Exhibit 99.1
|
| |
Connecticut Water Service, Inc. 93 West Main Street Clinton, Connecticut 06413-1600 | |
| | Mid-Year Report September 2012 |
Dear Shareholders:
I am pleased to inform you that on August 10, 2012, your Board of Directors increased the annual dividend rate on common shares by 2 cents to 97 cents per share, which is 2.1% above the current cash dividend. Over the past four years, the Company’s dividend has increased nearly 9%. Connecticut Water has raised its dividend payment in each of the last 43 years, and it has paid a dividend without interruption or reduction in every quarter since its founding 56 years ago. The Company knows that consistent dividend growth is important to its shareholders. It also allows us to attract capital in a very competitive market. That is why we are so proud of our dividend history.
For the first six month period ending June 30, 2012, we reported earnings of 70 cents per share, compared to 67 cents per share reported for the comparable period of 2011. Total revenue increased $8.4 million to $44.7 million from $36.3 million in 2011. The higher revenues and earnings are largely attributable to the acquisition of Aqua Maine, Inc., which is now Maine Water Company, in January 2012. Earnings and revenue in 2011 did not include any contribution from Maine Water.
On July 19, 2012, the Company announced that it had entered into an agreement to acquire the Biddeford and Saco Water Company (BSWC) in southern Maine. As a result of this transaction, we will grow our customer base by 16,000 customers, or approximately 15%. The transaction will expand our presence in Maine – and would make us the largest investor owned water utility in Maine with about 32,000 customers and serving a population of nearly 100,000 people. BSWC serves the communities of Biddeford, Saco, Old Orchard Beach and parts of Scarborough. This complements the recent acquisition of Maine Water and will allow us to leverage the economies of scale in Maine and seek opportunities over time to share staff, resources, systems and services between Maine Water and Biddeford and Saco Water Company to provide the best, most cost effective service for customers.
Once the acquisition is completed, Connecticut Water will serve more than 120,000 customers, or a population of about 400,000 people, in the New England states of Connecticut and Maine, and will be the fastest growing investor owed water utility in the region. We expect to complete the BSWC acquisition in the fourth quarter of 2012.
For additional information on any of these matters, please visit the Company’s Web site at www.ctwater.com. The ‘News’ section provides access to our news releases. If you would like an e-mail alert when the Company posts a news release to its Web site, you can join our e-mail list by going to the Email alerts tab located under the‘Investors’ section. You can also follow us on Facebook and Twitter using the links on our home page.
On behalf of the nearly 240 professionals who work hard to keep your company successful, I thank you for your continued support.
Very truly yours,
/s/ Eric W. Thornburg
Eric W. Thornburg
Chairman, President and CEO
Connecticut Water Service, Inc. & Subsidiaries
Condensed Consolidated Statements of Income (unaudited)
|
| | | | | | | | | | | | |
| | Three Months Ended | Six Months Ended |
| | June 30, | June 30, |
| (In thousands except per share amounts) | 2012 | 2011 | 2012 | 2011 |
| | | | | |
| Operating Revenues | $ | 21,348 |
| $ | 17,359 |
| $ | 39,888 |
| $ | 33,348 |
|
| Other Water Activities Revenues | 324 |
| 366 |
| 673 |
| 700 |
|
| Real Estate Revenues | 1,450 |
| -- |
| 1,450 |
| -- |
|
| Service and Rentals Revenues | 1,366 |
| 1,096 |
| 2,701 |
| 2,263 |
|
| Total Revenues | $ | 24,488 |
| $ | 18,821 |
| $ | 44,712 |
| $ | 36,311 |
|
| Operating Expenses | $ | 16,337 |
| $ | 12,989 |
| $ | 31,326 |
| $ | 25,618 |
|
| Other Utility Income, Net of Taxes | $ | 188 |
| $ | 210 |
| $ | 364 |
| $ | 388 |
|
| Total Utility Operating Income | $ | 5,199 |
| $ | 4,580 |
| $ | 8,926 |
| $ | 8,118 |
|
| Gain on Property Transactions, Net of Taxes | $ | 982 |
| $-- |
| $ | 982 |
| $-- |
|
| Non-Water Sales Earnings (Services and Rentals), Net of Taxes | $ | 333 |
| $ | 219 |
| $ | 683 |
| $ | 412 |
|
| Net Income | $ | 4,163 |
| $ | 3,470 |
| $ | 6,073 |
| $ | 5,738 |
|
| Net Income Applicable to Common Shareholders | $ | 4,153 |
| $ | 3,460 |
| $ | 6,054 |
| $ | 5,719 |
|
| Basic Earnings Per Average Common Share | $ | 0.48 |
| $ | 0.41 |
| $ | 0.7 |
| $ | 0.67 |
|
| Diluted Earnings Per Average Common Share | $ | 0.47 |
| $ | 0.4 |
| $ | 0.69 |
| $ | 0.66 |
|
| Basic Weighted Average Common Shares Outstanding | 8,667 |
| 8,601 |
| 8,659 |
| 8,590 |
|
| Diluted Weighted Average Common Shares Outstanding | 8,805 |
| 8,710 |
| 8,793 |
| 8,702 |
|
| Book Value Per Share | $ | 13.75 |
| $ | 13.27 |
| 13.75 |
| $ | 13.27 |
|
Condensed Consolidated Balance Sheets (unaudited)
|
| | | | | | |
| (In thousands) | June 30, 2012 | June 30, 2011 |
| |
| ASSETS | | |
| Net Utility Plant | $ | 419,002 |
| $ | 349,361 |
|
| Current Assets | 26,415 |
| 20,428 |
|
| Other Assets | 108,038 |
| 60,943 |
|
| |
| Total Assets | $ | 553,455 |
| $ | 430,732 |
|
| |
| CAPITALIZATION AND LIABILITIES | | |
| Shareholders’ Equity | $ | 121,208 |
| $ | 115,786 |
|
| Preferred Stock | 772 |
| 772 |
|
| Long-Term Debt | 187,841 |
| 111,385 |
|
| Current Liabilities | 36,890 |
| 34,739 |
|
| Other Liabilities and Deferred Credits | 206,744 |
| 168,050 |
|
| Total Capitalization and Liabilities | $ | 553,455 |
| $ | 430,732 |
|
|
| | | | | | |
| | Equity Type | Record Date | Payable Date | Rate |
| | | | | |
| Dividends Declared | Common (NASDAQ GS:CTWS) | September 3, 2012 | September 17, 2012 | $ | 0.2425 |
|
| Preferred A (not publicly traded) | October 1, 2012 | October 15, 2012 | $ | 0.2 |
|
| Preferred 90 (NASDAQ:CTWSP) | October 19, 2012 | November 2, 2012 | $ | 0.225 |
|
| | | | | |
| | Declaration date | Record Date | Payable Date | |
| Proposed Next Common Stock Dividend Date | November 15, 2012 | December 3, 2012 | December 17, 2012 | |
|
| |
| Connecticut Water Service, Inc. | Stock Transfer, Dividend Disbursing Agent and |
| 93 West Main Street | Agent to Administer Dividend Reinvestment Plan |
| Clinton, Connecticut 06413-1600 | Registrar and Transfer Company |
| FAX (860) 669-5579 | 10 Commerce Drive, Cranford, NJ 07016 |
| Shareholder Info: 1-800-428-3985, Ext.6015 | 1-800-368-5948 |
| Website: www.ctwater.com | On-line information: http://www.rtco.com |
