Form: 8-K

Current report filing

April 30, 2009

Exhibit 99.1
          
(CALIFORNIA WATER SERVICE GROUP LOGO)   NEWS RELEASE
CALIFORNIA WATER SERVICE GROUP
  (CWT LOGO)
         
 
  1720 North First Street   April 29, 2009
 
  San Jose, CA 95112-4598   For Immediate Release
 
       
Contact:
  Marty Kropelnicki (408) 367-8200 (analysts)    
 
  Shannon Dean (310) 257-1435 (media)    
CALIFORNIA WATER SERVICE GROUP ANNOUNCES
FIRST QUARTER 2009 RESULTS
SAN JOSE, CA — California Water Service Group (NYSE: CWT) today announced net income of $2.4 million and earnings per share of $0.12 for the first quarter of 2009, compared to net income of $0.2 million and earnings per share of $0.01 for the first quarter of 2008.
     Revenues increased by $13.7 million, or 19%, to $86.6 million, with rate increases adding $11.6 million and sales to new customers adding $2.4 million. A decrease in usage and other changes in revenue of $5.3 million were partially offset by an increase in revenue of $5.0 million due to the net increase of the Water Revenue Adjustment Mechanism (WRAM) and Modified Cost Balancing Account (MCBA) that went into effect July 1, 2008.
     Total operating expenses for the first quarter of 2009 increased $12.2 million, or 18%, to $80.3 million. Water

 


 

production costs increased $3.5 million, or 14%, due to increased purchased water costs and higher power costs. Administrative costs increased $5.4 million, or 41%, to $18.9 million, mainly due to higher benefit and legal expenses. Other production expenses increased $0.4 million, or 3%, to $12.5 million, as a result of increases in expenses for pumping and transmission & distribution.
     Maintenance expense increased 13%, or $0.5 million, to $4.6 million during the quarter, primarily due to increased spending on main repairs. Depreciation expense increased $1.0 million, or 11%, to $10.2 million due to increases in utility plant in 2008. Taxes other than income increased $0.3 million, or 9%, to $4.1 million, primarily due to increases for property tax paid in the first quarter.
     Other income, net of income taxes, increased $0.6 million primarily due to a property sale during the quarter — there were no property sales in the first quarter of 2008.
          On April 17, 2009, California Water Service Company completed an offering of $100 million in aggregate principal amount of its 5.875% First Mortgage Bonds due 2019, Series LL. Cal Water plans to use a portion of the net proceeds from the sale of the bonds to pay down outstanding short-term borrowings, and use the remainder of the proceeds to fund capital projects scheduled for 2009.

 


 

     On April 8, 2009, Standard & Poor’s Rating Services assigned it “AA—” secured debt rating and “1+” recovery rating to California Water Service Company’s First Mortgage Bonds. At the same time, Standard & Poor’s affirmed its “A+” corporate credit rating on the Company. “We were pleased to complete the debt offering and to receive the AA- rating on the $100 million First Mortgage Bonds,” said President and Chief Executive Officer Peter C. Nelson. “While the credit markets have been extremely volatile, the demand for Cal Water’s bonds was strong, and the “AA—” rating further shows the financial strength of our Company,” Nelson said.
     Nelson further noted that during the first quarter the Company has been preparing the 2009 general rate case (GRC) for Cal Water. It will be the first time in the Company’s history that it files for all 24 regulated districts plus general office in the same proceeding. In addition to the GRC filing, the Company is stepping up its water efficiency program. With WRAM and MCBA in place, the Company can aggressively pursue water efficiency programs and better support the State of California water efficiency goals.
     All stockholders and interested investors are invited to listen to the 2009 first quarter conference call on April 30, 2009, at 11:00 a.m. (EST), by dialing 1-866-847-7859 and keying in ID# 1347470. A replay of the call will

 


 

be available from 2:00 p.m. (EST) Thursday, April 30, 2009, through June 29, 2009, at 888-266-2081, ID# 1347470. 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., and CWS 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. Group’s 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 management’s 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; 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
                 
    March 31     December 31  
(In thousands, except per share data)   2009     2008  
ASSETS
               
Utility plant:
               
Utility plant
  $ 1,605,014     $ 1,583,079  
Less accumulated depreciation and amortization
    (482,235 )     (470,712 )
 
           
Net utility plant
    1,122,779       1,112,367  
 
           
 
               
Current assets:
               
Cash and cash equivalents
    5,278       13,869  
Receivables
               
Customers
    18,216       22,786  
Other
    19,006       12,071  
Unbilled revenue
    12,472       13,112  
Materials and supplies at average cost
    5,068       5,070  
Taxes, prepaid expense, and other assets
    12,265       12,890  
 
           
Total current assets
    72,305       79,798  
 
           
 
               
Other assets:
               
Regulatory assets
    198,170       198,293  
Goodwill
    3,906       3,906  
Other assets
    25,148       26,743  
 
           
Total other assets
    227,224       228,942  
 
           
 
  $ 1,422,308     $ 1,421,107  
 
           
 
               
CAPITALIZATION AND LIABILITIES
               
Capitalization:
               
Common stock, $.01 par value
  $ 207     $ 207  
Additional paid-in capital
    214,236       213,922  
Retained earnings
    185,128       188,820  
 
           
Total common stockholders’ equity
    399,571       402,949  
Preferred stock
    —       —  
Long-term debt, less current maturities
    287,202       287,498  
 
           
Total capitalization
    686,773       690,447  
 
           
 
               
Current liabilities:
               
Current maturities of long-term debt
    2,891       2,818  
Accounts payable
    37,988       41,772  
Notes payable
    52,000       40,000  
Accrued expenses and other liabilities
    37,195       38,606  
 
           
Total current liabilities
    130,074       123,196  
 
               
Unamortized investment tax credits
    2,392       2,392  
Deferred income taxes, net
    74,283       72,344  
Regulatory liability and other
    83,234       83,312  
Pension and postretirement benefits other than pensions
    150,074       152,685  
Advances for construction
    177,684       176,163  
Contributions in aid of construction
    117,794       117,568  
 
           
Commitments and contingencies
  $ 1,422,308     $ 1,418,107  
 
           

 


 

CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Unaudited
(In thousands, except per share data)
For the three months ended:
                 
    March 31,     March 31,  
    2009     2008  
Operating revenue
  $ 86,613     $ 72,921  
 
           
Operating expenses:
               
Water production costs
    28,868       25,358  
Admistrative and General
    18,861       13,418  
Other operations
    12,456       12,065  
Maintenance
    4,635       4,114  
Depreciation and amortization
    10,198       9,222  
Income taxes
    1,232       174  
Property and other taxes
    4,088       3,739  
 
           
Total operating expenses
    80,338       68,090  
 
           
 
               
Net operating income
    6,275       4,831  
 
           
 
               
Other income and expenses:
               
Non-regulated revenue
    2,881       2,905  
Non-regulated expenses
    (2,641 )     (3,036 )
Gain on sale of non-utility property
    603       —  
Less: income tax (expense) benefit on other income and expenses
    (338 )     49  
 
           
 
    505       (82 )
 
           
 
               
Interest expense:
               
Interest expense
    5,038       5,014  
Less: capitalized interest
    (679 )     (450 )
 
           
Total interest expense
    4,359       4,564  
 
           
 
               
Net income
  $ 2,421     $ 185  
 
           
 
               
Earnings per share
               
Basic
  $ 0.12     $ 0.01  
 
           
Diluted
  $ 0.12     $ 0.01  
 
           
Weighted average shares outstanding
               
Basic
    20,730       20,688  
 
           
Diluted
    20,759       20,711  
 
           
Dividends per share of common stock
  $ 0.29500     $ 0.29250