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Artesian Resources Corporation Reports Third Quarter 2014 Results

NEWARK, Del., Nov. 5, 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 third quarter of 2014 was $3.3 million, an increase of $0.7 million, or 27.5%, compared to $2.6 million in net income recorded during the third quarter of 2013. Diluted net income per share increased to $0.37 compared to $0.29 for the third quarter of 2013.

Revenues for the third quarter of 2014 were $19.6 million, a $1.5 million, or 8.4%, increase from the $18.1 million in revenues recorded for the same three month period of 2013. Water sales revenue increased $1.3 million, or 8.2%, to $17.7 million for the third quarter of 2014, compared to $16.3 million for the same period in 2013. The increase in water sales revenue is attributed to an overall increase in water consumption and increased water rates. "We have seen an overall increase in customer water consumption across our system this summer. We also were able to provide water to a neighboring municipality through an existing interconnection while they worked to install treatment equipment at the well field that is their sole source of self-supply. Our planning and efforts over the years to develop sources of supply and to fully integrate our New Castle County, Delaware system are what allow us to not only assure our customers of reliable water service, but to also assist neighboring water utilities when the need arises," said Dian C. Taylor, Chair, President and CEO.

Excluding depreciation and income taxes, operating expenses decreased $0.2 million, or 1.6%, to $9.8 million for the third quarter of 2014, compared to $9.9 million for the same period in 2013. Utility operating expenses for the third quarter of 2014 were $8.3 million, a $0.2 million, or 1.8%, decrease from the $8.4 million recorded for the same period in 2013. The ratio of operating expense, excluding depreciation and income taxes, to total revenue decreased to 49.9% for the third quarter of 2014, compared to 55.0% for the same period in 2013.

Depreciation and amortization expense increased $0.2 million, or 9.4%, to $2.3 million for the third quarter of 2014, compared to $2.1 million for the same period in 2013, primarily due to continued investment in utility plant in service providing supply, treatment, storage and distribution of water. The company invested $19.3 million in capital expenditures during the first nine months of 2014 compared to $13.9 million invested during the same period in 2013. "We continue to make important investments in necessary infrastructure that is critical for the assurance of quality water and service reliability to our customers, as well as the economic vitality of the areas we serve," said Taylor.

Interest expense increased $0.4 million, or 19.8%, to $2.1 million for the third quarter of 2014, compared to $1.8 million for the same period in 2013. The increase reflects accrued prejudgment interest of approximately $378,000 related to amounts withheld from payments to Chester Water Authority (CWA) for purchased water during the course of litigation against CWA. The litigation was in regard to the proper determination of the rate charged for water purchased under contract. On

September 30, 2014, the United States District Court for the Eastern District of Pennsylvania issued an Order regarding the litigation against CWA requiring Artesian Water to pay CWA the amounts withheld from 2008, 2009 and 2010 billings.

Through the first nine months of 2014, Artesian reported net income of $7.4 million, a $0.6 million, or 9.0%, increase from the $6.8 million in the same period of 2013. Diluted net income per common share was $0.83 through the first nine months of 2014 compared to $0.77 during the same period last year. Revenues during the first nine months of 2014 increased 4.2% to $54.4 million compared to $52.2 million in 2013. Water sales revenue increased $1.7 million, or 3.6%, to $48.7 million through the first nine months of 2014, compared to $47.0 million for the same period in 2013, as a result of increased water consumption during the summer of 2014 and an increase in water rates.

About Artesian

Artesian Resources Corporation (www.artesianwater.com) operates as the holding company of wholly-owned subsidiaries offering water, wastewater services and other 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 over 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 Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2014 2013 2014 2013
Operating Revenues
Water sales $ 17,647 $ 16,316 $ 48,680 $ 47,002
Other utility operating revenue 905 731 2,590 2,220
Non-utility operating revenue 1,043 1,026 3,115 2,959
19,595 18,073 54,385 52,181
Operating Expenses
Utility operating expenses 8,262 8,415 25,848 25,616
Non-utility operating expenses 509 511 1,697 1,598
Depreciation and amortization 2,259 2,066 6,553 6,164
State and federal income taxes 2,220 1,740 4,933 4,541
Property and other taxes 1,014 1,017 3,228 3,054
14,264 13,749 42,259 40,973
Operating Income 5,331 4,324 12,126 11,208
Allowance for funds used during construction 159 99 305 244
Miscellaneous (36) (37) 547 595
Income Before Interest Charges 5,454 4,386 12,978 12,047
Interest Charges 2,137 1,784 5,616 5,293
Net Income $ 3,317 $ 2,602 $ 7,362 $ 6,754
Weighted Average Common Shares Outstanding - Basic 8,898 8,789 8,876 8,759
Net Income per Common Share - Basic $ 0.37 $ 0.30 $ 0.83 $ 0.77
Weighted Average Common Shares Outstanding - Diluted 8,930 8,850 8,919 8,822
Net Income per Common Share - Diluted $ 0.37 $ 0.29 $ 0.83 $ 0.77
Artesian Resources Corporation
Condensed Consolidated Balance Sheet
(In thousands)
(Unaudited)
September 30, December 31,
2014 2013
Assets
Utility Plant, at original cost less
accumulated depreciation $391,136 $ 378,960
Current Assets 14,191 13,254
Regulatory and Other Assets 11,645 11,618
$416,972 $ 403,832
Capitalization and Liabilities
Stockholders' Equity $123,175 $ 121,836
Long Term Debt, Net of Current Portion 105,251 105,510
Current Liabilities 34,201 25,563
Net Advances for Construction 10,778 11,427
Contributions in Aid of Construction 90,134 87,865
Other Liabilities 53,433 51,631
$416,972 $ 403,832

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

Source:Artesian Resources Corporation