SJW Corp. (NYSE:SJW) today reported financial results for the second quarter ended June 30, 2011. Operating revenue was $59.0 million in the quarter compared to $54.1 million in 2010. The $4.9 million increase in revenue reflects cumulative rate increases of $2.1 million, $2.5 million in higher customer water usage and new customers compared to a year ago and $256,000 in higher revenue from real estate operations.

Net income was $5.5 million and diluted earnings per common share were $0.29, compared to $4.5 million and $0.24 per share, respectively, in the second quarter of 2010.

Water production costs for the quarter ended June 30, 2011 were $22.2 million compared to $21.7 million in 2010, an increase of $449,000. The increase in water production costs is primarily attributable to $739,000 in higher customer water usage and $235,000 in a higher unit cost for energy, offset by $525,000 due to an increase in use of available surface water supply.

Operating expenses, excluding water production costs, for the second quarter were $23.0 million compared to $21.0 million in 2010. The increase of $2.0 million reflects an additional $1.0 million of administrative and general expenses, $722,000 of depreciation expense and $250,000 more in taxes other than income tax and maintenance expenses. Income tax expense for the second quarter increased to $3.8 million in 2011 from $3.1 million in 2010 as a result of higher pre-tax income.

Year-to-date operating revenue increased by $8.2 million to $102.7 million from $94.5 million in the first six months of 2011. The increase was attributable to $4.5 million in cumulative rate increases, $2.8 million in higher customer water usage, $323,000 in revenue from new customers and $557,000 in higher revenue from real estate operations.

Year-to-date net income was $6.1 million, compared to $5.5 million in 2010. Diluted earnings per share were $0.32 in the first six months of 2011, compared to $0.29 per diluted share for the same period in 2010.

Year-to-date water production costs increased to $37.7 million from $36.2 million in 2010. The $1.5 million increase was primarily attributable to $758,000 in higher customer water usage, $515,000 in decreased surface water supply and $210,000 in higher unit cost for energy. Operating expenses, excluding water production costs, increased $4.0 million to $45.6 million from $41.6 million. The increase was due to an increase in administrative and general expenses of $1.7 million, $1.4 million of depreciation expense, $459,000 in maintenance expenses and $447,000 in taxes other than income taxes. Income tax expense increased by $467,000 year-to-date due to higher pre-tax income.

The Directors of SJW Corp. today declared a quarterly dividend on common stock of $0.1725 per share. The dividend is payable on September 1, 2011 to shareholders of record on August 8, 2011.

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 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 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. The results for a quarter are not indicative of results for a full year due to seasonality and other factors. 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

(Unaudited)

(in thousands, except per share data)
   
THREE MONTHS ENDEDJUNE 30

SIX MONTHS ENDEDJUNE 30
2011     2010     2011     2010  
   
OPERATING REVENUE $ 59,007 54,128 102,703 94,539
OPERATING EXPENSE:
Operation:
Purchased water 12,681 11,335 20,097 17,154
Power 1,373 1,584 2,387 2,728
Groundwater extraction charge 5,300 6,238 9,808 11,233
Other production costs   2,820 2,568 5,412 5,106
Total production costs 22,174 21,725 37,704 36,221
 
Administrative and general 9,658 8,639 19,294 17,627
Maintenance 3,476 3,289 6,524 6,065
Taxes other than income 2,123 2,060 4,210 3,763
Depreciation and amortization   7,792 7,070 15,586 14,181
Total operating expense   45,223 42,783 83,318 77,857
 
OPERATING INCOME 13,784 11,345 19,385 16,682
 

Interest on long-term debt and other
  (4,516 ) (3,728 ) (9,074 ) (7,398 )
 
Income before income taxes $ 9,268 7,617 10,311 9,284
 
Provision for income taxes   3,817 3,101 4,250 3,783
 
NET INCOME $ 5,451 4,516 6,061 5,501
 

Other comprehensive income (loss), net
  28 (1,240 ) 17 (727 )
 
COMPREHENSIVE INCOME $ 5,479 3,276 6,078 4,774
 
 
Earnings per share
-Basic $ 0.29 0.24 0.33 0.29
-Diluted $ 0.29 0.24 0.32 0.29
 
Dividend per share $ 0.17 0.17 0.34 0.34
 
Weighted average shares outstanding
-Basic 18,577 18,528 18,574 18,524
-Diluted 18,785 18,741 18,780 18,731
 

SJW Corp.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)
   
June 302011   December 312010
ASSETS
UTILITY PLANT:
Land $ 8,579 8,579
Depreciable plant and equipment 1,029,305 1,004,689
Construction in progress 17,912 10,103
Intangible assets   14,730 13,538
Total utility plant 1,070,526 1,036,909
Less accumulated depreciation and amortization   336,866 322,102
Net utility plant   733,660 714,807
 
REAL ESTATE INVESTMENT: 89,055 88,943
Less accumulated depreciation and amortization   9,692 8,854
Net real estate investment   79,363 80,089
CURRENT ASSETS:
Cash and equivalents 45,356 1,730

Accounts receivable and accrued unbilled utility revenue
36,105 33,835
Prepaid expenses and other   2,353 2,462
Total current assets   83,814 38,027
OTHER ASSETS:
Investment in California Water Service Group 7,206 7,177

Debt issuance costs, net of accumulated amortization
4,893 4,308
Regulatory assets 87,721 87,721
Other   3,657 3,233
  103,477 102,439
$ 1,000,314 935,362
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock $ 9,676 9,662
Additional paid-in capital 23,941 23,443
Retained earnings 219,155 219,568
Accumulated other comprehensive income   2,376 2,359
Total shareholders’ equity 255,148 255,032
Long-term debt, less current portion   344,811 295,704
Total capitalization   599,959 550,736
CURRENT LIABILITIES:
Line of credit 6,800 4,000
Current portion of long-term debt 1,119 1,133

Accrued groundwater extraction charge and purchased water
7,002 4,359
Purchased power 609 495
Accounts payable 9,765 5,487
Accrued interest 5,263 5,244
Other current liabilities   8,806 8,437
Total current liabilities   39,364 29,155
 
DEFERRED INCOME TAXES AND CREDITS 111,954 107,961

ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF CONSTRUCTION
189,862 190,155
POSTRETIREMENT BENEFIT PLANS 51,923 50,213
OTHER NONCURRENT LIABILITIES   7,252 7,142
$ 1,000,314 935,362

Copyright Business Wire 2010

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