SJW Corp. Announces First Quarter Financial Results

Business Wire

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

SJW Corp. (SJW) today reported financial results for the first quarter ended March 31, 2014. Operating revenue was $54.6 million in the quarter compared to $50.1 million in 2013. The $4.5 million increase in revenue was attributable to $3.3 million in higher customer water usage, $2.7 million in cumulative rate increases and $300,000 in revenue from new customers. These increases were offset by a decrease in the net recognition of certain balancing and memorandum accounts of $2.3 million. In addition, the Company earned $486,000 in higher revenue from real estate operations.

Water production expenses for the first quarter of 2014 were $23.5 million versus $18.3 million for the same period in 2013, an increase of $5.2 million. The increase in water production expenses was attributable to $2.7 million in higher expenses due to a decrease in the availability of surface water supply, $1.6 million in higher per unit costs for purchased water, groundwater extraction and energy charges and $900,000 in higher customer water usage. Operating expenses, excluding water production expenses, decreased $1 million to $25 million from $26 million. The decrease was due to $2 million in lower administrative and general expenses, partially offset by $669,000 of higher depreciation expense, $255,000 in higher taxes other than income taxes, and an increase of $74,000 in maintenance expenses.

Other, net in 2013 included a pre-tax gain on the sale of a real estate investment property in Connecticut of approximately $1.1 million. No similar sale occurred in 2014.

The effective consolidated income tax rates were 38% and 41% for the quarters ended March 31, 2014 and 2013, respectively.

Net income was $906,000 for the quarter ended March 31, 2014, compared to $1.3 million for the same period in 2013. Diluted earnings per share were $0.04 for the quarter ended March 31, 2014, compared to $0.07 per diluted share for the same period in 2013.

The Directors of SJW Corp. today declared a quarterly dividend on common stock of $0.1875 per share. The dividend is payable on June 2, 2014 to shareholders of record on May 12, 2014.

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 March 31,
2014   2013
OPERATING REVENUE $ 54,596   50,139  
OPERATING EXPENSE:
Production Expenses:
Purchased water 9,730 10,119
Power 1,489 885
Groundwater extraction charges 9,448 4,590
Other production expenses   2,862   2,713  
Total production expenses 23,529 18,307
Administrative and general 9,450 11,494
Maintenance 3,274 3,200
Property taxes and other non-income taxes 2,804 2,549
Depreciation and amortization   9,485   8,816  
Total operating expense   48,542   44,366  
OPERATING INCOME 6,054 5,773
Interest expense (4,870 ) (5,022 )
Other, net   283   1,496  
Income before income taxes 1,467 2,247
Provision for income taxes   561   930  
NET INCOME   906   1,317  
Other comprehensive income, net   198   354  
COMPREHENSIVE INCOME $ 1,104   1,671  
 
EARNINGS PER SHARE
Basic $ 0.04 0.07
Diluted $ 0.04 0.07
DIVIDENDS PER SHARE $ 0.19 0.18
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 20,195 18,689
Diluted 20,385 18,889
 
 
SJW Corp.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
   

   March 31,   

December 31,
2014 2013
ASSETS
Utility plant:
Land $ 10,844 10,418
Depreciable plant and equipment 1,275,335 1,254,586
Construction in progress 35,335 30,846
Intangible assets   19,148   18,341
Total utility plant 1,340,662 1,314,191
Less accumulated depreciation and amortization   424,786   415,453
Net utility plant   915,876   898,738
 
Real estate investments 73,783 78,477
Less accumulated depreciation and amortization   10,410   10,658
Net real estate investments   63,373   67,819
CURRENT ASSETS:
Cash and cash equivalents 3,118 2,299
Accounts receivable and accrued unbilled utility revenue 30,464 34,189
Long-lived assets held-for-sale 4,028
Prepaid expenses and other   3,142   3,164
Total current assets   40,752   39,652
OTHER ASSETS:
Investment in California Water Service Group 9,220 8,885
Debt issuance costs and other, net of accumulated amortization 5,056 5,176
Regulatory assets, net 83,220 83,543
Other   6,438   6,173
  103,934   103,777
$ 1,123,935   1,109,986
 
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock $ 10,523 10,505
Additional paid-in capital 63,887 63,017
Retained earnings 241,351 244,266
Accumulated other comprehensive income   3,585   3,387
Total shareholders' equity 319,346 321,175
Long-term debt, less current portion   334,876   334,997
Total capitalization   654,222   656,172
CURRENT LIABILITIES:
Line of credit 37,000 22,400
Current portion of long-term debt 537 554
Accrued groundwater extraction charge, purchased water and purchased power 7,135 7,781
Accounts payable 10,702 12,587
Accrued interest 5,543 5,369
Other current liabilities   11,009   10,504
Total current liabilities   71,926   59,195
 
DEFERRED INCOME TAXES AND CREDITS 142,180 142,111

ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF CONSTRUCTION

203,950 202,303
POSTRETIREMENT BENEFIT PLANS 45,003 43,496
OTHER NONCURRENT LIABILITIES   6,654   6,709
$ 1,123,935   1,109,986
 

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

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