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: November 2, 2018
MIDDLESEX WATER COMPANY
(Exact name of registrant as specified in its charter)
| NEW JERSEY | 0-422 | 22-1114430 |
| (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
(Address of principal executive offices, including zip code)
(732)-634-1500
(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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 2, 2018, Middlesex Water Company announced its financial results for the third quarter ended September 30, 2018. A copy of the press release announcing these results is attached hereto as Exhibit 99.1 and incorporated into this Current Report on Form 8-K by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
| Exhibit | |
| Number | Description of Document |
| 99.1 | Press Release issued by Middlesex Water Company, dated November 2, 2018, announcing Third Quarter 2018 Financial Results. |
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/A. Bruce O‘Connor | |
| A. Bruce O’Connor | |
| Vice President, Treasurer and | |
| Chief Financial Officer |
Dated: November 2, 2018
MIDDLESEX WATER COMPANY REPORTS
THIRD QUARTER FINANCIAL RESULTS
QUARTER HIGHLIGHTS
| § | Revenues Increase 7.0 % |
| § | Net Income Jumps 61% |
| § | Earnings Per Share Up 60% |
ISELIN, N.J., (November 2, 2018) -- Middlesex Water Company (the “Company” or “Middlesex”), (Nasdaq:MSEX), a provider of water and wastewater services, today reported third quarter consolidated operating revenues of $38.7 million as compared to $36.2 million for the same period in 2017. Net income for the quarter increased $4.6 million to $12.3 million, compared to $7.6 million for the same period in 2017. Diluted earnings per share for the quarter ended September 30, 2018 were $0.74 up from $0.46 for the same period in 2017.
“The favorable outcome of the Middlesex base rate case settlement reached in March 2018 allows for the recognition of tax benefits that propelled both Net Income and Earnings Per Share upward for the quarter and the year. Higher demand from our New Jersey contract customers, a base rate increase in our Middlesex System and customer growth in Delaware also had a favorable impact on third quarter results,” said Middlesex Chairman, President and Chief Executive Officer Dennis W. Doll. “We were pleased to announce a 7.3 % increase in the common dividend in late October, demonstrating our ongoing commitment to returning value to shareholders. The increase represents our 46th year of consecutive dividend increases in our company’s history,” added Doll.
Third Quarter Operating Results
Operating revenues for the quarter increased by $2.5 million from the same period in 2017. $1.5 million of higher revenue is due to the base rate increase in the Middlesex System which took effect April 1, 2018. Higher demand from our New Jersey contract customers added $0.6 million to revenues. In Delaware, Tidewater Utilities, Inc., $0.4 million in higher revenues was attributed to customer growth.
Operation and maintenance expenses for the third quarter increased $1.7 million from the same period in 2017. The increase was primarily attributable to $0.4 million of higher water production costs related to weather-driven changes in raw water quality as well as higher retiree healthcare insurance premium costs of $0.7 million. Higher headcount and average labor rates pushed labor costs up by $0.2 million. Rent expense rose by $0.2 million due to increased leased commercial office space required to accommodate various operational and administrative needs.
Income Tax expense for the third quarter decreased $4.2 million from the same period in 2017 due to the combined effect of the approved regulatory accounting treatment of the adoption of Internal Revenue Service (IRS) tangible property regulations and a lower effective tax rate resulting from the Tax Cuts and Jobs Act of 2017.
Nine Month Operating Results
Consolidated operating revenues for the nine months ended September 30, 2018 were $104.8 million, an increase of $5.5 million from the same period in 2017, primarily due to the base rate increase and higher demand by contract customers in the Middlesex System as well as increased revenues in our Tidewater system due to customer growth. For the nine months ended September 30, 2018, net income increased $8.0 million to $25.5 million. Diluted earnings per share were $1.54 as compared to $1.06 for the same period in 2017.
Operation and maintenance expenses for the nine months ended September 30, 2018 were higher by $3.6 million compared to the same period in 2017, due to increased water production costs, higher labor costs, higher net healthcare insurance policy premiums, heightened main break repair activity and increased transportation costs.
Income Tax expense for the nine months ended September 30, 2018 decreased $7.6 million from the same period in 2017, approved regulatory accounting treatment of the adoption of IRS tangible property regulations, as well as a lower effective tax rate resulting from the Tax Cuts and Jobs Act of 2017.
Board of Directors Declares Dividend
The Company’s Board of Directors declared a quarterly cash dividend of $0.24 per share, payable December 3, 2018 to common shareholders as of November 15, 2018. Middlesex has paid cash dividends continually since 1912.
About Middlesex Water Company
Middlesex Water Company, organized in 1897, is an investor-owned water and wastewater utility, serving customers primarily in central and southern New Jersey and Delaware. Information about Middlesex’s Direct Share Purchase and Sale and Dividend Reinvestment Plan can be found on our website.
This release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, our long-term strategy and expectations, the status of our acquisition program, the impact of our acquisitions, the impact of current and projected rate requests and the impact of our capital program on our environmental compliance. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: general economic business conditions, unfavorable weather conditions, the success of certain cost containment initiatives, changes in regulations or regulatory treatment, availability and the cost of capital, the success of growth initiatives and other factors discussed in our filings with the United States Securities and Exchange Commission.
Contact:
Bernadette Sohler, Vice President – Corporate Affairs
Middlesex Water Company,
1500 Ronson Road
Iselin, New Jersey 08830
(732) 638-7549
www.middlesexwater.com
MIDDLESEX WATER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Operating Revenues | $ | 38,713 | $ | 36,174 | $ | 104,809 | $ | 99,319 | ||||||||
| Operating Expenses: | ||||||||||||||||
| Operations and Maintenance | 18,114 | 16,383 | 52,773 | 49,178 | ||||||||||||
| Depreciation | 3,792 | 3,587 | 11,137 | 10,280 | ||||||||||||
| Other Taxes | 3,889 | 3,603 | 10,910 | 10,327 | ||||||||||||
| Total Operating Expenses | 25,795 | 23,573 | 74,820 | 69,785 | ||||||||||||
| Operating Income | 12,918 | 12,601 | 29,989 | 29,534 | ||||||||||||
| Other Income (Expense): | ||||||||||||||||
| Allowance for Funds Used During Construction | 424 | 174 | 805 | 473 | ||||||||||||
| Other Income (Expense), net | 409 | 248 | 1,277 | 684 | ||||||||||||
| Total Other Income, net | 833 | 422 | 2,082 | 1,157 | ||||||||||||
| Interest Charges | 1,723 | 1,493 | 4,929 | 3,965 | ||||||||||||
| Income before Income Taxes | 12,028 | 11,530 | 27,142 | 26,726 | ||||||||||||
| Income Taxes | (262 | ) | 3,888 | 1,683 | 9,263 | |||||||||||
| Net Income | 12,290 | 7,642 | 25,459 | 17,463 | ||||||||||||
| Preferred Stock Dividend Requirements | 36 | 36 | 108 | 108 | ||||||||||||
| Earnings Applicable to Common Stock | $ | 12,254 | $ | 7,606 | $ | 25,351 | $ | 17,355 | ||||||||
| Earnings per share of Common Stock: | ||||||||||||||||
| Basic | $ | 0.75 | $ | 0.47 | $ | 1.55 | $ | 1.06 | ||||||||
| Diluted | $ | 0.74 | $ | 0.46 | $ | 1.54 | $ | 1.06 | ||||||||
| Average Number of | ||||||||||||||||
| Common Shares Outstanding: | ||||||||||||||||
| Basic | 16,394 | 16,340 | 16,379 | 16,324 | ||||||||||||
| Diluted | 16,550 | 16,496 | 16,535 | 16,480 | ||||||||||||
| Cash Dividends Paid per Common Share | $ | 0.2238 | $ | 0.2113 | $ | 0.6713 | $ | 0.6338 | ||||||||