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
earnings results for 2022.
- Diluted net income per share increased to $0.65 in the
third quarter and to $1.65 year-to-date
- Net Income increased $1.1 million (21.5%) in the third
quarter and $1.9 million (13.8%) year-to-date
- Invested $36.7 million year-to-date in water and
wastewater infrastructure, including acquisitions
- Announced a settlement
agreement with the Delaware Sand & Gravel Trust (the Trust),
who will reimburse Artesian Water Company for treatment costs
associated with the release of contaminants from the Delaware Sand
& Gravel Landfill Superfund Site
Third Quarter Results
Net income was $6.1 million, a $1.1 million, or
21.5%, increase compared to net income recorded during the three
months ended September 30, 2021.
Revenues totaled $26.6 million for the three
months ended September 30, 2022, $1.7 million, or 6.7%, more than
revenues for the three months ended September 30, 2021. Comprising
this increase:
Other utility operating revenue increased
approximately $0.7 million, primarily due to an increase in
wastewater revenue associated with residential customer growth
resulting from the acquisition of Tidewater Environmental Services,
Inc., or TESI, in January 2022 and organic residential customer
growth.
Non-utility operating revenue increased
approximately $0.6 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, or SLPP, revenue.
Water sales revenue increased $0.4 million,
primarily due to an increase in overall water consumption revenue
and an increase in fixed fee revenue related to added
customers.
Operating expenses, excluding depreciation and
income taxes, increased $0.2 million, or 1.4%. Non-utility
operating expenses increased $0.6 million, primarily due to an
increase in costs associated with the wastewater infrastructure
design and construction contract and an increase in plumbing
services related to SLPP repairs.
Utility operating expenses decreased $0.5
million, primarily due to 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, and a decrease in
repair and maintenance costs related to reimbursements received
from the Trust for Artesian Water’s operating costs related to
certain treatment costs pursuant to a settlement agreement. These
decreases are partially offset by increases in water treatment
costs.
“We are pleased to once again share our positive
financial results. We remain committed to our continued focus on
strategic growth while increasing value to our shareholders” said
Dian C. Taylor, Chair and CEO. “Additionally, the settlement
agreement reached with the Trust without the need for costly
litigation demonstrates our continued commitment to our customers’
best interests and dedicated focus on environmental
stewardship.”
Depreciation and amortization expense increased
$0.2 million, or 8.1%, primarily due to continued investment in
utility plant providing supply, treatment, storage and distribution
of water to customers and service to our wastewater customers.
Allowance for funds used during construction, or
AFUDC, increased $0.3 million as a result of higher long-term
construction activity subject to AFUDC.
Long-term debt interest increased $0.3 million,
primarily related to an increase in long-term debt interest
associated with the Series W First Mortgage Bond issued on April
29, 2022.
Year-to-Date Results
Net income was $15.7 million, a $1.9 million, or
13.8%, increase compared to net income recorded during the nine
months ended September 30, 2021. Diluted net income per share
increased 13.0% to $1.65 for the nine months ended September 30,
2022 compared to $1.46 for the first nine months of
2021. Revenues totaled $73.8 million for the nine
months ended September 30, 2022, $5.7 million, or 8.4%, more than
revenues for the nine months ended September 30, 2021. Comprising
this increase:
Other utility operating revenue increased
approximately $3.7 million, primarily due to an increase in
wastewater revenue associated with residential customer growth
resulting from the acquisition of TESI in January 2022, industrial
wastewater services that started in June 2021, as well as organic
residential customer growth.
Non-utility operating revenue increased
approximately $1.7 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 SLPP
revenue.
Water sales revenue increased approximately $0.4
million, primarily due to an increase in fixed fee revenue related
to added customers and a slight increase in overall water
consumption revenue.
Operating expenses, excluding depreciation and
income taxes, increased $2.8 million, or 7.6%. Non-utility
operating expenses increased $1.7 million, primarily due to an
increase in costs associated with the wastewater infrastructure
design and construction contract and an increase in plumbing
services related to SLPP repairs.
Utility operating expenses increased $0.9
million, or 3.1%, primarily the result of increased costs
associated with repair, maintenance and treatment of our water and
wastewater systems as well as payroll and administrative costs. The
increase in repair and maintenance costs is partially offset by
reimbursements from the Trust for Artesian Water’s operating costs
related to certain treatment costs pursuant to a settlement
agreement. In addition, purchased water costs decreased related to
a decrease of water purchased 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 $0.2 million,
or 5.1%, primarily due to an increase in payroll taxes, related to
increased payroll related expenses and an increase in utility plant
subject to taxation.
Depreciation and amortization expense increased
$0.4 million, or 4.4%, primarily due to continued investment in
utility plant providing supply, treatment, storage and distribution
of water to customers and service to our wastewater customers.
Federal and state income tax expense increased
$0.3 million, or 6.4%, primarily due to higher pre-tax income in
2022 compared to 2021, partially offset by a decrease related to
stock options exercised.
AFUDC increased $0.2 million, as a result of
higher long-term construction activity subject to AFUDC.
Long-term debt interest increased $0.5 million,
primarily related to an increase in long-term debt interest
associated with the Series W First Mortgage Bond issued on April
29, 2022.
Capital Expenditures
As part of Artesian’s ongoing effort to ensure
high-quality reliable service to customers, $36.7 million was
invested in the first nine months of 2022 in water and wastewater
infrastructure projects and acquisitions, compared to $30.4 million
invested in the first nine months of 2021. We recently acquired
wastewater utility plant assets related to the acquisition of TESI
and purchased the Town of Clayton’s water utility plant assets.
These investments also include the installation of transmission and
distribution facilities, replacement of aging mains, rehabilitation
of treatment facilities, construction of new water storage tanks,
and redevelopment of wells and pumping equipment.
“We continue to make significant capital
investments to enhance existing capacities, increase
self-sufficiency and strategically meet the needs of continuing
development” said Taylor. “We are pleased that our sustained
investments have positioned us to successfully complete the
acquisitions of the water assets of the Town of Clayton and TESI
wastewater utility.”
About Artesian
ResourcesArtesian 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 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
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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
Water sales |
$ |
21,702 |
|
|
$ |
21,279 |
|
|
$ |
59,567 |
|
$ |
59,187 |
Other utility operating revenue |
|
2,841 |
|
|
|
2,177 |
|
|
|
8,281 |
|
|
4,566 |
Non-utility operating revenue |
|
2,039 |
|
|
|
1,463 |
|
|
|
5,932 |
|
|
4,279 |
|
|
26,582 |
|
|
|
24,919 |
|
|
|
73,780 |
|
|
68,032 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
Utility operating expenses |
|
10,428 |
|
|
|
10,889 |
|
|
|
30,994 |
|
|
30,055 |
Non-utility operating expenses |
|
1,570 |
|
|
|
979 |
|
|
|
4,418 |
|
|
2,756 |
Depreciation and amortization |
|
3,210 |
|
|
|
2,969 |
|
|
|
9,350 |
|
|
8,958 |
State and federal income taxes |
|
1,834 |
|
|
|
1,784 |
|
|
|
4,978 |
|
|
4,677 |
Property and other taxes |
|
1,458 |
|
|
|
1,400 |
|
|
|
4,371 |
|
|
4,160 |
|
|
18,500 |
|
|
|
18,021 |
|
|
|
54,111 |
|
|
50,606 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
8,082 |
|
|
|
6,898 |
|
|
|
19,669 |
|
|
17,426 |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for funds used during construction |
|
393 |
|
|
|
112 |
|
|
|
898 |
|
|
727 |
Miscellaneous |
|
(101 |
) |
|
|
(44 |
) |
|
|
1,311 |
|
|
1,299 |
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Interest Charges |
|
8,374 |
|
|
|
6,966 |
|
|
|
21,878 |
|
|
19,452 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest Charges |
|
2,230 |
|
|
|
1,910 |
|
|
|
6,205 |
|
|
5,685 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
6,144 |
|
|
$ |
5,056 |
|
|
$ |
15,673 |
|
$ |
13,767 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding - Basic |
|
9,477 |
|
|
|
9,404 |
|
|
|
9,451 |
|
|
9,389 |
Net Income per Common Share - Basic |
$ |
0.65 |
|
|
$ |
0.54 |
|
|
$ |
1.66 |
|
$ |
1.47 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding - Diluted |
|
9,492 |
|
|
|
9,432 |
|
|
|
9,473 |
|
|
9,421 |
Net Income per Common Share - Diluted |
$ |
0.65 |
|
|
$ |
0.54 |
|
|
$ |
1.65 |
|
$ |
1.46 |
|
|
|
|
|
|
|
|
|
|
|
|
Artesian Resources Corporation |
|
|
|
|
|
Condensed
Consolidated Balance Sheet |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
|
|
|
2022 |
|
2021 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Utility Plant, at original cost less |
|
|
|
|
|
|
|
|
|
|
|
accumulated depreciation |
$ |
655,960 |
|
|
$ |
590,431 |
|
|
|
|
|
|
|
Current Assets |
|
20,384 |
|
|
|
18,664 |
|
|
|
|
|
|
|
Regulatory and Other Assets |
|
26,460 |
|
|
|
15,620 |
|
|
|
|
|
|
|
|
$ |
702,804 |
|
|
$ |
624,715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
$ |
187,873 |
|
|
$ |
178,010 |
|
|
|
|
|
|
|
Long Term Debt, Net of Current Portion |
|
174,035 |
|
|
|
143,259 |
|
|
|
|
|
|
|
Current Liabilities |
|
32,876 |
|
|
|
47,206 |
|
|
|
|
|
|
|
Advances for Construction |
|
3,963 |
|
|
|
4,295 |
|
|
|
|
|
|
|
Contributions in Aid of Construction |
|
216,731 |
|
|
|
176,656 |
|
|
|
|
|
|
|
Other Liabilities |
|
87,326 |
|
|
|
75,289 |
|
|
|
|
|
|
|
|
$ |
702,804 |
|
|
$ |
624,715 |
|
|
|
|
|
|
|
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