Exhibit 99.1
Southwest Water Company Reports 2005 Financial Results;
Revenues Increase 13%, Income from Continuing Operations up 56%
LOS ANGELES--(BUSINESS WIRE)--March 16, 2006--Southwest Water
Company (NASDAQ:SWWC) today reported revenue and earnings for the year
ended December 31, 2005.
2005 Financial Highlights, Compared with 2004:
-- Revenues increased 13% to $203.2 million from $179.6 million.
-- Operating income increased 61% to $18.1 million from $11.2
million.
-- Income from continuing operations increased 56% to $7.3
million from $4.7 million.
-- Diluted earnings per share, excluding a loss from discontinued
operations, increased 42% to $0.34 from $0.24.
-- Net income, which includes a loss from discontinued operations
of $4.9 million from the June 2005 sale of a sub-metering
subsidiary, was $2.4 million, or $0.11 per diluted share,
compared to $4.5 million, or $0.23 per diluted share.
-- Weighted average shares outstanding increased 11%, primarily
as a result of the company's Direct Stock Purchase Plan.
Anton C. Garnier, Southwest Water chairman and chief executive
officer, said, "We are very pleased with the company's 2005 operating
results. The Utility Group and the Services Group both contributed to
our strong performance by executing on our strategic objectives of
solid organic growth and the acquisition of profitable entities. We
would like to thank our employees for their dedication and hard work."
Operating income in the company's Utility Group increased $4.5
million to $27.1 million in 2005 compared with $22.6 million in 2004,
due largely to a full year of operations of Monarch Utilities,
acquired in mid-2004, organic customer growth and a reduction in the
average cost of water at the company's California utility. Operating
income in the Services Group increased by $3.7 million to $3.6 million
compared with a loss of $100,000 in the prior year, primarily due to
increased contract and project work and the acquisition of an
Alabama-based contract operations company. Corporate SG&A expenses
were $12.5 million, an increase from $11.2 million, and remained
constant at 6.2% of revenues.
Total company funded capital expenditures were $33 million in
2005, representing on-going investment in increasing the company's
utility rate base.
Additional Highlights of 2005:
-- Expanded the Services Group with the acquisition of Novus
Utilities, Inc., a Birmingham, Alabama-based contract
operations company.
-- Purchased a wastewater utility in a high growth area south of
Birmingham, Alabama.
-- Signed more than 40 new service contracts, including a $7
million annual contract in Burbank, California, to operate and
maintain an environmental remediation water treatment plant.
-- Continued organic customer growth in the New Mexico and Texas
utility service areas.
-- Doubled the company's credit capacity with a $100 million line
of credit.
-- Declared a 10% increase in the common share quarterly cash
dividend rate, along with a 5% stock dividend.
Business Outlook
Garnier, commenting on the company's business outlook for 2006,
stated, "Looking forward to 2006, assuming normalized weather across
our geographic footprint, we anticipate revenue growth of 4% to 6% and
net income growth of 10% to 15% from 2005 income from continuing
operations. We believe our revenue mix will remain approximately 40%
from the Utility Group and 60% from the Services Group. We will
continue to invest in our infrastructure, with company funded capital
expenditures expected to be approximately $30 million. We anticipate
our tax rate for 2006 to be 35%."
Conference Call
The company will provide more detail regarding its 2005 results
and 2006 business outlook in a conference call and Web cast to be held
today, March 16, 2005, at 4:30 p.m. Eastern time (1:30 p.m. 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,
including water production, treatment and distribution; wastewater
collection and treatment; utility billing and collection; utility
infrastructure construction management; and public works services. The
company owns regulated public utilities and also serves cities,
utility districts and private companies under contract. More than two
million people 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 and 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 2004 Annual Report on Form 10-K
and 2005 Annual Report on Form 10-K that the company anticipates
filing shortly. The company assumes no obligation to update these
forward-looking statements to reflect any change in future events.
FINANCIAL HIGHLIGHTS -- SOUTHWEST WATER COMPANY
(unaudited and in thousands, except per share amounts)
Three Months Ended Years Ended
December 31, December 31,
2005 2004 2005 2004
--------------------------------------
Operating revenues $ 52,000 $45,501 $203,181 $179,595
Operating income 4,030 942 18,134 11,244
Income from continuing
operations 1,377 (80) 7,301 4,673
Net income (loss) 1,377 (410) 2,399 4,534
Diluted earnings (loss) per
common share:
Income from continuing
operations $ 0.06 $ 0.00 $ 0.34 $ 0.24
Net Income $ 0.06 $ (0.02) 0.11 0.23
Weighted average outstanding
common shares:
Diluted 22,591 21,244 21,611 19,413
NOTE: Per share amounts and weighted average outstanding common shares
reflect a 5% stock dividend on January 1, 2006.
CONSOLIDATED BALANCE SHEET INFORMATION
December 31, December 31,
2005 2004
-------------------------------
Current assets $ 47,746 $ 58,091
Property, plant and equipment, net 344,821 301,835
Total assets $ 444,725 $ 404,809
Current liabilities $ 40,579 $ 35,873
Long-term debt 117,603 115,827
Contributions in aid of construction 94,660 89,623
Stockholders' equity 145,253 126,198
Total liabilities and stockholders'
equity $ 444,725 $ 404,809
CONTACT: Southwest Water Company
DeLise Keim, 213-929-1800
www.swwc.com
or
PondelWilkinson Inc.
Robert Jaffe, 310-279-5969
www.pondel.com