Philadelphia Suburban Corporation Announces Record Operating Results for the Quarter and Year.
Business Editors
BRYN MAWR, Pa.--(BUSINESS WIRE)--Feb. 7, 2001--Philadelphia
Suburban Corporation (NYSE:PSC) today reported its quarterly and
year-end results for the periods ending December 31, 2000.
Net income available to common stock in the fourth quarter grew
29.6 percent to $12.4 million versus 1999's fourth quarter net income
of $9.6 million. Rate awards granted this year in Pennsylvania, Ohio
and Maine, and the continuation of PSC's successful
growth-through-acquisition strategy, including the liquidation of its
holdings in E'Town (water) Corporation, contributed to the increase in
net income available to common stock for the quarter.
Water sales in the fourth quarter of 2000 returned to normal after
experiencing a decline as a result of a wet summer. Earnings per share
grew 21.1 percent for the quarter to $.23 per share versus $.19 the
prior year on more shares outstanding as a result of the company's 1.7
million share equity offering in September 2000.
For the year, diluted net income per share increased 44.3 percent
to $1.01 versus $.70 in 1999, calculated on an increased average
number of shares outstanding. 1999 net income was negatively impacted
by $.17 per share as a result of costs related to the merger with
Consumers Water Company in March 1999, while 2000 earnings were
positively impacted by the partial regulatory recovery of those costs.
Absent the impacts from transaction ccosts, earnings from
operations increased 11.5 percent to $.97 per diluted share for the
year ended December 31, 2000, versus $.87 the prior year, with
corresponding income increasing by 12.7 percent to $50.5 million
versus $44.9 million in the prior year.
Despite unfavorable weather patterns, revenues for the year
increased by 7.1 percent to $275.5 million as compared to $257.3
million reported in 1999 as a result of rate adjustments and
previously mentioned growth initiatives. Overall customer growth for
the year was 4 percent, closing the year with 579,219 customers.
PSC had another good year of containing costs, even with higher
electric and fuel costs. Although operations and maintenance (O&M)
expenses increased three percent in comparison to 1999, PSC continues
to lower O&M expenses as a percentage of revenue. Overall, O & M costs
for 2000 represent only 36.9 percent of revenue versus 38.4 percent in
1999, a decrease of 150 basis points.
This record operating expense margin speaks to the company's
ability to continue to contain costs, while growing revenues.
Commenting on the year, Chairman and President Nicholas
DeBenedictis said, "2000 was a challenging year for PSC due to
unfavorable weather conditions. However, rate recovery and the
continued success of the company's growth-through-acquisition program
allowed PSC to recognize healthy earnings despite the weather. The
company experienced reduced water consumption during the third quarter
as a result of lower temperatures and 45 percent more rain than
typical in the company's primary service area. In addition to a wet
summer, expenses were adversely impacted by severe winter weather
conditions causing more than a 40 percent increase in repairs to water
mains in 2000."
PSC was able to enhance net income per share as a result of sale
of shares of E'Town Corporation, which had been acquired as part of
PSC's growth strategy to evaluate potential acquisition opportunities.
The gain realized as a result of the sale of E'Town, was a unique
aspect of PSC's growth strategy.
According to DeBenedictis, "An aggressive growth strategy
sometimes produces gains regardless of whether the deal goes through
as envisioned. This is the reason we continued to hold the E'Town
shares as an investment even after it became clear a merger was not
appropriate for us."
PSC entered its sixth state with the announcement in the fourth
quarter of its acquisition of MidSouth Utilities, Inc. in Sherrills
Ford, North Carolina. The company recently announced the completion of
its second acquisition in North Carolina, Hydraulics, Ltd., which
serves over 16,000 residents.
In addition to entering its sixth state, PSC announced the
acquisition of four Pennsylvania water utilities during the quarter.
Three of the companies are located in northeastern Pennsylvania
(Pocono area) and the other is located in northwestern Pennsylvania.
"This merger creates four new subsidiaries under PSC and extends
operations in both the northeastern and northwestern quadrants of
Pennsylvania, " said DeBenedictis. Expansion into the northeastern and
northwestern Pennsylvania areas will provide PSC with additional
growth opportunities in and around the new areas of its service
territory. Additionally, these areas will benefit from PSC's in-house
water quality expertise and its history of environmental compliance.
PSC is one of the nation's largest and most profitable
investor-owned water utilities serving approximately two million
residents in Pennsylvania, Illinois, Ohio, New Jersey, Maine, and
North Carolina.
PSC is a publicly-traded company listed on both the New York and
Philadelphia Stock Exchanges under the ticker symbol "PSC" and has
been committed to the preservation and improvement of the environment
throughout its history, which spans more than 100 years.
The company's quarterly conference call with analysts will be at
10:00 a.m. Eastern Standard Time today. Interested parties may listen
to the conference call over the Internet by logging onto
www.suburbanwater.com. The call will be recorded and replayed
beginning 12:00 PM, Wednesday, February 7, 2001, and will run until
12:00 PM, Friday, February 9, 2001.
The dial-in telephone number for the audio replay is 402/220-9917
(pin number 4461).
This release contains certain forward-looking statements involving
risks and uncertainties and other factors that may cause actual
results to be materially different from any future results expressed
or implied by such forward-looking statements.
These factors include, among others, the following: general
economic business conditions; unfavorable weather conditions; the
success of certain cost containment initiatives; changes in
regulations or regulatory treatment; availability and cost of capital;
and the success of growth initiatives.
The following table shows the comparative operating revenues, net
income available to common stock and net income per common share for
PSC for the quarters and years ended December 31, 2000 and 1999 (in
thousands, except per share data). All share and per share data have
been restated to reflect the recent five-for-four stock split effected
in the form of a stock distribution.
-0-
*T
(Unaudited)
Quarter Ended Year Ended
December 31, December 31,
------------------ --------------------
2000 1999 2000 1999
---- ---- ---- ----
Operating revenues $ 69,198 $ 63,037 $ 275,538 $ 257,326
Income from
operations exclusive
of net merger
recovery (costs) $ 12,434 $ 9,594 $ 50,548 $ 44,871
Merger recovery
(costs), net $ -- $ -- $ 2,236 $ (8,596)
Net income available
to common stock $ 12,434 $ 9,594 $ 52,784 $ 36,275
Income per common
share from operations
exclusive of net
merger recovery (costs):
Basic $ 0.23 $ 0.19 $ 0.98 $ 0.88
Diluted $ 0.23 $ 0.19 $ 0.97 $ 0.87
Net income per
common share:
Basic $ 0.23 $ 0.19 $ 1.02 $ 0.71
Diluted $ 0.23 $ 0.19 $ 1.01 $ 0.70
Average shares
outstanding:
Basic 53,164 51,232 51,807 51,080
Diluted 53,778 51,643 52,331 51,631
Note: The recovery (charge) for merger costs is related to the March
1999 merger with Consumers Water Company.
Philadelphia Suburban Corporation and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Year Ended
December 31, December 31,
------------ ------------
2000 1999 2000 1999
--------- --------- --------- ---------
Operating revenues $ 69,198 $ 63,037 $ 275,538 $ 257,326
Cost & expenses:
Operations and
maintenance 27,426 27,185 101,741 98,758
Depreciation 8,315 7,820 32,271 30,612
Amortization 654 302 1,829 1,291
Taxes other
than income
taxes 5,481 5,030 22,520 21,833
Restructuring
costs (recovery) -- -- (1,136) 3,787
--------- --------- --------- ---------
Total costs
and expenses 41,876 40,337 157,225 156,281
--------- --------- --------- ---------
Operating income 27,322 22,700 118,313 101,045
Interest
expense, net 10,233 8,730 40,360 33,698
Gain on sale
of securities (2,491) -- (3,552) --
Minority interest 27 17 103 93
Allowance for
funds used
during
construction (428) (626) (2,688) (1,995)
Merger transaction
costs (recovery) -- -- (2,905) 6,334
--------- --------- --------- ---------
Income before
income taxes 19,981 14,579 86,995 62,915
Provision for
income taxes 7,521 4,980 34,105 26,531
--------- --------- --------- ---------
Net income 12,460 9,599 52,890 36,384
Dividends on
preferred stock 26 5 106 109
--------- --------- --------- ---------
Net income
available to
common stock $ 12,434 $ 9,594 $ 52,784 $ 36,275
========= ========= ========= =========
Net income $ 12,460 $ 9,599 $ 52,890 $ 36,384
Other
comprehensive
income (loss),
net of tax (704) 952 (1,094) 2,020
--------- --------- --------- ---------
Comprehensive
income $ 11,756 $ 10,551 $ 51,796 $ 38,404
========= ========= ========= =========
Income from
operations,
exclusive of
net merger
(costs)
recovery $ 12,434 $ 9,594 $ 50,548 $ 44,871
Merger (costs)
recovery, net -- -- 2,236 (8,596)
--------- --------- --------- ---------
Net income
available for
common stock $ 12,434 $ 9,594 $ 52,784 $ 36,275
========= ========= ========= =========
Net income
per common
share:
Basic $ 0.23 $ 0.19 $ 1.02 $ 0.71
Diluted $ 0.23 $ 0.19 $ 1.01 $ 0.70
Income per
common share
from operations,
exclusive of
net merger
(costs) recovery:
Basic $ 0.23 $ 0.19 $ 0.98 $ 0.88
Diluted $ 0.23 $ 0.19 $ 0.97 $ 0.87
Average shares
outstanding:
Basic 53,164 51,232 51,807 51,080
========= ========= ========= =========
Diluted 53,778 51,643 52,331 51,631
========= ========= ========= =========
Philadelphia Suburban Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands of dollars, except per share amounts)
December 31, December 31,
2000 1999
----------- -----------
Assets
Property, plant and
equipment, at cost $ 1,536,162 $ 1,393,027
Less accumulated
depreciation 284,735 257,663
----------- -----------
Net property, plant and equipment 1,251,427 1,135,364
----------- -----------
Current assets:
Cash and cash equivalents 4,575 4,658
Accounts receivable and
unbilled revenues, net 51,223 44,399
Inventory, materials
and supplies 4,352 3,948
Prepayments and other
current assets 7,054 6,520
----------- -----------
Total current assets 67,204 59,525
----------- -----------
Regulatory assets 65,369 58,287
Deferred charges and
other assets, net 26,396 27,629
----------- -----------
$ 1,410,396 $ 1,280,805
=========== ===========
Liabilities and
Stockholders' Equity
Stockholders' equity:
6.05% Series B cumulative
preferred stock $ 1,760 $ 1,760
Common stock at $.50 par
value, authorized 100,000,000
shares, issued 54,520,300 and
51,880,796 in 2000 and 1999 27,260 20,814
Capital in excess of par value 291,013 251,440
Retained earnings 123,911 101,533
Minority interest 2,823 2,604
Treasury stock, 844,376 and
615,038 shares in 2000 and 1999 (15,346) (11,270)
Accumulated other
comprehensive income 926 2,020
----------- -----------
Total stockholders' equity 432,347 368,901
----------- -----------
Long-term debt, excluding
current portion 465,295 413,752
Commitments -- --
Current liabilities:
Current portion of long-term debt 15,943 12,194
Loans payable 88,994 103,069
Accounts payable 20,635 24,286
Accrued interest 10,199 8,994
Accrued taxes 17,366 12,689
Other accrued liabilities 23,364 22,581
----------- -----------
Total current liabilities 176,501 183,813
----------- -----------
Deferred credits and
other liabilities:
Deferred income taxes and
investment tax credits 150,167 136,528
Customers' advances for
construction 58,718 59,494
Other 7,202 8,434
----------- -----------
Total deferred credits
and other liabilities 216,087 204,456
----------- -----------
Contributions in aid
of construction 120,166 109,883
----------- -----------
$ 1,410,396 $ 1,280,805
=========== ===========
--30--KMK/ph*
CONTACT: Philadelphia Suburban Corporation, Bryn Mawr
Keya W. Epps, 610/645-1084
eppsk@suburbanwater.com
or
Donna Alston, 610/645-1095
alstond@suburbanwater.com
KEYWORD: PENNSYLVANIA
INDUSTRY KEYWORD: UTILITIES EARNINGS
COPYRIGHT 2001 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.
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