CLINTON, Conn., Nov. 9, 2011 (GLOBE NEWSWIRE) -- Connecticut Water Service, Inc. (Nasdaq:CTWS) announced net income of $3.7 million and earnings per basic share (EPS) of $0.43 for the third quarter of 2011 compared to net income of $4.7 million and EPS of $0.54 for the third quarter of 2010. Total revenue was $22.2 million in the third quarter of 2011 compared to $22.7 million for the same period of 2010.
In the third quarter of 2011, net income in the Company's core business, the Water Activities Segment, was $3.3 million, or $0.39 per basic common share, on revenues of $21 million. In the same period of 2010, net income from the segment totaled $4.5 million, or $0.52 per basic common share, on revenues of $21.4 million.
Third Quarter Operating Results
Water production was down 11% in the quarter, in large part due to the difference in weather from 2010 and associated changes in customers' usage. The third quarter of 2011 had cooler temperatures and unusually high precipitation levels, including the extraordinary rainfall from Tropical Storm Irene. During the months of June, July and August 2011, the Company's service area experienced 142% of normal precipitation in contrast to the 84% of normal precipitation in 2010.
Eric W. Thornburg, Chairman, President and Chief Executive Officer of Connecticut Water, said "The Company produced solid results for the quarter considering the impacts of the fifth wettest summer since 1895 and a $0.04 per share impact from expenses related to Tropical Storm Irene." Mr. Thornburg added, "I am extremely proud of my colleagues here at Connecticut Water who maintained safe and reliable water service to virtually 100% of our customers despite extended power outages at more than 100 of our facilities in the days following the landfall of Irene in Connecticut.
With the Company's continued cost containment efforts, Operations and Maintenance expense increased just $60,000 despite approximately $400,000 of additional costs resulting from the storm. Depreciation expense increased in 2011 reflecting the continued investment in infrastructure throughout the regulated operations and information technology improvements. Income tax expense increased due to higher taxable income resulting from expected timing differences in 2011 as well as the effect of an incremental federal tax rate increase.
Nine Month Operating Results
For the first nine months of 2011, the Company reported net income of $9.5 million and earnings per basic average share (EPS) of $1.10 compared to net income of $8.0 million and EPS of $0.94 for the same period of 2010. Total revenue for the nine month period grew to $58.5 million from $55.4 million, an increase of $3.1 million, or 5.7%.
Operation and Maintenance expense in the first nine months decreased $194,000 to $24.5 million compared to $24.7 million for the same period in 2010. As with the three month results, the benefits of diligent cost containment efforts drove the decline.
Acquisition
Connecticut Water Service, Inc. announced in July 2011 that it had reached an agreement to purchase the operating subsidiary of Aqua America, Inc. in the state of Maine for an enterprise value of $53.5 million. The Maine operating subsidiary serves 16,000 customers, or a population of 48,000, across the state. The acquisition is consistent with the company's growth strategy and will make the company the largest U.S. based, publicly traded water utility in New England. The transaction is subject to approval by the Maine Public Utility Commission. The company currently expects that the acquisition will close early in 2012.
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)
| Three Months Ended | Nine Months Ended | |||
| September 30 | September 30 | |||
| (In thousands except per share amounts) | 2011 | 2010 | 2011 | 2010 |
| Operating Revenues | $20,628 | $21,006 | $53,976 | $50,708 |
| Other Water Activities Revenues | 412 | 397 | 1,112 | 1,032 |
| Real Estate Revenues | -- | -- | -- | -- |
| Service and Rentals Revenues | 1,194 | 1,315 | 3,457 | 3,662 |
| Total Revenues | $22,234 | $22,718 | $58,545 | $55,402 |
| Organizational Review | $-- | $820 | $-- | $820 |
| Operating Expenses | $15,799 | $15,302 | $41,417 | $39,360 |
| Other Utility Income, Net of Taxes | $225 | $206 | $613 | $559 |
| Total Utility Operating Income | $5,054 | $5,910 | $13,172 | $11,907 |
| Gain (Loss) on Property Transactions, Net of Taxes | $114 | $(7) | $114 | (7) |
| Non-Water Sales Earnings (Services and Rentals), Net of Taxes | $296 | $190 | $708 | $626 |
| Net Income | $3,734 | $4,651 | $9,472 | $8,033 |
| Net Income Applicable to Common Shareholders | $3,724 | $4,641 | $9,433 | $8,004 |
| Basic Earnings Per Average Common Share | $0.43 | $0.54 | $1.10 | $0.94 |
| Diluted Earnings Per Average Common Share | $0.42 | $0.54 | $1.08 | $0.93 |
| Basic Weighted Average Common Shares Outstanding | 8,622 | 8,542 | 8,601 | 8,522 |
| Diluted Weighted Average Common Shares Outstanding | 8,729 | 8,645 | 8,711 | 8,623 |
| Book Value Per Share | $13.50 | $13.00 | $13.50 | $13.00 |
Condensed Consolidated Balance Sheets (unaudited)
| (In thousands) | September 30, 2011 | September 30, 2010 |
| ASSETS | ||
| Net Utility Plant | $354,555 | $340,313 |
| Current Assets | 24,172 | 26,274 |
| Other Assets | 56,866 | 61,245 |
| Total Assets | $435,593 | $427,832 |
| CAPITALIZATION AND LIABILITIES | ||
| Shareholders' Equity | $117,986 | $112,459 |
| Preferred Stock | 772 | 772 |
| Long-Term Debt | 111,305 | 111,715 |
| Current Liabilities | 39,587 | 41,106 |
| Other Liabilities and Deferred Credits | 165,943 | 161,780 |
| Total Capitalization and Liabilities | $435,593 | $427,832 |
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.