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, 1997
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, 1997 there were
1,480,897 shares of $1.50 par value common shares outstanding.
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
March 31, December 31,
1997 1996
ASSETS
Utility Plant $108,046 $106,684
Less accumulated depreciation and
amortization 37,482 36,808
Net utility plant 70,564 69,876
Current Assets
Cash and overnight investments 887 841
Accounts receivable - net 8,348 8,062
Inventories and prepayments 3,535 4,079
Total 12,770 12,982
Investments Held in Escrow for
Environmental Costs 3,048 2,881
Deferred Charges 1,288 2,430
Deferred Income Taxes and
Regulatory Asset 2,826 2,825
Total $ 90,496 $ 90,994
CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholders' equity $ 25,204 $ 24,511
Preferred stock 600 600
Long-term debt 23,500 23,500
Total 49,304 48,611
Current Liabilities
Notes payable 7,200 7,900
Accounts payable 5,690 7,564
Taxes accrued 962 308
Other 5,548 4,677
Customer deposits 3,693 3,634
Total 23,093 24,083
Deferred Credits 6,988 6,975
Deferred Income Taxes and
Regulatory Liability 11,111 11,325
Total $ 90,496 $ 90,994
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share data)
Three Months Ended
March 31,
1997 1996
Revenues
Natural gas $10,702 $11,036
Electric 9,560 10,393
Water 439 412
Propane gas 1,442 1,678
Total revenues 22,143 23,519
Cost of Fuel and Taxes
Based on Revenues 14,835 15,524
Operating Margin 7,308 7,995
Operating Expenses
Operations 3,470 3,381
Depreciation 994 960
Taxes other than income taxes 459 433
Income taxes 581 955
Total operating expenses 5,504 5,729
Operating Income 1,804 2,266
Interest Expense (759) (709)
Other Income 1 7
Net Income 1,046 1,564
Preferred Stock Dividends 7 7
Earnings for Common Stock $ 1,039 $ 1,557
Earnings Per Common Share $ .70 $ 1.06
Dividends Per Common Share $ .30 $ .30
Average Shares Outstanding 1,478,771 1,464,479
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Three Months Ended
March 31,
1997 1996
Cash Flows from Operating Activities
Net income $1,046 $1,564
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 994 960
Other (148) 174
Changes in operating assets and liabilities
Accounts receivable (326) (1,335)
Inventories and prepayments 544 16
Accounts payable and accrued expenses (251) 2,702
Over/(under)recovery of fuel costs 1,180 (913)
Other (51) 32
Net cash provided by operating activities 2,988 3,200
Cash Flows from Investing Activities
Construction expenditures (1,726) (1,692)
Other (164) (18)
Net cash used by investing activities (1,890) (1,710)
Cash Flows from Financing Activities
Net change in short-term borrowings (700) (1,100)
Dividends paid (449) (431)
Other 97 75
Net cash used by financing activities (1,052) (1,456)
Net Increase in Cash and Overnight Investments 46 34
Cash and Overnight Investments at Beginning
of Period 841 270
Cash and Overnight Investments at End
of Period $ 887 $ 304
<PAGE>
FLORIDA PUBLIC UTILITIES COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
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, 1997, under the most
restrictive provision, approximately $4,100,000 of retained earnings
were unrestricted.
<PAGE>
FLORIDA PUBLIC UTILITIES COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1997
Financial Condition The Company has a $15,000,000 line of credit with its
primary bank of which $7,200,000 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.
1997 1996 1995
Natural and Propane Gas
Operating margin $ 4,586 $ 5,273 $ 4,545
Less propane gas 760 940 892
Remainder $ 3,826 $ 4,333 $ 3,653
Electric
Operating margin $ 2,323 $ 2,347 $ 2,159
Less industrial 132 125 161
Remainder $ 2,191 $ 2,222 $ 1,998
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).
Natural and Propane Gas Service Total natural and propane gas service
operating margin decreased $687,000 or about 13% in 1997 as compared with
1996. Excluding propane gas operating margin from total gas operating margin,
remaining operating margin decreased $507,000 or about 12% in 1997 as compared
with 1996. The decrease in natural gas operating margin is due principally to
a 64% decrease in heating degree days. Similarly, the decrease in propane gas
operating margin is due principally to the warmer weather in 1997.
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.
Electric Service Total electric service operating margin decreased $24,000 or
1% in 1997 as compared with 1996. Affecting the comparison of operating
margin are two industrial customers. Excluding these customers, operating
margin decreased $31,000 or about 1%. The effect on consumption of the warmer
weather was greater than the effect on consumption of the 2.5% increase in
customer growth.
Total electric service operating margin increased $188,000, about 9% in 1996,
as compared with 1995. Excluding the two industrial 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.
Operating Expenses In 1997, operating expenses, excluding cost of fuel and
taxes passed-through to customers, increased $149,000, or about 2% in relation
to operating margin. Operating expenses have generally increased in all
classifications of expense, with the exception of propane delivery costs, due
primarily to inflationary pressures. Propane delivery costs decreased due to
warmer weather reducing the number of deliveries.
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.
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 increased in 1997 versus 1996 due primarily to greater
weighted average amounts outstanding in 1997 compared with 1996. Interest
rates were virtually unchanged from period to 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 15, 1997.
(b) Directors elected: Daniel Downey, John T. English and Robert L.
Terry.
Directors continuing: E. James Carr, Jr., Franklin C. Cressman,
Richard C. Hitchins and Gordon O. Jerauld.
(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, 1997.
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 R. Brown
Jack R. Brown
Treasurer
(DULY AUTHORIZED OFFICER
AND
CHIEF FINANCIAL OFFICER)
Date: May 6, 1997
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