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, 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 0-1055
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) (561) 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, 2000
there were 2,815,372 shares of $1.50 par value common shares outstanding.
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
March 31, December 31,
2000 1999
ASSETS
Utility Plant $125,640 $123,898
Less accumulated depreciation 46,520 45,626
Net utility plant 79,120 78,272
Current Assets
Cash and overnight investments 99 165
Accounts receivable 8,020 8,026
Inventories and prepayments 2,944 3,051
Total 11,063 11,242
Investments Held in Escrow for
Environmental Costs 2,886 2,877
Deferred Charges 4,957 4,416
Total $ 98,026 $ 96,807
CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholders' equity $ 26,931 $ 25,866
Preferred stock 600 600
Long-term debt 23,500 23,500
Total 51,031 49,966
Current Liabilities
Notes payable 12,000 13,000
Accounts payable 5,204 5,481
Other 8,019 6,424
Customer deposits 4,064 3,994
Total 29,287 28,899
Deferred Credits 9,278 9,224
Deferred Income Taxes and
Regulatory Liability 8,430 8,718
Total $ 98,026 $ 96,807
See notes to condensed consolidated financial statements.
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share data)
Three Months Ended
March 31,
2000 1999
Revenues
Electric $ 9,258 $ 8,742
Natural gas 10,225 8,982
Propane gas 1,431 1,256
Water 554 527
Total revenues 21,468 19,507
Cost of fuel and taxes
based on revenues 12,847 11,468
Operating Margin 8,621 8,039
Operating Expenses
Operations 3,921 3,439
Depreciation 1,172 1,131
Taxes other than income taxes 600 581
Income taxes 761 780
Total operating expenses 6,454 5,931
Operating Income 2,167 2,108
Interest Expense (830) (733)
Other - Net 76 76
Net Income 1,413 1,451
Preferred Stock Dividends 7 7
Earnings for Common Stock $ 1,406 $ 1,444
Earnings Per Common Share $ .50 $ .48
Dividends Per Common Share $ .17 $ .16
Average Shares Outstanding 2,810,801 3,006,341
See notes to condensed consolidated financial statements.
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Three Months Ended
March 31,
2000 1999
Cash Flows from Operating Activities
Net income $1,413 $1,451
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 1,172 1,131
Other (307) 133
Changes in operating assets and liabilities
Receivables 6 (300)
Inventories and prepayments 107 133
Accounts payable and accruals 1,332 755
Over recovery of fuel costs 119 119
Other (553) (56)
Net cash provided by operating activities 3,289 3,366
Cash Flows from Investing Activities
Construction expenditures (2,021) (2,461)
Other 12 169
Net cash used by investing activities (2,009) (2,292)
Cash Flows from Financing Activities
Net change in short-term borrowings (1,000) (600)
Dividends paid (483) (487)
Other 137 97
Net cash used by financing activities (1,346) (990)
Net Increase (Decrease) in Cash (66) 84
Cash at Beginning of Period 165 564
Cash at End of Period $ 99 $ 648
See notes to condensed consolidated financial statements.
FLORIDA PUBLIC UTILITIES COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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, 2000, under the most
restrictive provision, approximately $4,900,000 of retained earnings
were unrestricted.
3. Segment information is summarized as follows:
Non-
Three months ended Regulated Regulated
March 31, 2000 Gas Electric Water Propane Gas Consolidated
Revenues $10,224 $9,258 $ 554 $1,432 $21,468
Operating profit 1,776 810 120 222 2,928
March 31, 1999
Revenues 8,982 8,742 527 1,256 19,507
Operating profit 1,744 734 144 266 2,888
Notes:
a. Operating profit consists of revenues less operating expenses and
does not include interest, income taxes, and other income.
b. Total assets have not changed materially from December 31, 1999.
FLORIDA PUBLIC UTILITIES COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 2000
Financial Condition. The Company has a $15,000,000 line of credit with its
primary bank of which $12,000,000 is outstanding. The line provides for
interest at LIBOR plus fifty basis points. 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. The Company is in the
process of renewing the line of credit with its primary bank. The renewed
line is expected to have a $20,000,000 limit with the same terms and
conditions as the expiring line.
Overview. The Company is organized into three regulated operations: natural
gas, electric and water and a non-regulated operation, propane gas. The
water operations are not significant, approximating 2.6% of revenues.
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 Florida during the winter season.
Operating Margin 2000 1999 1998
Natural Gas $ 4,687 $ 4,339 $ 4,323
Propane Gas $ 872 $ 844 $ 820
Electric $ 2,532 $ 2,351 $ 2,371
Operating Margin. Operating margin, defined as gross operating revenues less
fuel costs and taxes based on revenues which are passed-through to customers,
provides a more meaningful basis for evaluating utility operations. Fuel
costs and taxed 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 (net revenues retained by the company
for operating purposes).
Three Months Ended March 31, 2000 Compared
with Three Months Ended March 31, 1999
Natural and Propane Gas Service. Natural gas service operating margin
increased $348,000 in 2000 as compared with 1999. Transportation revenues
accounted for $179,000 of the $348,000 increase as certain customers are
opting to purchase their own gas and use our system to transport the gas to
their location. The remaining $169,000 increase in operating margin was due
principally to an approximate 3.5% increase in average customers as compared
with the first quarter last year. Consumption didn't increase proportionately
as per customer consumption decreased by a similar percentage as winter
weather was approximately 40% warmer than normal in 2000. Propane gas
operating margin increased $28,000 as compared with 1999.
Electric Service. Electric service operating margin increased $181,000 as
compared with 1999. As compared with the first quarter last year, average
customers increased 2.6%, which was the major contributing factor to the
operating margin increase.
Operating Expenses. In 2000, operating expenses increased $542,000, or 10.5%,
excluding cost of fuel and taxes passed-through to customers. Other than the
general increases in all classifications of expense, there were increases in
gas line locating expenses, gas meter testing and expenses related to
increasing the gas pressure in our mains and services. Additional marketing
staff and customer service costs, including postage, also contributed to
increased expenses.
Three Months Ended March 31, 1999 Compared
with Three Months Ended March 31, 1998
Natural and Propane Gas Service. Natural gas service operating margin
increased $16,000 in 1999 as compared with 1998. The slight increase in
natural gas operating margin was principally due to a 4% increase in average
customers as compared with 1998, and was affected by weather 30% warmer than
the same period last year and 50% warmer than normal. Propane gas operating
margin increased $24,000 or about 3% versus 1998 and was also affected by the
warmer weather. Propane gas had a 10% decrease in average customers for
1999, most of whom were converted to natural gas. The increase in propane
operating margin is primarily due to the propane rate increase that became
effective in April 1998.
Electric Service. Electric service operating margin decreased $20,000 versus
1998. Average customers increased 1.7% as compared with the first quarter
last year, however consumption remained neutral due to the warmer weather.
Operating Expenses. In 1999, operating expenses, excluding fuel costs and
taxes passed-through to customers, increased $102,000 or about 1.3% in
relation to operating margin.
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 18, 2000.
(b) Not applicable
(c) None
(d) None
Item 6. Exhibits and reports on Form 8-K.
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed for the quarter ending
March 31, 2000.
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)
May 2, 2000
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