Investor Info 1999

August 16, 1999

Dear Shareholder:

I am pleased to report that Pennichuck Corporation’s financial results continue to show improvement over last year. For the six months ended June 30, 1999, net income was $1,233,000 or $0.71 per share, compared to $746,000 or $0.61 for the same period in 1998. Income for the second quarter increased to $777,000 or $0.45 per share compared to $510,000 or $0.42 per share in 1998. All per share amounts have been adjusted to reflect the 3 for 2 stock split effected in September 1998. Also, the 1999 EPS calculations include an additional 483,000 shares which were issued by the Company in its November 1998 common equity offering.

For the second quarter of 1999, consolidated revenues were $4,710,000 versus $3,973,000 reported for 1998. For the six months ended June 30, 1999, consolidated revenues were $8,602,000 compared to $6,889,000 last year. Revenues from our water utilities were $7,847,000 compared to $6,510,000 in 1998. The increase is attributed to (i) last year’s acquisition of 3600 new customers formerly serviced by Consumers New Hampshire, (ii) the effect of certain rate relief granted in April 1998 to two of the Company’s wholly owned, regulated water utilities and (iii) the hotter and drier than normal weather conditions experienced during the month of June 1999. I note that during the month of June, Pennichuck’s core system average daily pumpage increased 51% over the same month last year.

Revenues from real estate and other activities for the six month period increased to $755,000 versus $379,000 last year. Thus far in 1999, real estate revenues include (i) approximately $417,000 from the sale of homes in our "Heron Cove" and "Village at Bowers Pond" residential subdivisions, (ii) the sale of a one-half interest in a 4.2 acre land parcel and (iii) option fees generated from Southwood Corporate Park. Revenues from other operating activities during the six months ended June 30, 1999 include $248,000 for contract operations performed by our Service Corporation and $12,000 for miscellaneous lease and rental income.

The Board of Directors has declared a dividend of $0.23 per share. Your dividend check is enclosed with this report unless you participate in the dividend reinvestment plan, in which case, you will receive a statement of your account from our transfer agent within the next few days.

I thank you for your continuing 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
June 30

Six Months Ended
June 30
 
1999
1998
1999
1998

Revenues:

Water utility operations

$4,284

$3,694

 $7,847 $6,510

Real estate and other operations

426

279

755 379

4,710

3,973

8,602 6,889

Expenses:

Water utility operations

2,832

2,452

5,384 4,494

Real estate and other operations

156

110

319 135

2,988

2,562

5,703 4,629

Operating Income

1,722

1,411

2,899 2,260

Other income

45

9

89 25

Interest expense

(510)

(592)

(1,103) (1,082)

Pretax Income

1,257

828

1,975 1,203

Provision for income taxes

483

318

760 457

Net Income before minority interest

774

510

1,215 746

Minority interest in (loss) Westwood Park

(3)

--

(18) --

Net Income

$ 777

$ 510

$1,233 $ 746

Basic Earnings Per Share

$ .45

$ .42

$ .71 $ .61

Dividends Per Share

$ .23

$ .19

$ .45 $ .38

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

 
June 30
1999
December 31
1998

Assets

Plant in service

$78,942

$76,647

Accumulated depreciation

(18,853)

(18,258)

60,089

58,389

Current Assets

6,277

6,775

Land development costs

2,931

3,029

Other assets

2,750

2,645

Total Assets

$72,047

$70,838

Stockholders’ Equity and Liabilities

Common stock

$ 1,733

$ 1,714

Paid in capital

14,042

13,821

Retained earnings

9,794

9,335

Treasury stock

(100)

(59)

25,469

24,811

Minority Interest

296

314

Long-term debt

28,057

28,002

Current Liabilities

2,090

2,281

Other liabilities and deferred credits

16,135

15,430

Total Stockholders’ Equity and Liabilities

$72,047

$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.