UNITED STATES
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 June 30, 1995
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 0-1055
FLORIDA PUBLIC UTILITIES COMPANY
(Exact name of registrant as specified in its charter)
Florida 59-0539080
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
401 South Dixie Highway, West Palm Beach, FL 33401
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (407) 832-2461
(Former name, former 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 for 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 Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. 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. At July 31, 1995 there were
1,457,549 shares of $1.50 par value common stock outstanding.
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
June 30, December 31,
1995 1994
ASSETS
Utility Plant $98,561 $95,400
Less accumulated depreciation and
amortization 33,027 31,687
Net utility plant 65,534 63,713
Current Assets
Cash and cash equivalents 3,110 2,840
Accounts receivable - net 6,276 6,017
Inventories and prepayments 3,396 2,963
Total 12,782 11,820
Deferred Charges 1,026 1,048
Deferred Income Taxes and
Regulatory Asset 5,693 5,700
Total $85,035 $82,281
CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholders' equity $23,117 $22,334
Preferred stock 600 600
Long-term debt 23,500 23,500
Total 47,217 46,434
Current Liabilities
Long-term debt - current portion 673
Notes payable 5,800 4,000
Accounts payable 4,179 3,918
Taxes accrued 1,065 114
Other 3,242 3,103
Customer deposits 3,526 3,502
Total 17,812 15,310
Deferred Credits 6,854 7,283
Deferred Income Taxes and Regulatory
Liability 13,152 13,254
Total $85,035 $82,281
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
Revenues
Gas $ 7,414 $ 6,041 $15,723 $14,579
Electric 9,211 8,629 18,386 17,664
Water 430 415 787 742
Total revenues 17,055 15,085 34,896 32,985
Cost of fuel and taxes
based on revenues 11,179 9,590 21,976 21,017
Operating Margin 5,876 5,495 12,920 11,968
Operating Expenses
Operations 3,392 3,137 6,632 6,199
Depreciation 896 914 1,830 1,817
Taxes other than income taxes 384 397 800 831
Income taxes 169 113 828 613
Total operating expenses 4,841 4,561 10,090 9,460
Operating Income 1,035 934 2,830 2,508
Interest Expense (685) (671) (1,385) (1,341)
Other Income (Expense) 2 (5) 20 28
Net Income 352 258 1,465 1,195
Preferred Stock Dividends 7 7 14 14
Earnings for Common Stock $ 345 $ 251 $1,451 $1,181
Earnings Per Common Share $ .24 $ .18 $ 1.00 $ .83
Dividends Per Common Share $ .29 $ .29 $ .58 $ .58
Weighted Average Common
Shares Outstanding 1,452,093 1,432,399 1,450,950 1,430,337
FLORIDA PUBLIC UTILITIES COMPANY
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(in thousands)
Six Months Ended
June 30,
1995 1994
Cash Flows from Operating Activities
Net income $ 1,465 $ 1,195
Adjustments to reconcile net
income to net cash provided by
operating activities
Depreciation 1,830 1,817
Other 8 (927)
Changes in operating assets
and liabilities
Accounts receivable (318) 839
Inventories and prepayments (434) (191)
Accounts payable and accrued
expenses 1,372 583
Deferred credits 370 3,137
Over/(under) recovery of fuel costs (966) 265
Net cash provided by operating
activities 3,327 6,718
Cash Flows from Investing Activities
Construction expenditures (3,594) (2,830)
Customer advances for construction 90 178
Net cash used by investing
activities (3,504) (2,652)
Cash Flows from Financing Activities
Short-term borrowings 1,800
Repayment of short-term borrowings (1,500)
Repayment of long-term debt (673) (28)
Dividends paid (853) (827)
Other 173 168
Net cash provided (used) by
financing activities 447 (2,187)
Net Increase in Cash and Cash Equivalents 270 1,879
Cash and Cash Equivalents at Beginning
of Period 2,840 846
Cash and Cash Equivalents at End
of Period $3,110 $2,725
FLORIDA PUBLIC UTILITIES COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
1. In the opinion of the Company, the accompanying condensed consolidated
financial statements contain all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the financial
information contained therein. The results of operations are not
necessarily indicative of the results expected for the full year.
2. The First Mortgage Bond indentures provide for restrictions on the
payment of cash dividends. At June 30, 1995, under the most restrictive
provision, approximately $3,400,000 of retained earnings were
unrestricted.
FLORIDA PUBLIC UTILITIES COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1995
Financial Condition The Company has a $15,000,000 line of credit with its
primary bank of which $5,800,000 is outstanding at June 30, 1995. The line
provides for interest at LIBOR plus one-half percent. The Company is approved
by the Florida Public Service Commission to borrow up to $15,000,000 on a line
of credit basis, $14,000,000 of which is available for general corporate
purposes with the remaining $1,000,000 reserved as a contingency for major
storm repairs in the Marianna electric division.
Overview The Company is organized into three business segments, natural and
propane gas, electric and water. The gas and electric segments aggregate 97%
of total operating margin.
Contributing to variations in operating margins are the effects of seasonal
weather conditions, the timing of rate increases and the migration of winter
residents and tourists to central and southern Florida during the winter
season.
Summary of Operating Margins
(in thousands)
Six Months Ended June 30,
1995 1994 1993
Natural and Propane Gas
Operating margin $ 7,804 $ 7,088 $ 7,104
Less propane 1,440 1,437 1,468
Less municipal 116 111 111
Remainder $ 6,248 $ 5,540 $ 5,525
Electric
Operating margin $ 4,365 $ 4,171 $3,782
Less industrial interruptible 308 292 294
Remainder $ 4,057 $ 3,879 $ 3,488
Three Months Ended June 30,
1995 1994 1993
Natural and Propane Gas
Operating margin $ 3,259 $ 2,962 $ 3,094
Less propane 548 549 620
Less municipal 59 56 56
Remainder $ 2,652 $ 2,357 $ 2,418
Electric
Operating margin $ 2,206 $ 2,137 $1,963
Less industrial interruptible 147 138 172
Remainder $ 2,059 $ 1,999 $ 1,791
Operating Margin Operating margin, defined as gross operating revenues less
cost of fuel and taxes passed-through to customers which are based on
revenues, provides a more meaningful basis for evaluating utility operations
since fuel costs and taxes passed-through to customers have no effect on
results of operations.
Six Months Ended June 30, 1995 Compared With Six Months Ended June 30, 1994
Natural and Propane Gas Service Total natural and propane gas service
operating margin increased $716,000 or about 10% in 1995 as compared with
1994. Excluding propane gas operating margin and the natural gas operating
margin of a municipal customer from total gas operating margin, remaining
operating margin increased $708,000 or about 13% as compared with 1994. Such
remaining increase in operating margin is attributable principally to cooler
weather in the first quarter of 1995 as compared with 1994 and the interim
increase in natural gas base rates, which was effective from late 1994 until
May 5th and an approved final increase in base rates of $1,282,000 annually,
which became effective May 6th.
Total natural and propane gas service operating margin decreased $16,000 in
1994 as compared with 1993. Excluding propane gas operating margin and the
natural gas operating margin of a municipal customer from total gas operating
margin, remaining operating margin increased $15,000 as compared with 1993.
Propane gas operating margin decreased $31,000 or about 2%.
Electric Service In 1995, total electric service operating margin increased
$194,000 or about 5% as compared with 1994. Excluding the two industrial
interruptible customers, operating margin increased $178,000 or approximately
5%. Other than industrial customers, the increase is principally due to a 2%
increase in customers and an increase of about 4% in consumption.
Total electric service operating margin increased $389,000 or about 10% in
1994 as compared with 1993. Excluding the two industrial interruptible
customers, operating margin increased $391,000 or about 11% in 1994 as
compared with 1993. Other than industrial customers, the increase is
principally due to a 6% increase in consumption and a 2% increase in
customers.
Operating Expense In 1995, operating expenses, excluding cost of fuel and
taxes passed-through to customers, increased $417,000, about 3% in relation to
operating margin. Administrative and general expenses and other operating
expenses have generally increased in all classifications of expense.
Contributing to such increase was an increase in payroll costs, expensing of
overheads no longer appropriate to capitalize, an increase in property
insurance premiums, an increase in pension expense, and fees for an electrical
power study for the Fernandina Beach Division. Taxes other than income taxes
decreased due principally to a reduction in ad valorem taxes.
In 1994, operating expenses, excluding cost of fuel and taxes based on
revenues, increased $211,000 or almost 2% as a percent of operating margin.
Expenses have generally increased in all operating areas and in all
classifications of expense with taxes other than income taxes increasing
$88,000.
Income taxes were provided for at approximately the same rate in both six-
month periods. The difference between the periods in the apparent rate is due
mainly to amortization of investment tax credits.
Interest expense increased in 1995 versus 1994 due principally to line of
credit increases both in amounts outstanding and weighted average interest
rates.
Cash Flows Net cash provided by operating activities decreased $3,391,000 due
primarily to a decrease in environmental insurance settlement proceeds
(included in deferred credits in the statements of cash flows), net of income
taxes of $2,629,000, an increase of $1,231,000 in underrecovery of fuel costs
in 1995 and an increase in accounts payable and accrued expenses of $789,000.
Three Months Ended June 30, 1995 Compared with Three Months Ended
June 30, 1994
Natural and Propane Gas Service Total natural and propane gas service
operating margin increased $297,000 or 10% in 1995 as compared with 1994.
Excluding propane gas operating margin and the natural gas operating margin of
a municipal customer from total gas operating margin, remaining operating
margin increased $295,000 or about 13% as compared with 1994. The improvement
in operating margin is attributable principally to the interim increase in
natural gas base rates, which was effective until May 5th and an approved
final increase in base rates of $1,282,000 annually, which became effective
May 6th.
Total natural and propane gas service operating margin decreased $132,000 or
4% in 1994 as compared with 1993. Excluding propane gas operating margin and
the natural gas operating margin of a municipal customer from total gas
operating margin, remaining operating margin decreased $61,000 or 3% as
compared with 1993. Such remaining decrease is attributable principally to a
3% decrease in average natural gas consumption per customer resulting from a
warmer winter season as compared with 1993. Correspondingly, propane gas
operating margin also decreased $70,000 or 11%.
Electric Service In 1995, total electric service operating margin increased
$69,000 or 3% as compared with 1994. Excluding the two industrial
interruptible customers, operating margin increased $60,000 or 3% as compared
with 1994. Other than industrial customers, the increase is principally due
to a 2% increase in customers and a 5% increase in consumption.
Total electric service operating margin increased $174,000, about 9%, in 1994
as compared with 1993. Excluding the two industrial interruptible customers,
operating margin increased $208,000, about 12%, as compared with 1993. The
principal reasons for the increase are an approximate 2% increase in customers
and an 4% increase in consumption.
Operating Expenses In 1995, operating expenses, excluding cost of fuel and
taxes passed-through to customers, increased $224,000, about 4% in relation to
operating margin. Administrative and general expenses and other operating
expenses have generally increased in all classifications of expense. Refer to
the discussion above for the major reasons contributing to such increase.
Depreciation decreased in the natural gas divisions as a result of the final
tariff rates going into effect on May 6th. Taxes other than income taxes
decreased due principally to a reduction in ad valorem taxes.
In 1994, operating expenses, excluding cost of fuel and taxes passed-through
to customers, increased $88,000, or 2% of operating margin. Expenses have
generally increased in most operating areas and in all classifications of
expense with maintenance expense accounting for most of the increase.
Income taxes were provided for at approximately the same rate in both six-
month periods. The difference between the periods in the apparent rate is due
mainly to amortization of investment tax credits.
Interest expense increased in 1995 versus 1994 due principally to line of
credit increases both in amounts outstanding and weighted average interest
rates.
<PAGE>
PART II.
OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K.
(a) None.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed for the quarter ending
June 30, 1995.
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.
FLORIDA PUBLIC UTILITIES COMPANY
(Registrant)
By /s/ Jack Brown
Jack Brown
Treasurer
(DULY AUTHORIZED OFFICER
AND
CHIEF FINANCIAL OFFICER)
Date: August 10, 1995
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