York Water Co 10-Q for FY2023 Q3

York Water Co (YORW)

10-Q 2023-11-03 For: 2023-09-30

Added on April 12, 2026

About this 10-Q

York Water Co filed this 10-Q on November 3, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $18.77M; up 18.7% from $15.81M a year earlier
Net income: $7.57M; up 33.2% from net income of $5.68M a year earlier
Diluted EPS: $0.53; up 32.5% from $0.40 a year earlier

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Pennsylvania	23-1242500
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

130 East Market Street, York, Pennsylvania	17401
(Address of principal executive offices)	(Zip Code)

Common Stock, No par value	YORW	The Nasdaq Global Select Market
(Title of Class)	(Trading Symbol)	(Name of Each Exchange on Which Registered)

Large accelerated filer ☐	Accelerated filer ☐		Non-accelerated filer ⌧

Smaller reporting company ☒		Emerging growth company ☐

☐ Yes		⌧ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common stock, No par value	14,321,761 Shares outstanding as of November 3, 2023

PART I	Financial Information

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

PART II	Other Information

Item 6.	Exhibits	26

Signatures		27

	Sep. 30, 2023			Dec. 31, 2022
ASSETS
UTILITY PLANT, at original cost	$	598,536		$	549,141
Plant acquisition adjustments		(9,331	)		(9,178	)
Accumulated depreciation		(115,493	)		(108,758	)
Net utility plant		473,712			431,205

OTHER PHYSICAL PROPERTY, net of accumulated depreciation of $484 in 2023 and $463 in 2022		1,580			696

CURRENT ASSETS:
Cash and cash equivalents		1			1
Accounts receivable, net of reserves of $875 in 2023 and $855 in 2022		7,354			6,701
Unbilled revenues		3,249			3,290
Recoverable income taxes		578			882
Materials and supplies inventories, at cost		3,225			2,335
Prepaid expenses		1,703			1,025
Total current assets		16,110			14,234

OTHER LONG-TERM ASSETS:
Prepaid pension cost		19,244			17,090
Note receivable		255			255
Deferred regulatory assets		46,165			42,545
Other assets		4,687			4,570
Total other long-term assets		70,351			64,460

Total Assets	$	561,753		$	510,595

	Sep. 30, 2023		Dec. 31, 2022
STOCKHOLDERS’ EQUITY AND LIABILITIES
COMMON STOCKHOLDERS’ EQUITY:
Common stock, no par value, authorized 46,500,000 shares, issued and outstanding 14,320,737 shares in 2023 and 14,285,584 shares in 2022	$	135,695	$	134,220
Retained earnings		82,012		72,963
Total common stockholders’ equity		217,707		207,183

PREFERRED STOCK, authorized 500,000 shares, no shares issued		–		–

LONG-TERM DEBT		167,769		139,465

COMMITMENTS		–		–

CURRENT LIABILITIES:
Accounts payable		12,276		10,766
Dividends payable		2,639		2,628
Accrued compensation and benefits		1,589		1,541
Accrued interest		1,628		965
Deferred regulatory liabilities		596		593
Other accrued expenses		403		488
Total current liabilities		19,131		16,981

DEFERRED CREDITS:
Customers’ advances for construction		18,105		14,911
Deferred income taxes		53,639		47,901
Deferred employee benefits		3,747		3,725
Deferred regulatory liabilities		39,051		37,448
Other deferred credits		303		680
Total deferred credits		114,845		104,665

Contributions in aid of construction		42,301		42,301

Total Stockholders’ Equity and Liabilities	$	561,753	$	510,595

	Three Months Ended September 30						Nine Months Ended September 30
	2023			2022			2023			2022

OPERATING REVENUES	$	18,767		$	15,811		$	52,935		$	44,950

OPERATING EXPENSES:
Operation and maintenance		4,471			3,746			12,688			10,112
Administrative and general		2,605			2,328			8,028			7,564
Depreciation and amortization		2,944			2,572			8,777			7,545
Taxes other than income taxes		314			309			1,075			1,001
		10,334			8,955			30,568			26,222

Operating income		8,433			6,856			22,367			18,728

OTHER INCOME (EXPENSES):
Interest on debt		(1,850	)		(1,204	)		(5,041	)		(3,706	)
Allowance for funds used during construction		1,131			382			2,724			902
Other pension costs		(239	)		(318	)		(842	)		(956	)
Other income (expenses), net		(68	)		(117	)		(368	)		(546	)
		(1,026	)		(1,257	)		(3,527	)		(4,306	)

Income before income taxes		7,407			5,599			18,840			14,422

Income tax (benefit) expense		(161	)		(82	)		1,095			(147	)

Net Income	$	7,568		$	5,681		$	17,745		$	14,569

Basic Earnings Per Share	$	0.53		$	0.40		$	1.24		$	1.05

Diluted Earnings Per Share	$	0.53		$	0.40		$	1.24		$	1.05

	Common Stock Shares		Common Stock Amount		Retained Earnings			Total

Balance, June 30, 2023		14,309,160	$	135,199	$	77,345		$	212,544
Net income		–		–		7,568			7,568
Cash dividends declared, $0.2027 per share		–		–		(2,901	)		(2,901	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		11,577		438		–			438
Stock-based compensation		–		58		–			58
Balance, September 30, 2023		14,320,737	$	135,695	$	82,012		$	217,707

Balance, December 31, 2022		14,285,584	$	134,220	$	72,963		$	207,183
Net income		–		–		17,745			17,745
Cash dividends declared, $0.6081 per share		–		–		(8,696	)		(8,696	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		31,039		1,258		–			1,258
Stock-based compensation		4,114		217		–			217
Balance, September 30, 2023		14,320,737	$	135,695	$	82,012		$	217,707

	As of			As of
	Sep. 30, 2023			Dec. 31, 2022			Change

Accounts receivable – customers	$	7,994		$	7,069		$	925
Other receivables		235			487			(252	)
		8,229			7,556			673
Less: allowance for doubtful accounts		(875	)		(855	)		(20	)
Accounts receivable, net	$	7,354		$	6,701		$	653

Unbilled revenue	$	3,249		$	3,290		$	(41	)

	As of Sep. 30, 2023			As of Dec. 31, 2022

Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029	$	12,000		$	12,000
3.00% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series A of 2019, due 2036		10,500			10,500
3.10% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series B of 2019, due 2038		14,870			14,870
3.23% Senior Notes, due 2040		15,000			15,000
4.00% - 4.50% York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015, due 2029 - 2045		10,000			10,000
4.54% Senior Notes, due 2049		20,000			20,000
3.24% Senior Notes, due 2050		30,000			30,000
5.50% Senior Notes, due 2053		40,000			–
Committed Line of Credit, due September 2025		18,080			29,740
Total long-term debt		170,450			142,110
Less discount on issuance of long-term debt		(150	)		(158	)
Less unamortized debt issuance costs		(2,531	)		(2,487	)
Long-term portion	$	167,769		$	139,465

Description		September 30, 2023		Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap		$303		$303

Description		December 31, 2022		Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap		$680		$680

	Number of Shares		Grant Date Weighted Average Fair Value

Nonvested at beginning of the period	10,765		$43.24
Granted	5,947		$42.22
Vested	(5,935	)	$43.89
Forfeited	(1,833	)	$42.29
Nonvested at end of the period	8,944		$42.32

•	the amount and timing of rate changes and other regulatory matters including the recovery of costs recorded as regulatory assets;
•	expected profitability and results of operations;
•	trends;
•	goals, priorities and plans for, and cost of, growth and expansion;
•	strategic initiatives;
•	availability of water supply;
•	water usage by customers; and
•	the ability to pay dividends on common stock and the rate of those dividends.

	Three Months Ended September 30				Nine Months Ended September 30
	2023		2022		2023		2022

Weighted average common shares, basic		14,300,995		14,254,570		14,288,580		13,853,816
Effect of dilutive securities:
Employee stock-based compensation		834		703		305		407
Weighted average common shares, diluted		14,301,829		14,255,273		14,288,885		13,854,223

	Three Months Ended September 30				Nine Months Ended September 30
	2023		2022		2023		2022
Water utility service:
Residential	$	10,505	$	9,282	$	30,033	$	26,548
Commercial and industrial		5,244		4,208		14,341		11,692
Fire protection		1,040		856		3,022		2,528
Wastewater utility service:
Residential		1,458		976		3,998		2,830
Commercial and industrial		255		209		743		434
Billing and revenue collection services		115		149		357		363
Collection services		12		3		28		151
Other revenue		14		6		38		25
Total Revenue from Contracts with Customers		18,643		15,689		52,560		44,571
Rents from regulated property		124		122		375		379
Total Operating Revenue	$	18,767	$	15,811	$	52,935	$	44,950

	Three Months Ended September 30						Nine Months Ended September 30
	2023			2022			2023			2022

Service cost	$	150		$	257		$	449		$	769
Interest cost		469			334			1,407			1,002
Expected return on plan assets		(903	)		(1,054	)		(2,709	)		(3,163	)
Amortization of prior service cost		(4	)		(4	)		(10	)		(10	)
Rate-regulated adjustment		677			1,042			2,154			3,127
Net periodic pension expense	$	389		$	575		$	1,291		$	1,725

•	changes in weather or climate, including drought conditions or extended periods of heavy precipitation;
•	natural disasters, including pandemics such as the recent outbreak of the novel strain of coronavirus known as “COVID-19” and its variants and the effectiveness of the Company’s pandemic plans;
•	levels of rate relief granted;
•	the level of commercial and industrial business activity within the Company's service territory;
•	construction of new housing within the Company's service territory and increases in population;
•	changes in government policies or regulations, including the tax code;
•	the ability to obtain permits for expansion projects;
•	material changes in demand from customers, including the impact of conservation efforts which may impact the demand of customers for water;
•	changes in economic and business conditions, including interest rates;
•	loss of customers;
•	changes in, or unanticipated, capital requirements;
•	the impact of acquisitions;
•	changes in accounting pronouncements;
•	changes in the Company’s credit rating or the market price of its common stock; and
•	the ability to obtain financing.

Exhibit No.		Description

3		Amended and Restated Articles of Incorporation. Incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 4, 2010.

3.1		Amended and Restated By-Laws. Incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 26, 2012.

31.1		Certification of Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934.

31.2		Certification of Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934.

32.1		Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH		Inline XBRL Taxonomy Extension Schema.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase.

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

	THE YORK WATER COMPANY


	/s/ Joseph T. Hand
Date: November 3, 2023	Joseph T. Hand Principal Executive Officer



	/s/ Matthew E. Poff
Date: November 3, 2023	Matthew E. Poff Principal Financial and Accounting Officer

I, Joseph T. Hand, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of The York Water Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023	/s/ Joseph T. Hand
	Joseph T. Hand
	President and CEO

I, Matthew E. Poff, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of The York Water Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023	/s/ Matthew E. Poff
	Matthew E. Poff
	Chief Financial Officer

(1)	The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a)); and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.