CLINTON, Conn., Aug. 9, 2010 (GLOBE NEWSWIRE) -- Connecticut Water Service, Inc. (Nasdaq:CTWS) announced net income of $2.3 million and earnings per basic average share (EPS) of $0.28 for the second quarter of 2010, compared to net income of $2.3 million and EPS of $0.27 for the second quarter of 2009. Total revenue grew to $17.5 million from $16.7 million, an increase of $784,000, or 5%. Total revenue includes all revenues generated by the Company's three business segments: Water Activities, Services and Rentals, and Real Estate.
The increased revenues were partially offset by a $353,000, or 32%, increase in interest and debt expenses for the quarter related to a long-term financing completed at the end of 2009. Revenue growth was further offset by a $565,000, or 25%, increase in income tax and depreciation expenses for the quarter. The higher tax expense was due to a higher effective tax rate and increased pre-tax net income.
Second-quarter net income in the Water Activities segment, the Company's principal business, grew to $2.1 million from $2.0 million in 2009, an increase of 4.9%. The gain was largely attributable to increased revenue through implementation of the Water Infrastructure and Conservation Adjustment (WICA) surcharge that was added to customer bills in July of 2009. The WICA surcharge for the second quarter of 2010 was 2.1%.
Operating and Maintenance (O&M) expenses declined by $399,000, or 4.8%, from the 2009 second quarter. The decline was largely due to cost containment efforts; reduced use of outside services; and lower administrative costs associated with property, liability and medical insurance costs.
The Services and Rentals segment continued to perform consistently, producing EPS of slightly more than $0.02 in 2010. There was no activity in the Real Estate segment in the second quarter of either 2010 or 2009.
Eric W. Thornburg, Chairman, President, and Chief Executive Officer, stated, "I am proud of Connecticut Water employees who, through their commitment to cost containment, have been able to hold O&M expense for the quarter at levels comparable to the second quarter of 2008 despite upward pressure on the cost of water treatment, electricity and employee wages and benefits over the past two years. I am especially pleased that they were able to do that while still delivering world-class customer service."
For the first six months of 2010, the Company reported net income of $3.4 million and basic EPS of $0.40. These results were unchanged from the first six months of 2009. Total revenue increased $1.2 million to $32.7 million from $31.4 million in 2009. The revenue increase was largely offset by higher income tax, depreciation, and interest and debt expenses for the period.
Mr. Thornburg noted that the Company's results through the second quarter of 2010 do not include any effect from a decision last month by the Connecticut Department of Public Utility Control (DPUC) to grant an increase in revenues of $8.0 million, or 12.7%, over previous rates. The increase took effect on July 14, 2010. The rates approved by the DPUC folded in approximately $1.3 million in revenue associated with the 2.1% WICA surcharge that has been included on customer bills since January 1, 2010.
Connecticut Water Service, Inc. is the largest publicly traded water company based in New England. Through its wholly-owned public water utility subsidiary, The Connecticut Water Company, the Company provides drinking water to nearly 90,000 customers, or about 300,000 people, in 55 towns throughout Connecticut.
The Connecticut Water Service, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2893
| Connecticut Water Service, Inc. & Subsidiaries | ||||
| Condensed Consolidated Statements of Income (unaudited) | ||||
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Three Months Ended June 30, |
Six Months Ended June 30, |
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| (In thousands except per share amounts) | 2010 | 2009 | 2010 | 2009 |
| Operating Revenues | $15,901 | $15,147 | $29,702 | $28,528 |
| Other Water Activities Revenues | 304 | 315 | 635 | 606 |
| Real Estate Revenues | -- | -- | -- | -- |
| Service and Rentals Revenues | 1,267 | 1,226 | 2,347 | 2,303 |
| Total Revenues | $17,472 | $16,688 | $32,684 | $31,437 |
| Operating Expenses | $12,360 | $12,125 | $24,058 | $23,438 |
| Other Utility Income, Net of Taxes | $173 | $193 | $353 | $348 |
| Total Utility Operating Income | $3,714 | $3,215 | $5,997 | $5,438 |
| Gain on Property Transactions, Net of Taxes | $-- | $-- | $-- | $-- |
| Non-Water Sales Earnings (Services and Rentals), Net of Taxes | $200 | $253 | $436 | $462 |
| Net Income | $2,312 | $2,266 | $3,382 | $3,410 |
| Net Income Applicable to Common Shareholders | $2,302 | $2,256 | $3,363 | $3,391 |
| Basic Earnings Per Average Common Share | $0.28 | $0.27 | $0.40 | $0.40 |
| Diluted Earnings Per Average Common Share | $0.27 | $0.27 | $0.39 | $0.40 |
| Basic Weighted Average Common Shares Outstanding | 8,522 | 8,439 | 8,512 | 8,429 |
| Diluted Weighted Average Common Shares Outstanding | 8,624 | 8,513 | 8,612 | 8,503 |
| Book Value Per Share | $12.62 | $12.21 | $12.62 | $12.21 |
| Condensed Consolidated Balance Sheets (unaudited) | ||
| (In thousands) | June 30, 2010 | June 30, 2009 |
| ASSETS | ||
| Net Utility Plant | $333,422 | $310,576 |
| Current Assets | 19,755 | 15,404 |
| Other Assets | 67,687 | 56,808 |
| Total Assets | $420,864 | $382,788 |
| CAPITALIZATION AND LIABILITIES | ||
| Shareholders' Equity | $109,031 | $104,146 |
| Preferred Stock | 772 | 772 |
| Long-Term Debt | 111,740 | 92,094 |
| Current Liabilities | 35,787 | 25,492 |
| Other Liabilities and Deferred Credits | 163,534 | 160,284 |
| Total Capitalization and Liabilities | $420,864 | $382,788 |
This news release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company's results of operations, financial position, and long-term strategy. These forward-looking statements are based on current information and expectations, and are subject to risks and uncertainties discussed in our filings with the Securities and Exchange Commission, which could cause the Company's actual results to differ materially from expected results. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.