SJW Corp. (NYSE:SJW) today reported financial results for the second quarter ended June 30, 2010. Operating revenue was $54.1 million in the quarter compared to $58.2 million in 2009. The $4.1 million decrease in revenue primarily reflects a decline in customer water usage of $5.4 million, partially offset by an increase of $1.3 million in cumulative rate increases.

Net income for the quarter ended June 30, 2010 was $4.5 million and diluted earnings per common share were $0.24, compared to $4.4 million and $0.23 per share, respectively, in the second quarter of 2009.

Water production costs for the quarter ended June 30, 2010 were $19.2 million compared to $23.9 million in 2009, a decrease of $4.7 million. The decline in water production cost is primarily attributable to $3.3 million in lower customer water usage and $1.7 million in savings due to greater surface water supply, offset by $0.3 million in a higher unit cost for energy.

Operating expenses, excluding water production costs and income taxes, for the second quarter were $23.6 million compared to $23.3 million in 2009. The increase of $0.3 million was due to an increase of $0.8 million in depreciation expense as more capital expenditures were made and $0.1 million in maintenance expenses. These increases were partially offset by a $0.3 million decrease in taxes other than income tax and a $0.3 million decrease in administrative and general expenses and other operating expenses, primarily due to additional property tax expense as a result of a tenant bankruptcy in the 2009 period. Income tax expense for the second quarter increased to $3.1 million in 2010 from $3.0 million in 2009 as a result of higher pre-tax income.

Year-to-date operating revenue decreased by $3.7 million to $94.5 million from $98.2 million in the first six months of 2009. The decrease was attributable to $6.1 million in lower customer water usage and $0.6 million in lower revenue from real estate operations, partially offset by $2.9 million in cumulative rate increases and $0.1 million in revenue from new customers.

Year-to-date net income was $5.5 million, compared to $4.5 million in 2009. Earnings per basic and diluted share respectively was $0.29 in the first six months of 2010, compared to $0.25 and $0.24 per basic and diluted share, respectively, for the same period in 2009.

Year-to-date water production costs decreased to $31.1 million from $37.5 million in 2009. The $6.4 million decrease was primarily attributable to lower customer demand of $4.2 million and savings due to greater surface water supply of $3.0 million, offset by $0.8 million in a higher unit cost for energy. Operating expenses, excluding water production costs and income taxes, increased $0.6 million to $46.7 million from $46.1 million. The increase of $0.6 million was due to an increase of $1.4 million in depreciation expense, reflecting greater capital expenditures, and $0.5 million in other operating expenses. These increases were partially offset by a $0.9 million decrease in taxes other than income taxes and $0.4 million decrease in administrative and general expenses and maintenance expenses. Income tax expense increased by $0.7 million year-to-date due to higher pre-tax income.

The Directors of SJW Corp. today declared a quarterly dividend on common stock of $0.17 per share. The dividend is payable on September 1, 2010 to shareholders of record on August 9, 2010.

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. and SJW Land Company. Together, San Jose Water Company and SJWTX, Inc. provide regulated and nonregulated 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 buildings, has a majority interest in a real estate partnership, and owns properties in the states of California, Florida, Connecticut, Texas, Arizona and Tennessee.

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. The results for a quarter are not indicative of results for a full year due to seasonality. Certain 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 Income and Comprehensive Income (Loss)(Unaudited)(in thousands, except per share data)
       
THREE MONTHS ENDEDJUNE 30, SIX MONTHS ENDEDJUNE 30,
  2010     2009       2010     2009
 
OPERATING REVENUE $ 54,128 58,194 $ 94,539 98,215
OPERATING EXPENSE:
Operation:
Purchased water 11,335 12,601 17,154 20,390
Power 1,584 1,817 2,728 2,577
Groundwater extraction charge   6,238 9,480   11,233 14,532
Total production costs 19,157 23,898 31,115 37,499
 
Administrative and general 6,683 6,897 13,741 14,027
Other 4,524 4,547 8,992 8,524
Maintenance 3,289 3,216 6,065 6,132
Taxes, other than income 2,060 2,392 3,763 4,682
Depreciation & amortization 7,070 6,238 14,181 12,789
Income taxes   3,101 2,975   3,783 3,076
 
Total operating expense   45,884 50,163   81,640 86,729
 
OPERATING INCOME 8,244 8,031 12,899 11,486
 

Interest on long-term debt and other
  (3,728 ) (3,613 )   (7,398 ) (6,952 )
 
NET INCOME $ 4,516 4,418 $ 5,501 4,534
 
Other comprehensive loss, net   (1,240 ) (3,258 )   (727 ) (6,224 )
 
COMPREHENSIVE INCOME (LOSS) $ 3,276 1,160 $ 4,774 (1,690 )
 
 
Earnings per share
-Basic $ 0.24 0.24 0.29 0.25
-Diluted $ 0.24 0.23 0.29 0.24
 
Dividend per share $ 0.17 0.17 0.34 0.33
 
Weighted average shares outstanding
-Basic 18,528 18,483 18,524 18,476
-Diluted 18,741 18,670 18,731 18,664
 
SJW Corp.Condensed Consolidated Balance Sheets(Unaudited)(in thousands)
   
June 30,2010   December 31,2009
ASSETS
UTILITY PLANT:
Land $ 8,563 8,558
Depreciable plant and equipment 946,512 913,071
Construction in progress 24,807 11,119
Intangible assets   13,092 11,278
Total utility plant 992,974 944,026
Less accumulated depreciation and amortization   309,914 298,921
Net utility plant   683,060 645,105
 
REAL ESTATE INVESTMENT: 88,000 88,000
Less accumulated depreciation and amortization   8,027 7,188
Net real estate investment   79,973 80,812
CURRENT ASSETS:
Cash and equivalents 3,495 1,416
Restricted cash 27,733 -

Accounts receivable and accrued unbilled utility revenue
30,912 24,004
Prepaid expenses and other   2,308 2,590
Total current assets   64,448 28,010
OTHER ASSETS:
Investment in California Water Service Group 39,268 40,500

Debt issuance costs and broker fees, net of accumulated amortization
3,783 3,098
Regulatory assets 78,274 78,525
Other   4,174 2,424
  125,499 124,547
$ 952,980 878,474
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock $ 9,650 9,635
Additional paid-in capital 22,646 22,046
Retained earnings 207,028 207,888
Accumulated other comprehensive income   12,460 13,187
Total shareholders’ equity 251,784 252,756
Long-term debt, less current portion   296,295 246,879
Total capitalization   548,079 499,635
CURRENT LIABILITIES:
Line of credit 11,850 5,800
Current portion of long-term debt 1,108 1,081

Accrued groundwater extraction charge and purchased water
7,634 4,496
Purchased power 913 486
Accounts payable 17,965 6,562
Accrued interest 5,129 4,979
Income tax payable 1,911 728
Other current liabilities   8,504 7,826
Total current liabilities   55,014 31,958
 
DEFERRED INCOME TAXES AND CREDITS 102,704 102,381

ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF CONSTRUCTION
190,422 190,506
POSTRETIREMENT BENEFIT PLANS 49,892 47,484
OTHER NONCURRENT LIABILITIES   6,869 6,510
$ 952,980 878,474

Copyright Business Wire 2010

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