Artesian Resources Corporation Reports 3rd Quarter and Year-To-Date 2022 Results

NEWARK, Del., Nov. 03, 2022 (GLOBE NEWSWIRE) -- Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider of water and wastewater services, and related services, on the Delmarva Peninsula, today announced third quarter and year-to-date earnings results for 2022.

• Diluted net income per share increased to $0.65 in the third quarter and to $1.65 year-to-date
• Net Income increased $1.1 million (21.5%) in the third quarter and $1.9 million (13.8%) year-to-date
• Invested $36.7 million year-to-date in water and wastewater infrastructure, including acquisitions
• Announced a settlement agreement with the Delaware Sand & Gravel Trust (the Trust), who will reimburse Artesian Water Company for treatment costs associated with the release of contaminants from the Delaware Sand & Gravel Landfill Superfund Site

Third Quarter Results

Net income was $6.1 million, a $1.1 million, or 21.5%, increase compared to net income recorded during the three months ended September 30, 2021.

Revenues totaled $26.6 million for the three months ended September 30, 2022, $1.7 million, or 6.7%, more than revenues for the three months ended September 30, 2021. Comprising this increase:

Other utility operating revenue increased approximately $0.7 million, primarily due to an increase in wastewater revenue associated with residential customer growth resulting from the acquisition of Tidewater Environmental Services, Inc., or TESI, in January 2022 and organic residential customer growth.

Non-utility operating revenue increased approximately $0.6 million, primarily due to an increase in contract service revenue related to a contract for the design and construction of wastewater infrastructure and an increase in Service Line Protection Plan, or SLPP, revenue.

Water sales revenue increased $0.4 million, primarily due to an increase in overall water consumption revenue and an increase in fixed fee revenue related to added customers.

Operating expenses, excluding depreciation and income taxes, increased $0.2 million, or 1.4%. Non-utility operating expenses increased $0.6 million, primarily due to an increase in costs associated with the wastewater infrastructure design and construction contract and an increase in plumbing services related to SLPP repairs.

Utility operating expenses decreased $0.5 million, primarily due to a decrease in purchased water under a new contract, effective January 2022, in which the minimum amount of water required to be purchased was reduced, and a decrease in repair and maintenance costs related to reimbursements received from the Trust for Artesian Water’s operating costs related to certain treatment costs pursuant to a settlement agreement. These decreases are partially offset by increases in water treatment costs.

“We are pleased to once again share our positive financial results. We remain committed to our continued focus on strategic growth while increasing value to our shareholders” said Dian C. Taylor, Chair and CEO. “Additionally, the settlement agreement reached with the Trust without the need for costly litigation demonstrates our continued commitment to our customers’ best interests and dedicated focus on environmental stewardship.”

Depreciation and amortization expense increased $0.2 million, or 8.1%, primarily due to continued investment in utility plant providing supply, treatment, storage and distribution of water to customers and service to our wastewater customers.

Allowance for funds used during construction, or AFUDC, increased $0.3 million as a result of higher long-term construction activity subject to AFUDC.

Long-term debt interest increased $0.3 million, primarily related to an increase in long-term debt interest associated with the Series W First Mortgage Bond issued on April 29, 2022.

Year-to-Date Results

Net income was $15.7 million, a $1.9 million, or 13.8%, increase compared to net income recorded during the nine months ended September 30, 2021. Diluted net income per share increased 13.0% to $1.65 for the nine months ended September 30, 2022 compared to $1.46 for the first nine months of 2021.

Revenues totaled $73.8 million for the nine months ended September 30, 2022, $5.7 million, or 8.4%, more than revenues for the nine months ended September 30, 2021. Comprising this increase:

Other utility operating revenue increased approximately $3.7 million, primarily due to an increase in wastewater revenue associated with residential customer growth resulting from the acquisition of TESI in January 2022, industrial wastewater services that started in June 2021, as well as organic residential customer growth.

Non-utility operating revenue increased approximately $1.7 million, primarily due to an increase in contract service revenue related to a contract for the design and construction of wastewater infrastructure and an increase in SLPP revenue.

Water sales revenue increased approximately $0.4 million, primarily due to an increase in fixed fee revenue related to added customers and a slight increase in overall water consumption revenue.

Operating expenses, excluding depreciation and income taxes, increased $2.8 million, or 7.6%. Non-utility operating expenses increased $1.7 million, primarily due to an increase in costs associated with the wastewater infrastructure design and construction contract and an increase in plumbing services related to SLPP repairs.

Utility operating expenses increased $0.9 million, or 3.1%, primarily the result of increased costs associated with repair, maintenance and treatment of our water and wastewater systems as well as payroll and administrative costs. The increase in repair and maintenance costs is partially offset by reimbursements from the Trust for Artesian Water’s operating costs related to certain treatment costs pursuant to a settlement agreement. In addition, purchased water costs decreased related to a decrease of water purchased under a new contract, effective January 2022, in which the minimum amount of water required to be purchased was reduced.

Property and other taxes increased $0.2 million, or 5.1%, primarily due to an increase in payroll taxes, related to increased payroll related expenses and an increase in utility plant subject to taxation.

Depreciation and amortization expense increased $0.4 million, or 4.4%, primarily due to continued investment in utility plant providing supply, treatment, storage and distribution of water to customers and service to our wastewater customers.

Federal and state income tax expense increased $0.3 million, or 6.4%, primarily due to higher pre-tax income in 2022 compared to 2021, partially offset by a decrease related to stock options exercised.

AFUDC increased $0.2 million, as a result of higher long-term construction activity subject to AFUDC.

Long-term debt interest increased $0.5 million, primarily related to an increase in long-term debt interest associated with the Series W First Mortgage Bond issued on April 29, 2022.

Capital Expenditures

As part of Artesian’s ongoing effort to ensure high-quality reliable service to customers, $36.7 million was invested in the first nine months of 2022 in water and wastewater infrastructure projects and acquisitions, compared to $30.4 million invested in the first nine months of 2021. We recently acquired wastewater utility plant assets related to the acquisition of TESI and purchased the Town of Clayton’s water utility plant assets. These investments also include the installation of transmission and distribution facilities, replacement of aging mains, rehabilitation of treatment facilities, construction of new water storage tanks, and redevelopment of wells and pumping equipment.

“We continue to make significant capital investments to enhance existing capacities, increase self-sufficiency and strategically meet the needs of continuing development” said Taylor. “We are pleased that our sustained investments have positioned us to successfully complete the acquisitions of the water assets of the Town of Clayton and TESI wastewater utility.”

About Artesian Resources
Artesian Resources Corporation operates as a holding company of wholly-owned subsidiaries offering water and wastewater services, and a number of other related core business services, on the Delmarva Peninsula. Artesian Water Company, the principal subsidiary, is the oldest and largest regulated water utility on the Delmarva Peninsula and has been providing water service since 1905. Artesian supplies 8.4 billion gallons of water per year through 1,398 miles of main to over a third of Delawareans.

Forward Looking Statements
This release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, our growth strategy, our expectations regarding infrastructure investments, acquisition agreements and the continued growth in our business and the number of customers served. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: changes in weather, changes in our contractual obligations, changes in government policies, the timing and results of our rate requests, failure to receive regulatory approval, changes in economic and market conditions generally and other matters discussed in our filings with the Securities and Exchange Commission. While the Company may elect to update forward-looking statements, we specifically disclaim any obligation to do so and you should not rely on any forward-looking statement as representation of the Company’s views as of any date subsequent to the date of this release.

Contact:
Nicki Taylor
Investor Relations
(302) 453-6900
ntaylor@artesianwater.com