Middlesex Water Company Reports 2018 Fourth Quarter and Year-End Financial Results
March 08 2019 - 4:28PM
2018 HIGHLIGHTS
Middlesex Water Company (“Middlesex” or the “Company”)
(NASDAQ:MSEX) a provider of water and wastewater services, today
reported 2018 consolidated operating revenues of $138.1 million, as
compared to $130.8 million in 2017. Net income for the year
increased $9.6 million to $32.5 million, compared to $22.8 million
in 2017. Diluted earnings per share were $1.96, up $0.58 from
$1.38, reported for the same period in 2017.
2018 OPERATING RESULTS
Consolidated operating revenues rose to $138.1 million for the
year ended December 31, 2018. The $7.3 million increase in revenues
was primarily due to:
- $4.3 million from new base rates approved by the New Jersey
Board of Public Utilities on April 1, 2018 in the Middlesex
System.
- $0.6 million of added revenues attributed to higher water
demand from our New Jersey contract customers.
- $1.4 million fueled by customer growth in our Delaware
subsidiary, Tidewater Utilities, Inc. (“Tidewater”)
- $0.9 million in increased revenues from our non-regulated
operations, primarily from increased contract operations at our
White Marsh, Inc. (“White Marsh”) subsidiary.
Operation and maintenance expenses for the year ended December
31, 2018 increased $6.1 million from the same period in 2017. The
increase was attributable to numerous factors, including $1.2
million of higher water production costs related to weather-driven
changes in raw water quality as well as higher employee healthcare
and business liability insurance premium costs of $0.9 million.
Increases in headcount for regulatory and operational needs pushed
labor costs up by $1.5 million. Rent expense rose by $0.4 million
due to increased leased commercial office space required to
accommodate various operational and administrative needs.
Compliance with the recently enacted State of New Jersey Water
Quality Accountability Act (“WQAA”) increased regulatory related
costs by $0.3 million.
Income Tax expense for 2018 decreased $10.2
million from 2017 due to the combined effect of the approved
regulatory accounting treatment in the Middlesex base rate case
decision of the adoption of Internal Revenue
Service (IRS) tangible property regulations and a lower
effective tax rate resulting from the Tax Cuts and Jobs Act of
2017.
Earnings applicable to common stock for the year ended December
31, 2018 were $32.3 million, or $1.96 per share on a fully diluted
basis, compared to $22.7 million or $1.38 per diluted share in
2017.
“We continued to drive service quality and shareholder value in
2018 through diligent planning, executing capital projects and
effectively navigating the regulatory process. Our increased Net
Income and Earnings Per Share for the quarter and the year reflect
the favorable outcome of the Middlesex base rate case settlement
reached in March 2018, which allows for timely recovery of
infrastructure investments, increased operating costs and the tax
benefits associated with the adoption of the IRS repair and
maintenance regulations. Organic growth at Tidewater and enhanced
revenues from our White Marsh contract operations in Delaware also
contributed to these results,” said Middlesex Chairman, President
and Chief Executive Officer Dennis W. Doll. “We also executed on
various initiatives including our Water For Tomorrow® capital
investment program and the relocation of our corporate
headquarters,” added Doll.
FOURTH QUARTER 2018 RESULTS
For the three month period ended December 31, 2018, operating
revenues were $33.3 million, up from $31.5 million for the same
period in 2017. Operations and maintenance expenses were $18.8
million, up from $16.3 million for the same period in 2017 due
primarily to higher weather-related variable production costs,
higher WQAA regulatory related costs and higher labor costs from
increased headcount for regulatory and operational needs. Net
income increased to $7.0 million from $5.3 million for the same
period in 2017.
QUARTERLY DIVIDEND DECLARED
As previously announced in January 2019, the Board of Directors
of Middlesex Water Company declared a quarterly cash dividend of
$0.24 per common share which was paid on March 1, 2019 to
shareholders of record as of February 15, 2019. The Company has
paid cash dividends continually since 1912 and increased its
dividend for the forty-sixth consecutive year in 2018.
Middlesex Water currently has a 5% Discount in effect on its
Common Stock for participants in the Company’s Investment Plan on
purchases made by optional cash payment or dividend reinvestment.
The Discount, which commenced January 2, 2019, will continue until
200,000 shares are purchased at the discount price or December 30,
2019, whichever event occurs first.
ABOUT MIDDLESEX WATER COMPANY
Organized in 1897, Middlesex Water provides regulated and
unregulated water and wastewater utility services in New Jersey,
Delaware and Pennsylvania through various subsidiary companies.
The Company and its New Jersey subsidiaries -- Pinelands Water
Company and Pinelands Wastewater Company -- are subject to the
regulations of the Board of Public Utilities of the State of New
Jersey. Middlesex Water Company operates the water and wastewater
utilities for the City of Perth Amboy through its subsidiary,
Utility Service Affiliates (Perth Amboy) Inc. The Company also
provides contract operations services through its non-regulated
subsidiary, Utility Service Affiliates, Inc. The Company’s
regulated Delaware subsidiaries, Tidewater Utilities, Inc.,
together with Southern Shores Water Company and Tidewater
Environmental Services Inc., are subject to the regulations of the
Public Service Commission in Delaware. White Marsh Environmental
Systems, Inc. operates small water and wastewater systems under
contract on a non-regulated basis in Delaware. The Company serves
customers in Shohola, Pennsylvania through its subsidiary, Twin
Lakes Utilities, Inc. These companies are also subject to various
Federal and State regulatory agencies concerning water, and
wastewater effluent quality standards.
For additional information regarding Middlesex Water Company,
visit the Company’s web site at www.middlesexwater.com or call
(732) 634-1500.
This release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including, among others, our long-term strategy and
expectations, the status of our acquisition program, the impact of
our acquisitions, the impact of current and projected rate requests
and the impact of our capital program on our environmental
compliance. There are important factors that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements including: general economic
business conditions, unfavorable weather conditions, the success of
certain cost containment initiatives, changes in regulations or
regulatory treatment, availability and the cost of capital, the
success of growth initiatives and other factors discussed in our
filings with the Securities and Exchange Commission.
Media Contact:Bernadette Sohler, Vice President – Corporate
AffairsMiddlesex Water Companybsohler@middlesexwater.com(732)
638-7549
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MIDDLESEX WATER
COMPANY |
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CONSOLIDATED STATEMENTS OF
INCOME |
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(In thousands except per share
amounts) |
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Years Ended December 31, |
Quarter Ended December 31, |
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2018 |
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2017 |
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2018 |
|
2017 |
|
|
|
|
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|
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|
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|
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Operating Revenues |
$ |
138,077 |
|
$ |
130,775 |
|
$ |
33,268 |
|
$ |
31,456 |
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Operating Expenses: |
|
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|
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Operations and Maintenance |
|
71,570 |
|
|
65,490 |
|
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18,797 |
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16,312 |
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Depreciation |
|
15,037 |
|
|
13,922 |
|
|
3,900 |
|
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3,642 |
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Other Taxes |
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14,328 |
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13,565 |
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3,418 |
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3,238 |
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Total Operating
Expenses |
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100,935 |
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92,977 |
|
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26,115 |
|
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23,192 |
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Operating Income |
|
37,142 |
|
|
37,798 |
|
|
7,153 |
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8,264 |
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Other Income (Expense): |
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Allowance for Funds Used During Construction |
|
1,362 |
|
|
702 |
|
|
557 |
|
|
229 |
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Other Income (Expense), net |
|
1,630 |
|
|
915 |
|
|
353 |
|
|
231 |
|
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Total Other Income (Expense), net |
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2,992 |
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|
1,617 |
|
|
910 |
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|
460 |
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Interest Charges |
|
6,758 |
|
|
5,506 |
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|
1,829 |
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1,541 |
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Income before Income Taxes |
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33,376 |
|
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33,909 |
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6,234 |
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7,183 |
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Income Taxes |
|
924 |
|
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11,100 |
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(759) |
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1,837 |
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Net Income |
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32,452 |
|
|
22,809 |
|
|
6,993 |
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5,346 |
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Preferred Stock Dividend Requirements |
|
144 |
|
|
144 |
|
|
36 |
|
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36 |
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Earnings Applicable to Common Stock |
$ |
32,308 |
|
$ |
22,665 |
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$ |
6,957 |
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$ |
5,310 |
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Earnings per share of Common Stock: |
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Basic |
$ |
1.97 |
|
$ |
1.39 |
|
$ |
0.43 |
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$ |
0.33 |
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Diluted |
$ |
1.96 |
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$ |
1.38 |
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$ |
0.43 |
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$ |
0.32 |
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