Philadelphia Suburban Corporation Reports a 13.8 Percent Increase in Earnings Per Share in Second Quarter 2000
Philadelphia Suburban Corporation Reports a 13.8 Percent Increase in Earnings Per Share in Second Quarter 2000
July 26, 2000
Philadelphia Suburban Corporation Reports a 13.8 Percent Increase in Earnings Per Share in Second Quarter 2000BRYN MAWR, Pa. July 26, 2000 - Philadelphia
Suburban Corporation (NYSE/PSC) today reported a 13.8 percent increase
in diluted net income per common share to $.33 in the quarter ended
June 30 versus $.29 in the corresponding quarter in 1999.
Despite unfavorable weather conditions in Pennsylvania and Ohio, the company achieved improved results. The increase in earnings was primarily due to various rate case settlements, the partial recovery of certain previously-expensed merger costs, customer growth from acquisitions and continued company-wide cost containment efforts.
Revenues for the second quarter increased to $68.5 million, a 3.5 percent increase over the $66.2 million reported in 1999. Net income was $13.6 million, up $1.6 million from the same period in 1999.
Year-to-date revenues from operations increased to $133.0 million, a 6.6 percent increase over the $124.8 million reported in 1999. Net income for the six months was $23.8 million, up 93.5 percent from the $12.3 million reported during the same period in 1999 resulting in improved diluted net income per common share to $.58 from the $.30 reported last year.
The improvement in 2000 was attributable to rate settlement awards, customer growth from acquisitions, partial recovery of previously-expensed merger costs, and the sale of securities, while 1999 was adversely effected by a non-recurring first quarter charge of $8.6 million (net of taxes) from merger costs.
PSC's ongoing, company-wide cost containment initiatives continue to drive down its operating expense ratio to 38.1 percent on a trailing 12-month basis versus 38.9 percent in the same period last year, as synergies attained through the integration of the Consumers Water Company were realized.
Customer growth was nearly five percent since June 30, 1999, due primarily to PSC's growth-through-acquisitions strategy. The following recent growth ventures have contributed to this:
Nicholas DeBenedictis, Chairman and CEO commenting on the quarter stated, Our strong second quarter is an indication that our growth-through-acquisition strategy continues to be successful. Also, we are encouraged by the fair treatment we have received from state regulators in response to our growth initiatives and major capital investment in infrastructure.
PSC is the holding company for Philadelphia Suburban Water Company and Consumers Water Company, regulated public utilities that provide water to nearly 2 million residents in Pennsylvania, Ohio, New Jersey, Illinois and Maine. PSC's common shares are traded under the ticker symbol PSCon both the New York and Philadelphia Stock Exchanges. PSC has been committed to the preservation and improvement of the environment throughout its history which spans more than 100 years.
The following table shows the comparative operating revenues, net income and net income per share for Philadelphia Suburban Corporation for the quarters and six months ended June 30, 2000 and 1999 (in thousands, except per share amounts)
Despite unfavorable weather conditions in Pennsylvania and Ohio, the company achieved improved results. The increase in earnings was primarily due to various rate case settlements, the partial recovery of certain previously-expensed merger costs, customer growth from acquisitions and continued company-wide cost containment efforts.
Revenues for the second quarter increased to $68.5 million, a 3.5 percent increase over the $66.2 million reported in 1999. Net income was $13.6 million, up $1.6 million from the same period in 1999.
Year-to-date revenues from operations increased to $133.0 million, a 6.6 percent increase over the $124.8 million reported in 1999. Net income for the six months was $23.8 million, up 93.5 percent from the $12.3 million reported during the same period in 1999 resulting in improved diluted net income per common share to $.58 from the $.30 reported last year.
The improvement in 2000 was attributable to rate settlement awards, customer growth from acquisitions, partial recovery of previously-expensed merger costs, and the sale of securities, while 1999 was adversely effected by a non-recurring first quarter charge of $8.6 million (net of taxes) from merger costs.
PSC's ongoing, company-wide cost containment initiatives continue to drive down its operating expense ratio to 38.1 percent on a trailing 12-month basis versus 38.9 percent in the same period last year, as synergies attained through the integration of the Consumers Water Company were realized.
Customer growth was nearly five percent since June 30, 1999, due primarily to PSC's growth-through-acquisitions strategy. The following recent growth ventures have contributed to this:
| -- | Bensalem - Bucks County, PA |
| -- | Apple Grove - Stark County, OH |
| -- | Twin Hills - Chester County, PA |
| -- | Fulmor Heights - Montgomery County, PA |
| -- | Village of Bradley - Kankakee County, IL |
| -- | 5 additional smaller growth ventures |
Nicholas DeBenedictis, Chairman and CEO commenting on the quarter stated, Our strong second quarter is an indication that our growth-through-acquisition strategy continues to be successful. Also, we are encouraged by the fair treatment we have received from state regulators in response to our growth initiatives and major capital investment in infrastructure.
PSC is the holding company for Philadelphia Suburban Water Company and Consumers Water Company, regulated public utilities that provide water to nearly 2 million residents in Pennsylvania, Ohio, New Jersey, Illinois and Maine. PSC's common shares are traded under the ticker symbol PSCon both the New York and Philadelphia Stock Exchanges. PSC has been committed to the preservation and improvement of the environment throughout its history which spans more than 100 years.
The following table shows the comparative operating revenues, net income and net income per share for Philadelphia Suburban Corporation for the quarters and six months ended June 30, 2000 and 1999 (in thousands, except per share amounts)
(Unaudited)
Quarter Ended Six Months Ended
June 30 June 30
----------------------------------------
2000 1999 2000 1999
Operating revenues $ 68,494 $ 66,165 $ 133,004 $ 124,762
Income before
merger costs,
net of tax $ 13,565 $ 12,033 $ 23,811 $ 20,945
Merger costs,
net of tax -- -- -- $ (8,596)
Net income
available
to common
stock $ 13,565 $ 12,033 $ 23,811 $ 12,349
Net income
per common share:
Basic net
income per share $ .33 $ .29 $ .58 $ .30
Diluted net
income per share $ .33 $ .29 $ .58 $ .30
Average common
shares outstanding:
Basic 40,981 40,800 40,961 40,784
Diluted 41,441 41,251 41,337 41,266
This release contains certain forward-looking statements involving
risks, uncertainties and other factors that may cause the 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; the
success of certain cost containment initiatives, including the
recovery of merger costs; changes in regulations or regulatory
treatment; availability and cost of capital; and the success of
growth.
Philadelphia Suburban Corporation and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
-------- --------
2000 1999 2000 1999
---- ---- ---- ----
Operating revenues $ 68,494 $ 66,165 $ 133,004 $ 124,762
Cost & expenses:
Operations and
maintenance 24,350 24,203 49,278 46,928
Depreciation 7,665 7,608 15,916 15,027
Amortization 388 292 658 712
Taxes other than
income taxes 5,597 5,624 11,579 11,212
Restructuring
costs (recovery) (396) -- (396) 3,787
--------- --------- --------- ---------
Total 37,604 37,727 77,035 77,666
--------- --------- --------- ---------
Operating income 30,890 28,438 55,969 47,096
Interest expense,
net 9,990 8,530 19,845 16,621
Gain on sale of
securities -- -- (1,061) --
Minority interest 28 27 46 42
Allowance for
funds used
during
construction (985) (469) (1,719) (857)
Merger transaction
costs (recovery) (663) -- (663) 6,334
--------- --------- --------- ---------
Income before
income taxes 22,520 20,350 39,521 24,956
Provision for
income taxes 8,929 8,283 15,657 12,538
--------- --------- --------- ---------
Net income 13,591 12,067 23,864 12,418
Dividends on
preferred stock 26 34 53 69
--------- --------- --------- ---------
Net income
available to
common stock $ 13,565 $ 12,033 $ 23,811 $ 12,349
========= ========= ========= =========
Net income $ 13,591 $ 12,067 $ 23,864 $ 12,418
Other
comprehensive
income (loss),
net of tax 144 -- (510) --
--------- --------- --------- ---------
Comprehensive
income $ 13,735 $ 12,067 $ 23,354 $ 12,418
========= ========= ========= =========
Net income per
common share:
Basic $ 0.33 $ 0.29 $ 0.58 $ 0.30
Diluted $ 0.33 $ 0.29 $ 0.58 $ 0.30
Average shares
outstanding:
Basic 40,981 40,800 40,961 40,784
========= ========= ========= =========
Diluted 41,441 41,251 41,337 41,266
========= ========= ========= =========
Philadelphia Suburban Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands of dollars, except per share amounts)
(Unaudited) (Audited)
June 30, December 31,
2000 1999
------------------------------
Assets
Property, plant and
equipment, at cost $ 1,451,533 $ 1,393,027
Less accumulated
depreciation 274,467 257,663
----------- -----------
Net property, plant
and equipment 1,177,066 1,135,364
----------- -----------
Current assets:
Cash and cash
equivalents 8,429 4,658
Accounts receivable
and unbilled
revenues, net 48,585 44,399
Inventory, materials
and supplies 4,442 3,948
Prepayments and
other current assets 3,442 6,520
----------- -----------
Total current assets 64,898 59,525
----------- -----------
Regulatory assets 59,166 58,287
Deferred charges
and other assets, net 31,210 27,629
----------- -----------
$ 1,332,340 $ 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 41,856,617 and
41,627,644 in 2000 and
1999 20,928 20,814
Capital in excess of
par value 255,613 251,440
Retained earnings 110,589 101,533
Minority interest 2,613 2,604
Treasury stock, 792,764
and 615,038 shares in
2000 and 1999 (14,642) (11,270)
Accumulated other
comprehensive income 1,510 2,020
----------- -----------
Total stockholders'
equity 378,371 368,901
----------- -----------
Long-term debt, excluding
current portion 460,835 413,752
Commitments -- --
Current liabilities:
Current portion of
long-term debt 12,973 12,194
Loans payable 94,926 103,069
Accounts payable 21,142 24,286
Accrued interest 10,241 8,994
Accrued taxes 11,706 12,689
Other accrued
liabilities 22,211 22,581
----------- -----------
Total current
liabilities 173,199 183,813
----------- -----------
Deferred credits and
other liabilities:
Deferred income taxes
and investment tax
credits 139,942 136,528
Customers' advances
for construction 57,621 59,494
Other 7,716 8,434
----------- -----------
Total deferred
credits and other
liabilities 205,279 204,456
----------- -----------
Contributions in aid
of construction 114,656 109,883
----------- -----------
$ 1,332,340 $ 1,280,805
=========== ===========
--30--FT/ph* DES/ph*
CONTACT: Philadephia Suburban Corporation
Meg Grady, Director, Investor Relations
610/645-1084
www.suburbanwater.com