UNITED STATES
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: August 4, 2006
MIDDLESEX WATER COMPANY
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(Exact name of registrant as specified in its charter)
NEW JERSEY 0-422 22-1114430
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
1500 RONSON ROAD, P.O. BOX 1500, ISELIN, NEW JERSEY 08830
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(Address of principal executive offices, including zip code)
(732)-634-1500
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item. 8.01. Other Events
Announcement of Middlesex Water Company Second Quarter 2006 Earnings as set
forth in the attached press release.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned hereunto duly authorized.
MIDDLESEX WATER COMPANY
(Registrant)
s/Kenneth J. Quinn
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Kenneth J. Quinn
Vice President, General Counsel,
Secretary and Treasurer
Dated: August 4, 2006
2
MIDDLESEX WATER COMPANY
REPORTS SECOND QUARTER EARNINGS
ISELIN, NJ, (August 4, 2006) Middlesex Water Company, (NASDAQ:MSEX), a
provider of water and wastewater services in New Jersey and Delaware, today
announced that its Board of Directors has declared a cash dividend of $0.17 per
common share payable September 1, 2006 to shareholders of record as of August
15, 2006.
Second Quarter 2006 Results
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The second quarter of 2006 yielded positive results in a number of areas.
Earnings Applicable to Common Stock were $2.9 million or, $0.25 per common share
on a fully diluted basis, as compared to $1.9 million or, $0.16 per share in the
second quarter of 2005.
Operating revenues for the quarter were $21.0 million, an increase of $2.6
million over the same period in 2005. Operating revenues increased $0.6 million
due to increased water sales resulting from hot, dry weather. Base rate
increases received in the regulated utilities, the largest of which was received
in New Jersey in December 2005, contributed $1.2 million of the increase. Water
consumption and related fees from customer growth, primarily in the Delaware
subsidiaries, added $0.7 million to the increase, while additional revenues from
other sources contributed $0.1 million.
Operation and maintenance expenses for the quarter were $10.8 million, an
increase of $0.4 million over the same period in 2005. Approximately $0.2
million of this increase is due to additional costs for wages and benefits, some
of which is resulting from additional employees to support growth. The remaining
$0.2 million of the increase relates to a combination of additional wastewater
treatment costs in Delaware and various miscellaneous items. The Company
continues to focus on diligently managing its variable production costs as well
as its non-variable costs, with an emphasis on continually improving operating
margins.
Six-Month Results
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For the six months ended June 30, 2006, revenues rose to $39.3 million, an
increase of $4.1 million over the same period in 2005. Operating revenues
increased $0.6 million due to increased water sales resulting from hot, dry
weather. Base rate increases in the regulated utilities contributed $2.3 million
of the increase. Water consumption and related fees from customer growth,
primarily in Delaware, added $0.6 million to the increase, while additional
revenues from other sources contributed $0.6 million.
Earnings Applicable to Common Stock increased from $3.2 million to $4.7
million as compared to the same period in 2005. Basic and diluted earnings per
share increased from $0.28 to $0.40.
Rate Filings
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In the first quarter of 2006, Middlesex had filed for a $5.5 million
increase in annual operating revenues for Tidewater Utilities, Inc. the
Company's regulated water utility in Delaware. On June 27th the Delaware Public
Service Commission approved an initial portion of this request or, $1.6 million
in annual revenues, subject to refund pending review and approval of the overall
request. Delaware regulations allow for an interim rate increase prior to the
conclusion of rate proceedings, provided such interim rates do not exceed the
lesser of 15% of total operating revenues or $2.5 million. The Company continues
to work through the discovery phase of this proceeding and expects a final
decision by early 2007.
Growth in Delaware
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The Company's regulated water and wastewater utilities in Delaware
continue to expand their franchise territories. Tidewater has executed numerous
water service agreements with various developers to provide water treatment and
distribution services. Tidewater also continues to add customers from build-out
related to water service agreements that had been executed in prior periods.
"A significant priority for the Company remains the profitable expansion
of our regulated wastewater business in Delaware," said Dennis Doll, Middlesex
President & CEO. "We expect this business to contribute to shareholder value
over the long-term. In spite of the recent national trend of slower growth in
the housing markets and increased interest rates, the Company continues to
respond to numerous requests for proposals from developers in Delaware for the
construction and operation of wastewater collection and treatment facilities. We
have recently been selected as the service provider for several significant
projects."
The Company continues to expand its LineCare(SM) water service line
protection program in both New Jersey and Delaware. Since January 2006 the
customer base for this service has increased by 13%. Although not yet
contributing appreciably to earnings per share, the Company views this program
as: 1) an important service for the homeowner that also provides an opportunity
for further revenue growth, 2) providing supplemental income that contributes to
continually improving operating margins 3) complementary to the Company's
capabilities for maintaining water and wastewater infrastructure and 4) integral
to building quality relationships with municipalities and others who may desire
further services in the future.
Middlesex is working to further drive financial and operational
performance through a variety of initiatives that are well underway. The Company
continues to implement additional technology and business process improvements
in areas such as mapping, procurement, budgeting, capital planning, management
reporting and other areas where these tools are expected to translate into
continued improvements in financial and operating results.
About Middlesex Water Company
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Middlesex Water Company, organized in 1897, is an investor-owned water
utility, serving customers in central and southern New Jersey and in the State
of Delaware. The Company and its New Jersey subsidiaries - Pinelands Water
Company and Pinelands Wastewater Company--are subject to the regulations of the
Board of Public Utilities of the State of New Jersey. Middlesex Water operates
the water and wastewater utilities for the City of Perth Amboy through its
subsidiary, Utility Service Affiliates (Perth Amboy), Inc. Middlesex Water also
provides contract operations services and a service line maintenance program
through its non-regulated subsidiary, Utility Service Affiliates, Inc. The
Company's regulated Delaware subsidiaries, Tidewater Utilities, Inc., together
with Southern Shores Water Company, and Tidewater Environmental Services, Inc.
(TESI) are subject to the regulations of the Public Service Commission in
Delaware. TESI provides regulated wastewater utility services. White Marsh
Environmental Systems, Inc. operates small water and wastewater systems under
contract on a non-regulated basis in Delaware. These companies are also subject
to various Federal, State and regulatory agencies concerning water and
wastewater effluent, quality standards.
For additional information regarding Middlesex Water Company, visit the
Company's Web site at www.middlesexwater.com or call (732) 634-1500.
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Certain matters discussed in this press release are "forward-looking statements"
regarding the Company's results of operations and financial position. Such
statements address future plans, objectives, expectations and events concerning
various matters such as capital expenditures, earnings, litigation, growth
potential, rate, regulatory matters, liquidity, capital resources and accounting
matters. Actual results in each case could differ materially from those
currently anticipated in such statements. The Company undertakes no obligation
to publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.
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Contact:
Bernadette M. Sohler
Director of Communications
(732) 634-1500
MIDDLESEX WATER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2006 2005 2006 2005
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Operating Revenues $ 21,037,055 $ 18,430,751 $ 39,267,201 $ 35,173,654
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Operating Expenses:
Operations 10,011,895 9,409,108 19,658,026 18,451,104
Maintenance 794,248 979,119 1,533,232 1,877,804
Depreciation 1,712,740 1,620,159 3,381,133 3,168,207
Other Taxes 2,369,072 2,163,520 4,572,525 4,246,654
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Total Operating Expenses 14,887,955 14,171,906 29,144,916 27,743,769
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Operating Income 6,149,100 4,258,845 10,122,285 7,429,885
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Other Income:
Allowance for Funds Used During Construction 115,388 140,456 228,025 350,906
Other Income 40,840 35,943 98,778 91,162
Other Expense (12,519) (16,324) (14,258) (24,469)
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Total Other Income, net 143,709 160,075 312,545 417,599
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Interest Charges 1,808,118 1,578,078 3,323,116 2,960,170
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Income before Income Taxes 4,484,691 2,840,842 7,111,714 4,887,314
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Income Taxes 1,516,855 894,714 2,331,514 1,561,484
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Net Income 2,967,836 1,946,128 4,780,200 3,325,830
Preferred Stock Dividend Requirements 61,946 63,696 123,893 127,393
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Earnings Applicable to Common Stock $ 2,905,890 $ 1,882,432 $ 4,656,307 $ 3,198,437
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Earnings per share of Common Stock:
Basic $ 0.25 $ 0.17 $ 0.40 $ 0.28
Diluted $ 0.25 $ 0.16 $ 0.40 $ 0.28
Average Number of
Common Shares Outstanding :
Basic 11,610,579 11,392,964 11,602,149 11,380,290
Diluted 11,941,719 11,736,104 11,933,289 11,723,430
Cash Dividends Paid per Common Share $ 0.1700 $ 0.1675 $ 0.3400 $ 0.3350