Artesian Resources Corp 10-K for FY2024

Artesian Resources Corp (ARTNA)

10-K 2025-03-26 For: 2024-12-31

Added on April 06, 2026

About this 10-K

Artesian Resources Corp filed this 10-K on March 26, 2025, covering the fiscal year ended December 31, 2024 (FY2024).

Headline figures

Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $107.95M; up 9.2% from $98.86M a year earlier
Net income: $20.39M; up 22.1% from net income of $16.7M a year earlier
Diluted EPS: $1.98; up 18.6% from $1.67 a year earlier

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Delaware		51-0002090
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock	ARTNA	The Nasdaq Stock Market

Large Accelerated Filer □	Accelerated Filer □	Non-Accelerated Filer ☑	Smaller Reporting Company ☑
Emerging Growth Company ☐

FORWARD LOOKING STATEMENTS

PART I
Item 1. – Business
Item 1A. – Risk Factors
Item 1B. – Unresolved Staff Comments Item 1C – Cybersecurity
Item 2. – Properties
Item 3. – Legal Proceedings
Item 4. – Mine Safety Disclosures
PART II
Item 5. – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6. – [Reserved]
Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. – Quantitative and Qualitative Disclosure About Market Risk
Item 8. – Financial Statements and Supplementary Data
Item 9. – Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A. – Controls and Procedures
Item 9B. – Other Information Item 9C. – Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Item 10. – Directors, Executive Officers and Corporate Governance
Item 11. – Executive Compensation
Item 12. – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. – Certain Relationships and Related Transactions, and Director Independence
Item 14. – Principal Accountant Fees and Services
PART IV
Item 15. – Exhibits and Financial Statement Schedules Item 16. – Form 10-K Summary

Signatures

Utility plant comprises:
In thousands
	Estimated Useful Life (In Years) Effective June 12, 2024		December 31, 2024
Utility plant at original cost
Utility plant in service-Water
Intangible plant		---	$	140
Source of supply plant		45-85		30,320
Pumping and water treatment plant		15-64		130,226
Transmission and distribution plant
Mains		73-81		390,741
Services		39-58		63,613
Storage tanks		70-76		39,760
Meters		16-26		30,223
Hydrants		60-68		20,158
General plant		5-81		59,634

Utility plant in service-Wastewater
Intangible plant		---		116
Treatment and disposal plant		20-81		71,332
Collection mains and lift stations		70-81		57,084
General plant		5-31		2,632

Property held for future use		---		3,742
Construction work in progress		---		39,718
				939,439
Less – accumulated depreciation				192,253
			$	747,186

	Stock Price
	High		Low
2024
First Quarter	$	41.73	$	33.84
Second Quarter	$	41.29	$	33.34
Third Quarter	$	41.29	$	34.96
Fourth Quarter	$	37.35	$	30.99

2023
First Quarter	$	63.00	$	51.30
Second Quarter	$	58.41	$	46.37
Third Quarter	$	49.73	$	41.26
Fourth Quarter	$	44.78	$	38.76

			INDEXED RETURNS
	Base Period		Years Ending December 31
Company Name / Index	2019		2020		2021		2022		2023		2024
Artesian Resources Corporation		100		102.47		131.39		169.87		122.94		96.87
S&P 500 Index		100		118.40		152.39		124.79		157.69		197.02
Peer Group		100		115.32		142.97		122.40		105.25		100.73

Percentage of Operating Revenues
	2024			2023			2022
Water Sales
Residential		50.1	%		50.1	%		48.7	%
Commercial		18.0			17.9			17.6
Government and Other		13.5			13.0			12.9
Other utility operating revenues		12.1			12.3			11.6
Non-utility operating revenues		6.3			6.7			9.2
Total		100.0	%		100.0	%		100.0	%

Percentage of Operating and Maintenance Expenses
	2024			2023			2022
Payroll and Associated Expenses		47.7	%		49.5	%		47.5	%
Administrative		16.7			16.9			15.3
Supply and Treatment		13.3			11.9			10.8
Purchased Power		5.8			5.7			5.2
Transmission, Distribution and Collection		5.1			4.6			4.1
Purchased Water		2.8			2.7			3.6
Non-utility Operating		8.6			8.7			13.5
Total		100.0	%		100.0	%		100.0	%

Material Cash Requirements	Payments Due by Period
In thousands	Less than 1 Year		1-3 Years		4-5 Years		After 5 Years		Total
First mortgage bonds (principal and interest)	$	7,870	$	15,659	$	39,045	$	198,313	$	260,887
State revolving fund loans (principal and interest)		1,144		2,130		2,130		9,662		15,066
Promissory note (principal and interest)		962		1,924		1,925		8,689		13,500
Asset purchase contractual obligation (principal and interest)		333		647		---		---		980
Lines of credit		---		---		---		---		---
Operating leases		28		56		42		1,321		1,447
Operating agreements		38		31		4		---		73
Unconditional purchase obligations		928		1,000		114		260		2,302
Tank painting contractual obligation		313		---		---		---		313
Total contractual cash obligations	$	11,616	$	21,447	$	43,260	$	218,245	$	294,568


ASSETS	December 31, 2024		December 31, 2023
Utility plant, at original cost less accumulated depreciation	$	747,186	$	714,284
Current assets
Cash and cash equivalents		1,147		2,505
Accounts and other receivables (less provision for expected credit loss 2024 - $343; 2023 - $328)		11,339		12,830
Income tax receivable		624		1,799
Unbilled operating revenues		1,861		1,934
Materials and supplies		4,278		5,983
Prepaid property taxes		2,188		2,269
Prepaid expenses and other		3,091		3,297
Total current assets		24,528		30,617
Other assets
Non-utility property (less accumulated depreciation 2024 - $1,116; 2023 - $1,052)		3,603		3,693
Other deferred assets		6,525		8,504
Goodwill		1,939		1,939
Operating lease right of use assets		414		506
Total other assets		12,481		14,642
Regulatory assets, net		14,428		7,289
Total Assets	$	798,623	$	766,832

LIABILITIES AND STOCKHOLDERS’ EQUITY
Stockholders’ equity
Common stock	$	10,300	$	10,285
Preferred stock		—		—
Additional paid-in capital		143,920		143,369
Retained earnings		84,969		76,743
Total stockholders’ equity		239,189		230,397
Long-term debt, net of current portion		176,509		178,307
		415,698		408,704
Current liabilities
Lines of credit		—		—
Current portion of long-term debt		2,167		2,235
Accounts payable		11,228		9,697
Accrued expenses		5,336		3,519
Overdraft payable		31		9
Accrued interest		930		2,275
Income taxes payable		500		2
Customer and other deposits		3,347		2,983
Other		2,054		1,694
Total current liabilities	$	25,593	$	22,414

Commitments and contingencies (Note 11)		—		—

Deferred credits and other liabilities
Net advances for construction	$	1,582	$	2,797
Operating lease liabilities		404		503
Regulatory liabilities		30,267		25,676
Deferred investment tax credits		409		423
Deferred income taxes		52,265		58,381
Total deferred credits and other liabilities	$	84,927	$	87,780

Net contributions in aid of construction		272,405		247,934
Total Liabilities and Stockholders’ Equity	$	798,623	$	766,832

	For the Year Ended December 31,
	2024		2023		2022

Operating revenues
Water sales	$	88,079	$	80,033	$	78,318
Other utility operating revenue		13,129		12,195		11,506
Non-utility operating revenue		6,744		6,633		9,073
Total Operating Revenues		107,952		98,861		98,897

Operating expenses
Utility operating expenses		49,796		46,205		43,772
Non-utility operating expenses		4,743		4,428		6,850
Depreciation and amortization		13,629		13,335		12,620
Taxes
State and federal income tax expense
Current		6,737		2,962		4,285
Deferred		578		3,386		1,593
Property and other taxes		6,318		6,099		5,871
Total Operating Expenses		81,801		76,415		74,991

Operating income		26,151		22,446		23,906

Other income, net
Allowance for funds used during construction (AFUDC)		1,643		2,002		1,329
Miscellaneous		1,379		1,407		1,265
		3,022		3,409		2,594

Income before interest charges		29,173		25,855		26,500

Interest charges		8,779		9,156		8,502

Net income applicable to common stock	$	20,394	$	16,699	$	17,998

Net income per common share:
Basic	$	1.98	$	1.67	$	1.90
Diluted	$	1.98	$	1.67	$	1.90

Weighted average common shares outstanding:
Basic		10,294		10,018		9,462
Diluted		10,296		10,022		9,481

Cash dividends per share of common stock	$	1.18	$	1.14	$	1.09

	Common Shares Outstanding Class A Non-Voting (1) (3) (4)		Common Shares Outstanding Class B Voting (2)		$1 Par Value Class A Non-Voting		$1 Par Value Class B Voting		Additional Paid-in Capital		Retained Earnings			Total

Balance as of December 31, 2021		8,532		881	$	8,532	$	881	$	104,989	$	63,607		$	178,009

Net income		—		—		—		—		—		17,998			17,998
Cash dividends declared
Common stock		—		—		—		—		—		(10,319	)		(10,319	)
Issuance of common stock
Dividend reinvestment plan		7		—		7		—		366		—			373
Employee stock options and awards(4)		82		—		82		—		1,787		—			1,869
Employee Retirement Plan(3)		—		—		—		—		—		—			—
Balance as of December 31, 2022		8,621		881	$	8,621	$	881	$	107,142	$	71,286		$	187,930

Net income		—		—		—		—		—		16,699			16,699
Cash dividends declared
Common stock		—		—		—		—		—		(11,242	)		(11,242	)
Issuance of common stock
Public offering, net of costs		763		—		763		—		35,464		—			36,227
Dividend reinvestment plan		8		—		8		—		373		—			381
Employee stock options and awards(4)		12		—		12		—		390		—			402
Employee Retirement Plan(3)		—		—		—		—		—		—			—
Balance as of December 31, 2023		9,404		881	$	9,404	$	881	$	143,369	$	76,743		$	230,397

Net income		—		—		—		—		—		20,394			20,394
Cash dividends declared
Common stock		—		—		—		—		—		(12,168	)		(12,168	)
Issuance of common stock
Dividend reinvestment plan		10		—		10		—		337		—			347
Employee stock options and awards(4)		5		—		5		—		214		—			219
Employee Retirement Plan(3)		—		—		—		—		—		—			—
Balance as of December 31, 2024		9,419		881	$	9,419	$	881	$	143,920	$	84,969		$	239,189

Utility plant comprises:
In thousands
	Estimated Useful Life (In Years)				Estimated Useful Life (In Years)
	Effective June 12, 2024		December 31, 2024				December 31, 2023
Utility plant at original cost
Utility plant in service-Water
Intangible plant		—	$	140		—	$	140
Source of supply plant		45-85		30,320		45-85		29,960
Pumping and water treatment plant		15-64		130,226		8-62		130,337
Transmission and distribution plant
Mains		73-81		390,741		81		370,977
Services		39-58		63,613		39		60,818
Storage tanks		70-76		39,760		76		40,933
Meters		16-26		30,223		26		30,318
Hydrants		60-68		20,158		60		18,980
General plant		5-81		59,634		5-31		67,317

Utility plant in service-Wastewater
Intangible plant		—		116		—		116
Treatment and disposal plant		20-81		71,332		20-81		67,789
Collection mains & lift stations		70-81		57,084		70-81		51,539
General plant		5-31		2,632		5-31		2,478

Property held for future use		—		3,742		—		4,028
Construction work in progress		—		39,718		—		23,724
				939,439				899,454
Less – accumulated depreciation				192,253				185,170
			$	747,186			$	714,284

Expense	Years Amortized
Deferred contract costs and other	5
Rate case studies	5
Delaware rate proceedings	3
Debt related costs	15 to 30 (based on term of related debt)
Deferred costs affiliated interest agreement	20
Goodwill (Mountain Hill Water Company acquisition in 2008)	50
Deferred acquisition and franchise costs - Maryland	20 – 80
Deferred acquisition costs – Delaware	20
Deferred acquisition adjustments - Delaware	36 – 62
Unrecovered reserve for depreciation (general plant assets)	5

(in thousands)	December 31, 2024		December 31, 2023

Deferred contract costs and other	$	161	$	209
Rate case studies		141		166
Delaware rate proceedings		474		355
Deferred income taxes		423		444
Debt related costs		3,969		4,322
Deferred costs affiliated interest agreement		1,054		1,110
Goodwill		251		258
Deferred acquisition and franchise costs - Maryland		499		425
Deferred acquisition costs – Delaware		231		—
Deferred acquisition adjustments – Delaware		3,359		—
Unrecovered reserve for depreciation		3,866		—
	$	14,428	$	7,289

	December 31,
In thousands	2024		2023		2022

Customer accounts receivable – water	$	6,824	$	6,573	$	5,981
Customer accounts receivable – wastewater		928		869		767
Customer accounts receivable – SLP Plan		470		409		384
Settlement agreement receivable – short term		2,523		2,747		2,532
Developer receivable		837		2,089		1,151
Miscellaneous accounts receivable		100		471		3,112
		11,682		13,158		13,927
Less provision for expected credit loss		343		328		416
Net accounts receivable	$	11,339	$	12,830	$	13,511

Non-Tariff Revenue
Service line protection plans	$	5,825	$	5,632	$	5,020
Contract operations		1,047		1,046		931
Design and installation		62		181		3,315
Inspection fees		410		424		326
Total Non-Tariff Revenue	$	7,344	$	7,283	$	9,592

Other Operating Revenue	$	1,767	$	1,591	$	1,881

Total Operating Revenue	$	107,952	$	98,861	$	98,897

	For the Twelve Months Ended December 31,
(in thousands)
	2024		2023

Minimum rentals	$	35	$	34
Contingent rentals		—		—
	$	35	$	34

	Twelve Months Ended		Twelve Months Ended
	December 31,		December 31,
		2024			2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	35		$	34
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	414		$	506

(in thousands, except lease term and discount rate)
	December 31, 2024			December 31, 2023

Operating Leases:
Operating lease right-of-use assets	$	414		$	506

Other current liabilities	$	8		$	9
Operating lease liabilities		404			503
Total operating lease liabilities	$	412		$	512


Weighted Average Remaining Lease Term
Operating leases	68 years			58 years
Weighted Average Discount Rate
Operating leases		5.0	%		5.0	%

	(in thousands)
	Operating Leases
Year
2025	$	28
2026		28
2027		28
2028		22
2029		20
Thereafter		1,321
Total undiscounted lease payments	$	1,447
Less effects of discounting		(1,035	)
Total lease liabilities recognized		412

Components of Income Tax Expense
In thousands	For the Year Ended December 31,
Federal income taxes	2024			2023		2022
Current	$	4,733		$	1,946	$	2,912
Deferred		(104	)		1,968		930
Total federal income tax expense	$	4,629		$	3,914	$	3,842

	For the Year Ended December 31,
State income taxes	2024		2023		2022
Current	$	2,004	$	1,016	$	1,373
Deferred		682		1,418		663
Total state income tax expense	$	2,686	$	2,434	$	2,036

Reconciliation of effective tax rate:
	For the Year Ended December 31,
In thousands	2024			2024			2023			2023			2022			2022
	Amount			Percent			Amount			Percent			Amount			Percent
Reconciliation of effective tax rate
Income before federal and state income taxes	$	27,709			100.0	%	$	23,047			100.0	%	$	23,876			100.0	%

Amount computed at statutory rate		5,819			21.0	%		4,840			21.0	%		5,014			21.0	%
Reconciling items
State income tax-net of federal tax benefit		2,094			7.6	%		1,918			8.3	%		1,696			7.1	%
Regulatory liability adjustment		(719	)		(2.6	)%		(449	)		(1.9	)%		(450	)		(1.9	)%
Other		121			0.4	%		39			0.2	%		(382	)		(1.6	)%
Total income tax expense and effective rate	$	7,315			26.4	%	$	6,348			27.6	%	$	5,878			24.6	%

	For the Year Ended December 31,
In thousands	2024			2023

Deferred tax assets related to:
State operating loss carry-forwards	$	1,086		$	1,037
Bad debt allowance		96			92
Stock options		31			47
Tax effect of regulatory liabilities		7,408			—
Other		183			48
Total deferred tax assets	$	8,804		$	1,224
Less: valuation allowance		(1,084	)		(906	)
Total deferred tax assets net of valuation allowance		7,720			318

Deferred tax liabilities related to:
Property plant and equipment basis differences	$	(57,296	)	$	(56,012	)
Bond retirement costs		(907	)		(982	)
Property taxes		(610	)		(624	)
Other		(1,172	)		(1,081	)
Total deferred tax liabilities	$	(59,985	)	$	(58,699	)

Net deferred tax liability	$	(52,265	)	$	(58,381	)

Schedule of Valuation Allowance
	Balance at Beginning of Period			Additions Charged to Costs and Expenses			Deductions			Balance at End of Period
In thousands

Classification
For the Year Ended December 31, 2024 Valuation allowance for deferred tax assets		$	906		$	190		$	12		$	1,084
For the Year Ended December 31, 2023 Valuation allowance for deferred tax assets		$	600		$	312		$	6		$	906
For the Year Ended December 31, 2022 Valuation allowance for deferred tax assets		$	546		$	54		$	—		$	600

	For the years ended December 31,
In thousands	2024		2023
Balance at beginning of year	$	158	$	146
Additions based on tax positions related to the current year		46		—
Additions based on tax positions related to prior years		17		12
Reductions for tax positions of prior years		—		—
Lapses in statutes of limitations		—		—
Balance at end of year	$	221	$	158

	2024 Shares	2024 Weighted Average Exercise Price		2023 Shares		2023 Weighted Average Exercise Price		2022 Shares		2022 Weighted Average Exercise Price
Plan options
Outstanding at beginning of year	—	$	—		6,750	$	21.86		83,000	$	21.65
Granted	—		—		—		—		—		—
Exercised	—		—		(6,750)		21.86		(76,250)		21.63
Expired	—		—		—		—		—		—
Outstanding at end of year	—	$	—		—	$	—		6,750	$	21.86

Options exercisable at year end	—	$	—		—	$	—		6,750	$	21.86

Options Outstanding and Exercisable
Range of Exercise Price		Shares Outstanding at December 31, 2024	Weighted Average Remaining Life	Weighted Average Exercise Price		Aggregate Intrinsic Value
$	00.00	0	0 Years	$	00.00	$	0

	2024 Shares			2024 Weighted Average Grant Date Fair Value
Restricted stock awards
Outstanding at January 1, 2024		5,000		$	54.88
Granted		5,000			37.07
Exercised/vested and released		(5,000	)		54.88
Expired/cancelled		—			—
Outstanding at December 31, 2024		5,000		$	37.07

Exercisable/vested at December 31, 2024		—			—

Application Date	11/20/2020	05/30/2024	11/22/2024
DEPSC Approval Date	12/14/2020	06/12/2024	12/18/2024
Effective Date	01/01/2021	07/01/2024	01/01/2025
Cumulative DSIC Rate	7.50%	0.34%	1.66%
Net Eligible Plant Improvements – Cumulative Dollars (in millions)	$43.1	$2.0	$11.7
Eligible Plant Improvements – Installed Beginning Date	10/01/2014	10/01/2023	11/01/2023
Eligible Plant Improvements – Installed Ending Date	04/30/2019	04/30/2024	10/31/2024

	For the Year
	Ended December 31,
		2024		2023		2022
	(in thousands)

Weighted average common shares outstanding during the period for basic computation		$	10,294	$	10,018	$	9,462
Dilutive effect of employee stock options			2		4		19
Weighted average common shares outstanding during the period for diluted computation		$	10,296	$	10,022	$	9,481

	Years Ended December 31,
	2024						2023						2022
in thousands	Regulated Utility		Total				Regulated Utility		Total				Regulated Utility		Total
Regulated Utility Revenues	$	101,210	$	101,210			$	92,228	$	92,228			$	89,818	$	89,818

Reconciliation of revenue
Other revenues				7,014		(a)				6,877		(a)				9,248		(a)
Inter-segment elimination				(272	)					(244	)					(169	)
Consolidated revenues				107,952						98,861						98,897

Less: (b)
Payroll and Benefits (c)		25,975						25,031						24,018
Supply and Delivery (d)		14,704						12,595						11,936
Administrative (e)		9,389						8,823						7,987
Depreciation and Amortization		13,578						13,281						12,563
Income Taxes		6,552						5,216						5,091
Property and other taxes		6,255						6,036						5,812
Regulated Utility Operating Income	$	24,757	$	24,757			$	21,246	$	21,246			$	22,411	$	22,411

Reconciliation of operating income
Other profit				1,394		(a)				1,200		(a)				1,495		(a)
Consolidated operating income			$	26,151					$	22,446					$	23,906

CHIEF EXECUTIVE OFFICER:		CHIEF FINANCIAL OFFICER:

/s/ NICHOLLE R. TAYLOR		/s/ DAVID B. SPACHT
Nicholle R. Taylor		David B. Spacht