SOURCE: Middlesex Water Company

August 09, 2005 15:37 ET

Middlesex Water Company Reports Second Quarter Earnings

ISELIN, NJ -- (MARKET WIRE) -- August 9, 2005 -- Middlesex Water Company, (NASDAQ: MSEX), a provider of water and wastewater services in New Jersey and Delaware, announced a 3.0% increase in consolidated net income for the quarter ended June 30, 2005.

Second Quarter 2005 Results

Consolidated operating revenues for the quarter ended June 30, 2005, were $18.4 million, up from $17.8 million for the same period in 2004. Earnings applicable to common stock were $1.9 million, and basic and diluted earnings per share were $0.17 and $0.16 respectively, which were comparable with the prior year.

Revenues from sales of water increased by $0.9 million in the Middlesex system, which was primarily the result of a 9.5% base rate increase received in May 2004. This increase was partially offset by decreased water consumption by certain large industrial customers during the period. Continued customer growth and a base rate increase for the Company's Delaware subsidiary, Tidewater Utilities, Inc. (TUI), generated $0.5 million of additional water revenues compared to the same period in the prior year; however, weather-related construction delays in the housing industry in southern Delaware have resulted in slower than anticipated customer growth in the current period. This has resulted in a reduction of service connection fees of $0.1 million as compared to the same period in the prior year.

In spite of these construction delays, demand for new housing in Delaware continues to appear strong based upon applications for new water service. In addition to these requests for new water service, TUI is responding to numerous requests for proposals to provide residential wastewater services to proposed developments through the Company's newly formed regulated wastewater subsidiary, Tidewater Environmental Services, Inc.

Operating expenses increased to $15.1 million, primarily due to higher costs for payroll and benefits. The increased benefits costs were primarily related to pension, post-retirement and health care. Certain of these and other cost increases were unanticipated and are expected to adversely impact earnings for the remainder of 2005.

Six-Month Results

For the six months ended June 30, 2005, revenues increased to $35.2 million, up from $33.6 million for the same period in 2004. This increase is attributable to the factors discussed in the quarterly results above.

Operating expenses increased to $29.3 million, up from $28.3 million. Higher costs for payroll and benefits in the Middlesex system represented $1.0 million of the increase. Operating costs associated with customer growth in Delaware accounted for $0.5 million of the increase. Costs associated with a meter installation venture decreased $1.1 million as compared to the prior year period, due to the completion of the original contracts. Depreciation expense increased $0.3 million as a result of additional assets placed in service since June 30, 2004.

For the six-month period ended June 30, 2005, earnings applicable to common stock were $3.2 million, compared to $2.8 million in the prior year. Basic and diluted earnings per share improved from $0.26 to $0.28 as a result of the increased earnings.

Board Declares Quarterly Dividend

The Company's Board of Directors approved a quarterly dividend of $0.1675 per share, payable September 1, 2005, to common shareholders as of August 15, 2005. The Company has paid cash dividends in varying amounts for the past 90 years and the dividend has been increased in each year since 1973. Middlesex Water has a Dividend Reinvestment Plan (the Plan) under which dividends and optional cash payments can be used to purchase additional shares of Common stock. The Company is currently offering its shares at a 5% discount on all optional cash purchases and reinvested dividends under the Plan through December 1, 2005.

About Middlesex Water Company

Middlesex Water Company, organized in 1897, is an investor-owned water utility, serving customers in central and southern New Jersey and in the State of Delaware. The Company and its New Jersey subsidiaries -- Pinelands Water Company and Pinelands Wastewater Company -- are subject to the regulations of the Board of Public Utilities of the State of New Jersey. Middlesex Water operates the water and wastewater utilities for the City of Perth Amboy through its subsidiary, Utility Service Affiliates (Perth Amboy), Inc. The Company's Delaware subsidiaries, Tidewater Utilities, Inc., together with Southern Shores Water Company, and Tidewater Environmental Services, Inc., are subject to the regulations of the Public Service Commission in Delaware. These companies are also subject to various Federal and State regulatory agencies concerning water quality standards.

For additional information regarding Middlesex Water Company, visit the Company's website at www.middlesexwater.com or call (732) 634-1500.

Certain matters discussed in this press release are "forward-looking statements" regarding the Company's results of operations and financial position. Such statements address future plans, objectives, expectations and events concerning various matters such as capital expenditures, earnings, litigation, growth potential, rate, regulatory matters, liquidity, capital resources and accounting matters. Actual results in each case could differ materially from those currently anticipated in such statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

                  MIDDLESEX WATER COMPANY
        CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                         (Unaudited)

                           Three Months Ended         Six Months Ended
                                 June 30,                  June 30,
                            2005         2004         2005         2004
                        -----------  -----------  -----------  -----------

Operating Revenues      $18,430,751  $17,769,913  $35,173,654  $33,645,646
                        -----------  -----------  -----------  -----------

Operating Expenses:
  Operations              9,409,108    9,357,580   18,451,104   18,261,671
  Maintenance               979,119      808,459    1,877,804    1,670,967
  Depreciation            1,620,159    1,449,469    3,168,207    2,885,699
  Other Taxes             2,163,520    2,026,107    4,246,654    3,971,301
  Income Taxes              894,714    1,018,643    1,561,484    1,526,002
                        -----------  -----------  -----------  -----------

    Total Operating
     Expenses            15,066,620   14,660,258   29,305,253   28,315,640
                        -----------  -----------  -----------  -----------

      Operating Income    3,364,131    3,109,655    5,868,401    5,330,006

Other Income:
  Allowance for Funds
   Used During
   Construction             140,456       80,721      350,906      130,282
  Other Income               35,943      117,759       91,162      137,565
  Other Expense             (16,324)     (26,440)     (24,469)     (29,676)
                        -----------  -----------  -----------  -----------

    Total Other Income,
     net                    160,075      172,040      417,599      238,171

Interest Charges          1,578,078    1,391,364    2,960,170    2,644,206
                        -----------  -----------  -----------  -----------

Net Income                1,946,128    1,890,331    3,325,830    2,923,971

Preferred Stock
 Dividend Requirements       63,696       63,696      127,393      127,393
                        -----------  -----------  -----------  -----------

Earnings Applicable
 to Common Stock        $ 1,882,432  $ 1,826,635  $ 3,198,437  $ 2,796,578
                        -----------  -----------  -----------  -----------

Earnings per share of
 Common Stock:
  Basic                 $      0.17  $      0.17  $      0.28  $      0.26
  Diluted               $      0.16  $      0.16  $      0.28  $      0.26

Average Number of
 Common Shares
 Outstanding:
  Basic                  11,392,964   11,068,164   11,380,290   10,823,630
  Diluted                11,736,104   11,411,304   11,723,430   11,166,770

Cash Dividends Paid per
 Common Share           $    0.1675  $    0.1650  $    0.3350  $    0.3300

Contact Information

  • Contact:
    Bernadette M. Sohler
    Director of Communications
    (732) 634-1500