SJW Corp. Announces 2013 Annual and Fourth Quarter Financial Results

Business Wire

SAN JOSE, Calif.--(BUSINESS WIRE)--

SJW Corp. (SJW) today reported operating revenue for the year ended December 31, 2013 of $276.9 million versus $261.5 million for the year ended December 31, 2012, an increase of $15.4 million. The increase in revenue was attributable to $6.1 million in cumulative rate increases, $5.4 million in higher customer water usage, the net recognition of certain balancing and memorandum accounts of $1.4 million, which management has determined are probable of future recovery or refund and $1.3 million in revenue from new customers. In addition, the Company earned $1.2 million in higher revenue from real estate operations.

Water production expenses for the year ended December 31, 2013 were $120.8 million compared to $107.3 million in 2012, an increase of $13.5 million. The increase in water production expenses was attributable to $8.6 million in higher per unit costs for purchased water, groundwater extraction and energy charges and $5.2 million in higher customer water usage. These increases were offset by $275,000 in lower expenses due to an increase in the availability of surface water supply. Operating expenses, excluding water production expenses, increased $3.6 million to $102.6 million from $99 million. The increase was due to $1.9 million of higher depreciation expense, $902,000 in higher administrative and general expenses, $614,000 in higher taxes other than income taxes, and an increase of $198,000 in maintenance expenses.

Other, net includes a pre-tax gain on the sale of a real estate investment property in Connecticut of approximately $1.1 million.

The effective consolidated income tax rates were 39% and 41% for the years ended December 31, 2013 and 2012, respectively.

Net income was $22.4 million for the year ended December 31, 2013, compared to $22.3 million for the same period in 2012. Diluted earnings per share were $1.12 for the year ended December 31, 2013, compared to $1.18 per diluted share for the same period in 2012.

Fourth Quarter Financial Results

Operating revenue for the fourth quarter ended December 31, 2013 was $67.3 million versus $62.4 million for the same period in 2012, an increase of $4.9 million. The increase was attributable to $5.3 million in higher customer water usage, $1.9 million in cumulative rate increases, and $1.2 million in higher revenue from real estate operations and new customers. These increases were offset by a decrease of $3.5 million related to the year-over-year change in the net recognition of certain balancing and memorandum accounts.

Water production expenses for the fourth quarter of 2013 were $29.6 million compared to $23.1 million in 2012, an increase of $6.5 million. The increase in water production expenses was attributable to $3.5 million in higher customer water usage, $2.5 million in higher per unit costs for purchased water, groundwater extraction and energy charges, and $543,000 in higher expenses due to a decrease in the use of available surface water supply. Operating expenses, excluding water production expenses, increased $1.1 million to $26.3 million from $25.2 million. The increase was primarily due to $684,000 in general and administrative expenses, and $517,000 of higher depreciation expense, partially offset by $227,000 in lower maintenance expenses.

The effective consolidated income tax rates were 32% and 42% for the quarter ended December 31, 2013 and 2012, respectively. Income tax expense included the release of a $500,000 tax contingency reserve.

Net income was $4.7 million for the fourth quarter ended December 31, 2013, compared to $5.9 million in 2012. Diluted earnings per share were $0.23 in the quarter ended December 31, 2013, compared to $0.31 per diluted share for the same period in 2012.

Diluted earnings per share for the quarter and year-to-date ended December 31, 2013 includes the weighted average effect of 1,421,000 new shares of common stock issued in April of 2013.

SJW Corp. is a publicly traded holding company headquartered in San Jose, California. SJW Corp. is the parent company of San Jose Water Company, SJWTX, Inc., Texas Water Alliance Limited, and SJW Land Company. Together, San Jose Water Company and SJWTX, Inc. provide water service to more than one million people in San Jose, California and nearby communities and in Canyon Lake, Texas and nearby communities. SJW Land Company owns and operates commercial real estate investments.

This press release may contain certain forward-looking statements including but not limited to statements relating to SJW Corp.'s plans, strategies, objectives, expectations and intentions, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of SJW Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Results for a quarter are not indicative of results for a full year due to seasonality and other factors. Other factors that may cause actual results, performance or achievements to materially differ are described in SJW Corp.'s most recent reports on Form 10-K, Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. SJW Corp. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 

SJW Corp.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands, except shares and per share data)

           
Three months ended December 31, Twelve months ended December 31,
2013     2012 2013     2012
OPERATING REVENUE $ 67,262   62,449   $ 276,869   261,547  
OPERATING EXPENSE:
Production Expenses:
Purchased water 13,700 11,978 63,225 66,106
Power 1,883 1,354 7,619 5,796
Groundwater extraction charges 10,670 6,883 37,927 23,940
Other production expenses 3,398   2,934   12,073   11,445  
Total production expenses 29,651 23,149 120,844 107,287
Administrative and general 11,429 10,745 43,714 42,812
Maintenance 3,590 3,817 13,548 13,350
Property taxes and other non-income taxes 2,548 2,452 10,317 9,703
Depreciation and amortization 8,693   8,176   35,039   33,098  
Total operating expense 55,911   48,339   223,462   206,250  
OPERATING INCOME 11,351 14,110 53,407 55,297
Interest expense (4,935 ) (4,997 ) (19,922 ) (20,185 )
Other, net 472   1,131   3,034   2,748  
Income before income taxes 6,888 10,244 36,519 37,860
Provision for income taxes 2,211   4,320   14,135   15,542  
NET INCOME 4,677   5,924   22,384   22,318  
Other comprehensive income, net 627   (53 ) 1,077   36  
COMPREHENSIVE INCOME $ 5,304   5,871   $ 23,461   22,354  
 
EARNINGS PER SHARE
Basic $ 0.23 0.32 $ 1.13 1.20
Diluted $ 0.23 0.31 $ 1.12 1.18
DIVIDENDS PER SHARE $ 0.18 0.18 $ 0.73 0.71
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 20,164 18,671 19,775 18,635
Diluted 20,362 18,857 19,971 18,839
 
 

SJW Corp.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)

           
December 31,

2013

December 31,

2012

ASSETS
Utility plant:
Land $ 10,418   10,156
Depreciable plant and equipment 1,254,586 1,166,220
Construction in progress 30,846 24,298
Intangible assets 18,341   15,561
Total utility plant 1,314,191 1,216,235
Less accumulated depreciation and amortization 415,453   384,675
Net utility plant 898,738   831,560
 
Real estate investments 78,477 74,232
Less accumulated depreciation and amortization 10,658   9,045
Net real estate investments 67,819   65,187
CURRENT ASSETS:
Cash and cash equivalents 2,299 2,522
Accounts receivable and accrued unbilled utility revenue 34,189 29,944
Long-lived assets held-for-sale

7,768

Prepaid expenses and other 3,164   2,677
Total current assets 39,652   42,911
OTHER ASSETS:
Investment in California Water Service Group 8,885 7,067
Debt issuance costs and other, net of accumulated amortization 5,176 5,226
Regulatory assets, net 83,543 130,488
Other 6,173   5,060
103,777   147,841
$ 1,109,986   1,087,499
 
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock $ 10,505 9,724
Additional paid-in capital 63,017 26,117
Retained earnings 244,266 236,453
Accumulated other comprehensive income 3,387   2,310
Total shareholders' equity 321,175 274,604
Long-term debt, less current portion 334,997   335,598
Total capitalization 656,172   610,202
CURRENT LIABILITIES:
Line of credit 22,400 15,300
Current portion of long-term debt 554 5,392
Accrued groundwater extraction charge, purchased water and purchased power 7,781 5,072
Accounts payable 12,587 8,481
Accrued interest 5,369 5,355
Other current liabilities 10,504   9,507
Total current liabilities 59,195   49,107
 
DEFERRED INCOME TAXES AND CREDITS 142,111 149,013

ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF CONSTRUCTION

202,303 196,743
POSTRETIREMENT BENEFIT PLANS 43,496 73,425
OTHER NONCURRENT LIABILITIES 6,709   9,009
$ 1,109,986   1,087,499

Contact:
SJW Corp.
Suzy Papazian, 408-279-7961
Corporate Secretary/Attorney


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