Middlesex Water Company Conference Summary Company Overview - Company: Middlesex Water Company (NasdaqGS: MSEX) - Date of Conference: September 17, 2025 - Key Speakers: Nadine Leslie (Chair, President, and CEO), Rally Zeroni (Senior Vice President, Treasurer, and CFO) Strategic Vision - 2030 Vision: The company has launched a five-year strategic plan called MWC 2030, focusing on five strategic pillars: 1. Employee Development: Investment in leadership and upskilling programs to reduce turnover and improve efficiency [4][5] 2. Operational Excellence: Streamlining processes and focusing on compliance and safety to enhance reliability and stakeholder value [5] 3. Customer Experience: Anticipating customer needs and utilizing AI tools to improve service [6] 4. Stakeholder Management: Engaging with external stakeholders, including investors and community leaders [6] 5. Selective and Sustainable Growth: Investing in utility infrastructure and pursuing advantageous tuck-in opportunities [7] Regulatory Environment - New Jersey Rate Case: The New Jersey Board of Public Utilities is currently short-staffed, but the company does not anticipate significant delays in decision-making [9][10] - Interim Rates: Historically, the company has not implemented interim rates, but they will evaluate this as the rate case progresses [11] - Delaware Rate Case: A recent rate case was settled positively, with expectations to file again in two to three years [13] Financial Health and Customer Impact - Customer Bills: Represent less than 1% of household income, indicating a focus on affordability despite rising energy costs [15] - Electricity Costs: The company has fixed-cost contracts in place through early 2027, which helps manage energy market fluctuations [18] - Consumption Trends: Customer consumption has been lower due to unfavorable weather, but dry conditions may positively impact future consumption [21] Economic Conditions - Local Economies: Organic growth is observed in Delaware, with no significant impact on customer financial health noted [25][27] - Inflation Impact: The company is managing procurement processes effectively to mitigate inflationary pressures on costs [30] M&A Opportunities - Growth Strategy: The company is actively pursuing tuck-in acquisitions for water and wastewater systems within its geographic footprint, including New Jersey and Delaware [32][34] - Geographic Expansion: Potential expansion into neighboring states like Maryland and Pennsylvania is being considered [36] Capital Expenditure (CapEx) - Increased CapEx: The company anticipates elevated capital investments beyond 2027 to comply with new regulations and address aging infrastructure [39][40] - Regulatory Compliance: The company is prepared for stringent state and federal compliance requirements, particularly regarding emerging contaminants like PFAS [41][42] Financing Needs - Financial Strategy: A strong financial plan is in place, combining debt and equity financing to support capital programs [46] Investor Concerns - Key Topics: Investors are focused on rate cases, capital expenditures, and affordability, which are central to the company's operational strategy [47] Conclusion - Outlook: The company is optimistic about its strategic initiatives and the potential for long-term value creation for stakeholders [48]
Middlesex Water Company (NasdaqGS:MSEX) Conference Transcript