Pennichuck Corporation Announces First Quarter 2007 Earnings
May 08 2007 - 10:45AM
Business Wire
Pennichuck Corporation (the �Company�) today announced that for the
first quarter ended March 31, 2007, it earned $162,000, or $.04 per
share, compared with a net loss of $(707,000), or $(.17) per share,
for the same quarter in 2006. The first quarter 2007 increase in
earnings was due to higher water utility operating income, lower
eminent domain-related spending, and an increase in other income
attributable to the sale of a cell tower lease, offset in part by
lower allowance for funds used during construction (�AFUDC�) and
interest income, and higher interest expense. First quarter 2007
water utility operating income was up approximately $500,000 over
2006 levels due principally to higher water rates, net of the
effects of increased operating expenses and lower average per
customer water consumption as compared to the same period in 2006.
On March 30, 2007, the Company announced that its Pennichuck Water
Works, Inc. subsidiary (�Pennichuck Water�) had reached a
settlement with the staff of the New Hampshire Public Utilities
Commission (�NHPUC�) regarding Pennichuck Water�s request for rate
relief. The terms of the settlement, which are subject to approval
by the NHPUC, provide for an annualized increase in Pennichuck
Water�s revenues of approximately $5.2 million, or 31.43%, and
would replace an annualized temporary increase of $2.4 million, or
14.41%, that has been in effect since July 2006. Since a final
order from the NHPUC concerning the rate settlement has not yet
been issued, only the temporary increase has been reflected in
first quarter 2007 revenues. The difference between the temporary
increase and the permanent rates ultimately approved by the NHPUC
will be reconciled upon the approval of such permanent rates.
Consolidated revenues for the first quarter of 2007 were $6.0
million compared to $5.2 million for the same quarter in 2006.
Revenues for the quarter were higher due principally to the
temporary rate relief described above. Additionally, the Company
experienced 5.3% combined water utility customer growth during the
three months ended March 31, 2007 as compared to the three months
ended March 31, 2006, resulting in a total combined customer base
of approximately 32,400 at March 31, 2007. As previously disclosed,
shortly after commencing a hearing before the NHPUC in January 2007
to determine the merits of the City of Nashua�s eminent domain
case, Pennichuck and the City announced a 120-day postponement of
proceedings in order to engage in confidential discussions
regarding a possible comprehensive settlement of their dispute.
While a settlement could involve Nashua�s acquisition of some or
all of the assets of Pennichuck or one or more of its subsidiaries,
or alternatively the shares of Pennichuck stock, no assurance can
be given that the parties will be able to negotiate a mutually
acceptable settlement. The discussions are currently ongoing.
Eminent domain-related costs for the first quarter of 2007, less a
$250,000 cash payment received from the City in connection with the
120-day postponement of proceedings, netted to approximately zero,
as compared to expenses totaling $1.0 million for the same period
in 2006. No portion of the eminent domain-related costs incurred to
date have been charged or allocated to the Company�s three
utilities. Other income for the first quarter of 2007 includes a
$132,000 gain from the sale of a cell tower lease. AFUDC was lower
in the first quarter of 2007 due principally to the completion,
effective January 5, 2007, of the second of the three major phases
of Pennichuck Water�s upgrade to its water treatment plant in
Nashua, New Hampshire. Revenues from the Company's non-regulated
water service business increased to $600,000 for the three months
ended March 31, 2007, compared to $511,000 for the same period in
2006. The non-regulated water service business activities include
providing contract operations and maintenance, and water testing
and billing services, for municipalities and privately owned
community water systems. The increase in contract revenues over the
same period last year was due principally to the addition of a
municipal service contract pursuant to which, during the first
quarter of 2006, the Company began providing water services for the
town of Barnstable, Massachusetts. Pennichuck Corporation is a
holding company involved principally in the supply and distribution
of potable water in southern and central New Hampshire through its
three regulated water utilities. Its non-regulated, water-related
activities include operations and maintenance contracts with
municipalities and private entities in New Hampshire and
Massachusetts. The Company's real estate operations are involved in
the ownership, management and development of real estate in the
greater Nashua, New Hampshire areas. Pennichuck Corporation's
common stock trades on the Nasdaq Stock Exchange under the symbol
"PNNW". The Company's website is at www.pennichuck.com. This news
release may contain certain forward-looking statements with respect
to the financial condition, results of operations and business of
Pennichuck Corporation. Forward-looking statements are based on
current information and expectations available to management at the
time the statements are made, and are subject to various factors,
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements. These factors include, but are not limited to, timing
and results of eminent domain proceedings before the NHPUC, and the
impact thereof on consolidated business operations; timing and
amount of regulated water utility rate relief; changes in general
economic conditions, legislation or regulation and accounting
factors affecting Pennichuck Corporation's financial condition and
results of operations; and, the impact of weather. Investors are
encouraged to access Pennichuck Corporation's annual and quarterly
periodic reports filed with the Securities and Exchange Commission
for financial and business information regarding Pennichuck
Corporation, including a more detailed discussion of these and
other risks and uncertainties that could affect Pennichuck
Corporation's forward-looking statements. Pennichuck
CorporationComparative Operating Results � Quarter Ended March 31:
2007� 2006� Consolidated Revenues $5,993,000� $5,164,000� Operating
Income $669,000� $206,000� Net Income (Loss) $ 162,000� $(707,000)
Earnings (Loss) Per Share: Basic $.04� $(.17) Diluted $.04� $(.17)
Average Shares Outstanding: Basic 4,217,788� 4,191,273� Diluted
4,251,984� 4,191,273�
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