SAN JOSE, Calif.--(BUSINESS WIRE)--SJW Corp. (NYSE:SJW) today reported operating revenue for the year ended December 31, 2010 of $215.6 million versus $216.1 million for the year ended December 31, 2009, a decrease of $0.5 million. The decrease in revenue was primarily attributable to a decline in customer water usage of $5.5 million, partially offset by cumulative rate increases of $5.0 million.
Net income was $24.4 million for the year ended December 31, 2010, compared to $15.2 million for the year ended December 31, 2009. Diluted earnings per common share for the year ended December 31, 2010 were $1.30, compared to $0.81 per share in 2009. The Company sold 907,392 shares of California Water Service Group stock during the year ended December 31, 2010, which contributed $0.60 per share to results. No sales of California Water Service Group stock occurred during the same period in 2009.
Water production costs for the year ended December 31, 2010 were $76.6 million versus $83.5 million in 2009, a decrease of $6.9 million. The decline in water production costs is primarily attributable to $4.6 million in lower customer water usage and $3.0 million in savings due to greater surface water supply, offset by $0.7 million in higher per unit costs paid for power.
Operating expenses, excluding water production costs and income taxes, for the year ended December 31, 2010 were $101.0 million versus $92.9 million for 2009, an increase of $8.1 million. This increase was primarily attributable to an impairment loss of $3.6 million in 2010 on a real estate investment in Tennessee, $2.7 million in higher depreciation and amortization, $2.4 million in administrative and general expenses largely related to higher benefit, salary and pension costs, and $0.9 million in other operating expenses, offset by a decrease of $0.9 million in maintenance expenses and $0.6 million in taxes other than income tax expense. Income tax expense decreased $1.3 million for the year ended December 31, 2010 to $9.0 million from $10.3 million for the year ended December 31, 2009 as a result of the tax benefit recognized on the impairment of our real estate investment. Total operating expense, including water production costs, for the year ended December 31, 2010 was $186.5 million, compared to total operating expense of $186.7 million in 2009.
Fourth Quarter Financial Results
Operating revenue for the fourth quarter ended December 31, 2010 was $50.8 million versus $48.6 million for the same period in 2009, an increase of $2.2 million. The increase was attributable to $1.2 million in cumulative rate increases, $0.6 million in higher customer water usage, $0.3 million in higher revenue from real estate operations and $97,000 from new customers.
Net income was $8.1 million for the fourth quarter ended December 31, 2010, compared to $2.6 million for the same period in 2009. Diluted earnings per common share were $0.43 for the quarter ended December 31, 2010, compared to $0.14 per share for the same period in 2009. The Company sold 684,280 shares of California Water Service Group stock during the fourth quarter ended December 31, 2010, which contributed $0.46 per share to results. No sales of California Water Service Group stock occurred during the same period in 2009.
Water production costs for the fourth quarter of 2010 were $18.0 million versus $17.4 million for the same period in 2009, an increase of $0.6 million. Higher customer water usage and decreased surface water supply contributed to the increase.
Operating expenses, excluding water production costs and income taxes, for the fourth quarter of 2010 were $29.2 million versus $23.4 million for the same period in 2009, an increase of $5.8 million. This was attributable to increases of $3.6 million of impairment loss on a real estate investment in Tennessee, $1.4 million in administrative and general expenses, $617,000 in depreciation and amortization, $328,000 in other operating expenses, and $103,000 in taxes other than income tax expense, partially offset by a decrease of $208,000 in maintenance expenses. Income tax expense decreased $1.8 million for the fourth quarter in 2010 to a benefit of $321,000 from $1.5 million in expense for the same period in 2009 due to the tax benefit recognized on the real estate investment impairment loss. Total operating expense for the quarter ended December 31, 2010, was $47.0 million compared to $42.3 million in the period ended December 31, 2009.
Other comprehensive loss in 2010 was $10.8 million and $8.2 million, net of tax, for the full year and fourth quarter of 2010, respectively, due to a change in the market value of the investment in California Water Service Group of $44,000 and the recognition of unrealized holding gains of $10.8 million that were reclassified out of accumulated other comprehensive income due to the sale of California Water Service Group stock.
SJW Corp. management will discuss the annual and fourth quarter results in a webcast presentation available to interested parties from the Company’s website, www.sjwater.com, at 10:00 A.M. Pacific Time on Wednesday, February 23, 2011. The webcast will be accessible until April 25, 2011.
SJW Corp. is a publicly traded holding company headquartered in San Jose, California. SJW Corp. is the parent company of San Jose Water Company, SJWTX, Inc., Texas Water Alliance Limited, and SJW Land Company. Together, San Jose Water Company and SJWTX, Inc. provide regulated and nonregulated water service to more than one million people in San Jose, California and nearby communities and in Canyon Lake, Texas and nearby communities. SJW Land Company owns and operates commercial real estate investments.
This press release may contain certain forward-looking statements including but not limited to statements relating to SJW Corp.'s plans, strategies, objectives, expectations and intentions, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of SJW Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The results for a quarter are not indicative of results for a full year due to seasonality and other factors. Certain factors that may cause actual results, performance or achievements to materially differ are described in SJW Corp.'s most recent reports on Form 10-K, Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. SJW Corp. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
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SJW CORP. |
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
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AND COMPREHENSIVE INCOME |
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(UNAUDITED) |
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(in thousands, except per share data) |
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THREE MONTHS ENDED |
TWELVE MONTHS ENDED |
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DECEMBER 31 |
DECEMBER 31 |
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2010 |
2009 |
2010 |
2009 |
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| OPERATING REVENUE | $ | 50,752 | 48,556 | $ | 215,638 | 216,097 | |||||||||||
| OPERATING EXPENSE: | |||||||||||||||||
| Operation: | |||||||||||||||||
| Purchased water | 9,829 | 9,753 | 43,557 | 45,317 | |||||||||||||
| Power | 1,579 | 1,339 | 6,429 | 6,582 | |||||||||||||
| Groundwater extraction charge | 6,645 | 6,360 | 26,614 | 31,635 | |||||||||||||
| Total water production costs | 18,053 | 17,452 | 76,600 | 83,534 | |||||||||||||
| Administrative and general | 8,225 | 6,824 | 30,134 | 27,658 | |||||||||||||
| Other | 4,968 | 4,640 | 18,752 | 17,861 | |||||||||||||
| Maintenance | 3,282 | 3,490 | 12,242 | 13,172 | |||||||||||||
| Taxes other than income | 2,088 | 1,985 | 7,907 | 8,549 | |||||||||||||
| Depreciation and amortization | 7,068 | 6,451 | 28,331 | 25,643 | |||||||||||||
| Impairment on real estate investment | 3,597 | - | 3,597 | - | |||||||||||||
| Income taxes | (321 | ) | 1,469 | 8,964 | 10,280 | ||||||||||||
| Total operating expense | 46,960 | 42,311 | 186,527 | 186,697 | |||||||||||||
| OPERATING INCOME | 3,792 | 6,245 | 29,111 | 29,400 | |||||||||||||
| Gain on sale of California Water Service | |||||||||||||||||
| Group stock, net of taxes of | |||||||||||||||||
| $5,945 and $7,776 in 2010 | 8,555 | - | 11,190 | - | |||||||||||||
| Interest on long-term debt and other | (4,229 | ) | (3,625 | ) | (15,895 | ) | (14,229 | ) | |||||||||
| NET INCOME | $ | 8,118 | 2,620 | $ | 24,406 | 15,171 | |||||||||||
| Other comprehensive loss, net | $ | (8,220 | ) | (1,375 | ) | $ | (10,828 | ) | (6,236 | ) | |||||||
| COMPREHENSIVE INCOME/(LOSS) | $ | (102 | ) | 1,245 | $ | 13,578 | 8,935 | ||||||||||
| Earnings per share | |||||||||||||||||
| -Basic | $ | 0.45 | 0.14 | $ | 1.32 | 0.82 | |||||||||||
| -Diluted | 0.43 | 0.14 | 1.30 | 0.81 | |||||||||||||
| Dividends per share | $ | 0.17 | 0.17 | $ | 0.68 | 0.66 | |||||||||||
| Weighted average shares outstanding | |||||||||||||||||
| -Basic | 18,541,194 | 18,498,920 | 18,531,458 | 18,486,536 | |||||||||||||
| -Diluted | 18,754,884 | 18,703,127 | 18,742,315 | 18,680,458 | |||||||||||||
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SJW CORP. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(UNAUDITED) |
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(in thousands) |
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DECEMBER 31 |
DECEMBER 31 |
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| ASSETS |
2010 |
2009 |
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| UTILITY PLANT: | ||||||||
| Land | $ | 8,579 | $ | 8,558 | ||||
| Depreciable plant and equipment | 1,004,689 | 913,071 | ||||||
| Construction in progress | 10,103 | 11,119 | ||||||
| Intangible assets | 13,538 | 11,278 | ||||||
| Total utility plant | 1,036,909 | 944,026 | ||||||
| Less accumulated depreciation and amortization | 322,102 | 298,921 | ||||||
| Net utility plant | 714,807 | 645,105 | ||||||
| REAL ESTATE INVESTMENT: | 88,943 | 88,000 | ||||||
| Less accumulated depreciation and amortization | 8,854 | 7,188 | ||||||
| Net real estate investment | 80,089 | 80,812 | ||||||
| CURRENT ASSETS: | ||||||||
| Cash and equivalents | 1,730 | 1,416 | ||||||
| Accounts receivable and accrued unbilled utility revenue | 33,835 | 24,004 | ||||||
| Prepaid expenses and other | 2,462 | 2,590 | ||||||
| Total current assets | 38,027 | 28,010 | ||||||
| OTHER ASSETS: | ||||||||
| Investment in California Water Service Group | 7,177 | 40,500 | ||||||
| Debt issuance costs, net of accumulated amortization | 4,308 | 3,098 | ||||||
| Regulatory assets | 87,721 | 78,525 | ||||||
| Other | 3,233 | 2,424 | ||||||
| 102,439 | 124,547 | |||||||
| $ | 935,362 | $ | 878,474 | |||||
| CAPITALIZATION AND LIABILITIES | ||||||||
| CAPITALIZATION: | ||||||||
| Common stock | $ | 9,662 | $ | 9,635 | ||||
| Additional paid-in capital | 23,443 | 22,046 | ||||||
| Retained earnings | 219,568 | 207,888 | ||||||
| Accumulated other comprehensive income | 2,359 | 13,187 | ||||||
| Total shareholders' equity | 255,032 | 252,756 | ||||||
| Long-term debt, less current portion | 295,704 | 246,879 | ||||||
| Total capitalization | 550,736 | 499,635 | ||||||
| CURRENT LIABILITIES: | ||||||||
| Line of credit | 4,000 | 5,800 | ||||||
| Current portion of long-term debt | 1,133 | 1,081 | ||||||
| Accrued groundwater extraction charge and | ||||||||
| purchased water | 4,359 | 4,496 | ||||||
| Purchased power | 495 | 486 | ||||||
| Accounts payable | 5,487 | 6,562 | ||||||
| Accrued interest | 5,244 | 4,979 | ||||||
| Other current liabilities | 8,437 | 8,554 | ||||||
| Total current liabilities | 29,155 | 31,958 | ||||||
| DEFERRED INCOME TAXES AND CREDITS | 107,961 | 102,381 | ||||||
| ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS | ||||||||
| IN AID OF CONSTRUCTION | 190,155 | 190,506 | ||||||
| POSTRETIREMENT BENEFIT PLANS | 50,213 | 47,484 | ||||||
| OTHER NONCURRENT LIABILITIES | 7,142 | 6,510 | ||||||
| $ | 935,362 | $ | 878,474 | |||||