Investor Info 1999

November 15, 1999

Dear Shareholder:

I am pleased to report that we are continuing with our strong financial performance. For the nine months ended September 30, 1999, our consolidated net income was $2,103,000, a 17% increase over the same period last year. On a per share basis, however, earnings decreased to $1.21 from $1.46 last year -- a 17% decrease reflecting the dilutive effect of an additional 483,000 shares which we issued in our November 1998 equity offering. Those additional shares at that time represented a 39% increase in the number of outstanding shares of the Company. Also, the Company's 1998 earnings per share includes $.07 from the sale of a major parcel of land in September 1998 by one of our real estate development partnerships. Thus far in 1999, there have been no such major land sales.

Consolidated revenues for the nine months ended September 30, 1999 were $13,733,000 compared to $13,293,000 reported in 1998. Revenues from the Company’s water utilities increased 13.5% to $12,641,000 from $11,136,000 in 1998. That revenue increase is attributable to (i) an 8% increase in pumpage as a result of the warm and dry summer, (ii) additional revenues of $556,000 from Pennichuck East which began its operations in April 1998 and (iii) additional revenues from a 16.8% rate increase granted to Pennichuck Water Works, Inc. effective in April 1998.

Revenues from real estate and other activities for the nine-month period in 1999 were $1,092,000 compared to $2,157,000 last year, which included $1,380,000 from the sale of a major land parcel in September 1998. Excluding the effect of that sale, however, revenues from our contract operations and ongoing residential real estate partnerships have increased $315,000, or 40% more than last year.

I am pleased to inform you that the Board of Directors has authorized a quarterly dividend increase to $0.24 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.

As always, I thank you for your support.

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 September 30		Nine Months Ended September 30
	1999	1998	1999	1998
Revenues:
Water utility operations	$4,794	$4,626	$12,641	$11,136
Real estate and other operations	337	1,778	1,092	2,157
	5,131	6,404	13,733	13,293
Expenses:
Water utility operations	3,067	2,700	8,451	7,194
Real estate and other operations	167	1,319	486	1,454
	3,234	4,019	8,937	8,648
Operating Income	1,897	2,385	4,796	4,645
Other income	41	4	130	29
Interest expense	(506)	(599)	(1,519)	(1,681)
Pretax Income	1,432	1,790	3,407	2,993
Provision for income taxes	559	700	1,319	1,157
Net Income before minority interest	873	1,090	2,088	1,836
Minority interest in (loss) Westwood Park	3	41	(15)	41
Net Income	$ 870	$1,049	$2,103	$1,795
Basic Earnings Per Share	$ .50	$ .85	$1.21	$1.46
Dividends Per Share	$ .23	$ .19	$ .68	$ .57

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

	September 30 1999	December 31 1998
Assets
Plant in service	$80,153	$76,647
Accumulated depreciation	(19,380)	(18,258)
	60,773	58,389
Current Assets	6,673	6,775
Land development costs	3,557	3,029
Other assets	2,637	2,645
Total Assets	$73,640	$70,838
Stockholders’ Equity and Liabilities
Common stock	$ 1,743	$ 1,714
Paid in capital	14,195	13,821
Retained earnings	10,266	9,335
Treasury stock	(172)	(59)
	26,032	24,811
Minority Interest	299	314
Long-term debt	28,014	28,002
Current Liabilities	2,697	2,281
Other liabilities and deferred credits	16,598	15,430
Total Stockholders’ Equity and Liabilities	$73,640	$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.