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NEWARK, Del., May 08, 2019 (GLOBE NEWSWIRE) -- Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider of water and wastewater services, and related services, on the Delmarva Peninsula, today announced that net income for the first quarter was $3.6 million, a $0.1 million, or 3.2%, increase compared to net income recorded during the first quarter of 2018. Diluted net income per share increased 5.4% to $0.39 compared to $0.37 for the first quarter of 2018.
Revenues for the first quarter of 2019 were $19.4 million, a $0.5 million, or 2.5%, increase from the $18.9 million recorded for the same three-month period of 2018. Water sales revenue increased $0.3 million, or 1.7%, for the first quarter of 2019, primarily due to an increase from customer growth and an increase in Distribution System Improvement Charges (“DSIC”) revenue. Effective January 1, 2019, the DSIC rate increased from 4.71% to 5.55%.
The Delaware Public Service Commission approved a reduction in Delaware water rates on January 31, 2019 to return the savings from the Tax Cut and Jobs Act’s (“TCJA”) reduction in the corporate tax rate to customers. Approximately $3.3 million was placed in reserve and not included in water sales revenue in 2018. During the first quarter of 2019, an additional $0.5 million was placed in reserve and not included in water sales revenue. As of March 31, 2019, the total amount reserved to be refunded to customers in the second quarter of 2019 is $3.8 million.
Other utility operating revenue increased 12.1% to $1.1 million for the first quarter of 2019 compared to the same period in 2018, primarily as a result of an increase in wastewater customers served in new and existing developments in Sussex County, Delaware.
Non-utility revenue increased 5.5% to $1.3 million for the first quarter of 2019 compared to the same period in 2018, primarily due to an increase in the number enrolled in our Service Line Protection Plans (“SLP Plans”). The SLP Plans provide coverage for all material and labor required to repair or replace participants’ leaking water service or clogged sewer lines and internal plumbing lines.
Operating expenses, excluding depreciation and income taxes, increased $0.2 million, or 1.6%, for the three months ended March 31, 2019 compared to the same period in 2018. Non-utility operating expenses increased approximately $0.1 million, or 15.7%, for the first quarter of 2019 compared to the same period in 2018, primarily due to an increase in payroll and benefit costs as well as an increase in plumbing services related to the SLP Plans.
Depreciation and amortization expense increased $0.1 million, or 5.7%, for the three months ended March 31, 2019 compared to the same period in 2018, primarily due to continued investment in utility plant providing supply, treatment, storage and distribution of water to customers and service to our wastewater customers.
Federal and state income tax expense decreased $0.2 million, or 11.9%, for the three months ended March 31, 2019 compared to the same period in 2018, primarily due to the amortization of the deferred tax regulatory liability related to the reduction in federal corporate income tax rate associated with the TCJA.
Interest expense increased $0.2 million during the first quarter of 2019 compared to the same period in 2018, primarily due to long-term debt interest associated with the $7.5 million wastewater loan issued in August 2018 and the $4.5 million wastewater loan issued in December 2018.
“In 2018, we invested $49.1 million in water and wastewater utility plant to service our customers, and we invested another $9.1 million in the first quarter of 2019,” said Dian C. Taylor, Chair, President and CEO. “These strategic investments in water transmission and distribution facilities, replacement of aging mains, rehabilitation of treatment facilities, and redevelopment of wells and pumping equipment, along with new state-of-the-art wastewater recycling and reuse facilities, demonstrate that we as a company are primed for growth in 2019. Artesian is well positioned to continue to vigorously expand our provision of water and wastewater services to new customers and communities that can be assured of the superior service for which we have been known for nearly 115 years,” said Taylor.
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 7.9 billion gallons of water per year through 1,311 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, our anticipated expansion of water and wastewater services to new customers, our investment in infrastructure projects and wastewater facilities, continued growth in the number of customers served and our ability to continue to increase shareholder value. 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||1,120||999|
|Utility operating expenses||9,121||9,083|
|Non-utility operating expenses||767||663|
|Depreciation and amortization||2,715||2,568|
|State and federal income taxes||1,180||1,339|
|Property and other taxes||1,319||1,282|
|Allowance for funds used during construction||226||88|
|Income Before Interest Charges||5,310||4,977|
|Weighted Average Common Shares Outstanding - Basic||9,258||9,223|
|Net Income per Common Share - Basic||$||0.39||$||0.38|
|Weighted Average Common Shares Outstanding - Diluted||9,314||9,281|
|Net Income per Common Share - Diluted||$||0.39||$||0.37|
|Artesian Resources Corporation|
|Condensed Consolidated Balance Sheet|
|March 31,||December 31,|
|Utility Plant, at original cost less|
|Regulatory and Other Assets||15,755||15,034|
|Capitalization and Liabilities|
|Long Term Debt, Net of Current Portion||115,352||115,862|
|Advances for Construction||6,330||6,596|
|Contributions in Aid of Construction||138,594||138,015|