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SJW Corp. Announces Second Quarter Financial Results
Posted by: gurufocus (IP Logged)
Date: July 29, 2009 08:02PM

Press Release: SJW Corp. Announces Second Quarter Financial Results

SAN JOSE, Calif.--(BUSINESS WIRE)--SJW Corp. (NYSE:SJW) today reported financial results for the second quarter ended June 30, 2009. Operating revenue was $58.2 million versus $60.1 million for the same period in 2008. The decrease of $1.9 million primarily reflects a decrease of $4.6 million resulting from declining customer water usage, as well as $849,000 lower revenue from real estate operations due to a tenant vacancy in the real estate portfolio. The revenue decreases were partially offset by cumulative rate increases of $3.5 million and revenue from new customers of $58,000.

Net income was $4.4 million for the second quarter. Diluted earnings per common share were $0.23, compared to $0.34 per share for the second quarter in 2008.

Water production costs for the second quarter of 2009 were $23.9 million versus $25.6 million for the same period in 2008. The decrease of $1.7 million was primarily attributable to lower customer demand of $2.8 million and $744,000 in savings due to greater surface water supply, offset by $1.8 million in higher per unit costs for purchased water and groundwater extraction charges.

Non-water production costs for the second quarter of 2009 were $23.3 million versus $20.6 million for the same period in 2008, an increase of $2.7 million. This was attributable to increases of $1.2 million in administrative and general expenses, $751,000 in taxes other than income taxes, $478,000 in other operating expense and $198,000 in other expenses. Income tax expense decreased $1.3 million in the second quarter to $3.0 million in 2009 from $4.3 million in 2008 as a result of lower pre-tax income.

Year-to-date operating revenue decreased by $3.1 million to $98.2 million from $101.3 million in the first six months of 2008. The decrease was attributable to $7.5 million in lower customer water usage and $1.2 million lower revenue from real estate operations, partially offset by $5.5 million in cumulative rate increases and $125,000 from new customers.

Year-to-date net income was $4.5 million, compared to $9.0 million in 2008. Earnings per basic and diluted share respectively were $0.25 and $0.24 in the first six months of 2009, compared to $0.49 and $0.48 per basic and diluted share respectively for the same period in 2008.

Year-to-date water production costs decreased to $37.5 million from $39.1 million in 2008. The $1.6 million decrease was primarily attributable to lower customer demand of $4.0 million and savings due to greater surface water supply of $191,000, offset by higher per unit costs for purchased water and groundwater extraction charges of $2.6 million. Non-water production costs increased $5.3 million to $46.1 million from $40.8 million. Components of the increase included $2.5 million in administrative and general expenses, $1.5 million in taxes other than income taxes, $772,000 in other operating expenses, $742,000 in depreciation expense, partially offset by a decrease of $184,000 in maintenance expenses. Income tax expense decreased $3.0 million year-to-date due to lower pre-tax income.

The Directors of SJW Corp. today declared a quarterly dividend on common stock of $0.165 per share. The dividend is payable on September 1, 2009 to shareholders of record on August 10, 2009.

SJW Corp. is a publicly traded holding company headquartered in San Jose, California. SJW Corp. is the parent company of San Jose Water Company, SJWTX, Inc. and SJW Land Company. Together, San Jose Water Company and SJWTX, Inc. provide regulated and nonregulated water service to more than one million people in San Jose, California and nearby communities and in Canyon Lake, Texas and nearby communities. SJW Land Company owns and operates commercial buildings, has a majority interest in a real estate partnership, and has properties in the states of California, Florida, Connecticut, Texas, Arizona and Tennessee.

This press release may contain certain forward-looking statements including but not limited to statements relating to SJW Corp.\'s plans, strategies, objectives, expectations and intentions, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of SJW Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The results for a quarter are not indicative of results for a full year due to seasonality. Certain factors that may cause actual results, performance or achievements to materially differ are described in SJW Corp.\'s most recent reports on Form 10-K, Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. SJW Corp. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SJW Corp.
Condensed Consolidated Statements of Income and Comprehensive Income (Loss)
(Unaudited)
(in thousands, except per share data)

       
THREE MONTHS ENDED
JUNE 30,
SIX MONTHS ENDED
JUNE 30,
2009     2008     2009     2008  
 
OPERATING REVENUE $58,194 60,058 98,215 101,311
OPERATING EXPENSE:
Operation:
Purchased water 12,601 14,176 20,390 21,172
Power 1,817 2,010 2,577 3,076
Groundwater extraction charge 9,480   9,417   14,532   14,833  
Total production costs 23,898 25,603 37,499 39,081
 
Administrative and general 6,897 5,648 14,027 11,487
Other 4,547 4,069 8,524 7,752
Maintenance 3,216 3,272 6,132 6,316
Taxes, other than income 2,392 1,641 4,682 3,231
Depreciation & amortization 6,238 5,984 12,789 12,047
Income taxes 2,975   4,309   3,076   6,095  
 
Total operating expense 50,163   50,526   86,729   86,009  
 
OPERATING INCOME 8,031 9,532 11,486 15,302
 

 

Interest on long-term debt and other

(3,613 ) (3,254 ) (6,952 ) (6,306 )
 
NET INCOME $4,418   6,278   4,534   8,996  
 
Other comprehensive loss, net (3,258 ) (3,491 ) (6,224 ) (2,758 )
 
COMPREHENSIVE INCOME (LOSS) $1,160   2,787   (1,690 ) 6,238  
 
Earnings per share
-Basic $0.24 0.34 0.25 0.49
-Diluted $0.23 0.34 0.24 0.48
 
Dividend per share $0.17 0.16 0.33 0.32
 
Weighted average shares outstanding
-Basic 18,483 18,403 18,476 18,390
-Diluted 18,670 18,596 18,664 18,594
 
SJW Corp.
Condensed Consolidated Balance Sheets
(Unaudited)
(thousands of dollars)
 
 

     June 30
2009

December 31
2008
ASSETS
UTILITY PLANT:
Land $8,404 8,134
Depreciable plant and equipment 878,703 855,427
Construction in progress 15,380 7,142
Intangible assets 10,790 8,040
Total utility plant 913,277 878,743
Less accumulated depreciation and amortization 285,693 272,562
Net utility plant 627,584 606,181
 
REAL ESTATE INVESTMENT: 88,000 88,000
Less accumulated depreciation and amortization 6,350 5,511
Net real estate investment 81,650 82,489
CURRENT ASSETS:
Cash and equivalents 4,771 3,406

Accounts receivable and accrued unbilled utility revenue

34,297 26,329
Prepaid expenses and other 2,458 2,226
Total current assets 41,526 31,961
OTHER ASSETS:
Investment in California Water Service Group 40,522 51,071

Debt issuance costs, net of accumulated amortization

3,195 3,162
Regulatory assets 73,518 73,778
Other 2,360 2,235
119,595 130,246
$870,355 850,877
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock $9,628 9,611
Additional paid-in capital 21,358 20,548
Retained earnings 203,417 204,744
Accumulated other comprehensive income 13,200 19,423
Total shareholders’ equity 247,603 254,326
Long-term debt, less current portion 246,221 216,613
Total capitalization 493,824 470,939
CURRENT LIABILITIES:
Line of credit 3,000 18,400
Current portion of long-term debt 728 705

Accrued groundwater extraction charge and purchased water

8,112 5,256
Purchased power 1,300 563
Accounts payable 10,350 5,758
Accrued interest 4,984 4,567
Other current liabilities 8,529 8,074
Total current liabilities 37,003 43,323
 
DEFERRED INCOME TAXES AND CREDITS 98,648 98,713

ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF CONSTRUCTION

189,926 188,869
POSTRETIREMENT BENEFIT PLANS 44,178 42,331
OTHER NONCURRENT LIABILITIES 6,776 6,702
$870,355 850,877

Source: BusinessWire


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