Artesian Resources Corporation Reports 4th Quarter and 2017 Year-End Earnings
GlobeNewswire 14-Mar-2018 4:10 PM
NEWARK, Del., March 14, 2018 (GLOBE NEWSWIRE) -- Artesian Resources Corporation (NASDAQ:ARTNA), a leading provider of water, wastewater services and related services on the Delmarva Peninsula, today announced revenue and income for 2017. Revenues were $82.2 million, up 4.0% from $79.1 million in 2016. Net income increased 7.9% to $14.0 million, compared to $13.0 million in 2016. Diluted net income per common share was up 7.1% at $1.51 compared to $1.41 for 2016.
Water sales revenue increased 3.5% to $73.1 million from $70.6 million in 2016. The increase in water sales revenue is primarily due to an increase in the Distribution System Improvement Charge (DSIC), an increase in overall water consumption and an increase in the number of customers served.
Other utility operating revenue increased 9.5% from $3.8 million in 2016 to $4.2 million in 2017 as a result of an increase in wastewater customers served in existing and new developments in Sussex County, Delaware. We expect continued growth in the number of wastewater customers we serve in Sussex County, Delaware due to residential development and the desirability of this area as a retirement community, said Dian C. Taylor, Chair, President and CEO.
Non-utility revenue was $5.0 million up from $4.7 million in 2016, a 6.7% increase primarily due to an increase in Service Line Protection Plans revenue. 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 and internal plumbing lines.
Operating expenses, excluding depreciation and income taxes, increased $3.0 million, or 7.1% for the year ended December 31, 2017 compared to the year ended December 31, 2016. The majority of the increase in total operating expenses is related to the increase in utility operating expenses, which increased $2.6 million, or 7.3% for the year ended December 31, 2017 compared to the year ended December 31, 2016. The increase in overall operating expenses is primarily related to: increased payroll and employee benefit costs; repair and maintenance expenses, specifically carbon filter replacements; and maintenance of water treatment facilities and storage tanks.
Depreciation and amortization expense increased $0.4 million, or 4.0%, primarily due to continued investment in utility plant providing supply, treatment, storage and distribution of water to customers and service to our wastewater customers.
Interest expense decreased $0.5 million primarily due to the refinancing of the Series O and Series Q First Mortgage Bonds in January 2017, reducing interest rates from 8.17% and 4.75%, respectively, to 4.24%. Additionally, there was an interest rate change from 6.73% to 4.45% effective March 1, 2016 for the Series S First Mortgage Bond.
Federal and state income tax expense decreased $1.0 million, or 12.4%, from $8.3 million in 2016 to $7.3 million in 2017, primarily due to the federal Tax Cuts and Jobs Act of 2017.
In 2017 we invested $41.1 million to rehabilitate transmission and distribution facilities, improve existing treatment facilities, replace aging wells and pumping equipment, upgrade computer hardware and software and transportation equipment and upgrade and automate meter reading equipment. We firmly believe that investment in infrastructure drives economic growth, which is vital in making the Delmarva Peninsula a desirable place to live and conduct business, said Taylor. Investments also were made for the ongoing project to install an 8.5 mile pipeline and construct a 90 million gallon storage lagoon related to our agreement with Allen Harim LLC, a poultry processing plant in Harbeson, Delaware, to dispose of their treated process wastewater at Artesians facility near Milton, Delaware. We are dedicated to protecting and preserving the environment, partnering with industries to help address their wastewater needs and while helping to keep contaminants out of our waterways, said Taylor.
Fourth Quarter Financial Results
Net income increased 35.9% to $3.7 million for the three months ended December 31, 2017 compared to $2.7 million for the same period in 2016. Diluted net income per common share increased 33.3% to $0.40 for the three months ended December 31, 2017 compared to $0.30 for the same period in 2016.
For the three months ended December 31, 2017, revenues were $20.2 million, an increase of 4.0% from the $19.4 million recorded for the same period in 2016. Water sales revenue increased 4.0% to $17.8 million for the three months ended December 31, 2017. The increase in water sales revenue is the result of an increase in water consumption, an increase in the number of customers served and an increase in the Distribution System Improvement Charge.
Operating expenses, excluding income taxes and depreciation, increased by 6.9% to $11.6 million for the three months ended December 31, 2017 compared to $10.9 million for the same period in 2016. The increase in operating expenses is the result of increased payroll and employee benefit costs, and repair and maintenance expenses related to the maintenance of water treatment facilities and storage tanks.
Interest expense decreased 5.2% from $1.6 million for the three months ended December 31, 2016 to $1.5 million for the three months ended December 31, 2017 primarily due to the refinancing of the companys Series O and Series Q First Mortgage Bonds in January 2017, reducing interest rates from 8.17% and 4.75%, respectively, to 4.24%.
Federal and state income tax expense decreased 52.0% from $1.9 million for the three months ended December 31, 2016 to $0.9 million for the three months ended December 31, 2017, primarily due to the federal Tax Cuts and Jobs Act of 2017.
Other Highlights include:
Renewed over 8.5 miles of water main in 16 communities in New Castle County, Delaware
Upgraded or replaced 8 wells to keep 3.2 million gallons a day of available water supply in service
Began construction of an 8.5 mile-long, 16-inch transmission main and a 90 million gallon storage lagoon to accommodate the process treated wastewater of a large food processing plant in Sussex County
About Artesian Resources
Artesian Resources Corporation operates as holding company of wholly-owned subsidiaries offering water, 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 7.9 billion gallons of water per year through 1,293 miles of main to approximately 301,000 people.
Contact: Nicki Taylor Investor Relations(302) firstname.lastname@example.org
Artesian Resources Corporation
Condensed Consolidated Statement of Operations
(In thousands, except per share amounts)
Three months ended Twelve months ended
December 31, December 31,
2017 2016 2017 2016
Water sales $ 17,830 $ 17,147 $ 73,058 $ 70,587
Other utility operating revenue 1,102 1,063 4,177 3,816
Non-utility operating revenue 1,256 1,206 5,000 4,686
20,188 19,416 82,235 79,089
Utility operating expenses 9,714 9,053 38,277 35,658
Non-utility operating expenses 691 678 2,777 2,602
Depreciation and amortization 2,530 2,353 9,555 9,188
State and federal income taxes 892 1,859 7,295 8,331
Property and other taxes 1,195 1,120 4,731 4,491
15,022 15,063 62,635 60,270
Operating Income 5,166 4,353 19,600 18,819
Allowance for funds used during construction 106 62 334 222
Miscellaneous (5 ) (41 ) 226 557
Income Before Interest Charges 5,267 4,374 20,160 19,598
Interest Charges 1,563 1,648 6,177 6,644
Net Income $ 3,704 $ 2,726 $ 13,983 $ 12,954
Weighted Average Common Shares Outstanding - Basic 9,207 9,122 9,175 9,098
Net Income per Common Share - Basic $ 0.40 $ 0.30 $ 1.52 $ 1.42
Weighted Average Common Shares Outstanding - Diluted 9,274 9,187 9,242 9,161
Net Income per Common Share - Diluted $ 0.40 $ 0.30 $ 1.51 $ 1.41
Artesian Resources Corporation
Condensed Consolidated Balance Sheet
December 31, December 31,
Utility Plant, at original cost less
accumulated depreciation $ 460,502 $ 425,502
Current Assets 18,985 14,635
Regulatory and Other Assets 15,152 10,839
$ 494,639 $ 450,976
Capitalization and Liabilities
Stockholders' Equity $ 146,644 $ 139,023
Long Term Debt, Net of Current Portion 105,587 102,331
Current Liabilities 28,461 19,328
Net Advances for Construction 7,797 8,169
Contributions in Aid of Construction 128,286 112,106
Other Liabilities 77,864 70,019
$ 494,639 $ 450,976