California Water Service Group Announces Results for 3rd Quarter 2009
SAN JOSE, CA -- (MARKET WIRE) -- 10/28/09 -- California Water Service Group (NYSE: CWT) today announced net income of $19.6 million and earnings per share of $0.94 for the third quarter of 2009, compared to net income of $22.2 million and earnings per share of $1.06 in the third quarter of 2008.
Revenues increased by $7.5 million, or 6%, to $139.2 million, with rate increases adding $12.5 million and water usage by new customers adding $3.3 million. A decrease in water usage by existing customers and other charges reduced revenue by $8.3 million.
Total operating expenses for the third quarter of 2009 increased by $10.1 million, or 10%, to $115.1 million. Water production costs increased by $2.4 million, or 5%, due to higher power costs and wholesale water rates. Administrative costs increased $4.1 million, or 27%, due to increased pension & benefits costs, and increased legal costs. Other operations expenses increased by $1.7 million to $14.6 million as a result of higher costs for pumping and distributing water.
Maintenance expense increased by 15% to $4.4 million as a result of additional water main repairs. Depreciation expense increased by 11% to $10.3 million as a result of increases in capital expenditures. Taxes other than income increased $0.4 million to $4.4 million, primarily due to property tax increases.
Other income, net of income taxes, added $1.0 million of net income for the quarter, while interest expense increased by 33% to $5.5 million due to the new debt offering in April 2009.
For the twelve months ended September 30, 2009, net income was $41.4 million and diluted earnings per share were $1.99, compared to net income of $40.5 million and diluted earnings per share of $1.94 for the same period last year. Revenues for the trailing twelve months were $443 million, compared to $396 million for the same period in the prior year.
"During the quarter, the Company filed its 2009 General Rate Case for all 24 California districts and corporate costs," said President and Chief Executive Officer Peter C. Nelson. "This is significant because we are now filing for rate relief in California for all regulated districts and corporate costs at the same time, which will allow for more timely rate relief of prudently incurred costs," said Nelson.
"While we cannot predict the outcome of this filing, the rate case was filed on time and is currently proceeding on schedule," Nelson said.
Other Information
All stockholders and interested investors are invited to listen to the 2009 third quarter conference call on October 29, 2009, at 11:00 a.m. (EST), by dialing 1-866-814-8476 and keying in ID# 1399873. A replay of the call will be available from 2:00 p.m. (EST) October 29, 2009, through December 28, 2009, at 1-888-266-2081, ID# 1399873. 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 California, Washington, New Mexico, and Hawaii. 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)
September 30, December 31,
2009 2008
------------- -------------
ASSETS
Utility plant:
Utility plant $ 1,676,287 $ 1,583,079
Less accumulated depreciation and
amortization (501,704) (470,712)
------------- -------------
Net utility plant 1,174,583 1,112,367
------------- -------------
Current assets:
Cash and cash equivalents 47,581 13,869
Receivables:
Customers 31,722 22,786
Regulatory balancing accounts 15,592 4,629
Other 10,752 7,442
Unbilled revenue 21,352 13,112
Materials and supplies at average cost 5,457 5,070
Taxes, prepaid expenses and other assets 7,922 12,890
------------- -------------
Total current assets 140,378 79,798
------------- -------------
Other assets:
Regulatory assets 201,442 198,293
Goodwill 2,615 3,906
Other assets 30,456 23,743
------------- -------------
Total other assets 234,513 225,942
------------- -------------
$ 1,549,474 $ 1,418,107
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CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $.01 par value $ 207 $ 207
Additional paid-in capital 214,715 213,922
Retained earnings 204,570 188,820
------------- -------------
Total common stockholders' equity 419,492 402,949
Long-term debt, less current maturities 373,541 287,498
------------- -------------
Total capitalization 793,033 690,447
------------- -------------
Current liabilities:
Current maturities of long-term debt 12,424 2,818
Short-term borrowings 12,000 40,000
Accounts payable:
Trade and other 46,894 39,187
Regulatory balancing accounts 7,486 2,585
Accrued interest 9,096 3,295
Accrued expenses and other liabilities 42,938 35,311
------------- -------------
Total current liabilities 130,838 123,196
Unamortized investment tax credits 2,392 2,392
Deferred income taxes, net 83,512 72,344
Pension and postretirement benefits other
than pensions 152,467 152,685
Regulatory and other liabilities 83,357 83,312
Advances for construction 182,763 176,163
Contributions in aid of construction 121,112 117,568
Commitments and contingencies -- --
------------- -------------
$ 1,549,474 $ 1,418,107
============= =============
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)
September 30, September 30,
For the three months ended 2009 2008
------------- -------------
Operating revenue $ 139,167 $ 131,702
------------- -------------
Operating expenses:
Operations:
Water production costs 48,898 46,455
Administrative and general 19,084 14,995
Other operations 14,639 12,935
Maintenance 4,405 3,824
Depreciation and amortization 10,259 9,281
Income taxes 13,417 13,510
Property and other taxes 4,371 3,940
------------- -------------
Total operating expenses 115,073 104,940
------------- -------------
Net operating income 24,094 26,762
------------- -------------
Other income and expenses:
Non-regulated revenue 5,194 3,805
Non-regulated expenses, net (3,464) (4,501)
Gain on sale of non-utility property - -
Income taxes (expense) benefit on other
income and expenses (702) 288
------------- -------------
Net other income and expenses 1,028 (408)
------------- -------------
Interest expense:
Interest expense 6,480 5,233
Less: capitalized interest (950) (1,065)
------------- -------------
Net interest expense 5,530 4,168
------------- -------------
Net income $ 19,592 $ 22,186
============= =============
Earnings per share
Basic $ 0.94 $ 1.06
============= =============
Diluted $ 0.94 $ 1.06
============= =============
Weighted average shares outstanding
Basic 20,745 20,717
============= =============
Diluted 20,767 20,740
============= =============
Dividends declared per share of common stock $ 0.2950 $ 0.2925
============= =============
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)
September 30, September 30,
For the nine months ended 2009 2008
------------- -------------
Operating revenue $ 342,447 $ 310,204
------------- -------------
Operating expenses:
Operations:
Water production costs 119,468 112,162
Administrative and general 57,331 42,248
Other operations 41,425 37,766
Maintenance 13,352 12,884
Depreciation and amortization 30,739 27,779
Income taxes 21,438 20,127
Property and other taxes 12,371 11,163
------------- -------------
Total operating expenses 296,124 264,129
------------- -------------
Net operating income 46,323 46,075
------------- -------------
Other income and expenses:
Non-regulated revenue 11,173 9,452
Non-regulated expenses, net (6,826) (9,715)
Gain on sale of non-utility property 675 7
Income taxes (expense) benefit on other
income and expenses (2,032) 118
------------- -------------
Net other income and expense 2,990 (138)
------------- -------------
Interest expense:
Interest expense 17,480 15,405
Less: capitalized interest (2,270) (1,955)
------------- -------------
Net interest expense 15,210 13,450
------------- -------------
Net income $ 34,103 $ 32,487
============= =============
Earnings per share
Basic $ 1.64 $ 1.55
============= =============
Diluted $ 1.64 $ 1.55
============= =============
Weighted average shares outstanding
Basic 20,740 20,707
============= =============
Diluted 20,765 20,731
============= =============
Dividends declared per share of common stock $ 0.8850 $ 0.8775
============= =============
Released October 28, 2009