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Aquarion Company
835 Main Street, Bridgeport 06604-4995
(203) 335-2333
President and CEO: Richard K. Schmidt
Revenues (FY 1997): $107.1 million
Net Income (FY 1997): $15.0 million
Employees: 399
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Business New Haven
12/14/1998
By: BNH
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“Splish, splash; I was taking a bath.” But where does the water come from? If you are a resident in the Bridgeport or Nassau County, Long Island, it may very well be from the Aquarion Co.
Aquarion is involved in the supply of public water including protection, treatment and distribution. Its service area includes more than 30 communities in Connecticut and on Long Island and reaches more than half a million people.
The company operates through its subsidiaries: Sea Cliff Water Co. (SCWC) services parts of Nassau County (Long Island); and BHC (formerly Bridgeport Hydraulic Co.), the largest of Connecticut's investor-owned water companies. Aquarion is among the ten largest investor-owned water utilities in the country. The company is also involved in management of municipal water services and real estate, chiefly sales of its surplus land and timber processing.
Projects have been flowing for Aquarion over the past decade at a cost of more than $100 million for the improvement of water quality. One of these endeavors is the William S. Warner Water Treatment Plant in Fairfield - one of four constructed by the company meeting federal requirements of the Safe Drinking Water Act. The technology allows the treatment of 50 million gallons of water a day. Upstream in Litchfield, the company's completion of the Torrington Interconnection pipeline supplies 200,000 gallons of reservoir water to Litchfield from Torrington.
1997 marked the completion of Aquarion's BHC's filtration construction program. It is expected that the company's capital spending will remain at $17 million per year over the next few years. Also last year the company sold its Industrial and Environmental Analysts Inc. (IEA) unit, which was involved in environmental testing, for $10 million.
Other business operations include Aquarion Management Services (AMS), which offers contract services for water utility management to towns across the state. Aquarion has also expanded beyond the continental U.S. with a project to evaluate water and wastewater procedures for ASKI Ankara, Turkey's water utility.
Aquarion's real estate operation, Main Street South Corp. (MSSC), is involved in the sale of excess parcels of water company land. Its timber operation, Timco Inc., in Center Barnstead, N.H., processes lumber. It is one of the six largest white pine harvesters in New England. This operation supplies product to retail lumber and do-it-yourself outlets in a market area from Albany west to Pittsburgh and from southern New England to northern Virginia.
In 1997 the company earned approval from the state's Department of Public Utility Control (DPUC) for a 12.7-percent hike in its water service rate. In 1998 BHC applied for a 4.1 percent increase in rates for water service under its rate case from 1995. Within this request is the inclusion of $3 million for the cost of restoration of the Laurel Reservoir Dam in Stamford, as well as an increase in costs of purchasing water and service rates for Southwest Regional Pipeline.
Aquarion's financial performance has not been all wet. For the quarter ended September 30, the company reported a 6.9-percent increase in net income to $6.1 million, or 80 cents per diluted share, from $5.7 million (79 cents per diluted share) for the 1997 quarter. For the nine-month period net income rose 13 percent to $13.2 million, or $1.74 per diluted share, from $11.7 million, or $1.62 per diluted share, for the same period in 1997. Net income for both periods set records and were a result of improved results from the water utility operations and increased sales of land.
Revenues for the third quarter were up 2.5 percent $30.0 million, compared to $29.2 million, for the same 1997 period. For the nine-month period revenues increased 3.8 percent to $82.2 million, compared to $79.1 million for the 1997 nine-month period.
Looking at the last fiscal year, net income for 1997 was $15.0 million, or $2.08 per diluted share, with revenues of $107.1 million compared to net income of $9.0 million, or $1.29 per diluted share, with revenues of $94.8 million for the 1996 fiscal year. At year-end the company had an equity position of $133.9 million, with long-term liabilities and other obligations of $283 million.
Aquarion also received a designation as the first Connecticut water utility to receive the Connecticut Quality Improvement Award.
The company increased its quarterly dividend to its highest level, 41.5 cents per share, up from 41 cents, on common stock which was payable October 30. It is Aquarion's practice to target long-term dividend payout to 75 to 80 percent of net income.
Aquarion's stock price has not taken a bath despirte recent volatility in the market. Although it dipped during the stock market turmoil of the autumn months it is trading at an annual high in the $37 range, closing at 39 9/16 on November 30.
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