-----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, NV8ssRkRFaVJklAlwPz/3Zqij82/6KdpFlAXCXmk0lNHlPC88BYDHfyNHe7nzwoD HGg9Mz87cd1XEChl6zaxdA== 0001157523-04-010519.txt : 20041109 0001157523-04-010519.hdr.sgml : 20041109 20041109143050 ACCESSION NUMBER: 0001157523-04-010519 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041109 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041109 DATE AS OF CHANGE: 20041109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWEST WATER CO CENTRAL INDEX KEY: 0000092472 STANDARD INDUSTRIAL CLASSIFICATION: WATER SUPPLY [4941] IRS NUMBER: 951840947 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-08176 FILM NUMBER: 041128925 BUSINESS ADDRESS: STREET 1: 225 N BARRANCA AVE STREET 2: STE 200 CITY: WEST COVINA STATE: CA ZIP: 91791-1605 BUSINESS PHONE: 6269151551 MAIL ADDRESS: STREET 1: 225 N BARRANCA AVENUE STREET 2: SUITE 200 CITY: WEST COVINA STATE: CA ZIP: 91791-1605 FORMER COMPANY: FORMER CONFORMED NAME: SUBURBAN WATER SYSTEMS DATE OF NAME CHANGE: 19751202 8-K 1 a4761761.txt SOUTHWEST WATER 8-K - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ----------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): November 9, 2004 SOUTHWEST WATER COMPANY (Exact Name of Registrant as Specified in Its Charter) Delaware 0-8176 95-1840947 (State of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.) One Wilshire Building 624 South Grand Avenue, Suite 2900 Los Angeles, CA 90017-3782 (Address of principal executive offices) (Zip Code) (213) 929-1800 (Registrant's telephone number, including area code) ----------------- (Former name, former address and former fiscal year, if changed since last report date) ----------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 425 under the Securities Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) - -------------------------------------------------------------------------------- Item 2.02 Results of Operations and Financial Condition On November 9, 2004, Southwest Water Company issued a press release announcing its financial results for the three and nine months ended September 30, 2004 and providing guidance for the remainder of 2004. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. Item 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit No. Description - -------- ---------------------------------------------------- 99.1 Press release dated November 9, 2004 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SOUTHWEST WATER COMPANY (Registrant) By: /s/ Richard J Shields ---------------------------- Name: Richard J. Shields Title: Chief Financial Officer Date: November 9, 2004 3 Exhibit Index Exhibit No. Description - ------- ---------------------------------------------- 99.1 Press release dated November 9, 2004 4 EX-99.1 2 a4761761ex991.txt SOUTHWEST WATER EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Southwest Water Company Reports Third Quarter 2004 Revenues and Earnings LOS ANGELES--(BUSINESS WIRE)--Nov. 9, 2004--Southwest Water Company (Nasdaq:SWWC) today is reporting revenues and earnings for the third quarter ended September 30, 2004. The company is also updating its business outlook for the remainder of 2004. Third Quarter 2004 Summary, Compared with Third Quarter 2003: -- Revenues were $55.0 million, compared with $51.4 million. -- Operating income totaled $5.0 million, compared with $6.6 million. -- Net income was $2.4 million, compared with $3.4 million. -- Diluted earnings per share totaled $0.13, compared with $0.22. As a result of two public offerings in 2004, the weighted average number of shares outstanding increased by 19 percent, compared with the third quarter of 2003. Anton C. Garnier, Southwest Water chairman and chief executive officer, said, "Financially, the third quarter was very challenging, with a combination of several events that impacted our operations. Our Utility Group profitability was adversely affected by two source of supply issues in our Southern California utility at the height of the summer water demand. A break in a major pipeline owned by a third-party water supplier forced our utility to purchase significantly more expensive Metropolitan Water District water. Secondly, we lost production from one of our wells, which also caused us to purchase substantially higher priced water. We are working to replace this well, and we expect that both of these events will not affect our earnings going forward." Garnier continued: "In our Services Group, unexpected delays in obtaining permits for construction projects in Texas impacted our third quarter operating profit. Some of these delayed projects broke ground in the fourth quarter, but we do not anticipate making up the earnings shortfall associated with the delays in the remainder of this year. Finally, in our Services Group, we completed several acquisitions in our multi-family billing and collection subsidiary in the first half of this year. As we have integrated those acquisitions, we realized the benefits of focusing our ongoing marketing efforts on third-party equipment; consequently, we took an inventory valuation reserve of approximately $300,000 for our proprietary equipment. "The impact of these operational events and inventory valuation adjustments is a reduction in pre-tax income of approximately $1,500,000, and because we do not see a recovery of these expenses in the fourth quarter, we are changing our 2004 guidance for accordingly." Garnier noted, "In comparing the third quarter of 2004 with the third quarter of 2003, we have incurred significantly higher selling, general and administrative expenses due to our compliance efforts with the Sarbanes-Oxley Act, including independent auditor fees, independent internal audit fees, board governance fees and engagement of consultants for the purpose of completing documentation and testing required by Sarbanes-Oxley Section 404." Garnier added, "On a positive note, during the third quarter we completed the acquisition of approximately 25,000 utility accounts from Tecon Water Holdings, L.P. This utility, which we have renamed Monarch Utility Company, Inc., is outperforming our internal plans for revenues and profitability. During the fourth quarter, we settled a pending rate case for the utility at approximately 80 percent of the increase originally requested by Tecon. The remaining 20 percent of the original request will be added to customer rates in October 2005." Garnier concluded, "The past quarter was challenging, but we believe that our underlying businesses remain strong. We will continue to strategically review the performance of each business unit and make changes as warranted. We remain focused on long-term revenue growth and profitability improvement." Business Outlook The company's revised outlook for 2004 anticipates: -- Revenues of approximately $190 million, up from prior guidance of $185 million; -- Operating income of $17 million, down from prior guidance of $19 million; -- Income before taxes of $12.5 million, down from prior guidance of $14 million; -- Net income of $8 million, down from prior guidance of $9 million. Revenue guidance assumes normal weather conditions during the fourth quarter. Conference Call The company will provide more detail regarding its third quarter 2004 results and business outlook in a conference call and webcast to be held today, November 9, 2004, at 4:30 p.m. Eastern time (1:30 p.m. Pacific). The conference call can be accessed on the company's Web site at www.swwc.com. For those unable to participate in the live webcast, a replay will be available shortly after the call on the company's Web site. Southwest Water Company provides a broad range of services, including water production, treatment and distribution; wastewater collection and treatment; utility billing and collection; utility infrastructure construction management; and public works services. The company owns regulated public utilities and also serves cities, utility districts and private companies under contract. More than two million people in 35 states from coast to coast depend on Southwest Water for high-quality, reliable service. Additional information may be found on the company's Web site: www.swwc.com. This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, including expectations relating to future revenues and income, the company's ability to gain new business and control costs, involve risks and uncertainties, as well as assumptions that, if they prove incorrect or never materialize, could cause the results of the company to differ materially from those expressed or implied by such forward-looking statements. Actual results may differ materially from these expectations due to changes in regulatory, political, weather, economic, business, competitive, market, environmental and other factors. More detailed information about these factors is contained in the company's filings with the Securities and Exchange Commission, including the company's 2003 Annual Report on Form 10-K. The company assumes no obligation to update these forward-looking statements to reflect any change in future events. FINANCIAL HIGHLIGHTS -- SOUTHWEST WATER COMPANY (unaudited and in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 -------------------------------------- Operating revenues $55,018 $51,412 $140,439 $128,990 Operating income 4,987 6,603 11,088 11,021 Net income 2,373 3,429 4,944 5,169 Earnings per common share: Diluted $0.13 $0.22 $0.29 $0.36 Weighted average outstanding common shares: Diluted 18,154 15,315 17,066 14,363 NOTE: Per share amounts and weighted average outstanding common shares reflect a 4-for-3 stock dividend on January 1, 2004. CONSOLIDATED BALANCE SHEET INFORMATION September 30, December 31, 2004 2003 -------------------------- Current assets $48,777 $35,394 Property, plant and equipment, net 294,623 221,087 Total assets $398,323 $296,222 Current liabilities $33,995 $31,389 Long-term debt 69,407 56,493 Contributions in aid of construction 87,868 81,556 Stockholders' equity 126,894 79,667 Total liabilities and stockholders' equity $398,323 $296,222 CONTACT: Southwest Water Company Richard J. Shields, 213-929-1800 www.swwc.com or PondelWilkinson Inc Cecilia Wilkinson or Robert Jaffe 310-279-5970 or 310-279-5969 www.pondel.com -----END PRIVACY-ENHANCED MESSAGE-----