EXHIBIT 99.1
Published on May 1, 2008
Exhibit 99.1
1720 North First Street | ||||
San Jose, CA 95112-4598 | April 30, 2008 | |||
For Immediate Release | ||||
Contact:
|
Marty Kropelnicki (408) 367-8200 | |||
(analysts) | ||||
Shannon Dean (310) 257-1435 (media) |
CAL WATER ANNOUNCES FIRST QUARTER 2008 RESULTS
SAN JOSE, CA California Water Service Group (NYSE : CWT) today announced net income of
$0.2 million and diluted earnings per common share of $0.01 for the first quarter of 2008, compared
to net income of $1.6 million and diluted earnings per common share of $0.07 for the first quarter
of 2007.
Revenues increased by $1.4 million, or 2%, to $72.9 million, with rate increases adding $4.2
million and sales to new customers adding $0.4 million, partially offset by a decrease in sales to
existing customers of $3.2 million.
Total operating expenses for the first quarter of 2008 increased by $1.8 million. A decrease
of $0.5 million in water production costs was partially offset by an increase of $1.8 million in
administrative & general and other operations costs, primarily attributable to payroll increases
effective at the beginning of 2008 and increases for employee benefit programs.
Maintenance expense decreased by $0.4 million to $4.1 million for the quarter. Depreciation
expense increased $0.8 million to $9.2 million as a result of increases in 2007 capital
expenditures, while taxes other than income increased $0.3 million due to increases in payroll and
property taxes.
Other income, net of income taxes, reflected a loss of $0.1 million, compared to income of
$0.8 million last year, due to a decline in investment income and a mark-to-market adjustment in
investments associated with pension and deferred compensation plans.
For the twelve months ended March 31, 2008, net income was $29.8 million and dilutive earnings
per share were $1.43, compared to net income of $26.3 million and dilutive earnings per share of
$1.34 for the same period in the prior year. Revenues for the trailing twelve months were $368.4
million, compared to $341.1 million for the same period last year.
In 2007, our first quarter results benefited from higher water sales resulting from
above-average temperatures. In 2008, we were affected by cool, wet winter weather, with many of
our districts getting more than twice the rainfall than they did in the same period last year. Our
results were also impacted by increases in benefits costs and negative mark-to-market adjustments
associated with our pension and deferred compensation plans, said Peter C. Nelson, President and
Chief Executive Officer.
However, during the quarter, we continued to make progress with the California Public
Utilities Commissions (CPUC) Water Action Plan. Our 2007 General Rate Case progressed, and we
believe it will address many of the areas affected by regulatory lag. In addition, the CPUC issued
Decision #08-02-036 in February authorizing the decoupling of sales and revenues (weather revenue
adjustment mechanism), modified cost balancing accounts, and tiered rates, which are scheduled to
go into effect later this year, Nelson said.
All stockholders and interested investors are invited to listen to the 2008 first quarter
conference call on May 1, 2008, at 11:00 a.m. (EST), by dialing 1-866-814-1919 and keying in ID#
1226399. A replay of the call will be available from 2:00 p.m. (EST) Thursday, May 1, 2008,
through June 30, 2008, at 888-266-2081, ID# 1226399. The call, which will be hosted by President
and CEO Peter Nelson and Vice President and Chief Financial Officer Martin A. Kropelnicki will also
be webcast under the investor relations tab at www.calwatergroup.com.
California Water Service Group is the parent company of California Water Service Company,
Washington Water Service Company, New Mexico Water Service Company, Hawaii Water Service Company,
Inc., CWS Utility Services, and HWS
Utility
Services. Together these companies provide regulated and non-regulated water service to
nearly 2 million people in 100 California, Washington, New Mexico, and Hawaii communities. Groups
common stock trades on the New York Stock Exchange under the symbol CWT.
This news release contains forward-looking statements within the meaning established by the
Private Securities Litigation Reform Act of 1995 (Act). The forward-looking statements are
intended to qualify under provisions of the federal securities laws for safe harbor treatment
established by the Act. Forward-looking statements are based on currently available information,
expectations, estimates, assumptions and projections, and managements judgment about the Company,
the water utility industry and general economic conditions. Such words as expects, intends, plans,
believes, estimates, assumes, anticipates, projects, predicts, forecasts or variations of such
words or similar expressions are intended to identify forward-looking statements. The
forward-looking statements are not guarantees of future performance. They are subject to
uncertainty and changes in circumstances. Actual results may vary materially from what is
contained in a forward-looking statement. Factors that may cause a result different than expected
or anticipated include, but are not limited to: governmental and regulatory commissions decisions
including but not limited to rate case decisions and implementation of the CPUC Water Action Plan;
changes in regulatory commissions policies and procedures; the timeliness of regulatory
commissions actions concerning rate relief; new legislation; electric power interruptions;
increases in suppliers prices and the availability of supplies including water and power;
fluctuations in interest rates; changes in environmental compliance and water quality requirements;
acquisitions and our ability to successfully integrate acquired companies; the ability to
successfully implement business plans; changes in customer water use patterns; the impact of
weather on water sales and operating results; access to sufficient capital on satisfactory terms;
civil disturbances or terrorist threats or acts, or apprehension about the possible future
occurrences of acts of this type; the involvement of the United States in war or other hostilities;
restrictive covenants in or changes to the credit ratings on our current or future debt that could
increase our financing costs or affect our ability to borrow, make payments on debt or pay
dividends; and, other risks and unforeseen events. When considering forward-looking statements,
you should keep in mind the cautionary statements included in this paragraph, as well as the annual
10-K, Quarterly 10-Q, and other reports filed from time-to-time with the Securities and Exchange
Commission (SEC). The Company assumes no obligation to provide public updates of forward-looking
statements.
Additional information is available at our Web site at www.calwatergroup.com.
Attachments (2).
###
Source: California Water Service Group
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands, except per share data) | March 31 | December 31 | ||||||
2008 | 2007 | |||||||
ASSETS |
||||||||
Utility plant: |
||||||||
Utility plant |
$ | 1,468,966 | $ | 1,447,047 | ||||
Less accumulated depreciation and amortization |
(446,637 | ) | (436,851 | ) | ||||
Net utility plant |
1,022,329 | 1,010,196 | ||||||
Current assets: |
||||||||
Cash and cash equivalents |
2,967 | 6,734 | ||||||
Receivables |
||||||||
Customers |
17,404 | 18,600 | ||||||
Other |
5,357 | 8,617 | ||||||
Unbilled revenue |
11,368 | 12,911 | ||||||
Materials and supplies at average cost |
4,779 | 4,744 | ||||||
Taxes, prepaid expense, and other assets |
9,244 | 8,369 | ||||||
Total current assets |
51,119 | 59,975 | ||||||
Other assets: |
||||||||
Regulatory assets |
90,999 | 90,908 | ||||||
Other assets |
22,768 | 23,420 | ||||||
Total other assets |
113,767 | 114,328 | ||||||
$ | 1,187,215 | $ | 1,184,499 | |||||
CAPITALIZATION AND LIABILITIES |
||||||||
Capitalization: |
||||||||
Common stock, $.01 par value |
$ | 207 | $ | 207 | ||||
Additional paid-in capital |
211,976 | 211,885 | ||||||
Retained earnings |
167,710 | 173,617 | ||||||
Total common stockholders equity |
379,893 | 385,709 | ||||||
Preferred stock |
3,475 | 3,475 | ||||||
Long-term debt, less current maturities |
288,495 | 289,220 | ||||||
Total capitalization |
671,863 | 678,404 | ||||||
Current liabilities: |
||||||||
Current maturities of long-term debt |
2,701 | 2,701 | ||||||
Accounts payable |
26,653 | 36,694 | ||||||
Notes payable |
14,000 | | ||||||
Accrued expenses and other liabilities |
35,318 | 30,258 | ||||||
Total current liabilities |
78,672 | 69,653 | ||||||
Unamortized investment tax credits |
2,467 | 2,467 | ||||||
Deferred income taxes, net |
68,001 | 69,712 | ||||||
Pension and postretirement benefits other than pensions |
39,444 | 39,444 | ||||||
Regulatory and other liabilities |
40,113 | 38,783 | ||||||
Advances for construction |
168,822 | 168,024 | ||||||
Contributions in aid of construction |
117,833 | 118,012 | ||||||
Commitments and contingencies |
||||||||
$ | 1,187,215 | $ | 1,184,499 | |||||
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)
For the three months ended:
March 31, | March 31, | |||||||
2008 | 2007 | |||||||
Operating revenue |
$ | 72,921 | $ | 71,570 | ||||
Operating expenses: |
||||||||
Water production costs |
25,358 | 25,814 | ||||||
Administrative and General |
13,418 | 12,570 | ||||||
Other operations |
12,065 | 11,085 | ||||||
Maintenance |
4,114 | 4,509 | ||||||
Depreciation and amortization |
9,222 | 8,401 | ||||||
Income taxes |
174 | 543 | ||||||
Property and other taxes |
3,739 | 3,406 | ||||||
Total operating expenses |
68,090 | 66,328 | ||||||
Net operating income |
4,831 | 5,242 | ||||||
Other income and expenses: |
||||||||
Non-regulated revenue |
2,905 | 3,042 | ||||||
Non-regulated expenses |
(3,036 | ) | (1,751 | ) | ||||
Less: income taxes on other income and expenses |
49 | (526 | ) | |||||
(82 | ) | 765 | ||||||
Interest expense: |
||||||||
Interest Expense |
5,014 | 4,926 | ||||||
Less: capitalized interest |
(450 | ) | (500 | ) | ||||
Total interest expense |
4,564 | 4,426 | ||||||
Net income |
$ | 185 | $ | 1,581 | ||||
Earnings per share |
||||||||
Basic |
$ | 0.01 | $ | 0.07 | ||||
Diluted |
$ | 0.01 | $ | 0.07 | ||||
Weighted average shares outstanding |
||||||||
Basic |
20,688 | 20,659 | ||||||
Diluted |
20,711 | 20,681 | ||||||
Dividends per share of common stock |
$ | 0.29250 | $ | 0.29000 | ||||