Statement of Operations |
(In thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
September 30, |
|
September 30, |
|
2018 |
|
|
2017 |
|
2018 |
|
2017 |
Operating
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Water sales |
$ |
19,469 |
|
$ |
20,045 |
|
|
$ |
53,983 |
|
$ |
55,228 |
Other
utility operating revenue |
|
1,189 |
|
|
1,036 |
|
|
|
3,273 |
|
|
3,075 |
Non-utility operating revenue |
|
1,266 |
|
|
1,275 |
|
|
|
3,812 |
|
|
3,744 |
|
|
21,924 |
|
|
22,356 |
|
|
|
61,068 |
|
|
62,047 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Utility
operating expenses |
|
10,333 |
|
|
10,070 |
|
|
|
28,454 |
|
|
28,564 |
Non-utility operating expenses |
|
735 |
|
|
736 |
|
|
|
2,069 |
|
|
2,085 |
Depreciation and amortization |
|
2,513 |
|
|
2,377 |
|
|
|
7,623 |
|
|
7,024 |
State and
federal income taxes |
|
1,834 |
|
|
2,546 |
|
|
|
4,737 |
|
|
6,403 |
Property
and other taxes |
|
1,265 |
|
|
1,173 |
|
|
|
3,731 |
|
|
3,537 |
|
|
16,680 |
|
|
16,902 |
|
|
|
46,614 |
|
|
47,613 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
5,244 |
|
|
5,454 |
|
|
|
14,454 |
|
|
14,434 |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for funds used during construction |
|
146 |
|
|
83 |
|
|
|
413 |
|
|
229 |
Miscellaneous |
|
87 |
|
|
(62 |
) |
|
|
1,014 |
|
|
230 |
|
|
|
|
|
|
|
|
|
|
|
|
Income Before
Interest Charges |
|
5,477 |
|
|
5,475 |
|
|
|
15,881 |
|
|
14,893 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges |
|
1,548 |
|
|
1,533 |
|
|
|
4,548 |
|
|
4,614 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
3,929 |
|
$ |
3,942 |
|
|
$ |
11,333 |
|
$ |
10,279 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Basic |
|
9,244 |
|
|
9,191 |
|
|
|
9,235 |
|
|
9,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income per Common Share - Basic |
$ |
0.42 |
|
$ |
0.43 |
|
|
$ |
1.23 |
|
$ |
1.12 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Diluted |
|
9,299 |
|
|
9,286 |
|
|
|
9,290 |
|
|
9,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income per Common Share - Diluted |
$ |
0.42 |
|
$ |
0.42 |
|
|
$ |
1.22 |
|
$ |
1.11 |
|
|
|
|
|
|
|
|
|
|
|
|
Artesian Resources Corporation |
Condensed Consolidated Balance Sheet |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Utility
Plant, at original cost less |
|
|
|
|
|
|
|
|
|
|
|
accumulated depreciation |
$ |
487,135 |
|
$ |
460,502 |
|
|
|
|
|
|
|
Current
Assets |
|
18,364 |
|
|
18,985 |
|
|
|
|
|
|
|
Regulatory and Other Assets |
|
15,164 |
|
|
15,152 |
|
|
|
|
|
|
|
|
$ |
520,663 |
|
$ |
494,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization
and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
$ |
150,085 |
|
$ |
146,644 |
|
|
|
|
|
|
|
Long Term
Debt, Net of Current Portion |
|
111,826 |
|
|
105,587 |
|
|
|
|
|
|
|
Current
Liabilities |
|
37,174 |
|
|
28,461 |
|
|
|
|
|
|
|
Net
Advances for Construction |
|
7,114 |
|
|
7,797 |
|
|
|
|
|
|
|
Contributions in Aid of Construction |
|
134,560 |
|
|
128,286 |
|
|
|
|
|
|
|
Other
Liabilities |
|
79,904 |
|
|
77,864 |
|
|
|
|
|
|
|
|
$ |
520,663 |
|
$ |
494,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Artesian Resources (NASDAQ:ARTNA)
Historical Stock Chart
From Apr 2024 to May 2024
Artesian Resources (NASDAQ:ARTNA)
Historical Stock Chart
From May 2023 to May 2024