-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RPC+KzJWr9bRmLpOaOL8cLBhidUGf+iPW49PJsL9+Y3yvu4tyoYSC2jb+9rLPJ0H 9T0UtOHUnb5gevaVhKaVzw== 0000912057-97-027314.txt : 19970813 0000912057-97-027314.hdr.sgml : 19970813 ACCESSION NUMBER: 0000912057-97-027314 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970812 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOMINGUEZ SERVICES CORP CENTRAL INDEX KEY: 0000860673 STANDARD INDUSTRIAL CLASSIFICATION: WATER SUPPLY [4941] IRS NUMBER: 330391161 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18677 FILM NUMBER: 97657271 BUSINESS ADDRESS: STREET 1: 21718 S ALAMEDA STREET CITY: LONG BEACH STATE: CA ZIP: 90810 BUSINESS PHONE: 3108342625 MAIL ADDRESS: STREET 2: 21718 SOUTH ALAMEDA ST CITY: LONG BEACH STATE: CA ZIP: 90810 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------- F O R M 1 0 - Q Quarterly Report Under Section 13 OR 15 (D) of the Securities Exchange Act of 1934 ---------------------------------- JUNE 30, 1997 For Quarter Ended------------------------------------------on file No. 0-18677 DOMINGUEZ SERVICES CORPORATION - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) CALIFORNIA 33-0391161 - ------------------------------------------------------------------------------- (State of other jurisdiction (I.R.S. Employer incorporation or organization) Identification No.) 21718 SOUTH ALAMEDA STREET, LONG BEACH, CALIFORNIA 90810 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (310) 834-2625 Registrant's telephone number, including area code---------------------------- - ------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. 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, and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- (APPLICABLE ONLY TO CORPORATE ISSUERS): Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. Common stock (one class) - 1,004,370 DOMINGUEZ SERVICES CORPORATION INDEX ----- PAGE NO. -------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements (a) Consolidated Income Statement for the 3 Three Months Ending June 30, 1997 and 1996 (b) Consolidated Income Statement for the 4 Six Months Ending June 30, 1997 and 1996 (c) Consolidated Income Statement for the 5 Twelve Months Ending June 30, 1997 and 1996 (d) Consolidated Balance Sheet as of 6 June 30, 1997 and Consolidated Balance Sheet as of December 31, 1996 (e) Consolidated Statements of Cash Flows 7 for the Six Months Ending June 30, 1997 and 1996 (f) Capitalization and Stockholders' Equity 8 as of June 30, 1997 (g) Notes to Consolidated Financial 9 Statements Item 2. Management's Discussion and Analysis of 9-10 Financial Condition and Results of Operation PART II - OTHER INFORMATION Item 1. Legal Proceedings 11 Item 6. Exhibits and Reports on Form 8-K 11 Signature 11 2 PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Company or group of companies for which report is filed: Dominguez Services Corporation, Dominguez Water Company, Antelope Valley Water Company, Kern River Valley Water Company (Consolidating Kernville Domestic Water Co. and Arden Water Co.) and DSC Investments. (a) CONSOLIDATED INCOME STATEMENT (UNAUDITED) - FISCAL QUARTER ENDING: FOR THE FOR THE QUARTER ENDING QUARTER ENDING JUNE 30, 1997 JUNE 30, 1996 -------------- -------------- Operating revenue $7,000,908 $6,355,921 Costs and expenses Operating expenses 6,001,999 5,361,540 Interest expenses 214,386 172,779 Other expenses, net 14,283 3,289 Total costs and expenses 6,230,668 5,537,608 Income from operations 770,240 818,313 Other income 110,804 75,465 Income before taxes on income 881,044 893,778 Provision for taxes on income 353,730 358,745 Net income $527,314 $535,033 Less preferred dividends --0-- --0-- Net income applicable to common shares $527,314 $535,033 Earnings per common share $0.53 $0.53 Dividends per common share $0.325 $0.310 Average common shares outstanding 1,004,370 1,004,370 See accompanying notes to financial statements. 3 (b) CONSOLIDATED INCOME STATEMENT (UNAUDITED) - SIX MONTHS ENDING: FOR THE SIX FOR THE SIX MONTHS ENDING MONTHS ENDING JUNE 30, 1997 JUNE 30, 1996 ------------- ------------- Operating revenue $12,168,935 $11,581,189 Costs and expenses Operating expenses 10,582,071 10,053,977 Interest expenses 399,523 344,803 Other expenses, net 21,470 9,249 Total costs and expenses 11,003,064 10,408,029 Income from operations 1,165,871 1,173,160 Other income 187,907 172,439 Income before taxes on income 1,353,778 1,345,599 Provision for taxes on income 543,500 540,097 Net income $810,278 $805,502 Less preferred dividends --0-- 1,219 Net income applicable to common shares $810,278 $804,283 Earnings per common share $0.81 $0.80 Dividends per common share $0.65 $0.62 Average common shares outstanding 1,004,370 1,004,370 See accompanying notes to financial statements. 4 (c) Consolidated Income Statement (Unaudited) - Twelve Months Ending: FOR THE TWELVE FOR THE TWELVE MONTHS ENDING MONTHS ENDING JUNE 30, 1997 JUNE 30, 1996 -------------- -------------- Operating revenue $ 25,292,532 $ 25,367,586 Costs and expenses Operating expenses 21,721,101 21,963,934 Interest expenses 713,984 684,212 Other expenses, net 33,889 11,126 Total costs and expenses 22,468,974 22,659,272 Income from operations 2,823,558 2,708,314 Other income 479,888 369,942 Income before taxes on income 3,303,446 3,078,256 Provision for taxes on income 1,317,372 1,156,688 Net income $ 1,986,074 $ 1,921,568 Less preferred dividends -0- 3,657 Net income applicable to common shares $ 1,986,074 $ 1,917,911 Earnings per common share $ 1.98 $ 1.91 Dividends per common share $ 1.27 $ 1.20 Average common shares outstanding 1,004,370 1,004,370 See accompanying notes to financial statements. 5 (d) Consolidated Balance Sheet (Unaudited) AS OF AS OF JUNE 30, 1997 DECEMBER 31, 1996 ------------- ----------------- ASSETS Plant and equipment $ 59,666,787 $ 59,652,271 Depreciation allowance (21,910,752) (21,079,569) Construction work in progress 1,501,529 427,280 ------------ ------------ Net utility plant 39,257,564 38,999,982 Non-utility property 573,772 530,461 Current and accrued assets 7,472,834 5,004,365 Deferred debits 2,316,608 2,339,991 ------------ ------------ $ 49,620,778 $ 46,874,799 ------------ ------------ ------------ ------------ LIABILITIES Capital stock: Class A preferred - par value $25 per share No outstanding shares in 1997 and 1996 $ -0- $ -0- Common - par value $1 per share Outstanding 1,004,370 shares 1,004,370 1,004,370 Surplus: Capital surplus 2,507,502 2,507,502 Earnings retained in business 12,272,065 12,114,573 ------------ ------------ Total capital 15,783,937 15,626,445 ------------ ------------ Long-term debt: First mortgage bonds 4,000,000 5,212,000 Other notes 1,825,503 1,838,637 ------------ ------------ Total long-term debt 5,825,503 7,050,637 ------------ ------------ Interim debt 2,000,000 800,000 Current portion long-term debt 1,290,000 834,000 Current and accrued liabilities 6,281,159 4,303,365 Deferred taxes 3,988,569 3,903,699 Advances for construction 5,377,626 5,405,329 Contribution in aid of construction 6,002,464 6,075,881 Deferred credits 3,071,520 2,875,443 ------------ ------------ $ 49,620,778 $ 46,874,799 ------------ ------------ ------------ ------------ See accompanying notes to financial statements. 6 (e) CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) FOR THE SIX FOR THE SIX MONTHS ENDING MONTHS ENDING JUNE 30, 1997 JUNE 30, 1996 ------------- ------------- Cash Flow From Operating Activities: Net Income $810,278 $805,502 Adjustments to reconcile net income to net Cash provided by operation activities: Depreciation and amortization 743,532 617,863 Deferred income tax and ITC 84,870 64,870 Change in assets and liabilities: Customers receivable (896,512) (526,278) Other receivable (867,139) 506,877 Materials and supplies --0-- 23,536 Accounts payable 577,764 (64,907) Income taxes payable 397,896 143,779 Deferred credits 212,966 172,324 Other 565,669 (174,483) ---------- ---------- Net Cash Provided by Operating Activities 1,629,324 1,569,083 ---------- ---------- Cash Flows from Investing Activities: Capital expenditures (1,123,328) (1,926,409) ---------- ---------- Net Cash used for Investing Activities (1,123,328) (1,926,409) ---------- ---------- Cash Flows from Financing Activities: Proceeds from contributions in aid of construction & advances (101,120) 99,137 Repayment of long-term debt (769,134) 190,583 Dividends paid (652,841) (623,929) Preferred stock redemption --0-- (97,525) Proceeds from interim debt 1,200,000 --0-- Other 94,146 108,120 ---------- ---------- Net Cash Used by Financing Activities (228,949) (323,614) ---------- ---------- Net Increase (Decrease) in Cash $277,047 ($680,940) Cash at Beginning of Year 708,817 751,606 ---------- ---------- Cash at End of Year $985,864 $70,666 ---------- ---------- ---------- ---------- See accompanying notes to financial statements. 7 (f) CAPITALIZATION AND STOCKHOLDERS' EQUITY (UNAUDITED) AS OF JUNE 30, 1997 ------------- Debt: Long-term debt $7,115,503 Current sinking fund requirements (1,290,000) ------------ Total debt maturing in more than twelve months $5,825,503 ------------ ------------ Deferred credits $3,071,520 ------------ ------------ Stockholder's equity: Shares issued or outstanding Amount ----------- --------- Common stock $1 par value 1,004,370 $1,004,370 Capital in excess of par value 2,507,502 Retained earnings: Balance at beginning of current fiscal year $12,114,628 Net income 810,278 Cash dividends: Common stock @ $0.325 (652,841) ----------- Balance at end of interim period 12,272,065 ------------ Total stockholder's equity $15,783,937 ------------ ------------ See accompanying notes to financial statements. 8 (g) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. In the opinion of management, information furnished herein reflects adjustments necessary for a fair presentation of the financial position and results of operations for the interim periods. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION. For the quarter ended June 30, 1997, earnings per share were $0.53, compared to $0.53 in the same period in 1996. Revenues for the quarter ended June 30, 1997 were $7,000,908 and net income was $527,314, compared to revenues of $6,355,921 and net income of $535,033 for the same period last year. Earnings per share for the first half of 1997 were $0.81, which compared with $0.80 last year. Revenues for the six months ended June 30, 1997 were $12,168,935 and net income was $810,278, compared to revenues of $11,581,189 and net income of $805,502 for the same period last year. For the twelve months ended June 30, 1997, earnings per share were $1.98, up from $1.91 the same period in 1996. Revenues for the twelve months ended June 30, 1997 were $25,292,532 and net income was $1,986,074, compared to revenues of $25,367,586 and net income of $1,921,568 for the same period last year. The increase in gross revenues came from higher rates in the South Bay and increased sales. However, we experienced higher water costs and related operating expenses in the second quarter. Net income remained essentially unchanged. Dominguez increased rates by approximately 1.6% to recover higher costs charged by our wholesale supplier. However, water bills of Dominguez residential customers are still lower than those charged by other leading Southern California water utilities, according to industry data, which is an indication of our efficient operations and rigorous cost discipline. Residential sales increased by 4% for the first six months of the year compared to the same period last year. Business sales increased by 12% for the first six months of the year compared to the same period last year. Industrial sales dropped 14% from the same period last year. Overall, sales increased by 1% from last year. The Company expects to complete the integration of the Countrywood Water Company acquisition in to Kern River Valley operations in the third quarter. 9 The Company filed an application for approval of the acquisition of Southlake Water Company. We anticipate completing the transition in the fourth quarter. The Company also looks forward to developing a presence in Northern California. In early August, Dominguez signed a letter of intent to purchase Lucerne Water Company, which serves nearly 1,300 customers in Sonoma County, for 35,000 shares of stock. The Company is now entering into the due diligence process. The Company is refinancing series H bonds and short term borrowing at a lower interest rate. WATER QUALITY ------------- As previously reported, the federal Safe Drinking Water Act (SDWA) was re-authorized in 1996. Under the SDWA, the Company is subject to regulation by the United States Environmental Protection Agency (EPA) and the California Department of Health Services. The Company is required to complete monthly water sampling in a data acquisition program known as the Information Collection Rule (ICR). WATER SUPPLY ------------ As of March 1997, the water supply outlook is favorable. California State Water Project (SWP) reservoirs remain full. MWD also indicates that a full compliment of Colorado River Water is available. Dominguez expects an ample supply of imported water to be available for 1997. Dominguez anticipates that the West Basin Municipal Water District Recycled Water Project will be delivering recycled water to a limited number of South Bay customers in the 4th quarter of 1997. Dominguez' margins will remain equal to that of replaced potable sales. DIVIDEND DECLARED ----------------- The Board of Directors has declared the Company's 138th consecutive quarterly dividend at $0.325 per share on common stock, to be paid on September 15, 1997. 10 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - No legal proceedings have been filed against the registrant that have not been previously reported. ITEM 6. OTHER An 8-K report was not required for either. 1. Material unusual charges or credits to income during the most recently completed fiscal quarter, or 2. A change in independent accountants during the period. The information furnished reflects all adjustments which, in the opinion of management, are necessary to the fair statement of the results of the interim periods. DOMINGUEZ SERVICES CORPORATION Date:______________________________ By:______________________________ John S. Tootle CFO, Vice-President Finance 11 EX-27 2 EXHIBIT 27 - FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 6 MONTHS CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDING JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1996 JAN-01-1997 JUN-30-1997 985,864 0 3,765,533 (330,836) 46,385 7,472,834 61,168,316 21,910,752 49,620,778 9,571,167 5,825,503 0 0 1,004,370 14,779,559 49,620,778 11,226,426 12,168,935 5,584,585 9,618,623 0 67,442 399,523 1,353,778 543,500 810,278 0 0 0 810,278 0.81 0.81
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