Artesian Resources Corporation Reports 4th Quarter and 2011 Year End Earnings

Mar 13, 2012, 16:00 ET from Artesian Resources Corporation

NEWARK, Del., March 13, 2012 /PRNewswire/ -- (NASDAQ: ARTNA) Artesian Resources Corporation (Artesian) today announced that revenues for 2011 were $65.1 million, up 0.3% from $64.9 million in 2010. Net income was $6.7 million, compared to $7.6 million last year. Diluted net income per common share for 2011 was $0.83 compared to $1.00 for 2010. The decrease is the result of heavier precipitation in 2011 that reduced per capita consumption and a decrease in non-utility contract revenue.

"In 2011, we recorded the highest revenues in our company's history while making significant investments to protect the safety, quality and reliability of our system," said Dian C. Taylor, Chair, President & CEO. "We also completed an agreement that solidified our expansion into Cecil County, Maryland.  Artesian now has the capability and capacity to provide water service throughout the county's growth corridor."

Artesian increased its annual common stock dividend twice during 2011, first by 0.5% to $0.7608 per share and then by an additional 1.5% to $0.772 per share. The company has increased its dividend each of the last 14 years, and has now paid dividends each quarter for the last 19 years.

Water sales revenues increased 1.6%, from $56.7 million in 2010 to $57.6 million in 2011. This increase was primarily due to the addition of service territory, an increase in bulk sales to other water providers and rate increases. However, average annual per capita consumption was lower during the year as a result of two late summer tropical systems that hit the Delmarva Peninsula. The number of residential water customers served by Artesian increased by 2,230, or 2.8%, in 2011.

Other utility revenues increased 11.1%, from $3.0 million in 2010 to $3.3 million in 2011, as a result of greater wastewater utility revenues and an increase in service charges, contract revenue and rental income.

Non-utility revenue was $4.2 million, down from $5.2 million in 2010. The decrease was primarily due to a decrease in contract revenue. The decrease was partially offset by an increase in revenues generated by Artesian's water and wastewater Service Line Protection Plans, which continue to be popular with customers. The Service Line Protection Plans provide coverage for all material and labor required to repair or replace participants' leaking water service or clogged sewer lines up to an annual limit.

Operating expenses, excluding income taxes and depreciation, increased by 2.0% to $39.3 million in 2011 as compared to $38.5 million in 2010. The major components of the increase were higher payroll and related benefits costs, higher rates for purchased water and greater repair, maintenance and fuel costs. The ratio of operating expenses, excluding depreciation and income taxes, to total revenues was 60.4% for 2011 and 59.3% for 2010.

For the three months ending December 31, 2011, revenues were $16.1 million, an increase of 0.9% from $15.9 million for the same time period in 2010.  Net income was $1.7 million, an increase of 36.5% compared to $1.3 million last year.  Diluted net income per common share for the three months ended December 31, 2011 was $0.20, up from $0.17 for the comparable period in 2010.  The ratio of operating expenses, excluding depreciation and income taxes, to total revenues was 58.7% for the three months ending December 31, 2011 and 63.5% for the same period in 2010.

Other highlights of the past year include the following:

  • Completed the purchase of several Cecil County-owned water systems, including systems in Meadowview, Harbourview, Pine Hills and Route 7, which serve approximately 1,500 customers.
  • Invested $15.8 million in 2011 for infrastructure and other improvements, including the automation of meter reading equipment to ensure top quality service for our customers.
  • Raised $15.6 million in net proceeds upon the issuance of 888,290 shares of common stock last summer to finance its utility plant construction program.
  • Launched a free and secure e-Billing service that enables customers to view, print and pay their water and sewer bills online.

About Artesian Resources

Artesian Resources Corporation operates as the holding company of eight wholly-owned subsidiaries offering water, wastewater and engineering services on the Delmarva Peninsula. Artesian Water Company, the principal subsidiary, is the oldest and largest investor-owned public water utility on the Delmarva Peninsula and has been providing water service since 1905.

Artesian Resources Corporation

Condensed Consolidated Statement of Operations

(In thousands, except per share amounts)

(Unaudited)

Three months ended

Year ended

December 31,

December 31,

2011

2010

2011

2010

Operating Revenues

Water sales

$

14,045

$

13,784

$

57,564

$

56,685

Other utility operating revenue

1,094

984

3,302

2,973

Non-utility revenue

934

1,168

4,204

5,227

16,073

15,936

65,070

64,885

Operating Expenses

Utility operating expenses

7,770

8,403

32,300

30,934

Non-utility operating expenses

724

858

3,148

3,780

Depreciation and amortization

1,880

1,828

7,410

7,032

State and federal income taxes

1,197

834

4,654

5,082

Property and other taxes

940

858

3,822

3,789

12,511

12,781

51,334

50,617

Operating Income

3,562

3,155

13,736

14,268

Allowance for funds used during construction

22

43

163

183

Miscellaneous

(49)

(56)

136

464

Income Before Interest Charges

3,535

3,142

14,035

14,915

Interest Charges

1,789

1,863

7,289

7,295

Net Income

$

1,746

$

1,279

$

6,746

$

7,620

Weighted Average Common Shares Outstanding - Basic

8,601

7,611

8,122

7,557

Net Income per Common Share - Basic

$

0.20

$

0.17

$

0.83

$

1.01

Weighted Average Common Shares Outstanding - Diluted

8,634

7,667

8,160

7,618

Net Income per Common Share - Diluted

$

0.20

$

0.17

$

0.83

$

1.00

Artesian Resources Corporation

Condensed Consolidated Balance Sheet

(In thousands)

(Unaudited)

December 31,

December 31,

2011

2010

Assets

Utility Plant, at original cost less

accumulated depreciation

$

353,397

$

345,383

Current Assets

13,250

14,033

Regulatory and Other Assets

12,090

12,113

$

378,737

$

371,529

Capitalization and Liabilities

Stockholder’s Equity

$

112,997

$

95,146

Long Term Debt, Net of Current Portion

106,539

105,061

Current Liabilities

24,660

41,885

Advances for Construction

14,405

16,159

Contributions in Aid of Construction

77,306

74,531

Other Liabilities

42,830

38,747

$

378,737

$

371,529

SOURCE Artesian Resources Corporation