Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider
of water and wastewater services, and related services, on the
Delmarva Peninsula, today announced third quarter and year-to-date
results for 2021.
- Increased common stock dividend by 2.5% as announced on
September 22, 2021, marking a 4% increase this year
- Invested $29.7 million year-to-date in water and
wastewater infrastructure
- Entered into an agreement to acquire Tidewater
Environmental Services, Inc., a regulated wastewater company, which
will more than double the number of wastewater customers served in
Delaware
Year-to-Date Results
Net income was $13.8 million, a $0.1 million, or
0.5%, increase compared to net income recorded during the nine
months ended September 30, 2020. Diluted net income per share
remained the same at $1.46 for the nine months ended September 30,
2021 compared to the nine months ended September 30,
2020.
Revenues totaled $68.3 million, an increase of
$1.9 million, or 2.9%. Water sales revenue increased $1.0 million,
or 1.7%, primarily due to an increase in fixed fee revenue related
to customer growth and an increase in non-residential consumption
revenue. Other utility operating revenue increased $0.4 million, or
9.1%, primarily due to an increase in wastewater revenue related to
customer growth, offset by a decrease in industrial wastewater
service revenue resulting from adjustments related to the amounts
recorded for the minimum required volume of wastewater under
contract, pursuant to a settlement agreement. In addition, service
and finance charges increased, related to executive orders that
were issued by state governmental agencies in 2020 requiring
utility companies to prohibit late fees and service disconnections
for non-payment that since have been lifted. Non-utility operating
revenue increased 12.7% to $4.3 million, primarily due to an
increase in contract service revenue related to a contract for the
design and construction of wastewater infrastructure for a third
party 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 demonstrate Artesian’s ability to
steadily grow our business through the consistent and successful
execution of long-term strategies,” said Dian C. Taylor, Chair,
President and CEO. “We entered into an agreement in August for an
acquisition of Tidewater Environmental Services, Inc. that supports
the continued expansion of our wastewater business in Sussex
County, Delaware, which was approved by the Delaware Public Service
Commission on October 27th. Our Sussex Regional Recharge Facility
has been accepting treated industrial process wastewater from Allen
Harim since June, initiating our long-term mutually beneficial
arrangement protecting the environment. We also continue to invest
in both our water and wastewater infrastructure to meet the demand
of new home construction in growing communities,” said
Taylor.
Operating expenses, excluding depreciation and
income taxes, increased $1.2 million, or 3.5%, primarily related to
increases in utility and non-utility operating expenses and an
increase in property and other taxes. The increases in utility
operating expenses are mainly the result of increases in water and
wastewater treatment facilities and equipment maintenance costs,
purchased water costs, and payroll and benefits 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. Non-utility operating expenses increased primarily due to
an increase in costs associated with a wastewater infrastructure
design and construction contract and an increase in plumbing
services related to Service Line Protection Plan repairs.
Property and other taxes increased $0.1 million,
or 2.8%, 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.
Depreciation and amortization expense increased
$0.7 million, or 8.2%, 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 $0.2 million as a result of lower long-term
construction activity subject to AFUDC.
Capital Expenditures
Artesian invested approximately $29.7 million in
the first nine months of 2021 to enhance and expand our water and
wastewater infrastructure systems and to continue our on-going
effort to ensure high quality reliable service to customers. These
investments in water and wastewater infrastructure include the
installation of transmission and distribution facilities,
replacement of aging mains, rehabilitation of treatment facilities,
and redevelopment of wells and pumping equipment. These investments
also include the construction of a water treatment plant and
installation of an interconnection, located in the fast growing
area of Sussex County, Delaware. The Company remains on track to
continue this level of investments in our water and wastewater
infrastructure systems through 2021.
Third Quarter Results
Revenues totaled $25.0 million, an increase of
$0.3 million, or 1.0%. Water sales revenue decreased $0.1 million,
or 0.4%, primarily due to a decrease in residential consumption
revenue, partially offset by an increase in fixed fee revenue
related to customer growth. Other utility operating revenue
increased $0.2 million, or 7.9%, primarily due to an increase in
wastewater revenue related to customer growth, offset by a decrease
in industrial wastewater service revenue resulting from the timing
of revenue related to the minimum required volume of wastewater
under contract. Non-utility operating revenue increased 13.0% to
$1.5 million, primarily due to an increase in contract service
revenue related to a contract for the design and construction of
wastewater infrastructure for a third party and an increase in
Service Line Protection Plan revenue.
Operating expenses, excluding depreciation and
income taxes, increased $0.1 million, or 0.7%, primarily related to
an overall net increase in utility and non-utility operating
expenses. The increases in utility operating expenses are mainly
the result of an increase in repair and maintenance costs,
primarily related to increases in water and wastewater treatment
facilities and equipment maintenance costs. This increase is mostly
offset by a decrease in payroll and benefits costs, related to a
decrease in variable compensation, partially offset by an increase
in the number of employees and annual wage increases. In addition,
the bad debt reserve decreased, related to non-payment of water
customer receivable balances resulting from the COVID-19 pandemic.
Non-utility operating expenses increased primarily due to an
increase in costs associated with a wastewater infrastructure
design and construction contract and an increase in plumbing
services related to Service Line Protection Plan repairs.
Depreciation and amortization expense increased
$0.1 million, or 4.7%, 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
ResourcesArtesian 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 StatementsThis
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 regulated wastewater
company, including expectations regarding infrastructure
investments, acquisition agreements 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 TaylorInvestor
Relations(302) 453-6900ntaylor@artesianwater.com
Artesian Resources
Corporation |
|
Condensed
Consolidated Statement of Operations |
|
(In thousands,
except per share amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
|
Nine months
ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Water sales |
$ |
21,279 |
|
|
$ |
21,362 |
|
|
$ |
59,187 |
|
$ |
58,178 |
|
Other utility operating revenue |
|
2,245 |
|
|
|
2,080 |
|
|
|
4,818 |
|
|
4,416 |
|
Non-utility operating revenue |
|
1,463 |
|
|
|
1,295 |
|
|
|
4,279 |
|
|
3,796 |
|
|
|
24,987 |
|
|
|
24,737 |
|
|
|
68,284 |
|
|
66,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Utility operating expenses |
|
10,957 |
|
|
|
10,947 |
|
|
|
30,307 |
|
|
29,541 |
|
Non-utility operating expenses |
|
979 |
|
|
|
926 |
|
|
|
2,756 |
|
|
2,387 |
|
Depreciation and amortization |
|
2,969 |
|
|
|
2,835 |
|
|
|
8,958 |
|
|
8,280 |
|
State and federal income taxes |
|
1,784 |
|
|
|
1,784 |
|
|
|
4,677 |
|
|
4,680 |
|
Property and other taxes |
|
1,400 |
|
|
|
1,376 |
|
|
|
4,160 |
|
|
4,048 |
|
|
|
18,089 |
|
|
|
17,868 |
|
|
|
50,858 |
|
|
48,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
6,898 |
|
|
|
6,869 |
|
|
|
17,426 |
|
|
17,454 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for funds used during construction |
|
112 |
|
|
|
155 |
|
|
|
727 |
|
|
917 |
|
Miscellaneous |
|
(44 |
) |
|
|
(53 |
) |
|
|
1,299 |
|
|
1,022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Interest Charges |
|
6,966 |
|
|
|
6,971 |
|
|
|
19,452 |
|
|
19,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Charges |
|
1,910 |
|
|
|
1,908 |
|
|
|
5,685 |
|
|
5,690 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
5,056 |
|
|
$ |
5,063 |
|
|
$ |
13,767 |
|
$ |
13,703 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding - Basic |
|
9,404 |
|
|
|
9,338 |
|
|
|
9,389 |
|
|
9,320 |
|
Net Income per Common Share - Basic |
$ |
0.54 |
|
|
$ |
0.54 |
|
|
$ |
1.47 |
|
$ |
1.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding - Diluted |
|
9,432 |
|
|
|
9,377 |
|
|
|
9,421 |
|
|
9,363 |
|
Net Income per Common Share - Diluted |
$ |
0.54 |
|
|
$ |
0.54 |
|
|
$ |
1.46 |
|
$ |
1.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Artesian Resources Corporation |
|
Condensed
Consolidated Balance Sheet |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
|
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Utility Plant, at original cost less accumulated
depreciation |
$ |
581,565 |
|
|
$ |
559,561 |
|
|
|
|
|
|
|
|
Current Assets |
|
19,202 |
|
|
|
17,619 |
|
|
|
|
|
|
|
|
Regulatory and Other Assets |
|
15,676 |
|
|
|
16,038 |
|
|
|
|
|
|
|
|
|
$ |
616,443 |
|
|
$ |
593,218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
$ |
174,642 |
|
|
$ |
169,426 |
|
|
|
|
|
|
|
|
Long Term Debt, Net of Current Portion |
|
143,327 |
|
|
|
142,333 |
|
|
|
|
|
|
|
|
Current Liabilities |
|
47,998 |
|
|
|
43,724 |
|
|
|
|
|
|
|
|
Advances for Construction |
|
4,606 |
|
|
|
4,578 |
|
|
|
|
|
|
|
|
Contributions in Aid of Construction |
|
175,722 |
|
|
|
160,258 |
|
|
|
|
|
|
|
|
Other Liabilities |
|
70,148 |
|
|
|
72,899 |
|
|
|
|
|
|
|
|
|
$ |
616,443 |
|
|
$ |
593,218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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