CONNECTICUT WATER SERVICE INC / CT FORM 8-K (Current report filing) Filed 05/10/13 for the Period Ending 05/10/13 Address 93 W MAIN ST CLINTON, CT 06413 Telephone 8606698630 CIK 0000276209 Symbol CTWS SIC Code 4941 - Water Supply Industry Water Utilities Sector Utilities Fiscal Year 12/31 http://www.edgar-online.com Copyright 2016, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): May 10, 2013 (May 9, 2013) Connecticut Water Service, Inc. (Exact Name of Registrant as Specified in Its Charter) Connecticut (State or Other Jurisdiction of Incorporation) 0-8084 06-0739839 (Commission File Number) (IRS Employer Identification No.) 93 West Main Street, Clinton, Connecticut 06413-0562 (Address of Principal Executive Offices) (Zip Code) 860-669-8630 (Registrant s Telephone Number, Including Area Code) N/A (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below): o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o o o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.07. Submission of Matters to a Vote of Security Holders. Connecticut Water Service, Inc. (the Company ) held its Annual Meeting of Shareholders on May 9, 2013 (the Annual Meeting ). The following three directors were re-elected to the Company s Board of Directors (the Board ): Heather Hunt, Arthur C. Reeds and Eric W. Thornburg, President and CEO of the Company. Also elected to the Board was Judith E. Wallingford, President of the Company s Maine Water Company subsidiary, who was first elected by to the Board in 2012 by the Company s other directors. At the Annual Meeting, the Company s shareholders voted on the following proposals set forth in the Company s Definitive Proxy Statement on Schedule 14A, which was filed with the Securities and Exchange Commission and mailed to shareholders on March 28, 2013 (the 2013 Proxy Statement ). (1) A proposal to elect four directors to the Board, with Messrs. Reeds and Thornburg and Ms. Hunt to serve terms lasting until the 2016 annual meeting of shareholders and Ms. Wallingford to serve a term lasting until the 2015 annual meeting of shareholders. Each director was elected and received the following votes: Director For Withheld Broker Non-Votes Heather Hunt 19,398,362 910,173 8,342,752 Arthur C. Reeds 19,709,018 599,517 8,342,752 Eric W. Thornburg 19,710,878 597,657 8,342,752 Judith E. Wallingford 19,214,186 1,094,349 8,342,752 (2) A proposal to approve a non-binding advisory resolution regarding the compensation of the Company s named executive officers as disclosed in the 2013 Proxy Statement. The proposal was approved and received the following votes: For Against Abstain Broker Non-Votes 15,149,413 4,411,978 747,144 8,342,752 (3) A proposal to approve an amendment to the Company s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws to reduce the supermajority voting thresholds from 80% to 66 2/3%. The proposal was not approved and received the following votes: For Against Abstain Broker Non-Votes 18,999,113 972,054 337,368 8,342,752 As disclosed in the 2013 Proxy Statement, the affirmative vote of at least 80% of the combined voting power of all the then-outstanding shares of all classes and series of the Company s capital stock entitled to vote generally in the electing of directors was required to approve this proposal and for Proposals 4 and 5. (4) A proposal to approve an amendment to the Company s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws to decrease the minimum number of directors that may comprise the Board of Directors from nine (9) to seven (7). The proposal was not approved and received the following votes:
For Against Abstain Broker Non-Votes 19,285,895 802,587 220,053 8,342,752 (5) A proposal to approve an amendment to the Company s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws to increase the maximum retirement age for directors from seventy (70) to seventy-two (72). The proposal was not approved and received the following votes: For Against Abstain Broker Non-Votes 18,909,537 1,146,065 252,933 8,342,752 (6) A proposal to ratify the appointment of ParenteBeard LLP as the Company s independent registered public accounting firm for the fiscal year ending December 31, 2013. The proposal was approved and received the following votes: For Against Abstain 27,816,963 574,155 260,169
Item 8.01 Other Events 2013 Annual Meeting of Shareholders On May 9, 2013, the Company held its 2013 Annual Meeting of Shareholders at the Madison Beach Hotel in Madison, Connecticut. At the Annual Meeting, the Company s shareholders elected a slate of four directors, ratified the Audit Committee s appointment of ParenteBeard LLP as independent auditors for 2013 and voted on three corporate governance proposals. The President/CEO and the Vice President/CFO s presentation at the Annual Meeting of Shareholders will be available for viewing for 30 days at the Company s web site: www.ctwater.com on the Events & Presentations page of the Investor section. The presentation is also filed herewith as Exhibit 99.1 and is hereby incorporated herein by reference. Declaration of Dividends At its Organizational Meeting, the Board declared a quarterly cash dividend of $0.2425 per common share payable on June 17, 2013 for shareholders of record as of June 3, 2013. In addition, the Board also declared a quarterly cash dividend of $0.20 per share on Preferred A shares payable on July 17, 2013 for shareholders of record as of July 3, 2013, and a quarterly cash dividend of $0.225 on Preferred 90 (OTCBB: CTWSP) shares payable on August 5, 2013 for shareholders of record as of July 22, 2013. Award of Restricted Shares to Non-Employee Directors The Board approved the award of restricted shares of the Company s Common Stock to each of the Company s non-employee directors under the Company s 2004 Performance Stock Program (the Program ). These awards are consistent with a similar set of awards made in May of each year 2007-2012 pursuant to the Board s director compensation policies established by the Board in 2007. In 2013, the number of shares of Common Stock comprising each restricted share award shall, in each case, be equal to $17,500 divided by the fair market value (as calculated under the Program) of a share of Common Stock on May 8, 2013, the day prior to date of grant, and rounded up to the nearest whole share. The awards are not subject to the attainment of performance conditions and will vest in full as of May 9, 2014, the first anniversary of the date of grant. Each award will be evidenced by a written award agreement between the Company and the non-employee director. A copy of the form of restricted share award agreement for non-employee directors was previously filed as Exhibit 10.1 to the Company s Form 8-K dated May 10, 2007 and is incorporated herein by reference. Item 9.01 Financial Statements and Exhibits: The following are filed herewith as exhibits (c) Exhibits
10.1 Form of Restricted Share Award Agreement for non-employee Directors under the Company s 2004 Performance Stock Program (Exhibit 10.1 to Form 8-K filed on May 10, 2007). 99.1 President/CEO and the Vice President/CFO s presentation at the Annual Meeting of Shareholders, May 9, 2013.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. CONNECTICUT WATER SERVICE, INC., a Connecticut corporation Date: May 10, 2013 By: /s/ David C. Benoit Name: David C. Benoit Title: Vice President Finance and Chief Financial Officer
EXHIBIT INDEX Exhibit No. Description 99.1 President/CEO and the Vice President/CFO s presentation at the Annual Meeting of Shareholders, May 9, 2013.
Eric Thornburg on Yahoo Finance Breakout
Connecticut Water Service, Inc. 2013 Annual Meeting of Shareholders May 9, 2013
David Lentini Elected to CTWS Board in 2001 Lead Director since 2012 Served on Audit, Compensation and Corporate Finance & Investments committees Retired Chairman and CEO of CBT Retired Trustee Federal Reserve Bank of Boston Director 2001-2013
Forward Looking Statements Except for the historical statements and discussions, some statements contained in this report constitute forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward looking statements are based on current expectations and rely on a number of assumptions concerning future events, and are subject to a number of uncertainties and other factors, many of which are outside our control, that could cause actual results to differ materially from such statements.
2012 Recap 2012 - $83.8M 2011 - $69.4M Revenue 2012 - $611.8M 2011 - $487.5M Utility Plant Net Income 2011 - $11.3M 2012 - $13.6M
83,247 84,418 87,361 88,534 89,204 90,023 121,791 75,000 85,000 95,000 105,000 115,000 125,000 2006 2007 2008 2009 2010 2011 2012 Customers $46.9 $59.0 $61.3 $59.4 $66.4 $69.4 $83.8 $30 $45 $60 $75 $90 2006 2007 2008 2009 2010 2011 2012 Revenue (in millions) Consistent Financial Performance
$6.9 $8.7 $9.4 $10.2 $9.8 $11.3 $13.6 $4 $6 $8 $10 $12 $14 2006 2007 2008 2009 2010 2011 2012 Net Income $0.81 $1.05 $1.11 $1.19 $1.13 $1.29 $1.55 $0.60 $0.85 $1.10 $1.35 $1.60 2006 2007 2008 2009 2010 2011 2012 Earnings Per Share High Quality Earnings (in millions)
Stable & Growing Dividend Current 3.4% yield Dividend paid without interruption or reduction for 222 consecutive quarters Increased dividend payments for 43 consecutive years U.S. Broad Dividend Achievers Index January 31, 2012 $0.835 $0.845 $0.855 $0.865 $0.88 $0.90 $0.92 $0.94 $0.96 $0.97 $0.80 $0.85 $0.90 $0.95 $1.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 Current Annualized Annual Dividend
Performance 52.0% 5.0% 9.0% 19.8% 28.4% 0% 10% 20% 30% 40% 50% 60% CTWS Dow Jones Indus. S&P 500 Index NASDAQ Peer Average 5 Year Financial Performance Total Shareholder Return @ 12/31/12 Total Shareholder Return is a term describing the total of the Company s stock appreciation and dividends over a specified period of time.
Performance 52.0% 46.0% 48.0% 16.8% 27.0% -11.8% 38.8% 33.8% -15% 0% 15% 30% 45% 60% 5 Year Total Shareholder Return @ 12/31/12 Source: Edward Jones Water Utility Industry Summary 12/31/12 Total Shareholder Return is a term describing the total of the Company s stock appreciation and dividends over a specified period of time.
Successful Equity Offering Top 10 States by Allocation State Share Allocation California 271,300 New York 113,900 Florida 61,000 Illinois 56,000 Michigan 47,800 New Jersey 47,100 Texas 45,400 Connecticut 32,300 Pennsylvania 27,700 Missouri 26,100 Retail Allocations < 5,000 shares No Retail Allocations Retail Allocations > 25,000 shares Retail Allocations between 5,000 shares and 25,000 shares No Retail Allocations
1st Quarter EPS - 2013 vs 2012 $0.21 $0.18 0.23 $0.03 $0.04 $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 2013 2012 Average Estimate Water Activities Services & Rentals EPS $0.24 $0.22 $0.23
Financial Priorities Continue Growth Acquisitions Capital Investment Unregulated Leverage Strength Manage Costs Satisfy Customers
Water, the basic ingredient of Life
Our Mission Passionate employees delivering life sustaining, high quality water service to families and communities while providing a fair return to our shareholders
Our Values Honesty Trust Respect Service Teamwork Positive Attitude Straight Talk
Who We Are Founded in 1956 as the Connecticut Water Company Core regulated subsidiaries: Connecticut Water Company Maine Water Company Biddeford & Saco Water Company Connecticut Presence
Who We Are 90% of net income attributable to regulated operations 121,791 utility customers (~90% residential) Complementary non-regulated businesses: New England Water Utility Services, Inc. (NEWUS) Chester Realty, Inc. 250 employees Maine Presence
Company Strategy Growth Shareholders Customers Employees
Biddeford & Saco Water Company Serving 37,000 people 4 Towns $19.4 million Net Utility Plant EV = $20.6 million 28 Employees
Superstorm Sandy Maintained Uninterrupted Service: 99.2% of customers Interruptions less than 12 hours Off the grid for days: 30 generators in service Passionate dedicated employees
Linebacker Service Line Protection Sewer/Septic Lines Home Plumbing 0 2,000 4,000 6,000 Enrollments in Expanded Plans 1/1/2010 12/31/2012 Protection Plans
Utility Services 100 client contracts O&M Leak Detection Compliance Reporting University of Connecticut
Corporate Sustainability Plymouth Reservoir Open Space Infrastructure Replacement Energy Management Leveraging Technology for Environmental & Efficiency Savings E-Billing GIS Telecommuting Watershed Cleanups
Performance High Earnings Quality 90% of Revenues and Earnings from regulated business Strong Balance Sheet LTD 4.72% Embedded Cost Balanced Debt -Equity ratio S & P Rating A
Total Shareholder Return Ranked # 1 2008-2012 Dividends Yield 3.4% Paid since 1956 Increased 43 years Performance
Analysts Remarks Connecticut Water had a transformative 2012, expanding from a single- state water utility into a regional player in New England with aims on further expansion. Through its two acquisitions into Maine, the company grew its customer base 35% while significantly diversifying its regulatory exposure. (Janney, March 2013). The company has instituted an asset management program which focuses on capital investment with corresponding rate cases, acquired several small tuck in water systems and most recently made two large scale system purchases. These actions should position CTWS well for improved growth.. (Boenning and Scattergood, March 2013). CTWS' recent entry into Maine via acquisition provides ~30% customer growth, potentially boosting opportunities to invest capital and add tuck-in acquisitions, as well as diversifying the company's Connecticut regulatory risk. (Baird, March 2013).
NASDAQ Closing Bell Ceremony World Water Day March 22, 2013
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