UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 31, 1996
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 April 30, 1996 there were
1,466,608 shares of $1.50 par value common shares outstanding.
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
March 31, December 31,
1996 1995
ASSETS
Utility Plant $101,854 $100,658
Less accumulated depreciation and
amortization 34,892 34,380
Net utility plant 66,962 66,278
Current Assets
Cash and overnight investments 304 270
Accounts receivable - net 8,587 7,296
Inventories and prepayments 3,139 3,155
Total 12,030 10,721
Investments Held in Escrow for
Environmental Costs 2,784 2,737
Deferred Charges 2,125 1,210
Deferred Income Taxes and
Regulatory Asset 4,306 4,294
Total $ 88,207 $ 85,240
CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholders' equity $ 24,494 $ 23,302
Preferred stock 600 600
Long-term debt 23,500 23,500
Total 48,594 47,402
Current Liabilities
Notes payable 4,500 5,600
Accounts payable 6,607 5,660
Taxes accrued 1,316 309
Other 4,509 3,727
Customer deposits 3,533 3,550
Total 20,465 18,846
Deferred Credits 6,825 6,777
Deferred Income Taxes and
Regulatory Liability 12,323 12,215
Total $ 88,207 $ 85,240
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share data)
Three Months Ended
March 31,
1996 1995
Revenues
Natural gas $11,036 $ 6,753
Electric 10,393 9,175
Water 412 356
Propane gas 1,678 1,557
Total revenues 23,519 17,841
Cost of fuel and taxes
based on revenues 15,524 10,797
Operating Margin 7,995 7,044
Operating Expenses
Operations 3,381 3,241
Depreciation 960 934
Taxes other than income taxes 433 416
Income taxes 955 658
Total operating expenses 5,729 5,249
Operating Income 2,266 1,795
Interest Expense (709) (700)
Other Income 7 18
Net Income 1,564 1,113
Preferred Stock Dividends 7 7
Earnings for Common Stock $ 1,557 $ 1,106
Earnings Per Common Share $ 1.06 $ .76
Dividends Per Common Share $ .30 $ .29
Average Shares Outstanding 1,464,479 1,449,807
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Three Months Ended
March 31,
1996 1995
Cash Flows from Operating Activities
Net income $1,564 $1,113
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 960 934
Other 174 223
Changes in operating assets and liabilities
Accounts receivable (1,335) (49)
Inventories and prepayments 16 (501)
Accounts payable and accrued expenses 2,702 2,152
Under recovery of fuel costs (913) (667)
Other 32 16
Net cash provided by operating activities 3,200 3,221
Cash Flows from Investing Activities
Construction expenditures (1,692) (1,556)
Other (18) 69
Net cash used by investing activities (1,710) (1,487)
Cash Flows from Financing Activities
Net change in short-term borrowings (1,100) (1,500)
Dividends paid (431) (425)
Other 75 73
Net cash used by financing activities (1,456) (1,852)
Net Increase (Decrease) in Cash and
Overnight Investments 34 (118)
Cash and Overnight Investments at Beginning
of Period 270 2,840
Cash and Overnight Investments at End
of Period $ 304 $2,722
FLORIDA PUBLIC UTILITIES COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
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 March 31, 1996, under the most
restrictive provision, approximately $4,700,000 of retained earnings
were unrestricted.
FLORIDA PUBLIC UTILITIES COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1996
Financial Condition The Company has a $15,000,000 line of credit with its
primary bank of which $4,500,000 is outstanding. 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 regulated business segments,
natural gas, electric and water and one non-regulated segment, propane gas.
The gas and electric segments aggregate approximately 95% 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.
1996 1995 1994
Natural and Propane Gas
Operating margin $ 5,273 $ 4,545 $ 4,126
Less propane gas 940 892 888
Remainder $ 4,333 $ 3,653 $ 3,238
Electric
Operating margin $ 2,347 $ 2,159 $2,034
Less industrial 125 161 154
Remainder $ 2,222 $ 1,998 $ 1,880
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 and fluctuations in such costs distort the relationship
of gross operating revenues and operating margin (revenues retained by the
Company for operating purposes). For instance, as reflected in the accom-
panying income statement, natural gas gross operating revenues increased
$4,283,000 in 1996 from 1995. Had the cost of fuel per unit remained constant
from 1995 to 1996, natural gas revenues would have increased by only
$1,125,000, or a difference of $3,158,000. Such difference is a result of the
dramatic increase in natural gas prices during the first quarter of 1996.
Natural and Propane Gas Service Total natural and propane gas service
operating margin increased $728,000 or about 16% in 1996 as compared with
1995. Excluding propane gas operating margin from total gas operating margin,
remaining operating margin increased $680,000, or about 19% in 1996, as
compared with 1995. The increase in natural gas operating margin is due
principally to an increase in heating degree days of approximately 33% from
the comparable period in 1995 and the effect of an approved final increase in
base rates of $1,282,000 annually, which became effective last May (approved
lesser interim rates were in effect for the first quarter of 1995). Propane
gas operating margin increased $48,000, about 5%. Similarly, the increase in
propane gas operating margin is due principally to the colder weather in 1996.
Total natural and propane gas service operating margin increased $419,000 or
about 10% in 1995 as compared with 1994. Excluding propane gas operating
margin from total gas operating margin, remaining operating margin increased
$415,000 or about 13% as compared with 1994. Such increase in operating
margin is attributable principally to cooler weather in 1995 as compared with
1994 and an interim base rate increase in the natural gas divisions.
Electric Service Total electric service operating margin increased $188,000,
about 9% in 1996, as compared with 1995. Affecting the comparison of
operating margins are two industrial customers. Excluding these customers,
operating margin increased $224,000, about 11%. Other than industrial
customers, the increase in operating margin is due principally to a 2% growth
in customers and a 9% increase in average consumption per customer. A portion
of the increase in average consumption per customer is attributable to the
colder weather in 1996.
In 1995, total electric service operating margin increased $125,000 or about
6% as compared with 1994. Excluding the two industrial customers, operating
margin increased $118,000 or approximately 6%. Other than industrial
customers, the increase is principally due to a 2% increase in customers and a
2% increase in consumption.
Operating Expenses In 1996, operating expenses, excluding cost of fuel and
taxes passed-through to customers, increased $183,000, about 2% in relation to
operating margin. Operating expenses have increased in all classifications of
expense due primarily to inflationary pressures.
In 1995, operating expenses, excluding cost of fuel and taxes passed-through
to customers, increased almost 3% as a percent of operating margin. Expenses
have generally increased in all classifications of expense with administrative
and general expenses and other operating expenses accounting for most of the
increase. Contributing to such increase was an increase in payroll costs,
expensing of overheads no longer appropriate to capitalize and an increase in
the accrual for storm damages in the Marianna electric division. Taxes other
than income taxes decreased due principally to a reduction in ad valorem
taxes.
Income taxes were provided for at approximately the same rate in both three-
month periods. The difference between the periods in the apparent rate is due
mainly to amortization of investment tax credits.
Interest expense was virtually unchanged in 1996 from 1995. Weighted average
amounts outstanding were greater in 1996 compared with 1995; however, the
resultant interest effect was offset by lower rates in the 1996 period.
PART II.
OTHER INFORMATION
Item 4. Submission of matters to a vote of security holders.
(a) The annual meeting of stockholders was held on April 16, 1996.
(b) Directors elected: E. James Carr, Jr., Richard C. Hitchins and
Gordon O. Jerauld.
Directors continuing: Franklin C. Cressman, John T. English,
Daniel Downey, and Robert L. Terry.
(c) None.
(d) None.
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
March 31, 1996.
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: May 7, 1996
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