BRYN MAWR, Pa., May 7, 2003 -- Philadelphia Suburban Corp. announced significantly higher net income of $13.3 million or $0.19 per diluted share for the quarter ended March 31, 2003, compared to $11.9 million or $0.17 per diluted share for the same period in 2002.
Operating revenues for the quarter increased 12.3 percent to $80.5 million, versus $71.7 million for the same period in 2002, due to rate relief and customer growth in various states in which the company operates.
PSC maintained an efficiency ratio (operations and maintenance expenses to revenue) of 36.6 percent, for the twelve-month period ending on March 31, 2003, despite higher expenses as a result of a harsh winter (increased main break maintenance) and higher insurance and pension costs. This is consistent with the company's 2002 ratio of 36.6 percent.
The company continued its efforts to reduce its borrowing costs by taking advantage of historically low interest rates, and was able to secure favorable effective interest rates during late 2002. This allowed the company to increase average borrowings by 13.8 percent in the first quarter of 2003, while only incurring an 8.5 percent increase in interest expense in comparison to the same period in 2002. Over the past three years, the company's embedded cost of debt has decreased 84 basis points from 7.40 percent to 6.56 percent.
PSC's Chairman and President Nicholas DeBenedictis said, "Despite the challenging winter, we are pleased with our first quarter performance, including our revenue growth and the progress we have made with the planned AquaSource acquisition, which we expect to close mid-year. This acquisition will provide PSC with a broader platform for future growth, combined with greater geographic diversity to mitigate weather-related risks."
PSC has received regulatory approval to move forward with the planned acquisition of the water and wastewater operations of AquaSource in nine out of 10 states where approval is required. Necessary approvals were received in Texas, Florida, South Carolina, North Carolina, Virginia, New York, Kentucky, Missouri, and Connecticut. Regulatory approval is still pending in New Jersey.
Thanks to substantial precipitation in late 2002 and early 2003, the company also announced that it is currently well positioned to enter the heavy-demand spring and summer months in its largest operating division, with reservoirs filled to capacity in Southeastern Pennsylvania. At this time in 2002, drought conditions existed in Pennsylvania where the majority of PSC's customers are located.
PSC is the largest U.S.-based investor-owned water utility serving approximately two million residents in Pennsylvania, Ohio, Illinois, New Jersey, Maine, and North Carolina. PSC is a publicly traded company listed on both the New York and Philadelphia Stock Exchanges under the ticker symbol "PSC." The company has been committed to the preservation and improvement of the environment throughout its history, which spans more than 100 years.
