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: May 25, 2016
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:
| ¨ | 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. 5.07. | Submission of Matters to a Vote of Security Holders |
Middlesex Water Company (the “Company”) held its Annual Meeting of Shareholders on Tuesday, May 24, 2016. Shareholders voted to elect Kim C. Hanemann (Class I) to the Company’s Board of Directors (the “Board”), to serve a term of office of two years; and re-elected directors Steven M. Klein, Amy B. Mansue and Walter G. Reinhard (Class II), to each serve a term of office of three years. At the Annual Meeting, the Company’s shareholders voted on the following proposals set forth in the Company’s Definitive Proxy Statement on Schedule 14A, (2016 Proxy Statement) which was filed with the Securities and Exchange Commission on April 12, 2016 and mailed to shareholders.
Proposal No. 1
Description of Matters Submitted
| 1) | A proposal to elect four nominees to the Board with Ms. Hanemann to serve a term expiring at the 2018 Annual Meeting of Shareholders and Directors Klein, Mansue and Reinhard serving terms that expire at the 2019 Annual Meeting of Shareholders. Each Director was elected and received the following votes: |
| Director | For | Withheld | Broker Non-Votes | |||||||||
| Kim C. Hanemann | 8,491,532 | 168,945 | 5,109,684 | |||||||||
| Steven M. Klein | 8,462,289 | 198,188 | 5,109,684 | |||||||||
| Amy B. Mansue | 8,505,636 | 154,841 | 5,109,684 | |||||||||
| Walter G. Reinhard | 8,452,756 | 207,721 | 5,109,684 |
Proposal No. 2
Description of Matters Submitted
| 2) | A proposal to approve a non-binding advisory resolution approving the compensation of the Company’s named executive officers as disclosed in the 2016 Proxy Statement. The proposal was approved and received the following votes: |
| For | Against | Abstain | Broker Non-Votes | |||||||||
| 7,897,797 | 627,827 | 134,853 | 5,109,684 |
Proposal No. 3
Description of Matters Submitted
| 3) | A proposal to ratify the appointment by the Audit Committee of Baker Tilly Virchow Krause, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2015 |
| For | Against | Abstain | ||||||
| 13, 437,910 | 231,872 | 100,379 | ||||||
| Item 8.01 | Other Events |
2016 Annual Meeting of Shareholders
On May 24, 2016, Middlesex Water Company held its 2016 Annual Meeting of Shareholders at its company headquarters in Iselin, New Jersey. Announcement of voting results at which shareholders elected one Class I Director and three Class II Directors; approved, by a non-binding advisory vote, the compensation of the Company’s named executive officers, and ratified the Audit Committee’s appointment of Baker Tilly Virchow Krause LLP as the independent registered public accounting firm for 2016 is described above.
Management’s presentation at the Annual Meeting of Shareholders will be available in the Investor Relations section of the company’s website www.middlesexwater.com under News & Market Data/Presentations and Interviews. The presentation is also filed herewith as Exhibit 99.1 and is hereby incorporated by reference.
News Release
On May 25, 2016, the Company issued a press release describing the voting results of shareholders at the Annual Meeting, the election of directors, the approval of a non-binding advisory resolution approving the compensation of the Company’s named executive officers, and the ratification by shareholders of the appointment of Baker Tilly Virchow Krause LLP as the Company’s independent auditors for the year ending December 31, 2016. A copy of the Company’s press release dated May 25, 2016 is filed herewith as Exhibit 99.2 and is hereby incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| (c) | Exhibits |
| Exhibit | Description | |
| 99.1 | Company officers’ slide show presentation at the Annual Meeting of Shareholders May 24, 2016 | |
| 99.2 | Company press release dated May 25, 2016. |
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: May 25, 2016
Exhibit 99.1
May 24, 2016
FORWARD LOOKING STATEMENT As an introduction to the information we will be discussing, please be aware that some of our comments can be considered forward - looking statements as defined by the federal securities laws and as outlined in the Company’s SEC filings. As such, any forward - looking statements are based on currently available information and management’s assumptions, expectations, and estimates; however, actual results may vary significantly. Risk factors that could cause actual results to vary from expectations are described in the Company’s filings with the SEC. These factors are also available in our most recent earnings release which can be viewed on our website at www.middlesexwater.com or in our Annual Report .
A KEY FOCUS Continue strengthening our water distribution infrastructure for ongoing service reliability, resiliency and water quality
Incorporated: 1897 Market Cap: $576 Million 52 - Week Range: $21.24 - $38.68 3 Month Avg. Volume: 75,134 Shares Outstanding: 16.2 Million Dividend Yield: 2.24% Annual Dividend: $0.7952 Institutional Ownership: 41% COMPANY OVERVIEW
OUR STRATEGY FOR GROWTH Acquisitions of investor or municipal water/waste water utilities Timely and adequate recovery of prudent utility plant investments Investment in products, services and opportunities that leverage our water and wastewater competency Municipal and industrial water and wastewater system contract operations Investment in renewable energy projects that complement our core expertise
Public Private Partnerships Acquisitions Contract O perations Military Base Water System Acquisitions Industrial Applications Our Services LEVERAGING OUR CORE UTILITY EXPERTISE Renewable Energy
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PROTECTING PUBLIC HEALTH The Flint crisis has raised awareness of the critical role utilities play in ensuring public health protection. x We are in compliance with the USEPA’s Lead & Copper Rule. x We eliminated company - owned lead service lines more than 25 years ago. x Our treatment process includes corrosion control to further protect customers. x Our water quality results (including lead testing results) are available to customers online. View Dennis Doll’s NJ Spotlight Remarks at http://bit.ly/dollH20
FINANCIAL HIGHLIGHTS
13.4 14.4 16.6 18.5 2011 2012 2013 2014 2015 20.0 11 NET INCOME ($Millions)
$0.84 $0.90 $1.03 $1.13 2011 2012 2013 2014 2015 12 $1.22 EARNINGS PER SHARE
7.6% 8.0% 8.9% 9.5% 9.9% 2011 2012 2013 2014 2015 13 RETURN ON EQUITY
$102 $110 $115 $117 $126 2011 2012 2013 2014 2015 14 REVENUES ($Millions)
OPERATING REVENUES 88% 12% By Segment Regulated Non-Regulated Regulated Non - Regulated Regulated Business: Water and wastewater customers in NJ, DE and PA. Non - Regulated Contract Services: Operation and maintenance of water and wastewater systems in NJ and DE.
REGULATED REVENUE CONCENTRATION 39% 12% 19% 13% 17% 58% 12% 7% 10% 13% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% Residential Commercial Industrial Fire Protection Contract Sales 1991 2015 Revenue Shift Over 25 Years
FIRST QUARTER 2016 RESULTS ($Millions except per share amounts) First Quarter Ended March 31, 2016 2015 Operating Revenues $30.6 $28.8 O & M Expenses $15.8 $16.1 Net Income $ 4.8 $3.6 Diluted Earnings Per Share $ 0.29 $ 0.22
RATE ACTIVITY Effective Revenues Middlesex August 2015 $ 5.0M Tidewater DSIC January 2016 $ 0.1M Pinelands May 2016 $0.4M Twin Lakes June 2016 $0.1M Tidewater DSIC July 2016 $ 0.1M Middlesex PWAC September 2016 $ 0.1M
19 2016 CONSTRUCTION PROGRAM $49 MILLION $3.4 $4.1 $8.1 $ 33.4 Technology Other Infrastructure Needs Plant Improvements Distribution System
CAPITAL EXPENDITURES (in $Millions) $20M $22M $26M $24M $49M $45M $67 M 0 10 20 30 40 50 60 70 80 2012 2013 2014 2015 2016 2017 2018 20
UTILITY PLANT (In $Millions) 21 $332 $347 $359 $371 $385 $424 $461 $518 $183 $188 $198 $212 $222 $232 $240 $250 0 100 200 300 400 500 600 700 800 900 2011 2012 2013 2014 2015 2016 2017 2018 Delaware New Jersey
CAPITAL FUNDING » Cash Flow From Operations » Dividend Reinvestment Plan Proceeds » Short - term Lines of Credit » Long - term Debt » Common Stock Offering
2016 LONG - TERM DEBT » Qualified Projects F inanced Under State Revolving Loan Programs. » Interest Rates Below Market. » 20 Year F inal M aturity. » 2016 – Delaware Project Loan, $1.2 Million @ 2.0%. » 2016 – New Jersey (3 Projects) Loan, $16.0 Million, Estimated @ 1.5%
DIVIDEND PAYOUT RATIO 87.30% 82.60% 73.10% 67.5% 63.6% 2011 2012 2013 2014 2015
DIVIDENDS $0.68 $0.69 $0.70 $0.71 $0.72 $0.73 $0.74 $0.75 $0.76 $0.77 $ 0.795 $0.62 $0.64 $0.66 $0.68 $0.70 $0.72 $0.74 $0.76 $0.78 $0.80 $0.82 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
OPERATIONS HIGHLIGHTS
RENEW 2016 INFRASTRUCTURE INVESTMENT RENEW targets unlined and/or undersized mains for replacement. Improves water quality. Enhances fire flows. Minimizes future service disruptions. x Areas for investment: Edison and South Amboy x $12.0 Million Project x 8 Miles of Main x Replacement of mains, valves, hydrants x Meter pit installations The RENEW Project is funded through low interest loans through the NJ State Revolving Fund administered by the NJ Environmental Infrastructure Trust and the NJ Department of Environmental Protection.
METER PIT INSTALLATION INFRASTRUCTURE INVESTMENT Benefits No Need for Customer Appointments Unrestricted & Convenient access to Meter Compliance with NJBPU markout regulations Faster Access for Emergency Turnoffs Elimination of Meter Related Claims
AIR RELIEF VALVE REPLACEMENT Valves were prioritized for replacement based on GIS, operations data, hydraulic modeling and inspections. This proactive measure helped reduce the probability of disruption on this major water transmission main in central NJ. INFRASTRUCTURE INVESTMENT Replacing valves (which can trap air) decrease potential of main collapse
AIR RELIEF VALVE REPLACEMENT INFRASTRUCTURE INVESTMENT
REPLACEMENT OF AGING & UNDERPERFORMING INFRASTRUCTURE INFRASTRUCTURE INVESTMENT Replaced 11,500 ft. of distribution mains in NJ & DE. Replaced 800 ft. of 20” transmission main at key locations in our NJ system. Upgraded operational and administrative support technology to better serve our customers.
IMPROVEMENTS IN REMOTE MONITORING CAPABILITY INFRASTRUCTURE INVESTMENT Many of our wellfields and pump stations are controlled and operated remotely through our Supervisory Control and Data Acquisition System. Operators can view and monitor processes and adjust treatment parameters as required.
IMPROVED CAPACITY FOR FIRE PROTECTION & WATER SUPPLY NEEDS INFRASTRUCTURE INVESTMENT Tidewater’s newest elevated tank serves approx. 800 residential units in the Americana Bayside community near Selbyville, DE. Tidewater owns the 400,000 gallon elevated storage facility but branded the tank with the community’s logo.
IMPROVED RELIABILITY & REDUNDANCY INFRASTRUCTURE INVESTMENT To mitigate the effects of extreme weather on our operations and acting on our Post - Hurricane Sandy Action Plan, we upgraded our emergency water interconnections and enhanced electrical backup power generation.
INCREASING OUR FOCUS ON CYBERSECURITY “As cyber - attacks against utility systems nationwide continue to increase in number and sophistication, addressing cyber security is a top priority in enhancing the security and reliability of utility service in New Jersey and across the nation.” NJBPU President Richard Mroz To enhance cybersecurity protection, Middlesex Water’s IT Team is working with state and local cyber security experts to further identify and mitigate risks to critical infrastructure systems and Customer and Employee Personal Identifiable Information. MWC’s Robert Fullagar was nominated by the NJBPU Division of Security and Reliability to represent the water sector in New Jersey on the Infrastructure Advisory Committee (IAC) focusing on infrastructure resilience policy. The IAC is part of the NJ Office of Homeland Security and Preparedness working in coordination with the NJ Domestic Security Preparedness Task Force.
36 Continued Service Reliability, Resilience and Water Quality NOW and for the FUTURE
LARGE SCALE INFRASTRUCTURE INVESTMENTS FOR ADDED RELIABILITY AND RESILIENCY Through 2017, Middlesex Water expects to prudently invest over $100 million on capital projects that will include : Plant Upgrades Main Replacement Residuals Processing Booster Upgrades Disinfection By - Products Remediation Enhanced Back - Up Power Large Main Construction Ozonation Additional Storage
BENEFITS TO CUSTOMERS ▪ Enhanced water quality and water pressure ▪ More reliable fire protection ▪ Additional backup power in weather events ▪ Greater storage capacity to help sustain supplies during emergencies ▪ Fewer disinfection by - products ▪ Stabilized pressure and supply throughout our 770 - mile system ▪ Less lost water in the system ▪ Lessened impact of service disruption on customers ▪ Elevated supply offers emergency support ▪ Ample backup supply helps support business continuity x Create awareness x Generate Support x Educate about projects x Manage Expectations
DOVER AIR FORCE BASE UPDATE ▪ One Year Operations Anniversary of privatization contract ▪ Air Force conducted a first year performance assessment RESULTS: “ All operations and maintenance requirements are being MET OR EXCEEDED by Tidewater Utilities.”
3,000 4,500 5,100 6,000 6,600 10,100 11,300 12,700 15,700 19,100 21,300 23,600 26,000 28,300 30,100 38,000 43,100 43,400 44,175 42,500 44,180 45,249 45,717 47,418 64,995 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 DELAWARE CUSTOMER GROWTH
EMPLOYEE PROFESSIONAL DEVELOPMENT We applied and were approved for a state training grant that will provide for further training in the following areas: ▪ Customer Service Management ▪ Office Management ▪ Leadership ▪ PC Computer Skills ▪ Supervision and Management ▪ Computer Science ▪ Communication Technologies ▪ Operations Management ▪ Safety Employees participated in a Mentoring pilot program focused on leadership development.
HONORS AND AWARDS Dennis Doll Honored by Woodbridge Chamber as 2015 Citizen of the Year. Director of Distribution Robert Fullagar Named Operator of the Year by AWWA - NJ. Pinelands Water Company Earns Best Tasting Water. General Counsel Jay Kooper Honored by NJBIZ and NYSE in 2016. TUI’s Southern Sussex District Wins Professional Team Award. TUI Wins Best Tasting Water from DRWA. MSEX Named a 2015 and 2016 NYSE Governance Awards Finalist.
GIVING BACK TO THE COMMUNITIES WE SERVE
REACHING POTENTIAL RETAIL INVESTORS Objectives: x Build Name Recognition x Educate potential investors about investing in water x Increase base of “buy and hold” investors x DRP provides long term, low cost capital Dennis Doll served as a Guest Panelist at the Orlando MONEYSHOW addressing how “Investing in Sustainable Water Infrastructure Yields Dividends for Shareholders and Communities.”
WELCOMING NEW BOARD EXPERTISE Kim C. Hanemann Senior Vice President – Delivery Projects and Construction, PSE&G. Key Qualifications » Construction, engineering and service delivery background. » Leadership record in a regulated electric and gas utility company. » Responsible for execution of large transmission construction projects. » Oversees key components of PSEG’s resiliency initiatives » Bachelor’s Degree in Mechanical Engineering from Lehigh University and an M.B.A. from Rutgers Graduate School of Management
Exhibit 99.2
Middlesex Water Company
REPORTS Annual meeting RESULTS
ISELIN, NJ, (May 25, 2016) Middlesex Water Company (NASDAQ:MSEX), a provider of water and wastewater and related services held its Annual Meeting on May 24, 2016 at which shareholders elected new director Kim C. Hanemann and re-elected directors Stephen M. Klein, Amy B. Mansue and Walter G. Reinhard. Shareholders also approved a non-binding advisory resolution approving the compensation of the Company’s named executive officers and voted to ratify the Audit Committee’s selection of Baker Tilly Virchow Krause, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016.
During the meeting, officers discussed financial results as well as operational performance focusing on public health protection, utility cyber-security and large planned infrastructure investments for continued service reliability, resilience and water quality both now and in the future. Numerous company initiatives were discussed including replacement of aging and underperforming infrastructure, improvements in remote monitoring capability, added storage capacity needs and improved reliability and redundancy.
Management’s presentation at the Annual Meeting of Shareholders is available in the Investor Relations section of the company’s website www.middlesexwater.com under News & Market Data/Presentations and Interviews.
About Middlesex Water Company
Organized in 1897, Middlesex Water provides regulated and unregulated water and wastewater utility services in New Jersey, Delaware and Pennsylvania through various subsidiary companies. For additional information regarding Middlesex Water Company, visit the Company's Web site at www.middlesexwater.com or call (732) 634-1500.
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 Securities and Exchange Commission.
Media Contact:
Bernadette Sohler, Vice President – Corporate Affairs
Middlesex Water Company
(732) 638-7549
www.middlesexwater.com