Artesian Resources Corporation Reports 2016 Third Quarter And Year-to-Date Results

NEWARK, Del., Nov. 02, 2016 (GLOBE NEWSWIRE) -- Artesian Resources Corporation (Nasdaq:ARTNA), a leading provider of water, wastewater services and related services on the Delmarva Peninsula, announced today that net income for the third quarter of 2016 was $4.4 million, an increase of $0.7 million, or 17.9%, compared to the $3.7 million in net income reported during the third quarter of 2015.  Diluted net income per share increased 17.1% to $0.48 compared to $0.41 for the third quarter of 2015.

Revenues for the third quarter of 2016 were $21.8 million, a $1.0 million, or 5.1%, increase over the same quarter of 2015.  Water sales revenue increased $0.8 million, or 4.5%, to $19.7 million for the third quarter of 2015 compared to $18.8 million for the third quarter of 2015.  The increase is due primarily to an increase in the Distribution System Improvement Charge, or DSIC, and overall greater water consumption. 

Excluding depreciation and income taxes, operating expenses increased $0.4 million, or 4.0%, to $11.1 million for the third quarter of 2016 compared to $10.7 million for the same period in 2015.  Utility operating expenses for the third quarter of 2016 were $9.3 million, a $0.3 million, or 2.8%, increase from the $9.0 million recorded for the same period in 2015.  The increase is primarily the result of increased legal costs and increased purchased water expense due to the timing of purchases.

Interest expenses decreased $0.1 million, or 6.1%, to $1.7 million for the third quarter of 2016 compared to $1.8 million for the same period of 2015 primarily due to a decrease in the Series S First Mortgage Bond interest rate from 6.73% to 4.45%, effective March 1, 2016, and a decrease in short-term debt outstanding.

Through the first nine months of 2016, Artesian had net income of $10.2 million, an increase of 8.0% compared to net income of $9.5 million recorded for the same period of 2015.  Diluted net income per share increased 5.7% to $1.12 for the nine months ended September 30, 2016 from $1.06 for the same period of 2015.

Revenues during the first nine months of 2016 increased $1.4 million, or 2.4%, to $59.7 million.  Water sales revenue increased $1.1 million, or 2.1%, for the nine months ended September 30, 2016 from the corresponding period in 2015.  The increase in water sales revenue is primarily due to an increase in the DSIC and an increase in the number of customers served and resulting fixed customer and fire protection charges.

Excluding depreciation and income taxes, operating expenses increased $0.7 million, or 2.3%, to $31.9 million for the nine months ended September 30, 2016 compared to $31.2 million for the same period of 2015.  Utility operating expenses for the nine months ended September 30, 2016 were $26.6 million, a $0.4 million, or 1.5%, increase from the $26.2 million recorded for the same period of 2015.  The increase is primarily the result of increased legal, payroll and employee benefit expenses, somewhat offset by lower purchased power costs under a new three-year electric generation supply contract effective May 2016.

Interest expenses decreased $0.3 million, or 4.9%, to $5.0 million for the nine months ended September 30, 2016 compared to $5.3 million for the same period of 2015 primarily due to a decrease in the Series S First Mortgage Bond interest rate from 6.73% to 4.45%, effective March 1, 2016, and a decrease in short-term debt outstanding.

The Company invested $20.0 million in infrastructure improvements during the first nine months of 2016 to ensure high quality and reliable service to customers.  Significant infrastructure improvements included the replacement of aging water mains, upgrade of meter equipment, enhancement of water treatment facilities, rehabilitation of pumping equipment and the relocation of mains as mandated by state highway projects. 

"Our ability to continue to control expenses coupled with increased water consumption during the third quarter of 2016 contributed to our overall positive results.  We are also able to obtain timely recovery through the Distribution System Improvement Charge on a portion of our investments made in infrastructure so that our customers receive reliable and safe water," said Dian C. Taylor, Chair, President and CEO.

About Artesian ResourcesArtesian Resources Corporation operates as a holding company of wholly-owned subsidiaries offering water, wastewater services and related services on the Delmarva Peninsula.  Artesian Water Company, the principal subsidiary, is the oldest and largest investor-owned water utility on the Delmarva Peninsula and has been providing water service since 1905.  Artesian supplies 7.6 billion gallons of water per year through 1,218 miles of water main to approximately 301,000 people.

Artesian Resources Corporation  
Condensed Consolidated Statement of Operations  
(In thousands, except per share amounts)  
(Unaudited)  
                         
    Three months ended     Nine months ended  
    September 30,     September 30,  
      2016         2015       2016     2015  
Operating Revenues                        
Water sales $   19,680     $   18,831     $ 53,440   $ 52,343  
Other utility operating revenue     976         861       2,752     2,618  
Non-utility operating revenue     1,172         1,084       3,480     3,313  
      21,828         20,776       59,672     58,274  
                         
Operating Expenses                        
Utility operating expenses     9,292         9,036       26,603     26,198  
Non-utility operating expenses     698         578       1,924     1,705  
Depreciation and amortization     2,270         2,196       6,835     6,597  
State and federal income taxes     2,498         2,497       6,473     6,452  
Property and other taxes     1,125         1,075       3,371     3,270  
      15,883         15,382       45,206     44,222  
                         
Operating Income     5,945         5,394       14,466     14,052  
                         
Allowance for funds used during construction      87         86       160     153  
Miscellaneous     (26 )       (28 )     598     521  
                         
Income Before Interest Charges     6,006         5,452       15,224     14,726  
                         
Interest Charges     1,646         1,753       4,996     5,256  
                         
Net Income   $   4,360     $   3,699     $ 10,228   $ 9,470  
                         
Weighted Average Common Shares Outstanding - Basic     9,112         8,960       9,090     8,935  
Net Income per Common Share - Basic $   0.48     $   0.41     $ 1.13   $ 1.06  
                         
Weighted Average Common Shares Outstanding - Diluted     9,177         9,000       9,154     8,972  
Net Income per Common Share - Diluted $   0.48     $   0.41     $ 1.12   $ 1.06  
                         
Artesian Resources Corporation  
Condensed Consolidated Balance Sheet  
(In thousands)  
(Unaudited)  
                         
  September 30,   December 31,              
  2016   2015              
Assets                        
Utility Plant, at original cost less                         
accumulated depreciation $   419,952     $   405,606                
Current Assets     15,879         14,444                
Regulatory and Other Assets     11,108         11,576                
  $   446,939     $   431,626                
                         
Capitalization and Liabilities                        
                         
Stockholders' Equity $   135,877     $   132,331                
Long Term Debt, Net of Current Portion     102,599         103,647                
Current Liabilities     20,893         22,403                
Net Advances for Construction     8,542         8,752                
Contributions in Aid of Construction     110,868         99,847                
Other Liabilities     68,160         64,646                
  $   446,939     $   431,626                
                         

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

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