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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007
COMMISSION FILE NUMBER 1-31374
BIW LIMITED
(Exact name of registrant as specified in its charter)
Connecticut 04-3617838
----------- ----------
(State of Incorporation or Organization) (I.R.S Employer I.D. No.)
230 BEAVER STREET, ANSONIA, CT 06401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 735-1888
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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 [ ]
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
LARGE ACCELERATED FILER [ ] ACCELERATED FILER [ ] NON-ACCELERATED FILER [X]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at November 7, 2007
- -------------------------- -------------------------------
COMMON STOCK, NO PAR VALUE 1,679,579
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
BIW Limited
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
---------- ---------- ---------- ----------
Operating revenue $3,008,052 $2,378,367 $7,835,089 $6,847,365
---------- ---------- ---------- ----------
Operating expenses:
Operating expenses 1,753,324 1,434,658 4,621,786 4,274,272
Maintenance expenses 77,807 87,354 301,796 311,335
Depreciation 279,610 268,751 827,110 806,253
Taxes other than income taxes 179,546 163,630 541,660 507,371
Taxes on income 137,638 63,005 235,863 115,636
---------- ---------- ---------- ----------
Total operating expenses 2,427,925 2,017,398 6,528,215 6,014,867
---------- ---------- ---------- ----------
Operating income 580,127 360,969 1,306,874 832,498
Amortization of prior years'
deferred income on land dispositions
(net of income taxes) -- -- -- 242
Other income, net (including allowance
for funds used during construction of
$20,000 in 2007 and $68,806 in 2006) 26,453 58,878 86,462 119,587
---------- ---------- ---------- ----------
Income before interest expense 606,580 419,847 1,393,336 952,327
Interest and amortization of debt discount 276,852 264,260 817,266 656,784
---------- ---------- ---------- ----------
Net income 329,728 $ 155,587 $ 576,070 $ 295,543
Retained earnings, beginning 7,931,573 8,315,249 8,254,588 8,740,825
Dividends -- 284,678 569,357 850,210
---------- ---------- ---------- ----------
Retained earnings, ending $8,261,301 $8,186,158 $8,261,301 $8,186,158
========== ========== ========== ==========
Earnings per share - basic $ 0.20 $ 0.09 $ 0.34 $ 0.18
========== ========== ========== ==========
Earnings per share - diluted $ 0.20 $ 0.09 $ 0.34 $ 0.18
========== ========== ========== ==========
Dividends per share -- $ 0.17 $ 0.34 $ 0.51
========== ========== ========== ==========
The accompanying notes are an integral part of
these consolidated financial statements.
2
BIW Limited
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2007 2006
------------ ------------
ASSETS
Utility plant $ 44,448,948 $ 42,628,195
Accumulated depreciation (11,617,873) (10,805,946)
------------ ------------
Net utility plant 32,831,075 31,822,249
------------ ------------
Other property, net 416,544 501,927
------------ ------------
Current assets:
Accounts receivable, net of allowance for doubtful
accounts (2007, $194,678; 2006 $225,700) 1,552,998 1,179,559
Accrued utility and other revenue 754,229 664,482
Materials and supplies 420,885 312,766
Prepayments and other current assets 124,152 8,135
------------ ------------
Total current assets 2,852,264 2,164,942
------------ ------------
Deferred charges 124,841 137,007
Unamortized debt expense 230,703 276,999
Regulatory asset - income taxes recoverable 672,803 672,803
Other assets 952,372 910,847
------------ ------------
1,980,719 1,997,656
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38,080,602 36,486,774
============ ============
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity:
Common stock, no par value; authorized 5,000,000 shares:
issued and outstanding (2007, 1,679,579 shares; 2006,
1,666,579 shares) 3,155,954 3,125,329
Additional paid in capital 14,832 14,832
Retained earnings 8,261,301 8,254,588
------------ ------------
11,432,087 11,394,749
------------ ------------
Long-term debt 9,000,000 9,000,000
------------ ------------
Current liabilities:
Note payable 8,930,000 7,330,000
Accounts payable and accrued liabilities 1,127,046 1,249,576
------------ ------------
Total current liabilities 10,057,046 8,579,576
------------ ------------
Customers' advances for construction 607,288 611,413
Contributions in aid of construction 3,303,759 3,209,589
Accumulated provision for pension and postretirement benefits 245,557 245,557
Regulatory liability - income taxes refundable 111,768 111,768
Deferred income taxes 3,323,097 3,334,122
------------ ------------
7,591,469 7,512,449
------------ ------------
$ 38,080,602 $ 36,486,774
============ ============
The accompanying notes are an integral part of
these consolidated financial statements.
3
BIW Limited
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended September 30,
Cash flows from operating activities: 2007 2006
------------ ------------
Net income $ 576,070 $ 295,543
------------ ------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 827,110 806,253
Amortization of deferred income, net of tax -- (242)
Deferred income taxes (11,025) (11,025)
Increases and decreases in assets and liabilities:
Accounts receivable and accrued utility revenue (463,186) 40,419
Materials and supplies (108,119) (52,038)
Prepayments (116,017) (84,927)
Accounts payable and accrued expenses (122,530) 686,633
------------ ------------
Total adjustments 6,233 1,385,073
------------ ------------
Net cash flows provided by operating activities 582,303 1,680,616
------------ ------------
Cash flows from investing activities:
Capital expenditures - utility plant (1,730,708) (2,450,580)
Capital expenditures - other property (320) (23,683)
Sale of utility plant 1,927 14,610
Sale of other property 68,593 --
Other assets and deferred charges, net 16,937 (158,378)
------------ ------------
Net cash flows used in investing activities (1,643,571) (2,618,031)
------------ ------------
Cash flows from financing activities:
Dividends paid (569,357) (850,210)
Exercise of stock options 30,625 137,625
Advances on line of credit 1,600,000 1,650,000
------------ ------------
Net cash flows provided by financing activities 1,061,268 937,415
------------ ------------
Net change in cash & cash equivalents -- --
Cash & cash equivalents, beginning -- --
Cash & cash equivalents, ending $ 0 $ 0
============ ============
Supplemental disclosure of cash flow formation:
Cash paid for
Interest $ 839,340 $ 726,708
Income taxes 9,000 12,781
Supplemental disclosure of non-cash investing activities:
Birmingham Utilities receives contributions of
plant from builders and developers. These contributions
of plant are reported in utility plant and in customers'
advances for construction. The contributions are deducted
from construction expenditures by BUI
Gross plant, additions 1,820,753 2,613,277
Customers' advances for construction (90,045) (162,697)
------------ ------------
Capital expenditures, net $ 1,730,708 $ 2,450,580
============ ============
The accompanying notes are an integral part of
these consolidated financial statements.
4
BIW Limited
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BIW Limited (BIW or the Company) is the parent company of (i) Birmingham
Utilities, Inc. and its wholly-owned subsidiary Eastern Connecticut Regional
Water Company, Inc. (Eastern Division), (collectively BUI or Birmingham
Utilities), a regulated public water service company that provides water service
to customers in various cities and towns in Connecticut and (ii) Birmingham H2O
Services, Inc. (BHS or H2O Services), which provides non-regulated water-related
services to other water utilities, municipalities, contractors and individuals
throughout Connecticut.
Birmingham Utilities is subject to the jurisdiction of the Connecticut
Department of Public Utility Control (DPUC) as to accounting, financing,
ratemaking, disposal of property, the issuance of long-term securities and other
matters affecting its operations. The Connecticut Department of Public Health
(the Health Department or DPH) has regulatory powers over BUI under state law
with respect to water quality, sources of supply, and the use of watershed land.
The Connecticut Department of Environmental Protection (DEP) is authorized to
regulate BUI's operations with regard to water pollution abatement, diversion of
water from streams and rivers, safety of dams and the location, construction and
alteration of certain water facilities. BUI's activities are also subject to
regulation with regard to environmental and other operational matters by
federal, state and local authorities, including, without limitation, zoning
authorities.
In addition, Birmingham Utilities is subject to regulation of its water
quality under the Federal Safe Drinking Water Act (SDWA). The United States
Environmental Protection Agency has granted to the Health Department the primary
enforcement responsibility in Connecticut under the SDWA. The Health Department
has established regulations containing maximum limits on contaminants, which
have or may have an adverse effect on health.
NOTE 1 - QUARTERLY FINANCIAL DATA
The accompanying consolidated financial statements of BIW Limited have been
prepared in accordance with accounting principles generally accepted in the
United States of America, without audit, except for the Balance Sheet for the
year ended December 31, 2006, which has been audited. The interim financial
information conforms to the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X and, as applied in the case of rate-regulated public utilities,
complies with the Uniform System of Accounts and ratemaking practices prescribed
by the DPUC. In management's opinion, these consolidated financial statements
include all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the results of operations for the interim
periods presented. Certain information and footnote disclosures required by
5
accounting principles generally accepted in the United States of America have
been omitted, pursuant to such rules and regulations; although the Company
believes that the disclosures are adequate to make the information presented not
misleading.
In the first quarter of 2006, the Company adopted Statement of Financial
Accounting Standards No. 123R, "Share-Based Payment" (SFAS 123R) using the
modified prospective method. Under the modified prospective method, compensation
cost is recognized for all share-based payments granted after the adoption of
SFAS 123R and for all awards granted to employees prior to the adoption date of
SFAS 123R that were unvested on the adoption date. Accordingly, no restatements
were made to prior periods. Prior to the adoption of SFAS 123R, the Company
applied Statement of Financial Accounting Standards No. 123, "Accounting for
Stock Based Compensation" (SFAS 123) to account for its stock option plans. As
permitted by SFAS 123, the Company had chosen to apply Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" in accounting
for its employee stock compensation plans. Accordingly, no compensation expense
was recognized for its employee stock option issuances, as stock options were
issued with an exercise price at least equal to the closing price at the date of
grant.
In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans, an Amendment of FASB
Statements No. 87, 88, 106, and 132(R)" (SFAS 158). SFAS 158 requires companies
to recognize the overfunded or underfunded status of a defined benefit
postretirement plan as an asset or liability in its balance sheet and to
recognize changes in the funded status in the year in which the changes occur
through comprehensive income. SFAS 158 also requires the funded status of a plan
to be measured as of the balance sheet date. The Company adopted the provisions
of SFAS 158 effective December 31, 2006. The adoption of SFAS 158 did not have a
material impact on the Company's financial statements.
For further information, refer to the financial statements and accompanying
footnotes included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2006.
Birmingham Utilities' business of selling water is to a certain extent
seasonal because water consumption normally increases during the warmer summer
months. Another factor affecting the comparability of various accounting periods
includes the timing of rate increases. In addition, H2O Services' business
activities slow in the winter months. Accordingly, annualization of the results
of operations for the three and nine months ended September 30, 2007 and 2006
would not necessarily accurately forecast the annual results of each year.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of BIW Limited
and its wholly owned subsidiaries Birmingham Utilities, Inc. and Birmingham H2O
Services, Inc. All significant intercompany balances and transactions have been
eliminated in consolidation.
6
NOTE 3 - PLAN OF MERGER
On June 29, 2007, BIW Limited entered into an Agreement and Plan of Merger
with South Central Connecticut Regional Water Authority (RWA) and RWA 21, Ltd.
The Agreement and Plan of Merger provides that, upon the terms and subject to
the conditions set forth in the Agreement and Plan of Merger, RWA 21, Ltd. will
merge with and into BIW Limited, and BIW Limited will become a wholly-owned
subsidiary of RWA. At the effective time and as a result of the merger, each
share of BIW Limited common stock that is outstanding at the effective time of
the merger will be converted into the right to receive $23.75 in cash, resulting
in aggregate consideration of approximately $40 million. On June 29, 2007, in
connection with the Agreement and Plan of Merger, BIW, Eastern Connecticut
Regional Water Company, Inc. (ECRWC), an indirect, wholly-owned subsidiary of
BIW Limited, and The Connecticut Water Company (CWC) entered into an Asset
Purchase Agreement pursuant to which CWC agreed to purchase certain assets and
to assume certain liabilities of ECRWC including assets that RWA is not lawfully
permitted to acquire in connection with the merger. The purchase price for these
assets is $3,490,000 to be paid in cash. The closing of the sale of assets
pursuant to the Asset Purchase Agreement is conditioned upon the simultaneous
consummation of the merger pursuant to the Agreement and Plan of Merger. On July
13, 2007, the Company filed a joint application with RWA and CWC to the DPUC
requesting approval of the transaction. The transaction was approved by the
Company's shareholders on September 26, 2007, and by the Representative Policy
Board of RWA on September 20, 2007. The DPUC issued a Draft Decision on October
23, 2007 approving the transaction. A final decision is expected to be issued on
November 16, 2007. The merger transaction is scheduled to close on or about
January 15, 2008.
NOTE 4- WATER SERVICE RATE INCREASE
On November 27, 2006, the DPUC granted Birmingham Utilities a 16.2 percent
water service rate increase designed to provide a $1,172,148 annual increase in
revenues and a 10.2 percent ratemaking cost of common equity. The rate order
allowed BUI to combine its Ansonia and Eastern divisions for ratemaking
purposes.
In October 2005, the Ansonia division of Birmingham Utilities filed an
application with the DPUC for a 4.4%, $258,655 water service rate increase to
account specifically for increases in purchased water costs and property taxes.
This limited rate filing is allowed under Section 16-32c of the Connecticut
General Statutes. The DPUC granted BUI's request in its entirety in January
2006.
NOTE 5 - CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING- DILUTED
The following table summarizes the number of common shares used in the
calculation of earnings per share.
7
Nine Months Ended Three Months Ended
9/30/07 9/30/06 9/30/07 9/30/06
--------- --------- --------- ---------
Weighted average shares outstanding
for earnings per share, basic 1,675,971 1,666,163 1,678,709 1,672,786
Incremental shares from assumed
conversion of stock options 8,833 11,579 14,302 7,663
--------- --------- --------- ---------
Weighted average shares outstanding
for earnings per share, diluted 1,684,804 1,677,742 1,693,011 1,680,449
========= ========= ========= =========
NOTE 6 - PENSION AND OTHER POSTRETIREMENT BENEFITS
Net periodic pension and other postretirement benefit costs include the
following components:
Pension Benefits Postretirement Benefits
for the nine months for the nine months
ended September 30, ended September 30,
2007 2006 2007 2006
-------- -------- -------- --------
Components of net periodic benefit cost:
Service cost $ 55,263 $ 51,996 $ 21,909 $ 21,837
Interest cost 90,801 89,211 35,853 33,369
Expected return on plan assets (78,369) (68,550) (39,441) (34,542)
Amortization of unrecognized
transition obligation 4,404 4,404 19,035 19,035
Amortization of unrecognized
prior service cost 3,879 3,879 -- --
Recognized net actuarial loss (gain) -- 2,859 -- (147)
-------- -------- -------- --------
Net periodic benefit cost $ 75,978 $ 83,799 $ 37,356 $ 39,552
======== ======== ======== ========
NOTE 7 - CONTINGENCIES
In the ordinary course of business, the Company is subject to claims and legal
proceedings. In the opinion of management, these matters will not have a
material adverse impact on the operations of the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's Discussion and Analysis of the Financial Condition and Results
of Operations contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 2006 should be read in conjunction with the comments below.
Birmingham Utilities, a regulated public water service company, collects
and distributes water for domestic, commercial and industrial uses and fire
protection in the
8
Naugatuck Valley towns of Ansonia, Derby and small parts of Seymour,
Connecticut. The Company refers to this operation as its Ansonia Division. Water
service is also provided for domestic and commercial use in 33 satellite water
operations in 16 towns in eastern Connecticut, which form BUI's Eastern
Division. This division, which was acquired in 2003, was the former Eastern
Connecticut Regional Water Company, Inc.
H2O Services, the Company's non-regulated subsidiary, offers a consumer
protection program for residential service lines and provides water related
services to other water utilities, municipalities, contractors and individuals
throughout Connecticut. H2O Services operates from both the Ansonia and Eastern
Divisions. Non-regulated operations from the Ansonia Division principally relate
to construction activities including the installation of water mains, services
and other water related infrastructure. Non-regulated operations at the Eastern
Division principally relate to the operation of other water systems not owned by
the Company through contract operations.
CAPITAL RESOURCES AND LIQUIDITY
Completion of Birmingham Utilities' Long Term Capital Improvement Program
will be funded from the internal generation of funds, including rate relief, as
well as the Company's ability to raise capital from external sources. For the
nine months ended September 30, 2007 and 2006, BUI's additions to utility plant,
net of customer advances, were $1,730,708 and $2,450,580 respectively (See
Statement of Cash Flows).
Birmingham Utilities has outstanding a series of first mortgage bonds in
the amount of $9,000,000 due in April 2011, issued under its Mortgage Indenture.
The bonds carry an interest rate of 5.21%. The terms of the indenture provide,
among other things, limitations on (a) payment of cash dividends; and (b)
incurrence of additional bonded indebtedness. Interest is payable semi-annually
on the 15th day of April and October.
Note Payable consists of a $7,000,000 1-year, unsecured line of credit,
which was renewed in August 2006, increased to $9,000,000 in October 2006, and
will expire in December 2007. During the revolving period, Birmingham Utilities
can choose between variable rate options of 30, 60, 90 or 180-day LIBOR plus 100
basis points or prime. BUI is required to pay only interest during the revolving
period. The principal is payable in full at maturity. The line of credit
requires the maintenance of certain financial ratios and net worth of
$7,500,000. BUI was in compliance with all covenants as of September 30, 2007.
The Company anticipates that it will be able to extend the maturity date of the
line of credit to the January 2008 closing date of the proposed merger
transaction with RWA.
Results of Operations for the nine months and three months ended
- ----------------------------------------------------------------
September 30, 2007 and 2006
- ---------------------------
Net Income
- ----------
9
Net income for the nine months ended September 30, 2007 was $576,070
compared with $295,543 for the same 2006 period. The increase is due to the
16.2% rate increase granted to Birmingham Utilities, which became effective on
November 27, 2006. Net income for the three months ended September 30, 2007 was
$329,728 compared with $155,587 for the comparable 2006 period due to the rate
increase.
Operating Revenues
- ------------------
Operating revenues for the first nine months of 2007 of $7,835,089 were
14.4% or $987,724 above the comparable 2006 period. An increase of $891,253 for
the regulated operations due to the 16.2% rate increase along with higher
revenues from H2O Services of $96,471 accounts for the increase. H2O Services
had increased revenues of $96,471 for the first nine months of 2007 due to
higher revenues of $97,833 in the Eastern Division attributable to an increased
demand for services.
Operating revenues for the three months ended September 30, 2007 were
$629,685 or 26% above the comparable 2006 period. The increase of $421,552 for
the regulated operations is primarily due to the 16.2% rate increase. H2O
Services had higher revenues of $208,133 for the three month period ended
September 30, 2007 as compared with the same period in 2006. The timing of
contract work in the Naugatuck Valley as well as more contract work in the
Eastern Division accounts for the increase.
Operating and Maintenance Expenses
- ----------------------------------
Operating and Maintenance expenses for the first nine months of 2007 of
$4,923,582 were $337,975 or 7% higher than operating and maintenance expenses of
$4,585,607 recorded in the first nine months of 2006. Increased energy costs for
electric power as well as higher gasoline charges and higher purchased water
costs offset by lower salary expense due to a smaller workforce in the regulated
operations accounts for $58,000 of the increase while the balance of $280,000 is
attributable to increased costs associated with prevailing wage contract work
done by H2O Services. The operating and maintenance expenses for the three month
period ended September 30, 2007 are higher than the comparable 2006 period for
the same reasons.
Depreciation
- ------------
Depreciation expense of $827,110 for the first nine months of 2007 is
$20,857 higher than the comparable 2006 period, due to the similar levels of
plant additions and improvements made over the last two years. Depreciation
expense for the three month period ended September 30, 2007 was $10,859 higher
than the comparable 2006 period for the same reason as noted above.
Taxes Other Than Income Taxes
- -----------------------------
Taxes other than income taxes for the nine month period ended September 30,
2007 were $34,289 higher than the comparable 2006 period. Increased municipal
10
property taxes as a result of plant additions and improvements accounts for this
increase. Taxes other than income taxes for the three month period ended
September 30, 2007 were $15,916 higher than the comparable 2006 period for the
same reason as noted above.
Other Income
- ------------
Other income for the first nine months of 2007 was $33,125 lower than the
comparable period in 2006. Decreased AFUDC relating to decreased long- term
capital projects primarily in the third quarter is the reason for the decrease.
Other income for the three month period ended September 30, 2006 was $32,425
lower for the same reason as noted above.
Interest Expense
- ----------------
Interest expense of $817,266 recorded in the nine month period ended
September 30, 2007 was $160,482 higher than the comparable 2006 period.
Increased borrowings on the line of credit account for the difference. The
interest expense for the three month period ended September 30, 2007 was $12,592
higher than the same period in 2006 also due to increased borrowings offset by
lower interest rates in the third quarter of 2007 as compared to the same time
period in 2006.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has certain exposures to market risk related to changes in
interest rates. There have been no material changes in market risk since the
filing of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2006.
ITEM 4T - CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in the Company's Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and that such information is
accumulated and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure based on the definition of "disclosure
controls and procedures" in Rule 13a-15(e). In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.
The Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's Chief
Executive
11
Officer and the Company's Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as of September 30, 2007. Based on the foregoing, the Company's
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures were effective as of September 30, 2007.
There have been no changes in the Company's internal controls that have
materially affected, or are reasonably likely to materially affect the internal
controls over financial reporting during the quarter ended September 30, 2007.
PART II. OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders of the Company held on September 26, 2007,
four proposals were voted upon and approved by the Company's stockholders. A
brief discussion of each proposal voted upon at the Annual Meeting, and the
number of votes cast for, against and withheld, as well as the number of
abstentions to each proposal and broker non-votes are set forth below.
A vote was taken for the election of eight Directors of the Company to hold
office until the 2008 Annual Meeting. The aggregate numbers of shares of Common
Stock voted in person or by proxy for each nominee were as follows:
Nominee For Withheld
------------------- --------- --------
Mary Jane Burt 1,080,898 17,991
James E. Cohen 1,080,130 18,759
Betsy Henley-Cohn 987,843 111,046
Juri Henley-Cohn 986,355 112,534
Alvaro da Silva 1,080,669 18,220
B. Lance Sauerteig 1,080,667 18,222
Kenneth E. Schaible 1,080,769 18,120
John S. Tomac 989,366 109,523
A vote was taken on the proposal to ratify the appointment of Dworken, Hillman,
LaMorte & Sterczala, P.C. as the Company's independent registered public
accounting firm for the year ending December 31, 2007. The aggregate numbers of
shares of Common Stock voted in person or by proxy were as follows:
For Against Abstain
--------- ------- -------
1,061,508 5,033 32,349
A vote was taken on the proposal to approve an Agreement and Plan of Merger
dated as of June 29, 2007 among the South Central Connecticut Regional Water
Authority, RWA
12
21, Ltd. and BIW Limited. The aggregate numbers of shares of Common Stock voted
in person or by proxy were as follows:
Broker
For Against Abstain Non-Votes
--------- ------- ------- ---------
1,069,052 19,722 10,116 0
A vote was taken on the proposal to adjourn or postpone the annual meeting, if
necessary or appropriate to solicit additional proxies if there were
insufficient votes at the time of the annual meeting to approve the Agreement
and Plan of Merger. No such adjournment or postponement was necessary. The
aggregate numbers of shares of Common Stock voted in person or by proxy were as
follows:
Broker
For Against Abstain Non-Votes
--------- ------- ------- ---------
1,061,725 25,433 11,732 0
Except as noted above, there were no broker non-votes regarding the foregoing
proposals. The foregoing proposals are described more fully in the Company's
proxy statement dated August 15, 2007, filed with the Securities and Exchange
Commission pursuant to Section 14 (a) of the Securities Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
ITEM 5 - OTHER INFORMATION
On August 28, 2006, Birmingham Utilities renewed its unsecured line of
credit with Citizens Bank, which consisted of a $7,000,000 1-year, unsecured
line of credit. During the revolving period, Birmingham Utilities can choose
between variable rate options of 30, 60, 90 or 180-day LIBOR plus 100 basis
points or prime. Birmingham Utilities is required to pay only interest during
the revolving period. The principal is payable in full at maturity. The line of
credit requires the maintenance of certain financial ratios and net worth of
$7,500,000.
On October 30, 2006, the unsecured line of credit was amended to increase
the amount which can be borrowed to $9,000,000 and the term was extended until
September 2007. On September 28, 2007, the maturity date of the line was further
extended until December 28, 2007.
ITEM 6 - EXHIBITS
31.1 Certification of CEO pursuant to Section 302 of Sarbanes Oxley Act.
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31.2 Certification of CFO pursuant to Section 302 of Sarbanes Oxley Act.
32.1 Certification of CEO and CFO pursuant to Section 906 of Sarbanes Oxley
Act.
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.
BIW Limited
Registrant
Date: November 14, 2007
By: /s/ John S. Tomac
----------------------------
John S. Tomac, President
(Duly authorized officer, and
chief financial officer)
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