-----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, ODHdzlvEqUMZYHVd5nDTX+gmDmNgCX/wyp8vmcSLRyztWFWJ+iBqoZFiupFR8UFY 73ceLCtvVTQGUhAnxULhFA== 0000912057-96-025777.txt : 19961113 0000912057-96-025777.hdr.sgml : 19961113 ACCESSION NUMBER: 0000912057-96-025777 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 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: 96660034 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 FORM 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, 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 SEPTEMBER 30, 1996 AND 1995 (B) CONSOLIDATED INCOME STATEMENT FOR THE 4 NINE MONTHS ENDING SEPTEMBER 30, 1996 AND 1995 (C) CONSOLIDATED INCOME STATEMENT FOR THE 5 TWELVE MONTHS ENDING SEPTEMBER 30, 1996 AND 1995 (D) CONSOLIDATED BALANCE SHEET AS OF 6 SEPTEMBER 30, 1996 AND CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1995 (E) CONSOLIDATED STATEMENTS OF CASH FLOWS 7 FOR THE NINE MONTHS ENDING SEPTEMBER 30, 1996 AND 1995 (F) CAPITALIZATION AND STOCKHOLDERS' EQUITY 8 AS OF SEPTEMBER 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., KERN RIVER VALLEY WATER COMPANIES (CONSOLIDATING KERNVILLE DOMESTIC WATER CO., ARDEN WATER CO.,) (A) CONSOLIDATED INCOME STATEMENT (UNAUDITED) - FISCAL QUARTER ENDING:
FOR THE FOR THE QUARTER ENDING QUARTER ENDING SEPTEMBER 30, 1995 SEPTEMBER 30, 1996 ------------------ ------------------- OPERATING REVENUE $7,404,372 $7,543,353 COSTS AND EXPENSES OPERATING EXPENSES 6,026,528 6,129,554 INTEREST EXPENSES 172,005 171,021 OTHER EXPENSES, NET 22,696 732 TOTAL COSTS AND EXPENSES 6,221,229 6,301,307 INCOME FROM OPERATIONS 1,183,143 1,242,046 OTHER INCOME 131,464 9,631 INCOME BEFORE TAXES ON INCOME 1,314,607 1,251,677 PROVISION FOR TAXES ON INCOME 527,656 502,398 NET INCOME $786,951 $749,279 LESS PREFERRED DIVIDENDS --0-- 1,219 NET INCOME APPLICABLE TO COMMON SHARES $786,951 $748,060 EARNINGS PER COMMON SHARE $0.78 $0.75 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) - NINE MONTHS ENDING:
FOR THE NINE FOR THE NINE MONTHS ENDING MONTHS ENDING SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 ------------------ ------------------ OPERATING REVENUE $18,985,561 $19,243,278 COSTS AND EXPENSES OPERATING EXPENSES 16,080,505 16,226,102 INTEREST EXPENSES 516,808 514,745 OTHER EXPENSES, NET 31,945 6,042 TOTAL COSTS AND EXPENSES 16,629,258 16,746,889 INCOME FROM OPERATIONS 2,356,303 2,496,389 OTHER INCOME 303,903 152,569 INCOME BEFORE TAXES ON INCOME 2,660,206 2,648,958 PROVISION FOR TAXES ON INCOME 1,067,753 1,063,239 NET INCOME $1,592,453 $1,585,719 LESS PREFERRED DIVIDENDS 1,219 3,657 NET INCOME APPLICABLE TO COMMON SHARES $1,591,234 $1,582,062 EARNINGS PER COMMON SHARE $1.58 $1.58 DIVIDENDS PER COMMON SHARE $0.93 $0.87 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 SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 ------------------ ------------------ OPERATING REVENUE $25,228,605 $25,151,890 COSTS AND EXPENSES OPERATING EXPENSES 21,860,906 21,566,187 INTEREST EXPENSES 685,196 702,443 OTHER EXPENSES, NET 33,090 (13,809) TOTAL COSTS AND EXPENSES 22,579,192 22,254,821 INCOME FROM OPERATIONS 2,649,413 2,897,069 OTHER INCOME 491,775 352,781 INCOME BEFORE TAXES ON INCOME 3,141,188 3,249,850 PROVISION FOR TAXES ON INCOME 1,181,946 1,300,646 NET INCOME $1,959,242 $1,949,204 LESS PREFERRED DIVIDENDS 2,438 4,876 NET INCOME APPLICABLE TO COMMON SHARES $1,956,804 $1,944,328 EARNINGS PER COMMON SHARE $1.95 $1.94 DIVIDENDS PER COMMON SHARE $1.22 $1.145 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 SEPTEMBER 30, 1996 DECEMBER 31, 1995 ------------------ ----------------- ASSETS PLANT AND EQUIPMENT $57,200,694 $57,094,383 DEPRECIATION ALLOWANCE (21,417,210) (20,312,058) CONSTRUCTION WORK IN PROGRESS 2,939,207 291,478 ----------- ----------- NET UTILITY PLANT 38,722,691 37,073,803 NON-UTILITY PROPERTY 135,133 149,138 CURRENT AND ACCRUED ASSETS 6,697,748 5,272,443 DEFERRED DEBITS 2,480,343 2,799,374 ----------- ----------- $48,035,915 $45,294,758 ----------- ----------- ----------- ----------- LIABILITIES CAPITAL STOCK: CLASS A PREFERRED - PAR VALUE $25 PER SHARE ALL SHARES WERE REDEEMED IN MARCH 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 12,053,960 11,379,913 ----------- ----------- TOTAL CAPITAL 15,565,832 14,994,187 ----------- ----------- LONG-TERM DEBT: FIRST MORTGAGE BONDS 5,988,000 6,023,000 OTHER NOTES 2,051,506 1,250,335 ----------- ----------- TOTAL LONG-TERM DEBT 8,039,506 7,273,335 ----------- ----------- CURRENT PORTION LONG-TERM DEBT 58,000 81,000 CURRENT AND ACCRUED LIABILITIES 5,831,357 4,819,070 DEFERRED TAXES 3,803,870 3,696,565 ADVANCES FOR CONSTRUCTION 5,389,635 5,440,080 CONTRIBUTION IN AID OF CONSTRUCTION 6,133,071 6,055,354 DEFERRED CREDITS 3,214,644 2,935,167 ----------- ------------ $48,035,915 $45,294,758 ----------- ------------ ----------- ------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 6 (E) CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
FOR THE NINE FOR THE NINE MONTHS ENDING MONTHS ENDING SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 ------------------ ------------------ CASH FLOW FROM OPERATING ACTIVITIES: NET INCOME $1,592,453 $1,585,719 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATION ACTIVITIES: DEPRECIATION AND AMORTIZATION 953,422 1,053,322 DEFERRED INCOME TAX AND ITC 107,305 125,559 CHANGE IN ASSETS AND LIABILITIES: CUSTOMERS RECEIVABLE (688,971) (829,139) OTHER RECEIVABLE 584,678 352,298 MATERIALS AND SUPPLIES 23,277 8,663 ACCOUNTS PAYABLE 243,865 386,088 INCOME TAXES PAYABLE 632,013 11,210 DEFERRED CREDITS 271,058 (129,557) ALL OTHERS 191,225 576,462 ------- ------- NET CASH PROVIDED BY OPERATING ACTIVITIES 3,910,325 3,140,625 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: CAPITAL EXPENDITURES (2,758,917) (1,810,978) --------- --------- NET CASH USED FOR INVESTING ACTIVITIES (2,758,917) (1,810,978) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: PROCEEDS FROM CONTRIBUTIONS IN AID OF CONSTRUCTION & ADVANCES 189,452 111,615 REPAYMENT OF LONG-TERM DEBT 766,171 111,609 DIVIDENDS PAID (935,283) (877,452) STOCK REDEMPTION (97,525) --0-- CURRENT PORTION LONG-TERM DEBT (23,000) --0-- NET CASH USED BY FINANCING ACTIVITIES (100,185) (654,228) --------- --------- NET (DECREASE) INCREASE IN CASH $1,051,223 $675,419 CASH AT BEGINNING OF YEAR 751,606 1,427,321 --------- --------- CASH AT END OF YEAR $1,802,829 $2,102,740 ---------- ---------- ---------- ----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 7 (F) CAPITALIZATION AND STOCKHOLDERS' EQUITY (UNAUDITED)
AS OF SEPTEMBER 30, 1996 ------------------ DEBT: LONG-TERM DEBT $8,097,506 CURRENT SINKING FUND REQUIREMENTS (58,000) ------ TOTAL DEBT MATURING IN MORE THAN TWELVE MONTHS $8,039,506 ---------- ---------- DEFERRED CREDITS $3,214,644 ---------- ---------- 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 $11,396,790 NET INCOME 1,592,453 CASH DIVIDENDS: COMMON STOCK @ $0.31 $934,064 PREFERRED STOCK CLASS A @ $0.3125 1,219 (935,283) ----- ------- BALANCE AT END OF INTERIM PERIOD 12,053,960 ---------- TOTAL STOCKHOLDER'S EQUITY $15,565,832 ---------- ----------
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 September 30, 1996, earnings per share were $0.78, compared to $0.75 in the third quarter in 1995. Revenues for the quarter ended September 30, 1996 were $7,404,372 and net income was $786,951, compared to revenues of $7,543,353 and net income of $749,279 for the same period last year. On a nine months basis, earnings remained the same at $1.58 per share. Revenues were $18,985,561 and net income was $1,592,453, compared to 1995's revenues of $19,243,278 and net income of $1,585,719. For the twelve months ended September 30, 1996, earnings per share were $1.95, up from $1.94 for the same period in 1995. Revenues for the twelve months ended September 30, 1996 were $25,228,605 and net income was $1,959,242, compared to revenues of $25,151,890 and net income of $1,949,204 for the same period last year. The Company posted higher earnings for the quarter despite a 5.5% decrease in water sales from the same quarter last year. The decrease is due to reduced water purchases by industrial water users. Higher earnings are primarily attributable to proceeds from brokering water rights leases. As previously reported, 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 finalized several more service agreements in the Kern River Valley. The Company is also actively pursuing other partnerships. WATER QUALITY As previously reported, the Company is required to participate in EPA's data acquisition program known as the Information Collection Rule (ICR) The Company has completed the monthly sampling required in September and October. 9 WATER SUPPLY The water supply outlook is excellent. Statewide precipitation was 120% of normal through September, the end of the water year. The reservoirs throughout the state held 119% of the historical averages for September, and storage was 73% of total capacity. Early winter storms are encouraging as the state starts a new water year. Metropolitan Water District expects full deliveries from the Colorado River, and water from the State Water Project 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. A new well will be drilled in 1997. All South Bay wells are operational, producing approximately 50% of the system's supply. Local well production continues at a 20-year high. In the Kern River Valley and Antelope Valley, despite very high summer temperatures, water supplies were adequate to meet demands. DIVIDEND DECLARED The Board of Directors has declared the Company's 135th consecutive quarterly dividend at $0.31 per share on common stock to be paid on December 15, 1996. 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: November 12, 1996 By: /s/ John S. Tootle --------------------------- ---------------------------- 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 SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1995 JAN-01-1996 SEP-30-1996 1,802,829 0 3,422,664 (262,135) 70,894 7,147,748 60,139,901 21,417,210 48,035,915 6,339,357 5,988,000 0 0 1,004,370 14,561,462 48,035,915 17,949,833 18,985,561 6,247,752 14,760,425 0 94,083 516,808 2,660,206 1,067,753 1,592,453 0 0 0 1,592,453 1.58 1.58
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