-----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, C/f1Iaea76JlKH7k/l9K3BMO6S/V7Zo5GIknZ1khBLtABYmiUwns61dCPBGCouRG yEJi4lV9Cvp6PfB7JBOxMA== 0001047469-98-020642.txt : 19980518 0001047469-98-020642.hdr.sgml : 19980518 ACCESSION NUMBER: 0001047469-98-020642 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 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: SEC FILE NUMBER: 000-18677 FILM NUMBER: 98624008 BUSINESS ADDRESS: STREET 1: 21718 S ALAMEDA ST CITY: LONG BEACH STATE: CA ZIP: 90810 BUSINESS PHONE: 3108342625 MAIL ADDRESS: STREET 1: 21718 SOUTH ALAMEDA ST 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 10 - Q Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 MARCH 31, 1998 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) - 1,506,512 DOMINGUEZ SERVICES CORPORATION INDEX
PART I - FINANCIAL INFORMATION PAGE NO. --------- Item 1. Financial Statements (a) Consolidated Income Statement for the 3 Three Months Ending March 31, 1998 and 1997 (b) Consolidated Income Statement for the 4 Twelve Months Ending March 31, 1998 and 1997 (c) Consolidated Balance Sheet as of 5 March 31, 1998 and Consolidated Balance Sheet as of December 31, 1997 (d) Consolidated Statements of Cash Flows 6 for the Three Months Ended March 31, 1998 and 1997 (e) Capitalization and Shareholders' Equity 7 as of March 31, 1998 (f) Notes to Consolidated Financial 8 Statements Item 2. Management's Discussion and Analysis of 8-9 Financial Condition and Results of Operations PART II - OTHER INFORMATION Item 1. Legal Proceedings 10 Item 6. Exhibits and Reports on Form 8-K 10 Signature 10
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 Kern River Valley Water Company and Arden Water Company) and DSC Investments. (a) Consolidated Income Statement (Unaudited) - Fiscal Quarter ending:
For the For the Quarter Ending Quarter Ending March 31, 1998 March 31, 1997 -------------- -------------- Operating revenue $5,437,470 $5,168,027 Costs and expenses Operating expenses 4,878,597 4,580,072 Interest expenses 213,389 185,137 Total costs and expenses 5,091,986 4,765,209 Income from operations 345,484 402,818 Other income 85,658 69,916 Income before taxes on income 431,142 472,734 Provision for taxes on income 170,721 189,770 Net income $260,421 $282,964 Less preferred dividends --0-- --0-- Net income applicable to common shares $260,421 $282,964 Earnings per common share (basic & diluted) $0.17 $0.19 Dividends per common share $0.2300 $0.2175 Average common shares outstanding 1,506,512 1,506,512
See accompanying notes to financial statements. 3 (b) Consolidated Income Statement (Unaudited) - Twelve Months Ending:
For the Twelve For the Twelve Months Ending Months Ending March 31, 1998 March 31, 1997 -------------- -------------- Operating revenue $27,087,621 $24,647,545 Costs and expenses Operating expenses 23,502,626 21,080,642 Interest expenses 786,348 672,377 Total costs and expenses 24,288,974 21,753,019 Income from operations 2,798,647 2,894,526 Other income 565,911 421,654 Income before taxes on income 3,364,558 3,316,180 Provision for taxes on income 1,365,919 1,322,387 Net income $1,998,639 $1,993,793 Less preferred dividends --0-- --0-- Net income applicable to common shares $1,998,639 $1,993,793 Earnings per common share (basic & diluted) $1.32 $1.32 Dividends per common share $0.8825 $0.8400 Average common shares outstanding 1,506,512 1,506,512
See accompanying notes to financial statements. (d) Consolidated Balance Sheet (Unaudited)
As of As of March 31, 1998 December 31, 1997 -------------- ----------------- ASSETS Plant and equipment $ 62,256,131 $ 62,256,131 Depreciation allowance (22,681,186) (22,256,863) ------------ ------------ Net utility plant 39,574,945 39,999,268 Construction work in progress 2,637,773 1,255,260 Non-utility property 583,308 583,308 Current and accrued assets 5,975,458 7,569,388 Deferred debits 2,322,624 2,253,331 ------------ ------------ $ 51,094,108 $ 51,660,555 ------------ ------------ ------------ ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Capital stock: Common - par value $1 per share Outstanding 1,506,512 shares 1,506,512 1,506,512 Surplus: Capital surplus 2,005,352 2,005,352 Earnings retained in business 12,744,051 12,830,127 ------------ ------------ Total capital 16,255,915 16,341,991 ------------ ------------ Long-term debt: First mortgage bonds 9,000,000 9,000,000 Other notes 2,187,497 2,194,407 ------------ ------------ Total long-term debt 11,187,497 11,194,407 ------------ ------------ Current portion long-term debt 64,000 64,000 Current and accrued liabilities 4,746,919 5,439,195 Deferred taxes 4,131,559 4,089,364 Advances for construction 5,566,695 5,515,687 Contribution in aid of construction 6,142,678 6,117,603 Deferred credits 2,998,845 2,898,308 ------------ ------------ $ 51,094,108 $ 51,660,555 ------------ ------------ ------------ ------------
See accompanying notes to financial statements. 5 (e) Consolidated Statements of Cash Flows (Unaudited)
For the For the Quarter Ending Quarter Ending March 31, 1998 March 31, 1997 -------------- -------------- Cash Flow from Operating Activities: Net income $260,421 $282,964 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 383,451 380,948 Deferred income tax and ITC 42,195 42,435 Changes in assets and liabilities: Customers receivable 408,739 (113,884) Other receivable 80,819 (463,106) Accounts payable (835,432) (42,139) Income taxes payable 227,176 119,493 Deferred credits 31,244 107,186 Other 23,898 177,689 ---------- ---------- Net Cash Provided by Operating Activities 622,510 491,586 ---------- ---------- Cash Flows from Investing Activities: Capital expenditures (1,382,513) (472,969) ---------- ---------- Net Cash Used in Investing Activities (1,382,513) (472,969) ---------- ---------- Cash Flows from Financing Activities: Proceeds from contributions in aid of construction & advances 76,083 3,897 Repayment of long-term debt (6,910) (3,163) Dividends paid (346,497) (326,421) Proceeds from interim debt --0-- 700,000 ---------- ---------- Net Cash (Used in) Provided by Financing Activities (277,324) 374,313 ---------- ---------- Net Increase in Cash $(1,037,327) $ 392,930 Cash at Beginning of Year 2,137,339 708,817 ---------- ---------- Cash at End of Year $1,100,012 $1,101,747 ---------- ---------- ---------- ----------
See accompanying notes to financial statements. 6 (f) Capitalization and Shareholders' Equity (Unaudited)
As of March 31, 1998 -------------- Debt: Long-term debt $11,251,497 Current sinking fund requirements (64,000) ----------- Total debt maturing in more than twelve months $11,187,497 ----------- ----------- Deferred credits $ 2,998,845 ----------- ----------- Shareholders' equity: Shares issued or outstanding Amount ----------- ------ Common stock $1 par value 1,506,512 $1,506,512 Capital in excess of par value 2,005,352 Retained earnings: Balance at beginning of current fiscal year $12,830,127 Net income 260,421 Cash dividends: Common stock @ $0.23 (346,497) ---------- Balance at end of interim period 12,744,051 ----------- Total shareholders' equity $16,255,915 ----------- -----------
See accompanying notes to financial statements. 7 (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 Operations. For the quarter ended March 31, 1998, earnings per share were $0.17, compared to $0.19 in the first quarter in 1997. Revenues for the quarter ended March 31, 1998 were $5,437,470 and net income was $260,421, compared to revenue of $5,168,027 and net income of $282,964 for the same period last year. For the twelve months ended March 31,1998, earnings per share were $1.32, compared to $1.32 for the same period in 1997. Revenues for the twelve months ended March 31, 1998 were $27,087,621 and net income was $1,998,639, compared to revenue of $24,647,545 and net income of $1,993,793 for the same period last year. First quarter revenue growth was spurred by higher water sales to industrial customers. That water is sold at lower prices which, in turn, impacted margins and contributed to the slight dip in earnings we experienced year to year. Profit was constrained by higher water costs resulting from a one-time increase in the amount of imported water purchased for the South Bay service area. Also, we are experiencing higher tax and interest expenses associated with investment in acquired properties and capital expenditures. Water Quality ------------- The Company is subject to water quality regulations promulgated by the United States Environmental Protection Agency (EPA) and the California Department of Health Services (DHS). Both groundwater and purchased water are subject to extensive analysis. With occasional minor exceptions, the Company meets all current primary water standards. The Company is subject to other applicable environmental regulations related to the handling, storage and disposal of hazardous materials. The Company is currently in compliance with all such regulations. 8 Water Supply ------------ As of March 1998, the water supply outlook is excellent. California State Water Project (SWP) reservoirs are at levels that allow the SWP to supply 100% of the contractor requests for 1998. 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 1998. 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 1998. Dominguez' margins will remain equal to those of replaced potable sales. Strategic Growth Plan --------------------- Dominguez announced during the first quarter, that the City Council of Torrance, California, agreed to purchase pumped groundwater supply from Dominguez, who already provides services to portions of the city. Dominguez values this association greatly and is pleased to be able to meet the water needs of the community. In April, the Kern River Valley Water Company subsidiary relocated its headquarters to a facility which is more centrally located and convenient to all service areas. As always, the opening of this new location caps a period of well-planned expansion by Dominguez in Kern County and evidences our strong commitment to the area. Dividend Increased ------------------ The Board of Directors has declared the Company's 141st consecutive quarterly dividend at $0.23 per share on common stock to be paid on June 15, 1998. 9 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: May 15, 1998 By: /s/ John S. Tootle ------------------- ----------------------------- John S. Tootle CFO, Vice-President Finance 10 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLDIATED BALANCE SHEETS AND CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDING DECEMBER 31, 1997. 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 1,100,012 0 2,906,504 (245,270) 39,244 5,975,458 62,256,131 22,681,186 1,094,108 4,810,919 11,187,497 0 0 1,506,512 14,749,403 51,094,108 5,116,995 5,437,470 2,701,737 4,878,597 0 41,692 213,389 431,142 170,721 260,421 0 0 0 260,421 .17 .17
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