Middlesex Water Company · NASDAQ:MSEX
Middlesex Water — Shareholder Meeting (May 2018)
39 slides from Middlesex Water's shareholder meeting presentation, May 23, 2018
Slide 1: Annual Meeting of Shareholders 2018
ANNUAL MEETING OF SHAREHOLDERS 2018 May 22, 2018
Slide 2: Achieving Shareholder Value Through Sustained Investment in Regulated Utility Infrastructure
Achieving Shareholder Value Through Sustained Investment in Regulated Utility Infrastructure
Slide 3: Forward Looking Statement
Forward Looking Statement As an introduction to the information we will be discussing, please be aware that some of our comments can be considered forward - looking statements as defined by the federal securities laws and as outlined in the Company’s SEC filings. As such, any forward - looking state
Slide 4: Life Sustaining Water Ensures Public Health Protection, Fire Protection, Quality of Life and Economic Growth
Life Sustaining Water Ensures Public Health Protection, Fire Protection, Quality of Life and Economic Growth
Slide 5: Celebrating 120 Years
Celebrating 120 Years MWC held an Open House Reception and Plant Tour for local officials in observance of its 120 th Anniversary in 2017
Slide 6: Company Overview
Incorporated: 1897 Market Cap: $672 Million 52 - Week Range: $32.23 - $46.74 3 Month Avg. Volume: 76,641 Shares Outstanding : 16.3 Million Dividend Yield: 2.14% Annual Dividend: $0.90 Institutional Ownership: 56% Company Overview
Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 8: Revenues ($Millions)
REVENUES ($Millions) $115.0 $117.1 $ 126.0 $ 132.9 $ 130.8 $105.00 $110.00 $115.00 $120.00 $125.00 $130.00 $135.00 2013 2014 2015 2016 2017
Slide 9: Total Revenues (By Segment)
TOTAL REVENUES (By Segment) 2017 Regulated 88% Non - Regulated 12%
Slide 10: Revenue Sources
REVENUE SOURCES 48.80% 18.40% 9.00% 10.40% 11.50% 2.90% Residential Comm/Ind Fire Protection Contract Sales Contract Ops Other
Slide 11: Net Income ($Millions)
NET INCOME ($Millions) 16.6 18.5 20.0 22.7 22.8 0 5 10 15 20 25 2013 2014 2015 2016 2017 Net income up $0.1 Million
Slide 12: 2017 O&M Expense
2017 O&M EXPENSE Labor 32.5% Employee Benefits 12.0% Production Cost 24.0% Other 11.9% Contract Ops 10.5% Insurance 3.1% Pipe Repairs 3.1% IT 2.9%
Slide 13: Earnings Per Share
EARNINGS PER SHARE $1.03 $1.13 $1.22 $1.38 $1.38 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 2013 2014 2015 2016 2017
Slide 14: Dividend Payout Ratio
DIVIDEND PAYOUT RATIO 73 % 68% 64% 59% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 2013 2014 2015 2016 2017 62%
Slide 15: Dividends
DIVIDENDS $0.75 $0.76 $0.77 $0.80 $0.84 $0.90 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 2013 2014 2015 2016 2017 2018
Slide 16: First Quarter 2018 Results
FIRST QUARTER 2018 RESULTS (In Millions) 2018 2017 Operating Revenues O&M Expenses Net Income Diluted Earnings per Share $30.1 $15.9 $4.4 $0.27 $31.2 $17.8 $4.5 $0.27
Slide 17: Factors Affecting Earnings
FACTORS AFFECTING EARNINGS WEATHER TIMELY RATE RECOVERY COST MANAGEMENT CUSTOMER GROWTH
Slide 18: Rate Activity
RATE ACTIVITY Annual Effective Revenues Middlesex 04/01/18 $5.5M Middlesex PWAC 10/30/17 $0.8M TUI DSIC 01/01/18 $0.4M Pinelands Water 05/07/18 $0.1M
Slide 19: Construction Program Outlook
CONSTRUCTION PROGRAM 2018 5 Yrs. $78 Million Up to $305 Million OUTLOOK for Estimated Capital Expenditures
Slide 20: Utility Plant ($Millions)
UTILITY PLANT ($Millions) $461 $ 523 $621 $693 $243 $259 $271 $278 $0 $200 $400 $600 $800 $1,000 $1,200 2017 2018 2019 2020 Delaware New Jersey
Slide 21: Capital Program Funding
CAPITAL PROGRAM FUNDING Cash Flow from Operations Investment Plan Proceeds State Revolving Fund Loans Short Term Lines of Credit
Slide 22: 2018 SRF Loans
2018 SRF Loans NEW JERSEY RENEW 2017 : ▪ $9.4 Million, 30 Year Term, Interest Rate less than 1.5%. ▪ Closing May 22, 2018. Western Transmission Main : ▪ Estimated Construction Loan $52 Million, up to 3 years, current interest rate = 0%. RENEW 2018 : ▪ Estimated Construction Loan $10 Million, up to 1
Slide 23: Operations Highlights
— OPERATIONS HIGHLIGHTS |
Slide 24: Cyber Storm VI
CYBER STORM VI MWC participated in Cyber Storm VI, a national - level cyber exercise presented by the Department of Homeland Security, which simulated a cyber crisis of national consequence with impact to water infrastructure. ▪ MWC Employees participated in the Design and Execution of the Disaster
Slide 25: Headquarters Relocation
HEADQUARTERS RELOCATION x MWC Headquarters and Payment Center moving to a nearby location x J. Richard Tompkins Center to be completely Renovated x Operations Center and Fleet to remain at this Location x Shop area and Yard to be Expanded
Slide 26: Large Scale Infrastructure Investments for Greater Reliability, Resiliency & Service Quality
LARGE SCALE INFRASTRUCTURE INVESTMENTS FOR GREATER RELIABILITY, RESILIENCY & SERVICE QUALITY Back - Up Power Generation Plant Upgrades Main Replacement Booster Station Upgrades Ozonation Large Main Construction Additional Storage
Slide 27: Interconnection Upgrades Essential for Reliability
INTERCONNECTION UPGRADES ESSENTIAL FOR RELIABILITY The $3 million booster station upgrade ensures desired water pressures for peak demands and allows for the transfer of water between systems in emergencies.
Slide 28: Ozone Disinfection Conversion
Converting the treatment process in NJ to ozone disinfection to ensure compliance with increasingly stringent drinking water quality regulations and to mitigate the occurrence of disinfection by - products. x Design Complete
Slide 29: Wastewater Treatment Plant Construction
WASTEWATER TREATMENT PLANT CONSTRUCTION ▪ Replacing aging infrastructure in existing plants in Milton, Delaware. ▪ Ensure regulatory compliance with Discharge to Surface Water Permit ▪ 350 gpd Treatment Plant ▪ Construction Planned for 2018 - 2019 ▪ 100% Designed Current Plant
Slide 30: Water Quality Accountability Act
WATER QUALITY ACCOUNTABILITY ACT Rick Risoldi discussed water management strategies and new requirements of the WQAA at the Association of Environmental Authorities Annual Conference. x Establishes new requirements for public water purveyors to improve the safety, reliability and administrative over
Slide 31: Meeting Wastewater Needs for the Next Generation in NJ
Our subsidiary, Pinelands Wastewater is upgrading aging infrastructure at its WWTP serving residents of Southampton Township, New Jersey. MEETING WASTEWATER NEEDS FOR THE NEXT GENERATION IN NJ
Slide 32: Critical Resiliency Transmission Main
CRITICAL RESILIENCY TRANSMISSION MAIN ▪ 4.5 Miles of 42 - inch diameter main through Edison and Metuchen, New Jersey ▪ Sustains water supply to over 300,000 residents and businesses in eastern Middlesex County ▪ $52 Million Project Needed for Added Reliability, Resiliency and Redundancy www.WaterFor
Slide 33: Western Transmission Main Groundbreaking
WESTERN TRANSMISSION MAIN GROUNDBREAKING
Slide 34: Sustaining a High Performance Culture
SUSTAINING A HIGH PERFORMANCE CULTURE ▪ 315 Employees in the Middlesex Water Enterprise ▪ Over 3,500 Training Hours in 2017. ▪ 29 Licensed Operators in Delaware 51 Licensed Operators in NJ 2 Licensed Operators in PA ▪ Through employee development, we’re enhancing service to our customers . We suppor
Slide 35: Honors and Recognition
HONORS AND RECOGNITION Rob Capko, Rising Star CFO of the Year Awards Brian Carr Named AWWA - NJ Chair AWWA - NJ Project of the Year Dennis Doll, Honorary Grand Marshal, South Amboy St. Patrick’s Day Parade Jersey Water Works New Jersey One Water Award Bernadette Sohler, Top 25 Leading Women Corporat
Slide 36: Serving Our Communities
SERVING OUR COMMUNITIES G od il me €
Slide 37: Our Profile of Performance
Our Profile of Performance x Regulated Utility Business x Over a century of water utility management experience x Supportive regulatory environment x Stable residential customer base x Corporate Credit Rating “A” Stable x Strong financial record and balance sheet x Driving shareholder value through
Slide 38: Thank You Dr. Middleton!
Thank YOU Dr. Middleton! In Grateful Acknowledgement The Middlesex Water family of Companies acknowledges Director John R. Middleton, M.D. for his leadership and counsel throughout his 19 years of service.
Slide 39: Questions?
QUESTIONS? This presentation will be available on our Investor Relations Site at www.middlesexwater.com Thank you for your ongoing support!