Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider
of water and wastewater services, and related services, on the
Delmarva Peninsula, today announced earnings results for 2018.
Net income increased 2.1% to $14.3 million, compared to $14.0
million in 2017. Diluted net income per common share
increased 2.0% to $1.54, compared to $1.51 for 2017.
Approximately $3.3 million of water sales
revenue was placed in reserve in 2018. In accordance with the
Delaware Public Service Commission’s January 31, 2019 approval of a
reduction in Delaware water rates, the reserved revenue is to be
refunded to customers in the second quarter of 2019 to return the
savings from the Tax Cuts and Jobs Act’s (“TCJA”) reduction in the
corporate tax rate. The overall decrease in water sales
revenue compared to the prior year arising from the reduction in
water rates was partially offset by an increase in water
consumption and an increase in the number of customers served of
approximately 2.0%. Water sales revenue was $70.8 million in
2018, a decrease of $2.3 million, or 3.1%, from $73.1 million in
2017.
Other utility operating revenue increased 6.7%
to $4.5 million in 2018 from $4.2 million in 2017 as a result of an
increase in wastewater customers served in new and existing
developments in Sussex County, Delaware. “The number of
Delaware wastewater customers we serve grew by 16.6% in 2018 and we
expect to see continued growth in our customer base in Sussex
County, Delaware as a result of the strategic investments we have
made in infrastructure to support residential development and the
growing desirability of this area as a retirement community,” said
Dian C. Taylor, Chair, President and CEO.
Non-utility revenue increased 2.5% to $5.1
million in 2018 from $5.0 million in 2017, primarily due to an
increase in Service Line Protection Plans (“SLP Plans”)
revenue. The SLP Plans provide coverage for all material and
labor required to repair or replace participants’ leaking water
service or clogged sewer lines and internal plumbing lines.
Operating expenses, excluding depreciation and
income taxes, increased $0.4 million, or 0.9%, for the year ended
December 31, 2018 compared to the year ended December 31,
2017. Property and other taxes increased $0.2 million, or
5.0%, primarily due to an increase in utility plant subject to
taxation. Non-utility expenses increased approximately $0.1
million, or 3.7%, primarily due to an increase in plumbing services
related to the SLP Plans.
Depreciation and amortization expense increased
$0.7 million, or 7.7%, for the year ended December 31, 2018
compared to the year ended December 31, 2017, 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
$2.3 million, or 31.6%, from $7.3 million in 2017 to $5.0 million
in 2018, primarily due to the reduction in the federal corporate
income tax rate as a result of the TCJA.
Miscellaneous income increased $0.7 million for
the year ended December 31, 2018 compared to the year ended
December 31, 2017, primarily due to an increase in the amount of
the patronage payment from CoBank, ACB, related to the refinancing
of two First Mortgage bonds in January 2017 and a one-time
additional patronage payment in 2018 related to savings generated
from the TCJA.
Interest expense increased $0.1 million,
primarily due to an increase in borrowing under lines of credit.
This increase was mostly offset by a decrease in interest
charges due to a refinancing of the Series P First Mortgage bond in
January 2018, reducing the interest rate from 6.58% to 4.71%.
In 2018, we invested $49.1 million, compared to
$41.1 million in 2017, in infrastructure projects including
installation of transmission and distribution facilities,
replacement of aging mains, rehabilitation of treatment facilities,
redevelopment of wells and pumping equipment and upgrades to
computer, transportation and meter reading equipment as well as
investments in wastewater facilities in Delaware. Our
wastewater facilities investments included completing construction
of an eight mile pipeline, a 90 million gallon storage lagoon and
spray irrigation facilities to dispose of treated process
wastewater from a new industrial customer, service for which is
expected to begin in 2019. “We firmly believe that
investments we have made in infrastructure deliver the dual-benefit
of sustaining economic growth and improving the quality of our
environment in the region, and are vital to our ability to continue
to increase shareholder value,” said Taylor.
Fourth Quarter Financial Results
Financial results for the fourth quarter of
2018, specifically the reduction in water sales revenue and state
and federal income taxes, reflect the revenue reserve to be
refunded to customers and the implementation effect of the TCJA
including one-time adjustments that impacted the comparative period
of the fourth quarter of 2017. Utility and non-utility
operating expenses increased primarily due to increases in payroll
and repairs and maintenance expenses.
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
1,311 miles of main to over 300,000 people.
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 anticipated expansion of service in Sussex
County, Delaware, our investment in infrastructure projects and
wastewater facilities, continued growth in the number of customers
served and our ability to continue to increase shareholder value.
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 |
|
|
Twelve months ended |
|
|
December 31, |
|
|
December 31, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
2017 |
Operating
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Water
sales |
$ |
16,846 |
|
|
$ |
17,830 |
|
|
$ |
70,829 |
|
$ |
73,058 |
Other
utility operating revenue |
|
1,183 |
|
|
|
1,102 |
|
|
|
4,456 |
|
|
4,177 |
Non-utility operating revenue |
|
1,314 |
|
|
|
1,256 |
|
|
|
5,126 |
|
|
5,000 |
|
|
19,343 |
|
|
|
20,188 |
|
|
|
80,411 |
|
|
82,235 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Utility
operating expenses |
|
9,877 |
|
|
|
9,715 |
|
|
|
38,330 |
|
|
38,277 |
Non-utility operating expenses |
|
810 |
|
|
|
691 |
|
|
|
2,879 |
|
|
2,777 |
Depreciation and amortization |
|
2,666 |
|
|
|
2,530 |
|
|
|
10,288 |
|
|
9,555 |
State and
federal income taxes |
|
254 |
|
|
|
892 |
|
|
|
4,991 |
|
|
7,295 |
Property
and other taxes |
|
1,235 |
|
|
|
1,195 |
|
|
|
4,968 |
|
|
4,731 |
|
|
14,842 |
|
|
|
15,023 |
|
|
|
61,456 |
|
|
62,635 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
4,501 |
|
|
|
5,165 |
|
|
|
18,955 |
|
|
19,600 |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for funds used during construction |
|
209 |
|
|
|
107 |
|
|
|
622 |
|
|
334 |
Miscellaneous |
|
(60 |
) |
|
|
(5 |
) |
|
|
953 |
|
|
226 |
|
|
|
|
|
|
|
|
|
|
|
|
Income Before
Interest Charges |
|
4,650 |
|
|
|
5,267 |
|
|
|
20,530 |
|
|
20,160 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges |
|
1,705 |
|
|
|
1,563 |
|
|
|
6,252 |
|
|
6,177 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
2,945 |
|
|
$ |
3,704 |
|
|
$ |
14,278 |
|
$ |
13,983 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Basic |
|
9,249 |
|
|
|
9,207 |
|
|
|
9,239 |
|
|
9,175 |
Net
Income per Common Share - Basic |
$ |
0.32 |
|
|
$ |
0.40 |
|
|
$ |
1.55 |
|
$ |
1.52 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Diluted |
|
9,303 |
|
|
|
9,274 |
|
|
|
9,293 |
|
|
9,242 |
Net
Income per Common Share - Diluted |
$ |
0.32 |
|
|
$ |
0.40 |
|
|
$ |
1.54 |
|
$ |
1.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Artesian Resources CorporationCondensed
Consolidated Balance Sheets(In thousands)(Unaudited)
|
December 31, |
|
December 31, |
|
2018 |
|
2017 |
Assets |
|
|
|
|
|
Utility
Plant, at original cost less accumulated depreciation |
$ |
498,678 |
|
$ |
460,502 |
Current
Assets |
|
16,118 |
|
|
18,985 |
Regulatory and Other Assets |
|
15,034 |
|
|
15,152 |
|
$ |
529,830 |
|
$ |
494,639 |
|
|
|
|
|
|
Capitalization
and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
$ |
153,251 |
|
$ |
146,644 |
Long Term
Debt, Net of Current Portion |
|
115,862 |
|
|
105,587 |
Current
Liabilities |
|
37,731 |
|
|
28,461 |
Net
Advances for Construction |
|
6,596 |
|
|
7,797 |
Contributions in Aid of Construction |
|
138,015 |
|
|
128,286 |
Other
Liabilities |
|
78,375 |
|
|
77,864 |
|
$ |
529,830 |
|
$ |
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