Artesian Resources Corporation Reports 2017 Second Quarter and Year-to-Date Results and Announces Quarterly Dividend Declaration

NEWARK, Del., Aug. 02, 2017 (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 second quarter of 2017 was $3.3 million, an increase of $0.2 million, or 6.9%, compared to the second quarter of 2016.  Diluted net income per share increased to $0.35 compared to $0.33 for the second quarter of 2016. 

“We are pleased to report continued solid financial results in 2017,” said Dian C. Taylor, Chair, President and CEO.  “During the first six months of 2017, we made significant investments in treatment facilities, pumping equipment, transmission and distribution facilities and mains totaling $17.1 million, consistent with our continued effort to ensure high quality reliable service to our customers.  We also continue to build upon public and private partnerships such as those with the Fort DuPont Redevelopment and Preservation Corporation, the Town of Odessa and Allen Harim Foods that are important to the continued economic vitality of Delaware and the sustained growth of Artesian,” said Taylor.

Revenues for the second quarter of 2017 were $20.5 million, a $1.1 million, or 5.7%, increase from the $19.4 million in revenues recorded for the same three month period of 2016.  Water sales revenues increased $0.9 million, or 5.3%, for the three months ended June 30, 2017 compared to the same period a year ago, primarily as a result of an increase in the Distribution System Improvement Charge, or DSIC, applied to customer bills and an increase in overall water consumption.  The Distribution System Improvement Charge allows Delaware water utilities to place into effect interim rate increases for timely recovery of investments made in certain infrastructure improvements.  Other utility operating revenue increased $0.1 million, or 11.8%, for the three months ended June 30, 2017 compared to the same period a year ago as a result of an increase in the number of wastewater customers and new development inspection fees. 

Excluding depreciation and income taxes, operating expenses increased $1.0 million, or 9.2%, to $11.4 million for the second quarter of 2017.  Utility operating expenses increased $0.8 million, or 9.4%, for the three months ended June 30, 2017 compared to the same period in 2016, mainly the result of increases in payroll, employee benefit, purchased water and water treatment equipment maintenance expenses. 

Miscellaneous income decreased $0.3 million for the three months ended June 30, 2017 compared to the same period a year ago as a result of a pledge made to a non-profit entity in Delaware being organized to support the State’s economic development efforts.

Interest expense decreased $0.1 million, or 7.4%, to $1.5 million for the second quarter of 2017, compared to $1.6 million for the same period in 2016.  The decrease reflects the refinancing of the Series O and Series Q First Mortgage Bonds in January 2017, reducing interest rates from 8.17% and 4.75%, respectively, to 4.24%. 

Income tax expense decreased $0.3 million, or 12.9%, for the three months ended June 30, 2017 compared to the same period a year ago as a result of a decrease in our effective tax rate arising as a consequence of the adoption of amended guidance issued by the Financial Accounting Standards Board in 2017 that impacted accounting for stock compensation activities and the impact of the federal Qualified Domestic Production Activities Deduction.

Year to Date Results

Through the first six months of 2017, net income was $6.3 million, a $0.5 million, or 8.0%, increase compared to the same period a year ago.  Diluted earnings per share was $0.69 for the six months ended June 30, 2017 compared to $0.64 for six months ended June 30, 2016. 

Revenues during the first six months of 2017 were $39.7 million, a $1.9 million, or 4.9%, increase from the $37.8 million in revenues recorded for the same six month period in 2016.  Water sales revenues increased $1.4 million, or 4.2%, for the six months ended June 30, 2017 compared to the same period a year ago, primarily as a result of an increase in the DSIC applied to customer bills and an overall increase in water consumption.  Other utility operating revenue increased $0.3 million, or 14.8%, for the six months ended June 30, 2017 compared to the same period a year ago as a result of growth in the number of wastewater customers and new development inspection fees. 

Excluding depreciation and income taxes, operating expenses increased $1.4 million, or 6.8%, to $22.2 million for the six months ended June 30, 2017, compared to $20.8 million for the same period in 2016.  Utility operating expenses for the six months ended June 30, 2017 were $18.5 million, a $1.2 million, or 6.8%, increase from the same period a year ago, mainly the result of increases in payroll, employee benefit, purchased water and water treatment equipment maintenance expenses. 

Miscellaneous income decreased $0.3 million for the first six months of 2017 compared to the same period a year ago as a result of a pledge made to a non-profit entity in Delaware being organized to support the State’s economic development efforts.

Interest expense decreased $0.3 million, or 8.0%, to $3.1 million for the first six months of 2017 due to the refinancing of the Series O and Series Q First Mortgage Bonds in January 2017, reducing interest rates from 8.17% and 4.75%, respectively, to 4.24%.  The decrease in interest expense also reflects the reduction in the Series S First Mortgage Bond annual interest rate from 6.73% to 4.45%, which became effective March 1, 2016. 

Income tax expense decreased $0.1 million, or 3.0%, for the six months ended June 30, 2017 compared to the same period a year ago as a result of a decrease in our effective tax rate arising as a consequence of the adoption of amended guidance issued by the Financial Accounting Standards Board in 2017 that impacted accounting for stock compensation activities and the impact of the federal Qualified Domestic Production Activities Deduction.

Declaration of Quarterly Dividend

Artesian Resources Corporation also announced today that its Board of Directors has declared a regular quarterly dividend on the company’s Class A and Class B Common Stock.  The quarterly dividend of $0.2317 is payable August 25, 2017 to shareholders of record at the close of business on August 14, 2017.  This is the 99^th consecutive quarterly dividend paid to shareholders.

Other Second Quarter Highlights

• Closed on the purchase of water assets in the Fort DuPont Historic District in New Castle County, Delaware.  The acquisition was the culmination of a public-private partnership between Fort DuPont Redevelopment and Preservation Corporation and state and local governments to redevelop and revitalize the 325 acre historic waterfront community located on the Delaware River.
   
• Acquired the water assets of the Cantwell Water Company of Odessa and expanded water service to the residents of the Town of Odessa in southern New Castle County, Delaware through its regionalized integrated system. 
   
• Increased dividends to common shareholders for the 21^st consecutive year in May 2017.  The 1.5% increase raised the quarterly common stock dividend per share to $0.2317.

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 7.6 billion gallons of water per year through 1,260 miles of water main to approximately 301,000 people.