Investor Info 1999

May 17, 1999

Dear Shareholder:

At our annual meeting held on April 16, 1999, I was pleased to announce that we had an excellent first quarter. For the three months ended March 31, 1999, consolidated revenues increased to $3,892,000 from $2,916,000 in 1998. Consolidated net income was $456,000 compared to $236,000 for the same period in 1998. Earnings per share increased to $0.26 versus $0.19 in 1998. The 1998 results have been restated to reflect the 3 for 2 stock split effected last September.

For the quarter ended March 31, 1999, utility revenues were $3,563,000 versus $2,816,000 in 1998. The increase in revenues is attributable to (i) the core system rate increase effective on April 1, 1998, (ii) the additional revenues from Pennichuck East Utility which began operations on April 9, 1998 and (iii) a modest increase of 1.4% in Pennichuck’s billed consumption to its core franchise system customers.

Revenues from real estate and other activities were $329,000 versus $100,000 last year. During the quarter, our real estate partnerships closed on two homes in our Bowers Pond residential joint venture, leaving one remaining lot to be sold and we closed on three lots in our Heron Cove residential joint venture. In addition, we sold a one-half interest in a land parcel to a local developer resulting in a $72,000 pretax gain for Southwood. With the continuing excellent economy in our region, we expect real estate activity to continue at this brisk pace for the remainder of the year. In addition, revenues from our other water-related activities in the first quarter of 1999 increased by nearly $120,000 over last year.

The Board of Directors has declared a quarterly dividend of $0.23 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 you have acquired.

I wish you a pleasant summer and 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 1999	March 31 1998
Revenues:
Water utility operations	$ 3,563	$ 2,816
Real estate and other operations	329	100
	3,892	2,916
Expenses:
Water utility operations	2,552	2,042
Real estate and other operations	163	25
	2,715	2,067
Operating Income	1,177	849
Other income	44	16
Interest expense	(503)	(490)
Pretax Income	718	375
Provision for income taxes	277	139
Net Income before minority interest	441	236
Minority interest in loss of Westwood Park LLC	15	--
Net Income	$ 456	$ 236
Basic Earnings Per Share	$.26	$.19
Dividends Per Share	$.23	$.22

Condensed Consolidated Balance Sheet
Pennichuck Corporation and Subsidiaries
(In thousands)

	March 31 1999	December 31 1998
Assets
Plant in service	$ 77,490	$ 76,647
Accumulated depreciation	(18,707)	(18,258)
	58,783	58,389
Current Assets	7,096	6,775
Land development costs	2,982	3,029
Other assets	2,627	2,645
Total Assets	$ 71,488	$ 70,838
Stockholders’ Equity and Liabilities
Common stock	$ 1,726	$ 1,714
Paid in capital	13,946	13,821
Retained earnings	9,413	9,335
Treasury stock	(63)	(59)
	25,022	24,811
Minority Interest	299	314
Long-term debt	28,019	28,002
Current Liabilities	2,361	2,281
Other liabilities and deferred credits	15,787	15,430
Total Stockholders’ Equity and Liabilities	$ 71,488	$ 70,838

 

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.