UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

OR

[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                  to                             

Commission File Number: 1-1055

Florida Public Utilities Company

(Exact name of registrant as specified in its charter)

Florida

59-0539080

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

401 South Dixie Highway, West Palm Beach, FL

33401

(Address of principal executive offices)

(Zip Code)

(561) 832-0872

(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 Yes    [ X ]            No  [   ]    

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes   [    ]      No    [ X ]

     On June 30, 2004, there were 3,943,644 shares of $1.50 par value common shares outstanding.

FLORIDA PUBLIC UTILITIES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(dollars in thousands, except per share data)

           Three Months Ended

          Six Months Ended

             June 30,

          June 30,

Revenues

               2004

         2003

       2004

         2003

   Natural gas

$        12,109

$      12,792

$       29,172

 $      31,177

   Electric

10,126

        9,383

          20,440

         19,187

   Propane gas

2,494

          2,234

    5,842

           5,194

      Total revenues

24,729

24,409

55,454

55,558

Cost of fuel and taxes based on revenues

15,368

15,265

35,187

35,173

Gross Profit

9,361

9,144

20,267

20,385

Operating Expenses

   Operations

5,545

5,463

11,122

10,595

   Depreciation and amortization

1,451

1,375

2,955

2,703

   Taxes other than income taxes

650

655

1,356

1,301

      Total operating expenses

7,646

7,493

15,433

14,599

Operating income before income taxes

1,715

1,651

         4,834

        5,786

Other Income and (Deductions)

   Merchandise and service revenue

762

586

               1,626

          1,389

   Merchandise and service expenses

(741)

(570)

             (1,566)

           (1,327)

   Other income

142

157

                 286

         84

   Interest expense

(1,108)

(1,105)

             (2,215)

            (2,283)

      Total other deductions -- net

(945)

(932)

             (1,869)

           (2,137)

Income from continuing operations before income taxes

770

719

              2,965

             3,649

Income taxes

248

237

                1,030

             1,354

Income from continuing operations

522

482

              1,935

            2,295

Discontinued operations

   Income from discontinued operations – water

      Division

-

-

                       -

             149

   Income taxes

-

-

                       -

             (16)

   Gain (loss) on disposal of water division, net of

      income taxes (benefits) of ($37) and $5,923,

      respectively

-

(61)

                        -

             9,688

     Total income (loss) from discontinued            

       operations

-

(61)

                        -

           9,821

Net Income

522

421

1,935

          12,116

Preferred Stock Dividends

7

7

                14

                14

Earnings for Common Stock

$           515

$          414

$         1,921

$      12,102

Earnings (Loss) Per Common Share (basic and diluted):

   Continuing Operations

$          0.13

$         0.13

$           0.49

$          0.59

   Discontinued Operations

-

(0.02)

               0.00

           2.52

     Total

$          0.13

$         0.11

$           0.49

$          3.11

Dividends Declared Per Common Share

$      0.1500

$     0.1475

$       0.2975

$      0.2900

Average Shares Outstanding

3,932,009

3,899,488

     3,930,306

3,897,233

The financial statements should be read in conjunction with the Notes herein and the Notes to Condensed Consolidated Financial Statements appearing in the most recent Form 10-K.

FLORIDA PUBLIC UTILITIES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(dollars in thousands)

June 30,

December 31,

2004

2003

ASSETS

Utility Plant

      $    166,684

      $    160,644

   Less accumulated depreciation

              54,198

              52,302

      Net utility plant

            112,486

            108,342

Current Assets

   Cash

                1,828

                   859

   Accounts receivable

                7,755

                9,614

   Allowance for uncollectible accounts

                  (220)

                  (180)

   Unbilled receivables

                1,495

                1,673

   Notes receivable

                   357

                   244

   Inventories (at average or unit cost)

                2,722

                2,624

   Prepayments and deferrals

                4,637

                5,518

        Total current assets

              18,574

              20,352

Other Assets

   Investments held for environmental costs

                3,164

                3,149

   Other regulatory assets – environmental

                9,127

                9,127

   Long term receivable and other investments

                5,625

                5,672

   Deferred charges

              10,082

              10,161

   Goodwill

                3,366

                3,366

   Intangible assets (net)

                2,817

                2,821

      Total other assets

              34,181

              34,296

          Total

      $    165,241

      $    162,990

CAPITALIZATION AND LIABILITIES

Capitalization

   Common shareholders' equity

      $      42,514

      $      41,463

   Preferred stock

                   600

                   600

   Long-term debt

              52,500

              52,500

      Total capitalization

              95,614

              94,563

Current Liabilities

    Line-of-credit

                3,317

                2,278

   Accounts payable

                8,300

                8,864

   Insurance accrued

                   427

                   421

   Interest accrued

                   796

                   935

   Taxes accrued

                1,190

                   359

   Other accruals and payables

                3,403

                3,824

   Over recovery of fuel costs

                1,351

                1,740

   Over recovery of conservation and unbundling

                   371

                     71

   Customer deposits

                6,601

                6,134

      Total current liabilities

              25,756

              24,626

Other Liabilities

   Deferred income taxes and regulatory tax liability

              17,628

              17,882

   Environmental liabilities and other

              24,557

              24,102

   Long term medical and pension reserve

                1,686

                1,817

      Total other liabilities

              43,871

              43,801

          Total

      $    165,241

      $    162,990

The financial statements should be read in conjunction with the Notes herein and the Notes to Condensed Consolidated Financial Statements appearing in the most recent Form 10-K.

FLORIDA PUBLIC UTILITIES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars in thousands)

Six Months Ended

June 30,

2004

       2003

Net Cash Flow provided by

   Continuing Operating Activities

$       7,479

$     2,463

Net Cash Flow used in Discontinued Operations

-

(98)

Cash Flows from Investing Activities

   Construction expenditures

(6,992)

(3,248)

   Taxes on long term investments, net of interest

(15)

(265)

   Proceeds from sale of discontinued operations

66

19,184

   Other

264

55

      Net cash (used in) provided by investing activities

(6,677)

15,726

Cash Flows from Financing Activities

   Net change in short-term borrowings

1,039

(19,003)

   Dividends paid

(1,171)

(1,122)

   Other

299

242

      Net cash provided by (used in) financing activities

167

(19,883)

Net increase (decrease) in cash

969

(1,792)

Cash at beginning of period

859

3,200

Cash at end of period

$        1,828

$     1,408

The financial statements should be read in conjunction with the Notes herein and the Notes to Condensed Consolidated Financial Statements appearing in the most recent Form 10-K.