-----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, HYZiAFACOCP9K99GFKszUVu1uKCG9H3997x+5bXhypi8bbQqlnohqxDwTVdAE3tT n+xztj8pWgcQ00WCJaMd5g== 0001047469-98-031278.txt : 19980817 0001047469-98-031278.hdr.sgml : 19980817 ACCESSION NUMBER: 0001047469-98-031278 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 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: 98687257 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 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 -------------------- For Quarter Ended JUNE 30, 1998 on file No 0-18677 DOMINGUEZ SERVICES CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) CALIFORNIA 33-0391161 - ---------------------------- ----------------- (State or other jurisdiction of (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) - 1,506,512 DOMINGUEZ SERVICES CORPORATION INDEX ----- PART I - FINANCIAL INFORMATION PAGE NO. -------- Item 1. Financial Statements (a) Consolidated Income Statement for the 3 Three Months Ending June 30, 1998 and 1997 (b) Consolidated Income Statement for the 4 Six Months Ending June 30, 1998 and 1997 (c) Consolidated Income Statement for the 5 Twelve Months Ending June 30, 1998 and 1997 (d) Consolidated Balance Sheet as of 6 June 30, 1998 and Consolidated Balance Sheet as of December 31, 1997 (e) Consolidated Statements of Cash Flows 7 for the Six Months Ending June 30, 1998 and 1997 (f) Capitalization and Stockholders' Equity 8 as of June 30, 1998 (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 Company, Antelope Valley Water Company, Kern River Valley Water Company (Consolidating Kernville Domestic Water Co. and Arden Water Co.) and DSC Investments. (a) Consolidated Income Statement (Unaudited) - Fiscal Quarter ending:
For the For the Quarter Ending Quarter Ending June 30, 1998 June 30, 1997 ------------- ------------- Operating revenue $ 6,166,222 $ 7,000,908 Costs and expenses Operating expenses 5,432,779 6,001,999 Interest expenses 224,504 214,386 Total costs and expenses 5,657,283 6,216,385 Income from operations 508,939 784,523 Other income 143,521 96,521 Income before taxes on income 652,460 881,044 Provision for taxes on income 263,279 353,730 Net income $ 389,181 $ 527,314 Less preferred dividends --0-- --0-- Net income applicable to common shares $ 389,181 $ 527,314 Earnings per common share (basic & diluted) $ 0.26 $ 0.35 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) - Six Months Ending:
For the Six For the Six Months Ending Months Ending June 30, 1998 June 30, 1997 ------------- ------------- Operating revenue $ 11,603,692 $ 12,168,935 Costs and expenses Operating expenses 10,311,376 10,582,071 Interest expenses 437,893 399,523 Total costs and expenses 10,749,269 10,981,594 Income from operations 854,423 1,187,341 Other income 229,177 166,437 Income before taxes on income 1,083,600 1,353,778 Provision for taxes on income 434,000 543,500 Net income $ 649,600 $ 810,278 Less preferred dividends --0-- --0-- Net income applicable to common shares $ 649,600 $ 810,278 Earnings per common share (basic & diluted) $ 0.43 $ 0.54 Dividends per common share $ 0.460 $ 0.435 Average common shares outstanding 1,506,512 1,506,512
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, 1998 June 30, 1997 ------------- ------------- Operating revenue $ 26,252,935 $ 25,292,532 Costs and expenses Operating expenses 22,933,406 21,721,101 Interest expenses 796,466 713,984 Total costs and expenses 23,729,872 22,435,085 Income from operations 2,523,063 2,857,477 Other income 612,911 445,999 Income before taxes on income 3,135,974 3,303,446 Provision for taxes on income 1,275,468 1,317,372 Net income $ 1,860,506 $ 1,986,074 Less preferred dividends --0-- --0-- Net income applicable to common shares $ 1,860,506 $ 1,986,074 Earnings per common share (basic and diluted) $ 1.23 $ 1.32 Dividends per common share $ 0.895 $ 0.850 Average common shares outstanding 1,506,512 1,506,512
See accompanying notes to financial statements. 5 (d) Consolidated Balance Sheet (Unaudited)
As of As of June 30, 1998 December 31, 1997 ------------- ----------------- ASSETS Plant and equipment $ 62,357,240 $ 62,256,131 ------------ ------------ Depreciation allowance (23,089,429) (22,256,863) Net utility plant 39,267,811 39,999,268 Construction work in progress 3,487,010 1,255,260 Non-utility property 573,639 583,308 Current and accrued assets 6,202,862 7,569,388 Deferred debits 2,317,302 2,253,331 ------------ ------------ $ 51,848,624 $ 51,660,555 ------------ ------------ ------------ ------------ LIABILITIES 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 12,786,731 12,830,127 ------------ ------------ Total capital 16,298,595 16,341,991 ------------ ------------ Long-term debt: First mortgage bonds 9,000,000 9,000,000 Other notes 2,158,225 2,194,407 ------------ ------------ Total long-term debt 11,158,225 11,194,407 ------------ ------------ Current potion long-term debt 64,000 64,000 Current and accrued liabilities 5,314,514 5,439,195 Deferred taxes 4,173,634 4,089,364 Advances for construction 5,567,453 5,515,687 Contribution in aid of construction 6,213,679 6,117,603 Deferred credits 3,058,524 2,898,308 ------------ ------------ $ 51,848,624 $ 51,660,555 ------------ ------------ ------------ ------------
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, 1998 June 30, 1997 ------------- ------------- Cash Flow from Operating Activities: Net income $ 649,600 $ 810,278 Adjustments to reconcile net income to net cash provided by operation activities: Depreciation and amortization 761,463 743,532 Deferred income tax and ITC 84,270 84,870 Change in assets and liabilities: Customers receivable (134,135) (896,512) Other receivable 58,903 (867,139) Materials and supplies 3,000 --0-- Accounts payable (228,260) 577,764 Income taxes payable (23,972) 397,896 Deferred credits 96,245 212,966 Other (96,402) 565,669 ----------- ----------- Net Cash Provided by Operating Activities 1,170,712 1,629,324 ----------- ----------- Cash Flows from Investing Activities: Capital expenditures (2,332,859) (1,123,328) ----------- ----------- Net Cash used for Investing Activities (2,332,859) (1,123,328) ----------- ----------- Cash Flows from Financing Activities: Proceeds from contributions in aid of construction & advances 147,842 (101,120) Repayment of long-term debt (36,182) (769,134) Dividends paid (692,996) (652,841) Proceeds from interim debt --0-- 1,200,000 Other --0-- 94,146 ----------- ----------- Net Cash ued by Financing Activities (581,336) (228,949) ----------- ----------- Net Increase (Decrease) in Cash $(1,743,483) $ 277,047 Cash at Beginning of Year 2,137,339 708,817 ----------- ----------- Cash at End of Year $ 393,856 $ 985,864 ----------- ----------- ----------- -----------
See accompanying notes to financial statements. 7 (f) Capitalization and Stockholders' Equity (Unaudited)
As of June 30, 1998 ------------- Debt: Long-term debt $ 11,222,225 Current sinking fund requirements (64,000) ------------ Total debt maturing in more than twelve months $ 11,158,225 ------------ ------------ Deferred credits $ 3,058,524 ------------ ------------ Stockholder's 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 $ 12,830,127 fiscal year Net income 649,600 Cash dividends: Common stock @ $0.46 (692,996) Balance at end of interim period ----------- 12,786,731 ------------ Total stockholder's equity $ 16,298,595 ------------ ------------
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, 1998, earnings per share were $0.26, compared to $0.35 in the same period in 1997. Revenues for the quarter ended June 30, 1998, were $6,166,222 and net income was $389,181, compared to revenues of $7,000,908 and net income of $527,314 for the same period last year. Earnings per share for the first half of 1998 were $0.43, which compared with $0.54 last year. Revenues for the six months ended June 30, 1998, were $11,603,692 and net income was $649,602, compared to revenues of $12,168,935 and net income of $810,278 for the same period last year. For the twelve months ended June 30, 1998, earnings per share were $1.23, compared to $1.32 in the same period in 1997. Revenues for the twelve months ended June 30, 1998 were $26,252,935 and net income was $1,860,506, compared to revenues of $25,292,532 and net income of $1,986,074 for the same period last year. The second quarter operating results were constrained by the lingering effects of El Nino, which brought rain well into the month of May and curtailed consumer usage. While the Company's water sales to industrial customers remained strong, these lower-margin sales did not completely offset reduced residential usage. 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. In March 1998, the California Public Utilities Commission (CPUC) ordered all regulated utilities to furnish information related to the CPUC's investigation into the 9 existing standards and policies of the CPUC regarding drinking water quality. The Company will comply with the CPUC's order by September 11, 1998. WATER SUPPLY ------------ As of June 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 has signed up its first recycled water customer, which will receive water purchased from the West Basin Municipal Water District Recycled Water Project in El Sequndo, Over the next two years, Dominguez anticipates converting several industrial and irrigation users to recycled water. Margins on recycled water sales will be equal to those of replaced potable sales. STRATEGIC GROWTH PLAN --------------------- The Company has reached settlement agreements with the staff of CPUC for the purchase of the Lucerne and Armstrong Water Companies. Dominguez anticipates closing these transactions in the fourth quarter. DIVIDEND INCREASED ------------------ The Board of Directors has declared the Company's 142nd consecutive quarterly dividend at $0.23 per share on common stock to be paid on September 15, 1998. 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: August 13, 1998 By: /s/ John S. Tootle ------------------------ ------------------------------------ John S. Tootle CFO, Vice-President Finance 11 EX-27 2 EX-27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDING DECEMBER 31, 1997. 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 393,856 0 3,451,724 (247,614) 36,244 6,202,862 62,357,240 23,089,429 51,848,624 5,378,514 11,158,225 0 0 1,506,512 14,792,083 51,848,624 10,725,427 11,603,692 5,912,067 10,311,376 0 59,135 437,893 1,083,602 434,000 649,602 0 0 0 649,602 0.43 0.43
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