Pennichuck Corporation (NASDAQ: PNNW) today announced that net
income for 2010 was $3.8 million, or $.80 per share (diluted), on
revenues of $36.5 million. Adjusted for non-operating eminent
domain and merger-related costs which totaled $514,000, 2010
earnings would have been $.87 per share (diluted). Net income for
2009 was $2.4 million, or $.55 per share (diluted), on revenues of
$32.8 million. Adjusted for non-operating eminent domain-related
costs which totaled $499,000, 2009 earnings would have been $.63
per share (diluted).
The increase from $.63 per share to $.87 per share was due
principally to increased water utility revenues of $4.0 million and
a decrease in interest expense of $289,000, partially offset by
higher utility operating expenses of $1.9 million and increased
income tax expense of $836,000.
The increase in regulated water utility revenues for 2010
resulted primarily from increased water usage volumes due to dryer
and warmer weather conditions during the summer months of 2010 as
compared to 2009 and, to a lesser extent, higher water rates
granted by the New Hampshire Public Utilities Commission ("NHPUC")
to the Company's Pennichuck Water Works, Inc. utility subsidiary in
August 2009 and October 2010. The increase in utility operating
expenses for 2010 was due principally to increased variable
production costs in support of the higher usage volumes, higher
real estate taxes including state utility taxes, and increased
general and administrative expenses.
Fourth quarter 2010 net income was $437,000, or $.09 per share
(diluted), on revenues of $8.2 million. Adjusted for non-operating
eminent domain and merger-related costs which totaled $122,000,
fourth quarter 2010 earnings would have been $.11 per share
(diluted). Fourth quarter 2009 net income was $313,000, or $.07 per
share (diluted), on revenues of $7.8 million. Adjusted for eminent
domain-related costs which totaled $108,000, fourth quarter 2009
earnings would have been $.09 per share (diluted). The increase
from $.09 per share to $.11 per share was due to increased
operating revenues offset by increased real property taxes,
including state utility taxes.
Commenting on the Company's performance, Duane C. Montopoli,
Pennichuck's President and Chief Executive Officer, said, "2010 was
a strong year both operationally and financially. During 2010, our
Pennichuck Water and Pittsfield Aqueduct utility subsidiaries were
granted temporary rate relief and we expect follow-on permanent
rate relief in 2011, in part to cover the final phase of the
multi-year $40 million upgrade of our water treatment plant."
He added, "Of course, also during the year, we entered into a
merger agreement with the City of Nashua, New Hampshire, pursuant
to which our board has agreed to sell the Company to Nashua for
$29.00 per share in cash. We believe this compares favorably to the
economics of an eminent domain taking and liquidation because it
avoids effective double taxation to our shareholders. We also
believe $29.00 is a good valuation for the Company based on a
number of different metrics including, for example, that it equates
to nearly two and one-half times the Company's book value per share
as of the effective date of the merger agreement. We are proceeding
expeditiously to obtain New Hampshire Public Utilities Commission
approval for this sale and we expect to mail out proxies later this
year regarding the required two-thirds majority shareholder vote. I
urge our shareholders to examine this information carefully and to
vote in favor of this transaction."
The Company's regular annual meeting of shareholders will be
held at 9:00 am on Thursday, May 5, 2011 at the Courtyard by
Marriott in Nashua, New Hampshire. Our Board of Directors has fixed
the close of business on Friday, March 4, 2011 as the record date
for the determination of shareholders entitled to notice of, and to
vote at, the annual meeting.
About Pennichuck Corporation
Pennichuck Corporation is a holding company involved principally
in the supply and distribution of potable water in New Hampshire
through its three regulated water utilities. Its non-regulated,
water-related activities include operations and maintenance
contracts with municipalities and private entities in New Hampshire
and Massachusetts. The Company's real estate operations are
involved in the ownership, management and commercialization of real
estate in southern New Hampshire.
Pennichuck Corporation's common stock trades on the Nasdaq
Global Market under the symbol "PNNW." Upon completion of the
transaction, Pennichuck's common stock will cease to be publicly
traded. The Company's website is at www.pennichuck.com.
Forward-Looking Statements
This news release may contain certain forward-looking statements
with respect to the financial condition, results of operations and
business of Pennichuck Corporation. Forward-looking statements are
based on current information and expectations available to
management at the time the statements are made, and are subject to
various factors, risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements. These factors include, but are not
limited to, a future judicial or regulatory determination that
events prior to the November 11, 2010 effective date of our merger
agreement with the City of Nashua constituted a final determination
of the price to be paid under RSA 38:13 and triggered the statutory
90-day period within which the City was required to decide whether
to take, by eminent domain, the assets of our Pennichuck Water
Works, Inc. subsidiary; the expiration of said 90-day period
without the City having made any such decision; whether the merger
transaction is approved by our shareholders and the NHPUC; whether
the merger transaction is ultimately consummated; the outcome of
requests for rate relief from the NHPUC from time to time; changes
in governmental regulations; legislation and/or regulation and
accounting factors affecting Pennichuck Corporation's financial
condition and results of operations; the availability and cost of
capital, including the impact on our borrowing costs of changes in
interest rates; and, the impact of weather. Investors are
encouraged to access Pennichuck Corporation's annual and quarterly
periodic reports filed with the Securities and Exchange Commission
for financial and business information regarding Pennichuck
Corporation, including a more detailed discussion of these and
other risks and uncertainties that could affect Pennichuck
Corporation's forward-looking statements. We undertake no
obligation to update or revise publicly any forward-looking
statement.
Additional Information and Where to Find It
Pennichuck Corporation plans to file with the U.S. Securities
and Exchange Commission and mail to its shareholders a proxy
statement in connection with the transaction (the "Proxy
Statement"). The Proxy Statement will contain important information
about Pennichuck Corporation, the proposed acquisition by the City
of Nashua and related matters. EXISTING AND PROSPECTIVE PENNICHUCK
CORPORATION SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT
REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE AND
ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Pennichuck Corporation security holders will be able to obtain
free copies of the Proxy Statement and other documents filed with
the SEC by Pennichuck Corporation through the web site maintained
by the SEC at www.sec.gov. In addition, documents filed by
Pennichuck Corporation with the SEC, including filings that will be
incorporated by reference in the Proxy Statement, can be obtained,
without charge, upon written request addressed to Roland E.
Olivier, Secretary, Pennichuck Corporation, 25 Manchester Street,
Merrimack, New Hampshire 03054.
Participants in the Solicitation
Pennichuck Corporation, its directors, executive officers and
other members of management, and the City of Nashua and its
officials and employees may be deemed to be participants in the
solicitation of proxies in respect of the acquisition contemplated
by the merger agreement. Information regarding Pennichuck
Corporation's directors and executive officers is contained in
Pennichuck Corporation's Annual Report on Form 10-K for the year
ended December 31, 2009, as filed with the SEC on March 4, 2010,
and its proxy statement for its 2010 annual meeting, as filed with
the SEC on March 26, 2010. Information about the City and its
officials can be found at http://www.gonashua.com. Additional
information regarding the interests of those participants may be
obtained by reading the Proxy Statement regarding the proposed
transaction when it becomes available. EXISTING AND PROSPECTIVE
SECURITY HOLDERS SHOULD READ THE PROXY STATEMENT AND OTHER
DOCUMENTS TO BE FILED WITH THE SEC CAREFULLY BEFORE MAKING AN
INVESTMENT DECISION WITH RESPECT TO PENNICHUCK CORPORATION
SECURITIES.
Pennichuck Corporation and Subsidiaries
Comparative Financial Results
Quarter Ended December 31: 2010 2009
---- ----
Operating Revenues $8,198,000 $7,824,000
Operating Income $1,648,000 $1,407,000
Net Income $437,000 $313,000
Earnings Per Common Share:
Basic $0.09 $0.07
Diluted $0.09 $0.07
Weighted Average Common Shares Outstanding:
Basic 4,669,511 4,330,807
Diluted 4,730,784 4,360,522
Full Year Ended December 31: 2010 2009
---- ----
Operating Revenues $36,492,000 $32,772,000
Operating Income $10,096,000 $7,992,000
Net Income $3,781,000 $2,382,000
Earnings Per Common Share:
Basic $0.81 $0.56
Diluted $0.80 $0.55
Weighted Average Common Shares Outstanding:
Basic 4,660,456 4,274,174
Diluted 4,697,221 4,294,013
For More Information, Contact: Thomas C. Leonard Senior Vice
President and Chief Financial Officer Phone: 603-913-2300 Fax:
603-913-2305
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