California Water Service Group Announces First Quarter 2010 Results
SAN JOSE, CA -- (MARKET WIRE) -- 04/28/10 -- California Water Service Group (NYSE: CWT) today announced net income of $2.0 million and earnings per share of $0.10 for the first quarter of 2010, compared to net income of $2.4 million and earnings per share of $0.12 for the first quarter of 2009.
Revenue for the first quarter increased $3.7 million, or 4%, to $90.3 million. Rate increases added $4.3 million and sales to new customers added $0.6 million, while decreased usage by existing customers and other charges reduced revenue by $1.2 million.
Total operating expenses for the first quarter of 2010 increased $2.2 million, or 3%, to $82.5 million. Water production costs increased $1.6 million, or 6%, due primarily to increases in wholesaler water prices and higher power costs. Administrative costs decreased $1.4 million, or 8%, to $17.4 million due to lower legal expense and other administrative costs compared with the prior year. Other operations expenses increased $1.1 million, or 9%, to $13.6 million, as a result of increases in expenses for water treatment, water quality, and costs associated with water distribution systems.
Maintenance expense increased 7%, or $0.3 million, to $4.9 million, compared to $4.6 million in the same period last year. Depreciation expense increased $0.6 million, or 6%, to $10.8 million, due to increases in utility plant. Taxes other than income decreased $ 0.2 million, or 5%, to $3.9 million.
Other income, net of income taxes, decreased $0.6 million to a net loss of $0.1 million. The largest single component of the change was due to business development expenses in the regulated utility business. Interest expense increased $1.3 million, or 30%, to $5.7 million, due to the debt issuance in April 2009.
According to President and Chief Executive Officer Peter C. Nelson, 1st quarter 2010 results were in line with management's expectations.
"We are in the third year of a three-year rate case cycle in California, which as planned, resulted in lower rate relief for the first quarter of 2010. We will continue to work diligently to control costs while providing excellent service, both of which will benefit stockholders and rate payers in 2010 and beyond," Nelson said.
All stockholders and interested investors are invited to listen to the 2010 first quarter conference call on April 29, 2010, at 11:00 a.m. (EDT), by dialing 1-866-961-7942 and keying in ID# 1442193. A replay of the call will be available from 2:00 p.m. (EDT) Thursday, April 29, 2010, through June 28, 2010 at 888-266-2081, ID# 1442193. 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, LLC. 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.
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands, except per share data) March 31, December 31,
2010 2009
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ASSETS
Utility plant:
Utility plant $ 1,749,688 $ 1,709,062
Less accumulated depreciation and
amortization (522,508) (510,985)
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Net utility plant 1,227,180 1,198,077
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Current assets:
Cash and cash equivalents 11,352 9,866
Receivables
Customers 19,506 25,567
Regulatory balancing accounts 11,772 10,513
Other 6,829 9,043
Unbilled revenue 12,321 13,417
Materials and supplies at average cost 5,807 5,530
Taxes, prepaid expense, and other assets 22,696 18,305
------------- -------------
Total current assets 90,283 92,241
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Other assets:
Regulatory assets 211,802 204,104
Goodwill 2,615 2,615
Other assets 30,569 28,544
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Total other assets 244,986 235,263
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$ 1,562,449 $ 1,525,581
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CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $.01 par value $ 208 $ 208
Additional paid-in capital 215,800 215,528
Retained earnings 200,738 204,898
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Total common stockholders' equity 416,746 420,634
Long-term debt, less current maturities 381,048 374,269
------------- -------------
Total capitalization 797,794 794,903
------------- -------------
Current liabilities:
Current maturities of long-term debt 12,987 12,953
Short-term borrowings 19,100 12,000
Accounts payable
Trade and other 43,058 43,689
Regulatory balancing accounts 2,104 2,430
Accrued interest 9,101 4,258
Accrued expenses and other liabilities 33,056 35,028
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Total current liabilities 119,406 110,358
Unamortized investment tax credits 2,318 2,318
Deferred income taxes, net 90,806 91,851
Pension and postretirement benefits other
than pensions 143,723 137,127
Regulatory liability and Other 90,946 85,780
Advances for construction 186,045 185,027
Contributions in aid of construction 131,411 118,217
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$ 1,562,449 $ 1,525,581
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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
2010 2009
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Operating revenue $ 90,272 $ 86,613
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Operating expenses:
Operations:
Water production costs 30,454 28,868
Administrative and General 17,444 18,861
Other operations 13,567 12,456
Maintenance 4,951 4,635
Depreciation and amortization 10,792 10,198
Income taxes 1,403 1,232
Property and other taxes 3,903 4,088
------------- -------------
Total operating expenses 82,514 80,338
------------- -------------
Net operating income 7,758 6,275
------------- -------------
Other income and expenses:
Non-regulated revenue 3,422 2,881
Non-regulated expenses (3,546) (2,641)
Gain on sale of non-utility property - 603
Income taxes (expense) benefit on other
income and expenses 55 (338)
------------- -------------
Net other income (expense) (69) 505
------------- -------------
Interest expense:
Interest Expense 6,490 5,038
Less: capitalized interest (819) (679)
------------- -------------
Net interest expense 5,671 4,359
------------- -------------
Net income $ 2,018 $ 2,421
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Earnings per share
Basic $ 0.10 $ 0.12
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Diluted $ 0.10 $ 0.12
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Weighted average shares outstanding
Basic 20,778 20,730
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Diluted 20,793 20,759
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Dividends per share of common stock $ 0.2975 $ 0.2950
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Released April 28, 2010