Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider
of water and wastewater services, and related services, on the
Delmarva Peninsula, today announced year-to-date and second quarter
results for 2020.
- Reports earnings per share of $0.92 year-to-date and
$0.49 in the second quarter of 2020
- Invested $20.6 million year-to-date in water and
wastewater infrastructure
- Municipal water acquisitions add approximately 3,000
people served in Delaware service area in 2020
Year-to-Date Results
Net income for the first six months ended June
30, 2020 was $8.6 million, a $1.3 million, or 17.3%, increase
compared to net income recorded during the first six months of
2019. Diluted earnings per share was $0.92 for the six months
ended June 30, 2020, a 16.5% increase compared to $0.79 for the six
months ended June 30, 2019.
Revenues totaled $41.7 million for the six
months ended June 30, 2020, $1.6 million, or 4.0%, more than
revenues recorded for the same six month period in 2019. Water
sales revenue increased 4.8% to $36.8 million for the six months
ended June 30, 2020 from $35.1 million for the same period in 2019,
primarily due to an increase in residential consumption revenue and
an increase in the number of customers served. This increase
is partially offset by a decrease in non-residential consumption
revenue. In addition, Distribution System Improvement
Charges, or DSIC, revenue and fixed fee revenue
increased.
Other utility operating revenue increased 2.9%
to $2.3 million for the six months ended June 30, 2020 from the
same period in 2019, primarily as a result of increases in
wastewater revenue from customer growth. This increase is
partially offset by a decrease in utility service and finance
charges, related to state mandated prohibitions on late fees and
service disconnections.
Non-utility revenue decreased $0.1 million, or
5.3%, for the six months ended June 30, 2020 compared to the same
period in 2019, primarily due to a decrease in contract service
revenue. This decrease is partially offset by an increase in
Service Line Protection Plan revenue.
Operating expenses, excluding depreciation and
income taxes, increased $0.2 million, or 1.0%, for the six months
ended June 30, 2020 compared to the same period in 2019.
Utility operating expenses increased $0.2 million, or 1.2%,
primarily due to an increase in bad debt expense related to state
mandated prohibitions on late fees and service disconnections for
non-payment resulting in a longer receivable cycle and the need for
increased reserves for bad debt, as well as an increase in payroll
and employee benefits costs. This increase is partially
offset by a decrease in general administration expenses related to
reduced in person group activity costs, meetings, training and
conferences, as well as a decrease in consulting services.
“We remain diligent in controlling our discretionary expenses as we
continue to provide essential utility services during the
pandemic,” said Dian C. Taylor, Chair, President & CEO.
Federal and state income tax expense increased
$0.4 million, or 15.7%, for the six months ended June 30, 2020
compared to the same period in 2019, primarily due to increased
pre-tax income in 2020 compared to 2019.
Miscellaneous income increased $0.3 million for
the six months ended June 30, 2020 compared to the same period in
2019, primarily due to an increase in patronage from CoBank as a
result of a higher average loan balance outstanding and a special
distribution in 2020.
Allowance for funds used during construction, or
AFUDC, increased $0.3 million as a result of higher long-term
construction activity subject to AFUDC for the six months ended
June 30, 2020 compared to the same period in 2019.
Interest expense increased $0.3 million during
the six months ended June 30, 2020 compared to the same period in
2019, primarily due to an increase in long-term debt interest
related to the Series V First Mortgage Bond issued on December 17,
2019. This increase is partially offset by a decrease in
short-term debt interest, primarily related to lower interest rates
and short-term borrowing levels in 2020.
Water Utility Acquisition
Growth
“Artesian’s investments in two recent
acquisitions highlight the success of our public-private
partnerships throughout the Delmarva Peninsula and our continued
focus on strategic growth,” said Taylor.
Artesian completed the purchase of water system
operating assets from the Town of Frankford in April 2020, serving
a population of nearly 1,000 in Sussex County, Delaware. The
total purchase price was $3.6 million.
Artesian completed the purchase of water system
operating assets from the City of Delaware City on August 3, 2020,
which services a population of over 2,000 in New Castle County,
Delaware. The total purchase price was $2.1 million.
In the past three years, Artesian has now
completed seven acquisitions, including the prior acquisitions of
the water systems of the Slaughter Beach Water Company, High Point,
Cantwell, Odessa and Historic Fort DuPont.
Capital Expenditures
As part of Artesian’s continued effort to ensure
high quality reliable service to customers, $20.6 million was
invested in the first six months of 2020, compared to $18.2 million
from the same period a year ago, in water and wastewater
infrastructure projects including installation of transmission and
distribution facilities, replacement of aging mains, rehabilitation
of treatment facilities, and redevelopment of wells and pumping
equipment.
Second Quarter Results
Net income for the second quarter of 2020 was
$4.6 million, a 20.9% increase compared to $3.8 million for the
second quarter of 2019. Diluted earnings per share was $0.49
for the second quarter of 2020, a 19.5% increase compared to $0.41
for the same period in 2019.
Revenues totaled $21.8 million for the three
months ended June 30, 2020, $1.1 million, or 5.3%, more than
revenues for the three months ended June 30, 2019. Water sales
revenue increased $1.2 million, or 6.8%, for the three months ended
June 30, 2020 from the corresponding period in 2019, due to an
increase in residential consumption revenue and an increase in the
number of customers served. This increase is partially offset
by a decrease in non-residential consumption revenue. In
addition, DSIC revenue and fixed fee revenue increased.
Other utility operating revenue decreased
approximately $0.1 million, or 5.7%, for the three months ended
June 30, 2020 compared to the three months ended June 30,
2019. The decrease is primarily due to a decrease in service
and finance charges, related to executive orders issued by state
governmental agencies prohibiting utility companies from charging
late fees and disconnecting service for non-payment. This
decrease is partially offset by an increase in wastewater revenue
from customer growth.
Operating expenses, excluding depreciation and
income taxes, increased $0.1 million, or 1.0%, for the three months
ended June 30, 2020, compared to the same period in 2019.
Utility operating expenses increased $0.1 million, or 1.2%, for the
three months ended June 30, 2020 compared to the three months ended
June 30, 2019, primarily due to an increase in bad debt expense
related to state mandated prohibitions on late fees and service
disconnections for non-payment resulting in a longer receivable
cycle and the need for increased reserves for bad debt, as well as
an increase in payroll and employee benefits costs. This
increase is partially offset by a decrease in general
administration expenses primarily related to reduced in person
group activity costs, such as meetings, training and
conferences.
Federal and state income tax expense increased
$0.2 million, or 16.0%, primarily due to increased pre-tax book
income for the three months ended June 30, 2020 compared to the
same period in 2019.
AFUDC increased $0.1 million as a result of
higher long-term construction activity subject to AFUDC for the
three months ended June 30, 2020 compared to the same period in
2019.
Interest expense increased $0.1 million, or
7.6%, primarily due to an increase in long-term debt interest
related to the Series V First Mortgage Bond issued on December 17,
2019. This increase is partially offset by a decrease in
short-term debt interest, primarily related to lower interest rates
and short-term borrowing levels in 2020.
COVID-19
Artesian continues to provide essential utility
services during the COVID-19 pandemic and is following social
distancing and remote work directives to protect the well-being of
its customers and employees. The full impact of the COVID-19
outbreak continues to evolve and management is actively monitoring
the situation and impacts on its results of operations, customer
billing and collections, suppliers, industry, and workforce.
“Water and wastewater services are truly essential to those
we serve. Artesian, through the dedication of all of its
employees, remains intently focused on our commitment to our
customers for high quality, reliable and safe water and wastewater
service during these challenging times,” said Taylor.
About Artesian
ResourcesArtesian Resources Corporation operates as a
holding company of wholly-owned subsidiaries offering water and
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 8.3 billion gallons of water per year through
1,331 miles of main to over 300,000 people.
Forward Looking StatementsThis
release contains forward looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 regarding,
among other things, the impacts of the COVID-19 pandemic and the
continued growth in our business and the number of customers and
population served. These statements involve risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements
including: changes in weather, changes in our contractual
obligations, changes in government policies, the timing and results
of our rate requests, failure to receive regulatory approval,
changes in economic and market conditions generally and other
matters discussed in our filings with the Securities and Exchange
Commission. While the Company may elect to update
forward-looking statements, we specifically disclaim any obligation
to do so and you should not rely on any forward-looking statement
as representation of the Company’s views as of any date subsequent
to the date of this release.
Contact:Nicki TaylorInvestor
Relations(302) 453-6900ntaylor@artesianwater.com
|
Artesian Resources
Corporation |
Condensed
Consolidated Statement of Operations |
(In thousands,
except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Six months
ended |
|
June 30, |
|
June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
Water sales |
$ |
19,423 |
|
|
$ |
18,192 |
|
|
$ |
36,816 |
|
$ |
35,125 |
Other utility operating revenue |
|
1,084 |
|
|
|
1,150 |
|
|
|
2,336 |
|
|
2,270 |
Non-utility operating revenue |
|
1,245 |
|
|
|
1,310 |
|
|
|
2,501 |
|
|
2,642 |
|
|
21,752 |
|
|
|
20,652 |
|
|
|
41,653 |
|
|
40,037 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
Utility operating expenses |
|
9,359 |
|
|
|
9,249 |
|
|
|
18,593 |
|
|
18,370 |
Non-utility operating expenses |
|
733 |
|
|
|
779 |
|
|
|
1,462 |
|
|
1,546 |
Depreciation and amortization |
|
2,693 |
|
|
|
2,724 |
|
|
|
5,445 |
|
|
5,438 |
State and federal income taxes |
|
1,537 |
|
|
|
1,325 |
|
|
|
2,896 |
|
|
2,504 |
Property and other taxes |
|
1,306 |
|
|
|
1,255 |
|
|
|
2,672 |
|
|
2,575 |
|
|
15,628 |
|
|
|
15,332 |
|
|
|
31,068 |
|
|
30,433 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
6,124 |
|
|
|
5,320 |
|
|
|
10,585 |
|
|
9,604 |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for funds used during construction |
|
338 |
|
|
|
266 |
|
|
|
762 |
|
|
492 |
Miscellaneous |
|
(13 |
) |
|
|
(58 |
) |
|
|
1,075 |
|
|
742 |
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Interest Charges |
|
6,449 |
|
|
|
5,528 |
|
|
|
12,422 |
|
|
10,838 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest Charges |
|
1,883 |
|
|
|
1,750 |
|
|
|
3,782 |
|
|
3,470 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
4,566 |
|
|
$ |
3,778 |
|
|
$ |
8,640 |
|
$ |
7,368 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding - Basic |
|
9,326 |
|
|
|
9,276 |
|
|
|
9,311 |
|
|
9,267 |
Net Income per Common Share - Basic |
$ |
0.49 |
|
|
$ |
0.41 |
|
|
$ |
0.93 |
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding - Diluted |
|
9,367 |
|
|
|
9,324 |
|
|
|
9,357 |
|
|
9,319 |
Net Income per Common Share - Diluted |
$ |
0.49 |
|
|
$ |
0.41 |
|
|
$ |
0.92 |
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
|
|
Artesian Resources Corporation |
Condensed
Consolidated Balance Sheet |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
|
|
2020 |
|
2019 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Utility Plant, at original cost less |
|
|
|
|
|
|
|
|
|
|
|
accumulated depreciation |
$ |
544,575 |
|
|
$ |
530,721 |
|
|
|
|
|
|
|
Current Assets |
|
14,500 |
|
|
|
14,207 |
|
|
|
|
|
|
|
Regulatory and Other Assets |
|
16,824 |
|
|
|
15,440 |
|
|
|
|
|
|
|
|
$ |
575,899 |
|
|
$ |
560,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
$ |
162,910 |
|
|
$ |
160,268 |
|
|
|
|
|
|
|
Long Term Debt, Net of Current Portion |
|
143,183 |
|
|
|
144,156 |
|
|
|
|
|
|
|
Current Liabilities |
|
36,473 |
|
|
|
25,599 |
|
|
|
|
|
|
|
Advances for Construction |
|
5,058 |
|
|
|
5,421 |
|
|
|
|
|
|
|
Contributions in Aid of Construction |
|
154,883 |
|
|
|
149,479 |
|
|
|
|
|
|
|
Other Liabilities |
|
73,392 |
|
|
|
75,445 |
|
|
|
|
|
|
|
|
$ |
575,899 |
|
|
$ |
560,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Artesian Resources (NASDAQ:ARTNA)
Historical Stock Chart
From Feb 2024 to Mar 2024
Artesian Resources (NASDAQ:ARTNA)
Historical Stock Chart
From Mar 2023 to Mar 2024