-----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, M7nARXFe6D80gk9BAxH3TEwffRAbHh2fwxSaxfdGczyULFHMCDnoSgPy0DEixrfN ZhB1Me8Bced782uuDyCTVw== 0000912057-96-016987.txt : 19960813 0000912057-96-016987.hdr.sgml : 19960813 ACCESSION NUMBER: 0000912057-96-016987 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 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: 96607767 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, 1996 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, 1996 AND 1995 (b) CONSOLIDATED INCOME STATEMENT FOR THE 4 SIX MONTHS ENDING JUNE 30, 1996 AND 1995 (c) CONSOLIDATED INCOME STATEMENT FOR THE 5 TWELVE MONTHS ENDING JUNE 30, 1996 AND 1995 (d) CONSOLIDATED BALANCE SHEET AS OF 6 JUNE 30, 1996 AND CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1995 (e) CONSOLIDATED STATEMENTS OF CASH FLOWS 7 FOR THE SIX MONTHS ENDING JUNE 30, 1996 AND 1995 (f) CAPITALIZATION AND STOCKHOLDERS' EQUITY 8 AS OF JUNE 30, 1996 (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 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 ENDING QUARTER ENDING JUNE 30, 1996 JUNE 30, 1995 -------------- -------------- OPERATING REVENUE $6,355,921 $6,605,633 COSTS AND EXPENSES OPERATING EXPENSES 5,361,540 5,552,154 INTEREST EXPENSES 172,779 166,901 OTHER EXPENSES, NET 3,289 2,813 TOTAL COSTS AND EXPENSES 5,537,608 5,721,868 INCOME FROM OPERATIONS 818,313 883,765 OTHER INCOME 75,465 125,116 INCOME BEFORE TAXES ON INCOME 893,778 1,008,881 PROVISION FOR TAXES ON INCOME 358,745 404,945 NET INCOME $535,033 $603,936 LESS PREFERRED DIVIDENDS --0-- 1,219 NET INCOME APPLICABLE TO COMMON SHARES $535,033 $602,717 EARNINGS PER COMMON SHARE $0.53 $0.60 DIVIDENDS PER COMMON SHARE $0.31 $0.29 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, 1996 JUNE 30, 1995 ------------- ------------- OPERATING REVENUE $11,581,189 $11,699,925 COSTS AND EXPENSES OPERATING EXPENSES 10,053,977 10,096,548 INTEREST EXPENSES 344,803 343,724 OTHER EXPENSES, NET 9,249 5,310 TOTAL COSTS AND EXPENSES 10,408,029 10,445,582 INCOME FROM OPERATIONS 1,173,160 1,254,343 OTHER INCOME 172,439 142,938 INCOME BEFORE TAXES ON INCOME 1,345,599 1,397,281 PROVISION FOR TAXES ON INCOME 540,097 560,841 NET INCOME $805,502 $836,440 LESS PREFERRED DIVIDENDS 1,219 2,438 NET INCOME APPLICABLE TO COMMON SHARES $804,283 $834,002 EARNINGS PER COMMON SHARE $0.80 $0.83 DIVIDENDS PER COMMON SHARE $0.62 $0.58 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, 1996 JUNE 30, 1995 -------------- -------------- OPERATING REVENUE $25,367,586 $25,026,809 COSTS AND EXPENSES OPERATING EXPENSES 21,963,934 21,659,962 INTEREST EXPENSES 684,212 695,203 OTHER EXPENSES, NET 11,126 7,651 TOTAL COSTS AND EXPENSES 22,659,272 22,362,816 INCOME FROM OPERATIONS 2,708,314 2,663,993 OTHER INCOME 369,942 542,318 INCOME BEFORE TAXES ON INCOME 3,078,256 3,206,311 PROVISION FOR TAXES ON INCOME 1,156,688 1,312,989 NET INCOME $1,921,568 $1,893,322 LESS PREFERRED DIVIDENDS 3,657 4,876 NET INCOME APPLICABLE TO COMMON SHARES $1,917,911 $1,888,446 EARNINGS PER COMMON SHARE $1.91 $1.88 DIVIDENDS PER COMMON SHARE $1.20 $1.13 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, 1996 DECEMBER 31, 1995 ------------- ----------------- ASSETS PLANT AND EQUIPMENT $57,200,005 $57,094,383 DEPRECIATION ALLOWANCE (21,031,075) (20,312,058) CONSTRUCTION WORK IN PROGRESS 2,107,388 291,478 --------- ------- NET UTILITY PLANT 38,276,318 37,073,803 NON-UTILITY PROPERTY 135,133 149,138 CURRENT AND ACCRUED ASSETS 5,439,564 5,272,443 DEFERRED DEBITS 2,484,259 2,799,374 --------- --------- $46,335,274 $45,294,758 ----------- ----------- ----------- ----------- LIABILITIES CAPITAL STOCK: CLASS A PREFERRED - PAR VALUE $25 PER SHARE NO OUTSTANDING SHARES IN 1996 $--0-- $97,525 COMMON - PAR VALUE $1 PER SHARE OUTSTANDING 1,004,370 SHARES 1,004,370 1,004,370 SURPLUS: CAPITAL SURPLUS 2,507,502 2,512,379 EARNINGS RETAINED IN BUSINESS 11,561,486 11,379,913 ---------- ---------- TOTAL CAPITAL 15,073,358 14,994,187 ---------- ---------- LONG-TERM DEBT: FIRST MORTGAGE BONDS 6,005,000 6,023,000 OTHER NOTES 1,458,918 1,250,335 --------- --------- TOTAL LONG-TERM DEBT 7,463,918 7,273,335 --------- --------- CURRENT PORTION LONG-TERM DEBT 81,000 81,000 CURRENT AND ACCRUED LIABILITIES 5,244,650 4,819,070 DEFERRED TAXES 3,761,435 3,696,565 ADVANCES FOR CONSTRUCTION 5,485,300 5,440,080 CONTRIBUTION IN AID OF CONSTRUCTION 6,109,271 6,055,354 DEFERRED CREDITS 3,116,342 2,935,167 --------- --------- $46,335,274 $45,294,758 ----------- ----------- ----------- -----------
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, 1996 JUNE 30, 1995 ------------- ------------- CASH FLOW FROM OPERATING ACTIVITIES: NET INCOME $805,502 $836,440 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATION ACTIVITIES: DEPRECIATION AND AMORTIZATION 617,863 726,377 DEFERRED INCOME TAX AND ITC 64,870 83,706 CHANGE IN ASSETS AND LIABILITIES: CUSTOMERS RECEIVABLE (526,278) (573,962) OTHER RECEIVABLE 506,877 554,471 MATERIALS AND SUPPLIES 23,536 8,586 ACCOUNTS PAYABLE (64,907) (51,667) INCOME TAXES PAYABLE 143,779 (105,886) DEFERRED CREDITS 172,324 (160,576) ALL OTHERS (174,483) 354,168 ------- ------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,569,083 1,671,657 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: CAPITAL EXPENDITURES (1,926,409) (1,166,183) PURCHASE SUBSIDIARIES --0-- (10,001) ----- ------ NET CASH USED FOR INVESTING ACTIVITIES (1,926,409) (1,176,184) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: PROCEEDS FROM CONTRIBUTIONS IN AID OF CONSTRUCTION & ADVANCES 99,137 (283,725) REPAYMENT OF LONG TERM DEBT 190,583 154,933 DIVIDENDS PAID (623,929) (584,967) STOCK REDEMPTION (97,525) --0-- OTHER 108,120 113,010 ------- ------- NET CASH USED BY FINANCING ACTIVITIES (323,614) (600,749) ------- ------- NET (DECREASE) INCREASE IN CASH ($680,940) ($105,276) CASH AT BEGINNING OF YEAR 751,606 1,427,321 ------- --------- CASH AT END OF YEAR $70,666 $1,322,045 ------- ---------- ------- ----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 7 (f) CAPITALIZATION AND STOCKHOLDERS' EQUITY (UNAUDITED)
AS OF JUNE 30, 1996 ------------- DEBT: LONG-TERM DEBT $7,544,918 CURRENT SINKING FUND REQUIREMENTS (81,000) ------ TOTAL DEBT MATURING IN MORE THAN TWELVE MONTHS $7,463,918 ---------- ---------- DEFERRED CREDITS $3,116,342 ---------- ---------- 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 $11,379,913 NET INCOME 805,502 CASH DIVIDENDS: COMMON STOCK @ $0.31 $622,710 PREFERRED STOCK CLASS A @ $0.3125 1,219 (623,929) ----- ------- BALANCE AT END OF INTERIM PERIOD 11,561,486 ---------- TOTAL STOCKHOLDER'S EQUITY $15,073,358 ----------- -----------
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, 1996, earnings per share were $0.53, compared to $0.60 the same period in 1995. Revenues for the quarter ended June 30, 1996, were $6,355,921 and net income was $535,033, compared to revenues of $6,605,633 and net income of $603,936 for the same period last year. Earnings per share for the first half of 1996 were $0.80, which compared with $0.83 last year. Gross revenues were $11,581,189 and net income was $805,502, compared to 1995's gross revenues of $11,699,925 and net income of $836,440. For the twelve months ended June 30, 1996, earnings per share were $1.91, up from $1.88 the same period in 1995. Revenues for the twelve months ended June 30, 1996, were $25,367,586 and net income was $1,921,568, compared to revenues of $25,026,809 and net income of $1,893,322, for the same period last year. The slight decrease in this quarter's results are attributable to a 4.1% decrease in sales from the same quarter last year, caused by reduced water purchases by one industry group. However, seasonal variations in sales are to be expected in the water industry, and the Company does not anticipate the quarter's results to affect its year- end performance. The Company remains on track with its strategic plan, which focuses on increasing the efficiency and growing the business. Employee teams are delivering measurable improvements to some of the Company's key business processes, thus strengthening the core business and readying the Company for growth. Also enhancing the Company's growth potential, the Company has secured service agreements with two mutual water companies in the Kern River Valley. As part of the Company's strategic repositioning, Dominguez sold the remaining assets of its non-utility subsidiary, Hydro-Metric Corporation as of April 26, 1996. This transaction had no material effect on the Company's financial statements. As of March 15, 1996, the Company redeemed all its outstanding Class A Preferred Shares. 9 WATER QUALITY As a water purveyor to more than 100,000 people, the Company has been ordered by the EPA to participate in a data acquisition program beginning in September. The purpose of this nationwide study is to provide technical information which will guide the EPA in establishing additional disinfection by-products regulations. Known as the Information Collection Rule (ICR), the program is expected to last for two years. WATER SUPPLY The water supply outlook is encouraging. Although this year's runoff was slightly less than in the prior year, reservoirs are near capacity and snow pack in Northern California is still well above normal. MWD expects full deliveries from the Colorado River, and State Water Project water will be available. The Company is assured of having adequate supplies to meet South Bay customers' demands for the next two years. The Company continues to increase local well capacity in order to mitigate the effects of water shortages and future imported water rate increases. All South Bay wells are operational, producing approximately 50% of the system's supply. For the last twelve months, these wells produced more water than any other time in the last twenty years. In the Kern River Valley and Antelope Valley, ground water levels indicate that these systems should have an adequate water supply for 1996. DIVIDEND INCREASE The Board of Directors has declared the Company's 134th consecutive quarterly dividend at $.31 per share on common stock to be paid on September 15, 1996. OTHER The Company wish the best to Vice President and Corporate Secretary Chris Rose, who has decided to pursue other career opportunities. The Company thank him for the many contributions he has made to Dominguez's success. His management skills and valuable insight will be missed. He will continue to share his expertise with the Company in a consulting capacity. 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
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ------ CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDING JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1 3-MOS DEC-31-1995 JAN-01-1996 JUN-30-1996 70,666 0 3,254,719 (256,883) 70,635 5,439,564 59,307,393 21,031,075 46,335,274 5,325,650 6,005,000 1,004,370 0 0 14,068,988 46,335,274 10,970,172 11,581,189 3,748,330 9,172,059 0 49,648 344,803 1,345,599 540,097 805,502 0 0 0 805,502 0.80 0.80
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