Friday March 16, 2007
Southwest Water Company Reports
Fourth Quarter and Full Year 2006 Financial Results
Source: Business Wire
Fourth Quarter Results
In the fourth quarter of 2006, revenues increased 11% to $57.9 million from $52.0 million in the fourth quarter of 2005. Operating income was up 60% to $6.4 million versus $4.0 million in the same period of 2005. Net income grew 128% to $3.1 million, or $0.13 per diluted share, compared with $1.4 million, or $0.06 per diluted share, for the fourth quarter 2005.
Full Year Results
For the full year, revenues rose 10% to $224.2 million from $203.2 million in 2005. Operating income grew 22% to $22.2 million compared with $18.1 million in 2005. Income from continuing operations was up 28% to $9.3 million, or $0.40 per diluted share, compared with $7.3 million, or $0.34 per diluted share, in 2005. Net income was $9.4 million compared to $2.4 million in 2005, which included a loss from discontinued operations of $4.9 million. Weighted average diluted shares outstanding for the year increased 8% to 23.4 million.
"2006 was an excellent year for both of our divisions," said Mark A. Swatek, Southwest Water chief executive officer and chairman. "In the second half of the year, our Utility Group benefited from warm, dry weather and a rate increase in California and continued organic customer growth in our New Mexico and Texas utilities."
"Our Services Group," continued Swatek, "grew revenue through new contracts and enhanced their bottom line through increased efficiencies and improved contract pricing."
SG&A expenses for the year were $34.4 million versus $30.8 million in 2005, remaining stable at 15% of revenues. Total company funded capital expenditures in 2006 were $36.7 million, representing on-going investment in the company's water and wastewater infrastructure.
Division Results for Full Year 2006
Revenues in the Utility Group were $87.9 million in 2006, up from $80.0 million in 2005, which include intersegment revenues of $1.6 million and $1.1 million, respectively. This 10% increase was primarily due to increased consumption in California, rate increases in California and Texas, increased connections in New Mexico and Texas, and a full year of operations at a utility acquired in Alabama in the fourth quarter of 2005.
Utility Group operating income in 2006 increased 15% to $31.2 million compared with $27.1 million in 2005, primarily due to the company's ability to defer certain expenses of $2.2 million to a balancing account for recovery in future rates in California, a full year of operations at the Alabama utility, increased connections in New Mexico and Texas and a reduction in expenses of $0.4 million from a gain on sale of land in California.
Services Group revenues were $166.6 million in 2006, up from $146.3 million in 2005, which include intersegment revenues of $40.4 million and $31.3 million, respectively. This 14% increase was primarily due to increased contract operations, maintenance and construction work from new contracts and growth in customer base in existing contracts as a result of increased housing starts. Operating income increased 23% to $4.4 million, up from $3.6 million in 2005. Operating margin improved as a result of increased sales with higher margins, combined with improved pricing on several contracts that were successfully renegotiated.
Conference Call
The company will provide more detail regarding its fourth quarter and full year 2006 results in a conference call and web cast to be held today, March 16, 2007, at 4:30 p.m. Eastern time (1:30 p.m. Pacific). The conference call can be accessed on the company's website at www.swwc.com For those unable to participate in the live web cast, a replay will be available shortly after the call on the company's website. A telephonic replay will also be available beginning at 6:30 p.m. Eastern (3:30 p.m. Pacific) until midnight March 23, 2007 at 888-286-8010 (international callers 617-801-6888), passcode 11952201.
Southwest Water Company provides a broad range of services, including water production, treatment and distribution; wastewater collection and treatment; utility billing and collection; utility infrastructure construction management; and public works services. The company owns regulated public utilities and also serves cities, utility districts and private companies under contract. More than two million people from coast to coast depend on Southwest Water for high-quality, reliable service. Additional information may be found on the company's website: www.swwc.com
Contact:
Southwest Water Company
DeLise Keim, VP Corp. Communications, 213-929-1846
www.swwc.com
or
PondelWilkinson Inc.
Robert Jaffe, 310-279-5969
www.pondel.com
