Chesapeake Utilities Corporation Reports First Quarter 2018 Results

DOVER, Del., May 8, 2018

Higher earnings for the first quarter of 2018 reflect continued growth in the regulated natural gas and electric operations, pipeline expansion and favorable regulatory initiatives.  Increased profitability and growth from propane delivery operations and Aspire Energy of Ohio, LLC ("Aspire Energy") and the positive impact of the lower effective tax rate from the Tax Cuts and Jobs Act (the "TCJA") in the Unregulated Energy segment generated additional earnings. The results also reflect a return to more normal weather during the first quarter of 2018, compared to weather that was 20.9 percent warmer than normal during the first quarter of 2017.  A detailed discussion of operating results begins on page 3.

"We begin 2018 with strong first quarter financial results, which reflect the strength of our natural gas and propane operations under more normal weather conditions and the superior performance of the Company's investments and growth-oriented initiatives led by our dedicated team," stated Michael P. McMasters, President and Chief Executive Officer of Chesapeake Utilities Corporation. "We look forward to continued growth in our Regulated and Unregulated Energy segments this year and in future years," Mr. McMasters added. "During 2018, we are focused on completing the construction of Eastern Shore Natural Gas Company's ("Eastern Shore") largest ever expansion project as well as other projects that are critical to meeting our growth targets in future years," he added.  "Our energized employees continue to excel in identifying new growth opportunities and profitably managing current growth, while maintaining operating efficiency and providing safe, reliable service to our customers," he concluded.

Significant Item Impacting Earnings
Results for the first quarter of 2018 were impacted by the following significant item:

For the quarter ended March 31, 2018	Net Income			EPS ARIVA.DE Börsen-Geflüster Kurse Chesapeake Utilities 101,00 € 0,00%
(in thousands, except per share data)
Reported (GAAP) Earnings	$	26,855		$	1.64
Less: Realized Mark-to-Market ("MTM") gain	(4,008)			(0.24)
Adjusted (Non-GAAP) Earnings*	$	22,847		$	1.40

Excluding the realized MTM gain, that corresponds to the MTM unrealized loss recorded in the prior quarter (fourth quarter of 2017), earnings for the first quarter would have been $1.40 per share.  This represents an increase of 19.7 percent over the first quarter of 2017's EPS of $1.17 per share.  A more detailed discussion of the MTM gain can be found in the discussion of Peninsula Energy Services Company, Inc. ("PESCO")'s results under "Other Major Factors Influencing Gross Margin" later in this release.

*This press release includes references to non-Generally Accepted Accounting Principles ("GAAP") financial measures, including gross margin, adjusted earnings and Adjusted EPS.  A "non-GAAP financial measure" is generally defined as a numerical measure of a company's historical or future performance that includes or excludes amounts, or that is subject to adjustments, so as to be different from the most directly comparable measure calculated or presented in accordance with GAAP.  Our management believes certain non-GAAP financial measures, when considered together with GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period.

The Company calculates "gross margin" by deducting the cost of sales from operating revenue.  Cost of sales includes the purchased fuel cost for natural gas, electricity and propane, and the cost of labor spent on direct revenue-producing activities and excludes depreciation, amortization and accretion.  Other companies may calculate gross margin in a different manner. Gross margin should not be considered an alternative to operating income or net income, both of which are determined in accordance with GAAP.  The Company believes that gross margin, although a non-GAAP measure, is useful and meaningful to investors as a basis for making investment decisions.  It provides investors with information that demonstrates the profitability achieved by the Company under its allowed rates for regulated operations and under its competitive pricing structures for unregulated businesses.  The Company's management uses gross margin in measuring its business units' performance. This press release also includes gross margin that excludes the impact of unusual items, such as one-time impact from the enactment of the TCJA. The Company calculates "adjusted earnings" by adjusting reported (GAAP) earnings to exclude the impact of certain significant non-cash items, including the impact of realized MTM gains (losses) and calculates "adjusted EPS" by dividing adjusted earnings by the weighted average common shares outstanding.

Operating Results for the Quarters Ended March 31, 2018 and 2017

Operating income during the first quarter of 2018 increased by $5.3 million, or 15.1 percent, compared to the same period in 2017.  This increase was driven by a $10.3 million, or 12.2 percent, increase in gross margin, which was partially offset by a $1.2 million increase in depreciation, amortization and property taxes and a $616,000 increase in other operating expenses. First quarter gross margin and operating income were also impacted by a reserve for estimated customer refunds of $3.2 million, associated with the TCJA, which are offset by an equivalent reduction in income tax expenses for the Regulated Energy segment. Excluding the estimated reserve for refunds to customers associated with the TCJA, operating income increased by $8.5 million, or 24.1 percent.

Regulated Energy Segment

(in thousands)	March 31, 2018			March 31, 2017			Change			Percent Change
Gross margin before the TCJA impact	$	64,317		$	57,410		$	6,907		12.0%
Impact of the TCJA reserves for customer refunds	(3,155)			—			(3,155)			N/A
Gross margin	61,162			57,410			3,752			6.5%
Depreciation, amortization and property taxes	11,156			10,190			966			9.5%
Other operating expenses	23,295 Werbung Mehr Nachrichten zur Chesapeake Utilities Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 24.04.24 - PR Newswire Fidelity China Special Situations Plc - Transaction in Own Shares 24.04.24 - PR Newswire BlackRock Income and Growth Investment Trust Plc - Transaction in Own Shares 24.04.24 - PR Newswire Fidelity China Special Situations Plc - Monthly Factsheet