Exhibit 99.1
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NEWS RELEASE
CALIFORNIA WATER SERVICE GROUP
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1720 North First Street
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April 29, 2009 |
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San Jose, CA 95112-4598
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For Immediate Release |
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Contact:
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Marty Kropelnicki (408) 367-8200 (analysts) |
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Shannon Dean (310) 257-1435 (media) |
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CALIFORNIA WATER SERVICE GROUP ANNOUNCES
FIRST QUARTER 2009 RESULTS
SAN JOSE, CA — California Water Service Group (NYSE: CWT) today announced net income of $2.4
million and earnings per share of $0.12 for the first quarter of 2009, compared to net income of
$0.2 million and earnings per share of $0.01 for the first quarter of 2008.
Revenues increased by $13.7 million, or 19%, to $86.6 million, with rate increases adding
$11.6 million and sales to new customers adding $2.4 million. A decrease in usage and other changes
in revenue of $5.3 million were partially offset by an increase in revenue of $5.0 million due to
the net increase of the Water Revenue Adjustment Mechanism (WRAM) and Modified Cost Balancing
Account (MCBA) that went into effect July 1, 2008.
Total operating expenses for the first quarter of 2009 increased $12.2 million, or 18%, to
$80.3 million. Water
production costs increased $3.5 million, or 14%, due to increased purchased
water costs and higher power costs. Administrative costs increased $5.4 million, or 41%, to $18.9
million, mainly due to higher benefit and legal expenses. Other production expenses increased $0.4 million, or 3%, to $12.5 million, as a result of increases
in expenses for pumping and transmission & distribution.
Maintenance expense increased 13%, or $0.5 million, to $4.6 million during the quarter,
primarily due to increased spending on main repairs. Depreciation expense increased $1.0 million,
or 11%, to $10.2 million due to increases in utility plant in 2008. Taxes other than income
increased $0.3 million, or 9%, to $4.1 million, primarily due to increases for property tax paid in
the first quarter.
Other income, net of income taxes, increased $0.6 million primarily due to a property sale
during the quarter — there were no property sales in the first quarter of 2008.
On April 17, 2009, California Water Service Company completed an offering of $100 million in
aggregate principal amount of its 5.875% First Mortgage Bonds due 2019, Series LL. Cal Water plans
to use a portion of the net proceeds from the sale of the bonds to pay down outstanding short-term
borrowings, and use the remainder of the proceeds to fund capital projects scheduled for 2009.
On April 8, 2009, Standard & Poor’s Rating Services assigned it “AA—” secured debt rating
and “1+” recovery rating to California Water Service Company’s First Mortgage Bonds. At the same
time, Standard & Poor’s affirmed its “A+” corporate credit rating on the Company. “We were pleased
to complete the debt offering and to receive the AA- rating on the $100 million First Mortgage
Bonds,” said President and Chief Executive Officer Peter C. Nelson. “While the credit markets have
been extremely volatile, the demand for Cal Water’s bonds was strong, and the “AA—” rating further
shows the financial strength of our Company,” Nelson said.
Nelson further noted that during the first quarter the Company has been preparing the 2009
general rate case (GRC) for Cal Water. It will be the first time in
the Company’s history that it files for all 24 regulated districts plus general office in the same
proceeding. In addition to the GRC filing, the Company is stepping up its water efficiency
program. With WRAM and MCBA in place, the Company can aggressively pursue water efficiency
programs and better support the State of California water efficiency goals.
All stockholders and interested investors are invited to listen to the 2009 first quarter
conference call on April 30, 2009, at 11:00 a.m. (EST), by dialing 1-866-847-7859 and keying in ID#
1347470. A replay of the call will
be available from 2:00 p.m. (EST) Thursday, April 30, 2009,
through June 29, 2009, at 888-266-2081, ID# 1347470. The call, which will be hosted by President
and CEO, Peter Nelson and Vice President and Chief Financial Officer, Martin A. Kropelnicki, will
also be webcast under the investor relations tab at www.calwatergroup.com.
California Water Service Group is the parent company of California Water Service Company,
Washington Water Service Company, New Mexico Water Service Company, Hawaii Water Service Company,
Inc., and CWS Utility Services. Together these companies provide regulated and non-regulated water
service to nearly 2 million people in 100 California, Washington, New Mexico, and Hawaii
communities. Group’s common stock trades on the New York Stock Exchange under the symbol “CWT”.
This news release contains forward-looking statements within the meaning established by the
Private Securities Litigation Reform Act of 1995 (“Act”). The forward-looking statements are
intended to qualify under provisions of the federal securities laws for “safe harbor” treatment
established by the Act. Forward-looking statements are based on currently available information,
expectations, estimates, assumptions and projections, and management’s judgment about the Company,
the water utility industry and general economic conditions. Such words as expects, intends, plans,
believes, estimates, assumes, anticipates, projects, predicts, forecasts or variations of such
words or similar expressions are intended to identify forward-looking statements. The
forward-looking statements are not guarantees of future performance. They are subject to
uncertainty and changes in circumstances. Actual results may vary materially
from what is contained in a forward-looking statement. Factors that may cause a result
different
than expected or anticipated include, but are not limited to: governmental and regulatory
commissions’ decisions; changes in regulatory commissions’ policies and procedures; the timeliness
of regulatory commissions’ actions concerning rate relief; new legislation; electric power
interruptions; increases in suppliers’ prices and the availability of supplies including water and
power; fluctuations in interest rates; changes in environmental compliance and water quality
requirements; acquisitions and our ability to successfully integrate acquired companies; the
ability to successfully implement business plans; changes in customer water use patterns; the
impact of weather on water sales and operating results; access to sufficient capital on
satisfactory terms; civil disturbances or terrorist threats or acts, or apprehension about the
possible future occurrences of acts of this type; the involvement of the United States in war or
other hostilities; restrictive covenants in or changes to the credit ratings on our current or
future debt that could increase our financing costs or affect our ability to borrow, make payments
on debt or pay dividends; and, other risks and unforeseen events. When considering forward-looking
statements, you should keep in mind the cautionary statements included in this paragraph, as well
as the annual 10-K, Quarterly 10-Q, and other reports filed from time-to-time with the Securities
and Exchange Commission (SEC). The Company assumes no obligation to provide public updates of
forward-looking statements.
Additional information is available at our Web site at www.calwatergroup.com.
Attachments (2).
###
Source: California Water Service Group
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
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March 31 |
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December 31 |
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2009 |
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2008 |
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ASSETS |
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Utility plant: |
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Utility plant |
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$ |
1,605,014 |
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$ |
1,583,079 |
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Less accumulated depreciation and
amortization |
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(482,235 |
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(470,712 |
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Net utility plant |
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1,122,779 |
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1,112,367 |
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Current assets: |
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Cash and cash equivalents |
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5,278 |
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13,869 |
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Receivables |
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Customers |
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18,216 |
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22,786 |
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Other |
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19,006 |
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12,071 |
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Unbilled revenue |
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12,472 |
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13,112 |
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Materials and supplies at average cost |
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5,068 |
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5,070 |
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Taxes, prepaid expense, and other assets |
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12,265 |
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12,890 |
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Total current assets |
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72,305 |
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79,798 |
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Other assets: |
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Regulatory assets |
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198,170 |
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198,293 |
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Goodwill |
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3,906 |
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3,906 |
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Other assets |
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25,148 |
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26,743 |
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Total other assets |
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227,224 |
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228,942 |
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$ |
1,422,308 |
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$ |
1,421,107 |
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CAPITALIZATION AND LIABILITIES |
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Capitalization: |
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Common stock, $.01 par value |
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$ |
207 |
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207 |
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Additional paid-in capital |
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214,236 |
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213,922 |
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Retained earnings |
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185,128 |
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188,820 |
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Total common stockholders’ equity |
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399,571 |
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402,949 |
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Preferred stock |
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— |
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Long-term debt, less current maturities |
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287,202 |
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287,498 |
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Total capitalization |
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686,773 |
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690,447 |
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Current liabilities: |
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Current maturities of long-term debt |
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2,891 |
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2,818 |
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Accounts payable |
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37,988 |
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41,772 |
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Notes payable |
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52,000 |
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40,000 |
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Accrued expenses and other liabilities |
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37,195 |
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38,606 |
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Total current liabilities |
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130,074 |
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123,196 |
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Unamortized investment tax credits |
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2,392 |
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2,392 |
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Deferred income taxes, net |
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74,283 |
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72,344 |
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Regulatory liability and other |
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83,234 |
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83,312 |
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Pension and postretirement benefits other
than pensions |
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150,074 |
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152,685 |
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Advances for construction |
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177,684 |
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176,163 |
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Contributions in aid of construction |
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117,794 |
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117,568 |
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Commitments and contingencies |
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$ |
1,422,308 |
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$ |
1,418,107 |
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CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)
For the three months ended:
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March 31, |
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March 31, |
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2009 |
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2008 |
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Operating revenue |
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$ |
86,613 |
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$ |
72,921 |
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Operating expenses: |
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Water production costs |
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28,868 |
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25,358 |
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Admistrative and General |
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18,861 |
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13,418 |
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Other operations |
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12,456 |
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12,065 |
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Maintenance |
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4,635 |
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4,114 |
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Depreciation and amortization |
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10,198 |
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9,222 |
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Income taxes |
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1,232 |
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174 |
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Property and other taxes |
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4,088 |
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3,739 |
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Total operating expenses |
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80,338 |
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68,090 |
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Net operating income |
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6,275 |
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4,831 |
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Other income and expenses: |
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Non-regulated revenue |
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2,881 |
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2,905 |
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Non-regulated expenses |
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(2,641 |
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(3,036 |
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Gain on sale of non-utility property |
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603 |
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Less: income tax (expense) benefit on other
income and expenses |
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(338 |
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49 |
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505 |
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(82 |
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Interest expense: |
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Interest expense |
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5,038 |
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5,014 |
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Less: capitalized interest |
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(679 |
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(450 |
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Total interest expense |
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4,359 |
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4,564 |
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Net income |
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$ |
2,421 |
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$ |
185 |
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Earnings per share |
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Basic |
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$ |
0.12 |
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$ |
0.01 |
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Diluted |
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$ |
0.12 |
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$ |
0.01 |
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Weighted average shares outstanding |
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Basic |
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20,730 |
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20,688 |
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Diluted |
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20,759 |
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20,711 |
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Dividends per share of common stock |
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$ |
0.29500 |
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$ |
0.29250 |
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