Aqua America Reports Increased Net Income for Third Quarter 2005; 10 Percent Dividend Increase and Four-for-Three Stock Split Set for December 1.BRYN MAWR Bryn Mawr (brĭn mär), uninc. town (1990 est. pop. 10,000), Montgomery co., SE Pa., a residential suburb of Philadelphia. It is the seat of Bryn Mawr College (for women), opened in 1885 by the Society of Friends. , Pa. -- Aqua America, Inc. (NYSE NYSE See: New York Stock Exchange :WTR WTR Water WTR Writer WTR Wait To Restore WTR Wireless Technology Research WTR Walker, Texas Ranger (TV show) WTR Western Test Range WTR With-The-Rule Astigmatism WTR Working Time Regulation (UK) ) today reported net income for the quarter ended September 30, 2005 grew to $27.9 million, a 16 percent increase from $24.1 million in the third quarter of 2004. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter increased to $0.29, up 12 percent from $0.26 for the same period in 2004, on four percent more shares outstanding. Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. increased 14 percent to $136.8 million for the third quarter of 2005 from $120.3 million in the same period in 2004. The revenue increase is primarily due to the result of the benefits received from major rate awards in key states during the third quarter of 2004 and a return to more normal levels of water consumption over the same period last year. Aqua America Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Nicholas DeBenedictis said, "The weather during the months of May to September has a direct impact on customers' incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. water demand. During these key months, weather extremes such as hot, dry weather or cool, wet weather can have a positive or negative impact, respectively, on our financial results. This summer's weather could be classified as more normal overall." For the nine months ended September 30, 2005, operating revenues totaled $373.9 million, an increase of 14 percent from $326.6 million for the nine months ended September 30, 2004. The year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. revenue growth was driven by significant rate decisions during the third quarter of 2004 and also positively impacted by the benefits of customer growth due primarily to the larger acquisitions in mid 2004. Net income for the first nine months of 2005 increased 20 percent to $69.0 million from $57.5 million and corresponding diluted earnings per share increased 16 percent to $0.71 from $0.61 in the same period last year. DeBenedictis said, "The company's financial performance year-to-date has been exceptional, aided by the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. events in mid 2004, namely the acquisitions of Heater Utilities (North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. ) and Florida Water Services (Florida) and significant rate awards in some of our larger states. These events, supplemented by our normal growth-through-acquisition and capital investment strategy, have provided favorable comparisons over the past four quarters and now will be part of the company's growing asset and earnings base going forward. Our long-term goals Long-term goals Financial goals expected to be accomplished in five years or longer. have consistently been seven percent revenue growth and 10 percent earnings growth. While we are pleased that the favorable comparisons have allowed us to exceed these targets year-to-date, our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. objectives remain the same." On August 2, 2005, the Board of Directors voted to increase the December 1, 2005 common stock cash dividend to shareholders by 10 percent, which on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis is equivalent to a $0.05 increase above the current annual dividend rate of $0.52 to $0.57 per share. Additionally, the Board approved, for the sixth time in nine years, a stock split to be effected in the form of a four-for-three (33 1/3 percent) stock distribution. The increased quarterly cash dividend of $0.1425 per share, from $0.13 per share, and the subsequent stock split will be effected with the December 1, 2005 cash dividend payment and is available to shareholders of record as of November 17, 2005. As a result of the stock split, the new quarterly cash dividend rate will be $0.1069 per share on the increased number of shares resulting from the stock distribution, or $0.4276 per share on an annualized basis. This cash dividend increase is the company's 15th in 14 years. The company's ratio of operating and maintenance expenses to revenues (efficiency ratio) for the third quarter of 2005 was 38.5 percent, an improvement from 41.3 percent in the second quarter of 2005. Year-to-date September 30, 2005, the company's efficiency ratio also improved to 40.4 percent from 40.7 percent for the same period in 2004. DeBenedictis said, "Our efficiency ratio is an important measure and an ongoing focus of management. We work toward continuous improvement of our controllable expenses, which helps offset expenses that are trending upward, such as healthcare and pension costs." Consistent with Aqua America's long-term growth-through-acquisition strategy, the company has completed 28 acquisitions year-to-date in 2005 in the states in which it operates. DeBenedictis said, "These small system acquisitions are the bread and butter upon which our long-term growth strategy was founded. We use these small acquisitions to perpetuate per·pet·u·ate tr.v. per·pet·u·at·ed, per·pet·u·at·ing, per·pet·u·ates 1. To cause to continue indefinitely; make perpetual. 2. our growth and consolidation of the fragmented frag·ment n. 1. A small part broken off or detached. 2. An incomplete or isolated portion; a bit: overheard fragments of their conversation; extant fragments of an old manuscript. 3. water industry through the regulated model - buying underperforming assets underperforming asset An asset that earns a lower rate of return than it would be capable of earning if it were properly used. A firm with underperforming assets is a prime target for takeover. Compare nonperforming asset. , fixing them and then obtaining a fair regulated return for our investment through the rate-making process." The company's conference call with analysts will take place on Wednesday, November 9, 2005 at 11:00 a.m. Eastern Standard Time. The call will be webcast so that interested parties may listen over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by logging on to www.aquaamerica.com. The conference call will be archived in the investor relations Investor relations The process by which the corporation communicates with its investors. section of the company's Web site for 90 days following the call. Additionally, the call will be recorded and made available for replay for 10 business days after the call, beginning at 12:00 p.m. Wednesday, November 9, 2005 through Wednesday, November 23, 2005. To access the audio replay in the U.S., dial (888)-203-1112 (PIN# 4941886). For international callers, dial (719)-457-0820 (PIN# 4941886). Aqua America, Inc. is the largest U.S.-based publicly-traded water utility, serving more than 2.5 million residents in Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , Ohio, North Carolina, Illinois, Texas, Florida, New Jersey, Indiana, Virginia, Maine, Missouri, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , and South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. . Aqua America is listed on both the New York and Philadelphia Stock Exchanges Philadelphia Stock Exchange (PHLX) A securities exchange trading American and European foreign currency options on spot exchange rates. under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors WTR. This release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including, among others, the impact of acquisitions, customer growth and rate increases on revenues and earnings, increased opportunities from acquisitions to invest and earn a return on infrastructure improvements, opportunities to reduce expenses, the growth prospects, the effect on operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. levels associated with acquired operations and the company's long-term targets. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. including: general economic business conditions, unfavorable weather conditions, the success of certain cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. initiatives, changes in regulations or regulatory treatment, availability and the cost of capital, the success of growth initiatives, and other factors discussed in our filings with the Securities and Exchange Commission. The following table shows selected operating data for the quarters and nine months ended September 30, 2005 and 2004 (in thousands, except per share data) for Aqua America, Inc.
(Unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
-------------------- ------------------
Operating revenues $136,783 $120,305 $373,871 $326,597
==================== ==================
Net income $27,917 $24,087 $69,006 $57,533
==================== ==================
Basic net income per share $0.29 $0.26 $0.72 $0.62
==================== ==================
Diluted net income per share $0.29 $0.26 $0.71 $0.61
==================== ==================
Average common shares
outstanding:
Basic 96,185 93,065 95,867 92,874
==================== ==================
Diluted 97,674 94,023 97,226 93,884
==================== ==================
Aqua America, Inc. and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Operating revenues $136,783 $120,305 $373,871 $326,597
Cost & expenses:
Operations and maintenance 52,666 46,526 150,866 132,840
Depreciation 15,578 14,112 44,890 41,292
Amortization 1,172 1,177 3,627 3,096
Taxes other than income
taxes 8,276 7,493 24,033 21,455
--------- --------- --------- ---------
Total 77,692 69,308 223,416 198,683
--------- --------- --------- ---------
Operating income 59,091 50,997 150,455 127,914
Other expense (income):
Interest expense, net 13,279 12,346 38,615 35,584
Allowance for funds used
during construction (433) (695) (1,497) (2,028)
Gain on sale of other
assets (77) (491) (582) (967)
--------- --------- --------- ---------
Income before income taxes 46,322 39,837 113,919 95,325
Provision for income taxes 18,405 15,750 44,913 37,792
--------- --------- --------- ---------
Net income $27,917 $24,087 $69,006 $57,533
========= ========= ========= =========
Net income $27,917 $24,087 $69,006 $57,533
Other comprehensive income
(loss), net of tax:
Unrealized gain on
securities - - - 59
Reclassification adjustment
for gains reported in net
income - - - (230)
--------- --------- --------- ---------
Comprehensive income $27,917 $24,087 $69,006 $57,362
========= ========= ========= =========
Net income per common share:
Basic $0.29 $0.26 $0.72 $0.62
Diluted $0.29 $0.26 $0.71 $0.61
Average common shares
outstanding:
Basic 96,185 93,065 95,867 92,874
========= ========= ========= =========
Diluted 97,674 94,023 97,226 93,884
========= ========= ========= =========
Aqua America, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands of dollars)
(Unaudited)
September 30, December 31,
2005 2004
------------- -------------
Net property, plant and equipment $2,186,192 $2,069,812
Current assets 93,379 90,127
Regulatory assets and other assets 231,940 192,251
------------- -------------
$2,511,511 $2,352,190
============= =============
Common stockholders' equity $780,089 $747,231
Long-term debt, excluding current portion 854,469 784,461
Current portion of long-term debt and loans
payable 141,309 135,310
Other current liabilities 96,905 82,072
Deferred credits and other liabilities 638,739 603,116
------------- -------------
$2,511,511 $2,352,190
============= =============
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