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8-K - FORM 8-K - CONNECTICUT WATER SERVICE INC / CTd259862d8k.htm

Exhibit 99.1

 

Connecticut Water Service, Inc.

93 West Main Street

Clinton, Connecticut 06413-1600

  LOGO

Mid-Year Report

September 2016

Dear Shareholders:

This past May, Connecticut Water Service, Inc.’s (CTWS) Board of Directors increased the annual dividend rate on our common shares by 6 cents to $1.13 per share, which was an increase of 5.6% above the previous annualized cash dividend. Further, this increase also accelerated the timing of the annual increase, which has historically occurred in the third quarter of the year. That acceleration, combined with the increase, projects to a 6.2% increase in actual cash dividends paid in the year ended, December 31, 2016 versus 2015. The dividend increase on common shares became effective with the quarterly cash dividend payment of $0.2825 per common share that was paid on June 15, 2016.

The cash dividend increase, the largest since the Company was founded 60 years ago, affirms the Board of Directors’ confidence that our long-term strategy of growth through prudent acquisitions, infrastructure investment, and providing world-class service to our customers will continue to deliver solid financial performance. CTWS has a proud track record of increasing its cash dividend payment in each of the last 47 years and has paid a dividend without interruption or reduction in every quarter since its founding in 1956.

For the six month period ending June 30, 2016, we reported earnings of $1.19 per share, on Net Income of $13.1 million, compared to $1.07 per share, on Net Income of $11.8 million, reported for the comparable period of 2015. The Company saw an increase in revenues related to recovery of costs for completed infrastructure replacement projects through the Water Infrastructure and Conservation Adjustment (WICA) in Connecticut and the Water Infrastructure Charge (WISC) in Maine, as well as a general rate increase in Maine’s Biddeford Saco division. In addition, Net Income from Water Operations for the six month period was positively impacted in 2016 and 2015 by one-time items. Net Income increased $1.8 million in the first six months of 2016 compared to 2015 after removing the one-time items.

Installation has been completed on the 5-mile long pipeline to serve UConn and Mansfield. When the pipeline is placed in service it will bring additional water supply to the University of Connecticut’s Storrs Campus (UConn) and the town of Mansfield. The Connecticut Water Company (Connecticut Water) will have the ability to supply an average of 1.2 million gallons per day to UConn and the town of Mansfield to meet the long-term growth plans of the community.

On July 10, CTWS filed an application with the Connecticut Public Utilities Regulatory Authority (PURA) to acquire the Heritage Village Water Company (HVWC). HVWC serves 4,700 water and 3,000 wastewater customers in the Connecticut towns of Middlebury, Oxford, and Southbury. HVWC owns and operates the only investor wastewater utility regulated by PURA.

For additional information about these matters, please visit the Company’s website at www.ctwater.com. The ‘News’ section provides access to our news releases. E-mail alerts are available for news releases, end of the day stock quotes, SEC filings, events and presentations, and when new investor related items are posted to the Web site. You may sign-up for the alerts at http://ir.ctwater.com/investors/investor-resources/email-alerts/default.aspx.

On behalf of the passionate and dedicated professionals who work hard to keep your company successful, I thank you for your continued support.

Very truly yours,

 

LOGO

Eric W. Thornburg

Chairman, President and CEO


Connecticut Water Service, Inc. & Subsidiaries

Selected Income Statement Information (unaudited)

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
(In thousands except per share amounts)    2016      2015      2016      2015  

Operating Revenues

   $ 26,055       $ 26,624       $ 47,607       $ 46,654   

Other Water Activities Revenues

     321         343         624         653   

Real Estate Revenues

                               

Service and Rentals Revenues

     1,212         1,463         2,443         2,825   
  

 

 

 

Total Revenues

   $ 27,588       $ 28,430       $ 50,674       $ 50,132   
  

 

 

 

Operating Expenses

   $ 15,026       $ 16,875       $ 32,555       $ 32,740   

Other Utility Income, Net of Taxes

   $ 188       $ 205       $ 343       $ 360   

Total Utility Operating Income

   $ 11,217       $ 9,954       $ 15,395       $ 14,274   

Gain on Property Transactions, Net of Taxes

   $       $       $       $   

Non-Water Sales Earnings (Services and Rentals), Net of Taxes

   $ 406       $ 375       $ 801       $ 744   

Net Income

   $ 9,943       $ 8,675       $ 13,091       $ 11,778   

Net Income Applicable to Common Shareholders

   $ 9,933       $ 8,665       $ 13,072       $ 11,759   

Basic Earnings Per Average Common Share

   $ 0.90       $ 0.79       $ 1.19       $ 1.07   

Diluted Earnings Per Average Common Share

   $ 0.89       $ 0.77       $ 1.17       $ 1.05   

Basic Weighted Average Common Shares Outstanding

     11,004         10,958         10,998         10,941   

Diluted Weighted Average Common Shares Outstanding

     11,223         11,157         11,217         11,151   

Book Value Per Share

   $ 20.52       $ 19.36       $ 20.52       $ 19.36   

Condensed Consolidated Balance Sheets (unaudited)

 

(In thousands)    June 30, 2016      June 30, 2015  

ASSETS

     

Net Utility Plant

   $ 568,406       $ 515,367   

Current Assets

     30,941         35,704   

Other Assets

     145,894         142,730   
     

Total Assets

   $ 745,241       $ 693,801   

CAPITALIZATION AND LIABILITIES

     

Shareholders’ Equity

   $ 230,439       $ 216,186   

Preferred Stock

     772         772   

Long-Term Debt

     200,861         177,302   

Current Liabilities

     30,273         24,905   

Other Liabilities and Deferred Credits

     282,896         274,636   

Total Capitalization and Liabilities

   $ 745,241       $ 693,801   

 

    

Equity Type

  

Record Date

  

Payable Date

  

Rate

Dividends

Declared

  

Common (NASDAQ GS:CTWS)

  

September 1, 2016

  

September 15, 2016

   $0.2825
  

Preferred A (OTC: CTWSO)

  

October 3, 2016

  

October 14, 2016

   $0.20
  

Preferred 90 (OTC:CTWSP)

  

October 19, 2016

  

November 1, 2016

   $0.225
           
         
    

Declaration date

  

Record Date

  

Payable Date

    

Proposed Next

Common Stock

Dividend Date

   November 10, 2016    December 1, 2016    December 15, 2016   
                     

 

Connecticut Water Service, Inc.

93 West Main Street

Clinton, Connecticut 06413-1600

FAX (860) 669-5579

Shareholder Info: 860-664-6015

Website: www.ctwater.com

 

Stock Transfer Agent, Dividend Disbursing Agent and

Agent to Administer Dividend Reinvestment Plan

Broadridge Corporate Solutions, Inc.

1155 Long Island Avenue, Edgewood, NY 11717

1-888-205-0681

On-line information: http://shareholder.broadridge.com/ctwater