0000108985-26-000036
SEC filingStrong quarter driven by rate increase and customer growth, with net income surging 32% despite higher expenses and interest costs.
Revenue for the first quarter of 2026 increased 8.8% to $20.1 million compared to $18.5 million in the same period last year. The growth was primarily driven by a rate increase that became effective March 1, 2026, along with an increase in the number of water and wastewater customers from acquisitions and organic growth within the Company's service territory.
Operating income rose 1.1% to $6.4 million from $6.3 million, as revenue growth outpaced increases in operating expenses. Net income surged 32.3% to $4.8 million, benefiting from lower income taxes due to deductions related to tangible property regulations (TPR). Diluted earnings per share increased 32.0% to $0.33. The effective tax rate was lower in the quarter due to these tax benefits, which are expected to moderate in subsequent quarters.
Net cash provided by operating activities decreased to $5.4 million from $6.0 million in the prior year quarter. The decline was primarily due to higher interest paid and the timing of cash receipts from customers and payments to vendors. The Company manages its cash through a cash management account directly connected to its line of credit.
For the remainder of the year, management expects revenues to benefit from the new rates, higher summer demand, and continued customer growth through acquisitions and organic expansion. Depreciation and amortization expense is expected to rise due to additional investment in utility plant, and other expenses are expected to increase as costs to treat water and wastewater, and to maintain and extend the distribution system, continue to rise. The Company continuously looks for water and wastewater acquisition and expansion opportunities both within and outside its current service territory, as well as additional opportunities to enter into bulk water contracts. The Company's objectives are to continue to maximize its funds provided by operations and maintain a strong capital structure in order to be able to attract capital.