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Artesian Resources Corporation Reports Year-to-Date and Second Quarter 2016 Results

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NEWARK, Del., Aug. 03, 2016 (GLOBE NEWSWIRE) -- Artesian Resources Corporation (Nasdaq: ARTNA), a leading provider of water, wastewater services and related services on the Delmarva Peninsula, today announced that net income for the first six months of 2016 was $5.9 million, a $0.1 million increase compared to net income of $5.8 million recorded for the same period of 2015.  Diluted net income per share was $0.64 for the six months ended June 30, 2016 and for the six months ended June 30, 2015. 

Revenues during the first six months of 2016 were $37.8 million, a 0.9% increase from the $37.5 million in revenues recorded for the same six month period in 2015.  Water sales revenues increased $0.2 million, or 0.7%, for the six months ended June 30, 2016 compared to the same period a year ago.  The increase primarily was a result of an increase in the Distribution System Improvement Charge, or DSIC, compared to the same period a year ago, which was partially offset by a decrease in overall water consumption. 

Excluding depreciation and income taxes, operating expenses increased $0.3 million, or 1.5% to $20.8 million for the six months ended June 30, 2016, compared to $20.5 million for the same period in 2015.  Utility operating expenses for the six months ended June 30, 2016 were $17.3 million, a $0.2 million, or 0.9% increase from the same period a year ago, which is mainly the result of increases in employee payroll and benefit costs.   

Interest expense decreased 4.4% to $3.3 million for the first six months of 2016 compared to $3.5 million for the same period in 2015.  The decrease reflects the reduction in the Series S First Mortgage Bond annual interest rate from 6.73% to 4.45%, effective March 1, 2016 and a decrease in short-term debt outstanding.  "Our ability to obtain a reduction in the interest rate on $10.7 million of outstanding debt reflects our on-going efforts to reduce costs while ensuring we continue to provide superior service to our customers," said Dian C. Taylor, Chair, President and CEO.     

Net income for the second quarter of 2016 was $3.0 million, a decrease of $0.2 million, compared to $3.2 million in net income recorded during the second quarter of 2015.  Diluted net income per share decreased to $0.33 compared to $0.36 for the second quarter of 2015. 

Revenues for the second quarter of 2016 were $19.4 million, a 0.7% decrease from the $19.5 million in revenues recorded for the same three month period of 2015.  Water sales revenues decreased $0.2 million, or 0.9%, for the three months ended June 30, 2016 compared to the same period a year ago.  This decrease primarily was a result of lower overall water consumption during the three months ended June 30, 2016 compared to the same period a year ago as a result of a much cooler and wetter weather pattern this May compared to May 2015, which was partially offset by an increase in the DSIC.  Non-utility operating revenue was $1.2 million for the three months ended June 30, 2016 and 2015, respectively.

"The year to year differences in weather during the spring often impact water use and therefore our water sales revenue.  That was certainly the case when comparing May 2016, which was the 5th wettest May in Delaware history, to May 2015, which was the 10th driest May in Delaware since recordkeeping began in 1895," said Taylor.

Excluding depreciation and income taxes, operating expenses increased $0.3 million, or 2.8% to $10.5 million for the second quarter of 2016, compared to $10.2 million for the same period in 2015.  Utility operating expenses for the second quarter of 2016 were $8.8 million, a $0.3 million, or 3.1%, increase from the $8.5 million recorded for the same period in 2015, which is mainly the result of increases in legal, payroll and employee benefit costs.

Interest expense decreased 6.2% to $1.6 million for the second quarter of 2016, compared to $1.8 million for the same period in 2015.  The decrease reflects the reduction in the Series S First Mortgage Bond annual interest rate from 6.73% to 4.45% effective March 1, 2016 and a decrease in short-term debt outstanding. 

The Company invested $12.1 million in infrastructure improvements during the first six months of 2016 to ensure high quality and reliable service to customers.  Significant infrastructure improvements included the replacement of aging water mains, enhancement of water treatment facilities, rehabilitation of pumping equipment and the relocation of mains as mandated by state highway projects.  "Artesian continues to make the necessary investments in water infrastructure to ensure safe, reliable and quality water service to its customers," said Taylor.

About Artesian Resources
Artesian Resources Corporation operates as a holding company of wholly-owned subsidiaries offering water, wastewater services and related services on the Delmarva Peninsula.  Artesian Water Company, the principal subsidiary, is the oldest and largest investor-owned water utility on the Delmarva Peninsula and has been providing water service since 1905.  Artesian supplies 7.6 billion gallons of water per year through 1,218 miles of water main to approximately 301,000 people.

  
Artesian Resources Corporation 
Condensed Consolidated Statement of Operations 
(In thousands, except per share amounts) 
(Unaudited) 
             
  Three months ended  Six months ended 
  June 30,  June 30, 
   2016    2015   2016  2015 
Operating Revenues            
Water sales$ 17,323  $ 17,474  $33,760 $33,512 
Other utility operating revenue  912    894   1,777  1,756 
Non-utility operating revenue  1,160    1,168   2,308  2,229 
   19,395    19,536   37,845  37,497 
             
Operating Expenses            
Utility operating expenses  8,766    8,501   17,312  17,162 
Non-utility operating expenses  590    607   1,226  1,127 
Depreciation and amortization  2,249    2,192   4,564  4,401 
State and federal income taxes  2,023    2,191   3,975  3,955 
Property and other taxes  1,098    1,060   2,246  2,195 
   14,726    14,551   29,323  28,840 
             
Operating Income  4,669    4,985   8,522  8,657 
             
Allowance for funds used during construction   49    43   72  67 
Miscellaneous  (31)   (41)  625  549 
             
Income Before Interest Charges  4,687    4,987   9,219  9,273 
             
Interest Charges  1,646    1,754   3,349  3,503 
             
Net Income $ 3,041  $ 3,233  $5,870 $5,770 
             
Weighted Average Common Shares Outstanding - Basic  9,092    8,926   9,079  8,922 
Net Income per Common Share - Basic$ 0.33  $ 0.36  $0.65 $0.65 
             
Weighted Average Common Shares Outstanding - Diluted  9,155    8,960   9,142  8,958 
Net Income per Common Share - Diluted$ 0.33  $ 0.36  $0.64 $0.64 
             
Artesian Resources Corporation 
Condensed Consolidated Balance Sheet 
(In thousands) 
(Unaudited) 
             
 June 30, December 31,       
 2016 2015       
Assets            
Utility Plant, at original cost less             
accumulated depreciation$ 413,642  $ 405,606        
Current Assets  13,987    14,444        
Regulatory and Other Assets  11,329    11,576        
 $ 438,958  $ 431,626        
             
Capitalization and Liabilities            
             
Stockholders' Equity$ 135,388  $ 132,331        
Long Term Debt, Net of Current Portion  102,992    103,647        
Current Liabilities  17,452    22,403        
Net Advances for Construction  8,608    8,752        
Contributions in Aid of Construction  108,118    99,847        
Other Liabilities  66,400    64,646        
 $ 438,958  $ 431,626        
             



Contact: Nicki Taylor Investor Relations (302) 453-6900 ntaylor@artesianwater.com

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