SJW Corp. Announces Third Quarter Financial Results
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SAN JOSE, Calif.--(BUSINESS WIRE)-- SJW Corp. (NYSE: SJW) today reported financial results for the third quarter ended September 30, 2009. Operating revenue was $69.3 million versus $69.5 million for the same period in 2008. The decrease of approximately $200,000 primarily reflects a decrease of $3.2 million resulting from declining customer water usage, as well as $881,000 in 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 $372,000.
Net income was $8.0 million for the third quarter, compared to $8.3 million in the same period of 2008. Diluted earnings per share were $0.43, compared to $0.44 per share for the third quarter in 2008.
Water production costs for the third quarter of 2009 were $28.6 million versus $30.8 million for the same period in 2008. The decline in water production costs of $2.2 million reflects $1.6 million in lower customer water usage and $1.0 million in savings due to greater surface water supply, offset by $426,000 in higher per unit costs for purchased water and groundwater extraction charges.
Non-water production costs for the third quarter of 2009 were $23.3 million versus $21.7 million for the same period in 2008, an increase of $1.6 million. This was attributable to an increase of $485,000 in administrative and general expenses primarily related to pension plan expenses offset by lower transportation and legal and accounting expenses. In addition, there were increases of $415,000 in depreciation and amortization expense, $354,000 in other operating expense, $254,000 in maintenance expense and $119,000 in taxes other than income taxes. Income tax expense increased $219,000 in the third quarter of 2009 to $5.7 million from $5.5 million in 2008 as a result of a higher effective tax rate in 2009.
Year-to-date operating revenue decreased by $3.3 million to $167.5 million from $170.8 million in the first nine months of 2008. The decrease was attributable to $10.8 million in lower customer water usage and $2.0 million in lower revenue from real estate operations, partially offset by $9.0 million in cumulative rate increases and $497,000 in revenue from new customers.
Year-to-date net income was $12.6 million, compared to $17.3 million in 2008. Earnings per basic and diluted share respectively were $0.68 and $0.67 in the first nine months of 2009, compared to $0.94 and $0.93 per basic and diluted share, respectively, for the same period in 2008.
Year-to-date water production costs decreased to $66.1 million from $69.9 million in 2008. The $3.8 million decrease was primarily attributable to lower customer demand of $5.7 million and savings due to greater surface water supply of $1.2 million, offset by higher per unit costs for purchased water and groundwater extraction charges of $3.1 million. Non-water production costs increased $7.0 million to $69.5 million from $62.5 million. Components of the increase included $3.0 million in administrative and general expenses consisting primarily of an increase in pension plan expenses, $1.6 million in taxes other than income taxes, $1.2 million in depreciation expense, $1.1 million in other operating expenses and $70,000 in maintenance expenses. Income tax expense decreased $2.8 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 December 1, 2009 to shareholders of record on November 9, 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
(Unaudited)
(in thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2009 2008 2009 2008
OPERATING REVENUE $ 69,326 69,507 $ 167,541 170,818
OPERATING EXPENSE:
Operation:
Purchased water 15,174 16,390 35,564 37,562
Power 2,666 2,579 5,243 5,655
Groundwater extraction charge 10,743 11,845 25,275 26,678
Total production costs 28,583 30,814 66,082 69,895
Administrative and general 6,807 6,322 20,834 17,809
Other 4,697 4,343 13,221 12,095
Maintenance 3,550 3,296 9,682 9,612
Taxes, other than income 1,882 1,763 6,564 4,994
Depreciation & amortization 6,403 5,988 19,192 18,035
Income taxes 5,735 5,516 8,811 11,611
Total operating expense 57,657 58,042 144,386 144,051
OPERATING INCOME 11,669 11,465 23,155 26,767
Interest on long-term debt and (3,652 ) (3,208 ) (10,604 ) (9,514 )
other
NET INCOME $ 8,017 8,257 $ 12,551 17,253
Other comprehensive income (loss), 1,363 3,718 (4,861 ) 960
net
COMPREHENSIVE INCOME $ 9,380 11,975 $ 7,690 18,213
Earnings per share
-Basic $ 0.43 0.45 0.68 0.94
-Diluted $ 0.43 0.44 0.67 0.93
Dividend per share $ 0.16 0.16 0.49 0.48
Weighted average shares
outstanding
-Basic 18,494 18,423 18,482 18,401
-Diluted 18,690 18,619 18,673 18,603
SJW Corp.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
September December
30, 2009 31, 2008
ASSETS
UTILITY PLANT:
Land $ 8,502 8,134
Depreciable plant and equipment 894,656 855,427
Construction in progress 16,013 7,142
Intangible assets 11,278 8,040
Total utility plant 930,449 878,743
Less accumulated depreciation and amortization 292,215 272,562
Net utility plant 638,234 606,181
REAL ESTATE INVESTMENT: 88,000 88,000
Less accumulated depreciation and amortization 6,769 5,511
Net real estate investment 81,231 82,489
CURRENT ASSETS:
Cash and equivalents 1,860 3,406
Accounts receivable and accrued unbilled utility revenue 35,396 26,329
Prepaid expenses and other 2,605 2,226
Total current assets 39,861 31,961
OTHER ASSETS:
Investment in California Water Service Group 42,832 51,071
Debt issuance costs, net of accumulated amortization 3,147 3,162
Regulatory assets 74,000 73,778
Other 1,959 2,235
121,938 130,246
$ 881,264 850,877
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock $ 9,635 9,611
Additional paid-in capital 21,859 20,548
Retained earnings 208,351 204,744
Accumulated other comprehensive income 14,562 19,423
Total shareholders' equity 254,407 254,326
Long-term debt, less current portion 246,013 216,613
Total capitalization 500,420 470,939
CURRENT LIABILITIES:
Line of credit 4,300 18,400
Current portion of long-term debt 781 705
Accrued groundwater extraction charge and purchased water 8,291 5,256
Purchased power 1,511 563
Accounts payable 9,125 5,758
Accrued interest 3,951 4,567
Other current liabilities 9,365 8,074
Total current liabilities 37,324 43,323
DEFERRED INCOME TAXES AND CREDITS 102,194 98,713
ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF 191,157 188,869
CONSTRUCTION
POSTRETIREMENT BENEFIT PLANS 43,281 42,331
OTHER NONCURRENT LIABILITIES 6,888 6,702
$ 881,264 850,877
Source: SJW Corp.
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