Exhibit 99.1
Southwest Water Company Reports Second Quarter 2007 Results
LOS ANGELES--(BUSINESS WIRE)--Aug. 9, 2007--Southwest Water
Company (NASDAQ:SWWC), a leading provider of water, wastewater and
public works services, today reported financial results for the second
quarter ended June 30, 2007.
For the quarter, revenues increased 1% to $55.0 million from $54.3
million in the second quarter of 2006. Operating income rose 12% to
$5.5 million compared with $5.0 million in prior year second quarter.
Net income was up 22% to $2.2 million, or $0.09 per diluted share,
compared to $1.8 million, or $0.08 per diluted share, in the same
quarter of 2006. Weighted average diluted shares outstanding increased
4% to 24.4 million.
"This quarter's results were dominated by weather patterns," said
Mark A. Swatek, Southwest Water chief executive officer and chairman.
"In California, warm, dry weather drove higher water consumption, and
in Texas, record wet weather reduced water consumption at our
utilities and limited the amount of construction and repair work our
Services Group could perform."
Utility Group Results
In the Utility Group, revenues were up 13% to $24.0 million from
$21.2 million in the second quarter of 2006, which include
intersegment revenues of $438,000 and $384,000, respectively. This
increase was primarily due to higher consumption in California as well
as rate increases implemented in the second half of 2006 in California
and in one of the company's Texas utilities. Operating income
increased to $8.6 million compared with $8.4 million in the second
quarter 2006.
Services Group Results
Services Group revenues were down 10% to $37.0 million from $41.2
million in the 2006 second quarter, which include intersegment
revenues of $6.3 million and $9.6 million, respectively. This decrease
was primarily due to reduced field work in Texas as a result of wet
weather throughout the quarter, a slow down in housing construction
and a reduction in the company's contract base in its southeast
division. Operating income for the quarter increased to $744,000 from
$604,000 in 2006.
SG&A and Capital Expenditures
Consolidated selling, general and administrative (SG&A) expenses
for the quarter were $9.3 million versus $9.2 million in the second
quarter of 2006. Included in SG&A is $200,000 of legal costs
associated with the condemnation litigation against the company's New
Mexico utility. According to New Mexico statute, the company will be
entitled to reimbursement of these costs if the company prevails in
the legal actions.
Additionally, SG&A includes $400,000 of costs related to a
company-wide initiative to implement a single, integrated operating
system. "The company's current operating systems are inefficient,
costly to operate and make data consolidation time-consuming," said
Swatek. "This initiative will take time and significant investment,
but we believe that with this new technology we can implement best
business practices across the company, enhance customer service and
create a competitive advantage for our Services Group." He noted that
the majority of the expenditures related to this initiative will be
capitalized, though certain costs will be expensed as incurred.
Total company funded capital expenditures were $9.6 million in the
quarter, including $2.4 million related to the operating system
project, compared to $9.1 million in the second quarter of 2006.
Six Month Results
For the six months ended June 30, 2007 compared with June 30,
2006; revenues were $103.0 million versus $103.9 million, operating
income grew to $8.5 million from $8.0 million and net income rose to
$2.8 million from $2.6 million.
Conference Call
The company will provide more detail regarding its second quarter
operating results in a conference call and web cast to be held today,
August 9, 2007, at 4:30 p.m. Eastern time (1:30 p.m. Pacific). The
conference call can be accessed on the company's website 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
website. A telephonic replay will also be available beginning at 6:30
p.m. Eastern (3:30 p.m. Pacific) until midnight August 16, 2007 at
888-286-8010 (international callers 617-801-6888), passcode 25024994.
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 in 10 states depend on Southwest Water for
high-quality, reliable service. Additional information may be found on
the company's website: 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 under the caption "Risk Factors" in the company's 2006
Annual Report on Form 10-K. 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 Six Months Ended
June 30, June 30,
2007 2006 2007 2006
--------------------------------------
Operating revenues $54,975 $54,296 $103,049 $103,890
Operating income 5,547 4,960 8,490 7,977
Net income 2,223 1,816 2,837 2,588
Diluted earnings per common
share $0.09 $0.08 $0.12 $0.11
Weighted average outstanding
common shares (diluted) 24,386 23,451 24,301 23,338
CONSOLIDATED BALANCE SHEET INFORMATION
June 30, December 31,
2007 2006
------------------------
Current assets $45,803 $48,257
Property, plant and equipment, net 411,685 389,625
Total assets $511,319 $491,693
Current liabilities $32,149 $35,830
Long-term debt 143,629 128,624
Contributions in aid of construction 113,708 110,024
Stockholders' equity 170,376 166,527
Total liabilities and stockholders' equity $511,319 $491,693
CONTACT: Southwest Water Company
DeLise Keim, 213-929-1846
VP Corporate Communications
www.swwc.com
or
PondelWilkinson Inc.
Robert Jaffe, 310-279-5969
www.pondel.com