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Connecticut Water Service, Inc. Reports First Quarter Earnings

CLINTON, CONNECTICUT, May 09, 2016 (GLOBE NEWSWIRE via COMTEX) --

Connecticut Water Service, Inc. CTWS, +0.97% announced net income of $3.14 million, or earnings per basic average share (EPS) of $0.29, on total revenues of $23.1 million in the first quarter of 2016. Total revenues include revenues generated by the Company's three business segments: Water Operations, Service and Rentals, and Real Estate. In the same period of 2015, the Company had net income of $3.10 million, or $0.28 EPS, on total revenues of $21.7 million.

Operating Results
Net income in the Company's core business, the Water Operations segment, was $2.8 million, on revenues of $21.9 million. In the same period of 2015, net income from the segment totaled $2.7 million, on revenues of $20.3 million. The increase in revenues was related to recovery of costs for completed infrastructure replacement projects through the Water Infrastructure and Conservation Adjustment (WICA) in Connecticut and the Water Infrastructure Charge (WISC) in Maine, as well as a general rate increase in Maine's Biddeford division.

The Services and Rentals segment contributed income of $395,000 in the first quarter of 2016. In the same period of 2015, the segment contributed $369,000. There was no activity in the Real Estate segment in the first quarter of 2016 and 2015.

Income tax expense in first quarter of 2016 was approximately $400,000, resulting in an effective tax rate of just under 10%, a rate that should be typical going forward as the Company continues to benefit from its investment in aging infrastructure and the immediate tax deduction it provides. In 2015, the Company received a one-time credit in tax expense stemming from the completion of an IRS audit that yielded no change in the Company's tax liability for the years reviewed. The completion of the audit resulted in a $1.2 million reduction in tax expense and a (negative 34%) effective tax rate. Operations & Maintenance expenses decreased $35,000 in the first quarter of 2016 when compared to 2015.

Eric W. Thornburg, President and CEO of CTWS, noted that cost control is a key element of the Company's financial strategy. Mr. Thornburg stated, "In the first quarter our focus on cost control helped to partially offset the impact of a change in our effective tax rate on federal income tax from negative 34% in 2015 to positive 10% in 2016, a swing of $1.3 million. Excluding federal income tax expense, total operating expenses increased less than 2%." Mr. Thornburg added, "Continued investment in infrastructure replacement through WICA and WISC continue to benefit both our customers and shareholders. Projects completed through these programs improve service reliability to customers and allow the company to begin recovering costs through semi-annual rate adjustments. In 2016, $22.6 million is allocated for our WICA and WISC programs."

Credit Rating
In February 2016, Standard & Poor's (S&P) reaffirmed its 'A' credit rating for the Company. S&P also affirmed a 'stable' outlook.

Quarterly Dividend
On January 21, 2016, CTWS's Board of Directors declared a quarterly cash dividend payment of $0.2675 per common share that was paid on March 15, 2016, for all shareholders of record as of March 1, 2016. On March 21, 2016, CTWS was added to the NASDAQ US Broad...


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