Artesian Resources Corporation (Artesian Resources), a US based provider of water, wastewater and engineering services, has reported operating revenues of $56.2 million for the year-end 2008, up 7%, compared with the operating revenues of $52.5 million in the previous year-end. It has also reported a net income of $6.41 million, or $0.86 per diluted share, for the year-end 2008, compared with the net income of $6.26 million, or $0.90 per diluted share, in the previous year-end.
“Our growth and diversification strategy began to pay off as we recorded significant gains in non-utility revenue, increased the number of customers and our service area in Delaware, and made significant inroads for our water and wastewater businesses in Cecil County, Maryland, which is expected to grow rapidly in the next decade,” said Artesian president and chief executive officer Dian C. Taylor.
“Our ability to grow and produce consistent returns, despite pressure on our business from the struggling economy, demonstrates the strength of our business and quality of our workforce. We provide essential services—water and wastewater—that our customers need regardless of whether we are in good or bad financial times.”
The increase in 2008 revenues was primarily due to two factors. One factor was an increase in non-utility revenue of $1.7 million in 2008, a 72% gain from 2007. This revenue was primarily derived from the design, construction and operation of wastewater facilities and an increase in water and wastewater Service Line Protection Plan revenue. The other factor was an increase of $1.6 million, or 3.4%, in water sales revenue. The increase in water sales revenue reflects a 1.0% increase in the number of customers served and the impact of increased rates.
The $155,000 gain in net income was primarily due to increases in operating revenues generated by our regulated wastewater operations, increased non-utility revenue and increased water revenue from rate increases. The increase in water rates and number of water customers offset a decrease in water usage during the year.
Earnings per share were also impacted by an increase of 1 million shares outstanding compared to a year ago primarily as a result of the secondary offering completed in June 2007. In June 2007, the Company successfully completed the issuance of 1 million shares of Class A Stock through a secondary public offering. In July 2007, an additional 129,000 shares were issued under the terms of an over-allotment option. Fully diluted weighted average common shares outstanding for the year ended December 31, 2008, increased 7.1% as compared to the same period in 2007.
Operating expenses, excluding depreciation and taxes, increased approximately $2.6 million, or 8.3%, to $34.1 million in 2008. The major components of the increase were increased payroll and benefits costs, electric expense, purchased water expense and repair and maintenance expenses. Non-utility operating expenses increased approximately $957,000, primarily as the result of increased project activity as compared to the same period in 2007 and the addition of Artesian Consulting Engineers.
For the three months ending December 31, 2008, revenues were $14.4 million, up from $13.0 million for the same period in 2007. Net income available to common stockholders was $1.3 million, compared to $1.1 million last year. Diluted net income per common share for the three months ended December 31, 2008, was $0.17, up from $0.14 for the comparable period in 2007.