Pennichuck Corporation (NASDAQ: PNNW) today announced that net
income for its third quarter ended September 30, 2011 was $2.4
million, or $0.50 per share (diluted), on revenues of $11.9
million. Adjusted for non-operating eminent domain and
merger-related costs incurred in connection with the Company's
agreement to be acquired by the City of Nashua, New Hampshire,
which totaled $99,000, third quarter earnings were $0.51 per share
(diluted). This compares to net income for the third quarter in
2010 of $2.3 million, or $0.48 per share (diluted), on revenues of
$11.8 million. Adjusted for eminent domain and merger-related costs
which totaled $159,000, 2010 third quarter earnings were $0.50 per
share (diluted).
The increase in 2011 third quarter earnings of $104,000 was due
principally to increased water utility revenues of $95,000, lower
utility operating expenses of $33,000 and lower merger-related
costs of $60,000, offset in part by increased income tax expense of
$69,000. The increase in utility revenues for the quarter resulted
from an 11.95% permanent rate increase granted to the Company's
Pennichuck Water regulated utility subsidiary in June 2011, net of
the effects of an approximate 15% decline in water usage volumes in
this year's third quarter. Weather conditions for the third quarter
of 2010 were unusually dry and warm. The decrease in utility
operating expenses was due principally to decreased production
costs as a result of the lower water usage volumes, partly offset
by higher real property taxes including state utility taxes and
higher healthcare and other employee benefit costs.
For the nine months ended September 30, 2011, net income was
$4.0 million, or $0.83 per share (diluted), on revenues of $30.2
million. Adjusted for eminent domain and merger-related costs which
totaled $672,000, earnings for the nine months ended September 30,
2011 were $0.92 per share (diluted). This compares to net income
for the nine months ended September 30, 2010 of $3.3 million, or
$0.71 per share (diluted), on revenues of $28.3 million. Adjusted
for eminent domain and merger-related costs which totaled $392,000,
earnings for the nine months ended September 30, 2010 were $0.76
per share (diluted). Adjusted earnings of $0.92 per share
represents a 21% increase over adjusted earnings of $0.76 per
share.
The increase in net income for the nine months ended September
30, 2011, compared with the same period in the prior year, was due
principally to increased water utility revenues of $1.8 million,
offset in part by higher utility operating expenses of $542,000,
higher eminent domain and merger-related costs in the amount of
$280,000 and increased income tax expense of $408,000. The increase
in utility revenues resulted from a 10.8% temporary rate increase
prospectively granted to the Company's Pennichuck Water Works, Inc.
regulated water utility subsidiary ("Pennichuck Water") in October
2010 and the replacement of that temporary rate order by an 11.95%
permanent rate increase granted in June 2011, net of the effects of
lower water usage volumes in the third quarter of the current year
due to comparatively cooler weather and continued water
conservation. In June of this year, the Company also recorded
recoupment operating revenues of approximately $1.2 million based
on rates set in the permanent rate order for service rendered from
June 2010 to June 2011. The increase in utility operating expenses
was due principally to increased production, transmission and
distribution costs, higher real property taxes including state
utility taxes and higher healthcare and other employee benefit
costs.
Commenting on the results for the third quarter, Duane C.
Montopoli, Pennichuck's President and Chief Executive Officer,
said, "The timely receipt of rate relief by Pennichuck Water
resulted in revenues and net income that compare favorably with
2010 even though consumption dropped 15% primarily as a result of a
return to more seasonable weather in the current year."
Commenting on the Company's planned acquisition by the City of
Nashua, Mr. Montopoli added, "I am pleased that we were able to
reach a settlement with the NHPUC staff and a majority of the
intervenors, which was filed and then reviewed at an NHPUC hearing
on October 25, 2011. We are currently awaiting a decision from the
NHPUC. If we receive a favorable decision, I would expect Nashua to
complete its bond issue as soon as practicable in order to close
the transaction no later than the first quarter of 2012."
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 environmentally
responsible commercialization of real estate in southern New
Hampshire.
Pennichuck Corporation's common stock trades on the Nasdaq
Global Market under the symbol "PNNW." However, upon the completion
of the proposed merger with the City of Nashua, Pennichuck's common
stock will cease to be publicly-traded. The Company's website is at
www.pennichuck.com.
Forward-Looking Statements
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, a future judicial or regulatory determination that
events prior to the November 11, 2010 effective date of our merger
agreement with the City of Nashua constituted a final determination
of the price to be paid under RSA 38:13 and triggered the statutory
90-day period within which the City was required to decide whether
to take, by eminent domain, the assets of our Pennichuck Water
Works, Inc. subsidiary; the expiration of said 90-day period
without the City having made any such decision; whether the merger
transaction is approved by the NHPUC; whether the merger
transaction is ultimately consummated; Nashua's ability to obtain
appropriate financing for the merger; the outcome of requests for
rate relief from the NHPUC from time to time; changes in
governmental regulations; 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: 2011 2010
-------------- --------------
Operating Revenues $ 11,901,000 $ 11,765,000
Operating Income $ 4,869,000 $ 4,762,000
Net Income $ 2,377,000 $ 2,273,000
Earnings Per Common Share:
Basic $ 0.51 $ 0.49
Diluted $ 0.50 $ 0.48
Weighted Average Common Shares Outstanding:
Basic 4,685,170 4,660,077
Diluted 4,759,575 4,696,338
Nine Months Ended September 30: 2011 2010
-------------- --------------
Operating Revenues $ 30,214,000 $ 28,294,000
Operating Income $ 9,709,000 $ 8,448,000
Net Income $ 3,966,000 $ 3,344,000
Earnings Per Common Share:
Basic $ 0.85 $ 0.72
Diluted $ 0.83 $ 0.71
Weighted Average Common Shares Outstanding:
Basic 4,682,220 4,657,404
Diluted 4,755,818 4,685,389
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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