-----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, E1vMoAGUc6Sw99M5gE7uwKK77PaxQQP2grK4vHIc78Dns1YK+qJSLR9Ke1L9GSi5 MfrxM+OenPIGDrf9SycDUQ== 0001157523-05-002591.txt : 20050316 0001157523-05-002591.hdr.sgml : 20050316 20050316145513 ACCESSION NUMBER: 0001157523-05-002591 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050315 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050316 DATE AS OF CHANGE: 20050316 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: 05684961 BUSINESS ADDRESS: STREET 1: ONE WILSHIRE BUILDING STREET 2: 624 SOUTH GRAND AVENUE, SUITE 2900 CITY: LOS ANGELES STATE: CA ZIP: 90017-3782 BUSINESS PHONE: 2139291800 MAIL ADDRESS: STREET 1: ONE WILSHIRE BUILDING STREET 2: 624 SOUTH GRAND AVENUE, SUITE 2900 CITY: LOS ANGELES STATE: CA ZIP: 90017-3782 FORMER COMPANY: FORMER CONFORMED NAME: SUBURBAN WATER SYSTEMS DATE OF NAME CHANGE: 19751202 8-K 1 a4843476.txt SOUTHWEST WATER COMPANY 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): March 15, 2005 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 March 15, 2005, Southwest Water Company issued a press release announcing its financial results for the year ended December 31, 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 be deemed "filed" for the purposes of its incorporation by reference into the Company's effective registration statements. Item 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit No. Description - ------- ------------------------------------------------------ 99.1 Press release dated March 15, 2005 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: March 15, 2005 3 Exhibit Index Exhibit No. Description - -------- ---------------------------------- 99.1 Press release dated March 15, 2005 EX-99.1 2 a4843476ex991.txt SOUTHWEST WATER COMPANY EXHIBIT 99.1 Exhibit 99.1 Southwest Water Company Reports 2004 Financial Results LOS ANGELES--(BUSINESS WIRE)--March 15, 2005--For the year ended December 31, 2004, Southwest Water Company (NASDAQ:SWWC) reported revenues of $188.0 million, operating income of $11.6 million, net income of $4.5 million and earnings per diluted common share of $0.24. This compares with revenues of $173.0 million, operating income of $14.8 million, net income of $7.2 million and earnings per diluted common share of $0.47 for 2003. Weighted average shares outstanding increased by 20 percent in 2004 as compared with 2003, primarily as a result of equity offerings. The company increased revenues by $15 million in 2004, driven principally by its July 2004 acquisition of Monarch Utilities, Inc., increased water utility rates in California and Texas, and organic revenue growth in the Services Group compared with 2003. This helped to compensate for a $5.8 million reduction in construction-related revenue from the water treatment plant project in San Juan Capistrano, Calif. Segment operating income in the company's Utility Group increased by $4.8 million in 2004 compared with 2003, due largely to the Monarch Utilities acquisition, increased water utility rates, higher customer water consumption and a reduction in the average cost of water at the company's California utility subsidiary. New wells that produce less expensive water came online in 2004, which enabled the subsidiary to reduce the amount of higher cost water purchased from outside sources. Conversely, segment operating income in the Services Group decreased by $3.3 million compared with the prior year, principally due to project permitting delays, heavy rainfall that restricted billable work in Texas, write-offs and reserves for inventory, unbilled revenue and a loss on a small construction project in Virginia Beach, Va. Corporate headquarters segment operating expenses increased by $4.6 million compared with the prior year. In total, selling, general and administrative (SG&A) expenses increased by $7.4 million to $29.5 million in 2004. Of that increase, $4.4 million occurred in the fourth quarter of 2004, when SG&A expenses increased to $8.7 million. The 2004 increase in SG&A expenses included approximately $2.6 million related to the company's documentation and compliance with the Sarbanes-Oxley Act; $0.8 million related to executive separations and new business development expenses; $0.4 million related to the write-off of a strategic investment; $0.6 million related to newly acquired subsidiaries; and $2.5 million from increases in professional fees, facilities costs, salaries and benefits. Anton C. Garnier, Southwest Water chairman and chief executive officer, said, "Our Board and management team are very disappointed with the company's overall 2004 financial results. While we anticipated increased costs associated with growth and corporate governance programs, certain SG&A expenses that occurred late in the year were higher than expected. Consequently, as a percentage of consolidated revenue, SG&A expenses increased from 13% in 2003 to 16% in 2004. In addition, Services Group margins fell in 2004 from prior years. SG&A expense management and Services Group margin improvement are important profit drivers for us in 2005." Garnier continued, "Southwest Water did achieve significant operational milestones in 2004. We recorded increased revenues, completed construction and began operating a showcase reverse osmosis water treatment facility, and made the largest acquisition in our history, Monarch Utilities, Inc. Acquisitions have been an important part of our growth strategy, and each of the significant acquisitions we have made over the past several years demonstrated year-to-year financial improvement in 2004. Additionally, Monarch Utilities, purchased in 2004, is performing ahead of our initial acquisition forecast." Garnier concluded, "In spite of the challenges we faced in 2004, Southwest Water remains fundamentally strong. Our board of directors affirmed its confidence in the company by declaring a regular cash dividend for the first quarter of 2005, and at year-end we had $27 million available of our $50 million credit facility. We are committed to regaining Southwest Water's positive earnings momentum in 2005." Business Outlook The company's outlook for 2005 anticipates: -- Revenues increasing approximately 4% to approximately $195 million; -- Operating income increasing approximately 60% to approximately $19 million; -- Net income increasing approximately 65% to approximately $7.5 million; -- Utility Group revenue increasing from 37% to approximately 42% of total revenues; -- Company cash capital expenditures increasing to approximately $20 million; and -- An effective tax rate of 36%, consistent with 2004. This business outlook assumes normal weather conditions. 2004 Form 10-K The company's 2004 Form 10-K includes an assessment of its internal controls. Management is completing its assessment concerning the company's internal controls over financial reporting and expects to file for a 15-day extension under SEC Rule 12b-25 for its 2004 Annual Report on Form 10-K. The company cannot assure that it will not report a material weakness in its internal controls. Conference Call The company will provide more detail regarding its 2004 results and 2005 business outlook in a conference call and Web cast to be held today, March 15, 2005, 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 Web cast, 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 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 Years Ended Ended December 31, December 31, 2004 2003 2004 2003 ----------------------------------- Operating revenues $47,513 $43,984 $187,952 $172,974 Operating income 547 3,771 11,635 14,792 Net income (loss) (410) 2,024 4,534 7,193 Earnings (loss) per common share: Diluted $(0.02) $0.12 $0.24 $0.47 Weighted average outstanding common shares: Diluted 19,336 16,303 18,489 15,394 NOTE: Per share amounts and weighted average outstanding common shares reflect a 5 percent stock dividend on January 3, 2005. CONSOLIDATED BALANCE SHEET INFORMATION December 31, December 31, 2004 2003 ------------------------- Current assets $45,287 $35,394 Property, plant and equipment, net 302,596 221,087 Total assets $404,809 $296,222 Current liabilities $35,734 $31,389 Long-term debt 115,827 73,102 Contributions in aid of construction 89,623 81,556 Stockholders' equity 126,198 79,667 Total liabilities and stockholders' equity $404,809 $296,222 CONTACT: Southwest Water Company Richard J. Shields or Cheryl L. Clary, 213-929-1800 www.swwc.com or PondelWilkinson Inc. Robert Jaffe, 310-279-5969 www.pondel.com -----END PRIVACY-ENHANCED MESSAGE-----