Income Increases 37% Over Q1 Income in 2012
CLINTON, Conn., May 9, 2013 (GLOBE NEWSWIRE) -- Connecticut Water Service, Inc. (Nasdaq:CTWS) announced net income of $2.6 million in the first quarter of 2013. This was an increase of approximately 37% from the same period in 2012. Total revenues, which include all revenues generated by the Company's three business segments: Water Activities, Services and Rentals, and Real Estate, grew by approximately $1.3 million, or about 6.4%, in first quarter of 2013 to $21.5 million, from $20.2 million in the same period of in 2012.
Connecticut Water's earnings per share (EPS) in the first quarter of 2013 was $0.24 compared to an EPS of $0.22 during the same period of 2012. However, there were approximately 10.8 million weighted average common shares outstanding in the first quarter of 2013, which is approximately 25% more than in the same period in 2012 due to a successful equity offering of approximately 1.7 million shares and the issuance of 380,254 shares in the Biddeford & Saco Water Company (BSWC) acquisition in December 2012. A portion of the proceeds from the equity offering was used to repay approximately $21 million of bank lines of credit and $18 million in debt related to the acquisition of Maine Water, which will lower interest and debt expense more than $700,000 this year.
On December 10, 2012, the Company acquired BSWC through a stock-for-stock merger transaction valued at approximately $12.0 million. BSWC serves about 15,500 customers, or 35,000 people, in four southern Maine communities. BSWC was not a part of Connecticut Water in the first-quarter of 2012 and its financials are not included in 2012 comparisons.
Eric W. Thornburg, President and CEO of Connecticut Water, stated, "BSWC is being successfully integrated into our Maine Water family and is operating under Maine Water's highly regarded leadership team. We are leveraging the economies of scale in Maine and seeking opportunities to share staff, resources, systems and services between our Maine operations to provide the best, most cost effective service for customers while honoring our commitments to employees and shareholders."
First Quarter Operating Results
In the first quarter of 2013, income in the Company's core business, the Water Activities Segment, was $2.2 million, or $0.21 per basic common share, on total revenues of $20.1 million. In the same period of 2012, income from the segment totaled $1.6 million. The increase in revenues for the Water Activities Segment was largely attributable to the acquisition of BSWC and an increase in the Water Infrastructure and Conservation Adjustment (WICA) surcharge in Connecticut.
The Company saw consistent performance from its Services and Rentals Segment in the first quarter of 2013 that contributed $386,000, or $0.03 per basic common share, compared to $350,000 in the first quarter of 2012. There was no activity in the Real Estate Segment in the first quarter of 2013 or 2012.
Operating and Maintenance Expenses (O&M) increased $743,000, to $10.4 million in the first quarter of 2013 due to the acquisition of BSWC in December of 2012. The increase was largely attributable to BSWC operating expenses that were not included in the 2012 first quarter results. There were also increases in expenses related to taxes, due to higher earnings, and depreciation associated with the acquisition of BSWC. Excluding BSWC O&M expenses, the Company reduced O&M costs by $91,000 in 2013.
Interest and debt expense for the quarter declined 36% to $1.3 million, from $2.1 million for the same period of 2012. The decrease was related to reduced interest expense associated with the refinancing of $55 million in long-term debt in the fourth-quarter of 2012, the repayment of $18 million in debt used to acquire Maine Water, and an increase in the patronage refund from a bank cooperative that reduced interest expense.
Mr. Thornburg stated, "Performance of the Water Activities segment was solid in the first quarter of 2013, a quarter where weather typically has the least influence on consumption. Overall, we expect net income from the Water Activities and Services and Rental segments in 2013 will increase over 2012 levels. The anticipated increase will, in part, be driven by increases in the WICA surcharge related to the Company's pipeline replacement program in Connecticut. A similar surcharge mechanism for replacement or repair of aging infrastructure in Maine is expected to be available in late 2013 or early 2014. Both Connecticut's and Maine's infrastructure investment surcharges promote the replacement of aging water system infrastructure by allowing for timely recovery of the associated costs."
Connecticut Water Service, Inc. is the largest publicly traded water company based in New England. Through its wholly-owned public water utility subsidiaries, The Connecticut Water Company, The Maine Water Company and the Biddeford & Saco Water Company, the Company provides drinking water to nearly 122,000 customers, or about 400,000 people, throughout the states of Connecticut and Maine.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, our long-term strategy and expectations, the status of our acquisition program, the impact of our acquisitions on our financial results, the impact of current and projected rate requests and the impact of our capital program on our environmental compliance. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: general economic business conditions, unfavorable weather conditions, the success of certain cost containment initiatives, changes in regulations or regulatory treatment, availability and the cost of capital, the success of growth initiatives and other factors discussed in our filings with the Securities and Exchange Commission. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
|Connecticut Water Service, Inc. & Subsidiaries|
|Condensed Consolidated Statements of Income (unaudited)|
|(In thousands except per share amounts)||March 31, 2013||March 31, 2012|
|Other Water Activities Revenues||399||349|
|Real Estate Revenues||--||--|
|Service and Rentals Revenues||1,389||1,335|
|Total Operating Expenses||$16,370||$14,989|
|Other Utility Income, Net of Taxes||$206||$176|
|Total Utility Operating Income||$3,565||$3,727|
|Gain on Property Transactions, Net of Taxes||$--||$--|
|Non-Water Sales Earnings (Services and Rentals), Net of Taxes||$386||$350|
|Net Income Applicable to Common Shareholders||$2,604||$1,901|
|Basic Earnings Per Average Common Share||$0.24||$0.22|
|Diluted Earnings Per Average Common Share||$0.24||$0.22|
|Basic Weighted Average Common Shares Outstanding||10,803||8,651|
|Diluted Weighted Average Common Shares Outstanding||10,965||8,781|
|Book Value Per Share||$16.93||$13.47|
|Condensed Consolidated Balance Sheets (unaudited)|
|(In thousands)||March 31, 2013||March 31, 2012|
|Net Utility Plant||$449,592||$412,922|
|CAPITALIZATION AND LIABILITIES|
|Other Liabilities and Deferred Credits||201,266||202,881|
|Total Capitalization and Liabilities||$578,255||$547,953|
CONTACT: News media contact: Daniel J Meaney, APR, Director of Corporate Communications Connecticut Water Service, Inc. 93 West Main Street, Clinton, CT 06413-1600 (860) 664-6016
Source:Connecticut Water Service, Inc.