Artesian Resources Corporation Reports First Quarter 2022 Results

Newark, Delaware, UNITED STATES


NEWARK, Del., May 03, 2022 (GLOBE NEWSWIRE) -- Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider of water and wastewater services, and a number of other related core business services, on the Delmarva Peninsula, today announced earnings results for the first quarter of 2022. Net income for the three months ended March 31, 2022 was $4.5 million, a $0.3 million, or 6.6% increase, compared to net income recorded during the first quarter of 2021. Diluted net income per share increased 4.4% to $0.47 for the three months ended March 31, 2022 compared to $0.45 for the first quarter of 2021.

Dividend Increase

Artesian announced on April 13, 2022 that its Board of Directors approved a 2.0% increase in the company’s Class A and Class B Common Stock dividend, raising the annual dividend to $1.0916 per share. The quarterly dividend of $0.2729 is payable on May 23, 2022 to shareholders at the close of business on May 9, 2022. This marks Artesian’s 118th consecutive quarterly dividend paid to shareholders.

First Quarter Results

Revenues totaled $22.2 million for the three months ended March 31, 2022, $1.5 million, or 7.5%, more than revenues for the three months ended March 31, 2021. Water sales revenue increased $0.3 million, or 1.8%, primarily due to continued growth in the customer base. Other utility operating revenue increased approximately $1.1 million primarily due to an increase in wastewater revenue related to the acquisition of Tidewater Environmental Services, Inc., or TESI, in January 2022, continued growth of the residential customer base in our existing wastewater territories, and industrial wastewater service revenue associated with process wastewater operations that started in June 2021.   Non-utility operating revenue increased approximately $0.1 million, or 5.6%, primarily due to 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.

“With the recent integration of TESI progressing smoothly, we remain on track to continue with our acquisition growth. We are expected to close on the acquisition of the Town of Clayton’s water system in the second quarter of 2022,” said Dian C. Taylor, Chair, President and CEO. “Purchasing both municipally-owned systems and regulated public systems is not only about growth; it allows us to do our part to strengthen water and wastewater infrastructure in the communities we serve, something that is crucial for the future,” said Taylor.

Operating expenses, excluding depreciation and income taxes, increased $1.1 million, or 9.3%, primarily related to an increase in utility operating expenses and property and other taxes. The majority of the utility operating expense increases are related to repair and maintenance costs, payroll and benefits costs, contractual service costs and purchased power costs associated with both water and wastewater operations. The utility operating expense increases are partially offset by a decrease in purchased water under a new contract, effective January 2022, in which the minimum amount of water required to be purchased was reduced.

Property and other taxes increased $0.1 million, or 5.8%, primarily due to an increase in utility plant subject to taxation. Property taxes are assessed on land, buildings and certain utility plant, which include the footage and size of pipe, hydrants and wells.

Capital Expenditures

As part of Artesian’s ongoing effort to ensure high-quality reliable service to customers, $12.6 million was invested in the first three months of 2022 in water and wastewater infrastructure projects and acquisitions. These investments include the installation of transmission and distribution facilities, replacement of aging mains, rehabilitation of treatment facilities and redevelopment of wells and pumping equipment. We also acquired wastewater utility plant assets related to the acquisition of TESI. “For the remainder of 2022, we will continue to execute our strategic initiatives, which include consolidating and enhancing our water and wastewater systems, in addition to expanding our service territory. Furthermore, with the recent acquisition of TESI, we plan to utilize our larger regional wastewater facilities in order to gain additional efficiencies in the treatment and disposal of wastewater,” said Taylor.

About Artesian Resources
Artesian Resources Corporation operates as a holding company of wholly-owned subsidiaries offering water and wastewater services, and a number of other related core business 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 8.4 billion gallons of water per year through 1,398 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, our expectations regarding the closing of our transaction to acquire a municipal water system, expectations regarding infrastructure investments, strategic initiatives and the continued growth in our business, service territory 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, including inflationary pressures, 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 
  March 31, 
  2022  2021 
Operating Revenues      
Water sales$18,143 $17,830 
Other utility operating revenue 2,525  1,376 
Non-utility revenue 1,519  1,439 
  22,187  20,645 
       
Operating Expenses      
Utility operating expenses 10,495  9,505 
Non-utility operating expenses 943  915 
Depreciation and amortization 3,085  3,012 
State and federal income taxes 1,419  1,351 
Property and other taxes 1,502  1,420 
  17,444  16,203 
       
Operating Income 4,743  4,442 
       
Allowance for funds used during construction 181  244 
Miscellaneous 1,446  1,402 
       
Income Before Interest Charges 6,370  6,088 
       
Interest Charges 1,887  1,882 
       
Net Income $4,483 $4,206 
       
Weighted Average Common Shares Outstanding - Basic 9,423  9,368 
Net Income per Common Share - Basic$0.48 $0.45 
       
Weighted Average Common Shares Outstanding - Diluted 9,455  9,407 
Net Income per Common Share - Diluted$0.47 $0.45 
       
       
       
Artesian Resources Corporation
Condensed Consolidated Balance Sheet
(In thousands)
(Unaudited)
       
 March 31, December 31, 
 2022 2021 
Assets      
Utility Plant, at original cost less accumulated depreciation$618,424 $590,431 
Current Assets 15,636  18,664 
Regulatory and Other Assets 18,698  15,620 
 $652,758 $624,715 
       
Capitalization and Liabilities      
       
Stockholders' Equity$180,561 $178,010 
Long Term Debt, Net of Current Portion 142,908  143,259 
Current Liabilities 51,924  47,206 
Advances for Construction 4,310  4,295 
Contributions in Aid of Construction 197,062  176,656 
Other Liabilities 75,993  75,289 
 $652,758 $624,715