Pennichuck Corporation (NASDAQ: PNNW) today announced that net
income for its second quarter ended June 30, 2009 was $763,000, or
$.18 per share (diluted), on revenues of $8.5 million. Adjusted for
eminent domain-related costs in the quarter, earnings would have
been $.19 per share (diluted). This compares to net income of
$792,000, or $.19 per share (diluted), for the same quarter in
2008, on revenues of $7.9 million. There were essentially no
eminent domain-related costs in the second quarter of 2008.
Higher revenues for the second quarter of 2009 resulted from
increased water rates granted to the Company's Pennichuck Water and
Pittsfield Aqueduct regulated water utility subsidiaries in
December 2008, higher non-regulated water services revenue, and a
take-or-pay payment from an industrial customer that was recognized
as revenue in the quarter, net of the effects of year-over-year
lower water usage volumes. Residential customer water usage, which
comprised approximately 67% of total water demand, decreased 3% for
the three months ended June 30, 2009 compared to the same period in
2008. For the same comparative periods, commercial customer water
usage, which comprised approximately 14% of total water demand,
decreased 4%. These decreases in water usage volumes were due to
the combined effects of the current economic recession, an
unusually rainy June and continued conservation efforts by our
customers. Also in the second quarter of 2009, industrial customer
water usage, which comprised approximately 14% of total water
demand, was down compared to the same period in 2008 due
principally to a drop in usage by a large industrial customer that
resulted from an energy conservation program implemented by that
customer in the third quarter of 2008. However, the revenue effect
of this industrial usage decline was more than offset by the
take-or-pay payment from that customer pursuant to the terms of its
supply contract, which payment was recognized as revenue in the
second quarter of 2009. Looking ahead, year-over-year comparative
demand by that industrial customer is expected to generally
stabilize beginning in the third quarter of 2009. The Company's
total combined utility customer base as of June 30, 2009 and June
30, 2008 was 33,400 and 33,100, respectively, an increase of
approximately 1%.
Earnings for the second quarter of 2009 were essentially flat
with earnings for the same quarter in the preceding year due to the
combined effects of higher second quarter 2009 water utility
operating expenses and non-regulated service business operating
expenses, coupled with lower second quarter 2009 Allowance for
Funds Used During Construction ("AFUDC") and interest income.
Higher water utility operating expenses included increased general
and administrative costs, increased customer accounting expenses
and increased transmission and distribution expenses, offset in
part by lower production costs. Eminent domain-related costs were
$70,000 in the second quarter of 2009 compared to $4,000 in the
same quarter of the prior year.
For the six months ended June 30, 2009, net income was $695,000,
or $.16 per share (diluted), on revenues of $15.5 million. Adjusted
for eminent domain-related costs in the period, earnings would have
been $.19 per share (diluted). This compares to net income of $3.3
million, or $.77 per share (diluted), for the same period in 2008,
on revenues of $14.7 million. The prior year's first half net
income was higher due principally to a non-operating, after-tax
gain of approximately $2.3 million from the sale of the Company's
interests in three commercial office buildings (the "HECOPs") in
Merrimack, New Hampshire. Excluding the gain from the sale of the
HECOPs and excluding first half 2008 eminent domain-related costs,
earnings for the six months ended June 30, 2008 would have been
approximately $.24 per share (diluted). The decrease from $0.24 per
share to $.19 per share was due principally to lower AFUDC and
lower interest income in the current year. Eminent domain-related
costs were $188,000 in the first half of 2009 compared to $16,000
in the first half of 2008. Operating income of $3.1 million for the
first half of 2009 was essentially unchanged from 2008.
Pennichuck Water currently has a rate case before the New
Hampshire Public Utilities Commission ("NHPUC") that, if approved
in its entirety, would result in an annualized increase in revenues
of approximately $5.1 million. This rate case was filed to recover
increased operating expenses and to obtain recovery of and a return
on capital improvements principally for the then ongoing major
upgrade to the Company's water treatment plant, the replacement of
a 5.5 million gallon water tank, the installation of radio meter
reading equipment and the replacement of aging infrastructure. In
December 2008, the NHPUC issued an order granting Pennichuck Water
an annualized temporary increase in revenues of approximately $2.4
million, or 11%. At a hearing on May 19, 2009, the Company and the
NHPUC Staff presented a settlement agreement to the NHPUC
Commissioners which proposes a permanent rate increase of
approximately $4.7 million, or 22%. This includes a proposed 10.4%
step increase to be effective for bills rendered from and after the
date of issuance by the NHPUC of a final order for this rate case.
While the Company anticipates that a final order should be issued
at any time, its timing and terms are subject to the discretion of
the NHPUC. The estimated dollar amounts and percentages herein are
based on 2007 water usage volumes.
Pittsfield Aqueduct also has a rate case before the NHPUC
pursuant to which, in December 2008, the NHPUC issued an order
granting Pittsfield Aqueduct an annualized temporary increase in
revenues of approximately $666,000. In January 2009, Pittsfield
Aqueduct filed a motion with the NHPUC to extend the procedural
schedule and to allow it to modify its request for permanent rate
relief. A final hearing on this case regarding the establishment of
permanent rates is scheduled for late September of this year.
The temporary rate relief that has been granted by the NHPUC for
both Pennichuck Water and Pittsfield Aqueduct does not necessarily
reflect the ultimate outcome of the underlying requests for
permanent rate relief. Any difference between the temporary rate
relief that has been granted and the permanent rates ultimately
approved by the NHPUC for these utilities will be reconciled upon
the approval of permanent rates.
Regarding the Company's eminent domain dispute with the City of
Nashua, New Hampshire ("Nashua"), both the Company and Nashua have
filed appeals with the New Hampshire Supreme Court (the "Court").
The Court has agreed to hear the appeals and has set a briefing
schedule, but has not yet set a date for oral arguments. The
Company's initial brief is currently scheduled to be filed with the
Court on September 14, 2009. The Company expects that the Court is
not likely to render a decision before early 2010.
Commenting on the Company's results for the quarter, Duane C.
Montopoli, Pennichuck's President and Chief Executive Officer,
said, "Considering the current economic recession and the
abnormally wet June, we are pleased to have generally maintained
our earnings level in the second quarter. Looking ahead, and
considering the pending Pennichuck Water rate case before the
NHPUC, we believe we are well positioned to benefit from any
movement back to historical norms with respect to the economy and
the weather." Commenting on the ongoing eminent domain dispute with
the City of Nashua, he added, "We continue to believe that, subject
to gaining required approvals, a stock acquisition of Pennichuck by
Nashua in full settlement of this dispute could result in
significantly better economics for all parties relative to an
eminent domain taking pursuant to the terms of the July 2008 NHPUC
order."
Pennichuck Corporation is a holding company involved principally
in the supply and distribution of potable water in 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 commercialization of real
estate in southern New Hampshire.
Pennichuck Corporation's common stock trades on the Nasdaq
Global Market 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, the results of the appeal to the New Hampshire Supreme
Court of the reaffirmed eminent domain order of the New Hampshire
Public Utilities Commission in favor of the City of Nashua, New
Hampshire; the impact of an eminent domain taking by Nashua on
business operations and net assets; legislation and/or regulation
and accounting factors affecting Pennichuck Corporation's financial
condition and results of operations; the availability and cost of
capital, including the impact on our borrowing costs of changes in
interest rates; 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. We undertake no
obligation to update or revise publicly any forward-looking
statement.
Pennichuck Corporation and Subsidiaries
Comparative Financial Results
Quarter Ended June 30: 2009 2008
------------ ------------
Operating Revenues $ 8,452,000 $ 7,940,000
Operating Income $ 2,239,000 $ 2,046,000
Net Income $ 763,000 $ 792,000
Earnings Per Common Share:
Basic $ 0.18 $ 0.19
Diluted $ 0.18 $ 0.19
Weighted Average Common Shares Outstanding:
Basic 4,253,870 4,235,847
Diluted 4,272,528 4,266,998
Six Months Ended June 30: 2009 2008
------------ ------------
Operating Revenues $ 15,475,000 $ 14,682,000
Operating Income $ 3,069,000 $ 3,052,000
Net Income $ 695,000 $ 3,282,000
Earnings Per Common Share:
Basic $ 0.16 $ 0.78
Diluted $ 0.16 $ 0.77
Weighted Average Common Shares Outstanding:
Basic 4,253,218 4,233,288
Diluted 4,263,124 4,269,109
For More Information, Contact: Thomas C. Leonard Senior Vice
President and Chief Financial Officer Phone: 603-913-2300 Fax:
603-913-2305
Pennichuck (NASDAQ:PNNW)
Historical Stock Chart
From Jun 2024 to Jul 2024
Pennichuck (NASDAQ:PNNW)
Historical Stock Chart
From Jul 2023 to Jul 2024
