Earnings Total $0.22 per Share in the Quarter
Maine Water Acquisition Completed
CLINTON, Conn., May 10, 2012 (GLOBE NEWSWIRE) -- Connecticut Water Service, Inc. (Nasdaq:CTWS) announced income of $1.9 million, or $0.22 per basic common share, on total revenues of $20.2 million in the first quarter of 2012. This was a decrease of $358,000, or $0.04 per basic common share, on total revenues of $17.5 million recorded in the first quarter of 2011. Total revenues include all revenues generated by the Company's three business segments: Water Activities, Services and Rentals, and Real Estate.
Connecticut Water's results for the first quarter of 2012 include a contribution of $355,000 in income, or $0.04 per share, from Maine Water, excluding CTWS financing costs of the acquisition.
Acquisition and Q1 Results
On January 1, 2012, Connecticut Water acquired Aqua Maine, Inc. from Aqua America, Inc., which was renamed The Maine Water Company. Maine Water serves about 16,000 customers, or 48,000 people, across the state of Maine. Connecticut Water purchased all of the capital stock of Aqua Maine, Inc. for an aggregate cash purchase price of approximately $35.6 million, subject to certain closing adjustments, plus assumption of approximately $17.7 million of long-term debt as of December 31, 2010. The 2011 results do not include Maine Water.
Eric W. Thornburg, Chairman, President and Chief Executive Officer, stated: "Maine Water has been seamlessly integrated into Connecticut Water, and the two companies share a culture of serving shareholders, customers and employees. The Company now has a multi-state platform to grow in New England and along the east coast."
First Quarter Operating Results
In the first quarter of 2012, income in the Company's core business, the Water Activities Segment, was $1.6 million, or $0.18 per basic common share, on total revenues of $18.9 million. In the same period of 2011, income from the segment totaled $2.1 million, or $0.24 per basic common share, on total revenues of $16.3 million. The increase in revenues for the Water Activities Segment was largely attributable to the acquisition of Maine Water. Excluding Maine Water, Connecticut Water saw a decrease in revenue from the Water Activities Segment of $93,000, which is attributable to a decline in water consumption for the period.
The Company saw consistent performance from its Services and Rentals Segment in the first quarter of 2012 that contributed $350,000, or $0.04 per basic common share, compared to $193,000, or $0.02 per share, in the first quarter of 2011. There was no activity in the Real Estate Segment in the first quarter of 2012 or 2011.
Operations and Maintenance (O&M) expenses increased $1.6 million, to $9.6 million in the first quarter of 2012. Excluding the O&M expenses attributable to Maine Water, O&M expenses for the Company increased $411,000, or 5.1%, which was primarily related to increases in pension and other employee benefit expenses.
The Company also saw an increase in its depreciation expense of $515,000, or 28%, compared to the same period of 2011. The acquisition of Maine Water accounts for $393,000 of the increase in depreciation expense. Interest and debt expense increased $720,000, or 53%, for the quarter compared to the first quarter of 2011. The increased expense is related to a $24 million debt offering in December 2011, interest costs associated with the additional borrowings required to acquire Maine Water, and interest charged on Maine Water's outstanding debt.
Mr. Thornburg stated, "First quarter results for 2012 are consistent with the Company's internal forecasts and we expect net income for the fiscal year 2012 will increase over 2011 levels due primarily to the addition of Maine Water and the expected completion of an open space land sale to the Town of Plymouth, Connecticut, later this month." He also noted that he was pleased that the Maine Legislature unanimously passed and Governor LePage signed enabling legislation in early April that promotes the replacement of aging water system infrastructure and allows for the timely recovery of associated costs. Maine's legislation is similar to Connecticut's WICA (Water Infrastructure and Conservation Adjustment) program and is expected to be available to Maine Water in mid-2013.
Connecticut Water Service, Inc. is the largest publicly traded water company based in New England. Through its wholly-owned public water utility subsidiaries, The Connecticut Water Company and The Maine Water Company, the Company provides drinking water to 106,000 customers, or about 350,000 people, throughout the states of Connecticut and Maine.
The Connecticut Water Service, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2893
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 operation, 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.
Connecticut Water Service, Inc. & Subsidiaries
Condensed Consolidated Statements of Income (unaudited)
| (In thousands except per share amounts) | March 31, 2012 | March 31, 2011 |
| Operating Revenues | $18,540 | $15,989 |
| Other Water Activities Revenues | 349 | 334 |
| Real Estate Revenues | -- | -- |
| Service and Rentals Revenues | 1,335 | 1,167 |
| Total Revenues | $20,224 | $17,490 |
| Total Operating Expenses | $14,989 | $12,629 |
| Other Utility Income, Net of Taxes | $176 | $178 |
| Total Utility Operating Income | $3,727 | $3,538 |
| Gain on Property Transactions, Net of Taxes | $-- | $-- |
| Non-Water Sales Earnings (Services and Rentals), Net of Taxes | $350 | $193 |
| Net Income | $1,910 | $2,268 |
| Net Income Applicable to Common Shareholders | $1,901 | $2,259 |
| Basic Earnings Per Average Common Share | $0.22 | $0.26 |
| Diluted Earnings Per Average Common Share | $0.22 | $0.26 |
| Basic Weighted Average Common Shares Outstanding | 8,651 | 8,579 |
| Diluted Weighted Average Common Shares Outstanding | 8,781 | 8,694 |
| Book Value Per Share | $13.47 | $13.09 |
Condensed Consolidated Balance Sheets (unaudited)
| (In thousands) | March 31, 2012 | March 31, 2011 |
| ASSETS | ||
| Net Utility Plant | $412,922 | $344,506 |
| Current Assets | 26,131 | 21,205 |
| Other Assets | 108,900 | 61,338 |
| Total Assets | $547,953 | $427,049 |
| CAPITALIZATION AND LIABILITIES | ||
| Shareholders' Equity | $118,506 | $113,916 |
| Preferred Stock | 772 | 772 |
| Long-Term Debt | 188,030 | 111,485 |
| Current Liabilities | 37,764 | 34,100 |
| Other Liabilities and Deferred Credits | 202,881 | 166,776 |
| Total Capitalization and Liabilities | $547,953 | $427,049 |