Middlesex Water Announces First Quarter 2024 Results

Rhea-AI Summary

Middlesex Water Company reported strong first quarter 2024 financial results, with net income increasing by 82.1% to $10.7 million, diluted earnings per share rising by 78.8% to $0.59, and revenues increasing by 6.2% to $40.5 million. The company's capital investment plan is on schedule, and a dividend of $0.325 per share is payable in June. The annual dividend rate has been increased for fifty-one consecutive years.

Positive

• Strong first quarter 2024 financial results with an 82.1% increase in net income to $10.7 million.

• Diluted earnings per share rose by 78.8% to $0.59 compared to the same period in 2023.

• Revenues increased by 6.2% to $40.5 million for the first quarter of 2024.

• Capital investment plan delivery is on schedule.

• Declared dividend of $0.325 per share payable in June.

• Increased annual dividend rate for fifty-one consecutive years.

Negative

• None.

Insights

Financial Analyst

The pronounced rise in net income for Middlesex Water, at an impressive 82.1%, suggests a robust fiscal performance, particularly when contrasted with the previous year. This sharp increase can be primarily credited to the cost recovery mechanism authorized by the New Jersey Board of Public Utilities following the PFOA lawsuit settlement. It's worth noting the relatively modest revenue increase—only 6.2%—which indicates that the net income boost does not stem from revenue growth, but rather improved margins and cost recovery strategies. This effective management of expenses and leveraging of regulatory instruments could signal strong governance and operational efficiency, elements that often contribute to a stock's long-term appeal. The dividend declaration, consistent since 1912 and increasing for fifty-one consecutive years, underscores a commitment to returning value to shareholders. Such a track record can be a sign of reliability and financial stability, which are key considerations for investors seeking steady dividend income.

Utilities Sector Analyst

The report indicates a successful rate filing in New Jersey, which led to increased revenues from the Middlesex system. This points to the company's ability to navigate regulatory landscapes effectively—an essential factor in the utilities sector. It is important to highlight the associated industry-specific nuance: utilities companies rely heavily on regulatory approvals for rate increases, which can compensate for capital investments and operational costs. Middlesex’s case reflects a successful alignment with regulatory requirements, which is promising for sustainability and potential growth. Additionally, the mention of heightened customer demand in the Delaware system aligns with favorable demographic trends and could indicate scalable growth opportunities in that region. Operation and maintenance expenses only slightly increased despite enhanced water treatment processes, suggesting operational efficiencies are being realized. The strategic focus on infrastructure investment and technology for service quality improvement is a positive indicator for future resilience against regulatory changes and market demands.

HIGHLIGHTS

• First Quarter 2024 Net Income was $10.7 million, as compared to $5.9 million in 2023, an increase of 82.1%
• First Quarter 2024 Diluted Earnings Per Share were $0.59, as compared to $0.33 in 2023, an increase of 78.8%
• First Quarter 2024 Revenues were $40.5 million, as compared to $38.2 million in 2023, an increase of 6.2%
• 2024 Capital Investment Plan Delivery on schedule
• Dividend of $0.325 per share of common stock payable in June

ISELIN, N.J., May 08, 2024 (GLOBE NEWSWIRE) -- Middlesex Water Company (“Middlesex” or the “Company”) (NASDAQ:MSEX) a provider of water and wastewater services, today reported first quarter financial results.

First Quarter 2024 Results

Diluted earnings per share were $0.59 for the three months ended March 31, 2024, compared to $0.33 for the same period in 2023. Net income for the quarter ended March 31, 2024 rose to $10.7 million from $5.9 million during the same period in 2023. Most of the increase is attributable to the recovery of operating and carrying costs associated with the prior period construction and operation of the water treatment facilities at Middlesex’s Park Avenue Wellfield. As part of the New Jersey Board of Public Utilities (NJBPU) approved Middlesex base rate case, which included the impact of the previously disclosed PFOA lawsuit settlement, the NJBPU authorized these operating and carrying costs to be recovered after Middlesex first applied settlement proceeds to the cost of the water treatment facilities at Middlesex’s Park Avenue Wellfield.

Quarterly consolidated operating revenues rose $2.4 million to $40.5 million compared to the same period in 2023. Revenues in our Middlesex System increased $1.6 million due to the NJBPU approved base rate increase which took effect March 1, 2024, and higher commercial and industrial customer billings. In our Delaware system, revenues increased $0.8 million due to increased customer connections and heightened customer demand.

Operation and maintenance expenses for the first quarter of 2024 increased $0.2 million from the same period in 2023. The increase was largely related to an enhanced water treatment process at the Company’s Park Avenue Plant, increased labor costs, and outside professional support services costs. These costs were offset by the cost recovery described above.

Middlesex President and Chief Executive Officer Nadine Leslie said, “We continue to focus on our strategy: infrastructure investments, growth, training, technology to improve service quality and reliability, protect the safety of our employees and customers, enhance efficiencies in our business processes and deliver to our shareholders’ expectations. Our successful New Jersey rate filing, which took effect March 1 in our Middlesex system, provides for recovery of numerous investments made to ensure delivering water services that meets state and federal regulations,” added Ms. Leslie.

Board Declares Dividend
We previously announced that our Board of Directors declared a quarterly cash dividend of $0.325 per common share payable on June 3, 2024, to shareholders of record as of May 15, 2024. Middlesex has paid cash dividends in varying amounts continually since 1912 and has increased its annual dividend rate for fifty-one consecutive years.

Virtual Annual Meeting Announced
Middlesex Water will be holding its Annual Meeting virtually online on Tuesday, May 21, 2024, at 11:00 a.m. EDT. Shareholders may obtain instructions to access the meeting by visiting www.virtualshareholdermeeting.com/MSEX2024 and entering the 16-digit control number listed on their Notice of Internet Availability of Proxy Materials or proxy card.

ABOUT MIDDLESEX WATER COMPANY

Established in 1897, Middlesex Water Company (NASDAQ: MSEX) serves as a trusted provider of life-sustaining high quality water service for residential, commercial, industrial and fire protection purposes. The Company and its subsidiaries form the Middlesex family of companies, which collectively serve a population of nearly half a million people in New Jersey and Delaware. We offer a full range of water, wastewater utility and related services including municipal and industrial contract operations and water and wastewater system technical operations and maintenance. We are focused on meeting and balancing the needs of our employees, customers, and shareholders. We invest in our people, our infrastructure, and the communities we serve to support reliable and resilient utility services, economic growth and quality of life.  Information about Middlesex Water’s Investment Plan (Direct Share Purchase and Sale and Dividend Reinvestment Plan) is available at https://shareholder.broadridge.com/middlesexwater/

This press release contains “forward‐looking statements” within the meaning of U.S. federal securities laws reflecting the current beliefs or expectations of Middlesex Water Company “MSEX” or the “Company” regarding its future performance, its financial condition, its strategic plans and cash flows, its results of operations as well as any other statements that do not directly relate to any historical or current facts. These statements reflect the Company’s current views and information currently available.  This information is based on estimates, assumptions and analysis that the Company believes, as of the date hereof, provide a reasonable basis for the information contained herein.  Forward‐looking statements can generally be identified by the use of forward‐looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “foresees.” Actual results, performance or achievements may differ materially from forward‐looking statements, and the assumptions on which forward-looking statements are based.  There can be no assurance that the information contained herein is reflective of future performance, and investors are cautioned not to place undue reliance on forward‐looking statements as a predictor of future performance. Unless otherwise specified, all information contained in this press release speaks only as of the date hereof. The Company undertakes no duty to update or revise the information contained herein, whether as a result of new information, future events or otherwise.

Media Contact:
Bernadette Sohler, Vice President – Corporate Affairs
Middlesex Water Company
(732) 638-7549
www.middlesexwater.com

MIDDLESEX WATER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands except per share amounts)
			Three Months Ended March 31,
				2024			2023
Operating Revenues			$	40,524		$	38,156
Operating Expenses:
	Operations and Maintenance			20,465			20,257
	Depreciation			5,396			5,986
	Other Taxes			4,798			4,423
Total Operating Expenses				30,659			30,666
Operating Income				9,865			7,490
Other Income (Expense):
	Allowance for Funds Used During Construction			176			813
	Other Income (Expense), net			5,189			898
Total Other Income, net				5,365			1,711
Interest Charges				3,269			2,595
Income before Income Taxes				11,961			6,606
Income Taxes				1,279			738
Net Income				10,682			5,868
Preferred Stock Dividend Requirements				30			30
Earnings Applicable to Common Stock			$	10,652		$	5,838
Earnings per share of Common Stock:
	Basic		$	0.60		$	0.33
	Diluted		$	0.59		$	0.33
Average Number of Common Shares Outstanding:
	Basic			17,819			17,652
	Diluted			17,934			17,767

FAQ

What were Middlesex Water's first quarter 2024 net income and diluted earnings per share?

Middlesex Water's net income for the first quarter of 2024 was $10.7 million, and diluted earnings per share were $0.59.

What was the increase in revenues for the first quarter of 2024 compared to 2023?

Revenues for the first quarter of 2024 increased by 6.2% to $40.5 million compared to 2023.

When is the dividend payable and how much is it per share?

The dividend of $0.325 per share is payable on June 3, 2024.

What is the date of Middlesex Water's virtual Annual Meeting in 2024?

Middlesex Water's Annual Meeting will be held virtually online on Tuesday, May 21, 2024, at 11:00 a.m. EDT.