NEWARK, Del., Nov. 04, 2015 (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 2015 was $3.7 million, an increase of $0.4 million, or 11.5%, compared to $3.3 million in net income recorded during the third quarter of 2014. Diluted net income per share increased to $0.41 compared to $0.37 for the third quarter of 2014.
Revenues for the third quarter of 2015 were $20.8 million, a $1.2 million, or 6.0%, increase from the $19.6 million in revenues recorded for the same three month period of 2014. Water sales revenue increased $1.2 million, or 6.7%, to $18.8 million for the third quarter of 2015, compared to $17.6 million for the third quarter of 2014. The increase in water sales revenue is attributed primarily to the rate increase placed into effect November 13, 2014.
Excluding depreciation and income taxes, operating expenses increased $0.9 million, or 9.2%, to $10.7 million for the third quarter of 2015 compared to $9.8 million for the same period in 2014. Utility operating expenses for the third quarter of 2015 were $9.0 million, a $0.8 million, or 9.4%, increase from the $8.3 million recorded for the same period in 2014. The increase is primarily the result of increased payroll and employee benefit costs.
Interest expense decreased $0.4 million, or 18.0%, to $1.8 million for the third quarter of 2015 compared to $2.1 million for the same period in 2014. The decrease reflects accrued prejudgment interest in the third quarter of 2014 of approximately $378,000 related to payments withheld from Chester Water Authority (CWA) during the course of litigation against CWA in regard to the proper determination of the rate CWA charged for water purchased under contract.
Through the first nine months of 2015, Artesian had net income of $9.5 million, an increase of $2.1 million, or 28.6%, compared to net income of $7.4 million recorded for the same period of 2014. Diluted earnings per share increased to $1.06 for the nine months ended September 30, 2015 from $0.83 for the same period in 2014.
Revenues during the first nine months of 2015 increased $3.9 million, or 7.2%, to $58.3 million. Water sales revenue increased $3.7 million, or 7.5%, for the nine months ended September 30, 2015 compared to the same period a year ago due to the rate increases that were placed into effect on June 10, 2014 and November 13, 2014. Non-utility operating revenue increased approximately $0.2 million, or 6.4%, for the nine months ended September 30, 2015 compared to the same period in 2014. The increase is primarily due to an increase in water and wastewater Service Line Protection Plan revenues.
Excluding depreciation and income taxes, operating expenses increased $0.4 million, or 1.3%, to $31.2 million for the nine months ended September 30, 2015 compared to $30.8 million for the same period in 2014. Utility operating expenses for the nine months ended September 30, 2015 were $26.2 million, a $0.3 million, or 1.4%, increase from the $25.9 million recorded for the same period in 2014.
“Our continued efforts to control costs while obtaining rate recovery for the $47 million we had invested in water infrastructure in Delaware in a three year period through September 2014 has resulted in our improved financial results,” said Dian C. Taylor, Chair, President & CEO.
On September 15, 2015, Artesian entered into an agreement to reduce the annual interest rate on its Series S First Mortgage Bond from 6.73% to 4.45% effective March 1, 2016. The change in the rate will reduce interest on the Bond by approximately $180,000 in 2016. In October, Artesian entered into a new three year contract that becomes effective in May 2016 reducing our electric power rate by 11%. “We will continue to pursue other opportunities to reduce costs while we also continue to invest in water infrastructure improvements to ensure water quality and service reliability to our customers,” said Ms. Taylor.
About Artesian Resources
Artesian Resources Corporation operates as a holding company of 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 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 1,201 miles of water main to approximately 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, | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Operating Revenues | |||||||||||||||
| Water sales | $ | 18,831 | $ | 17,647 | $ | 52,343 | $ | 48,680 | |||||||
| Other utility operating revenue | 861 | 905 | 2,618 | 2,590 | |||||||||||
| Non-utility operating revenue | 1,084 | 1,043 | 3,313 | 3,115 | |||||||||||
| 20,776 | 19,595 | 58,274 | 54,385 | ||||||||||||
| Operating Expenses | |||||||||||||||
| Utility operating expenses | 9,036 | 8,262 | 26,198 | 25,848 | |||||||||||
| Non-utility operating expenses | 578 | 509 | 1,705 | 1,697 | |||||||||||
| Depreciation and amortization | 2,196 | 2,259 | 6,597 | 6,553 | |||||||||||
| State and federal income taxes | 2,497 | 2,220 | 6,452 | 4,933 | |||||||||||
| Property and other taxes | 1,075 | 1,014 | 3,270 | 3,228 | |||||||||||
| 15,382 | 14,264 | 44,222 | 42,259 | ||||||||||||
| Operating Income | 5,394 | 5,331 | 14,052 | 12,126 | |||||||||||
| Allowance for funds used during construction | 86 | 159 | 153 | 305 | |||||||||||
| Miscellaneous | (28 | ) | (36 | ) | 521 | 547 | |||||||||
| Income Before Interest Charges | 5,452 | 5,454 | 14,726 | 12,978 | |||||||||||
| Interest Charges | 1,753 | 2,137 | 5,256 | 5,616 | |||||||||||
| Net Income | $ | 3,699 | $ | 3,317 | $ | 9,470 | $ | 7,362 | |||||||
| Weighted Average Common Shares Outstanding – Basic | 8,960 | 8,898 | 8,935 | 8,876 | |||||||||||
| Net Income per Common Share – Basic | $ | 0.41 | $ | 0.37 | $ | 1.06 | $ | 0.83 | |||||||
| Weighted Average Common Shares Outstanding – Diluted | 9,000 | 8,930 | 8,972 | 8,919 | |||||||||||
| Net Income per Common Share – Diluted | $ | 0.41 | $ | 0.37 | $ | 1.06 | $ | 0.83 | |||||||
| Artesian Resources Corporation | |||||||||||||||
| Condensed Consolidated Balance Sheet | |||||||||||||||
| (In thousands) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| September 30, | December 31, | ||||||||||||||
| 2015 | 2014 | ||||||||||||||
| Assets | |||||||||||||||
| Utility Plant, at original cost less | |||||||||||||||
| accumulated depreciation | $ | 403,101 | $ | 393,793 | |||||||||||
| Current Assets | 14,974 | 16,648 | |||||||||||||
| Regulatory and Other Assets | 11,787 | 11,772 | |||||||||||||
| $ | 429,862 | $ | 422,213 | ||||||||||||
| Capitalization and Liabilities | |||||||||||||||
| Stockholders’ Equity | $ | 129,189 | $ | 125,605 | |||||||||||
| Long Term Debt, Net of Current Portion | 103,911 | 104,954 | |||||||||||||
| Current Liabilities | 27,329 | 30,192 | |||||||||||||
| Net Advances for Construction | 9,359 | 10,228 | |||||||||||||
| Contributions in Aid of Construction | 97,562 | 92,429 | |||||||||||||
| Other Liabilities | 62,512 | 58,805 | |||||||||||||
| $ | 429,862 | $ | 422,213 | ||||||||||||
CONTACT: Contact: Nicki Taylor Investor Relations (302) 453-6900 [email protected]