SAN JOSE, Calif.--(BUSINESS WIRE)--April 30, 2008--California
Water Service Group (NYSE:CWT) today announced net income of $0.2
million and diluted earnings per common share of $0.01 for the first
quarter of 2008, compared to net income of $1.6 million and diluted
earnings per common share of $0.07 for the first quarter of 2007.
Revenues increased by $1.4 million, or 2%, to $72.9 million, with
rate increases adding $4.2 million and sales to new customers adding
$0.4 million, partially offset by a decrease in sales to existing
customers of $3.2 million.
Total operating expenses for the first quarter of 2008 increased
by $1.8 million. A decrease of $0.5 million in water production costs
was partially offset by an increase of $1.8 million in administrative
& general and other operations costs, primarily attributable to
payroll increases effective at the beginning of 2008 and increases for
employee benefit programs.
Maintenance expense decreased by $0.4 million to $4.1 million for
the quarter. Depreciation expense increased $0.8 million to $9.2
million as a result of increases in 2007 capital expenditures, while
taxes other than income increased $0.3 million due to increases in
payroll and property taxes.
Other income, net of income taxes, reflected a loss of $0.1
million, compared to income of $0.8 million last year, due to a
decline in investment income and a mark-to-market adjustment in
investments associated with pension and deferred compensation plans.
For the twelve months ended March 31, 2008, net income was $29.8
million and dilutive earnings per share were $1.43, compared to net
income of $26.3 million and dilutive earnings per share of $1.34 for
the same period in the prior year. Revenues for the trailing twelve
months were $368.4 million, compared to $341.1 million for the same
period last year.
"In 2007, our first quarter results benefited from higher water
sales resulting from above-average temperatures. In 2008, we were
affected by cool, wet winter weather, with many of our districts
getting more than twice the rainfall than they did in the same period
last year. Our results were also impacted by increases in benefits
costs and negative mark-to-market adjustments associated with our
pension and deferred compensation plans," said Peter C. Nelson,
President and Chief Executive Officer.
"However, during the quarter, we continued to make progress with
the California Public Utilities Commission's (CPUC) Water Action Plan.
Our 2007 General Rate Case progressed, and we believe it will address
many of the areas affected by regulatory lag. In addition, the CPUC
issued Decision #08-02-036 in February authorizing the decoupling of
sales and revenues (weather revenue adjustment mechanism), modified
cost balancing accounts, and tiered rates, which are scheduled to go
into effect later this year," Nelson said.
All stockholders and interested investors are invited to listen to
the 2008 first quarter conference call on May 1, 2008, at 11:00 a.m.
(EST), by dialing 1-866-814-1919 and keying in ID# 1226399. A replay
of the call will be available from 2:00 p.m. (EST) Thursday, May 1,
2008, through June 30, 2008, at 888-266-2081, ID# 1226399. The call,
which will be hosted by President and CEO Peter Nelson and Vice
President and Chief Financial Officer Martin A. Kropelnicki will also
be webcast under the investor relations tab at www.calwatergroup.com.
California Water Service Group is the parent company of California
Water Service Company, Washington Water Service Company, New Mexico
Water Service Company, Hawaii Water Service Company, Inc., CWS Utility
Services, and HWS Utility Services. Together these companies provide
regulated and non-regulated water service to nearly 2 million people
in 100 California, Washington, New Mexico, and Hawaii communities.
Group's common stock trades on the New York Stock Exchange under the
symbol "CWT".
This news release contains forward-looking statements within the
meaning established by the Private Securities Litigation Reform Act of
1995 ("Act"). The forward-looking statements are intended to qualify
under provisions of the federal securities laws for "safe harbor"
treatment established by the Act. Forward-looking statements are based
on currently available information, expectations, estimates,
assumptions and projections, and management's judgment about the
Company, the water utility industry and general economic conditions.
Such words as expects, intends, plans, believes, estimates, assumes,
anticipates, projects, predicts, forecasts or variations of such words
or similar expressions are intended to identify forward-looking
statements. The forward-looking statements are not guarantees of
future performance. They are subject to uncertainty and changes in
circumstances. Actual results may vary materially from what is
contained in a forward-looking statement. Factors that may cause a
result different than expected or anticipated include, but are not
limited to: governmental and regulatory commissions' decisions
including but not limited to rate case decisions and implementation of
the CPUC Water Action Plan; changes in regulatory commissions'
policies and procedures; the timeliness of regulatory commissions'
actions concerning rate relief; new legislation; electric power
interruptions; increases in suppliers' prices and the availability of
supplies including water and power; fluctuations in interest rates;
changes in environmental compliance and water quality requirements;
acquisitions and our ability to successfully integrate acquired
companies; the ability to successfully implement business plans;
changes in customer water use patterns; the impact of weather on water
sales and operating results; access to sufficient capital on
satisfactory terms; civil disturbances or terrorist threats or acts,
or apprehension about the possible future occurrences of acts of this
type; the involvement of the United States in war or other
hostilities; restrictive covenants in or changes to the credit ratings
on our current or future debt that could increase our financing costs
or affect our ability to borrow, make payments on debt or pay
dividends; and, other risks and unforeseen events. When considering
forward-looking statements, you should keep in mind the cautionary
statements included in this paragraph, as well as the annual 10-K,
Quarterly 10-Q, and other reports filed from time-to-time with the
Securities and Exchange Commission (SEC). The Company assumes no
obligation to provide public updates of forward-looking statements.
Additional information is available at our Web site at
www.calwatergroup.com.
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands, except per share data) March 31 December 31
2008 2007
----------- -----------
ASSETS
Utility plant:
Utility plant $1,468,966 $1,447,047
Less accumulated depreciation and
amortization (446,637) (436,851)
----------- -----------
Net utility plant 1,022,329 1,010,196
----------- -----------
Current assets:
Cash and cash equivalents 2,967 6,734
Receivables
Customers 17,404 18,600
Other 5,357 8,617
Unbilled revenue 11,368 12,911
Materials and supplies at average cost 4,779 4,744
Taxes, prepaid expense, and other assets 9,244 8,369
----------- -----------
Total current assets 51,119 59,975
----------- -----------
Other assets:
Regulatory assets 90,999 90,908
Other assets 22,768 23,420
----------- -----------
Total other assets 113,767 114,328
----------- -----------
$1,187,215 $1,184,499
=========== ===========
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $.01 par value $ 207 $ 207
Additional paid-in capital 211,976 211,885
Retained earnings 167,710 173,617
----------- -----------
Total common stockholders' equity 379,893 385,709
Preferred stock 3,475 3,475
Long-term debt, less current maturities 288,495 289,220
----------- -----------
Total capitalization 671,863 678,404
----------- -----------
Current liabilities:
Current maturities of long-term debt 2,701 2,701
Accounts payable 26,653 36,694
Notes payable 14,000 -
Accrued expenses and other liabilities 35,318 30,258
----------- -----------
Total current liabilities 78,672 69,653
Unamortized investment tax credits 2,467 2,467
Deferred income taxes, net 68,001 69,712
Pension and postretirement benefits other than
pensions 39,444 39,444
Regulatory and other liabilities 40,113 38,783
Advances for construction 168,822 168,024
Contributions in aid of construction 117,833 118,012
Commitments and contingencies
----------- -----------
$1,187,215 $1,184,499
=========== ===========
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)
For the three months ended:
March 31, March 31,
2008 2007
--------- ---------
Operating revenue $ 72,921 $ 71,570
--------- ---------
Operating expenses:
Water production costs 25,358 25,814
Administrative and General 13,418 12,570
Other operations 12,065 11,085
Maintenance 4,114 4,509
Depreciation and amortization 9,222 8,401
Income taxes 174 543
Property and other taxes 3,739 3,406
--------- ---------
Total operating expenses 68,090 66,328
--------- ---------
Net operating income 4,831 5,242
--------- ---------
Other income and expenses:
Non-regulated revenue 2,905 3,042
Non-regulated expenses (3,036) (1,751)
Less: income taxes on other income and expenses 49 (526)
--------- ---------
(82) 765
--------- ---------
Interest expense:
Interest Expense 5,014 4,926
Less: capitalized interest (450) (500)
--------- ---------
Total interest expense 4,564 4,426
--------- ---------
Net income $ 185 $ 1,581
========= =========
Earnings per share
Basic $ 0.01 $ 0.07
========= =========
Diluted $ 0.01 $ 0.07
========= =========
Weighted average shares outstanding
Basic 20,688 20,659
========= =========
Diluted 20,711 20,681
========= =========
Dividends per share of common stock $0.29250 $0.29000
========= =========
CONTACT: California Water Service Group
Marty Kropelnicki, 408-367-8200 (analysts)
Shannon Dean, 310-257-1435 (media)
SOURCE: California Water Service Group