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Artesian Resources Corporation Reports 2nd Quarter and Year-To-Date 2022 Results

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Artesian Resources Corporation
Artesian Resources Corporation

NEWARK, Del., Aug. 03, 2022 (GLOBE NEWSWIRE) -- Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider of water and wastewater services, and related services, on the Delmarva Peninsula, today announced second quarter and year-to-date results for 2022.

  • Diluted net income per share increased to $0.53 in the second quarter and to $1.01 year-to-date

  • Net Income increased $0.5 million (12.0%) in the second quarter and $0.8 million (9.4%) year-to-date

  • Invested $29.6 million year-to-date in water and wastewater infrastructure, including acquisitions

  • In May 2022, completed the purchase of substantially all the operating water assets of the Town of Clayton, located in Kent County, Delaware

Second Quarter Results

Net income was $5.0 million, a $0.5 million, or 12.0%, increase compared to net income recorded during the three months ended June 30, 2021.

Revenues totaled $25.0 million for the three months ended June 30, 2022, $2.5 million, or 11.3%, more than revenues for the three months ended June 30, 2021. Comprising this increase:

Other utility operating revenue increased approximately $1.9 million primarily due to an increase in wastewater revenue resulting from the acquisition of Tidewater Environmental Services, Inc., or TESI, in January 2022 and an increase in industrial wastewater service revenue that began in June 2021.

Non-utility operating revenue increased approximately $1.0 million, primarily due to an increase in contract service revenue related to a contract for the design and construction of wastewater infrastructure and an increase in Service Line Protection Plan revenue.

Water sales revenue decreased $0.4 million, or 1.8%, primarily due to a decrease in overall water consumption, partially offset by an increase in fixed fee revenue related to added customers.

“We are pleased to announce these strong financial results, with our wastewater operations reflecting the accretive effect of our acquisition of TESI earlier this year along with a major industrial user going online in June 2021. Additionally, we are pleased to welcome our new customers upon closing on the acquisition of the Town of Clayton’s water system in May,” said Dian C. Taylor, Chair, President and CEO.

“The completion of these acquisitions demonstrates our continued focus on expansion and growth. With the acquisition of TESI, we more than doubled the number of wastewater customers we serve; and our water system acquisitions, as well as robust home and business development in our service territories, increased the number of water customers we serve by 3.3% in the past year,” said Taylor.

Operating expenses, excluding depreciation and income taxes, increased $1.5 million, or 12.8%. Utility operating expense increases primarily are the result of increased costs associated with repair, maintenance and treatment of our water and wastewater systems as well as payroll and administrative costs. These increases are partially offset by a decrease in purchased water under a new contract, effective January 2022, in which the minimum amount of water required to be purchased was reduced.

Non-utility operating expenses increased $1.0 million primarily due to an increase in costs associated with a wastewater infrastructure design and construction contract and an increase in plumbing services related to Service Line Protection Plan repairs.

Long-term debt interest expense increased $0.2 million, primarily related to an increase in long-term debt interest related to the Series W First Mortgage Bond issued on April 29, 2022.

Year-to-Date Results

Net income was $9.5 million, a $0.8 million, or 9.4%, increase compared to net income recorded during the six months ended June 30, 2021. Diluted net income per share increased 8.6% to $1.01 for the six months ended June 30, 2022 compared to $0.93 for the first six months of 2021.

Revenues totaled $47.2 million for the six months ended June 30, 2022, $4.1 million, or 9.5%, more than revenues for the six months ended June 30, 2021. Comprising this increase:

Other utility operating revenue increased approximately $3.0 million primarily due to an increase in wastewater revenue resulting from the acquisition of TESI in January 2022 and an increase in industrial wastewater service revenue that began in June 2021.

Non-utility operating revenue increased approximately $1.1 million, primarily due to an increase in contract service revenue related to a contract for the design and construction of wastewater infrastructure and an increase in Service Line Protection Plan revenue.

Water sales revenue remained consistent for the six months ended June 30, 2022 with the corresponding period in 2021. Overall water consumption decreased, partially offset by an increase in fixed fee revenue related to customer growth.

Operating expenses, excluding depreciation and income taxes, increased $2.6 million, or 11.1%. Utility operating expense increases are primarily the result of increased costs associated with repair, maintenance and treatment of our water and wastewater systems as well as increases in payroll and administrative costs. These increases are partially offset by a decrease in purchased water under a new contract, effective January 2022, in which the minimum amount of water required to be purchased was reduced.

Non-utility operating expenses increased $1.1 million primarily due to an increase in costs associated with a wastewater infrastructure design and construction contract and an increase in plumbing services related to Service Line Protection Plan repairs.

Long-term debt interest expense increased $0.2 million, primarily related to an increase in long-term debt interest related to the Series W First Mortgage Bond issued on April 29, 2022.

Capital Expenditures

As part of Artesian’s ongoing effort to ensure high-quality reliable service to customers, $29.6 million was invested in the first six months of 2022 in water and wastewater infrastructure projects and acquisitions. These investments include the installation of transmission and distribution facilities, replacement of aging mains, rehabilitation of treatment facilities and redevelopment of wells and pumping equipment. We also acquired wastewater utility plant assets related to the acquisition of TESI and purchased the Town of Clayton’s water utility plant assets.

“We continue to make strategic capital investments in infrastructure projects, not only to increase reliability for our customers but to ensure that supply meets demands arising from continued growth in the number of customers we serve. Additionally, we have focused on further enhancing our self-supply, which resulted in a 42.9% reduction in Delaware’s purchased water costs year-to-date compared to the same period in 2021,” said Taylor.

About Artesian Resources
Artesian Resources Corporation operates as a holding company of wholly-owned subsidiaries offering water and wastewater services, and a number of other related core business services, on the Delmarva Peninsula. Artesian Water Company, the principal subsidiary, is the oldest and largest regulated water utility on the Delmarva Peninsula and has been providing water service since 1905. Artesian supplies 8.4 billion gallons of water per year through 1,398 miles of main to over a third of Delawareans.

Forward Looking Statements
This release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, our growth strategy, our expectations regarding infrastructure investments, acquisition agreements and the continued growth in our business and the number of customers served. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: changes in weather, changes in our contractual obligations, changes in government policies, the timing and results of our rate requests, failure to receive regulatory approval, changes in economic and market conditions generally and other matters discussed in our filings with the Securities and Exchange Commission. While the Company may elect to update forward-looking statements, we specifically disclaim any obligation to do so and you should not rely on any forward-looking statement as representation of the Company’s views as of any date subsequent to the date of this release.

Contact:
Nicki Taylor
Investor Relations
(302) 453-6900
ntaylor@artesianwater.com

 

Artesian Resources Corporation

Condensed Consolidated Statement of Operations

(In thousands, except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Water sales

 

$

19,722

 

 

$

20,078

 

 

$

37,865

 

 

$

37,908

 

Other utility operating revenue

 

 

2,914

 

 

 

1,014

 

 

 

5,440

 

 

 

2,390

 

Non-utility operating revenue

 

 

2,375

 

 

 

1,377

 

 

 

3,893

 

 

 

2,815

 

 

 

 

25,011

 

 

 

22,469

 

 

 

47,198

 

 

 

43,113

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Utility operating expenses

 

 

10,070

 

 

 

9,661

 

 

 

20,566

 

 

 

19,166

 

Non-utility operating expenses

 

 

1,905

 

 

 

862

 

 

 

2,847

 

 

 

1,777

 

Depreciation and amortization

 

 

3,055

 

 

 

2,976

 

 

 

6,140

 

 

 

5,988

 

State and federal income taxes

 

 

1,725

 

 

 

1,542

 

 

 

3,144

 

 

 

2,893

 

Property and other taxes

 

 

1,413

 

 

 

1,341

 

 

 

2,914

 

 

 

2,761

 

 

 

 

18,168

 

 

 

16,382

 

 

 

35,611

 

 

 

32,585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 

6,843

 

 

 

6,087

 

 

 

11,587

 

 

 

10,528

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for funds used during construction

 

 

324

 

 

 

371

 

 

 

505

 

 

 

615

 

Miscellaneous

 

 

(33

)

 

 

(59

)

 

 

1,412

 

 

 

1,343

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Interest Charges

 

 

7,134

 

 

 

6,399

 

 

 

13,504

 

 

 

12,486

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Charges

 

 

2,088

 

 

 

1,894

 

 

 

3,975

 

 

 

3,775

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

5,046

 

 

$

4,505

 

 

$

9,529

 

 

$

8,711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding - Basic

 

 

9,452

 

 

 

9,395

 

 

 

9,438

 

 

 

9,381

 

Net Income per Common Share - Basic

 

$

0.53

 

 

$

0.48

 

 

$

1.01

 

 

$

0.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding - Diluted

 

 

9,470

 

 

 

9,425

 

 

 

9,464

 

 

 

9,416

 

Net Income per Common Share - Diluted

 

$

0.53

 

 

$

0.48

 

 

$

1.01

 

 

$

0.93

 


Artesian Resources Corporation

Condensed Consolidated Balance Sheet

(In thousands)

(Unaudited)

 

 

 

June 30,

 

December 31,

 

 

2022

 

2021

Assets

 

 

 

 

 

 

 

 

Utility Plant, at original cost less

 

 

 

 

 

 

 

 

accumulated depreciation

 

$

639,513

 

 

$

590,431

 

Current Assets

 

 

16,931

 

 

 

18,664

 

Regulatory and Other Assets

 

 

17,634

 

 

 

15,620

 

 

 

$

674,078

 

 

$

624,715

 

 

 

 

 

 

 

 

 

 

Capitalization and Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

$

180,902

 

 

$

178,010

 

Long Term Debt, Net of Current Portion

 

 

173,597

 

 

 

143,259

 

Current Liabilities

 

 

33,490

 

 

 

47,206

 

Advances for Construction

 

 

4,174

 

 

 

4,295

 

Contributions in Aid of Construction

 

 

206,695

 

 

 

176,656

 

Other Liabilities

 

 

75,220

 

 

 

75,289

 

 

 

$

674,078

 

 

$

624,715