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Artesian Resources Corp. Reports Operating Results (10-Q)

November 08, 2010 | About:
10qk

10qk

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Artesian Resources Corp. (ARTNA) filed Quarterly Report for the period ended 2010-09-30.

Artesian Resources Corp. has a market cap of $146 million; its shares were traded at around $19.33 with a P/E ratio of 20.56 and P/S ratio of 2.4. The dividend yield of Artesian Resources Corp. stocks is 3.92%. Artesian Resources Corp. had an annual average earning growth of 0.5% over the past 10 years.ARTNA is in the portfolios of Mario Gabelli of GAMCO Investors.

Highlight of Business Operations:

Revenues totaled $18.0 million for the three months ended September 30, 2010, $1.8 million or 11.1%, above revenues for the three months ended September 30, 2009 of $16.2 million. Water sales revenues increased $1.7 million, or 11.6%, for the three months ended September 30, 2010 over the corresponding period in 2009, a result of an increase in water consumption. The heavy precipitation experienced in 2009 reduced per capita consumption, thereby reducing water sales revenue for the three months ended September 30, 2009. The increase in water sales for the three months ended September 30, 2010 compared to the same period in 2009 more closely reflects the return to the average annual per capita consumption over a five-year period. An increase of approximately $187,000 in other utility operating revenue also contributed to the increase in our total operating revenues. We realized 89.6% of our total operating revenue for the three months ended September 30, 2010 from the sale of water. During the same period of 2009, 89.3% of our total revenue was from water sales.

Operating expenses, excluding depreciation and income taxes, increased $399,000, or 4.3%, to $9.6 million for the three months ended September 30, 2010, compared to $9.2 million for the same period in 2009. The components of the change in operating expenses includes an increase in utility operating expenses of $218,000 and an increase in non-utility operating expenses of $127,000.

Operating expenses, excluding depreciation and income taxes, increased $2.0 million, or 7.8%, to $28.3 million for the nine months ended September 30, 2010, compared to $26.3 million for the same period in 2009. The components of the change in operating expenses includes an increase in utility operating expenses of $1,062,000 and an increase in non-utility operating expenses of $644,000.

Miscellaneous income increased approximately $68,000 for the nine months ended September 30, 2010 compared to the same period in 2009, primarily due to the amount of the annual CoBank investment patronage distribution, which increased from $512,000 in 2009 to $647,000 in 2010. The distribution in 2010 included an increased return due to the addition of the $15 million Series S Bond issued in December 2008. Our AFUDC decreased $190,000 compared to the same period in 2009, due to management s decision to reduce discretionary capital expenditures and the general slowdown in the housing market, resulting in decreased long-term construction activity subject to AFUDC for the period ended September 30, 2010 compared to the same period in 2009.

The primary focus of Artesian Water s investment was to continue to provide high quality reliable service to our growing service territory. We invested $11.6 million in capital expenditures during the first nine months of 2010 compared to $13.2 million invested during the same period in 2009. During the first nine months of 2010, we invested $0.4 million to enhance or improve existing treatment facilities and for the rehabilitation of pumping equipment to better serve our customers. We invested $2.2 million to upgrade and automate our meter reading equipment. We invested approximately $2.2 million for our rehabilitation program for transmission and distribution facilities and replacing aging or deteriorating mains. We invested approximately $0.3 million in mandatory utility plant expenditures, due to governmental highway projects, which require the relocation of water service mains. Approximately $0.3 was invested in new transmission and distribution facilities. Developers financed $1.5 million for the installation of water mains and hydrants for the first nine months of 2010 compared to $0.9 million for the first nine months of 2009. We also invested $0.7 million for renovations made to the main office building located in New Castle County and furniture and equipment related to the renovation. The investment in general plant also includes an additional investment of $0.4 million for computer hardware and software upgrades and approximately $0.4 in transportation and equipment purchases. An additional $0.4 million was invested in wastewater projects in Sussex County, Delaware. Also, we invested approximately $0.4 million and developers financed $0.5 million for transmission and distribution facilities in Cecil County, Maryland.

At September 30, 2010, Artesian Water had a $20 million line of credit with CoBank, ACB, or CoBank, that allows for the financing of operations for Artesian Water, with up to $10 million of this line available for the operations of Artesian Water Maryland. As of September 30, 2010, there was $17.0 million of available funds under this line of credit. The interest rate for borrowings under this line is LIBOR plus 1.50%. The term of this line of credit expires on January 18, 2011.

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