SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 26, 2000
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Philadelphia Suburban Corporation
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(Exact name of registrant specified in Charter)
Pennsylvania 001-06659 23-1702594
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
762 W. Lancaster Avenue, Bryn Mawr, Pennsylvania 19010
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(Address of principal executive offices) Zip Code
Registrant's telephone, including area code: (610) 527-8000
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Not Applicable
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(Former name and former address, if changed since last report)
Item 5. Other Events.
The Press Release issued by the Registrant on July 26, 2000 announcing
the Registrant's earnings for the second quarter of 2000 and the
Registrant's unaudited consolidated financial statements as of and for
the quarter and six months ended June 30, 2000 attached hereto as
Exhibit 99.1 is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHILADELPHIA SUBURBAN CORPORATION
Dated: July 26, 2000 By: /s/ Roy H. Stahl
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Name: Roy H. Stahl
Title: Executive Vice President and General Counsel
EXHIBIT INDEX
Exhibit No. Exhibit Page
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99.1 Press Release dated July 26, 2000 and accompanying 5
unaudited consolidated financial statements as of and
for the quarter and six month ended June 30, 2000.
Meg Grady
Director, Investor Relations
(610) 645-1084
www.suburbanwater.com
gradym@suburbanwater.com
Donna Alston
Manager, Communications
(610) 645-1095
FOR RELEASE: July 26, 2000
PHILADELPHIA SUBURBAN CORPORATION REPORTS A 13.8 PERCENT INCREASE IN
EARNINGS PER SHARE IN SECOND QUARTER 2000
BRYN MAWR, PA, July 26 -- Philadelphia Suburban Corporation (NYSE/PSC)
today reported a 13.8 percent increase in diluted net income per common share to
$.33 in the quarter ended June 30 versus $.29 in the corresponding quarter in
1999.
Despite unfavorable weather conditions in Pennsylvania and Ohio, the
company achieved improved results. The increase in earnings was primarily due to
various rate case settlements, the partial recovery of certain
previously-expensed merger costs, customer growth from acquisitions and
continued company-wide cost containment efforts.
Revenues for the second quarter increased to $68.5 million, a 3.5 percent
increase over the $66.2 million reported in 1999. Net income was $13.6 million,
up $1.6 million from the same period in 1999.
Year-to-date revenues from operations increased to $133.0 million, a 6.6
percent increase over the $124.8 million reported in 1999. Net income for the
six months was $23.8 million, up 93.5 percent from the $12.3 million reported
during the same period in 1999 resulting in improved diluted net income per
common share to $.58 from the $.30 reported last year. The improvement in 2000
was attributable to rate settlement awards, customer growth from acquisitions,
partial recovery of previously-expensed merger costs, and the sale of
securities, while 1999 was adversely effected by a non-recurring first quarter
charge of $8.6 million (net of taxes) from merger costs.
PSC's ongoing, company-wide cost containment initiatives continue to drive
down its operating expense ratio to 38.1 percent on a trailing 12-month basis
versus 38.9 percent in the same period last year, as synergies attained through
the integration of the Consumers Water Company were realized.
Customer growth was nearly five percent since June 30, 1999, due primarily
to PSC's growth-through-acquisitions strategy. The following recent growth
ventures have contributed to this:
o Bensalem - Bucks County, PA
o Apple Grove - Stark County, OH
o Twin Hills - Chester County, PA
o Fulmor Heights - Montgomery County, PA
o Village of Bradley - Kankakee County, IL
o 5 additional smaller growth ventures
Nicholas DeBenedictis, Chairman and CEO commenting on the quarter stated,
"Our strong second quarter is an indication that our growth-through-acquisition
strategy continues to be successful. Also, we are encouraged by the fair
treatment we have received from state regulators in response to our growth
initiatives and major capital investment in infrastructure."
PSC is the holding company for Philadelphia Suburban Water Company and
Consumers Water Company, regulated public utilities that provide water to nearly
2 million residents in Pennsylvania, Ohio, New Jersey, Illinois and Maine. PSC's
common shares are traded under the ticker symbol "PSC" on both the New York and
Philadelphia Stock Exchanges. PSC has been committed to the preservation and
improvement of the environment throughout its history which spans more than 100
years.
The following table shows the comparative operating revenues, net income and net
income per share for Philadelphia Suburban Corporation for the quarters and six
months ended June 30, 2000 and 1999 (in thousands, except per share amounts)
(Unaudited)
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Quarter Ended Six Months Ended
June 30 June 30
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2000 1999 2000 1999
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Operating revenues $ 68,494 $ 66,165 $ 133,004 $124,762
Income before merger costs, net of tax $ 13,565 $ 12,033 $ 23,811 $ 20,945
Merger costs, net of tax - - - $ (8,596)
Net income available to common stock $ 13,565 $ 12,033 $ 23,811 $ 12,349
Net income per common share:
Basic net income per share $ 0.33 $ 0.29 $ 0.58 $ 0.30
Diluted net income per share $ 0.33 $ 0.29 $ 0.58 $ 0.30
Average common shares outstanding:
Basic 40,981 40,800 40,961 40,784
Diluted 41,441 41,251 41,337 41,266
This release contains certain forward-looking statements involving risks,
uncertainties and other factors that may cause the 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; the success of certain cost containment
initiatives, including the recovery of merger costs; changes in regulations or
regulatory treatment; availability and cost of capital; and the success of
growth.
Philadelphia Suburban Corporation and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unauditied)
Quarter Ended Six Months Ended
June 30, June 30,
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2000 1999 2000 1999
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Operating revenues $ 68,494 $ 66,165 $133,004 $124,762
Cost & expenses:
Operations and maintenance 24,350 24,203 49,278 46,928
Depreciation 7,665 7,608 15,916 15,027
Amortization 388 292 658 712
Taxes other than income taxes 5,597 5,624 11,579 11,212
Restructuring costs (recovery) (396) - (396) 3,787
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Total 37,604 37,727 77,035 77,666
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Operating income 30,890 28,438 55,969 47,096
Interest expense, net 9,990 8,530 19,845 16,621
Gain on sale of securities - - (1,061) -
Minority interest 28 27 46 42
Allowance for funds used during construction (985) (469) (1,719) (857)
Merger transaction costs (recovery) (663) - (663) 6,334
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Income before income taxes 22,520 20,350 39,521 24,956
Provision for income taxes 8,929 8,283 15,657 12,538
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Net income 13,591 12,067 23,864 12,418
Dividends on preferred stock 26 34 53 69
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Net income available to common stock $ 13,565 $ 12,033 $ 23,811 $ 12,349
======== ======== ======== ========
Net income $ 13,591 $ 12,067 $ 23,864 $ 12,418
Other comprehensive income (loss), net of tax 144 - (510) -
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Comprehensive income $ 13,735 $ 12,067 $ 23,354 $ 12,418
======== ======== ======== ========
Net income per common share:
Basic $ 0.33 $ 0.29 $ 0.58 $ 0.30
Diluted $ 0.33 $ 0.29 $ 0.58 $ 0.30
Average shares outstanding:
Basic 40,981 40,800 40,961 40,784
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Diluted 41,441 41,251 41,337 41,266
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Philadelphia Suburban Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands of dollars, except per share amounts)
(Unaudited) (Audited)
June 30, December 31,
2000 1999
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Assets
Property, plant and equipment, at cost $ 1,451,533 $ 1,393,027
Less accumulated depreciation 274,467 257,663
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Net property, plant and equipment 1,177,066 1,135,364
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Current assets:
Cash and cash equivalents 8,429 4,658
Accounts receivable and unbilled revenues, net 48,585 44,399
Inventory, materials and supplies 4,442 3,948
Prepayments and other current assets 3,442 6,520
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Total current assets 64,898 59,525
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Regulatory assets 59,166 58,287
Deferred charges and other assets, net 31,210 27,629
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$ 1,332,340 $ 1,280,805
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Liabilities and Stockholders' Equity
Stockholders' equity:
6.05% Series B cumulative preferred stock $ 1,760 $ 1,760
Common stock at $.50 par value, authorized 100,000,000 shares,
issued 41,856,617 and 41,627,644 in 2000 and 1999 20,928 20,814
Capital in excess of par value 255,613 251,440
Retained earnings 110,589 101,533
Minority interest 2,613 2,604
Treasury stock, 792,764 and 615,038 shares in 2000 and 1999 (14,642) (11,270)
Accumulated other comprehensive income 1,510 2,020
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Total stockholders' equity 378,371 368,901
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Long-term debt, excluding current portion 460,835 413,752
Commitments - -
Current liabilities:
Current portion of long-term debt 12,973 12,194
Loans payable 94,926 103,069
Accounts payable 21,142 24,286
Accrued interest 10,241 8,994
Accrued taxes 11,706 12,689
Other accrued liabilities 22,211 22,581
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Total current liabilities 173,199 183,813
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Deferred credits and other liabilities:
Deferred income taxes and investment tax credits 139,942 136,528
Customers' advances for construction 57,621 59,494
Other 7,716 8,434
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Total deferred credits and other liabilities 205,279 204,456
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Contributions in aid of construction 114,656 109,883
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$ 1,332,340 $ 1,280,805
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