Investor Info 2001

 

May 15, 2001

Dear Shareholder:

For the three months ended March 31, 2001, the Company's consolidated net income was $415,000 compared to $460,000 for the same period in 2000 while earnings per share were $0.23 compared to $0.26 for the same period in 2000. The decrease in earnings resulted principally from a $222,000 decline in our utilities’ net operating margin from the prior year’s quarter.

At our Annual Shareholders’ meeting held on April 19, 2001, I announced that Pennichuck Water Works, Inc., our largest water utility, had filed a “Notice of Intent to File” with the New Hampshire Public Utilities Commission informing them that Pennichuck intended to file for a rate increase in June of this year.The proposed rate increase, if granted, represents a 22% increase over our existing rates and would provide additional annual revenues of approximately $2.7 million.This increase is necessary to earn a return on the nearly $11.4 million of net capital investment Pennichuck has made over the past three years and to recover approximately $470,000 of operating costs associated with that investment.

For the quarter ended March 31, 2001, our combined utilities’ revenues were $3,613,000 versus $3,640,000 in 2000. Within Pennichuck Water Works, Inc. and Pittsfield Aqueduct Company, Inc., we experienced a decline in revenues of 1.3% and 6.7%, respectively, from March 31, 2000 to March 31, 2001 while revenues for Pennichuck East Utility, Inc. increased 7.5% for the same period. However, our total customer base increased 2% in the past twelve months and we expect to realize the benefit of that increased customer growth later this year.

Revenues from real estate activities were $576,000 versus $317,000 last year.During the quarter, our residential real estate partnership closed on two homes in our Heron Cove development project and we expect to close on the remaining 13 homes during the second quarter.Also, Southwood sold a one-half interest in a land parcel to a local developer for the development of a third building in our Heron Cove Office Park. We expect real estate activity to continue at a reasonable pace for the remainder of the year.

Both resolutions presented for approval at our Annual Shareholders’ meeting were adopted. Directors Charles E. Clough, Dr. John R. Kreick, and Atty. Martha E. O’Neill were re-elected for three-year terms and Arthur Andersen LLP was approved as our outside auditor for the year ending December 31, 2001.

The Board of Directors has declared a quarterly dividend of $0.25 per share and your dividend check is enclosed with this report. If you participate in the dividend reinvestment plan, you will receive a report from our transfer agent stating the number of new shares that have been credited to your account.

I thank you for your continued support of our Company.

Sincerely,

Maurice L. Arel
President and Chief Executive Officer

Condensed Consolidated Statement of Income
Pennichuck Corporation and Subsidiaries
(In thousands, except per share amounts)

Three Months Ended
March 31
2001
March 31
2000
Revenues:
Water utility operations  
$3,613
$3,640
Real estate and other operations
797
495
4,410
4,135
Expenses:
Water utility operations
2,915
2,720
Real estate and other operations
366
218
3,281
2,938
Operating income
1,129
1,197
Other income
62
40
Interest expense
(495)
(500)
Pretax income
696
737
Provision for income taxes
268
283
Net income before minority interest
428
454
Minority interest in (earnings) loss of Westwood 
(13)
6
Net Income
$415
$460
       
Basic Earnings Per Share  
$.23 

$.26
Dividends Per Share  
$.25
$.24

 

 

Condensed Consolidated Balance Sheet
Pennichuck Corporation and Subsidiaries
(In thousands)
March 31
2001
December 31
2000
Assets
Plant in service
$ 91,497
$ 90,890
Accumulated depreciation
(23,083)
(22,453)
 
68,414
68,437
 
Current assets
8,313
8,453
Land development costs
2,658
2,522
Other assets
3,329
3,468
Total Assets
$ 82,714
$ 82,880
     
Stockholders’ Equity and Liabilities    
     
Common stock
$1,775
$1,770
Paid in capital
14,772
14,667
Retained earnings
12,313
12,343
Treasury stock
(222)
(184)
 
28,638
28,596
     
Minority interest
1,163
1,150
Long-term debt
26,901
26,918
Current liabilities
2,214
2,473
Other liabilities and deferred credits
23,798
23,743
Total Stockholders’ Equity and Liabilities
$ 82,714
$ 82,880
     

The Company's Form 10-QSB filed quarterly with the Securities and Exchange Commission is available to shareholders upon request. Shareholders who are interested in the Company's dividend reinvestment and common stock purchase plan may obtain a prospectus by writing directly to the Company.

4370 1QTR 01