Middlesex(MSEX) - 2025 Q2 - Quarterly Results

Company Announcement & Overview Middlesex Water Company announced Q2 2025 financial results, with the CEO highlighting the Delaware rate case outcome and key business achievements including diluted EPS and infrastructure investments Introduction and CEO Statement Middlesex Water Company announced its second quarter 2025 financial results, with the CEO emphasizing the positive outcome of the Delaware general rate case as a support for sustainable growth and continued prudent investments in infrastructure - CEO Nadine Leslie highlighted the constructive outcome of the general rate case in Delaware, supporting the company's selective and sustainable growth pillar and its ability to continue making prudent investments in the Tidewater System for safe and reliable water utility service[3] Key Business Highlights Key highlights for the period include diluted EPS of $0.60 for Q2 2025, significant infrastructure investment in the first half of 2025, a favorable resolution of the Delaware rate case, and the declaration of a common stock cash dividend - The company reported diluted earnings per share (EPS) of $0.60 for the second quarter of 2025[8] - Middlesex invested $51 million in water and wastewater utility infrastructure during the first half of 2025, representing approximately 55% of its 2025 capital budget[8][11] - A constructive outcome was achieved in the general base rate case in Delaware[8] - A common stock cash dividend of $0.34 was declared[8][14] Financial Performance Summary The company reported mixed financial results for Q2 and YTD 2025, with Q2 showing increased net income and EPS, while YTD saw a decrease due to prior year's one-time recovery and lower consumption Second Quarter 2025 Results For the second quarter of 2025, Middlesex Water Company experienced an increase in net income and diluted EPS, primarily driven by rate increases and customer growth, despite facing challenges from lower consumption due to unfavorable weather Net Income and Diluted EPS | Metric | Q2 2025 | Q2 2024 | Change | | :----------------------- | :------ | :------ | :----- | | Net Income (in millions) | $10.8 | $10.5 | +$0.3 | | Diluted EPS | $0.60 | $0.59 | +$0.01 | - The increase in net income and diluted EPS was attributable to rate increases, customer growth, and higher income tax benefits associated with increased capital investment deduction on tangible property[4] - These positive factors were partially offset by lower consumption driven by unfavorable weather[4] Operating Revenues | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | | :--------------- | :-------------------- | :-------------------- | :------------------- | | Operating Revenues | $49.3 | $49.1 | +$0.2 | - The increase in operating revenues was attributable to rate increases and customer growth[5] - This increase was offset by lower consumption driven by unfavorable weather[5] Operating Expenses | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | | :--------------- | :-------------------- | :-------------------- | :------------------- | | Operating Expenses | $35.4 | $33.8 | +$1.6 | - The increase in operating expenses was primarily driven by higher variable production costs from weather-driven lower water quality, higher labor costs due to wage and employee headcount increases, and higher depreciation[6] Year-to-Date 2025 Results For the first six months of 2025, net income and diluted EPS decreased compared to the prior year, largely due to a one-time recovery in Q1 2024 and reduced consumption Net Income and Diluted EPS | Metric | YTD 2025 (in millions) | YTD 2024 (in millions) | Change (in millions) | | :----------------------- | :--------------------- | :--------------------- | :------------------- | | Net Income | $20.3 | $21.2 | -$1.0 | | Diluted EPS | $1.13 | $1.18 | -$0.05 | - The decrease in net income and diluted EPS was attributable to a one-time recovery in Q1 2024 of $4.3 million (net of tax) associated with the construction and operation of water treatment facilities at Middlesex's Park Avenue water treatment plant[7] - Lower consumption driven by unfavorable weather also contributed to the decrease, partially offset by rate increases and customer growth[7] Operating Revenues | Metric | YTD 2025 (in millions) | YTD 2024 (in millions) | Change (in millions) | | :--------------- | :--------------------- | :--------------------- | :------------------- | | Operating Revenues | $93.6 | $89.7 | +$4.0 | - Operating revenues increased by $3.1 million in the Middlesex System and $1.2 million in the Tidewater system, largely driven by rate increases and customer growth[9] - This increase was offset by lower consumption due to unfavorable weather and $0.4 million of lower supplemental contract services revenue in non-regulated businesses[9] Operating Expenses | Metric | YTD 2025 (in millions) | YTD 2024 (in millions) | Change (in millions) | | :--------------- | :--------------------- | :--------------------- | :------------------- | | Operating Expenses | $68.2 | $64.5 | +$3.7 | - The increase in operating expenses was primarily due to higher variable production costs from weather-driven lower water quality, increased weather-driven main break activity, and the one-time recovery in 2024 of previously incurred depreciation expense and water treatment operating costs at Middlesex's Park Avenue water treatment plant[10] Strategic Initiatives & Regulatory Updates The company made significant infrastructure investments, secured a favorable Delaware rate case settlement, initiated new New Jersey rate filings, and declared a consistent cash dividend Infrastructure Investment Middlesex Water Company invested a significant portion of its annual capital budget in the first half of 2025 to upgrade and enhance its water and wastewater utility infrastructure, focusing on resiliency - Middlesex invested approximately $51 million to upgrade, replace, and enhance the resiliency of its water and wastewater utility infrastructure during the first half of 2025[11] - This investment represents approximately 55% of its planned 2025 annual investment of $93 million[11] Regulatory Rate Case Outcomes The company secured a favorable settlement in its Delaware general rate case, leading to an approved annual revenue increase, and initiated new rate case filings in New Jersey seeking substantial revenue increases and new surcharge programs Delaware General Rate Case - In July 2025, the Delaware Public Service Commission (DEPSC) approved a settlement agreement for Tidewater Utilities, Inc.'s general base rate application[12] - The DEPSC order approved an increase in annual operating revenues by $5.5 million, with new rates effective July 3, 2025[12] - The approval was based on an authorized return on common equity of 9.5% and a common equity ratio of 53.50%[12] New Jersey Rate Case Filings - In June 2025, New Jersey regulated utilities filed a joint petition with the NJBPU requesting an increase in annual base revenues by approximately $24.9 million, or 19.3%[13] - This increase is intended to recover approximately $100 million of prudently incurred investments made to comply with environmental regulations and continue providing safe and reliable water and wastewater service[13] - In July 2025, New Jersey regulated utilities also filed a Distribution System Improvement Charge (DSIC) and a Resiliency and Environmental System Improvement Charge (RESIC) Foundational Filing for the three-year period ending October 2028, allowing semi-annual recovery of qualifying capital investments up to $11.4 million or 7.5% of total annual revenues[13] Dividend Declaration The Board of Directors declared a third-quarter cash dividend, continuing the company's long-standing tradition of consistent and increasing dividend payments to shareholders - On July 23, 2025, the Company's Board of Directors declared a third quarter cash dividend of $0.34 per common share[14] - Dividends on common shares will be paid on September 2, 2025, to shareholders of record as of August 15, 2025[14] - The Company has paid cash dividends continually since 1912 and has increased the dividends received by shareholders each calendar year for 52 consecutive years[14] About Middlesex Water Company Middlesex Water Company is an established investor-owned utility providing water and wastewater services in New Jersey and Delaware, focused on operational excellence and sustainable growth Company Overview Middlesex Water Company is a long-established investor-owned utility providing essential water and wastewater services to over half a million people in New Jersey and Delaware, with a strategic focus on operational excellence, customer experience, infrastructure investment, and sustainable growth - Middlesex Water Company, established in 1897, is an investor-owned water and wastewater utility[16] - It provides services to more than half a million people in New Jersey and Delaware[16] - The company focuses on employee engagement, operational excellence, superior customer experience, investment in infrastructure, and selective and sustainable growth[16] Forward-Looking Statements This section provides a cautionary disclaimer on forward-looking statements, noting their inherent risks and uncertainties, and the company's non-commitment to updates Disclaimer This section serves as a cautionary statement regarding forward-looking information, emphasizing that such statements reflect current beliefs and expectations, are subject to material risks and uncertainties, and the company does not commit to updating them - The press release contains 'forward-looking statements' reflecting current beliefs or expectations regarding future performance, financial condition, strategic plans, cash flows, and results of operations[17] - Actual results, performance, or achievements may differ materially from forward-looking statements, and investors are cautioned not to place undue reliance on them[17] - The Company undertakes no duty to update or revise the information contained herein, whether as a result of new information, future events, or otherwise[17] Contact Information This section provides contact information for media and investor relations inquiries Media and Investor Relations Contact details are provided for media and investor relations inquiries - Media Contact: Brian Hague, Vice President of Communications & Corporate Affairs (bhague@middlesexwater.com, 732-638-7549)[18] - Investor Relations Contact: Jennifer Ketschke, Director of Treasury and Investor Relations (jketschke@middlesexwater.com, 732-638-7523)[18] Condensed Consolidated Statements of Income This section presents unaudited condensed consolidated statements of income, detailing financial figures for revenues, expenses, net income, and EPS for Q2 and YTD 2025 and 2024 Unaudited Financial Statements This section presents the unaudited condensed consolidated statements of income, providing detailed financial figures for operating revenues, expenses, net income, and earnings per share for both the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Income (Unaudited) | | | Three Months Ended June 30, (in thousands) | Six Months Ended June 30, (in thousands) | | | --- | --- | --- | --- | --- | | | 2025 | 2024 | 2025 | 2024 | | Operating Revenues (in thousands) | $49,323 | $49,146 | $93,624 | $89,670 | | Operating Expenses: | | | | | | Operations and Maintenance (in thousands) | 23,066 | 21,825 | 44,175 | 42,290 | | Depreciation (in thousands) | 6,703 | 6,305 | 13,230 | 11,701 | | Other Taxes (in thousands) | 5,642 | 5,701 | 10,750 | 10,499 | | Total Operating Expenses (in thousands) | 35,411 | 33,831 | 68,155 | 64,490 | | Operating Income (in thousands) | 13,912 | 15,315 | 25,469 | 25,180 | | Other Income: | | | | | | Allowance for Funds Used During Construction (in thousands) | 413 | 257 | 786 | 433 | | Other Income, net (in thousands) | 1,485 | 2,399 | 2,910 | 7,588 | | Total Other Income, net (in thousands) | 1,898 | 2,656 | 3,696 | 8,021 | | Interest Charges (in thousands) | 3,623 | 4,041 | 6,336 | 7,310 | | Income before Income Taxes (in thousands) | 12,187 | 13,930 | 22,829 | 25,891 | | Income Taxes (in thousands) | 1,409 | 3,384 | 2,571 | 4,663 | | Net Income (in thousands) | 10,778 | 10,546 | 20,258 | 21,228 | | Preferred Stock Dividend Requirements (in thousands) | 19 | 30 | 41 | 60 | | Earnings Applicable to Common Stock (in thousands) | $10,759 | $10,516 | $20,217 | $21,168 | | Earnings per share of Common Stock: | | | | | | Basic | $0.60 | $0.59 | $1.13 | $1.19 | | Diluted | $0.60 | $0.59 | $1.13 | $1.18 | | Average Number of Common Shares Outstanding: | | | | | | Basic (in thousands) | 17,962 | 17,829 | 17,926 | 17,824 | | Diluted (in thousands) | 17,993 | 17,944 | 17,957 | 17,939 |