Connecticut Water Service, Inc. Reports Earnings for First-Quarter 2004.Business Editors CLINTON, Conn.--(BUSINESS WIRE)--May 10, 2004 Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). Water Service, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CTWS CTWS Confederated Tribes of Warm Springs ), New England's largest domestically based investor owned water company, serving over 300,000 people in 42 towns in Connecticut The U.S. state of Connecticut is divided into 169 towns. The towns are grouped into eight counties. 19 of the towns are consolidated city-towns and one is a consolidated borough-town. These are indicated in the list below. and Massachusetts, announced first quarter 2004 net income applicable to common shareholders of $1,975,000, or $.25 a share, compared to net income of $2,110,000, or $.27 a share, for the same period last year. Increases in the earnings of the Company's core 'Water Activities' and 'Services and Rentals' business segments of $79,000 and $23,000, respectively were offset by a decrease in the 'Real Estate' segment of $237,000. The decline in 2004 net income in the Real Estate segment was expected due to the relative size of the land donated do·nate v. do·nat·ed, do·nat·ing, do·nates v.tr. To present as a gift to a fund or cause; contribute. v.intr. To make a contribution to a fund or cause. in 2004 versus 2003. Both years' land donations were to the Town of Killingly, CT and were part of a three year (2002-2004) phased plan for land donations in Connecticut. Mr. Marshall T. Chiaraluce, the Company's Chairman, President and Chief Executive Officer, stated, "The land donation in the first quarter of 2004 will produce federal and state tax benefits of approximately $700,000 while providing approximately 133 acres of land for open space purposes to the Town of Killingly." Mr. Chiaraluce also stated that management continues to be pleased by the growth of the Services and Rentals business segment in which net income rose 19% during the first quarter over the same period last year. In addition, on March 4th, the Company's main subsidiary, The Connecticut Water Company (CWC CWC Chemical Weapons Convention CWC Cricket World Cup CWC Central Wyoming College CWC Ceylon Workers' Congress (trade union; Sri Lanka) CWC Ceylon Workers Congress (Sri Lanka) ), completed the refinancing Refinancing An extension and/or increase in amount of existing debt. of its Series V 6.94% $12,050,000 First Mortgage Bonds by issuing a $12,500,000 Variable Rate Taxable Debenture Bond Debenture bond An unsecured bond whose holder has the claim of a general creditor on all assets of the issuer not pledged specifically to secure other debt. Compare subordinated debenture bond and collateral trust bonds. with a maturity date of January 4, 2029. CWC then immediately entered into an interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. for a five-year period with a coupon rate Coupon rate In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year. of 3.73%. The Company estimates that this refinancing will result in a reduction in annual interest payments of approximately $400,000. This press release may contain certain 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. regarding the Company's results of operations and financial position. These forward-looking statements are based on current information and expectations, and are subject to risks and uncertainties, which could cause the Company's actual results to differ materially from expected results. Our water companies are subject to various federal and state regulatory agencies state regulatory agency A state body responsible for establishing professional standards, and for certifying professionals or organizations through appropriate documentation concerning water quality and environmental standards. Generally, the water industry is materially dependent on the adequacy of approved rates to allow for a fair rate of return on the investment in utility plant. The ability to maintain our operating costs operating costs npl → gastos mpl operacionales at the lowest possible level while providing good quality water service is beneficial to customers and stockholders. Profitability is also dependent on the timeliness of rate relief, when necessary, and numerous factors over which we have little or no control, such as the quantity of rainfall and temperature, industrial demand, financing costs, energy rates, tax rates and stock market trends which may affect the return earned on pension assets, and compliance with environmental and water quality regulations. The profitability of our other revenue sources is subject to the amount of land we have available for sale and/or donation, the demand for the land, the continuation of the current state tax benefits relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the donation of land for open space purposes, regulatory approval of land dispositions, the demand for telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. antenna site leases and the successful extensions and expansion of our service contract work. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
Connecticut Water Service, Inc. & Subsidiaries
Condensed Consolidated Statements of Income (unaudited)
Three Months Twelve Months
Ended Ended
March 31 March 31
(In thousands except per share
amounts) 2004 2003 2004 2003
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Operating Revenues $10,919 $10,901 $47,133 $46,447
Utility Operating Income $1,906 $2,016 $11,421 $11,351
Gain on Property Transactions,
Net $706 $943 $792 $1,383
Net Income Applicable to Common
Shareholders $1,975 $2,110 $9,037 $9,308
Basic Earnings Per Average
Common Share $0.25 $0.27 $1.13 $1.20
Diluted Earnings Per Average
Common Share $0.25 $0.26 $1.12 $1.19
Basic Weighted Average Common
Shares Outstanding 7,973 7,943 7,986 7,789
Diluted Weighted Average Common
Shares Outstanding 8,023 7,986 8,033 7,836
Book Value Per Share $10.51 $10.14 $10.51 $10.14
Condensed Consolidated Balance Sheets (unaudited)
(In thousands) March 31, 2004 March 31, 2003
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ASSETS
Net Utility Plant $233,540 $228,230
Current Assets 12,191 11,873
Other Assets 32,323 25,209
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Total Assets $278,054 $265,312
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CAPITALIZATION AND LIABILITIES
Shareholders' Equity $83,930 $80,585
Preferred Stock 847 847
Long-Term Debt 65,072 64,605
Current Liabilities 14,451 14,865
Other Liabilities and Deferred Credits 113,754 104,410
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Total Capitalization and Liabilities $278,054 $265,312
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