NEWARK, Del., May 06, 2020 (GLOBE NEWSWIRE) -- Artesian Resources Corporation (ARTNA), a leading provider of water and wastewater services, and related services, on the Delmarva Peninsula, today announced first quarter results for 2020. Net income for the three months ended March 31, 2020 was $4.1 million, a $0.5 million, or 13.5%, increase compared to net income recorded during the first quarter of 2019. Diluted net income per share increased 12.8% to $0.44 compared to $0.39 for the first quarter of 2019.
The Company continues to provide essential utility services during the COVID-19 pandemic and is following social distancing and remote work directives to protect the well-being of its customers and employees. To support our customers and communities, we have suspended service disconnections and late fees. The full impact of the COVID-19 outbreak continues to evolve and management is actively monitoring the situation and impacts on its results of operations, customer billing and collections, suppliers, industry, and workforce.
“During these challenging times we remain committed to providing uninterrupted quality water service to our customers and community. We have modified our work practices and limited in-person customer interactions to safeguard the health and well-being of our employees and customers,” said Dian C. Taylor, Chair, President & CEO.
Water sales revenue increased 2.7% to $17.4 million for the three months ended March 31, 2020 from $17.0 million for the same period in 2019, primarily due to increases in the number of customers served, overall water consumption and distribution system improvement charge revenue.
Other utility operating revenue increased 11.9% to $1.3 million for the three months ended March 31, 2020 from $1.1 million for the same period in 2019, primarily as a result of increases in wastewater revenue from additional customers and in inspection fee revenue related to new development.
Non-utility revenue decreased $0.1 million, or 5.7%, for the three months ended March 31, 2020 compared to the same period in 2019, primarily due to a decrease in contract service revenue.
Operating expenses, excluding depreciation and income taxes, increased $0.1 million, or 1.1%, for the three months ended March 31, 2020 compared to the same period in 2019. The majority of the increase is related to increases in payroll and employee benefit costs, partially offset by a decrease in repair and maintenance costs related to the painting of elevated water storage tanks under contract.
Federal and state income tax expense increased $0.2 million, or 15.2%, for the three months ended March 31, 2020 compared to the same period in 2019, primarily due to increased pre-tax income in 2020 compared to 2019.
Miscellaneous income increased $0.3 million, or 36.0%, for the three months ended March 31, 2020 compared to the same period in 2019 due to the annual patronage distribution from CoBank, ACB. An increased average loan volume with CoBank, ACB in 2020 compared to 2019 and its issuance in 2020 of a special patronage distribution equivalent to 0.1% of the 2019 average loan volume resulted in the increased patronage distribution.
Allowance for funds used during construction, or AFUDC, increased $0.2 million, or 87.2%, as a result of higher long-term construction activity subject to AFUDC for the three months ended March 31, 2020 compared to the same period in 2019. “We remain focused on our long term growth strategy, investing in new sources of supply and new distribution mains to meet current and projected demands. We also recently completed the acquisition of the water assets of the town of Frankford, further expanding our customer base in our Sussex County service area,” said Taylor.
Interest expense increased $0.2 million during the three months ended March 31, 2020 compared to the same period in 2019, primarily due to an increase in long-term debt interest related to the Series V First Mortgage Bond issued on December 17, 2019. This increase is partially offset by a decrease in short-term debt interest, primarily related to lower short-term borrowing levels in 2020.
About Artesian Resources
Artesian Resources Corporation operates as a holding company of wholly-owned subsidiaries offering water and wastewater services, and related 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 8.3 billion gallons of water per year through 1,331 miles of main to over 300,000 people.
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, the impacts of the COVID-19 pandemic 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.
|Artesian Resources Corporation|
|Condensed Consolidated Statement of Operations|
|(In thousands, except per share amounts)|
|Three months ended|
|Other utility operating revenue||1,253||1,120|
|Utility operating expenses||9,235||9,121|
|Non-utility operating expenses||728||767|
|Depreciation and amortization||2,752||2,715|
|State and federal income taxes||1,359||1,180|
|Property and other taxes||1,365||1,319|
|Allowance for funds used during construction||423||226|
|Income Before Interest Charges||5,973||5,310|
|Weighted Average Common Shares Outstanding - Basic||9,297||9,258|
|Net Income per Common Share - Basic||$||0.44||$||0.39|
|Weighted Average Common Shares Outstanding - Diluted||9,343||9,314|
|Net Income per Common Share - Diluted||$||0.44||$||0.39|
|Artesian Resources Corporation|
|Condensed Consolidated Balance Sheet|
|March 31,||December 31,|
|Utility Plant, at original cost less|
|Regulatory and Other Assets||15,718||15,440|
|Capitalization and Liabilities|
|Long Term Debt, Net of Current Portion||143,563||144,156|
|Advances for Construction||5,302||5,421|
|Contributions in Aid of Construction||152,457||149,479|