SOURCE: California Water Service Group

California Water Service Group

May 01, 2013 16:15 ET

California Water Service Group Announces First Quarter 2013 Results

SAN JOSE, CA--(Marketwired - May 1, 2013) - California Water Service Group (NYSE: CWT) today announced a net loss of $1.1 million or a $0.03 net loss per diluted common share for the first quarter of 2013, compared to net income of $1.1 million or $0.03 per diluted common share for the first quarter of 2012.

Revenue for the first quarter of 2013 was $111.4 million, compared to revenue of $116.8 million in first quarter 2012. The primary reason for the reduction in revenue was a net benefit of $8.9 million in revenue from the reversal of the 2011 deferred Water Revenue Adjustment Mechanism (WRAM) account balance recorded during the first quarter of 2012. In addition, revenue during the quarter was reduced by a $3.0 million decrease in accrued unbilled revenue which is not included in the WRAM balance and driven by lower consumption. 

Total operating expenses for the first quarter of 2013 decreased $4.5 million, or 4.1%, to $105.7 million. Reduced expenses in several categories were partially offset by increases in purchased water costs and expenses for wages & benefits, and uninsured losses. 

Maintenance expense decreased $1.6 million, or 28.3%, to $4.1 million, while depreciation expense increased $0.7 million, or 4.9%, to $14.6 million due to 2012 capital additions. 

Other income, net of income taxes, decreased $0.6 million to $0.7 million, due to lower unrealized gains related to the Company's non-qualified retirement plans. Interest expense increased $0.8 million, or 11.3%, to $7.5 million due to completion of plant and increases in short-term rates.

On March 26, 2013, the Company received $105.8 million in net proceeds from the sale of 5,750,000 shares of common stock. The Company plans to use the proceeds to pay down its revolving lines of credit and fund operations, capital projects, and general operations. 

"Results for the first quarter were in line with the Company's expectations due to the seasonality of our business," said Chairman and Chief Executive Officer Peter C. Nelson. "Cost controls were effective during the first quarter of 2013, and we will continue to focus on managing expenses as we pursue fair and timely rate relief," he said. 

All stockholders and interested investors are invited to listen to the first quarter 2013 conference call on May 2, 2013, at 11:00 a.m. (EDT), by dialing 1-888-438-5491 or 1-719-325-2361 and keying in ID# 3539432. A replay of the call will be available from 2:00 p.m. EDT on May 2, 2013, through June 30, 2013, at 1-888-203-1112 or 1-719-457-0820, ID# 3539432. The call, which will be hosted by President and Chief Operating Officer Martin A. Kropelnicki and Vice President and Chief Financial Officer Thomas F. Smegal, will also be webcast under the investor relations tab at www.calwatergroup.com.

California Water Service Group is the parent company of California Water Service Company, Washington Water Service Company, New Mexico Water Service Company, Hawaii Water Service Company, Inc., CWS Utility Services, and HWS Utility Services. Together these companies provide regulated and non-regulated water service to approximately 2 million people in more than 100 California, Washington, New Mexico, and Hawaii communities. Group's common stock trades on the New York Stock Exchange under the symbol "CWT." 

Additional information is available at our Web site at www.calwatergroup.com.

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 ("Act"). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the Act. Forward-looking statements are based on currently available information, expectations, estimates, assumptions and projections, and management's judgment about the Company, the water utility industry and general economic conditions. Such words as expects, intends, plans, believes, estimates, assumes, anticipates, projects, predicts, forecasts or variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not guarantees of future performance. They are subject to uncertainty and changes in circumstances. Actual results may vary materially from what is contained in a forward-looking statement. Factors that may cause a result different than expected or anticipated include, but are not limited to: governmental and regulatory commissions' decisions; changes in regulatory commissions' policies and procedures; the timeliness of regulatory commissions' actions concerning rate relief; new legislation; electric power interruptions; increases in suppliers' prices and the availability of supplies including water and power; fluctuations in interest rates; changes in environmental compliance and water quality requirements; acquisitions and our ability to successfully integrate acquired companies; the ability to successfully implement business plans; changes in customer water use patterns; the impact of weather on water sales and operating results; access to sufficient capital on satisfactory terms; civil disturbances or terrorist threats or acts, or apprehension about the possible future occurrences of acts of this type; the involvement of the United States in war or other hostilities; restrictive covenants in or changes to the credit ratings on our current or future debt that could increase our financing costs or affect our ability to borrow, make payments on debt or pay dividends; and, other risks and unforeseen events. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph, as well as the annual 10-K, Quarterly 10-Q, and other reports filed from time-to-time with the Securities and Exchange Commission (SEC). The Company assumes no obligation to provide public updates of forward-looking statements.

         
CALIFORNIA WATER SERVICE GROUP        
CONDENSED CONSOLIDATED BALANCE SHEETS        
Unaudited        
         
(In thousands, except per share data) March 31,   December 31,  
  2013   2012  
ASSETS            
Utility plant:            
  Utility plant $ 2,123,935   $ 2,096,363  
  Less accumulated depreciation and amortization   (655,345 )   (639,307 )
    Net utility plant   1,468,590     1,457,056  
             
Current assets:            
  Cash and cash equivalents   127,677     38,790  
  Receivables            
    Customers   29,204     29,958  
    Regulatory balancing accounts   29,607     34,020  
    Other   11,577     11,943  
  Unbilled revenue   15,551     15,394  
  Materials and supplies at weighted average cost   5,687     5,874  
  Taxes, prepaid expenses, and other assets   12,393     10,585  
    Total current assets   231,696     146,564  
             
Other assets:            
  Regulatory assets   353,606     344,419  
  Goodwill   2,615     2,615  
  Other assets   47,848     45,270  
    Total other assets   404,069     392,304  
  $ 2,104,355   $ 1,995,924  
             
CAPITALIZATION AND LIABILITIES            
Capitalization:            
  Common stock, $.01 par value $ 477   $ 419  
  Additional paid-in capital   327,178     221,013  
  Retained earnings   244,502     252,280  
    Total common stockholders' equity   572,157     473,712  
  Long-term debt, less current maturities   434,153     434,467  
    Total capitalization   1,006,310     908,179  
             
Current liabilities:            
  Current maturities of long-term debt   46,743     46,783  
  Short-term borrowings   93,275     89,475  
  Accounts payable   44,293     47,199  
  Regulatory balancing accounts   6,132     5,018  
  Accrued interest   11,003     4,705  
  Accrued expenses and other liabilities   55,308     49,887  
    Total current liabilities   256,754     243,067  
             
Unamortized investment tax credits   2,180     2,180  
Deferred income taxes, net   158,037     158,846  
Pension and postretirement benefits other than pensions   248,385     244,901  
Regulatory and other liabilities   88,476     92,593  
Advances for construction   186,242     187,584  
Contributions in aid of construction   157,971     158,574  
  $ 2,104,355   $ 1,995,924  
             
           
           
CALIFORNIA WATER SERVICE GROUP          
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)          
Unaudited          
(In thousands, except per share data)          
           
For the Three-Months ended:          
  March 31,     March 31,  
  2013     2012  
               
Operating revenue $ 111,444     $ 116,749  
Operating expenses:              
  Operations:              
    Water production costs   41,697       38,952  
    Administrative and general   25,281       23,018  
    Other operations   15,645       23,826  
  Maintenance   4,133       5,760  
  Depreciation and amortization   14,629       13,951  
  Income tax (benefit) expense   (1,146 )     28  
  Property and other taxes   5,435       4,607  
    Total operating expenses   105,674       110,142  
                 
    Net operating income   5,770       6,607  
               
Other income and expenses:              
  Non-regulated revenue   3,522       4,136  
  Non-regulated expenses, net   (2,417 )     (2,099 )
  Income tax (expense) on other income and expense   (451 )     (823 )
    Net other income   654       1,214  
               
Interest expense:              
  Interest expense   8,037       7,639  
  Less: capitalized interest   (540 )     (903 )
    Net interest expense   7,497       6,736  
               
Net (loss) income $ (1,073 )   $ 1,085  
               
(Loss) Earnings per share              
  Basic $ (0.03 )   $ 0.03  
  Diluted $ (0.03 )   $ 0.03  
Weighted average shares outstanding              
  Basic   42,248       41,842  
  Diluted   42,248       41,842  
Dividends declared per share of common stock $ 0.1600     $ 0.1575  
               

1720 North First Street
San Jose, CA 95112-4598

Contact Information

  • Contact:
    Tom Smegal
    (408) 367-8200 (analysts)

    Shannon Dean
    (310) 257-1435 (media)