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CHESAPEAKE UTILITIES CORPORATION REPORTS THIRD QUARTER 2024 RESULTS

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Chesapeake Utilities (NYSE: CPK) reported Q3 2024 net income of $17.5 million ($0.78 per share), compared to $9.4 million ($0.53 per share) in Q3 2023. Excluding FCG acquisition-related expenses, adjusted net income was $18.1 million ($0.80 per share). For the first nine months of 2024, net income reached $81.9 million ($3.66 per share). The company affirmed its 2024 EPS guidance of $5.33-$5.45 and capital expenditure guidance of $300-360 million. Growth was driven by FCG contributions, infrastructure programs, pipeline expansions, and natural gas distribution growth. The company projects 2025 EPS of $6.15-$6.35 and 2028 EPS of $7.75-$8.00.

Chesapeake Utilities (NYSE: CPK) ha riportato un utile netto per il terzo trimestre del 2024 di 17,5 milioni di dollari (0,78 dollari per azione), rispetto a 9,4 milioni di dollari (0,53 dollari per azione) nel terzo trimestre del 2023. Escludendo le spese relative all'acquisizione della FCG, l'utile netto rettificato è stato di 18,1 milioni di dollari (0,80 dollari per azione). Nei primi nove mesi del 2024, l'utile netto ha raggiunto 81,9 milioni di dollari (3,66 dollari per azione). L'azienda ha confermato le sue previsioni di EPS per il 2024 di 5,33-5,45 dollari e le previsioni di spese in conto capitale di 300-360 milioni di dollari. La crescita è stata sostenuta dai contributi della FCG, dai programmi infrastrutturali, dalle espansioni delle pipeline e dalla crescita nella distribuzione di gas naturale. L'azienda prevede un EPS di 6,15-6,35 dollari per il 2025 e di 7,75-8,00 dollari per il 2028.

Chesapeake Utilities (NYSE: CPK) reportó un ingreso neto del tercer trimestre de 2024 de 17.5 millones de dólares (0.78 dólares por acción), en comparación con 9.4 millones de dólares (0.53 dólares por acción) en el tercer trimestre de 2023. Excluyendo los gastos relacionados con la adquisición de FCG, el ingreso neto ajustado fue de 18.1 millones de dólares (0.80 dólares por acción). En los primeros nueve meses de 2024, el ingreso neto alcanzó los 81.9 millones de dólares (3.66 dólares por acción). La compañía reafirmó su guía de EPS para 2024 de 5.33-5.45 dólares y su guía de gastos de capital de 300-360 millones de dólares. El crecimiento fue impulsado por las contribuciones de FCG, programas de infraestructura, expansiones de tuberías y crecimiento en la distribución de gas natural. La compañía proyecta un EPS de 6.15-6.35 dólares para 2025 y de 7.75-8.00 dólares para 2028.

체서피크 유틸리티스 (NYSE: CPK)는 2024년 3분기 순이익이 1,750만 달러(주당 0.78달러)로, 2023년 3분기의 940만 달러(주당 0.53달러)와 비교되었다고 보고했습니다. FCG 인수 관련 비용을 제외하면 조정된 순이익은 1,810만 달러(주당 0.80달러)였습니다. 2024년 첫 9개월 동안 순이익은 8,190만 달러(주당 3.66달러)에 달했습니다. 회사는 2024년 EPS 가이던스를 5.33-5.45달러, 자본지출 가이던스를 3억-3억 6천만 달러로 확정했습니다. 성장은 FCG 기여, 인프라 프로그램, 파이프라인 확장 및 천연가스 배급 성장에 의해 이루어졌습니다. 회사는 2025년 EPS를 6.15-6.35달러, 2028년 EPS를 7.75-8.00달러로 예상하고 있습니다.

Chesapeake Utilities (NYSE: CPK) a déclaré un bénéfice net de 17,5 millions de dollars (0,78 dollar par action) pour le troisième trimestre 2024, contre 9,4 millions de dollars (0,53 dollar par action) au troisième trimestre 2023. En excluant les frais liés à l'acquisition de FCG, le bénéfice net ajusté a été de 18,1 millions de dollars (0,80 dollar par action). Pour les neuf premiers mois de 2024, le bénéfice net a atteint 81,9 millions de dollars (3,66 dollars par action). La société a confirmé ses prévisions de BPA pour 2024, s'élevant à 5,33-5,45 dollars, ainsi que ses prévisions de dépenses d'investissement de 300 à 360 millions de dollars. La croissance a été soutenue par les contributions de FCG, les programmes d'infrastructure, l'expansion des pipelines et la croissance de la distribution de gaz naturel. L'entreprise prévoit un BPA de 6,15-6,35 dollars pour 2025 et de 7,75-8,00 dollars pour 2028.

Chesapeake Utilities (NYSE: CPK) berichtete für das 3. Quartal 2024 einen Nettogewinn von 17,5 Millionen Dollar (0,78 Dollar pro Aktie), verglichen mit 9,4 Millionen Dollar (0,53 Dollar pro Aktie) im 3. Quartal 2023. Ohne die mit der FCG-Akquisition verbundenen Kosten betrug das bereinigte Nettoergebnis 18,1 Millionen Dollar (0,80 Dollar pro Aktie). In den ersten neun Monaten des Jahres 2024 erreichte der Nettogewinn 81,9 Millionen Dollar (3,66 Dollar pro Aktie). Das Unternehmen bestätigte seine EPS-Prognose für 2024 von 5,33-5,45 Dollar und die Prognose für Investitionen von 300-360 Millionen Dollar. Das Wachstum wurde durch die Beiträge von FCG, Infrastrukturprogramme, Pipeline-Erweiterungen und das Wachstum der Naturgasverteilung getrieben. Das Unternehmen prognostiziert ein EPS von 6,15-6,35 Dollar für 2025 und 7,75-8,00 Dollar für 2028.

Positive
  • Net income increased 86% YoY to $17.5 million in Q3 2024
  • Adjusted gross margin grew by 29.1% to $121.9 million in Q3 2024
  • Operating income doubled to $40.9 million in Q3 2024
  • Company affirmed 2024 EPS guidance of $5.33-$5.45
  • Strong customer growth of 4% in both Delmarva and Florida
Negative
  • Increased interest expense from FCG acquisition debt
  • Higher operating expenses due to FCG integration
  • Additional shares outstanding causing dilution

Insights

Chesapeake Utilities delivered a strong Q3 2024 with $17.5 million in net income ($0.78 per share), up significantly from $9.4 million ($0.53 per share) in Q3 2023. The adjusted EPS of $0.80 represents a solid 16% year-over-year growth. Key highlights include:

  • Adjusted gross margin grew 29.1% to $121.9 million, driven by FCG acquisition and organic growth
  • Capital expenditure of nearly $100 million in Q3 alone
  • Company affirmed 2024 adjusted EPS guidance of $5.33 to $5.45
  • Strong 4% customer growth in both Delmarva and Florida markets

The company's ambitious five-year capital plan of $1.5-1.8 billion through 2028 and projected EPS growth of 8% from 2025 to 2028 demonstrate strong fundamentals and growth trajectory.

  • Net income and earnings per share ("EPS")* were $17.5 million and $0.78, respectively, for the third quarter of 2024, and $81.9 million and $3.66, respectively, for the nine months ended September 30, 2024
  • Adjusted net income and Adjusted EPS**, which exclude transaction and transition-related expenses attributable to the acquisition and integration of Florida City Gas ("FCG"), were $18.1 million and $0.80, respectively, for the third quarter of 2024 and $84.2 million and $3.76, respectively, for the nine months ended September 30, 2024
  • Adjusted gross margin** growth of $89.3 million during the first nine months of 2024 driven by contributions from FCG, regulatory initiatives and infrastructure programs, natural gas organic growth, continued pipeline expansion projects, and additional customer consumption
  • Results continue to track in line with Management's expectations, and the Company continues to affirm 2024 EPS and capital guidance

DOVER, Del., Nov. 7, 2024 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today announced financial results for the three and nine months ended September 30, 2024.

Net income for the third quarter of 2024 was $17.5 million ($0.78 per share) compared to $9.4 million ($0.53 per share) in the third quarter of 2023. Excluding transaction and transition-related expenses associated with the fourth quarter 2023 acquisition of FCG, adjusted net income was $18.1 million ($0.80 per share) or approximately 16 percent higher per share compared to the prior-year period. 

The higher results for the third quarter of 2024 were largely attributable to incremental contributions from FCG, additional margin from regulated infrastructure programs, continued pipeline expansion projects to support distribution growth, growth in the Company's natural gas distribution businesses and increased levels of virtual pipeline services. The financing impacts of the FCG acquisition, including increased interest expense related to debt issued and additional shares outstanding, partially offset the increases.  

During the first nine months of 2024, net income was $81.9 million ($3.66 per share) compared to $61.9 million ($3.47 per share) in the prior-year period. Excluding the transaction and transition-related expenses, adjusted net income was $84.2 million ($3.76 per share) compared to $64.8 million ($3.63 per share) for the same period in 2023.

Year-to-date earnings for 2024 were primarily impacted by the factors discussed for the third quarter as well as additional adjusted gross margin from increased customer consumption experienced earlier in the year and contributions from the Company's unregulated businesses. 

"Chesapeake Utilities delivered strong financial performance and sustained operational excellence in the third quarter as we continued to execute on the three pillars that drive long-term earnings growth and shareholder value: prudently deploying record levels of capital, proactively advancing our regulatory agenda and continually executing on business transformation," said Jeff Householder, chair, president and CEO. "In the third quarter alone, we invested nearly $100 million in capital expenditures, filed for rate increases in Delaware and in Florida for our electric operations and successfully implemented our new enterprise-wide customer billing system."

"In the third quarter of 2024, adjusted earnings per share was up 16 percent relative to the same period in 2023, attributable to adjusted gross margin growth of close to 30 percent and continued cost management driven by our business transformation efforts and focus on a "one company" approach. Some of the larger margin drivers include the addition of FCG, which we continue to effectively integrate, strong customer growth of approximately 4 percent in both Delmarva and Florida, incremental margin related to transmission expansions and increased virtual pipeline services and depreciation savings related to regulatory initiatives," continued Householder. "I'm proud of our teammates' consistent dedication to prioritizing service and safety to deliver performance in line with our expectations. This commitment enables us to affirm our full-year 2024 adjusted EPS and capital guidance."

Earnings and Capital Investment Guidance

The Company continues to affirm its 2024 EPS guidance of $5.33 to $5.45 in adjusted earnings per share given the incremental margin opportunities present across the Company's businesses, investment opportunities within and surrounding FCG, regulatory initiatives and operating synergies.

The Company also affirms its previously-announced 2024 capital expenditure guidance of $300 million to $360 million, as well as the capital expenditure guidance for the five-year period ended 2028 that will range from $1.5 billion to $1.8 billion. This investment forecast is projected to result in a 2025 EPS guidance range of $6.15 to $6.35, as well as a 2028 EPS guidance range of $7.75 to $8.00. This implies an EPS growth rate of approximately 8 percent from the 2025 EPS guidance range.

*Unless otherwise noted, EPS and Adjusted EPS information are presented on a diluted basis.

Non-GAAP Financial Measures

**This press release including the tables herein, include references to both Generally Accepted Accounting Principles ("GAAP") and non-GAAP financial measures, including Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS. A "non-GAAP financial measure" is generally defined as a numerical measure of a company's historical or future performance that includes or excludes amounts, or that is subject to adjustments, so as to be different from the most directly comparable measure calculated or presented in accordance with GAAP. Our management believes certain non-GAAP financial measures, when considered together with GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period.

The Company calculates Adjusted Gross Margin by deducting the purchased cost of natural gas, propane and electricity and the cost of labor spent on direct revenue-producing activities from operating revenues. The costs included in Adjusted Gross Margin exclude depreciation and amortization and certain costs presented in operations and maintenance expenses in accordance with regulatory requirements. The Company calculates Adjusted Net Income and Adjusted EPS by deducting costs and expenses associated with significant acquisitions that may affect the comparison of period-over-period results. These non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures. The Company believes that these non-GAAP measures are useful and meaningful to investors as a basis for making investment decisions, and provide investors with information that demonstrates the profitability achieved by the Company under allowed rates for regulated energy operations and under the Company's competitive pricing structures for unregulated energy operations. The Company's management uses these non-GAAP financial measures in assessing a business unit and Company performance. Other companies may calculate these non-GAAP financial measures in a different manner.

The following tables reconcile Gross Margin, Net Income, and EPS, all as defined under GAAP, to our non-GAAP measures of Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS for each of the periods presented.

Adjusted Gross Margin



For the Three Months Ended September 30, 2024

(in thousands)


Regulated
Energy


Unregulated
Energy


Other and
Eliminations


Total

Operating Revenues


$               130,633


$                 35,567


$                  (6,062)


$               160,138

Cost of Sales:









Natural gas, propane and electric costs


(28,366)


(15,868)


6,033


(38,201)

Depreciation & amortization


(12,301)


(4,553)


3


(16,851)

Operations & maintenance expenses (1)


(10,722)


(8,058)



(18,780)

Gross Margin (GAAP)


79,244


7,088


(26)


86,306

Operations & maintenance expenses (1)


10,722


8,058



18,780

Depreciation & amortization


12,301


4,553


(3)


16,851

Adjusted Gross Margin (Non-GAAP)


$               102,267


$                 19,699


$                       (29)


$               121,937





For the Three Months Ended September 30, 2023

(in thousands)


Regulated
Energy


Unregulated
Energy


Other and
Eliminations


Total

Operating Revenues


$               102,411


$                 34,970


$                  (5,834)


$               131,547

Cost of Sales:









Natural gas, propane and electric costs


(26,518)


(16,381)


5,805


(37,094)

Depreciation & amortization


(13,192)


(4,420)


2


(17,610)

Operations & maintenance expenses (1)


(4,819)


(7,532)


(382)


(12,733)

Gross Margin (GAAP)


57,882


6,637


(409)


64,110

Operations & maintenance expenses (1)


4,819


7,532


382


12,733

Depreciation & amortization


13,192


4,420


(2)


17,610

Adjusted Gross Margin (Non-GAAP)


$                 75,893


$                 18,589


$                       (29)


$                 94,453





For the Nine Months Ended September 30, 2024

(in thousands)


Regulated
Energy


Unregulated
Energy


Other and
Eliminations


Total

Operating Revenues


$               429,684


$               160,089


$                (17,619)


$               572,154

Cost of Sales:









Natural gas, propane and electric costs


(105,662)


(70,928)


17,532


(159,058)

Depreciation & amortization


(39,495)


(12,257)


8


(51,744)

Operations & maintenance expenses (1)


(35,713)


(24,373)


1


(60,085)

Gross Margin (GAAP)


248,814


52,531


(78)


301,267

Operations & maintenance expenses (1)


35,713


24,373


(1)


60,085

Depreciation & amortization


39,495


12,257


(8)


51,744

Adjusted Gross Margin (Non-GAAP)


$               324,022


$                 89,161


$                       (87)


$               413,096





For the Nine Months Ended September 30, 2023

(in thousands)


Regulated
Energy


Unregulated
Energy


Other and
Eliminations


Total

Operating Revenues


$               345,822


$               158,886


$                (19,439)


$               485,269

Cost of Sales:









Natural gas, propane and electric costs


(105,692)


(75,068)


19,282


(161,478)

Depreciation & amortization


(39,179)


(12,923)


6


(52,096)

Operations & maintenance expenses (1)


(23,346)


(23,528)


(377)


(47,251)

Gross Margin (GAAP)


177,605


47,367


(528)


224,444

Operations & maintenance expenses (1)


23,346


23,528


377


47,251

Depreciation & amortization


39,179


12,923


(6)


52,096

Adjusted Gross Margin (Non-GAAP)


$               240,130


$                 83,818


$                     (157)


$               323,791


(1) Operations & maintenance expenses within the condensed consolidated statements of income are presented in accordance with regulatory requirements and to provide comparability within the industry. Operations & maintenance expenses which are deemed to be directly attributable to revenue producing activities have been separately presented above in order to calculate Gross Margin as defined under US GAAP.

Adjusted Net Income and Adjusted EPS



Three Months Ended



September 30,

(in thousands, except per share data)


2024


2023

Net Income (GAAP)


$          17,507


$            9,407

FCG transaction and transition-related expenses, net (1)


593


2,804

Adjusted Net Income (Non-GAAP)


$          18,100


$          12,211






Weighted average common shares outstanding - diluted (2)


22,564


17,858






Earnings Per Share - Diluted (GAAP)


$               0.78


$               0.53

FCG transaction and transition-related expenses, net (1)


0.02


0.16

Adjusted Earnings Per Share - Diluted (Non-GAAP)


$               0.80


$               0.69




Nine Months Ended



September 30,

(in thousands, except per share data)


2024


2023

Net Income (GAAP)


$          81,946


$          61,884

FCG transaction and transition-related expenses, net (1)


2,276


2,898

Adjusted Net Income (Non-GAAP)


$          84,222


$          64,782






Weighted average common shares outstanding - diluted (2)


22,402


17,847






Earnings Per Share - Diluted (GAAP)


$               3.66


$               3.47

FCG transaction and transition-related expenses, net (1)


0.10


0.16

Adjusted Earnings Per Share - Diluted (Non-GAAP)


$               3.76


$               3.63


(1) Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transaction costs, transition services, consulting, system integration, rebranding and legal fees.

(2) Weighted average shares for the three and nine months ended September 30, 2024 reflect the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG.

 

Operating Results for the Quarters Ended September 30, 2024 and 2023

Consolidated Results


Three Months Ended






September 30,





(in thousands)

2024


2023


Change


Percent
Change

Adjusted gross margin**

$       121,937


$         94,453


$         27,484


29.1 %

Depreciation, amortization and property taxes

24,998


23,800


1,198


5.0 %

FCG transaction and transition-related expenses

819


3,899


(3,080)


(79.0) %

Other operating expenses

55,202


46,526


8,676


18.6 %

Operating income

$         40,918


$         20,228


$         20,690


102.3 %

Operating income for the third quarter of 2024 was $40.9 million, an increase of $20.7 million compared to the same period in 2023. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $17.6 million or 73.0 percent compared to the prior-year period. An increase in adjusted gross margin in the third quarter of 2024 was driven by contributions from the acquisition of FCG, incremental margin from regulated infrastructure programs, continued pipeline expansion projects, increased demand for virtual pipeline services and natural gas organic growth. Higher operating expenses were driven largely by the operating expenses of FCG and increased payroll, benefits and other employee-related expenses compared to the prior-year period. Increases in depreciation, amortization and property taxes attributable to growth projects and FCG were partially offset by a $3.2 million reserve surplus amortization mechanism ("RSAM") adjustment from FCG and lower depreciation from our electric operations and Maryland natural gas division due to revised rates from approved depreciation studies.

Regulated Energy Segment


Three Months Ended






September 30,





(in thousands)

2024


2023


Change


Percent
Change

Adjusted gross margin**

$       102,267


$         75,893


$         26,374


34.8 %

Depreciation, amortization and property taxes

19,853


18,891


962


5.1 %

FCG transaction and transition-related expenses

819


3,899


(3,080)


(79.0) %

Other operating expenses

37,660


28,191


9,469


33.6 %

Operating income

$         43,935


$         24,912


$         19,023


76.4 %

The key components of the increase in adjusted gross margin** are shown below:

(in thousands)


Contribution from FCG

$                        23,399

Margin from regulated infrastructure programs

1,806

Natural gas transmission service expansions, including interim services

1,548

Natural gas growth including conversions (excluding service expansions)

1,013

Changes in customer consumption

(361)

Other variances

(1,031)

Quarter-over-quarter increase in adjusted gross margin**

$                        26,374

The major components of the increase in other operating expenses are as follows:

(in thousands)


FCG operating expenses

$                          7,476

Payroll, benefits and other employee-related expenses

1,223

Insurance related costs

222

Other variances

548

Quarter-over-quarter increase in other operating expenses

$                          9,469

Unregulated Energy Segment


Three Months Ended
September 30,





(in thousands)

2024


2023


Change


Percent
Change

Adjusted gross margin**

$         19,699


$         18,589


$           1,110


6.0 %

Depreciation, amortization and property taxes

5,144


4,902


242


4.9 %

Other operating expenses

17,616


18,410


(794)


(4.3) %

Operating loss

$         (3,061)


$         (4,723)


$           1,662


35.2 %

Operating results for the second and third quarters historically have been lower due to reduced customer demand during warmer periods of the year. The impact to operating income may not align with the seasonal variations in adjusted gross margin as many of the operating expenses are recognized ratably over the course of the year.

The major components of the increase in adjusted gross margin** are shown below:

(in thousands)



Propane Operations



Contributions from acquisition


$                      135

CNG/RNG/LNG Transportation and Infrastructure



Increased level of virtual pipeline services


1,098

Other variances


(123)

Quarter-over-quarter increase in adjusted gross margin**


$                   1,110

The major components of the decrease in other operating expenses are as follows:

(in thousands)



Payroll, benefits and other employee-related expenses


$                    (515)

Other variances


(279)

Quarter-over-quarter decrease in other operating expenses


$                    (794)

Operating Results for the Nine Months Ended September 30, 2024 and 2023

Consolidated Results


Nine Months Ended






September 30,





(in thousands)

2024


2023


Change


Percent
Change

Adjusted gross margin**

$       413,096


$       323,791


$         89,305


27.6 %

Depreciation, amortization and property taxes

77,811


70,918


6,893


9.7 %

FCG transaction and transition-related expenses

3,114


3,899


(785)


(20.1) %

Other operating expenses

170,878


145,486


25,392


17.5 %

Operating income

$       161,293


$       103,488


$         57,805


55.9 %

Operating income for the first nine months of 2024 was $161.3 million, an increase of $57.8 million compared to the same period in 2023. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $57.0 million or 53.1 percent compared to the prior-year period. An increase in adjusted gross margin in the first nine months of 2024 was driven by contributions from the acquisition of FCG, incremental margin from regulatory initiatives, natural gas organic growth and continued pipeline expansion projects, higher customer consumption and increased margins from the Company's unregulated businesses. Higher operating expenses during the current period were driven largely by the operating expenses of FCG and increased insurance costs. These increases were partially offset by lower payroll, benefits and other employee-related expenses compared to the prior-year period. Increases in depreciation, amortization and property taxes attributable to growth projects and FCG were partially offset by an $8.9 million RSAM adjustment from FCG and lower depreciation from our electric operations and Maryland natural gas division due to revised rates from approved depreciation studies.

Regulated Energy Segment


Nine Months Ended






September 30,





(in thousands)

2024


2023


Change


Percent
Change

Adjusted gross margin**

$       324,022


$       240,130


$         83,892


34.9 %

Depreciation, amortization and property taxes

63,671


56,415


7,256


12.9 %

FCG transaction and transition-related expenses

3,114


3,899


(785)


(20.1) %

Other operating expenses

114,688


87,988


26,700


30.3 %

Operating income

$       142,549


$         91,828


$         50,721


55.2 %

The key components of the increase in adjusted gross margin** are shown below:

(in thousands)


Contribution from FCG

$                        71,725

Margin from regulated infrastructure programs

4,424

Natural gas growth including conversions (excluding service expansions)

4,182

Natural gas transmission service expansions, including interim services

3,702

Rate changes associated with the Florida natural gas base rate proceeding (1)

1,630

Eastern Shore contracted rate adjustments

(238)

Other variances

(1,533)

Period-over-period increase in adjusted gross margin**

$                        83,892


(1) Includes adjusted gross margin contributions from permanent base rates that became effective in March 2023.

The major components of the increase in other operating expenses are as follows:

(in thousands)


FCG operating expenses

$                        25,363

Facilities, maintenance costs and outside services

677

Insurance related costs

651

Other variances

9

Period-over-period increase in other operating expenses

$                        26,700

Unregulated Energy Segment


Nine Months Ended  

September 30,





(in thousands)

2024


2023


Change


Percent
Change

Adjusted gross margin**

$         89,161


$         83,818


$           5,343


6.4 %

Depreciation, amortization and property taxes

14,142


14,500


(358)


(2.5) %

Other operating expenses

56,413


57,789


(1,376)


(2.4) %

Operating income

$         18,606


$         11,529


$           7,077


61.4 %

The major components of the change in adjusted gross margin** are shown below:

(in thousands)



Propane Operations



Increased propane customer consumption


$                   1,261

Contributions from acquisition


733

Increased propane margins and service fees


521

CNG/RNG/LNG Transportation and Infrastructure



Increased level of virtual pipeline services


1,585

Aspire Energy



Increased margins - rate changes and gathering fees


1,267

Other variances


(24)

Period-over-period increase in adjusted gross margin**


$                   5,343

The major components of the decrease in other operating expenses are as follows:

(in thousands)



Vehicle expenses


$                      575

Insurance related costs


456

Payroll, benefits and other employee-related expenses


(1,598)

Facilities, maintenance costs, and outside services


(631)

Other variances


(178)

Period-over-period decrease in other operating expenses


$                 (1,376)

Forward-Looking Statements

Matters included in this release may include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements. Please refer to the Safe Harbor for Forward-Looking Statements in the Company's 2023 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the third quarter of 2024 for further information on the risks and uncertainties related to the Company's forward-looking statements.

Conference Call

Chesapeake Utilities (NYSE: CPK) will host a conference call on Friday, November 8, 2024 at 8:30 a.m. Eastern Time to discuss the Company's financial results for the three and nine months ended September 30, 2024. To listen to the Company's conference call via live webcast, please visit the Events & Presentations section of the Investors page on www.chpk.com. For investors and analysts that wish to participate by phone for the question and answer portion of the call, please use the following dial-in information:

Toll-free: 800.245.3074
International: 203.518.9765
Conference ID: CPKQ324

A replay of the presentation will be made available on the previously noted website following the conclusion of the call.

About Chesapeake Utilities Corporation 

Chesapeake Utilities Corporation is a diversified energy delivery company, listed on the New York Stock Exchange. Chesapeake Utilities Corporation offers sustainable energy solutions through its natural gas transmission and distribution, electricity generation and distribution, propane gas distribution, mobile compressed natural gas utility services and solutions, and other businesses.

Please note that Chesapeake Utilities Corporation is not affiliated with Chesapeake Energy, an oil and natural gas exploration company headquartered in Oklahoma City, Oklahoma.

For more information, contact:

Beth W. Cooper
Executive Vice President, Chief Financial Officer, Treasurer and Assistant Corporate Secretary
302.734.6022

Michael D. Galtman
Senior Vice President and Chief Accounting Officer
302.217.7036

Lucia M. Dempsey
Head of Investor Relations
347.804.9067

 

Financial Summary
(in thousands, except per-share data)


Three Months Ended


Nine Months Ended


September 30,


September 30,


2024


2023


2024


2023

Adjusted Gross Margin








  Regulated Energy segment

$ 102,267


$  75,893


$   324,022


$ 240,130

  Unregulated Energy segment

19,699


18,589


89,161


83,818

  Other businesses and eliminations

(29)


(29)


(87)


(157)

Total Adjusted Gross Margin**

$ 121,937


$  94,453


$   413,096


$ 323,791









Operating Income (Loss)








   Regulated Energy segment

$  43,935


$  24,912


$   142,549


$  91,828

   Unregulated Energy segment

(3,061)


(4,723)


18,606


11,529

   Other businesses and eliminations

44


39


138


131

Total Operating Income

40,918


20,228


161,293


103,488

Other income (expense), net

400


(72)


1,705


1,036

Interest charges

17,022


7,076


50,861


21,272

Income Before Income Taxes

24,296


13,080


112,137


83,252

Income taxes

6,789


3,673


30,191


21,368

Net Income

$  17,507


$     9,407


$     81,946


$  61,884









Weighted Average Common Shares Outstanding: (1)








Basic

22,501


17,797


22,346


17,784

Diluted

22,564


17,858


22,402


17,847









Earnings Per Share of Common Stock








Basic

$      0.78


$      0.53


$        3.67


$      3.48

Diluted

$      0.78


$      0.53


$        3.66


$      3.47









Adjusted Net Income and Adjusted Earnings Per Share








Net Income (GAAP)

$  17,507


$     9,407


$     81,946


$  61,884

FCG transaction and transition-related-expenses, net (2)

593


2,804


2,276


2,898

Adjusted Net Income (Non-GAAP)**

$  18,100


$  12,211


$     84,222


$  64,782









Earnings Per Share - Diluted (GAAP)

$       0.78


$       0.53


$         3.66


$       3.47

FCG transaction and transition-related-expenses, net (2)

0.02


0.16


0.10


0.16

Adjusted Earnings Per Share - Diluted (Non-GAAP)**

$       0.80


$       0.69


$         3.76


$       3.63


(1) Weighted average shares for the three and nine months ended September 30, 2024 reflect the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG.

(2) Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transaction costs, transition services, consulting, system integration, rebranding and legal fees.

Financial Summary Highlights

Key variances between the third quarter of 2023 and 2024 included:

(in thousands, except per share data)


Pre-tax

Income


Net

Income


Earnings

Per Share

Third Quarter of 2023 Adjusted Results**


$      16,979


$      12,211


$           0.69








Increased Adjusted Gross Margins:







Contributions from acquisitions


23,534


16,958


0.75

Margin from regulated infrastructure programs*


1,806


1,301


0.06

Natural gas transmission service expansions, including interim services*


1,548


1,115


0.05

Increased level of virtual pipeline services


1,098


791


0.04

Natural gas growth including conversions (excluding service expansions)


1,013


730


0.03

Changes in customer consumption


(651)


(469)


(0.02)



28,348


20,426


0.91








Increased Operating Expenses (Excluding Natural Gas, Propane, and Electric Costs):







FCG operating expenses


(8,680)


(6,255)


(0.28)

Payroll, benefits and other employee-related expenses


(708)


(510)


(0.02)



(9,388)


(6,765)


(0.30)








Interest charges


(9,946)


(7,167)


(0.32)

Increase in shares outstanding due to 2023 and 2024 equity offerings***




(0.14)

Net other changes


(878)


(605)


(0.04)



(10,824)


(7,772)


(0.50)

Third Quarter of 2024 Adjusted Results**


$      25,115


$      18,100


$           0.80



*

Refer to Major Projects and Initiatives Table for additional information.

** 

Transaction and transition-related expenses attributable to the acquisition and integration of FCG have been excluded from the Company's non GAAP measures of adjusted net income and adjusted EPS. See reconciliations above for a detailed comparison to the related GAAP measures.

***

Reflects the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG and shares also issued in 2024.

Key variances between the nine months ended September 30, 2023 and September 30, 2024 included: 

(in thousands, except per share data)


Pre-tax

Income


Net

Income


Earnings

Per Share

Nine months ended September 30, 2023 Adjusted Results**


$      87,151


$      64,782


$           3.63








Non-recurring Items:







Absence of benefit associated with a reduction in the PA state tax rate



(1,284)


(0.06)




(1,284)


(0.06)








Increased Adjusted Gross Margins:







Contributions from acquisitions


72,458


52,952


2.36

Margin from regulated infrastructure programs*


4,424


3,233


0.14

Natural gas growth including conversions (excluding service expansions)


4,182


3,056


0.14

Natural gas transmission service expansions, including interim services*


3,702


2,706


0.12

Rate changes associated with the Florida natural gas base rate proceeding*


1,630


1,191


0.05

Increased level of virtual pipeline services


1,585


1,158


0.05

Improved Aspire Energy performance - rate changes and gathering fees


1,267


926


0.04

Changes in customer consumption


1,191


870


0.04

Increased propane margins and fees


521


381


0.02



90,960


66,473


2.96








(Increased) Decreased Operating Expenses (Excluding Natural Gas, Propane, and Electric Costs):







FCG operating expenses


(28,813)


(21,057)


(0.94)

Depreciation, amortization and property tax costs (includes FCG)


(3,441)


(2,515)


(0.11)

Insurance related costs


(1,107)


(809)


(0.04)

Payroll, benefits and other employee-related expenses


1,484


1,084


0.05



(31,877)


(23,297)


(1.04)








Interest charges


(29,589)


(21,623)


(0.97)

Increase in shares outstanding due to 2023 and 2024 equity offerings***




(0.74)

Net other changes


(1,394)


(829)


(0.02)



(30,983)


(22,452)


(1.73)

Nine months ended September 30, 2024 Adjusted Results**


$    115,251


$      84,222


$           3.76

*

Refer to Major Projects and Initiatives Table for additional information.

** 

Transaction and transition-related expenses attributable to the acquisition and integration of FCG have been excluded from the Company's non GAAP measures of adjusted net income and adjusted EPS. See reconciliations above for a detailed comparison to the related GAAP measures.

***

Reflects the impact of 4.4 million common shares issued in November 2023 in connection with the acquisition of FCG and shares also issued in 2024.

Recently Completed and Ongoing Major Projects and Initiatives

The Company continuously pursues and develops additional projects and initiatives to serve existing and new customers, further grow its businesses and earnings, and increase shareholder value. The following table includes all major projects and initiatives that are currently underway or recently completed. The Company's practice is to add incremental margin associated with new projects and initiatives to this table once negotiations or details are substantially final and/or the associated earnings can be estimated. Major projects and initiatives that have generated consistent year-over-year adjusted gross margin contributions are removed from the table at the beginning of the next calendar year.

The related descriptions of projects and initiatives that accompany the table include only new items and/or items where there have been significant developments, as compared to the Company's prior quarterly filings. A comprehensive discussion of all projects and initiatives reflected in the table below can be found in the Company's third quarter 2024 Quarterly Report on Form 10-Q.


Adjusted Gross Margin


Three Months Ended


Nine Months Ended


Year Ended


Estimate for


September 30,


September 30,


December 31,


Fiscal

(in thousands)

2024


2023


2024


2023


2023


2024


2025

Pipeline Expansions:














Southern Expansion

$        586


$        100


$     1,758


$        586


$               586


$     2,344


$     2,344

Beachside Pipeline Expansion

603


603


1,809


1,206


1,810


2,451


2,414

St. Cloud / Twin Lakes Expansion

146


118


438


118


264


584


2,752

Wildlight

566


178


970


271


471


1,423


2,996

Lake Wales

114


114


342


152


265


454


454

Newberry

646



718




1,364


2,585

Boynton Beach







3,342

New Smyrna Beach







1,710

Central Florida Reinforcement






98


1,959

Warwick






258


1,858

Renewable Natural Gas Supply Projects







5,460

Total Pipeline Expansions

2,661


1,113


6,035


2,333


3,396


8,976


27,874















CNG/RNG/LNG Transportation and Infrastructure

3,498


2,385


10,438


8,811


11,181


14,000


15,000















Regulatory Initiatives:














Florida GUARD program

982


90


2,436


90


353


3,566


6,333

FCG SAFE Program

1,051



2,152




3,337


6,534

Capital Cost Surcharge Programs

765


687


2,373


2,110


2,829


3,167


4,374

Florida Rate Case Proceeding (1)

3,991


3,991


13,591


11,961


15,835


17,153


17,153

Maryland Rate Case (2)






TBD


TBD

Delaware Rate Case (3)






TBD


TBD

Electric Rate Case (4)






TBD


TBD

Electric Storm Protection Plan

717


298


2,024


940


1,326


3,133


5,581

Total Regulatory Initiatives

7,506


5,066


22,576


15,101


20,343


30,356


39,975















Total

$   13,665


$     8,564


$   39,049


$   26,245


$          34,920


$   53,332


$   82,849


(1) Includes adjusted gross margin during 2023 comprised of both interim rates and permanent base rates which became effective in March 2023.

(2) Rate case application and depreciation study filed with the Maryland PSC in January 2024. See additional information provided below.

(3) Rate case application and depreciation study filed with the Delaware PSC in August 2024. See additional information provided below.

(4) Rate case application filed with the Florida PSC in August 2024. See additional information provided below.

Detailed Discussion of Major Projects and Initiatives

Pipeline Expansions

St. Cloud / Twin Lakes Expansion
In February 2024, Peninsula Pipeline filed a petition with the Florida Public Service Commission ("PSC") for approval of an amendment to its Transportation Service Agreement with FPU for an additional 10,000 Dts/day of firm service in the St. Cloud, Florida area. Peninsula Pipeline will construct pipeline expansions that will allow FPU to serve the future communities that are expected in that area. The Florida PSC approved the project in May 2024, and it is expected to be complete in the fourth quarter of 2025.

Newberry Expansion
In April 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with FPU for an additional 8,000 Dts/day of firm service in the Newberry, Florida area. The petition was approved by the Florida PSC in the third quarter of 2023. Peninsula Pipeline will construct a pipeline extension, which will be used by FPU to support the development of a natural gas distribution system to provide gas service to the City of Newberry. A filing to address the acquisition and conversion of existing Company owned propane community gas systems in Newberry was made in November 2023. The Florida PSC approved it in April 2024, and conversions of the community gas systems began in the second quarter of 2024.

East Coast Reinforcement Projects
In December 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities on the East Coast of Florida. The projects are driven by the need for increased supply to coastal portions of the state that are experiencing significant population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU's distribution system in the areas of Boynton Beach and New Smyrna Beach with an additional 15,000 Dts/day and 3,400 Dts/day, respectively. The Florida PSC approved the projects in March 2024. Construction is projected to be complete in the first and second quarters of 2025 for Boynton Beach and New Smyrna Beach, respectively.

Central Florida Reinforcement Projects
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities located in Central Florida. The projects are driven by the need for increased supply to communities in central Florida that are experiencing significant population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU's distribution system around the Plant City and Lake Mattie areas of Florida with an additional 5,000 Dts/day and 8,700 Dts/day, respectively. The Florida PSC approved the projects in May 2024. Completion of the projects is projected for the fourth quarter of 2024 for Plant City and the fourth quarter of 2025 for Lake Mattie.

Warwick
In July 2024, the Company announced plans to extend Eastern Shore's transmission deliverability by constructing an additional 4.4 miles of six inch steel pipeline. The project will reinforce the supply and growth for our Delaware division distribution system and expand natural gas service further into Maryland for anticipated future growth. The project is estimated to be in service during the fourth quarter of 2024.

Pioneer Supply Header Pipeline Project
In March 2024, Peninsula Pipeline filed a petition with the Florida PSC for its approval of Firm Transportation Service Agreements with both FCG and FPU for a project that will support greater supply growth of natural gas service in southeast Florida. The project consists of the transfer of a pipeline asset from FCG to Peninsula Pipeline. Peninsula Pipeline will proceed to provide transportation service to both FCG and FPU using the pipeline asset, which supports continued customer growth and system reinforcement of these distribution systems. The Florida PSC approved the petition in July 2024.

Renewable Natural Gas Supply Projects
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of Transportation Service Agreements with FCG for projects that will support the transportation of additional renewable energy supply to FCG. The projects, located in Florida's Brevard, Indian River and Miami-Dade counties, will bring renewable natural gas produced from local landfills into FCG's natural gas distribution system. Peninsula Pipeline will construct several pipeline extensions which will support FCG's distribution system in Brevard County, Indian River County, and Miami-Dade County. Benefits of these projects include increased gas supply to serve expected FCG growth, strengthened system reliability and additional system flexibility. The Florida PSC approved the petition at its July 2024 meeting with the projects estimated to be completed in the first half of 2025. 

Regulatory Initiatives

Maryland Natural Gas Rate Case
In January 2024, the Company's natural gas distribution businesses in Maryland, CUC-Maryland Division, Sandpiper Energy, Inc., and Elkton Gas Company (collectively, "Maryland natural gas distribution businesses") filed a joint application for a natural gas rate case with the Maryland PSC. In connection with the application, the Company is seeking approval of the following: (i) permanent rate relief of approximately $6.9 million with a return on equity ("ROE") of 11.5 percent; (ii) authorization to make certain changes to tariffs to include a unified rate structure and to consolidate the Maryland natural gas distribution businesses which is anticipated to be called Chesapeake Utilities of Maryland, Inc.; and (iii) authorization to establish a rider for recovery of the costs associated with the Company's new technology systems. In August 2024, the Maryland natural gas distribution businesses, the Maryland Office of Peoples' Counsel ("OPC") and PSC Staff reached a settlement agreement which provided for, among other things, an increase in annual base rates of $2.6 million. In September 2024, the Maryland Public Utility Judge issued an order approving the settlement agreement in part. The $2.6 million increase in annual base rates was approved and the Company will file a Phase II filing to determine rate design across the Maryland natural gas distribution businesses, consolidation of the applicable tariffs and recovery of technology costs. The outcome of the application is subject to review and approval by the Maryland PSC.

Maryland Natural Gas Depreciation Study
In January 2024, the Company's Maryland natural gas distribution businesses filed a joint petition for approval of its proposed unified depreciation rates with the Maryland PSC. A settlement agreement between the Company, PSC staff and the Maryland OPC Counsel was reached and the final order approving the settlement agreement went into effect in July 2024, with new depreciation rates effective as of January 1, 2023. The approved depreciation rates will result in an annual reduction in depreciation expense of approximately $1.2 million.

FCG SAFE Program
In April 2024, FCG filed a petition with the Florida PSC to more closely align the SAFE Program with FPU's GUARD program. Specifically, the requested modifications will enable FCG to accelerate remediation related to problematic pipe and facilities consisting of obsolete and exposed pipe. These modifications will require an estimated additional $50.0 million in capital expenditures associated with the SAFE Program, which would increase the total projected capital expenditures to approximately $255.0 million over a 10-year period. The Florida PSC approved the modifications in September 2024.

Delaware Natural Gas Rate Case
In August 2024, the Company's Delaware natural gas division filed an application for a natural gas rate case with the Delaware PSC. In connection with the application, the Company is seeking approval of the following: (i) permanent rate relief of approximately $12.1 million with a ROE of 11.5 percent; (ii) proposed changes to depreciation rates which were part of a depreciation study also submitted with the filing; and (iii) authorization to make certain changes to the existing tariffs. In September 2024, interim rates were approved by the Delaware PSC in the amount of $2.5 million on an annualized basis effective in October 2024. The discovery process has commenced and hearing for the proceeding has been scheduled for May 2025. The outcome of the application is subject to review and approval by the Delaware PSC.

FPU Electric Rate Case
In August 2024, the Company's Florida Electric division filed a petition with the Florida PSC seeking a general base rate increase of $12.6 million with a ROE of 11.3 percent based on a 2025 projected test year. The outcome of the application will be subject to review and approval by the Florida PSC. In October 2024, annualized interim rates of approximately $1.8 million were approved with an effective date of November 1, 2024.

Other Major Factors Influencing Adjusted Gross Margin

Weather and Consumption
Weather was not a significant factor to adjusted gross margin in the third quarter of 2024 compared to the same period in 2023.

For the nine months ended September 30, 2024, higher consumption which includes the effects of colder weather conditions compared to the prior-year period resulted in a $1.2 million increase in adjusted gross margin. While temperatures through September 30, 2024 were colder than the prior-year period, they were approximately 13.2 percent and 13.1 percent warmer, respectively, compared to normal temperatures in our Delmarva and Ohio service territories.

The following table summarizes HDD and CDD variances from the 10-year average HDD/CDD ("Normal") for the three and nine months ended September 30, 2024 and 2023.


Three Months Ended




Nine Months Ended




September 30,




September 30,




2024


2023


Variance


2024


2023


Variance

Delmarva












Actual HDD

6


19


(13)


2,287


2,069


218

10-Year Average HDD ("Normal")

27


38


(11)


2,635


2,731


(96)

Variance from Normal

(21)


(19)




(348)


(662)















Florida












Actual HDD


1


(1)


511


371


140

10-Year Average HDD ("Normal")

1


1



512


550


(38)

Variance from Normal

(1)





(1)


(179)















Ohio












Actual HDD

43


86


(43)


3,180


3,148


32

10-Year Average HDD ("Normal")

65


65



3,661


3,661


Variance from Normal

(22)


21




(481)


(513)















Florida












Actual CDD

1,528


1,533


(5)


2,824


2,793


31

10-Year Average CDD ("Normal")

1,420


1,391


29


2,615


2,535


80

Variance from Normal

108


142




209


258



 

Natural Gas Distribution Growth

The average number of residential customers served on the Delmarva Peninsula increased by approximately 3.9 percent for the three and nine months ended September 30, 2024 while our legacy Florida Natural Gas distribution business increased by approximately 3.9 percent and 3.7 percent, respectively, during the same periods.  

The details of the adjusted gross margin increase are provided in the following table:


Adjusted Gross Margin**


Three Months Ended


Nine Months Ended


September 30, 2024


September 30, 2024

(in thousands)

Delmarva
Peninsula


Florida


Delmarva
Peninsula


Florida

Customer growth:








Residential

$            276


$            470


$         1,118


$         1,997

Commercial and industrial

172


95


452


615

Total customer growth (1)

$            448


$            565


$         1,570


$         2,612

(1) Customer growth amounts for the legacy Florida operations include the effects of revised rates associated with the Company's natural gas base rate proceeding, but exclude the effects of FCG.

Capital Investment Growth and Capital Structure Updates

The Company's capital expenditures were $256.8 million for the nine months ended September 30, 2024. The following table shows a range of the forecasted 2024 capital expenditures by segment and by business line:


2024

(in thousands)

Low


High

Regulated Energy:




Natural gas distribution

$      160,000


$       190,000

Natural gas transmission

75,000


90,000

Electric distribution

30,000


38,000

Total Regulated Energy

265,000


318,000

Unregulated Energy:




Propane distribution

13,000


15,000

Energy transmission

5,000


6,000

Other unregulated energy

13,000


15,000

Total Unregulated Energy

31,000


36,000

Other:




Corporate and other businesses

4,000


6,000

Total 2024 Forecasted Capital Expenditures

$      300,000


$       360,000

The capital expenditure projection is subject to continuous review and modification. Actual capital requirements may vary from the above estimates due to a number of factors, including changing economic conditions, supply chain disruptions, capital delays that are greater than currently anticipated, customer growth in existing areas, regulation, new growth or acquisition opportunities and availability of capital. 

The Company's target ratio of equity to total capitalization, including short-term borrowings, is between 50 and 60 percent. The Company's equity to total capitalization ratio, including short-term borrowings, was approximately 49 percent as of September 30, 2024.

 

Chesapeake Utilities Corporation and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

 



Three Months Ended


Nine Months Ended



September 30,


September 30,



2024


2023


2024


2023

(in thousands, except per share data)









Operating Revenues









   Regulated Energy


$      130,633


$     102,411


$     429,684


$     345,822

Unregulated Energy


35,567


34,970


160,089


158,886

Other businesses and eliminations


(6,062)


(5,834)


(17,619)


(19,439)

Total Operating Revenues


160,138


131,547


572,154


485,269

Operating Expenses









  Natural gas and electricity costs


28,366


26,518


105,662


105,692

  Propane and natural gas costs


9,835


10,576


53,396


55,786

  Operations


49,519


41,217


153,418


128,147

  FCG transaction and transition-related expenses


819


3,899


3,114


3,899

  Maintenance


5,062


5,125


16,526


15,487

  Depreciation and amortization


16,851


17,610


51,744


52,096

  Other taxes


8,768


6,374


27,001


20,674

Total operating expenses


119,220


111,319


410,861


381,781

Operating Income


40,918


20,228


161,293


103,488

Other income (expense), net


400


(72)


1,705


1,036

Interest charges


17,022


7,076


50,861


21,272

Income Before Income Taxes


24,296


13,080


112,137


83,252

Income taxes


6,789


3,673


30,191


21,368

Net Income


$        17,507


$         9,407


$       81,946


$       61,884










Weighted Average Common Shares Outstanding:









Basic


22,501


17,797


22,346


17,784

Diluted


22,564


17,858


22,402


17,847










Earnings Per Share of Common Stock:









Basic


$            0.78


$           0.53


$           3.67


$           3.48

Diluted


$            0.78


$           0.53


$           3.66


$           3.47










Adjusted Net Income and Adjusted Earnings Per Share









Net Income (GAAP)


$        17,507


$         9,407


$       81,946


$       61,884

FCG transaction and transition-related expenses, net (1)


593


2,804


2,276


2,898

Adjusted Net Income (Non-GAAP)**


$        18,100


$       12,211


$       84,222


$       64,782










Earnings Per Share - Diluted (GAAP)


$            0.78


$           0.53


$           3.66


$           3.47

FCG transaction and transition-related expenses, net (1)


0.02


0.16


0.10


0.16

Adjusted Earnings Per Share - Diluted (Non-GAAP)**


$            0.80


$           0.69


$           3.76


$           3.63


(1) Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transaction costs, transition services, consulting, system integration, rebranding and legal fees.

 

Chesapeake Utilities Corporation and Subsidiaries

Consolidated Balance Sheets (Unaudited)

 

Assets


September 30,
2024


December 31,
2023

(in thousands, except per share data)





Property, Plant and Equipment





Regulated Energy


$           2,600,087


$           2,418,494

Unregulated Energy


426,127


410,807

Other businesses and eliminations


32,136


30,310

Total property, plant and equipment


3,058,350


2,859,611

Less: Accumulated depreciation and amortization


(556,421)


(516,429)

Plus: Construction work in progress


156,180


113,192

Net property, plant and equipment


2,658,109


2,456,374

Current Assets





Cash and cash equivalents


1,609


4,904

Trade and other receivables


57,113


74,485

Less: Allowance for credit losses


(2,739)


(2,699)

Trade and other receivables, net


54,374


71,786

Accrued revenue


23,634


32,597

Propane inventory, at average cost


6,781


9,313

Other inventory, at average cost


21,139


19,912

Regulatory assets


20,446


19,506

Storage gas prepayments


4,339


4,695

Income taxes receivable


12,563


3,829

Prepaid expenses


18,965


15,407

Derivative assets, at fair value


405


1,027

Other current assets


2,232


2,723

Total current assets


166,487


185,699

Deferred Charges and Other Assets





Goodwill


507,852


508,174

Other intangible assets, net


15,475


16,865

Investments, at fair value


14,156


12,282

Derivative assets, at fair value


122


40

Operating lease right-of-use assets


10,945


12,426

Regulatory assets


81,899


96,396

Receivables and other deferred charges


12,147


16,448

Total deferred charges and other assets


642,596


662,631

Total Assets


$           3,467,192


$           3,304,704

 

Chesapeake Utilities Corporation and Subsidiaries

 Consolidated Balance Sheets (Unaudited)

 

Capitalization and Liabilities


September 30,
2024


December 31,
2023

(in thousands, except per share data)





Capitalization





Stockholders' equity





Preferred stock, par value $0.01 per share (authorized 2,000 shares), no shares issued and outstanding


$                       —


$                       —

Common stock, par value $0.4867 per share (authorized 50,000 shares)


11,085


10,823

Additional paid-in capital


812,896


749,356

Retained earnings


528,426


488,663

Accumulated other comprehensive loss


(4,135)


(2,738)

Deferred compensation obligation


9,775


9,050

Treasury stock


(9,775)


(9,050)

Total stockholders' equity


1,348,272


1,246,104

Long-term debt, net of current maturities


1,172,956


1,187,075

Total capitalization


2,521,228


2,433,179

Current Liabilities





Current portion of long-term debt


18,522


18,505

Short-term borrowing


214,753


179,853

Accounts payable


70,138


77,481

Customer deposits and refunds


47,408


46,427

Accrued interest


13,776


7,020

Dividends payable


14,492


13,119

Accrued compensation


14,495


16,544

Regulatory liabilities


14,762


13,719

Derivative liabilities, at fair value


633


354

Other accrued liabilities


25,832


13,362

Total current liabilities


434,811


386,384

Deferred Credits and Other Liabilities





Deferred income taxes


289,208


259,082

Regulatory liabilities


190,512


195,279

Environmental liabilities


2,441


2,607

Other pension and benefit costs


16,327


15,330

Derivative liabilities, at fair value


2,030


927

Operating lease - liabilities


9,157


10,550

Deferred investment tax credits and other liabilities


1,478


1,366

Total deferred credits and other liabilities


511,153


485,141

Environmental and other commitments and contingencies (1)





Total Capitalization and Liabilities


$           3,467,192


$           3,304,704


(1) Refer to Note 6 and 7 in the Company's Quarterly Report on Form 10-Q for further information.

 

Chesapeake Utilities Corporation and Subsidiaries

Distribution Utility Statistical Data (Unaudited)

 


For the Three Months Ended September 30, 2024


For the Three Months Ended September 30, 2023


Delmarva NG
Distribution


Florida
Natural Gas
Distribution


Florida City 
Gas
Distribution


FPU Electric
Distribution


Delmarva NG
Distribution


Florida
Natural Gas
Distribution


FPU Electric
Distribution

Operating Revenues
(in thousands)














  Residential

$              8,277


$              9,583


$            12,026


$            16,053


$              8,663


$              9,862


$            16,967

  Commercial and Industrial

7,119


22,873


15,713


14,368


9,119


26,020


15,920

  Other (1)

2,375


4,485


5,710


(565)


217


2,441


(204)

Total Operating Revenues

$            17,771


$            36,941


$            33,449


$            29,856


$            17,999


$            38,323


$            32,683















Volumes (in Dts for natural gas and MWHs for electric)














  Residential

237,744


347,995


341,010


100,207


245,612


325,445


102,699

  Commercial and Industrial

1,913,091


9,070,258


2,686,804


118,214


1,915,125


10,684,539


96,716

  Other

59,512


659,557


1,496,698



62,277



Total

2,210,347


10,077,810


4,524,512


218,421


2,223,014


11,009,984


199,415















Average Customers














  Residential

101,635


92,125


114,200


25,776


97,847


88,640


25,782

  Commercial and Industrial

8,322


8,494


8,567


7,354


8,208


8,411


7,382

  Other

27



118



24


6


Total

109,984


100,619


122,885


33,130


106,079


97,057


33,164
















For the Nine Months Ended September 30, 2024


For the Nine Months Ended September 30, 2023


Delmarva NG
Distribution


Florida
Natural Gas
Distribution


Florida City
Gas
Distribution


FPU Electric
Distribution


Delmarva NG
Distribution


Florida
Natural Gas
Distribution


FPU Electric
Distribution

Operating Revenues
(in thousands)














  Residential

$            60,003


$            36,201


$            39,975


$            38,704


$            67,562


$            38,546


$            39,347

  Commercial and Industrial

35,009


80,647


52,115


37,285


41,637


80,499


39,913

  Other (1)

(2,262)


7,966


9,730


(3,623)


(6,696)


6,401


(805)

Total Operating Revenues

$            92,750


$          124,814


$          101,820


$            72,366


$          102,503


$          125,446


$            78,455















Volumes (in Dts for natural gas and MWHs for electric)














  Residential

3,499,276


1,714,914


1,367,409


243,454


3,302,125


1,551,348


238,051

  Commercial and Industrial

7,588,547


29,318,803


8,455,727


301,687


7,523,061


31,047,013


239,505

  Other

207,213


1,962,689


4,566,210



213,600


627,934


Total

11,295,036


32,996,406


14,389,346


545,141


11,038,786


33,226,295


477,556















Average Customers














  Residential

101,045


91,345


113,633


25,747


97,230


88,051


25,718

  Commercial and Industrial

8,361


8,484


8,545


7,361


8,242


8,408


7,373

  Other

26



109



23


6


Total

109,432


99,829


122,287


33,108


105,495


96,465


33,091
















(1) Operating Revenues from "Other" sources include unbilled revenue, under (over) recoveries of fuel cost, conservation revenue, other miscellaneous charges, fees for billing services provided to third parties and adjustments for pass-through taxes.

 

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SOURCE Chesapeake Utilities Corporation

FAQ

What was Chesapeake Utilities (CPK) earnings per share in Q3 2024?

Chesapeake Utilities reported earnings per share of $0.78 in Q3 2024, or $0.80 adjusted EPS excluding FCG acquisition-related expenses.

What is CPK's 2024 earnings guidance?

Chesapeake Utilities affirmed its 2024 adjusted EPS guidance range of $5.33 to $5.45.

How much was CPK's Q3 2024 net income?

Chesapeake Utilities reported net income of $17.5 million for Q3 2024, compared to $9.4 million in Q3 2023.

What is CPK's capital expenditure guidance for 2024?

The company affirmed its 2024 capital expenditure guidance of $300 million to $360 million.

Chesapeake Utilities

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