CORRECTING and REPLACING Southwest Water Company Reports First Quarter 2005 Financial Results
May 10 2005 - 8:25PM
Business Wire
Financial tables, Consolidated Balance Sheet Information, Current
liabilities for March 31, 2005, should read: $32,855 (sted
$32,390). The corrected release reads: SOUTHWEST WATER COMPANY
REPORTS FIRST QUARTER 2005 FINANCIAL RESULTS Southwest Water
Company (NASDAQ:SWWC) today reported its financial results for the
three months ended March 31, 2005. First Quarter 2005, Compared
with First Quarter 2004: -- Revenues increased 18 percent to $46.9
million from $39.7 million. -- Operating income rose 59 percent to
$1.5 million from $933,000. -- Net loss, after interest expense of
$2.0 million, was $241,000, or $0.01 per share, versus net income,
after interest expense of $1.1 million, of $18,000, equal to
break-even on a diluted per-share basis. Anton C. Garnier,
Southwest Water chairman and chief executive officer, said,
"Improved financial performance from our Services Group and the
positive results from the acquisition of our Texas-based Monarch
Utilities contributed to the positive, quarter-over-quarter growth
in revenues and operating income. A higher level of selling,
general and administrative expenses and increased interest expense,
combined with the adverse impact on Utility Group profitability of
nearly double the amount of average seasonal rainfall in Southern
California, resulted in a 2005 first quarter net loss." Utility
Group revenues for the 2005 first quarter rose $2.5 million, or 19
percent, compared with the same quarter last year, largely due to
the addition of Monarch Utilities, acquired in July 2004, and other
new customer connections. The increased revenues were partially
offset by a decrease in California utility revenues of $1.2 million
as a result of the exceptionally wet weather. For the 2005 first
quarter, Services Group revenues increased by $4.7 million, or 18
percent, compared with the 2004 first quarter. New operating
contracts, project work that had been delayed during 2004,
increased billable services and two small acquisitions added
approximately $7 million to revenues. This increase was partially
offset by a $2.3 million reduction in construction-related revenue
from the water treatment plant project in San Juan Capistrano,
which was substantially complete at the end of 2004. Segment
operating income in the Services Group for the first quarter of
2005 improved by approximately $2 million, compared with the same
period a year ago. In the Utility Group, segment operating income
for the first quarter of 2005 was basically flat in comparison to
that of the first quarter in the prior year, as the operating
income contribution from the Monarch Utilities acquisition offset
much of the negative impact of the unusually wet Southern
California weather. For the first three months of 2005, selling,
general and administrative expenses rose by $1.7 million, or 25
percent, compared with the first quarter of 2004, due to expenses
for audit, legal and other outside services, as well as higher
expenses associated with the Sarbanes-Oxley Act of 2002 and related
regulations. As expected, the recent acquisitions also resulted in
higher general and administrative expenses. In addition, interest
expense increased approximately $900,000, primarily due to the
increased debt level associated with the acquisition of Monarch
Utilities and additional fixed rate, long-term debt to fund
investment in utility plant assets. Garnier concluded, "Southwest
Water typically generates its lowest levels of revenue and
profitability in the first quarter of any calendar year, primarily
due to seasonably cool, wet weather that restricts utility water
sales. As demonstrated in the first quarter of 2005, our geographic
operations footprint, stretching from coast to coast, helps
mitigate the effects of regional weather extremes in any season."
Business Outlook The company reaffirms its guidance for 2005 as
follows: -- Revenues of approximately $195 million; -- Operating
income of approximately $19 million; -- Net income of approximately
$7.5 million; -- Utility Group revenues of approximately 42% of
total revenues; -- Company cash capital expenditures increasing to
approximately $20 million; and -- An effective tax rate of 36%.
This business outlook assumes normal weather conditions. Conference
Call The company will discuss its first quarter 2005 results in a
conference call and Web cast to be held today, May 10, 2005, at
4:30 p.m. Eastern time (1:30 p.m. Pacific). The conference call can
be accessed on the company's Web site at www.swwc.com. For those
unable to participate in the live Web cast, a replay will be
available shortly after the call on the company's Web site.
Southwest Water Company provides a broad range of operations,
management and maintenance services, including water production,
treatment and distribution; wastewater collection and treatment;
utility billing and collection; customer service; and utility
infrastructure construction management. The company owns regulated
public utilities and also serves cities, utility districts and
private companies under contract. More than two million people from
coast to coast depend on Southwest Water for high-quality, reliable
service. Additional information may be found on the company's Web
site: www.swwc.com. This document contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements, including expectations
relating to future revenues and income, the company's ability to
gain new business and control costs, involve risks and
uncertainties, as well as assumptions that, if they prove incorrect
or never materialize, could cause the results of the company to
differ materially from those expressed or implied by such
forward-looking statements. Actual results may differ materially
from these expectations due to changes in regulatory, political,
weather, economic, business, competitive, market, environmental and
other factors. More detailed information about these factors is
contained in the company's filings with the Securities and Exchange
Commission, including the company's 2004 Annual Report on Form
10-K. The company assumes no obligation to update these
forward-looking statements to reflect any change in future events.
-0- *T FINANCIAL HIGHLIGHTS - SOUTHWEST WATER COMPANY (unaudited
and in thousands, except per share amounts) Three Months Ended
March 31, 2005 2004 ----------- ----------- Operating revenues $
46,866 $ 39,727 Operating income 1,479 933 Net income (loss) (241)
18 Income (loss) per common share: Diluted $ (0.01) $ 0.00 Weighted
average outstanding common shares: Diluted 19,411 16,470 NOTE: Per
share amounts and weighted average outstanding common shares
reflect a 5 percent stock dividend on January 3, 2005. CONSOLIDATED
BALANCE SHEET INFORMATION March 31, December 31, 2005 2004
----------- ------------ Current assets $ 46,222 $ 45,287 Property,
plant and equipment, net 306,893 302,596 Total assets $ 413,737 $
404,809 Current liabilities $ 32,855 $ 35,734 Long-term debt
128,335 115,827 Contributions in aid of construction 89,511 89,623
Stockholders' equity 125,442 126,198 Total liabilities and
stockholders' equity $ 413,737 $ 404,809 *T
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