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 September 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 October 31, 1995 there
were 1,459,696 shares of $1.50 par value common stock outstanding.
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
September 30, December 31,
1995 1994
ASSETS
Utility Plant $99,962 $95,400
Less accumulated depreciation and
amortization 33,708 31,687
Net utility plant 66,254 63,713
Current Assets
Cash and cash equivalents 2,518 2,840
Accounts receivable - net 6,809 6,017
Inventories and prepayments 3,225 2,963
Total 12,552 11,820
Deferred Charges 1,031 1,048
Deferred Income Taxes and Regulatory
Asset 5,999 5,700
Total $85,836 $82,281
CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholders' equity $23,075 $22,334
Preferred stock 600 600
Long-term debt 23,500 23,500
Total 47,175 46,434
Current Liabilities
Notes payable 4,000 4,000
Accounts payable 4,273 3,918
Taxes accrued 1,227 114
Other 4,139 3,103
Customer deposits 3,514 3,502
Long-term debt - current portion 673
Total 17,153 15,310
Deferred Credits 7,768 7,283
Deferred Income Taxes and Regulatory
Liability 13,740 13,254
Total $85,836 $82,281
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Revenues
Gas $ 5,320 $ 5,326 $21,043 $19,904
Electric 11,260 9,824 29,646 27,489
Water 443 421 1,230 1,163
Total revenues 17,023 15,571 51,919 48,556
Cost of Fuel and Taxes
Based on Revenues 11,043 10,175 33,019 31,193
Operating Margin 5,980 5,396 18,900 17,363
Operating Expenses
Operations 3,435 3,276 10,067 9,473
Depreciation 930 925 2,760 2,742
Taxes other than
income taxes 399 406 1,200 1,238
Income taxes 181 18 1,008 632
Total operating
expenses 4,945 4,625 15,035 14,085
Operating Income 1,035 771 3,865 3,278
Interest Expense (689) (664) (2,074) (2,005)
Other Income (Expense) 7 (4) 28 25
Net Income 353 103 1,819 1,298
referred Stock Dividends 7 7 21 21
Earnings for Common Stock $ 346 $ 96 $ 1,798 $ 1,277
Earnings per Common Share $ .24 $ .07 $ 1.24 $ .89
Dividends per Common Share $ .29 $ .29 $ .58 $ .58
Weighted Average Common
Shares Outstanding 1,457,949 1,438,255 1,453,283 1,432,976
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(in thousands)
Nine Months Ended
September 30,
1995 1994
Cash Flows from Operating Activities
Net income $ 1,819 $ 1,298
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 2,760 2,742
Other 353 (83)
Changes in operating assets and liabilities
Accounts receivable (889) 911
Inventories and prepayments (262) (154)
Accounts payable and accrued expenses 2,514 132
Environmental insurance proceeds 715 3,160
Over/(under) recovery of fuel costs (253) 1,100
Other (153) 125
Net cash provided by operating activities 6,604 9,231
Cash Flows from Investing Activities
Construction expenditures (5,292) (4,515)
Customer advances for construction 113 178
Net cash used by investing activities (5,179) (4,337)
Cash Flows from Financing Activities
Short-term borrowings 4,750 2,750
Repayment of short-term borrowings (4,750) (4,750)
Repayment of long-term debt (673) (28)
Dividends paid (1,281) (1,673)
Other 207 301
Net cash used by financing activities (1,747) (3,400)
Net Increase (Decrease) in Cash
and Cash Equivalents (322) 1,494
Cash and Cash Equivalents at Beginning
of Period 2,840 846
Cash and Cash Equivalents at End of Period $ 2,518 $ 2,340
FLORIDA PUBLIC UTILITIES COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 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 September 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
September 30, 1995
Financial Condition The Company has a $15,000,000 line of credit with its
primary bank of which $4,000,000 is outstanding at September 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
approximately 94% 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)
Nine Months Ended September 30,
1995 1994 1993
Natural and Propane Gas
Operating margin $10,831 $ 9,746 $ 9,707
Less propane 1,905 1,901 1,937
Remainder $ 8,926 $ 7,845 $ 7,770
Electric
Operating margin $ 6,894 $ 6,507 $6,095
Less industrial interruptible 462 427 430
Remainder $ 6,432 $ 6,080 $ 5,665
Three Months Ended September 30,
1995 1994 1993
Natural and Propane Gas
Operating margin $ 3,027 $ 2,658 $ 2,603
Less propane 464 463 469
Remainder $ 2,563 $ 2,195 $ 2,134
Electric
Operating margin $ 2,529 $ 2,336 $2,313
Less industrial interruptible 154 135 137
Remainder $ 2,375 $ 2,201 $ 2,176
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.
Nine Months Ended September 30, 1995 Compared With Nine Months Ended
September 30, 1994
Natural and Propane Gas Service Total natural and propane gas service
operating margin increased $1,085,000 or about 11% in 1995 as compared with
1994. Excluding propane gas operating margin from total gas operating margin,
remaining operating margin increased $1,081,000 or about 14% as compared with
1994. Such increase in remaining 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 increased $39,000 in
1994 as compared with 1993. Excluding propane gas operating margin from total
gas operating margin, remaining operating margin increased $75,000 as compared
with 1993. Propane gas operating margin decreased $36,000 or about 2%.
Electric Service In 1995, total electric service operating margin increased
$387,000 or about 6% as compared with 1994. Excluding the two industrial
interruptible customers, remaining operating margin increased $352,000 or
approximately 6%. Other than industrial customers, the increase is due
principally to a 2% increase in customers and an increase of about 4% in
consumption.
Total electric service operating margin increased $412,000 or about 7% in 1994
as compared with 1993. Excluding the two industrial interruptible customers,
operating margin increased $415,000 or about 7% in 1994 as compared with 1993.
Other than industrial customers, the increase is due principally to a slight
increase in consumption and a 2% increase in customers.
Operating Expenses In 1995, operating expenses, excluding cost of fuel and
taxes passed-through to customers, increased $573,000, about 3% in relation to
operating margin. Contributing to the increase was payroll costs, expensing
of overheads no longer appropriate to capitalize, an increase in property
insurance premiums, an increase in pension expense, an increase in maintenance
costs and fees for an electrical power study for the Fernandina Beach
Division. Taxes other than income taxes decreased due principally to reduced
ad valorem taxes.
In 1994, operating expenses, excluding cost of fuel and taxes based on
revenues, increased $493,000 or almost 3% as a percent of operating margin.
Expenses have generally increased in all operating areas and classifications
of expense with taxes other than income taxes increasing 9% or $98,000.
Income taxes are computed on taxable income at approximately the same rate in
both nine-month periods and are reduced by amortization of investment tax
credits, which is approximately the same amount in each nine-month reporting
period. As the tax provision increases or decreases, the amortization of
investment tax credits varies as a percent of the provision, thus causing a
fluctuation in the tax provision in relation to pretax income.
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 $2,627,000
primarily due to a decrease in environmental insurance settlement proceeds
(net of income taxes of $2,629,000), a decrease of $1,353,000 in overrecovery
of fuel costs in 1995 and an increase in accounts payable and accrued expenses
of $2,382,000.
Three Months Ended September 30, 1995 Compared with Three Months Ended
September 30, 1994
Natural and Propane Gas Service Total natural and propane gas service
operating margin increased $369,000 or 14% in 1995 as compared with 1994.
Excluding propane gas operating margin from total gas operating margin,
remaining operating margin increased $368,000 or about 17% as compared with
1994. The improvement in operating margin is attributable principally to the
approved final increase in natural gas base rates of $1,282,000 annually,
which became effective May 6th.
Total natural and propane gas service operating margin increased $55,000 or 2%
in 1994 as compared with 1993. Excluding propane gas operating margin from
total gas operating margin, remaining operating margin increased $61,000 or 3%
as compared with 1993. Such increase is attributable principally to a 5%
increase in average natural gas consumption per customer as compared with
1993. Propane gas operating margin decreased $6,000 or 1%.
Electric Service In 1995, total electric service operating margin increased
$193,000 or 8% as compared with 1994. Excluding the two industrial
interruptible customers, operating margin increased $174,000 or 8% as compared
with 1994. Other than industrial customers, the increase is due principally
to a 2% increase in customers and a 9% increase in the average consumption per
customer.
Total electric service operating margin increased $23,000 in 1994 as compared
with 1993. Excluding the two industrial interruptible customers, operating
margin increased $25,000 as compared with 1993. The principal reason for the
increase is an approximate 2% increase in customers.
Operating Expenses In 1995, operating expenses, excluding cost of fuel and
taxes passed-through to customers, increased $157,000, about 3% in relation to
operating margin. Refer to the Operating Expenses discussion above for the
major reasons contributing to such increase. Taxes other than income taxes
decreased due principally to reduced ad valorem taxes.
In 1994, operating expenses, excluding cost of fuel and taxes passed-through
to customers increased $282,000, or 5% of operating margin. Expenses have
generally increased in all operating areas and classifications of expense.
Income taxes are computed on taxable income, at approximately the same rate in
both three-month periods and are reduced by amortization of investment tax
credits, which is approximately the same amount in each three-month reporting
period. As the tax provision increases or decreases, the amortization of
investment tax credits varies as a percent of the provision, thus causing a
fluctuation in the tax provision in relation to pretax income.
Interest expense increased in 1995 versus 1994 due principally to line of
credit increases both in amounts outstanding and weighted average interest
rates.
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 September 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: November 8, 1995
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