Exhibit 99.1
Southwest Water Company Reports First Quarter 2004 Financial Results
LOS ANGELES--(BUSINESS WIRE)--May 11, 2004--Southwest Water
Company (Nasdaq:SWWC) today reported its financial performance for the
first quarter of 2004.
First Quarter 2004 Highlights, Compared with First Quarter 2003:
-- Revenues increased 10 percent to $39.7 million from $36.1
million.
-- Operating income rose 1 percent to $933,000 from $918,000.
-- The company recorded net income of $18,000, or $0.00 per
diluted share, versus a net loss of $149,000, or $0.01 per
diluted share.
Anton C. Garnier, Southwest Water chairman and chief executive
officer, said, "We achieved an overall increase in first quarter
revenues despite an unusually long period of heavy rainfall in Texas,
which significantly restricted our ability to perform billable outdoor
work. For example, rainfall in the Houston region was 38 percent above
normal in the first quarter of 2004, compared to 20 percent below
normal a year ago. Historically, the first quarter of each year is the
lowest in terms of our revenue as cool, wet weather tends to reduce
water sales and outdoor billable work.
"Despite the weather's impact, our Services Group recorded an
increase in first quarter revenues compared to last year as a result
of an ongoing infrastructure construction project in California and
the impact of a new operations contract in Mississippi, which we were
awarded in June 2003. In our Utility Group, first quarter revenues
benefited from water rate increases at our California and Texas
utility subsidiaries, which went into effect in 2003, coupled with
small increases in water consumption and number of customers."
Garnier continued, "Operating income increased modestly during the
first quarter of 2004 as compared to the same period a year ago, and
we recorded net income in 2004 as opposed to a net loss in 2003.
However, several factors besides the weather's adverse impact combined
to temper our profitability in the first quarter of this year. First
quarter selling, general and administrative expenses rose 5 percent as
compared to the prior year as we incurred increased costs related to
audit and legal services, facility rental, employee benefits and
compliance with provisions of the Sarbanes-Oxley Act. Also in the
first quarter of 2004 we wrote off certain construction-related
receivables and accrued a loss on a contract involving the
rehabilitation of a wastewater treatment plant.
"Earlier this month, we announced the signing of a purchase
agreement to acquire two water and wastewater utility companies from
Tecon Water Holdings, L.P. We are excited about this expansion of our
Utility Group as it marks a significant step in our strategic plan for
long-term growth. We expect to finalize the acquisition in the third
quarter of 2004, pending regulatory approval."
Garnier concluded, "Looking ahead, our efforts are focused on the
integration plan for the Tecon utilities acquisition, continued
application of operating expense controls and development of
additional growth opportunities in both the Utility Group and the
Services Group."
Conference Call
The company will discuss its first quarter 2004 results and its
pending acquisition in a conference call and Web cast to be held
today, May 11, 2004, at 4:30 PM Eastern time (1:30 PM Pacific). The
conference call can be accessed on the company's Web site at
www.swwc.com. For those unable to participate in the live Web cast, a
replay will be available shortly after the call on the company's Web
site.
Southwest Water Company provides a broad range of services: water
production, treatment and distribution; wastewater collection and
treatment; public works services; utility billing and collection; and
utility infrastructure construction management. The company owns
regulated public utilities and also serves cities, utility districts
and private companies under contract. More than two million people in
35 states from coast to coast depend on Southwest Water for
high-quality, reliable service. Additional information may be found on
the company's Web site: www.swwc.com.
This document contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements, including expectations relating to future revenues and
income, the company's ability to gain new business and control costs,
involve risks and uncertainties, as well as assumptions that, if they
prove incorrect or never materialize, could cause the results of the
company to differ materially from those expressed or implied by such
forward-looking statements. Actual results may differ materially from
these expectations due to changes in regulatory, political, weather,
economic, business, competitive, market, environmental and other
factors. More detailed information about these factors is contained in
the company's filings with the Securities and Exchange Commission,
including the company's 2003 Annual Report on Form 10-K. The company
assumes no obligation to update these forward-looking statements.
FINANCIAL HIGHLIGHTS -- SOUTHWEST WATER COMPANY
(unaudited and in thousands, except per share amounts)
Three Months Ended
March 31,
2004 2003
-------------------
Operating revenues $39,727 $36,114
Operating income 933 918
Net income (loss) 18 (149)
Income (loss) per common share:
Diluted $0.00 ($ 0.01)
Weighted average outstanding
common shares:
Diluted 15,686 13,028
NOTE: Per share amounts and weighted average outstanding common
shares reflect a 4-for-3 stock dividend on January 1, 2004.
CONSOLIDATED BALANCE SHEET INFORMATION
March 31, December 31,
2004 2003
-----------------------
Current assets $32,820 $35,394
Property, plant and equipment, net 222,856 219,519
Total assets $297,109 $296,222
Current liabilities $27,471 $31,389
Long-term debt 55,007 73,102
Contributions in aid of construction 82,542 81,556
Stockholders' equity 101,658 79,667
Total liabilities and stockholders' equity $297,109 $296,222
CONTACT: Southwest Water Company, Los Angeles
Richard J. Shields, 213-929-1800
www.swwc.com
or
PondelWilkinson Inc., Los Angeles
Cecilia Wilkinson or Robert Jaffe, 323-866-6089 or
323-866-6007
www.pondel.com