Cal Water Announces First Quarter 2007 Results
SAN JOSE, Calif.--(BUSINESS WIRE)--
California Water Service Group (NYSE:CWT) today announced net income of $1.6 million and earnings per common share of $0.07 for the first quarter of 2007, compared to net income of $0.8 million and earnings of $0.04 per common share in the first quarter of 2006.
Revenues increased by $6.4 million to $71.6 million, benefiting from a $3.2 million increase in water sales to existing customers, a $2.6 million increase in rates, and a $0.6 million increase in sales to new customers.
Total operating expenses for the first quarter of 2007 increased by $6.0 million to $66.3 million. Included in this category is a $4.4 million increase in water production costs, due largely to the increase in customer water usage. Other operations expenses were $23.7 million, remaining unchanged from the first quarter of 2006.
Maintenance expense increased by $0.6 million to $4.5 million for the quarter, while depreciation expense increased $0.7 million to $8.4 million, as a result of increases in 2006 capital expenditures.
Other income increased $0.8 million to $1.3 million, due to interest income from short-term investments.
Taxes other than income taxes increased $0.2 million to $3.4 million as a result of higher franchise fees and property taxes, while total income taxes increase $0.5 million to $1.1 million because pre-tax income was higher in the first quarter of 2007.
For the twelve months ended March 31, 2007, net income was $26.3 million, compared to $27.4 million for the same period in the previous year, while dilutive earnings per share were $1.34, compared to $1.48 for the same period. Revenues for the trailing twelve months were $341.1 million, compared to $325.6 million for the same period in the previous year.
"The first quarter of 2007 was unusually dry for many of our service territories, and, as a result, customer demand remained relatively strong. Despite the dry weather, we remain well positioned to meet our customer needs now and in the future. In addition to our long-range supply planning, we continue to support our customers in their efforts to use water wisely," said Peter C. Nelson, President and Chief Executive Officer.
Further, he noted, the Company remains focused on seeking rates that accurately reflect the costs of service and allow stockholders a reasonable rate of return. Management is currently reviewing a proposed decision by the California Public Utilities Commission on the General Rate Case Plan to determine how it will affect Company applications in the future.
All stockholders and interested investors are invited to listen to the 2007 first quarter conference call on May 3, 2007, at 11:00 a.m. (EDT), by dialing 1-866-835-8908 and keying in ID# 1064646. A replay of the call will be available from 2:00 p.m. (EDT) Thursday, May 3, 2007, through July 2, 2007, at 888-266-2081, ID# 1064646. 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 more than 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 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,
2007 2006
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ASSETS
Utility plant:
Utility plant $1,363,764 $1,344,415
Less accumulated depreciation and
amortization 411,724 402,940
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Net utility plant 952,040 941,475
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Current assets:
Cash and cash equivalents 43,095 60,313
Receivables:
Customers 17,375 19,526
Other 5,675 6,700
Unbilled revenue 10,468 11,341
Materials and supplies at average cost 4,469 4,515
Prepaid pension expense - 1,696
Taxes and other prepaid expenses 7,086 5,534
----------- ------------
Total current assets 88,168 109,625
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Other assets
Regulatory assets 93,844 93,785
Other assets 21,900 20,134
----------- ------------
Total other assets 115,744 113,919
----------- ------------
$1,155,952 $1,165,019
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CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $.01 par value $207 $207
Additional paid-in capital 211,588 211,513
Retained earnings 162,135 166,582
----------- ------------
Total common stockholders' equity 373,930 378,302
Preferred stock 3,475 3,475
Long-term debt, less current maturities 291,379 291,814
----------- ------------
Total capitalization 668,784 673,591
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Current liabilities:
Current maturities of long-term debt 1,778 1,778
Accounts payable 32,151 33,130
Accrued expenses and other liabilities 28,941 35,317
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Total current liabilities 62,870 70,225
Unamortized investment tax credits 2,541 2,541
Deferred income taxes, net 69,670 69,503
Pension and postretirement benefits other
than pensions 48,584 48,584
Regulatory and other liabilities 33,545 33,411
Advances for construction 160,378 157,660
Contributions in aid of construction 109,580 109,504
Commitments and contingencies - -
----------- ------------
$1,155,952 $1,165,019
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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,
2007 2006
--------- ---------
Operating revenue $71,570 $65,216
--------- ---------
Operating expenses:
Water production costs 25,814 21,428
Other operations 23,655 23,789
Maintenance 4,509 3,899
Depreciation and amortization 8,401 7,709
Income taxes 543 287
Property and other taxes 3,406 3,176
--------- ---------
Total operating expenses 66,328 60,288
--------- ---------
Net operating income 5,242 4,928
--------- ---------
Other income and expenses:
Non-regulated income, net 1,291 610
Gain on sale of non-utility property -- 25
Less income taxes on other income and expenses (526) (259)
--------- ---------
Total other income and expenses 765 376
--------- ---------
Interest expense:
Interest expense 4,926 4,697
Less: capitalized interest (500) (225)
--------- ---------
Total interest expense 4,426 4,472
--------- ---------
Net income $1,581 $832
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Earnings per share
Basic $0.07 $0.04
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Diluted $0.07 $0.04
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Weighted average shares outstanding
Basic 20,659 18,403
========= =========
Diluted 20,681 18,427
========= =========
Dividends per share of common stock $0.2900 $0.2875
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Released May 2, 2007