Connecticut Water Service, Inc. Reports Increased Net Income for the Nine Months Ended September 30, 2005 Compared to 2004.CLINTON, Conn. -- 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 domestic-based investor-owned water company, serving over 80,000 customers in 41 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. , announced an increase in net income for the nine months ended September 30, 2005 of approximately $1.6 million to $9.4 million. This increase is due primarily to a net gain on the sale of Barnstable Water Company ("BWC BWC Biological Weapons Convention BWC Bureau of Workers Compensation BWC Best Workplaces for Commuters (EPA/DOT program promoting commuting efficiency) BWC Beauty Without Cruelty (skin care product company) ") assets to the Town of Barnstable, MA (the "Town") of approximately $2.8 million, which has been included in Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Net Income from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the decreased for the nine months ended September 30, 2005 by approximately $1.1 million to approximately $6.5 million. Total earnings per common share including discontinued operations increased from $0.98 to $1.16, due primarily to the gain on the sale of the BWC assets. Marshall T. Chiaraluce, 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. of CTWS, said, "We are pleased to announce an increase in net income for the nine months ending September 30, 2005 compared to the same period a year ago." Under the sale of the BWC assets, the Company began operating the water system on an interim basis for the Town. The Company does not expect to be selected as the 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. operator of the system for the Town and as a result the Company is treating all current and prior period reported operations as "Discontinued Operations," including the gain on the sale of the BWC assets to the Town. Mr. Chiaraluce stated, "While we are disappointed that we will not be in the Town's plans as operators of their water system, we are pleased to have an opportunity to deploy the proceeds from the sale of the assets of the Barnstable Water Company in a productive manner." Recently the Company announced an agreement with the University of Connecticut The University of Connecticut is the State of Connecticut's land-grant university. It was founded in 1881 and serves more than 27,000 students on its six campuses, including more than 9,000 graduate students in multiple programs. UConn's main campus is in Storrs, Connecticut. (the "University") where the Company, through its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. Water Utility Services, Inc. ("NEWUS"), will operate and manage the University's water systems at the Storrs, CT campus. Under the terms of the agreement, the Company will provide an on-site project manager to direct the operation of the water system at the Storrs' campus to ensure regulatory compliance. The Company will provide guidance and direction on the water system operations including a review of the University's water system, make recommendations on capital improvements and major maintenance projects, and conduct a leak (programming) leak - With a qualifier, one of a class of resource-management bugs that occur when resources are not freed properly after operations on them are finished, so they effectively disappear (leak out). This leads to eventual exhaustion as new allocation requests come in. detection survey of the water systems. This agreement expands upon services that the Company has been providing to the University over the past two years. "We look forward to a partnership with the University to operate the school's water systems and to ensure that the water systems are in full compliance with state and federal regulations," said Mr. Chiaraluce. "Connecticut Water has every intention of seeking a long-term operating contract for the University's water systems." For the three month period ended September 30, 2005, the Company's net income decreased by approximately $0.4 million to $3.3 million when compared to the same period one year ago. Total net income per share decreased from $0.47 to $0.41. Additionally, income from continuing operations decreased from approximately $3.6 million to $3.3 million and earnings from continuing operations per common share decreased by $0.05 to $0.40. Both of these declines are primarily associated with increases in operating costs operating costs npl → gastos mpl operacionales in the current year. Mr. Chiaraluce also announced that the Company's Board of Directors approved a quarterly common stock dividend of $0.2125 per share to common shareholders of record as of December 1, 2005 together with the regular quarterly dividends payable Dividends payable The declared dividend dollar amount that a company is obligated to pay. to holders of the Company's 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. . 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 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, 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 Ended Nine Months Ended
September 30, September 30,
(In thousands except per share
amounts) 2005 2004 2005 2004
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Operating Revenues $14,088 $13,148 $35,999 $34,905
Utility Operating Income $3,794 $4,193 $7,737 $8,748
Gain on Property Transactions, Net $45 -- $306 $706
Non-Water Sales Earnings (Services and
Rentals) $186 $198 $644 $553
Income From Continuing Operations $3,282 $3,567 $6,462 $7,630
Discontinued Operations, Net of Tax $46 $173 $2,939 $240
Net Income Applicable to Common
Shareholders $3,318 $3,740 $9,372 $7,841
Basic Earnings Per Average Common
Share - Continuing Operations $0.40 $0.45 $0.80 $0.95
Basic Earnings Per Average Common
Share - Discontinued Operations $0.01 $0.02 $0.36 $0.03
Basic Total Earnings Per Average
Common Share $0.41 $0.47 $1.16 $0.98
Diluted Earnings Per Average Common
Share - Continuing Operations $0.40 $0.45 $0.79 $0.95
Diluted Earnings Per Average Common
Share - Discontinued Operations $0.01 $0.02 $0.36 $0.03
Diluted Total Earnings Per Average
Common Share $0.41 $0.47 $1.15 $0.98
Basic Weighted Average Common Shares
Outstanding 8,108 8,008 8,078 7,991
Diluted Weighted Average Common Shares
Outstanding 8,141 8,042 8,123 8,032
Book Value Per Share $11.61 $10.92 $11.61 $10.92
Condensed Consolidated Balance Sheets (unaudited)
(In thousands) September 30, September 30,
2005 2004
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ASSETS
Net Utility Plant $244,161 $236,704
Current Assets 21,773 13,973
Other Assets 33,943 29,691
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Total Assets $299,877 $280,368
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CAPITALIZATION AND LIABILITIES
Shareholders' Equity $94,326 $87,578
Preferred Stock 847 847
Long-Term Debt 64,584 66,472
Current Liabilities 18,786 12,060
Other Liabilities and Deferred Credits 121,334 113,411
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Total Capitalization and Liabilities $299,877 $280,368
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