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EXHIBIT 99.1


SJW GROUP ANNOUNCES 2020 SECOND QUARTER FINANCIAL RESULTS

SAN JOSE, CA, August 6, 2020 – SJW Group (NYSE: SJW) today reported financial results for the second quarter ended June 30, 2020. SJW Group net income was $19.7 million for the quarter ended June 30, 2020, compared to $13.5 million for the same period in 2019. Diluted earnings per share were $0.69 and $0.47 for the quarters ended June 30, 2020 and 2019, respectively. Diluted earnings per share in 2020 includes $0.72 per share from ongoing operations offset by non-recurring expenses related to COVID-19 related reserves and expenses of $731,000 (net of tax) or $0.03 per share. Diluted earnings per share in 2019 includes $0.47 per share from ongoing operations and $0.06 per share of interest income earned on temporarily invested proceeds from our equity offering in December 2018, offset by $0.06 per share of non-recurring expenses related to the Connecticut Water Service, Inc. ("CTWS") merger.

The Company is affirming its 2020 guidance provided in the 2020 first quarter press release of a range of $1.95 and $2.05 per diluted share.

Operating revenue was $147.2 million for the quarter ended June 30, 2020, compared to $103.0 million in 2019. The $44.2 million increase in revenue was primarily attributable to $32.8 million in new revenue as a result of the merger with CTWS, $8.4 million in increased customer usage, and $1.6 million in cumulative water rate increases, partially offset by a $1.3 million decrease in the net recognition of certain balancing and memorandum accounts. In addition, we issued $2.2 million in customer rate credits in the prior year related to our billing settlement with the California Public Utilities Commission ("CPUC"). No similar rate credits were required in 2020.

Operating expenses for the quarter ended June 30, 2020, were $111.1 million, compared to $81.0 million in 2019, an increase of $30.1 million. Operating expenses include water production expenses for the second quarter of 2020 of $58.2 million compared to $42.1 million for the same period in 2019, an increase of $16.1 million. The increase in water production expenses was primarily attributable to $6.9 million in new CTWS expenses, $6.7 million due to a decrease in surface water supplies, $2.9 million in higher customer water usage, and $1.5 million in higher per unit costs for purchased water, groundwater extraction and energy charges, partially offset by a $1.9 million decrease in cost recovery balancing and memorandum accounts. Operating expenses, excluding water production costs, increased $14.1 million to $53.0 million from $38.9 million. The increase was primarily due to a $7.7 million increase in depreciation expenses, $4.5 million in higher general and administrative expenses, $3.3 million in higher property taxes and other non-income taxes, and $605,000 in higher maintenance expenses. The increases were primarily a result of inclusion of CTWS post-merger activities. In addition, we experienced $1.8 million in lower merger related expenses.

Other expense and income in the second quarter of 2020 included $4.1 million in new interest on SJW Group’s $510.0 million Senior Notes issued in October 2019 and $307,000 in new interest on Connecticut Water Company's $35.0 million Senior Notes issued in March 2020. Other expense and income in the second quarter of 2019 included $2.3 million of interest income earned on temporarily invested proceeds from our equity offering in December 2018. The proceeds were used to partially finance the CTWS merger and no similar income was earned in the second quarter of 2020.

The effective consolidated income tax rates for the quarters ended June 30, 2020 and 2019, were approximately 18% and 23%, respectively. The effective tax rate decreased primarily due to the flow-through impact of certain CTWS tax deductions.

Year-to-date net income was $22.1 million, compared to $19.4 million in 2019. Diluted earnings per share were $0.77 in the first six months of 2020, compared to $0.68 per diluted share for the same period in 2019. Diluted earnings per share in 2020 includes $0.86 per share from ongoing operations offset by non-recurring expenses related to the CTWS merger and integration fees of $1.4 million (net of tax) or $0.05 per share and COVID-19 related reserves and expenses of $1.2 million (net of tax) or $0.04 per share. Diluted earnings per share in 2019 includes $0.69 per

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share from ongoing operations and $0.11 per share of interest income earned on temporarily invested proceeds from our equity offering in December 2018, offset by $0.12 per share of non-recurring expenses related to the CTWS merger.

Year-to-date operating revenue increased by $82.4 million to $263.0 million from $180.6 million in the first six months of 2020. The increase was attributable to $60.2 million in new revenue as a result of the merger with CTWS, $14.4 million in increased customer usage, and $5.1 million in cumulative water rate increases. In addition, as previously noted we issued $2.2 million in customer rate credits in the prior year related to our billing settlement with the CPUC. No similar rate credits were required in 2020.

Year-to-date water production expenses increased to $102.0 million from $68.9 million in 2019. The $33.1 million increase was attributable to $13.1 million in new CTWS expenses, $12.1 million due to a decrease in the use of available surface water supplies, $8.2 million in higher customer water usage, and $3.0 million in higher per unit costs for purchased water, groundwater extraction and energy charges, partially offset by a $3.4 million decrease in cost recovery balancing and memorandum accounts. Operating expenses, excluding water production costs, increased $32.1 million to $109.5 million from $77.4 million. The increase was primarily due to a $13.9 million increase in depreciation expenses, $13.7 million in higher general and administrative expenses, $6.6 million in higher property taxes and other non-income taxes, and $2.4 million in higher maintenance expenses. The increases were primarily a result of inclusion of CTWS post-merger activities. In addition, we experienced $4.4 million in lower merger related expenses.

Other expense and income year-to-date for 2020 included $8.2 million in new interest on SJW Group’s $510.0 million Senior Notes issued in October 2019, $858,000 in new interest on San Jose Water Company's $80.0 million Senior Notes issued March 2019 and $307,000 in new interest on Connecticut Water Company's $35.0 million Senior Notes issued in March 2020. Other expense and income year-to-date 2019 included $4.2 million of interest income earned on temporarily invested proceeds from our equity offering in December 2018. The proceeds were used to partially finance the CTWS merger and no similar income was earned in 2020.

The effective consolidated income tax rates for the six-month periods ended June 30, 2020 and 2019, were approximately 17% and 24%, respectively. The effective tax rate decreased primarily due to the flow-through impact of certain CTWS tax deductions and lower pre-tax income.
    

About SJW Group    

SJW Group is the second largest investor-owned pure play water and wastewater utility based on rate base in the United States, providing life-saving and high-quality water service to nearly 1.5 million people. SJW Group’s locally led and operated water utilities - San Jose Water Company in California; Connecticut Water Company, Avon Water Company and Heritage Village Water Company in Connecticut; Maine Water Company in Maine; and SJWTX, Inc. (dba Canyon Lake Water Service Company) in Texas - possess the financial strength, operational expertise and technological innovation to deliver outstanding service to customers, safeguard the environment, and provide opportunities to employees. SJW Group remains focused on investing in its operations, remaining actively engaged in its local communities and delivering continued sustainable value to its shareholders. For more information about SJW Group, please visit www.sjwgroup.com.


Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Some of these forward-looking statements can be identified by the use of forward-looking words such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates," "projects," "strategy," or "anticipates," or the negative of those words or other comparable terminology. These forward looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict.

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The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the following factors: (1) the effect of water, utility, environmental and other governmental policies and regulations, including actions concerning rates, authorized return on equity, authorized capital structures, capital expenditures and other decisions; (2) changes in demand for water and other services; (3) the impact of the Coronavirus ("COVID-19") pandemic on our business operation and financial results; (4) unanticipated weather conditions and changes in seasonality; (5) climate change and the effects thereof; (6) the risk that the benefits expected from the merger of SJW Group and Connecticut Water Service, Inc. (the "Merger") will not be realized; (7) the risk that the integration of Connecticut Water Service, Inc. will be more difficult, time-consuming or expensive than anticipated; (8) the outcome of the California Public Utilities Commission's investigation in the Merger; (9) unexpected costs, charges or expenses resulting from the Merger or otherwise; (10) our ability to successfully evaluate investments in new business and growth initiatives; (11) the risk of work stoppages, strikes and other labor-related actions; (12) catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, hurricanes, terrorist acts, physical attacks, cyber-attacks, or other similar occurrences; (13) changes in general economic, political, business and financial market conditions; (14) the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, changes in interest rates, compliance with regulatory requirements, compliance with the terms and conditions of our outstanding indebtedness, and general stock and debt market conditions; and (15) legislative and general market and economic developments.

Results for a quarter are not indicative of results for a full year due to seasonality and other factors. In addition, actual results are subject to other risks and uncertainties that relate more broadly to our overall business, including those more fully described in our filings with the SEC, including our most recent reports on Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements are not guarantees of performance, and speak only as of the date made, and we undertake no obligation to update or revise any forward-looking statements except as required by law.

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SJW Group
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands, except per share data)
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2020
 
2019
 
2020
 
2019
REVENUE
$
147,209

 
102,965

 
$
262,963

 
180,647

OPERATING EXPENSE:
 
 
 
 
 
 
 
Production Expenses:
 
 
 
 
 
 
 
Purchased water
25,889

 
26,381

 
41,823

 
40,043

Power
3,426

 
1,493

 
6,151

 
2,653

Groundwater extraction charges
18,583

 
9,100

 
33,611

 
15,963

Other production expenses
10,280

 
5,159

 
20,373

 
10,258

Total production expenses
58,178

 
42,133

 
101,958

 
68,917

Administrative and general
17,772

 
13,408

 
39,388

 
25,699

Maintenance
5,334

 
4,729

 
11,420

 
9,054

Property taxes and other non-income taxes
7,102

 
3,848

 
14,565

 
7,976

Depreciation and amortization
22,753

 
15,101

 
44,135

 
30,246

Merger related expenses

 
1,775

 

 
4,376

Total operating expense
111,139

 
80,994

 
211,466

 
146,268

OPERATING INCOME
36,070

 
21,971

 
51,497

 
34,379

OTHER (EXPENSE) INCOME:
 
 
 
 
 
 
 
Interest expense
(13,180
)
 
(6,714
)
 
(26,464
)
 
(12,505
)
Interest income on Money Market Fund

 
2,342

 

 
4,174

Gain on sale of real estate investment

 
745

 

 
745

Pension non-service cost
(7
)
 
(907
)
 
(52
)
 
(1,828
)
Other, net
1,048

 
517

 
1,805

 
907

Income before income taxes
23,931

 
17,954

 
26,786

 
25,872

Provision for income taxes
4,210

 
4,192

 
4,648

 
6,237

NET INCOME BEFORE NONCONTROLLING INTEREST
19,721

 
13,762

 
22,138

 
19,635

Less net income attributable to noncontrolling interest

 
224

 

 
224

SJW GROUP NET INCOME
19,721

 
13,538

 
22,138

 
19,411

Unrealized loss on investment, net of taxes of $50
10

 

 
(125
)
 

SJW GROUP COMPREHENSIVE INCOME
$
19,731

 
13,538

 
$
22,013

 
19,411

 
 
 
 
 
 
 
 
EARNINGS PER SHARE:
 
 
 
 
 
 
 
Basic
$
0.69

 
0.48

 
$
0.78

 
0.68

Diluted
$
0.69

 
0.47

 
$
0.77

 
0.68

DIVIDENDS PER SHARE
$
0.32

 
0.30

 
$
0.64

 
0.60

WEIGHTED AVERAGE SHARES OUTSTANDING:
 
 
 
 
 
 
 
Basic
28,508

 
28,440

 
28,499

 
28,432

Diluted
28,683

 
28,526

 
28,679

 
28,517



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SJW Group
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)

 
June 30,
2020
 
December 31,
2019
ASSETS
 
 
 
   Utility plant:
 
 
 
Land
$
34,929

 
34,395

Depreciable plant and equipment
3,031,451

 
2,988,454

Construction in progress
144,429

 
112,232

Intangible assets
32,826

 
33,424

Total utility plant
3,243,635

 
3,168,505

Less accumulated depreciation and amortization
1,004,776

 
962,019

Net utility plant
2,238,859

 
2,206,486

 
 
 
 
   Real estate investments
58,023

 
57,699

   Less accumulated depreciation and amortization
14,197

 
13,597

Net real estate investments
43,826

 
44,102

CURRENT ASSETS:
 
 
 
   Cash and cash equivalents:
 
 
 
Cash
23,317

 
12,944

Restricted cash

 
5,000

   Accounts receivable and accrued unbilled utility revenue
105,104

 
88,077

   Current regulatory assets, net
5,691

 
6,472

   Other current assets
11,431

 
9,553

Total current assets
145,543

 
122,046

OTHER ASSETS:
 
 
 
   Regulatory assets, net
132,539

 
113,945

   Investments
13,493

 
12,928

   Goodwill
628,343

 
628,287

   Other
7,374

 
4,676

 
781,749

 
759,836

 
$
3,209,977

 
3,132,470



















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SJW Group
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)

 
June 30,
2020
 
December 31,
2019
CAPITALIZATION AND LIABILITIES
 
 
 
CAPITALIZATION:
 
 
 
   Common stock
$
29

 
28

   Additional paid-in capital
508,098

 
506,639

   Retained earnings
387,003

 
383,191

   Accumulated other comprehensive (loss) income
1

 
126

Total stockholders equity
895,131

 
889,984

   Long-term debt, less current portion
1,315,979

 
1,283,597

Total capitalization
2,211,110

 
2,173,581

CURRENT LIABILITIES:
 
 
 
   Lines of credit
146,671

 
117,209

   Current portion of long-term debt
22,354

 
22,272

   Accrued groundwater extraction charges, purchased water and power
26,614

 
17,211

   Accounts payable
24,295

 
34,886

   Accrued interest
12,390

 
13,140

   Accrued payroll
12,064

 
11,570

   Other current liabilities
13,578

 
18,279

Total current liabilities
257,966

 
234,567

 
 
 
 
DEFERRED INCOME TAXES
195,116

 
195,598

ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF
 
 
 
CONSTRUCTION
409,125

 
398,374

POSTRETIREMENT BENEFIT PLANS
113,983

 
108,044

OTHER NONCURRENT LIABILITIES
22,677

 
22,306

 
$
3,209,977

 
3,132,470





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