Cal Water Announces Second Quarter 2005 Results; Board Declares 243rd Consecutive Quarterly Dividend and Appoints New Vice President, Engineering & Water Quality.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif. -- California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Water Service Group (NYSE NYSE See: New York Stock Exchange :CWT cwt 112 pounds avoirdupois weight. ) today announced net income of $7.6 million and earnings of $0.41 per share for the second quarter of 2005, compared to net income of $10.1 million and earnings of $0.59 per share in the second quarter of 2004. Revenue for the second quarter decreased $7.4 million, or 8%, to $81.5 million. Rate increases added $2.5 million to revenue and sales to new customers added $0.9 million. These increases were offset by a $10.8 million decrease in sales to existing customers resulting from cooler temperatures and higher than normal rainfall. "Our results continue to be hampered by cool weather and an unusual amount of precipitation precipitation, in chemistry precipitation, in chemistry, a process in which a solid is separated from a suspension, sol, or solution. In a suspension such as sand in water the solid spontaneously precipitates (settles out) on standing. . In California, we had 2.5 inches of rain in the second quarter, compared to less than one-third of an inch in the second quarter of 2004. Long term, the above-average precipitation replenishes the state's underground aquifers The following is a partial list of aquifers around the world. A of aquifers is also available. North America Canada
"Despite the rain, we continue to execute our strategy by aggressively pursuing fair regulatory treatment, operating efficiently, adding customers, and providing excellent service, and we expect to see improved results when the weather heats up and sales rise," Nelson said. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the second quarter decreased 6%, or $4.6 million. Water production costs decreased 12% due to the decrease in water usage. Other operations expenses were comparable to those incurred in the second quarter of 2004. Maintenance expense increased 24%, reflecting work done on wells, pumping equipment, water treatment equipment, mains, and meters. Depreciation expense increased 7% due to increases in 2004 capital expenditures. Income taxes were 25% lower due to lower pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income. Other income increased $0.2 million, or 34%, primarily due to interest from short term investments. There were minimal gains from property sales for either quarter. On July July: see month. 21, 2005, the California Public Utilities Commission The California Public Utilities Commission (CPUC; also often commonly referred to as simply the PUC) [1] is a state Public Utilities Commission which regulates privately-owned utilities in the state of California, including electric power, (CPUC CPUC California Public Utilities Commission CPUC Current Procurement Unit Cost ) approved the Company's 2004 General Rate Case filing (GRC GRC Greece (ISO Country code) GRC Glenn Research Center (NASA) GRC Governance, Risk and Compliance GRC Gendarmerie Royale du Canada (RCMP - Canada) GRC John H. ), which will increase revenues by $7.6 million on an annual basis. The decision is substantially the same as the proposed decision announced on June June: see month. 28, 2005. The GRC includes 8 of the Company's 24 districts and nearly 50% of the Company's California customers. The new rates were effective July 26, 2005. At their meeting today, Directors declared the 243rd consecutive quarterly dividend on common stock in the amount of $0.2850. It is payable on August 19, 2005, to stockholders of record on August 8, 2005. The regular dividend on Series C preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. was also declared. The Board also appointed Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. J. Rossi Rossi is an Italian surname, in fact the most frequent in Italy. Due to Italian immigration to many other countries, is also very common in the United States, Brazil, Argentina, Uruguay and Chile. Rossi is the plural of Rosso, meaning the color red in Italian language. as Vice President, Engineering & Water Quality, effective October 1, 2005. Currently California Water Service Company's Chief Engineer, Rossi began his career with the Company in 1977. He holds a Bachelor of Science Noun 1. Bachelor of Science - a bachelor's degree in science BS, SB bachelor's degree, baccalaureate - an academic degree conferred on someone who has successfully completed undergraduate studies Degree in Civil Engineering and a Master of Science Degree in Business Administration, both earned at San Jose State University. He is also a registered civil engineer and state-certified water treatment and water distribution operator. Robert R. Guzzetta, who currently holds the position, was appointed as Vice President of Operations. He will succeed Raymond H. Taylor, who is retiring after 23 years of service. At the same time, the Board approved additional changes in responsibilities of three other officers of the Company. Dan L. Stockton, current Vice President of Information Systems, was appointed Vice President, Corporate Development & Corporate Secretary; Paul G. Ekstrom, currently Vice President, Customer Service & Corporate Secretary, was appointed Vice President, Customer Service & Information Systems; and Francis S Francis, French prince, duke of Alençon and Anjou Francis, 1554–84, French prince, duke of Alençon and Anjou; youngest son of King Henry II of France and Catherine de' Medici. . Ferraro, currently Vice President, Regulatory Matters & Corporate Development, was appointed Vice President, Regulatory & Corporate Relations. All changes will be effective October 1, 2005. "These key leadership changes further position the Company to achieve its objectives," Nelson said. Investors are invited to listen to the Company's analyst teleconference, which is scheduled for 4:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT / 1:00 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT on July 28, 2005. The call-in number is 1-866-814-1919 and the ID No. is 733669. A replay is available through September 25, 2005, by calling 1-888-266-2081 and entering pass code 733669. California Water Service Group is the parent company of California Water Service Company, Washington Water Service Company, New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). Water Service Company, Hawaii Water Service Company, Inc., and CWS CWS Chicago White Sox CWS College World Series CWS Church World Service CWS Child Welfare Services CWS Canadian Wildlife Service CWS Community Water System (EPA) CWS Canada-Wide Standard CWS Compressed Work Schedule Utility Services. Together these companies provide regulated and non-regulated water service to more than 2 million people in 100 California, Washington, New Mexico, and Hawaii communities. Group's common stock trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "CWT." This news release contains 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. within the meaning established by 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 ("Act"). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . 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: governmental and regulatory commissions' decisions, including decisions on proper disposition of property; changes in regulatory commissions' policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental ; the timeliness of regulatory commissions' actions concerning rate relief; new legislation; the ability to satisfy requirements related to the Sarbanes-Oxley Act See SOX. and other regulations on internal controls; 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 Group acts of violence and disorder prejudicial to public law and order. See also domestic emergencies. or terrorist threats or acts, or apprehension The seizure and arrest of a person who is suspected of having committed a crime. A reasonable belief of the possibility of imminent injury or death at the hands of another that justifies a person acting in Self-Defense against the potential attack. about the possible future occurrences of acts of this type; the involvement of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in war or other hostilities; restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. 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. The Company assumes no obligation to provide public updates of forward-looking statements. Additional information is available at our Web site at www.calwatergroup.com.
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands, except per share data) June 30, December 31,
2005 2004
-----------------------
ASSETS
Utility plant:
Utility plant $1,177,272 $1,144,074
Less accumulated depreciation and
amortization 358,184 343,769
-----------------------
819,088 800,305
-----------------------
Current assets:
Cash and cash equivalents 19,243 18,820
Receivables, net of allowances for
uncollectible accounts of $286 at June
30, 2005 and $287 at December 31, 2004
Customers 18,331 15,867
Income taxes 363 7,298
Other 4,629 3,147
Unbilled revenue 13,601 9,307
Materials and supplies, at average cost 3,834 3,161
Prepaid pension expense 281 3,671
Taxes and other prepaid expenses 5,501 9,122
-----------------------
Total current assets 65,783 70,393
-----------------------
Regulatory assets 55,174 53,477
Other assets 19,646 18,678
-----------------------
$959,691 $942,853
=======================
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $.01 par value $184 $184
Additional paid-in capital 131,510 131,271
Retained earnings 154,574 156,851
Accumulated other comprehensive loss (701) (701)
-----------------------
Total common stockholders' equity 285,567 287,605
Preferred stock 3,475 3,475
Long-term debt, less current maturities 274,538 274,821
-----------------------
Total capitalization 563,580 565,901
-----------------------
Current liabilities:
Current maturities of long-term debt 1,144 1,100
Short-term borrowings -- --
Accounts payable 30,096 19,745
Accrued expenses and other liabilities 37,868 36,367
-----------------------
Total current liabilities 69,108 57,212
Unamortized investment tax credits 2,721 2,721
Deferred income taxes 56,710 54,826
Regulatory and other liabilities 36,170 35,986
Advances for construction 136,010 131,292
Contributions in aid of construction 95,392 94,915
Commitments and contingencies - -
-----------------------
$959,691 $942,853
=======================
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Unaudited
For the three For the six
months ended: months ended:
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
-------- -------- --------- ---------
Operating revenue $81,457 $88,845 $141,760 $149,085
-------- -------- --------- ---------
Operating expenses:
Water production costs 29,395 33,563 49,215 54,724
Other operations 21,804 21,887 43,747 42,224
Maintenance 3,759 3,032 7,418 6,213
Depreciation and amortization 7,006 6,521 14,002 13,039
Income taxes 5,148 6,844 5,603 7,802
Property and other taxes 3,092 2,915 6,057 5,609
-------- -------- --------- ---------
Total operating expenses 70,204 74,762 126,042 129,611
-------- -------- --------- ---------
Net operating income 11,253 14,083 15,718 19,474
-------- -------- --------- ---------
Other income and expenses:
Non-regulated income, net 705 573 1,343 1,123
Gain on sale of non-utility
property 61 -- 59 1
-------- -------- --------- ---------
Total other income and expenses 766 573 1,402 1,124
-------- -------- --------- ---------
Interest expense:
Interest expense 4,653 4,752 9,299 9,398
Less capitalized interest 225 150 450 300
-------- -------- --------- ---------
Total interest expense 4,428 4,602 8,849 9,098
-------- -------- --------- ---------
Net income $7,591 $10,054 $8,271 $11,500
======== ======== ========= =========
Earnings per share
Basic $0.41 $0.59 $0.45 $0.67
======== ======== ========= =========
Diluted $0.41 $0.59 $0.45 $0.67
======== ======== ========= =========
Weighted average shares
outstanding
Basic 18,373 16,965 18,372 16,949
======== ======== ========= =========
Diluted 18,407 16,983 18,404 16,967
======== ======== ========= =========
Dividends per share of common
stock $0.2850 $0.2825 $0.5700 $0.5650
======== ======== ========= =========
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