-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, iKC0fqvtXDZXCZuShOKJZEI4zEZuTkR7cF6kspjIn/hfw4AVD/VmoQ4MLzqnCZ/M rWA8C40IAda7AVKy6ONGiA== 0000912057-95-006540.txt : 19950830 0000912057-95-006540.hdr.sgml : 19950830 ACCESSION NUMBER: 0000912057-95-006540 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOMINGUEZ SERVICES CORP CENTRAL INDEX KEY: 0000860673 STANDARD INDUSTRIAL CLASSIFICATION: 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: 95563711 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, 1995 For Quarter Ended . . . . . . . . . . . . . . . . . Commission 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) Registrant's telephone number, including area code. . . . . . . (310) 834-2625 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 Ended June 30, 1995 and 1994 (b) Consolidated Income Statement for the 4 Six Months Ended June 30, 1995 and 1994 (c) Consolidated Income Statement for the 5 Twelve Months Ended June 30, 1995 and 1994 (d) Consolidated Balance Sheet as of 6 June 30, 1995 and Consolidated Balance Sheet as of December 31, 1994 (e) Consolidated Statements of Cash Flows 7 for the Six Months Ended June 30, 1995 and 1994 (f) Capitalization and Stockholders' Equity 8 as of June 30, 1995 (g) Notes to Consolidated Financial 9 Statements Item 2. Management's Discussion and Analysis of 10-11 Financial Condition and Results of Operation PART II - OTHER INFORMATION Item 1. Legal Proceedings 12 Item 6. Exhibits and Reports on form 8-K 12 Signatures 2 PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Company or group of companies for which report is filed: Dominguez Services Corporation, Dominguez Water Corporation, Antelope Valley Water Company, Kernville Domestic Water Company, Arden Water Company, Hydro-Metric Service Corporation. (a) Consolidated Income Statement (Unaudited) - Fiscal Quarter ending:
For the For the Quarter Ended Quarter Ended June 30, 1995 June 30, 1994 ------------- ------------- Operating Revenue . . . . . . . . . . . . . . . . . . . . . . $6,868,243 $5,867,300 Costs and Expenses Operating Expenses. . . . . . . . . . . . . . . . . . . 5,704,554 4,616,834 Interest Expenses . . . . . . . . . . . . . . . . . . . 166,901 179,920 Other expenses, net . . . . . . . . . . . . . . . . . . 2,813 22,674 Total Costs and Expenses. . . . . . . . . . . . . . . . 5,874,268 4,819,428 Income from operations. . . . . . . . . . . . . . . . . . . . 993,976 1,047,872 Other income. . . . . . . . . . . . . . . . . . . . . . . . . $ 14,906 42,673 Income before taxes on income. . . . . . . . . . . . . . 1,008,882 1,090,545 Provision for taxes on income . . . . . . . . . . . . . . . . 404,945 437,749 Net income. . . . . . . . . . . . . . . . . . . . . . . . . . $603,937 $ 652,796 Less preferred dividends. . . . . . . . . . . . . . . . 1,219 1,219 Net income applicable to common shares . . . . . . . . . $ 602,718 $ 651,577 Earnings per common share . . . . . . . . . . . . . . . . . . $0.60 $0.65 Dividends per common share. . . . . . . . . . . . . . . . . . $0.29 $0.275 Average common shares outstanding . . . . . . . . . . . . . . 1,004,370 1,004,370
See accompanying notes to Financial Statements 3 (b) Consolidated Income Statement (Unaudited) - Six Months Ended:
For the Six For the Six Months Ended Months Ended June 30, 1995 June 30, 1994 ------------- ------------- Operating Revenues. . . . . . . . . . . . . . . . . . . . . . $11,962,535 $10,706,843 Costs and Expenses Operating Expenses. . . . . . . . . . . . . . . . . . . 10,248,948 8,915,948 Interest Expenses . . . . . . . . . . . . . . . . . . . 343,724 362,232 Other expenses, net . . . . . . . . . . . . . . . . . . 5,310 27,088 Total Costs and Expenses. . . . . . . . . . . . . . . . 10,597,982 9,305,268 Income from operations. . . . . . . . . . . . . . . . . . . . 1,364,553 1,401,575 Other income. . . . . . . . . . . . . . . . . . . . . . . . . 32,728 61,219 Income before taxes on income . . . . . . . . . . . . . . . . 1,397,281 1,462,794 Provision for taxes on income . . . . . . . . . . . . . . . . 560,841 587,149 Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . $ 836,440 $ 875,645 Less preferred dividends. . . . . . . . . . . . . . . . 2,438 2,438 Net income applicable to common shares. . . . . . . . . . . . $ 834,002 $ 873,207 Earnings per common share . . . . . . . . . . . . . . . . . . $0.83 $0.87 Dividends per common share. . . . . . . . . . . . . . . . . . $0.58 $0.55 Average common shares outstanding . . . . . . . . . . . . . . 1,004,370 1,004,370
See accompanying notes to Financial Statements 4 (c) Consolidated Income Statement (Unaudited) - Twelve Months Ended:
12 Months 12 Months Ended Ended June 30, 1995 June 30, 1994 ------------- ------------- Operating Revenue . . . . . . . . . . . . . . . . . . . . . . $25,942,424 $22,431,208 Costs and Expenses Operating Expenses. . . . . . . . . . . . . . . . . . . 22,103,422 18,838,247 Interest Expenses . . . . . . . . . . . . . . . . . . . 695,203 716,769 Other expenses, net . . . . . . . . . . . . . . . . . . 7,651 28,861 Total Costs and Expenses. . . . . . . . . . . . . . . . 22,806,276 19,583,877 Income from operations. . . . . . . . . . . . . . . . . . . . 3,136,148 2,847,331 Other Income. . . . . . . . . . . . . . . . . . . . . . . . . 70,163 378,125 Income before taxes on income . . . . . . . . . . . . . . . . 3,206,311 3,225,456 Provision for taxes on income . . . . . . . . . . . . . . . . 1,312,989 1,226,580 Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,893,322 $ 1,998,876 Less preferred dividends. . . . . . . . . . . . . . . . 4,876 4,876 Net income applicable to common shares. . . . . . . . . . . . $ 1,888,446 $ 1,994,000 Earnings per common share . . . . . . . . . . . . . . . . . . $1.88 $1.99 Dividends per common share. . . . . . . . . . . . . . . . . . $1.13 $1.08 Average common share 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, 1995 Dec. 31, 1994 ------------- ------------- ASSETS Plant and equipment . . . . . . . . . . . . . . . . . . $54,750,691 $54,787,402 Less allowance for depreciation . . . . . . . . . . . . 20,418,417 19,586,430 ----------- ----------- Net plant and investments . . . . . . . . . . . . . . . 34,332,274 35,200,972 Construction work in progress . . . . . . . . . . . . . 1,983,050 748,375 ----------- ----------- Net utility plant . . . . . . . . . . . . . . . . . . . 36,315,324 35,949,347 Non utility property. . . . . . . . . . . . . . . . . . 184,472 560,185 Current and accrued assets. . . . . . . . . . . . . . . 6,122,940 5,507,209 Deferred debits . . . . . . . . . . . . . . . . . . . . 2,783,075 2,635,590 ----------- ----------- $45,405,811 $44,652,331 ----------- ----------- ----------- ----------- LIABILITIES Capital stock Class A Preferred - par value $25 per share Outstanding 3,901 shares . . . . . . . . . . . . . . $ 97,525 $ 97,525 Common - par value $1 per share Outstanding 1,004,370 shares . . . . . . . . . . . . 1,004,370 1,004,370 Surplus: Capital Surplus. . . . . . . . . . . . . . . . . . . . . 2,512,371 2,490,591 Earnings retained in business. . . . . . . . . . . . . . . 10,848,815 10,597,342 ----------- ----------- Total Capital. . . . . . . . . . . . . . . . . . . . . . 14,463,081 14,189,828 ----------- ----------- Long-term debt: First mortgage bonds . . . . . . . . . . . . . . . . . . 6,065,000 6,083,000 Other notes. . . . . . . . . . . . . . . . . . . . . . . 1,415,714 1,242,781 ----------- ----------- Total Long-term debt . . . . . . . . . . . . . . . . . . 7,480,714 7,325,781 ----------- ----------- Current portion long-term debt . . . . . . . . . . . . . . 319,000 319,000 Current and accrued liabilities. . . . . . . . . . . . . . 5,307,060 4,776,055 Deferred taxes . . . . . . . . . . . . . . . . . . . . . . 3,646,771 3,563,065 Advances for construction. . . . . . . . . . . . . . . . . 5,153,816 5,334,557 Contributions and in aid of construction . . . . . . . . 6,160,621 6,263,605 Deferred credits . . . . . . . . . . . . . . . . . . . . . 2,874,748 2,880,440 ----------- ----------- $45,405,811 $44,652,331 ----------- ----------- ----------- -----------
See accompanying notes to Financial Statements 6 (e) Consolidated Statements of Cash Flows (Unaudited)
For the Six For the Six Months Ended Months Ended June 30, 1995 June 30, 1994 ------------- ------------- Cash Flows from operating activities: Net Income . . . . . . . . . . . . . . . . . . . . . . $ 836,440 $ 875,645 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and Amortization. . . . . . . . . . . . . 760,467 639,223 Deferred Income Tax and ITC. . . . . . . . . . . . . . 83,706 83,706 Change in Assets and Liabilities: Customers Receivables. . . . . . . . . . . . . . . . . (573,962) (665,600) Other Receivables. . . . . . . . . . . . . . . . . . . 574,471 379,262 Materials and Supplies . . . . . . . . . . . . . . . . 8,586 6,847 Accounts Payable . . . . . . . . . . . . . . . . . . . (51,667) 650,241 Income Taxes Payable . . . . . . . . . . . . . . . . . (105,886) (167,819) Deferred Credits . . . . . . . . . . . . . . . . . . . (431,351) 130,750 All Other. . . . . . . . . . . . . . . . . . . . . . . 966,981 (121,835) ----------- ----------- Net Cash Provided by Operating Activities . . . . . . . . . 2,047,785 1,810,420 ----------- ----------- Cash flows from Investing Activities: Capital Expenditures . . . . . . . . . . . . . . . . . (1,176,184) (1,456,714) ----------- ----------- Net Cash Used for Investing Activities. . . . . . . . . . . (1,176,184) (1,456,714) ----------- ----------- Cash Flow from Financing Activities: Proceeds from Contributions in Aid of Construction . . (204,805) (106,166) Repayment of Long-Term Debt. . . . . . . . . . . . . . 154,933 (31,486) Dividends Paid . . . . . . . . . . . . . . . . . . . . (584,967) (554,844) ----------- ----------- Net Cash Used by Financing Activities . . . . . . . . . . . 634,839 (692,496) ----------- ----------- Net Increase (Decrease) in Cash . . . . . . . . . . . . . . 236,762 (338,790) Cash at Beginning of Year . . . . . . . . . . . . . . . . . 1,085,283 1,910,767 ----------- ----------- Cash at End of Period . . . . . . . . . . . . . . . . . . . . $ 1,322,045 $ 1,571,977 ----------- ----------- ----------- -----------
See accompanying notes to Financial Statements 7 (f) Capitalization and Stockholders' Equity (Unaudited)
As of June 30, 1995 ------------- Debt: Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . $7,799,714 Current sinking fund requirements . . . . . . . . . . . . . . 319,000 ---------- Long-term debt maturing in more than twelve months . . . . . . . $7,480,714 ---------- ---------- Deferred credits. . . . . . . . . . . . . . . . . . . . . . . . . . $2,874,748 ---------- ----------
Shares Issued Or Outstanding -------------- Stockholders' Equity: Non-convertible cumulative preferred stock Class A, 5%, $25 par value . . . . . . . . . . 3,901 $ 97,525 Common stock. . . . . . . . . . . . . . . . . . . 1,004,370 $ 1,004,370 Capital in excess of par value. . . . . . . . . . $ 2,512,371 ----------- Retained earnings: Balance at beginning of current Fiscal Year . . $10,597,342 Net Income . . . . . . . . . . . . . . . . . 836,440 Cash dividends Common stock @ $0.58. . . . . 582,529 Preferred stock Class A @ $0.6250. . . . . 2,438 ------- Balance at end of interim period. . . . . . . . $10,848,815 ----------- ----------- Total Stockholders' Equity . . . . . . . . . . . . $14,463,081 ----------- -----------
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. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION. Earnings per share for the quarter ended June 30, 1995 were $0.60 compared to $0.65 in the second quarter of 1994. Revenues for the quarter ended June 30, 1995 were $6,868,243 and net income was $603,937, compared to revenues of $5,867,300 and net income of $652,796 for the same period last year. Despite increased revenues for the second quarter, earnings were lower due to a tighter margin and higher operating expenses. Margin narrowed due to lower revenues associated with leased water rights and costs recorded for the Company's participation in water supply management programs. Operating expenses included additional costs to renovate wells in the South Bay and higher costs in the Kern River Valley. However, we do expect year-end earnings to exceed industry averages. Earnings for the first half of 1995 were $0.83, which compares with $0.87 last year. Gross revenues were $11,962,535 and net income was $836,440, compared to 1994's gross revenues of $10,706,843 and net income of $875,645. Earnings per share for the twelve months ended the same date were $1.88, compared to $1.99 for the same period last year. Revenues totaled $25,942,424 and net income was $1,893,322, compared to $22,431,208 and $1,998,876 respectively for the same period last year. On June 27, 1995, the Board of Directors announced the Company's 129th consecutive quarterly dividend at $.29 per share on common stock to be paid on September 15, 1995. The most significant event during this quarterly period is the increase in water costs to us adopted by our imported suppliers, Metropolitan Water District and the West Basin Municipal Water District. The Water Replenishment District also increased its charges for basin management. The total cost increases are $1,500,000. This would be a 6.2 percent increase effective July 1 to our South Bay customers. The application to the Commission is now under consideration. Because of the Company's high earnings, not all of the amount will be recoverable in rates at this time. However, we can expect to recover the difference in the balancing account in the future. This pass-through of higher water costs in rates does not increase the profits of the Company. At the Annual Shareholders' Meeting held May 5, the Companys president, C.W. Porter, announced that he would be retiring at the end of 1995. The Board has hired an executive recruiter to search for outside candidates, in addition to considering our internal candidates. Selection can then be made from a broad spectrum of aspirants. This search should be culminated when the next quarterly report is due in October. 10 The status of regulation of utility companies through the California Public Utilities Commission (CPUC) is in a state of flux. The legislature is holding hearings concerning the organization of the Commission. The Public Utilities Commissioners are trying to forestall legislative action by submitting a plan that envisions performance based rate making for utilities as well as other steps to reorganize the Commission itself to streamline its task of regulating. One proposal, that we would welcome, is a division within the Commission dedicated to regulating water utilities instead of multi-divisions which now regulate the water industry. Whatever the outcome, we expect public utility type regulation will be carried-on into the future. The difference might be adoption of performance-based rate making similar in form now being negotiated by the power companies. Under these rules, the utility and the Commission would agree to a set of certain operating utility efficiency ratios. The companies would agree to pursue greater efficiencies which would then allow the company to post better earnings, part of which the shareholders would keep and part of which would be passed on to rate payers. Rate cases would be less frequent. In the meantime, owners, customers, and management will be watching closely the developments in the California legislature. We are pleased to welcome a new member to our Board of Directors. Ms. Debra Reed is Executive Vice President of Southern California Gas Company and lends considerable expertise to our Board. She is manager of the largest division of the gas company, which includes the rate making, distribution, and billing. This most recent assignment follows her position as Vice President of Human Resources. All of this experience will be valuable for the company inasmuch as there are many changes in these arenas. 11 PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS On June 28, 1994, a complaint was filed in the Superior Court of the State of California for the County of Los Angeles against the Company, its wholly owned subsidiary, Dominguez Water Corporation (the "Water Company"), and other defendants by the widow of a deceased employee. The complaint seeks $10 million in actual damages as well as punitive damages from the defendants in connection with the death of plaintiff's husband who was shot dead on January 7, 1994 by Ahmed Kadil who was employed by the Water Company at the time of the shooting. The shooting did not occur on the Company's premises. Plaintiff alleges, however, that Mr. Kadil was acting as an agent of the Company and the Water Company and that, among other things, they were both negligent in hiring, training and retaining him as an employee. Plaintiff has not yet served her complaint on the Company or the Water Company. The Company intends to deny any responsibility or liability for the death of plaintiff's husband. It further believes that there is a reasonable likelihood that the plaintiff will be precluded by the California Workers' Compensation law for recovering any monetary damages directly from the Company or the Water Company as a successful claim against them would only entitle plaintiff to recover statutorily mandated damages directly from the California Workers' Compensation fund. 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: 8/14/95 By: John S. Tootle ---------------------------- ---------------------------- John S. Tootle Vice-President Finance 12 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDING JUNE 30, 1995. 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 1,322,045 0 3,179,713 (224,997) 92,478 6,122,940 56,733,741 20,418,417 45,405,811 5,626,060 6,065,000 1,004,370 0 97,525 13,361,186 45,405,811 10,999,734 11,962,585 5,679,463 9,385,653 0 74,431 343,724 1,397,281 560,841 836,440 0 0 0 836,440 0.83 0.83
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