NEWARK, Del., Nov. 6 /PRNewswire-FirstCall/ -- Artesian Resources Corporation (Artesian) today announced that revenues for the nine-month period were $39.6 million, up 7.8% from $36.7 million in 2006. Net income available to common stockholders was $5.2 million, compared to $5.0 million last year, a 4.6% increase. Basic and diluted net income per common share for the nine months ended September 30, 2007 were $0.78 and $0.77, as compared to $0.82 and $0.80 for the comparable period in 2006. Earnings for 2006 benefited from the recognition of the gain on the sale of land by Artesian Development in the third quarter of 2006 of $1.3 million, or approximately $0.14 per share. Excluding the gain, the nine months ended September 30, 2006 diluted earnings per share were $0.66.
Revenues for the quarter ended September 30, 2007 were $15.0 million, up 6.0% from $14.2 million in 2006. Net income was $2.8 million, compared to $2.6 million last year, a 6.0% increase. Basic and diluted net income per common share for the quarter were $0.38 and $0.37 as compared to $0.43 and $0.42 for the quarter ended September 30, 2006, which included $0.14 for the gain on the sale of land.
In June 2007 the Company successfully completed the issuance of 1,000,000 shares of Class A Stock through a secondary public offering. In July, an additional 129,000 shares were issued under the terms of an over-allotment option. The dilutive effect of the issuance was partially mitigated by the implementation of the second step of a previously awarded rate increase. The second step was placed in effect in July 2007. The second step rates were designed to recover approximately $1.2 million of annual revenue.
The increases in net income for both the quarter and nine-month periods reflect increased water sales due to generally drier weather, higher water rates and 2% more customers compared to the same periods a year ago and improved operating margins in our non-utility business. For the quarter, lower interest expense as a result of repayment of our outstanding lines of credit with the proceeds from our stock issuance also helped to improve results.
Artesian Chair and CEO Dian C. Taylor said that, "We are pleased with the positive results generated by our non-regulated businesses. Margins in our design/build activities and our Service Line Protection Plan continue to improve. Fortunately our Delaware service area has not been impacted by the housing slowdown experienced elsewhere. We continue to see consistent growth in our customer base and increases in our water and wastewater facility design/build work. In addition, the drier weather pattern positively impacted water sales. Our previous investments have assured an abundant source of supply, therefore our customers can continue to be confident in our ability to meet their unrestricted water demands, even if these dry conditions persist."
On October 30, Artesian declared a 3.6%, or a $0.024 per share annual increase in the Class A Non-Voting and Class B Common shareholders' dividend, raising the annual dividend to $0.688 per share. This was the second increase approved this year, in total a 7.5% increase over last year. The quarterly dividend of $0.172 per share is payable November 21, 2007 to shareholders of record at the close of business on November 8, 2007.
About Artesian
Artesian, through our wholly-owned subsidiary Artesian Water Company, Inc., is the oldest and largest investor owned regulated public water utility on the Delmarva Peninsula and has been providing superior water service since 1905. Artesian also provides water and wastewater treatment contract services through Artesian Utility Development, Inc., a non-regulated subsidiary, and wastewater utility services through Artesian Wastewater Management, Inc., a regulated subsidiary. Artesian currently owns and operates five wastewater treatment plants. In addition, Artesian operates forty-five water and wastewater treatment plants under contract.
As of September 30, 2007, Artesian was serving approximately 74,800 metered water customers, providing water service to about 250,000 residents in Delaware, Maryland and Pennsylvania. Last year, Artesian distributed 7.6 billion gallons of water through a total of 172 wells and 1,050 miles of water main. Artesian's water supply is treated at 50 different locations. Artesian has increased its water customer base by 27% and has more than doubled it franchise area over the past decade. About $193 million has been invested in utility plant over the last 10 years to provide sufficient treated supply, new water mains and additional storage capacity to meet peak demands and provide fire protection.
Artesian Resources Corporation Condensed Consolidated Statement of Operations (In thousands, except per share amounts) (Unaudited) Three Three Nine Nine months months months months ended ended ended ended September September September September 30, 2007 30, 2006 30, 2007 30, 2006 Operating Revenues Utility Operating Revenue - Water Sales 13,853 12,231 36,505 33,253 Other - Utility Operating Revenue 357 267 1,259 779 Non-Utility Operating Revenue 836 1,696 1,799 2,664 $15,046 $14,194 $39,563 $36,696 Operating Expenses Utility Operating Expenses 6,389 6,240 19,632 18,210 Non-Utility Operating Expenses 619 289 1,217 892 Depreciation and Amortization 1,339 1,237 3,842 3,422 State & Federal Taxes 1,814 1,599 3,420 3,127 Property and Other Taxes 750 648 2,131 1,922 10,911 10,013 30,242 27,573 Operating Income 4,135 4,181 9,321 9,123 Allowance for funds used during construction 78 100 213 219 Other Income, net 42 (31) 464 349 Income Before Interest Charges 4,255 4,250 9,998 9,691 Interest Charges 1,492 1,643 4,808 4,729 Net Income Applicable to Common Stock $2,763 $2,607 $5,190 $4,962 Weighted Average Common Shares Outstanding - Basic 7,277 6,065 6,619 6,047 Net Income per Common Share - Basic $0.38 $0.43 $0.78 $0.82 Weighted Average Common Shares Outstanding - Diluted 7,425 6,247 6,771 6,232 Net Income per Common Share - Diluted $0.37 $0.42 $0.77 $0.80 Artesian Resources Corporation Condensed Consolidated Balance Sheet (In thousands) (Unaudited) September 30, 2007 December 31, 2006 ASSETS Utility Plant, at original cost less accumulated depreciation $267,462 $253,182 Current Assets 21,848 10,245 Regulatory and Other Assets 6,045 5,933 $295,355 $269,360 CAPITALIZATION AND LIABILITIES Stockholders' Equity $85,013 $61,800 Long Term Debt, Net of Current Portion 91,799 92,073 Current Liabilities 13,500 19,122 Advances for Construction 24,195 24,991 Contributions in Aid of Construction 54,348 48,177 Other Liabilities 26,500 23,197 $295,355 $269,360
