SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File
For Quarter Ended: March 31, 1997 No. 0-422
MIDDLESEX WATER COMPANY
(Exact name of registrant as specified in its charter)
INCORPORATED IN NEW JERSEY 22-1114430
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 RONSON ROAD, ISELIN, NJ 08830
(Address of principal executive offices) (Zip Code)
(908) 634-1500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities and Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that this registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 30 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the
Issuer's classes of common stock, as of the latest practicable
date.
Class Outstanding at March 31, 1997
Common Stock, No Par Value 4,218,332
PART I. - FINANCIAL INFORMATION
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months
Ended March 31,
1997 1996
__________ __________
Operating Revenues $ 9,336,019 $ 9,246,949
__________ __________
Operating Expenses:
Operation and Maintenance 4,515,228 4,625,478
Depreciation 755,483 722,020
Taxes,other than Income Taxes 1,391,170 1,384,751
Federal Income Taxes 650,733 546,360
__________ __________
Total Operating Expenses 7,312,614 7,278,609
__________ __________
Utility Operating Income 2,023,405 1,968,340
Other Income-Net 76,632 9,585
__________ __________
Income Before Interest Charges 2,100,037 1,977,925
Interest Charges 818,012 824,662
__________ __________
Net Income 1,282,025 1,153,263
Preferred Stock Dividend
Requirements 39,732 39,732
__________ __________
Earnings Applicable to
Common Stock $ 1,242,293 $ 1,113,531
__________ __________
Earnings per Share of
Common Stock $0.30 $0.27
__________ __________
Average Number of Common
Shares Outstanding 4,210,636 4,143,181
Cash Dividends Paid per
Common Share $0.28 $0.27 1/2
See Notes to Consolidated Financial Statements.
MIDDLESEX WATER COMPANY
CONSOLIDATED BALANCE SHEETS
ASSETS AND OTHER DEBITS
March 31, December 31,
1997 1996
___________ ___________
(Unaudited)
UTILITY PLANT:
Water Production $ 27,473,110 $ 27,378,668
Transmission and Distribution 104,222,620 103,852,969
General 17,155,005 18,156,233
Construction Work in Progress 358,090 319,238
___________ ___________
TOTAL 149,208,825 149,707,108
Less Accumulated Depreciation 27,925,812 28,462,588
___________ ___________
UTILITY PLANT-NET 121,283,013 121,244,520
___________ ___________
NONUTILITY ASSETS-NET 1,672,406 1,774,106
___________ ___________
CURRENT ASSETS:
Cash and Cash Equivalents 4,163,722 4,262,862
Accounts Receivable(net of allowance
for doubtful accounts) 3,950,490 4,022,129
Unbilled Revenues 2,176,409 2,175,478
Materials and Supplies(at average cost) 1,051,343 1,034,572
Prepayments and Other Current Assets 395,875 430,000
___________ ___________
TOTAL CURRENT ASSETS 11,737,839 11,925,041
___________ ___________
DEFERRED CHARGES:
Regulatory Assets 7,248,864 7,184,764
Unamortized Debt Expense 2,818,120 2,848,352
Preliminary Survey and Investigation Charges 1,850,460 1,716,884
Other 1,917,458 1,965,855
___________ ___________
TOTAL DEFERRED CHARGES 13,834,902 13,715,855
___________ ___________
TOTAL $148,528,160 $148,659,522
___________ ___________
See Notes to Consolidated Financial Statements.
MIDDLESEX WATER COMPANY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND OTHER CREDITS
March 31, December 31,
1997 1996
___________ ___________
(Unaudited)
CAPITALIZATION(see accompanying statements) $105,158,033 $104,843,071
CURRENT LIABILITIES:
Current Portion of Long-term Debt 39,932 39,047
Accounts Payable 919,271 1,686,652
Customer Deposits 383,556 377,702
Taxes Accrued 5,759,313 4,529,185
Interest Accrued 449,623 1,168,242
Other 1,816,900 2,125,683
___________ ___________
TOTAL CURRENT LIABILITIES 9,368,595 9,926,511
___________ ___________
DEFERRED CREDITS:
Customer Advances for Construction 8,886,203 8,977,081
Accumulated Deferred Investment Tax Credits 2,290,817 2,308,736
Accumulated Deferred Federal Income Taxes 12,292,681 12,088,144
Other 1,774,980 1,715,458
___________ ___________
TOTAL DEFERRED CREDITS 25,244,681 25,089,419
___________ ___________
CONTRIBUTIONS IN AID OF CONSTRUCTION 8,756,851 8,800,521
___________ ___________
TOTAL $148,528,160 $148,659,522
___________ ___________
See Notes to Consolidated Financial Statements.
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION AND RETAINED EARNINGS
March 31, December 31,
1997 1996
___________ ___________
(Unaudited)
CAPITALIZATION:
Common Stock,No Par Value
Shares Authorized,6,000,000
Shares Outstanding-1997,4,218,332
1996,4,204,949 $ 30,250,027 $ 29,988,966
Retained Earnings 19,291,069 19,226,847
___________ ___________
TOTAL COMMON EQUITY 49,541,096 49,215,813
___________ ___________
Cumulative Preference Stock,No Par Value
Shares Authorized,100,000; Shares Outstanding,None
Cumulative Preferred Stock,No Par Value,
Shares Authorized,69,418
Convertible:
Shares Outstanding,$7.00 Series - 14,901 1,564,605 1,564,605
Nonredeemable:
Shares Outstanding,$7.00 Series - 1,017 101,700 101,700
Shares Outstanding,$4.75 Series - 10,000 1,000,000 1,000,000
___________ ___________
TOTAL CUMULATIVE PREFERRED STOCK 2,666,305 2,666,305
___________ ___________
Long-term Debt:
8.02% Amortizing Secured Note,
due December 20,2021 3,490,564 3,500,000
First Mortgage Bonds:
7.25%,Series R,due July 1,2021 6,000,000 6,000,000
5.20%,Series S,due October 1,2022 12,000,000 12,000,000
5.25%,Series T,due October 1,2023 6,500,000 6,500,000
6.40%,Series U,due February 1,2009 15,000,000 15,000,000
5.25%,Series V,due February 1,2029 10,000,000 10,000,000
___________ ___________
SUBTOTAL LONG-TERM DEBT 52,990,564 53,000,000
Less: Current Portion of Long-term Debt (39,932) (39,047)
___________ ___________
TOTAL LONG-TERM DEBT 52,950,632 52,960,953
___________ ___________
TOTAL CAPITALIZATION $105,158,033 $104,843,071
___________ ___________
Three Months Ended Year Ended
March 31, December 31,
1997 1996
___________ ___________
(Unaudited)
RETAINED EARNINGS:
BALANCE AT BEGINNING OF PERIOD $ 19,226,847 $ 18,822,817
Net Income 1,282,025 5,167,460
___________ ___________
TOTAL 20,508,872 23,990,277
___________ ___________
Cash Dividends:
Cumulative Preferred Stock 39,732 158,926
Common Stock 1,178,071 4,604,504
___________ ___________
TOTAL DEDUCTIONS 1,217,803 4,763,430
___________ ___________
BALANCE AT END OF PERIOD $ 19,291,069 $ 19,226,847
___________ ___________
See Notes to Consolidated Financial Statements.
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
1997 1996
___________ ___________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,282,025 $ 1,153,263
Adjustments To Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 772,408 749,840
Provision for Deferred Income Taxes 204,537 149,491
Allowance for Funds Used During Construction (5,997) (5,895)
Changes in Current Assets and Liabilities:
Accounts Receivables 71,639 151,819
Materials and Supplies (16,771) 8,167
Accounts Payable (767,381) 133,207
Accrued Income Taxes 1,230,128 1,501,778
Accrued Interest (718,619) (697,749)
Unbilled Revenues (931) 14,300
Other-Net (316,164) (59,605)
___________ ___________
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,734,874 3,098,616
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility Plant Expenditures (786,755) (744,739)
Preliminary Survey and Investigation Charges (133,576) (29,352)
Other-Net 183,872 (51,875)
___________ ___________
NET CASH USED IN INVESTING ACTIVITIES (736,459) (825,966)
___________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of Long-term Debt (9,436) 0
Deferred Debt Issuance Expenses 0 (116)
Temporary Cash Investments-Restricted 3,171 (731)
Proceeds from Issuance of Common Stock-Net 261,061 285,780
Payment of Preferred Dividends (39,732) (39,732)
Payment of Common Dividends (1,178,071) (1,138,586)
Customer Advances and Contributions-Net (134,548) 72,520
___________ ___________
NET CASH USED IN FINANCING ACTIVITIES (1,097,555) (820,865)
___________ ___________
NET CHANGE IN CASH AND CASH EQUIVALENTS (99,140) 1,451,785
___________ ___________
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 4,262,862 4,900,640
___________ ___________
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 4,163,722 $ 6,352,425
___________ ___________
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash Paid During the Period for:
Interest(net of amounts capitalized) $ 1,510,178 $ 1,487,412
Income Taxes $ 0 $ 25,000
Excludes Allowance for funds Used During Construction.
See Notes to Consolidated Financial Statements.
MIDDLESEX WATER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies
Organization - Middlesex Water Company (Middlesex or the Company) is the
parent company and sole shareholder of Tidewater Utilities, Inc.
(Tidewater), Pinelands Water Company, Pinelands Wastewater Company, and
Utility Service Affiliates, Inc. (USA). White Marsh Environmental
Systems, Inc., is a wholly-owned subsidiary of Tidewater. The financial
statements for Middlesex and its wholly-owned subsidiaries (Consolidated
Group) are reported on a consolidated basis. All intercompany accounts
and transactions have been eliminated.
The consolidated notes accompanying the 1996 Form 10-K are applicable to
this report and, in the opinion of the Company, the accompanying
unaudited consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present
fairly the financial position as of March 31, 1997 and the results of
operations and its cash flows for the periods ended March 31, 1997 and
1996. Information included in the Balance Sheet as of December 31, 1996
has been derived from the Company's audited financial statements
included in its annual report on Form 10-K for the year ended December
31, 1996.
Note 2 - Capitalization
Common Stock - During the first quarter, 13,383 common shares ($0.2
million) were issued under the Company's Restricted Stock Plan and the
Dividend Reinvestment and Common Stock Purchase Plan.
Note 3 - Commitments
On March 7, 1997, Middlesex Water Company entered into a contract to
acquire Public Water Supply Company, Inc., (Public) a 2,400 customer water
system located in Sussex County, Delaware. Under the terms of the
contract, Middlesex Water will exchange preferred stock convertible into
approximately 135,000 shares of its common stock for 100% of the shares
of Public. The acquisition was approved by the New Jersey Board of
Public Utilities and the Delaware Public Service Commission on April
30, 1997 and May 1, 1997, respectively. A closing date for the
acquisition has not been determined.
MIDDLESEX WATER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO MARCH 31, 1996
Net income for the first quarter rose by $0.1 million or 10% and was
partially due to increased revenues from the subsidiaries and decreased
operations and maintenance expenses, which included purchase power,
water treatment chemicals, and overtime labor. Additionally, there was
an increase in Other Income which includes the net benefit from the
transfer of Robinson's Branch Reservoir property and associated
development rights. Offsetting these positive impacts to net income was
an increase of $0.1 million in Federal Income Taxes due to a higher
level of taxable income.
Capital Resources: The consolidated capital program for 1997, estimated
at $17.1 million, includes $5.6 million for routine capital expenditures
and $11.5 million for special plant additions. The $5.6 million for
routine plant items is comprised of $2.0 million for cleaning and
lining, $1.6 million for mains, $0.7 million for service lines, $0.4
million for meters, and $0.9 million for various other items. The $11.5
million for special plant additions consists of $6.4 million for the
upgrade of the Carl J. Olsen Water Treatment Plant, $1.9 million for
treatment of well supplies, $2.3 million for water systems additions and
improvements in Delaware, $0.2 million for the South River Basin
regional supply, and $0.7 million for miscellaneous items.
Liquidity: To finance the Capital Program, the Company will utilize
internally-generated cash and external financing. The Company will
initially rely upon short-term borrowings through lines of credit
established with three financial institutions. There is $20 million
available under these commitments. Capital expenditures of $0.8 million
have been incurred in the three months ended March 31, 1997.
New Accounting Pronouncement: In February 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No.
128, "Earnings Per Share" (SFAS 128). SFAS 128 simplifies the financial
accounting and reporting standards for computing and presenting earnings
per share (EPS) previously found in Accounting Principles Board Opinion
No. 15, "Earnings Per Share". SFAS 128 is effective for financial
statements issued for periods ending after December 15, 1997, including
interim periods. Earlier application is not permitted. The company will
adopt SFAS 128 in 1997 and believes there will be no impact on the EPS
as currently computed.
MIDDLESEX WATER COMPANY
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
Exhibits - 27 Financial Data Schedule
Reports on Form 8-K - Filed March 31, 1997
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 by the undersigned thereto duly authorized.
MIDDLESEX WATER COMPANY
(Registrant)
/A. Bruce O'Connor/
Date: May 12, 1997 A. Bruce O'Connor
Vice President and Controller
UT
0000066004
MIDDLESEX WATER COMPANY
3-MOS
DEC-31-1997
MAR-31-1997
PER-BOOK
121,283,013
1,672,406
11,737,839
13,834,902
0
148,528,160
30,250,027
0
19,291,069
49,541,096
0
2,666,305
52,950,632
0
0
0
39,932
0
0
0
43,330,195
148,528,160
9,336,019
650,733
6,661,881
7,312,614
2,023,405
76,632
2,100,037
818,012
1,282,025
39,732
1,242,293
1,178,071
2,885,250
1,734,874
.30
.30
