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Previous: PACER TECHNOLOGY, 10-Q, EX-27, 2000-11-14 |
Next: CONNECTICUT WATER SERVICE INC / CT, 10-Q, EX-27, 2000-11-14 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED September 30, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
TO
Commission File Number 0-8084
Connecticut Water Service, Inc.
(Exact name of registrant as specified in its charter)
Connecticut 06-0739839
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
93 West Main Street, Clinton, CT 06413-1600
(Address of principal executive offices) (Zip Code)
(860) 669-8636
(Registrant's telephone number, including area code)
Not Applicable
(Former name, address and former fiscal year, if changed since last report)
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 Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a count. Yes ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
4,844,275
Number of shares of common stock outstanding, September 30, 2000
<PAGE> 2
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
Financial Report
September 30, 2000 and 1999
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I, ITEM 1: FINANCIAL STATEMENTS
Consolidated Balance Sheets at September 30, 2000
and December 31, 1999 Page 3
Consolidated Statements of Capitalization at
September 30, 2000 and December 31, 1999 Page 4
Consolidated Statements of Income for Three Months
Ended September 30, 2000 and 1999 Page 5
Consolidated Statements of Income for Nine Months
Ended September 30, 2000 and 1999 Page 6
Consolidated Statements of Income for Twelve Months
Ended September 30, 2000 and 1999 Page 7
Consolidated Statements of Retained Earnings for Three
Months Ended September 30, 2000 and 1999 Page 8
Consolidated Statements of Retained Earnings for Nine
Months Ended September 30, 2000 and 1999 Page 8
Consolidated Statements of Retained Earnings for Twelve
Months Ended September 30, 2000 and 1999 Page 8
Consolidated Statements of Cash Flows for Nine Months
Ended September 30, 2000 and 1999 Page 9
Notes to Consolidated Financial Statements Page 10
PART I, ITEM 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations Page 11-13
Signature Page Page 14
</TABLE>
<PAGE> 3
Page 3
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
At September 30, 2000 and December 31, 1999
(In thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30,
2000 DEC. 31,
(UNAUDITED) 1999
--------- ---------
<S> <C> <C>
ASSETS
Utility Plant
Utility Plant $ 244,701 $ 240,122
Construction Work in Progress 6,400 5,804
Utility Plant Acquisition Adjustments (1,256) (1,273)
--------- ---------
249,845 244,653
Accumulated Provision for Depreciation (66,811) (63,311)
--------- ---------
Net Utility Plant 183,034 181,342
--------- ---------
Investments 2,771 2,747
--------- ---------
Current Assets
Cash 57 1,013
Accounts Receivable (Less Allowance, 2000- $160; 1999 - $455) 5,601 5,301
Accrued Unbilled Revenues 3,264 2,805
Materials and Supplies at Average Cost 825 761
Prepayments and Other Current Assets 875 237
--------- ---------
Total Current Assets 10,622 10,117
--------- ---------
Deferred Charges and Regulatory Assets
Unamortized Debt Issuance Expense 5,557 5,722
Unrecovered Income Taxes 8,907 8,843
Postretirement Benefits Other Than Pension 1,083 1,083
Other Costs 1,075 1,031
--------- ---------
Total Deferred Charges and Regulatory Assets 16,622 16,679
--------- ---------
TOTAL ASSETS $ 213,049 $ 210,885
========= =========
CAPITALIZATION AND LIABILITIES
Capitalization (See accompanying statements)
Common Stockholders' Equity $ 64,396 $ 62,495
Preferred Stock 772 772
Long-Term Debt 64,825 65,399
--------- ---------
Total Capitalization 129,993 128,666
--------- ---------
Current Liabilities
Current Portion Long Term Debt 194 194
Interim Bank Loans Payable 1,931 2,411
Accounts Payable and Accrued Taxes and Interest 7,726 8,405
Other 3,043 2,864
--------- ---------
Total Current Liabilities 12,894 13,874
--------- ---------
Long-Term Liabilities
Advances for Construction 17,093 15,994
Contributions in Aid of Construction 24,415 24,165
Deferred Federal Income Taxes 17,253 16,743
Unfunded Future Income Taxes 8,349 8,349
Unfunded Postretirement Benefits Other Than Pension 1,083 1,083
Unamortized Investment Tax Credits 1,969 2,011
Commitments and Contingencies
--------- ---------
Total Long-Term Liabilities 70,162 68,345
--------- ---------
TOTAL CAPITALIZATION AND LIABILITIES $ 213,049 $ 210,885
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
Page 4
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CAPITALIZATION
At September 30, 2000 and December 31, 1999
(In thousands, except share data)
<TABLE>
<CAPTION>
SEPTEMBER 30,
2000 DEC. 31,
(UNAUDITED) 1999
--------- ---------
<S> <C> <C>
Common Stockholders' Equity
Common Stock Without Par Value; Authorized - 7,500,000 Shares;
Shares Issued and Outstanding: 2000 - 4,844,275; 1999 - 4,838,688 $ 46,194 $ 46,039
Stock Issuance Expense (1,385) (1,385)
Retained Earnings 19,587 17,841
--------- ---------
Total Common Stockholders' Equity 64,396 62,495
--------- ---------
Cumulative Preferred Stock of Connecticut Water Service, Inc.
Series A Voting, $20 Par Value; Authorized, Issued and
Outstanding 15,000 Shares, Redeemable at $21.00 Per Share 300 300
Series $.90 Non-Voting, $16 Par Value; Authorized 50,000 Shares
Issued and Outstanding 29,499 Shares, Redeemable at $16.00 Per Share 472 472
--------- ---------
Total Preferred Stock of Connecticut Water Service, Inc. 772 772
--------- ---------
Long-Term Debt
The Connecticut Water Company
First Mortgage Bonds
5.875% Series R, due 2022 14,715 14,800
6.65% Series S, due 2020 8,000 8,000
5.75% Series T, due 2028 5,000 5,000
5.3% Series U, due 2028 4,550 4,550
6.94% Series V, due 2029 12,050 12,050
--------- ---------
44,315 44,400
--------- ---------
Unsecured Water Facilities Revenue Refinancing Bonds
5.05% 1998 Series A, due 2028 9,780 10,000
5.125% 1998 Series B, due 2028 7,880 8,000
--------- ---------
17,660 18,000
--------- ---------
Other
5.5% Unsecured Promissory Note 76 103
--------- ---------
Total Connecticut Water Company 62,051 62,503
--------- ---------
Crystal Water Utilities Corporation
8.0% New London Trust, Due 2017 131 133
--------- ---------
131 133
--------- ---------
Crystal Water Company of Danielson
7.82% Connecticut Development Authority, Due 2020 510 518
8.0% New London Trust, Due 2011 2,203 2,298
--------- ---------
Total Crystal Water Company 2,713 2,816
--------- ---------
Chester Realty
6% Note Payable Due 2006 124 141
--------- ---------
124 141
--------- ---------
TOTAL CONNECTICUT WATER SERVICE, INC. 65,019 65,593
--------- ---------
Less Current Portion of Long-Term Debt (194) (194)
--------- ---------
Total Long-Term Debt 64,825 65,399
--------- ---------
TOTAL CAPITALIZATION $ 129,993 $ 128,666
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
Page 5
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended September 30, 2000 and 1999
(In thousands, except share data)
<TABLE>
<CAPTION>
2000 1999
(UNAUDITED) (UNAUDITED)
-------- --------
<S> <C> <C>
Operating Revenues $ 11,532 $ 12,892
-------- --------
Operating Expenses
Operation and Maintenance 3,965 4,681
Depreciation 1,133 1,133
Federal and State Income Taxes 1,607 2,222
Other Taxes 1,182 1,093
-------- --------
Total Operating Expenses 7,887 9,129
-------- --------
Utility Operating Income 3,645 3,763
-------- --------
Other Income (Deductions)
Interest 22 15
Allowance for Funds Used During Construction 118 84
Gain on Sale of Property 0 53
Non-Water Sales Earnings 104 0
Miscellaneous Income (Deductions) (8) (8)
Taxes on Other Income (37) (14)
-------- --------
Total Other Income (Deductions) 199 130
-------- --------
Interest and Debt Expense
Interest on Long-Term Debt 980 984
Other Interest Charges 122 128
Amortization of Debt Expense 55 55
-------- --------
Total Interest and Debt Expense 1,157 1,167
-------- --------
Net Income Before Preferred Dividends 2,687 2,726
Preferred Stock Dividend Requirement 10 10
-------- --------
Net Income Applicable to Common Stockholders $ 2,677 $ 2,716
======== ========
Weighted Average Common Shares Outstanding:
Basic 4,844 4,839
Diluted 4,865 4,858
-------- --------
Earnings Per Average Common Share:
Basic $ 0.55 $ 0.56
Diluted $ 0.55 $ 0.56
-------- --------
Dividends Per Common Share $ 0.30 $ 0.28
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
Page 6
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Nine Months Ended September 30, 2000 and 1999
(In thousands, except share data)
<TABLE>
<CAPTION>
2000 1999
(UNAUDITED) (UNAUDITED)
-------- --------
<S> <C> <C>
Operating Revenues $ 31,473 $ 32,575
-------- --------
Operating Expenses
Operation and Maintenance 12,319 13,096
Depreciation 3,401 3,322
Federal and State Income Taxes 3,605 4,051
Other Taxes 3,284 3,164
-------- --------
Total Operating Expenses 22,609 23,633
-------- --------
Utility Operating Income 8,864 8,942
-------- --------
Other Income (Deductions)
Interest 67 77
Allowance for Funds Used During Construction 322 316
Gain on Sale of Property 99 94
Non-Water Sales Earnings 257 132
Miscellaneous Income (Deductions) (28) (13)
Taxes on Other Income (113) (64)
-------- --------
Total Other Income (Deductions) 604 542
-------- --------
Interest and Debt Expense
Interest on Long-Term Debt 2,949 2,962
Other Interest Charges 267 265
Amortization of Debt Expense 165 191
-------- --------
Total Interest and Debt Expense 3,381 3,418
-------- --------
Net Income Before Preferred Dividends 6,087 6,066
Preferred Stock Dividend Requirement 29 29
-------- --------
Net Income Applicable to Common Stockholders $ 6,058 $ 6,037
======== ========
Weighted Average Common Shares Outstanding:
Basic 4,844 4,836
Diluted 4,858 4,836
-------- --------
Earnings Per Average Common Share
Basic $ 1.25 $ 1.25
Diluted $ 1.25 $ 1.25
-------- --------
Dividends Per Common Share $ 0.89 $ 0.85
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
Page 7
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Twelve Months Ended September 30, 2000 and 1999
(In thousands, except share data)
<TABLE>
<CAPTION>
2000 1999
(UNAUDITED) (UNAUDITED)
-------- --------
<S> <C> <C>
Operating Revenues $ 41,522 $ 42,235
-------- --------
Operating Expenses
Operation and Maintenance 17,053 17,537
Depreciation 4,469 4,440
Federal and State Income Taxes 4,562 4,772
Other Taxes 4,305 4,190
-------- --------
Total Operating Expenses 30,389 30,939
-------- --------
Utility Operating Income 11,133 11,296
-------- --------
Other Income (Deductions)
Interest 142 129
Allowance for Funds Used During Construction 460 435
Gain on Sale of Property 166 316
Non-Water Sales Earnings 295 253
Miscellaneous Income (Deductions) (85) (27)
Taxes on Other Income (105) (202)
-------- --------
Total Other Income (Deductions) 873 904
-------- --------
Interest and Debt Expense
Interest on Long-Term Debt 3,931 3,953
Other Interest Charges 339 394
Amortization of Debt Expense 219 247
-------- --------
Total Interest and Debt Expense 4,489 4,594
-------- --------
Net Income Before Preferred Dividend 7,517 7,606
Preferred Stock Dividend Requirement 38 38
-------- --------
Net Income Applicable to Common Stockholders $ 7,479 $ 7,568
======== ========
Weighted Average Common Shares Outstanding:
Basic 4,843 4,834
Diluted 4,858 4,834
-------- --------
Earnings Per Average Common Share:
Basic $ 1.54 $ 1.57
Diluted $ 1.54 $ 1.57
-------- --------
Dividends Per Common Share $ 1.19 $ 1.14
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
Page 8
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(In thousands, except share data)
<TABLE>
<CAPTION>
2000 1999
(UNAUDITED) (UNAUDITED)
------- -------
<S> <C> <C>
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
Balance at Beginning of Period $18,358 $16,569
Net Income 2,687 2,726
------- -------
21,045 19,295
------- -------
Dividends Declared:
Cumulative Preferred, Class A, $.20 per share 3 3
Cumulative Preferred, Series $.90, $.225 per share 7 7
Common Stock - 2000 $0.30 per share; 1999 $0.28 per share 1,448 1,432
------- -------
1,458 1,442
------- -------
Balance at End of Period $19,587 $17,853
======= =======
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
Balance at Beginning of Period $17,841 $15,923
Net Income 6,087 6,066
------- -------
23,928 21,989
------- -------
Dividends Declared:
Cumulative Preferred, Class A, $.60 per share 9 9
Cumulative Preferred, Series $.90, $.675 per share 20 20
Common Stock - 2000 $0.89 per share; 1999 $0.85 per share 4,312 4,107
------- -------
4,341 4,136
------- -------
Balance at End of Period $19,587 $17,853
======= =======
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
Balance at Beginning of Period $17,853 $15,781
Net Income 7,517 7,606
------- -------
25,370 23,387
------- -------
Dividends Declared:
Cumulative Preferred, Class A, $.80 per share 12 12
Cumulative Preferred, Series $.90, $.90 per share 26 26
Common Stock - 2000 $1.19 per share; 1999 $1.14 per share 5,745 5,496
------- -------
5,783 5,534
------- -------
Balance at End of Period $19,587 $17,853
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
Page 9
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2000 and 1999
(In thousands)
<TABLE>
<CAPTION>
2000 1999
(UNAUDITED) (UNAUDITED)
------- -------
<S> <C> <C>
Operating Activities:
Net Income Before Preferred Dividends $ 6,087 $ 6,066
------- -------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation (including $112 in 2000, $93 in 1999 charged to other accounts) 3,513 3,415
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable and Accrued Unbilled Revenues (759) (1,736)
(Increase) Decrease in Other Current Assets (702) (778)
(Increase) Decrease in Other Non-Current Items 33 99
Increase (Decrease) in Accounts Payable, Accrued Expenses and
Other Current Liabilities (500) (513)
Increase (Decrease) in Deferred Federal Income Taxes and
Investment Tax Credits, Net 468 441
------- -------
Total Adjustments 2,053 928
------- -------
Net Cash Provided by (Used for) Operating Activities 8,140 6,994
------- -------
Investing Activities:
Gross Additions to Utility Plant (including Allowance for Funds
Used During Construction of $322 in 2000 and $316 in 1999) (5,214) (6,156)
------- -------
Financing Activities:
Proceeds from Interim Bank Loans 1,931 5,410
Repayment of Interim Bank Loans (2,411) (1,895)
Proceeds from Issuance of Common Stock 155 182
Repayment of Long-Term Debt (574) (384)
Advances, Contributions and Funds From Others for Construction, Net 1,358 1,585
Costs Incurred to Issue Long-Term Debt, Preferred Stock, and Common Stock 0 (36)
Cash Dividends Paid (4,341) (4,136)
------- -------
Net Cash Provided by (Used for) Financing Activities (3,882) 726
------- -------
Net Increase (Decrease) in Cash (956) 1,564
Cash at Beginning of Year 1,013 372
------- -------
Cash at End of Period $ 57 $ 1,936
======= =======
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for:
Interest (Net of Amounts Capitalized) $ 3,460 $ 2,912
Income Taxes $ 2,740 $ 2,723
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 10
Page 10
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein have been prepared by
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES (Connecticut Water or the
Company), without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission and reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for interim periods.
Certain information and footnote disclosures have been omitted pursuant to such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is suggested that
these consolidated financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
annual report or 10-K.
The results for interim periods are not necessarily indicative of results
to be expected for the year since the consolidated earnings are subject to
seasonal factors.
2. Earnings per average common share are calculated by dividing net income
applicable to common stock by the average number of shares of common stock
outstanding during the respective periods as detailed below:
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
3 Months Ended 12 Months Ended
------------------------ --------------------------------------
9/30/00 9/30/99 9/30/00 9/30/99 12/31/99
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Common Shares Outstanding:
January 1, 1999 -- -- -- -- 4,828,619
October 1, 1999 & 1998
respectively -- 4,838,688 4,828,147 --
July 1, 2000 & 1999
respectively 4,844,133 4,838,563 -- -- --
Common Shares Issued:
To CSE - December 15, 1998 -- -- -- 81 --
To 401-K - December 31, 1998 -- -- -- 391 --
To PSP - March 1, 1999 -- -- -- 9,658 9,658
To CSE - March 15, 1999 -- -- -- 147 147
To CSE - June 15, 1999 -- -- -- 139 139
To CSE - September 15, 1999 -- 125 -- 125 125
To CSE - December 15, 1999 -- -- 106 -- 106
To PSP - January 13, 2000 -- -- 10,099 -- --
To PSP - February 17, 2000 -- -- (5,070) -- --
To CSE - March 15, 2000 -- -- 145 -- --
To CSE - June 15, 2000 -- -- 165 -- --
To CSE - September 15, 2000 142 -- 142 -- --
--------- --------- --------- --------- ---------
Common Shares Outstanding:
September 30, 2000 & 1999
respectively 4,844,275 4,838,688 4,844,275 4,838,688
========= ========= ========= =========
December 31, 1999 4,838,794
=========
Weighted Average Common Shares Outstanding:
Days outstanding basis
Basic 4,844,158 4,838,585 4,842,991 4,834,294 4,836,951
========= ========= ========= ========= =========
Fully Diluted 4,865,469 4,857,943 4,858,360 4,838,780 4,839,210
========= ========= ========= ========= =========
</TABLE>
PSP = Performance Stock Program
401-K = Company contribution to employees' 401-K savings plan
CSE = Common Stock Equivalents
<PAGE> 11
Page 11
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
PART I, ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LAND DONATIONS
On October 2, 2000 the Connecticut Department of Utility Control approved
The Connecticut Water Company's request to donate 134 acres of land to the Town
of Middlebury, Connecticut and 104 acres of land to the Borough of Naugatuck.
The land to be donated has a total fair market value of $2,675,000. Primarily,
as a result of recent Connecticut tax legislation granting tax credits for the
donation of land for open space purposes, these donations will result in an
after tax gain of approximately $1,500,000. The Company expects that the
donations will be made in two phases, the Naugatuck donation in the 4th quarter
of 2000 and the Middlebury donation in the 1st quarter of 2001.
ACQUISITION
In November 2000, the Company acquired Pugliese Construction Co. a.k.a.
Howie's Water Company ("Howie's Water") in a stock for stock transaction.
Howie's Water is based in Burlington, Connecticut and is the state's largest
provider of emergency drinking water and pool water via tanker truck. The
acquisition of Howie's Water is a key component of the Company's continuing
efforts to be a full service provider for all drinking water needs throughout
the state.
HOWIE'S WATER
On November 9, 2000, the Company issued 8,237 shares of its common stock
in exchange for all the outstanding common stock of Howie's Water. The acquired
company was renamed Connecticut Water Emergency Services, Inc. at the time of
the merger. The merger qualifies as a tax-free reorganization and will be
accounted for as a pooling-of-interests.
These financial statements as of September 30, 2000 have not been restated
for this transaction. Condensed Statements of Income and Condensed Balance
Sheets of Connecticut Water Emergency Services, Inc. are as follows:
<PAGE> 12
Page 12
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
Connecticut Water Emergency Services, Inc.
(a.k.a. Howie's Water Company)
Condensed Statements of Income
(In thousands, except share amounts)
<TABLE>
<CAPTION>
Unaudited
---------
Twelve Months Ended
December 31,
1999 1998
---- ----
<S> <C> <C>
Operating Revenues $ 492 $ 258
Net Income Applicable to Common Shareholders $ 33 $ 23
CWS Common Stock Shares Issued relating to
acquisition 8,237 8,237
Earnings Per Share on CWS Shares Issued
relating to acquisition $4.01 $2.79
</TABLE>
Connecticut Water Emergency Services, Inc.
(a.k.a. Howie's Water Company)
Condensed Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
Unaudited
---------
December 31,
1999 1998
---- ----
ASSETS
<S> <C> <C>
Current Assets $ 139 $ 83
Net Fixed Assets 3 3
Other Assets 3 3
----- -----
Total Assets $ 145 $ 89
===== =====
CAPITALIZATION AND LIABILITIES
Shareholders' Equity $ 80 $ 47
Current Liabilities 65 42
----- -----
Total Capitalization and Liabilities $ 145 $ 89
===== =====
</TABLE>
LIQUIDITY AND CORPORATE RESOURCES
At September 30, 2000 the Company had $7,069,000 of unused lines of
interim bank loan credit available. At September 30, 2000 there were no Letters
of Credit being secured by the lines of credit.
<PAGE> 13
Page 13
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
RESULT OF OPERATIONS
THE FOLLOWING FACTORS HAD A SIGNIFICANT EFFECT UPON THE COMPANY'S NET
INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AS COMPARED WITH THE NET
INCOME FOR THE SAME PERIOD LAST YEAR.
Net income applicable to common stock for the three months ended September
30, 2000 decreased from that of September 30, 1999 by $39,000, or $.01, per
average common share. The decrease in net income resulted from a $118,000
decrease in operating income, partially offset by a $69,000 increase in other
income and a $10,000 decrease in interest and debt expense.
The decrease in operating income is due to a $1,360,000 decrease in
operating revenues, partially offset by a $1,242,000 decrease in operating
expenses. The revenue decline is primarily due to the hot, dry weather last year
which caused last year's operating revenue to be unusually high. The decrease in
operating expense is primarily due to our cost containment efforts in operation
and maintenance expense.
The increase in other income is primarily due to an increase in the
Allowance for Funds Used During Construction and an increase in Non-water Sales
Earnings.
THE FOLLOWING FACTORS HAD A SIGNIFICANT EFFECT UPON THE COMPANY'S NET
INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AS COMPARED WITH THE NET
INCOME FOR THE SAME PERIOD LAST YEAR.
Net income applicable to common stock for the nine months ended September
30, 2000 increased from that of September 30, 1999 by $21,000. The increase in
net income resulted from a $62,000 increase in other income and a $37,000
decrease in interest and debt expense partially offset by a $78,000 decrease in
operating income.
The increase in other income is primarily due to increases in non-water
sales earnings in 2000 as compared to 1999.
The decrease in interest and debt expense is primarily due to the
write-off of unamortized debt expense related to the early redemption of Gallup
Water Service's long term debt that occurred when we acquired this company in
April 1999.
The decrease in operating income is primarily due to a $1,102,000
reduction in operating revenues partially offset by a $1,024,000 reduction in
operating expenses. The reasons for the decline in operating income are the same
as stated above in the three month narrative.
FORWARD LOOKING INFORMATION
This report, including management's discussion and analysis, contains
certain forward looking statements regarding the Company's results of operations
and financial position. These forward looking statements are based on current
information and expectations, and are subject to risks and uncertainties, which
could cause the Company's actual results to differ materially from expected
results.
<PAGE> 14
Page 14
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 thereunto duly authorized.
Connecticut Water Service, Inc.
(Registrant)
Date: November 9, 2000 By /s/ David C. Benoit
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David C. Benoit
Vice President - Finance
Date: November 9, 2000 By: /s/ Peter J. Bancroft
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Peter J. Bancroft
Assistant Treasurer
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