Southwest Water Company Reports Second Quarter Financial Results
09 8월 2005 - 10:00PM
Business Wire
Southwest Water Company (NASDAQ:SWWC) today reported record second
quarter revenues, operating income and net income from continuing
operations. A loss incurred on the sale of a subsidiary in June
2005 resulted in a net loss for the quarter. Second Quarter Ended
June 30, 2005 Results, Compared with Second Quarter 2004: --
Revenues increased 18 percent to $51.3 million from $43.4 million
-- Operating income grew 40 percent to $6.5 million, compared with
$4.6 million -- Net income from continuing operations rose 30
percent to $3.0 million from $2.3 million -- Diluted earnings per
share from continuing operations totaled $0.15, up from $0.13 --
Net loss, which includes a $4.8 million after-tax loss on
discontinued operations resulting from the sale of Master Tek
International, Inc., a subsidiary that provided billing and
collection services for multi-family residential properties, was
$1.7 million, or $0.09 per diluted share, compared with net income
of $2.5 million, or $0.14 per diluted share Anton C. Garnier,
Southwest Water chairman and chief executive officer, said, "I am
pleased that both our Utility Group and our Services Group
contributed to record second quarter revenues and operating income.
The financial success of our utility acquisition, the favorable
impact of new operations, maintenance and management contracts and
increased project work were primarily responsible for our improved
performance. Additionally, we benefited from our strategy of
geographic diversification. While unseasonably wet weather in
southern California impacted utility water sales, improved weather
conditions in Texas enabled us to overcome that challenge." For the
second quarter of 2005 compared with the same period a year ago,
Utility Group revenues increased by $3.7 million, or 22 percent, to
$20.3 million. Monarch Utilities, Inc., acquired in July 2004,
added $4.1 million to revenues. This increase was partially offset
by a $0.7 million revenue decrease in the company's California
utility as a result of significantly higher rainfall during the
second quarter of 2005 versus the second quarter of 2004. In the
Services Group, revenues for the three months ended June 30, 2005
increased $4.2 million, or 16 percent, to $31.0 million, compared
with the same quarter in 2004. New contracts, increased project
work, the contribution from acquisitions and favorable weather
generated higher revenues. The company's showcase reverse osmosis
water treatment plant in San Juan Capistrano, California, was
substantially complete as of December 31, 2004; therefore,
construction-related revenue decreased by $2.0 million for the
second quarter of 2005. Southwest Water has begun its 20-year, $20
million contract to operate and maintain the facility. Operating
income for the second quarter of 2005 increased by $1.9 million
compared with the same period in 2004. Services Group operating
income improved by $1.4 million and Utility Group operating income
increased $0.8 million. Selling, general and administrative
expenses increased by $1.4 million, or 23 percent, to $7.4 million
compared with the second quarter of 2004. This increase was
primarily associated with the expenses of operating newly acquired
businesses. Interest expense increased by $0.9 million, primarily
due to the higher debt level from the acquisition of Monarch
Utilities and continued investment in our regulated utility plant
and equipment. At the close of the 2005 second quarter, Southwest
Water sold Master Tek. The $3.7 million after-tax loss on the sale,
as well as a $1.1 million loss associated with Master Tek's current
year operations and reserves, are reflected in the company's
financial statements as discontinued operations. Garnier stated,
"The sale of Master Tek resulted from a careful and thorough
strategic review process. Our Board of Directors and executive team
concluded that rate-regulated water and wastewater utilities and
contract operations currently offer the potential for a greater
return on investment. The performance of our Utility and Services
Group companies during the second quarter of 2005 underscores the
wisdom of that decision." Business Outlook With the sale of the
Master Tek subsidiary, the company's business outlook for 2005 now
includes net income from continuing operations instead of net
income. Assuming normal weather conditions for the remainder of the
year, the company's business outlook remains unchanged: -- Revenues
of approximately $195 million -- Operating income of $19 million --
Net income from continuing operations (instead of net income) of
$7.5 million -- Utility Group revenues of approximately 42 percent
of revenues -- Company cash capital expenditures of approximately
$20 million -- An effective tax rate of 36% Conference Call The
company will provide more detail regarding its second quarter 2005
results and business outlook in a conference call and Web cast to
be held today, August 9, 2005, at 4:30 p.m. (Eastern time) and 1:30
p.m. (Pacific time). The conference call can be accessed on the
company's Web site at www.swwc.com. For those unable to participate
in the live Web cast, a replay will be available shortly after the
call on the company's Web site. Southwest Water Company provides a
broad range of operation, maintenance and management services,
including water production, treatment and distribution; wastewater
collection and treatment; customer service; and utility
infrastructure construction management. The company owns regulated
public utilities and also serves cities, utility districts and
private companies under contract. Approximately two million people
from coast to coast depend on Southwest Water for high-quality,
reliable service. Additional information may be found on the
company's Web site: www.swwc.com. This document contains
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements,
including expectations relating to future revenues and income, and
the company's ability to gain new business and control costs,
involve risks and uncertainties, as well as assumptions that, if
they prove incorrect or never materialize, could cause the results
of the company to differ materially from those expressed or implied
by such forward-looking statements. Actual results may differ
materially from these expectations due to changes in regulatory,
political, weather, economic, business, competitive, market,
environmental and other factors. For example, rainfall can
significantly affect the company's financial performance from one
quarter to the next. More detailed information about these factors
is contained in the company's filings with the Securities and
Exchange Commission, including under the caption "Risk Factors" in
the company's 2004 Annual Report on Form 10-K. The company assumes
no obligation to update these forward-looking statements to reflect
any change in future events. -0- *T FINANCIAL HIGHLIGHTS -
SOUTHWEST WATER COMPANY (unaudited and in thousands, except per
share amounts) Three Months Six Months Ended Ended June 30, June
30, 2005 2004 2005 2004 -------- ----------------- --------
Operating revenues $51,282 $43,433 $96,513 $81,441 Operating income
6,490 4,628 7,975 5,251 Net income from continuing operations 3,045
2,346 2,917 2,222 Discontinued operations (4,788) --- (4,902) ---
Net income (loss) (1,743) 2,554 (1,985) 2,572 Earnings (loss) per
common share: Diluted Continuing operations $0.15 $0.13 $0.14 $0.13
Net income $(0.09) $0.14 $(0.10) $0.15 Weighted average outstanding
common shares: Diluted 20,263 18,251 20,135 17,386 NOTE: Per share
amounts and weighted average outstanding common shares reflect a 5
percent stock dividend on January 3, 2005. CONSOLIDATED BALANCE
SHEET INFORMATION June 30, December 31, 2005 2004
-------------------------- Current assets $53,150 $58,091 Property,
plant and equipment, net 312,558 301,835 Total assets $413,371
$404,809 Current liabilities $32,894 $35,873 Long-term debt 126,620
115,827 Contributions in aid of construction 90,264 89,623
Stockholders' equity 124,553 126,198 Total liabilities and
stockholders' equity $413,371 $404,809 *T
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