Artesian Resources Corporation Reports Third Quarter 2009 Results

NEWARK, Del., Nov. 5 /PRNewswire-FirstCall/ -- (Nasdaq: ARTNA) Artesian Resources Corporation (Artesian) today announced that revenue through the third quarter of 2009 was $45.4 million, up from $41.8 million for the same nine-month period of 2008. Net income rose to $5.7 million for the year through September 30, an increase of 11.6% from the same period last year. Diluted net income per common share increased to $0.76 for the nine months ended September 30, 2009 from $0.69 in the same period last year.

For the third quarter of 2009, revenue was $16.2 million, up from $15.7 million for the same three-month period in 2008. Net income decreased to $2.1 million from $2.6 million in the same quarter a year ago, while diluted net income per common share declined to $0.28 from $0.35 in the same period last year.

"The extremely wet weather this summer has reduced customer demand for water to the lowest levels we have seen in nearly a decade," said Artesian President and CEO Dian C. Taylor. "However, we softened the impact of the wet weather on our earnings by initiating company-wide cost containment efforts, with particular focus on controlling discretionary spending, and diversifying our business to provide revenue from non-utility sources that are not weather dependent."

Non-utility revenues for the year through September 30, 2009, increased 29.7% to $3.3 million. For the third quarter of 2009, non-utility revenues grew to $1.3 million, a 32.5% increase from the same period of 2008. The increase in non-utility revenue was attributable to last year's acquisition of Artesian Consulting Engineers and the continued popularity of water and wastewater Service Line Protection Plans.

Revenues from water sales during the third quarter were steady at $14.4 million, up 1.4% from the third quarter of 2008. In 2009, the Delaware Public Service Commission granted an increase in water rates of 15%. The impact of the rate increase was offset by lower demand for water due to the weather.

Operating expenses increased 5.9% to $12.3 million in the third quarter of 2009 compared to the same period in 2008, reflecting higher payroll and employee benefits costs, as well as increased purchased water expenses and taxes.

About Artesian

Artesian Resources Corporation operates as the holding company of eight wholly-owned subsidiaries offering water, wastewater and engineering services. Artesian Water Company, the principal subsidiary, is the oldest and largest investor-owned public water utility on the Delmarva Peninsula, and has been providing water service since 1905. Artesian Water distributes and sells water to residential, commercial, industrial, governmental, municipal and utility customers. Artesian Resources is a member of the small-market Russell 2000 Index and has paid a common stock dividend for 68 consecutive quarters.

http://artesianwater.com

                         Artesian Resources Corporation
                 Condensed Consolidated Statement of Operations
                     (In thousands, except per share amounts)
                                   (Unaudited)

                            Three     Three       Nine         Nine
                           months    months     months       months
                            Ended     ended      ended        ended
                        September September  September    September
                              30,       30,        30,          30,
                             2009      2008       2009         2008
                             ----      ----       ----         ----
    Operating Revenues
      Water sales        $ 14,426  $ 14,224   $ 40,643     $ 37,827
      Other utility
       operating
       revenue                470       477      1,480        1,469
      Non-utility revenue   1,265       955      3,284        2,532
                           16,161    15,656     45,407       41,828
    Operating Expenses
      Utility operating
       expenses             7,479     7,034     21,469       21,288
      Non-utility
       operating
       expenses               819       621      2,279        1,766
      Depreciation and
       amortization         1,653     1,422      4,852        4,062
      State and federal
       income taxes         1,471     1,758      3,859        3,448
      Property and other
       taxes                  888       791      2,594        2,381
                           12,310    11,626     35,053       32,945
    Operating Income        3,851     4,030     10,354        8,883
      Allowance for funds
       used during
       construction           106       285        330          615
      Other Income, Net       (35)      (49)       452          385
    Income Before Interest
     Charges                3,922     4,266     11,136        9,883
    Interest Charges        1,810     1,673      5,420        4,762
    Net Income Applicable
     to Common Stock      $ 2,112   $ 2,593    $ 5,716      $ 5,121
    Weighted Average
     Common Shares
     Outstanding -
     Basic                  7,465     7,355      7,439        7,340
    Net Income per
     Common Share -
     Basic                 $ 0.28    $ 0.35     $ 0.77       $ 0.70
    Weighted Average
     Common Shares
     Outstanding -
     Diluted                7,538     7,451      7,498        7,439
    Net Income per
     Common Share -
     Diluted               $ 0.28    $ 0.35     $ 0.76       $ 0.69



                              Artesian Resources Corporation
                           Condensed Consolidated Balance Sheet
                                        (In thousands)
                                         (Unaudited)

                                 September 30, December 31,
                                         2009         2008
                                         ----         ----
    Assets
      Utility Plant, at
       original cost less
       accumulated depreciation       $ 324,296    $ 318,243
      Current Assets                     13,979       13,472
      Regulatory and
       Other Assets                      18,888       16,991
                                      $ 357,163    $ 348,706
    Capitalization and Liabilities
      Stockholder's Equity             $ 90,688     $ 87,794
      Long Term Debt, Net of
       Current Portion                  106,221      107,555
      Current Liabilities                38,214       34,377
      Advances for Construction          19,799       21,089
      Contributions in Aid of
       Construction                      68,008       66,841
      Other Liabilities                  34,233       31,050
                                      $ 357,163    $ 348,706