Exhibit 99.1
MIDDLESEX WATER COMPANY REPORTS THIRD QUARTER EARNINGS
Consolidated Revenues Climb 8.6% in Third Quarter
ISELIN, NJ (October 27, 2006) Middlesex Water Company (Nasdaq Global
Select Market:MSEX), a provider of water and wastewater services in New Jersey
and Delaware, today announced that its Board of Directors approved an increase
in the quarterly dividend from $0.17 to $0.1725 per common share, payable
December 1, 2006, to shareholders of record as of November 15, 2006.
Third Quarter 2006 Results
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Middlesex Water Company produced positive financial results in several
areas in the third quarter of 2006. Earnings applicable to common stock rose to
$3.3 million for the quarter ended September 30, 2006, up from $3.0 million from
the same period in 2005. Basic and diluted earnings per share of common stock
rose to $0.29 and $0.28 per share, respectively, from $0.26 for both for that
period in 2005.
Consolidated operating revenues for the quarter ended September 30,
2006 were $22.6 million, up $1.8 million from $20.8 million for the same period
in 2005. Water sales revenues improved by $0.6 million in the regulated New
Jersey utilities, of which $1.3 million was the result of a base rate increase
that was granted to Middlesex on December 8, 2005. Unfavorable weather at the
beginning and end of the quarter resulted in a decrease of consumption revenues
of $0.7 million when compared to the same period in 2005. Revenues rose in the
Delaware service territories by $1.1 million. Higher water consumption by
existing customers contributed $0.4 million of the increase, customer growth
accounted for $0.2 million and the implementation of the 15% interim rate
increase on June 28, 2006 contributed an additional $0.5 million. New
unregulated wastewater contracts in Delaware provided $0.1 million.
Operations and maintenance expenses for the quarter increased to $11.4
million, up from $10.8 million. The continued growth of the Delaware systems
resulted in $0.4 million of increases for the cost of water and wastewater
treatment, business insurance, payroll and related employee benefit costs.
Nine-Month Results
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For the nine-month period ended September 30, 2006, earnings applicable
to common stock were $8.0 million, compared to $6.2 million in the prior year.
Basic and diluted earnings per share increased to $0.69 and $0.68 respectively,
up from $0.54 for both for the same period in 2005. Operating revenues increased
$5.9 million, or 10.5% from the same period in 2005. Base rate increases in New
Jersey and Delaware combined to contribute $3.9 million of the higher revenues.
Water consumption and related fees from customer growth, primarily in Delaware,
added $0.8 million of the increase, while water sales to our existing customers
grew by $0.4 million. New unregulated wastewater contracts in Delaware provided
$0.4 million of additional revenues. All other sources contributed $0.4 million.
Operation and maintenance expenses increased $1.4 million, or 4.4%.
Water production and treatment costs for our Middlesex system increased by $0.2
million, which was offset by $0.2 million of reduced maintenance costs. The
continuing growth of our Delaware systems resulted in higher costs of water
treatment, additional employees and related benefit expenses of $0.4 million.
Costs related to providing services by our non-regulated wastewater operation in
Delaware increased $0.2 million. USA-PA expenses for subcontractor fees and
labor increased by $0.2 million. Business insurance increased $0.2 million. All
other operation costs increased by $0.4 million.
"We continue to remain focused on obtaining timely and adequate rate
relief for the substantial capital investments we continue to make in water
infrastructure, primarily in our Delaware service territory. In addition, we
continue to demonstrate our capabilities in the wastewater business to
prospective customers and we are actively pursuing profitable growth in this
business," said Dennis W. Doll, Middlesex President & CEO.
About Middlesex Water Company
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Middlesex Water Company, organized in 1897, is an investor-owned water
utility, serving customers in central and southern New Jersey and in the State
of Delaware. The Company and its New Jersey subsidiaries - Pinelands Water
Company and Pinelands Wastewater Company--are subject to the regulations of the
Board of Public Utilities of the State of New Jersey. Middlesex Water operates
the water and wastewater utilities for the City of Perth Amboy through its
subsidiary, Utility Service Affiliates (Perth Amboy), Inc. Middlesex Water also
provides contract operations services and a service line maintenance program
through its non-regulated subsidiary, Utility Service Affiliates, Inc. The
Company's regulated Delaware subsidiaries, Tidewater Utilities, Inc., together
with Southern Shores Water Company, and Tidewater Environmental Services are
subject to the regulations of the Public Service Commission in Delaware. White
Marsh Environmental Systems, Inc. operates small water and wastewater systems
under contract on a non-regulated basis in Delaware. These companies are also
subject to various Federal and State and regulatory agencies concerning water
quality standards.
For additional information regarding Middlesex Water Company, visit the
Company's Web site at www.middlesexwater.com or call (732) 634-1500.
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Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
Certain matters discussed in this press release are "forward-looking statements"
intended to qualify for safe harbors from liability established by the Private
Securities Litigation Reform Act of 1995. Such statements address future plans,
objectives, expectations and events concerning various matters such as capital
expenditures, earnings, litigation, growth potential, rates, regulatory matters,
liquidity, capital resources and accounting matters. Actual results in each case
could differ materially from those currently anticipated in such statements. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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Contact:
Bernadette M. Sohler
Director of Communications
(732) 634-1500
MIDDLESEX WATER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2006 2005 2006 2005
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Operating Revenues $ 22,631,975 $ 20,832,448 $ 61,899,176 $ 56,006,102
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Operating Expenses:
Operations 10,446,019 10,065,706 30,104,046 28,516,810
Maintenance 907,554 765,422 2,440,786 2,643,226
Depreciation 1,882,544 1,635,403 5,263,677 4,803,610
Other Taxes 2,537,462 2,352,781 7,109,987 6,599,435
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Total Operating Expenses 15,773,579 14,819,312 44,918,496 42,563,081
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Operating Income 6,858,396 6,013,136 16,980,680 13,443,021
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Other Income:
Allowance for Funds Used During Construction 170,148 109,009 398,173 459,915
Other Income 41,393 63,368 140,171 154,530
Other Expense (6,372) (1,879) (20,630) (26,348)
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Total Other Income, net 205,169 170,498 517,714 588,097
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Interest Charges 1,889,572 1,624,145 5,212,687 4,584,315
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Income before Income Taxes 5,173,993 4,559,489 12,285,707 9,446,803
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Income Taxes 1,796,998 1,535,061 4,128,512 3,096,545
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Net Income 3,376,995 3,024,428 8,157,195 6,350,258
Preferred Stock Dividend Requirements 61,947 61,947 185,840 189,340
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Earnings Applicable to Common Stock $ 3,315,048 $ 2,962,481 $ 7,971,355 $ 6,160,918
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Earnings per share of Common Stock:
Basic $ 0.29 $ 0.26 $ 0.69 $ 0.54
Diluted $ 0.28 $ 0.26 $ 0.68 $ 0.54
Average Number of
Common Shares Outstanding :
Basic 11,629,681 11,466,024 11,611,427 11,409,182
Diluted 11,960,821 11,805,164 11,942,567 11,750,989
Cash Dividends Paid per Common Share $ 0.1700 $ 0.1675 $ 0.5100 $ 0.5025