CLINTON, Conn., May 8, 2014 (GLOBE NEWSWIRE) -- Connecticut Water Service, Inc. (Nasdaq: CTWS ) announced net income of $3.0 million in the first quarter of 2014. This was an increase of approximately 14% from the $2.6 million reported in the same period of 2013. Connecticut Water's earnings per basic average share (EPS) in the first quarter of 2014 was $0.27 compared to an EPS of $0.24 during the same period of 2013.
Revenues in the Company's two business segments that had activity in the period, Water Activities and Services and Rentals, grew by $515,000, or about 2.4%, in first quarter of 2014 to $22.0 million, from $21.5 million in the same period of in 2013. There was no activity in the Company's third business segment, Real Estate, in either the first quarter of 2013 or 2014.
First Quarter Operating Results
In the first quarter of 2014, net income in the Company's core business, the Water Activities Segment, was $2.6 million, or EPS of $0.23, on revenues of $20.6 million. In the same period of 2013, net income from the segment totaled $2.2 million, or EPS of $0.21, on revenues of $20.1 million. The increase in revenues for the Water Activities Segment was largely attributable to an increase in the Water Infrastructure and Conservation Adjustment (WICA) surcharge in Connecticut and higher water rates in Maine.
The Company saw consistent performance from its Services and Rentals Segment in the first quarter of 2014 that contributed $433,000, or EPS of $0.04, compared to $386,000, or EPS of $0.03, in the first quarter of 2013.
Operating and Maintenance Expenses (O&M) increased $289,000, or 2.8%, to $10.7 million in the first quarter of 2014. The increased expenses were largely related to employee wages, benefits and incentives.
Interest and debt expense for the quarter increased $321,000 to $1.7 million, from $1.3 million for the same period of 2013. The increase was related to a timing change in 2013 associated with a patronage refund from a bank cooperative.
2014 Regulatory Developments
On February 1, 2014, Maine Water's first Water Infrastructure Charge (WISC) became effective, as approved by the Maine Public Utilities Commission. Maine Water applies for and implements WISC on a division by division basis. The second WISC charge went into effect in the Biddeford Saco Division on May 1, 2014.
Eric W. Thornburg, Connecticut Water's President and CEO, stated, "We continue to execute on our strategy of investing in vital water infrastructure. As a result, we anticipate solid growth in earnings for 2014 through the use of the WICA and WISC." Mr. Thornburg further stated, "We successfully launched our Linebacker service line protection program in Maine in late 2013 and expect it to benefit our Services and Rentals segment in 2014."
Maine Water – Biddeford & Saco Merger
In January, the Biddeford & Saco Water Company was formally merged into Maine Water Company. Biddeford & Saco had been operating as a separate company, under Maine Water's leadership, since its acquisition by CTWS in December 2012. "Now that we have merged the companies, our focus is moving from integration to long-term value creation," stated Mr. Thornburg. He further stated, "We have already announced plans to consolidate the corporate and customer service functions of Maine Water in the Biddeford area. This will place our state leadership team and customer service functions in the area of highest customer density." The consolidation in the Biddeford area is expected to be completed by the end of 2014.
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 nearly 122,000 customers, or about 400,000 people, throughout the states of Connecticut and Maine.
This news 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 on our financial results, 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 Securities and Exchange Commission. 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, 2014 | March 31, 2013 |
| Operating Revenues | $20,260 | $19,729 |
| Other Water Activities Revenues | 360 | 399 |
| Real Estate Revenues | -- | -- |
| Service and Rentals Revenues | 1,412 | 1,389 |
| Total Revenues | $22,032 | $21,517 |
| Total Operating Expenses | $16,356 | $16,370 |
| Other Utility Income, Net of Taxes | $185 | $206 |
| Total Utility Operating Income | $4,089 | $3,565 |
| Gain on Property Transactions, Net of Taxes | $-- | $-- |
| Non-Water Sales Earnings (Services and Rentals), Net of Taxes | $433 | $386 |
| Net Income | $2,986 | $2,613 |
| Net Income Applicable to Common Shareholders | $2,977 | $2,604 |
| Basic Earnings Per Average Common Share | $0.27 | $0.24 |
| Diluted Earnings Per Average Common Share | $0.27 | $0.24 |
| Basic Weighted Average Common Shares Outstanding | 10,869 | 10,803 |
| Diluted Weighted Average Common Shares Outstanding | 11,061 | 10,965 |
| Book Value Per Share | $17.93 | $16.93 |
| Condensed Consolidated Balance Sheets (unaudited) | ||
| (In thousands) | March 31, 2014 | March 31, 2013 |
| ASSETS | ||
| Net Utility Plant | $473,703 | $449,592 |
| Current Assets | 43,791 | 33,145 |
| Other Assets | 112,510 | 95,518 |
| Total Assets | $630,004 | $578,255 |
| CAPITALIZATION AND LIABILITIES | ||
| Shareholders' Equity | $198,638 | $185,894 |
| Preferred Stock | 772 | 772 |
| Long-Term Debt | 174,400 | 177,941 |
| Current Liabilities | 20,534 | 12,382 |
| Other Liabilities and Deferred Credits | 154,464 | 123,871 |
| Contributions in Aid of Construction | 81,196 | 77,395 |
| Total Capitalization and Liabilities | $630,004 | $578,255 |
Daniel J Meaney, APR, Director of Corporate Communications Connecticut Water Service, Inc. 93 West Main Street, Clinton, CT 06413-1600 (860) 664-6016
