Artesian Resources Corporation Reports Second Quarter Results

NEWARK, Del., Aug. 5 /PRNewswire-FirstCall/ -- Artesian Resources Corporation, (Nasdaq: ARTNA), a leading provider of water, wastewater and engineering services on the Delmarva Peninsula, today announced that revenues for the second quarter of 2010 were $16.0 million, a 4.1% increase from the $15.4 million in revenues recorded for the same three-month period of 2009.

Net income for the quarter was $1.8 million, while basic and diluted net income per share were $0.24 and $0.24. Net income decreased by $199,000 compared to the same period a year ago primarily due to a decrease in construction activity and lower utility operating income margins.

Water sales, which accounted for 86.9% of revenues, increased to $13.9 million, a 1.4% increase over the second quarter of 2009.

"Water sales increased in June due to the extremely hot weather in our service areas, but that was nearly offset by the very wet beginning to the quarter when water consumption was down," said Artesian President and CEO Dian C. Taylor.  

During the second quarter, non-utility revenues grew by $269,000 to $1.4 million, a 24.2% increase over the same period a year ago. The increase was primarily attributable to additional contract revenue for design and permitting services for a project in Middletown, Delaware, and for increased contract services for municipalities in Maryland. Non-utility revenues made up 8.6% of Artesian's total revenue for the quarter.

"We are focused on diversifying our Company to grow our service area and product offering, in order to expand into a total water resource company that includes less weather-dependent, non-utility businesses," Taylor said. "We made significant progress during the quarter."

Artesian received Maryland Public Service Commission (PSC) approval for our agreement to acquire the water assets of the Town of Port Deposit in Cecil County.  The acquisition, which was announced in December 2009, includes a water treatment facility with a capacity of up to 500,000 gallons per day, a Susquehanna River water appropriation permit, a 500,000 gallon ground storage tank, water mains and water service rights to significant growth areas.

In Delaware, Artesian expanded its wastewater management capabilities with the launch of the Artesian Water Resource Management Partnership. Through the Partnership, Artesian is encouraging and supporting the use of reclaimed water for agricultural irrigation and other needs by providing planning, engineering, and technical expertise and bringing together various state, local and private partners needed for water resource management project approvals. The Artesian Water Resource Management Partnership's project with the town of Middletown, completed with the assistance of Delaware's Governor, Secretary of the Department of Natural Resources and Environmental Control and Secretary of Agriculture, has saved nearly 150 million gallons of ground water so far this year.

Operating expenses for the second quarter grew 5.9% to $12.4 million, primarily due to increases in payroll and employee benefit costs, purchased water expenses and increases in property and other taxes.  Our increased purchased water expenses included an intentional acceleration of takes from the Chester Water Authority in advance of an increase in their rates effective July 1, 2010.

As always, Artesian focused its operations, as well as its infrastructure investments, on continuing to ensure the safety, reliability and quality of its water system.  Even though Artesian's network of deep wells provides some of the cleanest supplies of water found in the region, the Company tests and treats its water to ensure quality at the tap. The company continues to meet all federal Safe Drinking Water Act requirements.

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.

SOURCE Artesian Resources Corporation