Philadelphia Suburban Corporation Announces Significantly Higher First Quarter Operating Results for 2003
BRYN MAWR, Pa., May 7, 2003 (BUSINESS WIRE) -- Philadelphia Suburban Corporation (NYSE:PSC) today announced significantly higher net income of $13.3 million or $0.19 per diluted share for the quarter ended March 31, 2003, compared to $11.9 million or $0.17 per diluted share for the same period in 2002. Operating revenues for the quarter increased 12.3 percent to $80.5 million, versus $71.7 million for the same period in 2002, due to rate relief and customer growth in various states in which the company operates.
PSC maintained an efficiency ratio (operations and maintenance expenses to revenue) of 36.6 percent, for the twelve-month period ending on March 31, 2003, despite higher expenses as a result of a harsh winter (increased main break maintenance) and higher insurance and pension costs. This is consistent with the company's 2002 ratio of 36.6 percent.
The company continued its efforts to reduce its borrowing costs by taking advantage of historically low interest rates, and was able to secure favorable effective interest rates during late 2002. This allowed the company to increase average borrowings by 13.8 percent in the first quarter of 2003, while only incurring an 8.5 percent increase in interest expense in comparison to the same period in 2002. Over the past three years, the company's embedded cost of debt has decreased 84 basis points from 7.40 percent to 6.56 percent.
PSC's Chairman and President Nicholas DeBenedictis said, "Despite the challenging winter, we are pleased with our first quarter performance, including our revenue growth and the progress we have made with the planned AquaSource acquisition, which we expect to close mid-year. This acquisition will provide PSC with a broader platform for future growth, combined with greater geographic diversity to mitigate weather-related risks."
PSC has received regulatory approval to move forward with the planned acquisition of the water and wastewater operations of AquaSource in nine out of 10 states where approval is required. Necessary approvals were received in Texas, Florida, South Carolina, North Carolina, Virginia, New York, Kentucky, Missouri, and Connecticut. Regulatory approval is still pending in New Jersey.
Thanks to substantial precipitation in late 2002 and early 2003, the company also announced that it is currently well positioned to enter the heavy-demand spring and summer months in its largest operating division, with reservoirs filled to capacity in Southeastern Pennsylvania. At this time in 2002, drought conditions existed in Pennsylvania where the majority of PSC's customers are located.
PSC is the largest U.S.-based investor-owned water utility serving approximately two million residents in Pennsylvania, Ohio, Illinois, New Jersey, Maine, and North Carolina. PSC is a publicly traded company listed on both the New York and Philadelphia Stock Exchanges under the ticker symbol "PSC." The company has been committed to the preservation and improvement of the environment throughout its history, which spans more than 100 years.
The company's quarterly conference call with analysts will be at 11:00 a.m. Eastern Daylight Time today. Interested parties may listen to the conference call over the Internet by logging onto www.suburbanwater.com. The call will be recorded and replayed beginning 1:00 p.m., Wednesday, May 7, 2003, and will run until 12:00 p.m., Tuesday, May 20, 2003. The dial-in telephone number for the audio replay is 973/341-3080 (pin number 3883019). A replay of the call will also be available in the Investor Relations section of www.suburbanwater.com.
The following table shows selected operating data for the quarters ended March 31, 2003 and 2002 (in thousands, except per share data) for Philadelphia Suburban Corporation.
Quarter Ended
March 31
-----------------
2003 2002
------- --------
Operating revenues $80,489 $71,669
-----------------
Net income available to common stock $13,324 $11,875
=================
Net income per common share:
Basic $0.20 $0.17
Diluted $0.19 $0.17
Average common shares outstanding:
Basic 67,977 68,451
Diluted 68,586 69,300
This release contains certain forward-looking statements involving risks and uncertainties and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These factors include, among others, the following: general economic business conditions; weather conditions; the success of certain cost containment initiatives; changes in regulations or regulatory treatment; availability and cost of capital; the success of growth initiatives; and the completion of the AquaSource transaction.
Philadelphia Suburban Corporation and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended
March 31
-----------------
2003 2002
------- --------
Operating revenues $80,489 $71,669
Cost & expenses:
Operations and maintenance 30,664 27,285
Depreciation 11,347 9,893
Amortization 712 540
Taxes other than income taxes 5,320 5,314
-----------------
Total 48,043 43,032
-----------------
Operating income 32,446 28,637
Other expense (income):
Interest expense, net 10,612 9,780
Allowance for funds used during construction (376) (386)
Gain on sale of other assets (55) (349)
-----------------
Income before income taxes 22,265 19,592
Provision for income taxes 8,938 7,702
-----------------
Net income 13,327 11,890
Dividends on preferred stock 3 15
-------- --------
Net income available to common stock $13,324 $11,875
=================
Net income $13,327 $11,890
Other comprehensive income (loss), net of tax:
Unrealized gain on securities 47 128
Reclassification adjustment for gains
reported in net income - (227)
-----------------
Comprehensive income $13,374 $11,791
=================
Net income per common share:
Basic $0.20 $0.17
Diluted $0.19 $0.17
Average common shares outstanding:
Basic 67,977 68,451
=================
Diluted 68,586 69,300
=================
Philadelphia Suburban Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands of dollars)
(Unaudited)
March 31, Dec. 31,
2003 2002
---------- -----------
Net property, plant and equipment $1,504,329 $1,490,841
Current assets 72,822 70,908
Regulatory assets and other assets 154,543 155,320
-----------------------
$1,731,694 $1,717,069
=======================
Stockholders' equity $499,723 $493,097
Long-term debt, excluding current portion 580,841 582,910
Current portion of long-term debt and loans
payable 161,119 149,378
Other current liabilities 66,801 77,153
Deferred credits and other liabilities 423,210 414,531
-----------------------
$1,731,694 $1,717,069
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SOURCE: Philadelphia Suburban Corporation
Philadelphia Suburban Corporation
Cheryl Hansen, 610/645-1084
hansenc@suburbanwater.com
or
Barbara Cummings, 610/645-1196
cummingsb@suburbanwater.com
or
Donna Alston, 610/645-1095
alstond@suburbanwater.com