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 September 30, 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 October 31, 2000 there
were 2,827,805 shares of $1.50 par value common shares outstanding.
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
September 30, December 31,
2000 1999
ASSETS
Utility Plant $129,893 $123,898
Less accumulated depreciati 47,796 45,626
Net utility plant 82,097 78,272
Current Assets
Cash 99 165
Accounts receivable 8,461 8,026
Inventories and prepayments 3,121 2,787
Total 11,681 10,978
Investments Held in Escrow for
Environmental Costs 2,877 2,877
Deferred Charges 5,745 4,416
Total $102,400 $ 96,543
CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholders' equity $ 27,117 $ 25,866
Preferred stock 600 600
Long-term debt 23,500 23,500
Total 51,217 49,966
Current Liabilities
Notes payable 13,800 13,000
Accounts payable 6,975 5,481
Other 8,163 6,160
Customer deposits 4,226 3,994
Total 33,164 28,635
Deferred Credits 9,594 9,224
Deferred Income Taxes and
Regulatory Liability 8,425 8,718
Total $102,400 $ 96,543
See accompanying notes.
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,
2000 1999 2000 1999
Revenues
Natural gas $ 7,553 $ 6,112 $26,069 $21,741
Electric 11,083 10,957 29,795 28,889
Propane gas 783 731 3,220 2,890
Water 763 667 2,105 1,843
Total revenues 20,182 18,467 61,189 55,363
Cost of Fuel and Taxes
Based on Revenues 12,959 11,502 38,044 33,420
Operating Margin 7,223 6,965 23,145 21,943
Operating Expenses
Operations 4,576 4,347 13,639 12,499
Depreciation 1,162 1,112 3,503 3,385
Income taxes 198 259 1,208 1,362
Total
operating expenses 5,936 5,718 18,350 17,246
Operating Income 1,287 1,247 4,795 4,697
Interest Expense (885) (733) (2,566) (2,187)
Other Income 78 36 203 145
Gain from Sale of Non-Utility
Property -- -- -- 134
Income Taxes on
Above Gain -- -- -- (51)
Net Income 480 550 2,432 2,738
Preferred Stock Dividends 7 7 21 21
Earnings For
Common Stock $ 473 $ 543 $ 2,411 $ 2,717
Earnings Per
Common Share $ .17 $ .18 $ .86 $ .90
Dividends Per
Common Share $ .18 $ .17 $ .52 $ .49
Weighted Average Common Shares
Outstanding 2,824,431 3,018,191 2,816,744 3,011,619
See accompanying notes.
FLORIDA PUBLIC UTILITIES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Nine Months Ended
September 30,
2000 1999
Net Cash Provided by Operating Activities $ 7,456 $ 7,632
Cash Flows from Investing Activities
Construction expenditures (7,284) (6,740)
Proceeds from sale of non-utility property -- 154
Other 110 250
Net cash used by investing activities (7,174) (6,336)
Cash Flows from Financing Activities
Net change in short-term borrowings 800 200
Dividends paid (1,482) (1,494)
Other 334 282
Net cash used by financing activities (348) (1,012)
Net Increase/(Decrease) in Cash (66) 284
Cash at Beginning of Period 165 564
Cash at End of Period $ 99 $ 848
See accompanying notes.
FLORIDA PUBLIC UTILITIES COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
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, 2000 under the most
restrictive provision, approximately $4,900,000 of retained earnings
were unrestricted.
3. In May 1999, the Company sold non-utility, unimproved real property for
a gain after income taxes of $83,000, equal to $0.03 per share.
4. Segment information is summarized as follows:
Non-
Nine months ended Regulated Regulated
September 30, Gas Electric Water Propane Gas Consolidated
2000
Revenues $26,069 $29,795 $2,105 $3,220 $61,189
Operating profit 2,635 2,464 733 171 6,003
1999
Revenues 21,741 28,889 1,843 2,890 55,363
Operating profit 2,521 2,532 632 374 6,059
Three Months ended
September 30, _
2000
Revenues 7,553 11,083 763 783 20,182
Operating profit 271 990 297 (73) 1,485
1999
Revenues 6,112 10,957 667 731 18,467
Operating profit 246 1,012 253 (6) 1,505
Notes:
1. Operating profit consists of revenues less operating expenses and does
not include interest, income taxes, and other income.
2. 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
Financial Condition. The Company has a $20,000,000 line of credit with its
primary bank of which $13,800,000 is outstanding at September 30, 2000. The
line provides for interest at LIBOR plus fifty basis points. The Company has
agreed with the Florida Public Service Commission to borrow up to $19,000,000
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 a non-regulated operation, propane gas.
The water operations are not significant, approximating 3% 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.
Summary of Operating Margins
(in thousands) Nine Months Ended September 30,
2000 1999
Natural Gas $11,314 $10,620
Propane gas 2,016 2,036
Electric 7,804 7,525
Three Months Ended September 30,
2000 1999
Natural Gas $ 3,137 $ 3,049
Propane gas 524 543
Electric 2,834 2,736
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 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 (net revenues retained by the Company for
operating purposes).
Nine Months Ended September 30, 2000 Compared With Nine Months Ended September
30, 1999
Natural and Propane Gas Service. Natural gas service operating margin
increased $694,000 in 2000 as compared with 1999. Transportation revenues
accounted for $383,000 of the increase as certain customers are opting to
purchase their own gas and use our system to transport the gas to their
location. The remaining $311,000 increase in operating margin was due
principally to an approximate 4% increase in average customers as compared
with 1999. Consumption did not increase in proportion to the increase in
customers as per customer average consumption decreased by a similar percentage
due to winter weather warmer than normal in 2000. Propane gas operating margin
decreased $20,000 as compared with 1999. Average customers decreased 6%
from 1999 to 2000, most of whom were converted to our Mid-Florida natural gas
system. The effect of the reduction in average customers was offset by an
increase in per customer average consumption and greater margins.
Electric Service. Electric service operating margin increased $279,000 as
compared with 1999. As compared with last year, average customers increased
approximately 3% which was the major factor contributing to the operating
margin increase.
Operating Expenses. In 2000, operating expenses increased $1,258,000, or 8%,
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, expenses related to increasing the gas pressure in
our mains and services, expenses attributable to the implementation of a new
customer information system, and start-up expenses attributable to our propane
gas service in Fernandina Beach, which commenced October 1, 2000. Additional
marketing staff and customer service costs also contributed to increased
expenses.
Income taxes were provided for at approximately the same rate in both
nine-month periods and are reduced by amortization of deferred investment
tax credits.
Interest expense increased 17% in 2000 versus 1999 due to an increase in
amounts borrowed under the line of credit and interest rate increases.
Three Months Ended September 30, 2000 Compared with Three Months Ended
September 30, 1999
Natural and Propane Gas Service. Natural gas service operating margin
increased $88,000 in 2000 as compared with 1999. Transportation revenues
accounted for $57,000 of the increase as certain customers are opting to
purchase their own gas and use our system to transport the gas to their
location. The remaining $31,000 increase in operating margin was due
principally to an approximate 4% increase in average customers as compared with
the third quarter last year. Propane gas operating margin decreased $19,000 as
compared with 1999 due primarily to a reduction of 5% in average customers in
the Mid-Florida division, most of whom were converted to our natural gas
system.
Electric Service. Electric service operating margin increased $98,000 as
compared with 1999. As compared with the third quarter last year, average
customers increased approximately 3%, which caused operating margin per
customer to increase slightly.
Operating Expenses. In 2000, operating expenses increased $279,000, or 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, expenses related to increasing the gas pressure in
our mains and services, expenses attributable to the implementation of a new
customer information system, and start-up expenses attributable to our propane
gas service in Fernandina Beach, which commenced October 1, 2000. Additional
marketing staff and customer service costs also contributed to increased
expenses.
Income taxes were provided for at approximately the same rate in both
three-month periods and are reduced by amortization of deferred investment tax
credits.
Interest expense increased 21% in 2000 versus 1999. See interest expense in the
nine months discussion above.
PART II.
OTHER INFORMATION
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
September 30, 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)
Date: November 3, 2000
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