-----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, QZpSpZymAt1237JGgBOykgNRyxwtY5iAoyShyHDnqbc0yMaJ0xgJwwnGgBDb/nEP Hkpsaq4Xzm2a84R1KJuhaQ== 0000912057-95-009589.txt : 19951119 0000912057-95-009589.hdr.sgml : 19951119 ACCESSION NUMBER: 0000912057-95-009589 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 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: 95589230 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 --------------------- SEPTEMBER 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 September 30, 1995 and 1994 (b) Consolidated Income Statement for the 4 Nine Months Ended September 30, 1995 and 1994 (c) Consolidated Income Statement for the 5 Twelve Months Ended September 30, 1995 and 1994 (d) Consolidated Balance Sheet as of 6 September 30, 1995 and Consolidated Balance Sheet as of December 31, 1994 (e) Consolidated Statements of Cash Flows 7 for the Nine Months Ended September 30, 1995 and 1994 (f) Capitalization and Stockholders' Equity 8 as of September 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 Co., Kernville Domestic Water Co., Arden Water Co., Hydro-Metric Service Corporation. (a) Consolidated Income Statement (Unaudited) - Fiscal Quarter Ending:
FOR THE FOR THE QUARTER ENDED QUARTER ENDED SEPT. 30, 1995 SEPT. 30, 1994 -------------- -------------- Operating Revenue. . . . . . . . . . . . . . . $7,551,966 $7,735,767 Costs and Expenses Operating Expenses. . . . . . . . . . . . 6,154,954 6,369,339 Interest Expense. . . . . . . . . . . . . 171,021 163,781 Other deductions, net . . . . . . . . . . 732 21,867 Total Costs and Expenses. . . . . . . . . 6,326,707 6,554,987 Income from operations . . . . . . . . . . . . 1,225,259 1,180,780 Other income (loss). . . . . . . . . . . . . . $26,418 27,358 Income before taxes on income. . . . . . . . . 1,251,677 1,208,138 Provision for taxes on income. . . . . . . . . 502,398 514,741 Net income . . . . . . . . . . . . . . . . . . $749,279 $693,397 Less preferred dividends. . . . . . . . . 1,219 1,219 Net income applicable to common shares . . . . . . . . . . . . . . . . . . $748,060 $692,178 Earnings per common share. . . . . . . . . . . $0.74 $0.69 Dividends per common share . . . . . . . . . . $0.290 $0.275 Average common shares outstanding. . . . . . . 1,004,370 1,004,370
See accompanying notes to Financial Statements 3 (b) Consolidated Income Statement (Unaudited) - Nine Months Ending:
FOR THE NINE FOR THE NINE MONTHS ENDING MONTHS ENDING SEPT. 30, 1995 SEPT. 30, 1994 -------------- -------------- Operating Revenues . . . . . . . . . . . . . $19,514,501 $18,442,610 Cost and Expenses Operating Expenses. . . . . . 16,403,902 15,285,287 Interest Expense. . . . . . . 514,745 526,013 Other deductions, net . . . . 6,042 48,955 Total Costs and Expenses. . . 16,924,689 15,860,255 Income from operations . . . . . . . . . . . 2,589,812 2,582,355 Other income . . . . . . . . . . . . . . . . 59,146 88,577 Income before taxes on income. . . . . . . . 2,648,958 2,670,932 Provision for taxes on income. . . . . . . . 1,063,239 1,101,890 Net Income . . . . . . . . . . . . . . . . . $1,585,719 $1,569,042 Less preferred dividends. . . 3,657 3,657 Net income applicable to common shares . . . $1,582,062 $1,565,385 Earnings per common share. . . . . . . . . . $1.58 $1.56 Dividends per common share . . . . . . . . . $0.870 $0.825 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 SEPT. 30, 1995 SEPT. 30, 1994 -------------- -------------- Operating Revenues . . . . . . . . . . . . . $25,758,623 $23,688,378 Cost and Expenses Operating Expenses. . . . . . 21,934,037 19,991,756 Interest Expense. . . . . . . 702,443 704,725 Other deductions, net . . . . (13,484) 50,589 Total Costs and Expenses. . . 22,622,996 20,747,070 Income from operations . . . . . . . . . . . 3,135,627 2,941,308 Other income . . . . . . . . . . . . . . . . 69,223 374,588 Income before taxes on income. . . . . . . . 3,204,850 3,315,896 Provision for taxes on income. . . . . . . . 1,275,937 1,299,325 Net Income . . . . . . . . . . . . . . . . . $1,928,913 $2,016,571 Less preferred dividends. . . 4,876 4,876 Net income applicable to common shares . . . $1,924,037 $2,011,695 Earnings per common share. . . . . . . . . . $1.92 $2.00 Dividends per common share . . . . . . . . . $1.145 $1.090 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 SEPT. 30, 1995 DEC. 31, 1994 -------------- ------------- ASSETS Plant and Equipment . . . . . . . . . . $54,763,966 $54,787,402 Less allowance for depreciation . . . . 20,798,168 19,586,430 ------------ ----------- Net plant and investments . . . . . . . 33,965,798 35,200,972 Construction work in progress . . . . . 2,604,569 748,375 ------------ ----------- Net utility plant . . . . . . . . . . . 36,570,367 35,949,347 Non utility property. . . . . . . . . . 168,665 560,185 Current and accrued assets. . . . . . . 7,660,470 5,507,209 Deferred debits . . . . . . . . . . . . 2,779,003 2,635,590 ------------ ----------- $47,178,505 $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 . . . . . 11,305,609 10,597,342 ------------ ----------- Total Capital. . . . . . . . . . . 14,919,875 14,189,828 ------------ ----------- Long-term debt: First mortgage bonds . . . . . . . 6,025,000 6,083,000 Other Notes. . . . . . . . . . . . 1,412,390 1,242,781 ------------ ----------- Total Long-term debt . . . . . . . 7,437,390 7,325,781 ------------ ----------- Current portion long-term debt. . . . . 319,000 319,000 Current and accrued liabilities . . . . 6,367,959 4,776,055 Deferred taxes. . . . . . . . . . . . . 3,688,624 3,563,065 Advances for construction . . . . . . . 5,418,061 5,334,557 Contributions and in aid of construction . . . . . . . . . . . 6,122,201 6,263,605 Deferred credits. . . . . . . . . . . . 2,905,395 2,880,440 ------------ ----------- $47,178,505 $44,652,331 ------------ ----------- ------------ -----------
See accompanying notes to Financial Statements 6 (e) Consolidated Statements of Cash Flow (Unaudited):
FOR THE FOR THE NINE MONTHS ENDED NINE MONTHS ENDED SEPT. 30, 1995 SEPT. 30, 1994 ----------------- ----------------- Cash Flows from operating activities: Net Income . . . . . . . . . . . . . . $1,585,719 $1,569,042 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and Amortization. . . . . 1,087,412 963,657 Deferred Income Tax and ITC. . . . . . 125,559 125,559 Change in Assets and Liabilities: Customers Receivables. . . . . . . . . (829,139) (869,848) Other Receivables. . . . . . . . . . . 352,298 540,760 Materials and Supplies . . . . . . . . 8,663 4,176 Accounts Payable . . . . . . . . . . . 386,088 838,886 Income Taxes Payable . . . . . . . . . 11,210 (61,747) Deferred Credits . . . . . . . . . . . (129,557) 125,704 All Other. . . . . . . . . . . . . . . 918,500 88,836 ----------- ----------- Net Cash Provided by Operating Activities. . . . . 3,516,753 3,325,025 ----------- ----------- Cash flows from investing activities: Capital Expenditures . . . . . . . . . (1,810,978) (2,202,030) Assets Acquisitions. . . . . . . . . . -- (10,002) ----------- ----------- Net Cash Used for Investing Activities . . . . . . (1,810,978) (2,212,032) ----------- ----------- Cash Flow from financing activities: Proceeds from Contributions in Aid of Construction . . . . . . . . . . . 77,525 (6,346) Repayment of Long Term Debt. . . . . . 111,609 (79,726) Dividends Paid . . . . . . . . . . . . (877,452) (832,264) ----------- ----------- Net Cash Used by Financing Activities. . . . . . . (688,318) (918,336) ----------- ----------- Net Increase in Cash . . . . . . . . . . . . . . . 1,017,457 194,657 Cash at Beginning of Year. . . . . . . . . . . . . 1,085,283 1,910,767 ----------- ----------- Cash at End of Period. . . . . . . . . . . . . . . $2,102,740 $2,105,424 ----------- ----------- ----------- -----------
See accompanying notes to Financial Statements 7 (f) Capitalization and Stockholders' Equity (Unaudited):
AS OF SEPT. 30, 1995 -------------- AMOUNT -------------- Debt: Long-term debt . . . . . . . . . . . . . . . . . . . $7,756,390 Current sinking fund requirements . . . . . . . . 319,000 --------- Total debt maturing in more than twelve months . . . $7,437,390 --------- --------- Deferred credits . . . . . . . . . . . . . . . . . . . . . . . . $2,907,295 --------- ---------
SHARES ISSUED OR OUTSTANDING AMOUNT -------------- --------- 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. . . . . . . . . . . . . 1,585,719 Cash dividends Common stock @ $0.87 . . . . . 873,795 Preferred stock Class A @ $0.9375 . 3,687 ----------- Balance at end of interim period . . . . . . . . . $11,346,267 ----------- ----------- Total Stockholders' Equity . . . . . . . . . . . . $14,919,875 ----------- -----------
See accompanying notes to Financial Statement 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 September 30, 1995, were $0.74, compared to $0.69 in the third quarter of 1994. Revenues were $7,551,966 and net income was $748,060 this quarter, compared to last year third quarter revenues of $7,735,767 and net income of $692,178. Despite the fact that water sales for the quarter are slightly higher, revenues dropped due to less income from leasing of water rights. Third quarter earnings were higher by $.10 per share due to reversal of accrued litigation costs for the claims of the widow and estate of a deceased employee who was shot to death by another employee in early 1994. The Company's insurance carrier has settled the claims with no adverse financial impact on the company. Revenues for nine months are $19,514,501 and net income is $1,582,062, compared to prior year revenues of $18,442,610 and net income of $1,565,385. Increased revenues are due to 10% greater water sales and higher water rates in the South Bay which are partially offset by lower income from leasing water rights. Operating expenses were higher for the period partially due to higher water costs as difficulty with Company's wells production forced the Company to purchase higher priced imported water. Last quarter we reported higher water costs from the Metropolitan Water District of Southern California (MWD) and the West Basin Municipal Water District (WBMWD), which were estimated at $1.5 million. Since then, the California Public Utilities Commission has authorized the company to collect all but $100,000 of its requested increase through higher water rates. We do expect year-end earnings to exceed industry averages. As previously reported, the company is working to bring recycled water to our industrial and landscape customer in early 1997. Management is working closely with our supplier, WBMWD, and our largest potential customer, ARCO Los Angeles Refinery, in a long and complicated series of negotiations regarding water quality, capital costs, and water pricing. There are still unresolved issues, which make it problematical for pipeline and facilities construction to begin in the spring of 1996. Almost 80% of our demand for reclaimed water will come from ARCO, so reaching agreement with them is an important step in reaching our goal of adding recycled water to our sources of supply while maintaining our margins on water sales. The California Water Association, of which the company is an active member, sponsored legislation, which has passed, to ensure fair regulatory treatment of gains made from the sale of land no longer used for utility business. Fairness dictates that such gains belong to the shareholder, however, recent CPUC decisions have awarded various percentages to rate payers. 10 The Board of Directors has completed and announced the company's search for C.W. Porter's successor. Brian J. Brady will assume responsibilities of president and chief executive officer on November 6, 1995. C.W. Porter will remain chairman of the board until his retirement in early January, at which time Mr. Brady will undertake that role as well. Brian J. Brady comes to Dominguez Services Corporation with 24 years of experience in the utility industry. Previously, he served the City of Anaheim as assistant general manager of the Public Utility Department, where he directed electric and water system operations. Prior to his work at the City of Anaheim, Mr. Brady served Southern California Edison in a number of capacities. Mr. Brady holds a Bachelor of Science degree in engineering from Loyola Marymount University and a Master of Business Administration from the University of Southern California. He is also a registered engineer. October 5, 1995, the Board of Directors announced the Company's 130th consecutive quarterly dividend at $0.290 per share on common stock to be paid on December 15, 1995. 11 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company's insurance carrier has settled the claims of the widow and estate of a deceased employee who was shot to death by another employee in early 1994. The terms of the settlement will have no adverse financial impact on the Company. 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: November 13, 1995 By: /s/ 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 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 2,102,740 0 3,453,994 (244,101) 92,401 7,660,470 57,368,535 20,798,168 47,178,505 6,686,959 6,025,000 1,004,370 0 97,525 13,720,455 47,178,505 18,010,565 19,514,501 8,944,043 15,117,289 0 13,570 514,745 2,648,958 1,063,239 1,585,719 0 0 0 1,585,719 1.58 1.58
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