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Artesian Resources Corporation Reports Second Quarter 2014 Results

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NEWARK, Del., Aug. 7, 2014 (GLOBE NEWSWIRE) -- Artesian Resources Corporation (Nasdaq:ARTNA), a leading provider of water, wastewater services and related services on the Delmarva Peninsula, today announced that net income for the second quarter of 2014 was $2.0 million, a decrease of $0.5 million, compared to $2.5 million in net income recorded during the second quarter of 2013. Diluted net income per share decreased to $0.22 compared to $0.28 for the second quarter of 2013.

Revenues for the second quarter of 2014 were $17.9 million, a 0.6% increase from the $17.8 million in revenues recorded for the same three month period of 2013. Water sales revenues decreased $0.2 million, or 1.0%, for the three months ended June 30, 2014 compared to the same period a year ago, a result of a slight decrease in overall water consumption, which offset the effect of the temporary rate increase that was placed into effect on June 10, 2014. This decrease was partially offset by an increase in the Distribution System Improvement Charge, or DSIC, revenue of approximately $49,000. Other utility revenue increased $0.2 million, or 27.0%, for the three months ended June 30, 2014 compared to the same period a year ago as a result of increased service and finance charges and wastewater utility revenue. Non-utility operating revenue increased $0.1 million, or 9.3%, for the three months ended June 30, 2014 compared to the same period a year ago as enrollment in water and wastewater service line protection plans continued to increase.

Excluding depreciation and income taxes, operating expenses increased $0.9 million, or 9.0%, to $10.8 million for the second quarter of 2014, compared to $9.9 million for the same period in 2013. Utility operating expenses for the second quarter of 2014 were $9.1 million, a $0.7 million, or 8.4%, increase from the $8.4 million recorded for the same period in 2013. This increase is primarily the result of increased payroll and employee benefit costs. Partially offsetting these increased expenses, administrative expenses decreased $0.2 million, or 15.9%, of which $0.1 million is due to decreased legal costs associated with the litigation against the Chester Water Authority in regard to proper determination of the rate charged for water purchased from them under contract. Property and other taxes increased $0.1 million, or 10.6%, reflecting increases in tax rates and an increase in utility plant in service subject to taxation.

Through the first six months of 2014, Artesian had net income of $4.0 million, compared to net income of $4.2 million recorded for the same period of 2013. Diluted earnings per share decreased to $0.45 for the six months ended June 30, 2014 from $0.47 for the six months ended June 30, 2013. Revenues during the first six months of 2014 increased 2.0% to $34.8 million, while operating expenses, excluding depreciation and income taxes, increased 3.3%.

On April 11, 2014, Artesian filed a request with the Delaware Public Service Commission for an increase in water rates. Artesian is asking for a $7.5 million increase in annual water service revenues, or about 12.0% greater than under rates currently in effect. This rate increase request will help offset the $47.1 million Artesian has invested over the past three years in infrastructure improvements to ensure water quality and service reliability to its customers. In the first six months of 2014, Artesian has invested $9.7 million to enhance or improve water treatment facilities, rehabilitate pumping equipment and to replace aging water mains.

"The combined impact of a wetter than normal weather pattern through June of this year and increased operating and property tax costs has significantly pressured earnings while our request for rate relief in Delaware proceeds," said Dian C. Taylor, Chair, President and CEO of Artesian Resources Corporation.

About Artesian Resources

Artesian Resources Corporation operates as the holding company for wholly-owned subsidiaries offering water, wastewater services and related services on the Delmarva Peninsula. Artesian Water Company, the principal subsidiary, is the oldest and largest investor-owned public water utility on the Delmarva Peninsula and has been providing water service since 1905. Artesian supplies 7.3 billion gallons of water per year through 1,182 miles of water main to about 300,000 people.

Artesian Resources Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2014 2013 2014 2013
Operating Revenues
Water sales $ 15,950 $ 16,118 $ 31,034 $ 30,686
Other utility operating revenue 893 703 1,686 1,489
Non-utility revenue 1,048 959 2,071 1,933
17,891 17,780 34,791 34,108
Operating Expenses
Utility operating expenses 9,070 8,370 17,587 17,201
Non-utility operating expenses 632 548 1,190 1,087
Depreciation and amortization 2,155 2,058 4,293 4,099
State and federal income taxes 1,312 1,689 2,713 2,801
Property and other taxes 1,073 970 2,213 2,037
14,242 13,635 27,996 27,225
Operating Income 3,649 4,145 6,795 6,883
Allowance for funds used during construction 95 78 146 145
Miscellaneous (39) 51 583 632
Income Before Interest Charges 3,705 4,274 7,524 7,660
Interest Charges 1,743 1,762 3,479 3,509
Net Income $ 1,962 $ 2,512 $ 4,045 $ 4,151
Weighted Average Common Shares Outstanding - Basic 8,884 8,761 8,865 8,743
Net Income per Common Share - Basic $ 0.22 $ 0.29 $ 0.46 $ 0.47
Weighted Average Common Shares Outstanding - Diluted 8,928 8,829 8,914 8,814
Net Income per Common Share - Diluted $ 0.22 $ 0.28 $ 0.45 $ 0.47
Artesian Resources Corporation
Condensed Consolidated Balance Sheet
(In thousands)
(Unaudited)
June 30, December 31,
2014 2013
Assets
Utility Plant, at original cost less accumulated depreciation $ 383,823 $ 378,960
Current Assets 12,385 13,254
Regulatory and Other Assets 11,697 11,618
$ 407,905 $ 403,832
Capitalization and Liabilities
Stockholders' Equity $ 123,439 $ 121,836
Long Term Debt, Net of Current Portion 105,485 105,510
Current Liabilities 25,913 25,563
Advances for Construction 11,030 11,427
Contributions in Aid of Construction 89,181 87,865
Other Liabilities 52,857 51,631
$ 407,905 $ 403,832

CONTACT: Nicki Taylor Investor Relations (302) 453-6900 ntaylor@artesianwater.com

Source:Artesian Resources Corporation