Artesian Resources Corporation Reports Year-to-Date and Second Quarter 2021 Results

Newark, Delaware, UNITED STATES


NEWARK, Del., Aug. 04, 2021 (GLOBE NEWSWIRE) -- Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider of water and wastewater services, and related services, on the Delmarva Peninsula, today announced second quarter and year-to-date results for 2021.

  • Diluted net income per share increased to $0.93 year-to-date
  • Invested $22.1 million year-to-date in water and wastewater infrastructure
  • Completed construction of a water treatment facility located in Dagsboro, Sussex County, Delaware, which provides an additional 2.0 million gallons per day of water supply to this fast-growing area
  • Commenced operation of our Sussex Regional Wastewater Recharge Facility

Year-to-Date Results

Net income was $8.7 million, a $0.1 million, or 0.8%, increase compared to net income recorded during the six months ended June 30, 2020. Diluted net income per share increased 1.1% to $0.93 for the six months ended June 30, 2021 compared to $0.92 for the six months ended June 30, 2020.  

Revenues totaled $43.3 million, an increase of $1.6 million, or 3.9%. Water sales revenue increased $1.1 million, or 3.0%, primarily due to an increase in residential and non-residential consumption and an increase in the number of customers served. Other utility operating revenue increased $0.2 million, or 10.2%, primarily the result of an increase in wastewater revenue from customer growth. Non-utility operating revenue increased 12.6% to $2.8 million, primarily due to an increase in contract service revenue related to a contract for the design and construction of wastewater infrastructure and an increase in Service Line Protection Plan revenue that covers the cost of materials and labor to repair or replace participants’ leaking water services or clogged sewer lines.

“The results of our strategic focus on the provision of wastewater services in fast-growing Sussex County, Delaware, are evident by the increase in wastewater revenue seen as new residents continue to relocate to be near the Delaware beaches,” said Dian C. Taylor, Chair, President and CEO. “These new residents are also our new water customers. Our ability to provide both water and wastewater infrastructure has allowed for construction of new home communities in targeted areas to meet the demand of those seeking to relocate to this highly desirable area,” said Taylor.

Operating expenses, excluding depreciation and income taxes, increased $1.2 million, or 5.1%, primarily related to increases in utility and non-utility operating expenses. The increases are mainly the result of increases in payroll and benefits costs, water and wastewater treatment equipment maintenance costs and purchased water costs, partially offset by a decrease in bad debt reserve related to non-payment of water customer receivable balances resulting from the COVID-19 pandemic.

Depreciation and amortization expense increased $0.5 million, or 10.0%, primarily due to continued investment in utility plant providing supply, treatment, storage and distribution of water to customers and service to our wastewater customers.

Miscellaneous income increased $0.3 million, primarily due to an increase in patronage from CoBank, ACB as a result of a higher average loan balance outstanding.

Allowance for funds used during construction, or AFUDC, decreased $0.1 million as a result of lower long-term construction activity subject to AFUDC.

Capital Expenditures

As part of Artesian’s on-going effort to ensure high quality reliable service to customers, $22.1 million was invested in the first six months of 2021 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. Approximately $9.3 million of this investment includes critical infrastructure in Sussex County to construct a water treatment plant and complete an interconnection in Dagsboro. “We continue to make significant investments in water and wastewater infrastructure projects across our service areas, with a focus on ensuring on-going system reliability and keeping ahead of demand in fast growing areas,” said Taylor.

Second Quarter Results

Revenues totaled $22.6 million, an increase of $0.8 million, or 3.7%. Water sales revenue increased $0.7 million, or 3.4%, primarily due to an increase in non-residential consumption revenue and an increase in the number of customers served. Non-utility operating revenue increased 10.6% to $1.4 million, primarily due to an increase in contract service revenue related to a contract for the design and construction of wastewater infrastructure and an increase in Service Line Protection Plan revenue.

Operating expenses, excluding depreciation and income taxes, increased $0.6 million, or 4.9%, primarily related to increases in utility and non-utility operating expenses. The increases are mainly the result of increases in payroll and benefits costs, water and wastewater treatment equipment maintenance costs and purchased water costs, partially offset by a decrease in bad debt reserve related to non-payment of water customer receivable balances resulting from the COVID-19 pandemic.  

Depreciation and amortization expense increased $0.3 million, or 10.5%, primarily due to continued investment in utility plant providing supply, treatment, storage and distribution of water to customers and service to our wastewater customers.

About Artesian Resources
Artesian 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 1,368 miles of main to over a third of Delawareans.

Forward Looking Statements
This release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, our growth strategy, including expectations regarding infrastructure investments, and the continued growth in our business and the number of customers 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 Taylor
Investor Relations
(302) 453-6900
ntaylor@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, 
  2021   2020   2021  2020 
Operating Revenues            
Water sales$20,078  $19,423  $37,908 $36,816 
Other utility operating revenue 1,107   1,084   2,574  2,336 
Non-utility operating revenue 1,377   1,245   2,815  2,501 
  22,562   21,752   43,297  41,653 
             
Operating Expenses            
Utility operating expenses 9,754   9,359   19,350  18,593 
Non-utility operating expenses 862   733   1,777  1,462 
Depreciation and amortization 2,976   2,693   5,988  5,445 
State and federal income taxes 1,542   1,537   2,893  2,896 
Property and other taxes 1,341   1,306   2,761  2,672 
  16,475   15,628   32,769  31,068 
             
Operating Income 6,087   6,124   10,528  10,585 
             
Allowance for funds used during construction 371   338   615  762 
Miscellaneous (59)  (13)  1,343  1,075 
             
Income Before Interest Charges 6,399   6,449   12,486  12,422 
             
Interest Charges 1,894   1,883   3,775  3,782 
             
Net Income $4,505  $4,566  $8,711 $8,640 
             
Weighted Average Common Shares Outstanding - Basic 9,395   9,326   9,381  9,311 
Net Income per Common Share - Basic$0.48  $0.49  $0.93 $0.93 
             
Weighted Average Common Shares Outstanding - Diluted 9,425   9,367   9,416  9,357 
Net Income per Common Share - Diluted$0.48  $0.49  $0.93 $0.92 
             
Artesian Resources Corporation 
Condensed Consolidated Balance Sheet 
(In thousands) 
(Unaudited) 
             
 June 30, December 31,       
  2021  2020        
Assets            
Utility Plant, at original cost less            
accumulated depreciation$577,126  $559,561        
Current Assets 16,361   17,619        
Regulatory and Other Assets 16,484   16,038        
 $609,971  $593,218        
             
Capitalization and Liabilities            
             
Stockholders' Equity$171,860  $169,426        
Long Term Debt, Net of Current Portion 143,286   142,333        
Current Liabilities 49,749   43,724        
Advances for Construction 4,277   4,578        
Contributions in Aid of Construction 171,248   160,258        
Other Liabilities 69,551   72,899        
 $609,971  $593,218