Middlesex Water Company Reports Third Quarter Financial Results

Iselin, New Jersey, UNITED STATES


ISELIN, N.J., Nov. 01, 2019 (GLOBE NEWSWIRE) -- Middlesex Water Company (the “Company” or “Middlesex”), (Nasdaq: MSEX), a provider of water and wastewater services, today reported financial results for the quarter ended September 30, 2019.

Third Quarter Operating Results

Consolidated net income for the quarter was $11.1 million, a decrease of $1.2 million from $12.3 million for the same period in 2018.  Diluted earnings per share for the quarter were $0.66, down from $0.74 for the same period in 2018. 

Operating revenues decreased $0.9 million to $37.8 million as compared to $38.7 million for the same period in 2018 with unfavorable weather patterns in the mid-Atlantic region reducing customer demand for water. We continued to add customers in our Delaware system, Tidewater Utilities, Inc. (“Tidewater”), which offset a portion of the decline in water consumption.  Non-regulated revenues decreased $1.3 million. As previously described in other communications, we changed the structure of the wastewater component relative to our new 10-year contract (effective January 1, 2019) to operate the City of Perth Amboy, New Jersey’s (Perth Amboy) water and wastewater systems. This change also resulted in a related decrease in operating expenses for the quarter. On an annual basis, this amounts to $5.6 million in lower revenue.

Middlesex Chairman, President and Chief Executive Officer Dennis W. Doll said, “While unfavorable weather impacted consumption in the third quarter, we remained focused on strategic growth and increasing reliability and resiliency throughout our various systems.  We announced the acquisition of approximately 1,000 new customer connections in Delaware. We raised $60 million through the New Jersey Economic Development Authority by issuing tax-exempt first mortgage bonds to help fund the recently commenced $70 million upgrade to our largest treatment plant in New Jersey.  In addition, we were pleased to announce a 6.7 % increase in the common dividend in late October, demonstrating our ongoing commitment to returning value to shareholders. This increase represents our 47th year of consecutive dividend increases in our company’s history,” added Doll.

Operation and maintenance expenses were $17.7 million, down $0.4 million from the same period in 2018.  The lower expenses attributable to the Perth Amboy contract change partially mitigated increased labor related costs. We have added personnel in selected areas to meet increasing regulatory requirements as well as to meet the demands related to customer growth in a competitive job market.

Nine Month Operating Results

Consolidated net income for the nine months ended September 30, 2019 increased $0.4 million to $25.8 million. Diluted earnings per share were $1.55 compared to $1.54 for the same period in 2018. 

Consolidated operating revenues for the nine months ended September 30, 2019 were $101.9 million, a decrease of $3.0 million from the same period in 2018.  Unfavorable weather reduced customer demand for water and non-regulated revenues decreased due to changes in our Perth Amboy contract.  Partially offsetting these decreases was an April 1, 2018 base rate increase in our Middlesex System in New Jersey and Tidewater customer growth. 

Operation and maintenance expenses for the nine months ended September 30, 2019 decreased by $2.2 million as compared to the same period in 2018, due to reduced expenses associated with our new Perth Amboy operating contract offset by higher labor costs. 

Income Tax expense for the nine months ended September 30, 2019 decreased $2.6 million as compared with the same period in 2018, primarily due to the regulatory accounting treatment of tangible property regulations related expense deductions, lower-pre-tax income and a lower Tidewater effective income tax rate resulting from a March 2019 tariff rate reduction.

Board of Directors Declares Dividend

The Company’s Board of Directors declared a quarterly cash dividend of $0.25625 per share, payable December 2, 2019 to common shareholders as of November 15, 2019.  Middlesex has paid cash dividends continually since 1912. 

About Middlesex Water Company

Middlesex Water Company, organized in 1897, is an investor-owned water and wastewater utility, serving customers primarily in central and southern New Jersey and Delaware.  Information about Middlesex’s Direct Share Purchase and Sale and Dividend Reinvestment Plan can be found on our website.

This release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, our long-term strategy and expectations, the status of our acquisition program, the impact of our acquisitions, the impact of current and projected rate requests and the impact of our capital program on our environmental compliance. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: general economic business conditions, unfavorable weather conditions, the success of certain cost containment initiatives, changes in regulations or regulatory treatment, availability and the cost of capital, the success of growth initiatives and other factors discussed in our filings with the United States Securities and Exchange Commission.

Contact:  
Bernadette Sohler, Vice President – Corporate Affairs
Middlesex Water Company 
 (732) 638-7549
www.middlesexwater.com

         
         
 MIDDLESEX WATER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands except per share amounts)
         
    Three Months Ended September 30,   Nine Months Ended September 30,
  2019 2018 2019 2018
         
Operating Revenues$ 37,769 $38,713 $ 101,859 $104,809
         
Operating Expenses:       
 Operations and Maintenance17,669 18,114 50,569 52,773
 Depreciation4,246 3,792 12,415 11,137
 Other Taxes3,871 3,889 10,913 10,910
         
  Total Operating Expenses25,786 25,795 73,897 74,820
         
Operating Income11,983 12,918 27,962 29,989
         
Other Income (Expense):       
 Allowance for Funds Used During Construction871 424 2,030 805
 Other Income (Expense), net(4) 409 (142) 1,277
         
Total Other Income, net867 833 1,888 2,082
         
Interest Charges1,996 1,723 4,984 4,929
         
Income before Income Taxes10,854 12,028 24,866 27,142
         
Income Taxes(265) (262) (952) 1,683
         
Net Income11,119 12,290 25,818 25,459
         
Preferred Stock Dividend Requirements30 36 102 108
         
Earnings Applicable to Common Stock$ 11,089 $12,254 $ 25,716 $25,351
         
Earnings per share of Common Stock:       
 Basic$ 0.67 $0.75 $ 1.56 $1.55
 Diluted$ 0.66 $0.74 $ 1.55 $1.54
         
Average Number of       
 Common Shares Outstanding :       
 Basic16,610 16,394 16,520 16,379
 Diluted16,757 16,550 16,673 16,535
         
Cash Dividends Paid per Common Share$ 0.2400 $0.2238 $ 0.7200 $0.6713