Pennichuck Corporation (NASDAQ: PNNW) today announced that net
income for its third quarter ended September 30, 2009 increased to
$1.4 million, or $.32 per share (diluted), on revenues of $9.5
million. Adjusted for eminent domain-related costs in the quarter,
earnings would have been $.37 per share (diluted). This compares to
net income of $913,000, or $.21 per share (diluted), for the same
quarter in 2008, on revenues of $8.4 million. Adjusted for eminent
domain-related costs in the 2008 quarter, earnings would have been
$.24 per share (diluted). Eminent domain-related costs in the third
quarter of 2009 and 2008 were $204,000 and $125,000, respectively.
The increase in revenues of $1.0 million for the third quarter
of 2009 resulted from increased water rates granted to the
Company's Pennichuck Water regulated utility subsidiary in December
2008 and August 2009 and to its Pittsfield Aqueduct regulated
utility subsidiary in December 2008, net of the effects of
year-over-year lower water usage volumes. The August 2009 rate
increase granted to Pennichuck Water provides for an annualized
increase in revenues of $4.7 million, or 22%, based on 2007 water
usage volumes and replaced an 11% temporary rate increase
previously granted. The purpose of the Pennichuck Water rate
relief, which was initiated in June 2008, is to allow it to recover
increased operating expenses and to obtain recovery of and a return
on capital improvements principally for the then ongoing major
upgrade to its 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. Pittsfield
Aqueduct has a rate case before the New Hampshire Public Utilities
Commission (the "NHPUC") pursuant to which, in December 2008, the
NHPUC issued an order granting it an annualized temporary increase
in revenues of approximately $666,000.
Total water usage volumes were down for the third quarter versus
the same period in the preceding year due principally to the
combined effects of the economic recession, abnormally cool and wet
weather in the first month of the quarter, and likely continued
customer conservation efforts. The Company's total combined utility
customer base as of September 30, 2009 and September 30, 2008 was
33,500 and 33,200, respectively, an increase of approximately
1%.
Earnings for the third quarter of 2009 increased by $461,000, or
$.11 per share, over the third quarter of 2008 due to the increased
revenues, offset in part by higher eminent domain-related costs,
lower Allowance for Funds Used During Construction ("AFUDC"), lower
interest income, and a higher income tax provision.
For the nine months ended September 30, 2009, net income was
$2.1 million, or $.48 per share (diluted), on revenues of $24.9
million. Adjusted for eminent domain-related costs totaling
$392,000 in the period, earnings would have been $.58 per share
(diluted). This compares to net income of $4.2 million, or $.98 per
share (diluted), for the same period in 2008, on revenues of $23.1
million. The prior year's net income for the nine-month period 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 eminent domain-related costs totaling $141,000, earnings
for the nine months ended September 30, 2008 would have been
approximately $.48 per share (diluted).
The increase from $.48 per share to $.58 per share was due
principally to increased water utility revenues of $1.7 million,
offset in part by higher operating expenses of $748,000, lower
Allowance for Funds Used During Construction ("AFUDC") of $189,000
and lower interest income of $181,000 in the current year.
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. In broad terms, the Company
has proposed to transfer the assets of the systems in Barnstead,
Middleton and Conway, New Hampshire (the "North Country Systems")
to its sister utility, Pennichuck East. The Company and the NHPUC
Staff presented a settlement agreement on the merits of the case to
the Commission at a final hearing on September 30, 2009. Temporary
rates, as approved, will remain in effect for the North Country
Systems until permanent rates are approved by the Commission.
The temporary rate relief granted by the NHPUC to Pittsfield
Aqueduct does not necessarily reflect the ultimate outcome of the
underlying request for permanent rate relief. Any difference
between the temporary rate relief that has been granted and the
permanent rates ultimately approved by the NHPUC will be reconciled
upon the approval of permanent rates.
Regarding the Company's eminent domain dispute with the City of
Nashua, New Hampshire (the "City"), both the Company and the City
have filed appeals with the New Hampshire Supreme Court (the
"Court"). The City filed its appeal brief on August 14, 2009. The
Company filed its appeal brief, and its initial reply to the City's
brief, on September 29, 2009. Additional reply briefs were filed by
the City on October 29, 2009 and are expected to be filed by the
Company by November 18, 2009. Oral arguments before the Court are
expected to take place in either December 2009 or January 2010.
Commenting on the Company's results for the quarter, Duane C.
Montopoli, Pennichuck's President and Chief Executive Officer,
said, "Considering the uncooperative weather and the severe
economic recession, we are pleased with the results for the
quarter." 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 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 September 30: 2009 2008
------------ ------------
Operating Revenues $ 9,473,000 $ 8,440,000
Operating Income $ 3,516,000 $ 2,455,000
Net Income $ 1,374,000 $ 913,000
Earnings Per Common Share:
Basic $ 0.32 $ 0.21
Diluted $ 0.32 $ 0.21
Weighted Average Common Shares Outstanding:
Basic 4,258,770 4,243,987
Diluted 4,291,142 4,266,333
Nine Months Ended September 30: 2009 2008
------------ ------------
Operating Revenues $ 24,948,000 $ 23,122,000
Operating Income $ 6,585,000 $ 5,507,000
Net Income $ 2,069,000 $ 4,195,000
Earnings Per Common Share:
Basic $ 0.49 $ 0.99
Diluted $ 0.48 $ 0.98
Weighted Average Common Shares Outstanding:
Basic 4,255,089 4,236,880
Diluted 4,272,132 4,268,176
For More Information, Contact: Thomas C. Leonard Senior Vice
President and Chief Financial Officer Phone: 603-913-2300 Fax:
603-913-2305
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