Artesian Resources Corporation (Nasdaq:ARTNA), a leading provider
of water, wastewater services and related services on the Delmarva
Peninsula, announced today that revenues for the third quarter of
2017 were $22.4 million, a $0.5 million, or 2.4%, increase over the
same quarter of 2016. Water sales revenue increased $0.4
million, or 1.9%, to $20.0 million for the third quarter of 2017
compared to $19.7 million for the third quarter of 2016. The
increase is due primarily to an increase in the Distribution System
Improvement Charge, or DSIC, and an increase in the number of
customers served, partially offset by a decrease in water
consumption.
Excluding depreciation and income taxes,
operating expenses increased $0.9 million, or 7.8%, to $12.0
million for the third quarter of 2017 compared to $11.1 million for
the same period in 2016. Utility operating expenses for the
third quarter of 2017 were $10.1million, a $0.8 million, or 8.4%,
increase from the $9.3 million recorded during the same period in
2016. The increase is primarily the result of increased
payroll and employee benefit costs, and repair and maintenance
expenses related to water treatment equipment and storage
tanks.
Interest expenses decreased $0.1 million, or
6.9%, to $1.5 million for the third quarter of 2017 compared to
$1.6 million for the same period in 2016, primarily due to the
refinancing of the company’s Series O and Series Q First Mortgage
Bonds in January 2017, reducing interest rates from 8.17% and
4.75%, respectively, to 4.24%.
Net income for the third quarter of 2017 was
$3.9 million, a decrease of $0.4 million, or 9.6%, compared to the
third quarter of 2016. Diluted net income per share decreased
12.5%, to $0.42 for the third quarter of 2017 compared to $0.48 for
the third quarter of 2016.
Year to Date Results
Revenues during the first nine months of 2017
increased $2.4 million, or 4.0%, to $62.0 million. Water
sales revenue increased $1.8 million, or 3.3%, for the nine months
ended September 30, 2017 from the corresponding period in
2016. The increase in water sales revenue is primarily due to
an increase in the DSIC, an increase in the number of customers
served and a slight increase in overall water
consumption.
Excluding depreciation and income taxes,
operating expenses increased $2.3 million, or 7.2%, to $34.2
million for the nine months ended September 30, 2017 compared to
$31.9 million for the same period of 2016. Utility operating
expenses for the nine months ended September 30, 2017 were $28.6
million, a $2.0 million, or 7.4%, increase from the $26.6 million
recorded for the same period of 2016. The increase is
primarily the result of increased payroll and employee benefit
costs, and repair and maintenance expenses related to water
treatment equipment and storage tanks. The increase is also
attributed to an increase in purchased water during a relocation of
a major transmission main in northern New Castle County, Delaware
due to state highway construction.
Miscellaneous income decreased $0.4 million for
the first nine months of 2017 compared to the same period a year
ago primarily as a result of a pledge made to a non-profit entity
in Delaware being organized to support the State’s economic
development efforts.
Interest expenses decreased $0.4 million, or
7.6%, to $4.6 million for the nine months ended September 30, 2017
compared to $5.0 million for the same period of 2016 primarily due
to the refinancing of the company’s Series O and Series Q First
Mortgage Bonds in January 2017, reducing interest rates from 8.17%
and 4.75% respectively, to 4.24%. Additionally, there was an
interest rate change from 6.73% to 4.45% effective March 1, 2016
for the company’s Series S First Mortgage Bond.
Through the first nine months of 2017, Artesian
had net income of $10.3 million, an increase of $0.1 million, or
0.5%, compared to the same period of 2016. Diluted net income
per share decreased 0.9%, to $1.11 for the nine months ended
September 30, 2017 compared to $1.12 for the same period in
2016.
Artesian invested $28.3 million in
infrastructure improvements during the first nine months of 2017 to
ensure high quality and reliable service to its customers.
Significant infrastructure improvements included the replacement of
aging water mains, enhancement of water treatment facilities,
rehabilitation of pumping equipment, upgrade of meter equipment and
the relocation of mains as mandated by state highway
projects. Artesian also invested in wastewater projects in
Delaware, including ongoing construction of an eight mile pipeline
and a 90 million gallon storage lagoon for spray irrigation to
disperse treated wastewater from a new industrial customer.
“Through the first nine months of 2017, we have
invested in major water infrastructure improvements to ensure our
customers receive high-quality water and reliable service and in
wastewater projects in Sussex County, Delaware, where new
development is occurring,” said Dian C. Taylor, Chair, President
and CEO.
Declaration of Quarterly
Dividend
Artesian Resources Corporation also announced
today that its Board of Directors has approved a 1.5% increase in
the company’s Class A and Class B Common Stock dividend, raising
the annual dividend to $0.9408 per share. The quarterly
dividend of $0.2352 per share is payable November 22, 2017 to
shareholders of record at the close of business on November 13,
2017. This marks Artesian Resources Corporation’s 100th
consecutive quarterly dividend and the 21st consecutive year
dividends have been increased.
“Our 100th consecutive quarterly dividend marks
a milestone that reflects our strong commitment to deliver
consistent, solid returns to our shareholders while remaining
focused on operating efficiently to deliver safe and reliable water
and wastewater service to our customers,” said Taylor.
About Artesian
ResourcesArtesian 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 regulated water utility on the Delmarva
Peninsula and has been providing water service since 1905.
Artesian supplies 7.6 billion gallons of water per year through
1,260 miles of water main to approximately 301,000 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, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
Operating
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Water
sales |
$ |
20,045 |
|
|
$ |
19,680 |
|
|
$ |
55,228 |
|
$ |
53,440 |
|
Other
utility operating revenue |
|
1,036 |
|
|
|
976 |
|
|
|
3,075 |
|
|
2,752 |
|
Non-utility operating revenue |
|
1,275 |
|
|
|
1,172 |
|
|
|
3,744 |
|
|
3,480 |
|
|
|
22,356 |
|
|
|
21,828 |
|
|
|
62,047 |
|
|
59,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Utility
operating expenses |
|
10,070 |
|
|
|
9,292 |
|
|
|
28,564 |
|
|
26,603 |
|
Non-utility operating expenses |
|
736 |
|
|
|
698 |
|
|
|
2,085 |
|
|
1,924 |
|
Depreciation and amortization |
|
2,377 |
|
|
|
2,270 |
|
|
|
7,024 |
|
|
6,835 |
|
State and
federal income taxes |
|
2,546 |
|
|
|
2,498 |
|
|
|
6,403 |
|
|
6,473 |
|
Property
and other taxes |
|
1,173 |
|
|
|
1,125 |
|
|
|
3,537 |
|
|
3,371 |
|
|
|
16,902 |
|
|
|
15,883 |
|
|
|
47,613 |
|
|
45,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
5,454 |
|
|
|
5,945 |
|
|
|
14,434 |
|
|
14,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for funds used during construction |
|
83 |
|
|
|
87 |
|
|
|
228 |
|
|
160 |
|
Miscellaneous |
|
(62 |
) |
|
|
(26 |
) |
|
|
231 |
|
|
598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before
Interest Charges |
|
5,475 |
|
|
|
6,006 |
|
|
|
14,893 |
|
|
15,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges |
|
1,533 |
|
|
|
1,646 |
|
|
|
4,614 |
|
|
4,996 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
3,942 |
|
|
$ |
4,360 |
|
|
$ |
10,279 |
|
$ |
10,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Basic |
|
9,191 |
|
|
|
9,112 |
|
|
|
9,164 |
|
|
9,090 |
|
Net
Income per Common Share - Basic |
$ |
0.43 |
|
|
$ |
0.48 |
|
|
$ |
1.12 |
|
$ |
1.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding - Diluted |
|
9,286 |
|
|
|
9,177 |
|
|
|
9,262 |
|
|
9,154 |
|
Net
Income per Common Share - Diluted |
$ |
0.42 |
|
|
$ |
0.48 |
|
|
$ |
1.11 |
|
$ |
1.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Artesian Resources Corporation |
|
Condensed Consolidated Balance Sheet |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
|
|
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Utility
Plant, at original cost less |
|
|
|
|
|
|
|
|
|
|
|
|
accumulated depreciation |
$ |
447,762 |
|
|
$ |
425,502 |
|
|
|
|
|
|
|
|
Current
Assets |
|
16,393 |
|
|
|
14,635 |
|
|
|
|
|
|
|
|
Regulatory and Other Assets |
|
15,308 |
|
|
|
10,839 |
|
|
|
|
|
|
|
|
|
$ |
479,463 |
|
|
$ |
450,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization
and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
$ |
144,584 |
|
|
$ |
139,023 |
|
|
|
|
|
|
|
|
Long Term
Debt, Net of Current Portion |
|
105,860 |
|
|
|
102,331 |
|
|
|
|
|
|
|
|
Current
Liabilities |
|
23,232 |
|
|
|
19,328 |
|
|
|
|
|
|
|
|
Net
Advances for Construction |
|
8,200 |
|
|
|
8,169 |
|
|
|
|
|
|
|
|
Contributions in Aid of Construction |
|
121,544 |
|
|
|
112,106 |
|
|
|
|
|
|
|
|
Other
Liabilities |
|
76,043 |
|
|
|
70,019 |
|
|
|
|
|
|
|
|
|
$ |
479,463 |
|
|
$ |
450,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact:Nicki TaylorInvestor
Relations(302) 453-6900ntaylor@artesianwater.com
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