York Water Co 10-Q for FY2020 Q3

York Water Co (YORW)

10-Q 2020-11-06 For: 2020-09-30

Added on April 12, 2026

About this 10-Q

York Water Co filed this 10-Q on November 6, 2020, covering the quarter ended September 30, 2020 (FY2020 Q3).

Headline figures

Quarter ended September 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $14.26M; up 4.2% from $13.68M a year earlier
Net income: $4.7M; up 4.9% from net income of $4.48M a year earlier
Diluted EPS: $0.36; up 2.9% from $0.35 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

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)

Large accelerated filer ◻	Accelerated filer ◻		Non-accelerated filer ⌧

Small Reporting company ⌧		Emerging growth company ◻

COMMON STOCK, NO PAR VALUE	YORW	The NASDAQ Global Select Market
(Title of Class)	(Trading Symbol)	(Name of Each Exchange on Which Registered)

PART I	Financial Information

Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

PART II	Other Information

Item 6.	Exhibits	28

Signatures		29

	Sep. 30, 2020			Dec. 31, 2019
ASSETS
UTILITY PLANT, at original cost	$	423,676		$	401,383
Plant acquisition adjustments		(2,973	)		(3,318	)
Accumulated depreciation		(90,217	)		(84,841	)
Net utility plant		330,486			313,224

OTHER PHYSICAL PROPERTY, net of accumulated depreciation of $452 in 2020 and $435 in 2019		748			769

CURRENT ASSETS:
Cash and cash equivalents		10,901			2
Accounts receivable, net of reserves of $477 in 2020 and $305 in 2019		5,193			4,421
Unbilled revenues		2,801			2,276
Recoverable income taxes		50			547
Materials and supplies inventories, at cost		1,158			1,007
Prepaid expenses		1,679			1,131
Total current assets		21,782			9,384

OTHER LONG-TERM ASSETS:
Prepaid pension cost		3,878			1,819
Note receivable		255			255
Deferred regulatory assets		37,314			34,189
Other assets		3,954			3,889
Total other long-term assets		45,401			40,152

Total Assets	$	398,417		$	363,529

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	13,049,958 Shares outstanding as of November 6, 2020

	Sep. 30, 2020		Dec. 31, 2019
STOCKHOLDERS' EQUITY AND LIABILITIES
COMMON STOCKHOLDERS' EQUITY:
Common stock, no par value, authorized 46,500,000 shares, issued and outstanding 13,049,237 shares in 2020 and 13,014,898 shares in 2019	$	85,375	$	83,976
Retained earnings		56,053		50,209
Total common stockholders' equity		141,428		134,185

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

LONG-TERM DEBT, excluding current portion		116,829		94,535

COMMITMENTS		–		–

CURRENT LIABILITIES:
Current portion of long-term debt		–		6,500
Accounts payable		6,770		3,452
Dividends payable		2,102		2,096
Accrued compensation and benefits		1,175		1,247
Accrued interest		1,068		914
Deferred regulatory liabilities		453		609
Other accrued expenses		352		338
Total current liabilities		11,920		15,156

DEFERRED CREDITS:
Customers' advances for construction		10,291		7,844
Deferred income taxes		42,195		40,426
Deferred employee benefits		4,545		4,317
Deferred regulatory liabilities		27,149		24,790
Other deferred credits		2,919		2,247
Total deferred credits		87,099		79,624

Contributions in aid of construction		41,141		40,029

Total Stockholders' Equity and Liabilities	$	398,417	$	363,529

	Three Months Ended September 30						Nine Months Ended September 30
	2020			2019			2020			2019

OPERATING REVENUES	$	14,257		$	13,680		$	40,454		$	38,559

OPERATING EXPENSES:
Operation and maintenance		2,659			2,586			7,940			7,639
Administrative and general		2,257			2,172			6,573			6,181
Depreciation and amortization		2,046			1,926			6,113			5,750
Taxes other than income taxes		274			281			898			914
		7,236			6,965			21,524			20,484

Operating income		7,021			6,715			18,930			18,075

OTHER INCOME (EXPENSES):
Interest on debt		(1,152	)		(1,314	)		(3,503	)		(3,937	)
Allowance for funds used during construction		115			117			330			273
Other pension costs		(341	)		(362	)		(1,022	)		(1,088	)
Gain on life insurance		–			–			515			–
Other income (expenses), net		(41	)		(81	)		(287	)		(353	)
		(1,419	)		(1,640	)		(3,967	)		(5,105	)

Income before income taxes		5,602			5,075			14,963			12,970

Income taxes		898			592			2,075			1,957

Net Income	$	4,704		$	4,483		$	12,888		$	11,013

Basic Earnings Per Share	$	0.36		$	0.35		$	0.99		$	0.85

Diluted Earnings Per Share	$	0.36		$	0.35		$	0.99		$	0.85

	Common Stock Shares		Common Stock Amount		Retained Earnings			Total

Balance, June 30, 2020		13,033,999	$	84,872	$	53,700		$	138,572
Net income		–		–		4,704			4,704
Cash dividends declared, $0.1802 per share		–		–		(2,351	)		(2,351	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		10,326		429		–			429
Stock-based compensation		4,912		74		–			74
Balance, September 30, 2020		13,049,237	$	85,375	$	56,053		$	141,428

Balance, December 31, 2019		13,014,898	$	83,976	$	50,209		$	134,185
Net income		–		–		12,888			12,888
Cash dividends declared, $0.5406 per share		–		–		(7,044	)		(7,044	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		29,427		1,273		–			1,273
Stock-based compensation		4,912		126		–			126
Balance, September 30, 2020		13,049,237	$	85,375	$	56,053		$	141,428

	As of Sep. 30, 2020			As of Dec. 31, 2019			Change

Accounts receivable – customers	$	5,392		$	4,574		$	818
Other receivables		278			152			126
		5,670			4,726			944
Less: allowance for doubtful accounts		(477	)		(305	)		(172	)
Accounts receivable, net	$	5,193		$	4,421		$	772

Unbilled revenue	$	2,801		$	2,276		$	525

	As of Sep. 30, 2020			As of Dec. 31, 2019

10.05% Senior Notes, Series C, due 2020	$	–		$	6,500
8.43% Senior Notes, Series D, due 2022		7,500			7,500
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			–
Committed Line of Credit, due 2022		–			7,672
Total long-term debt		119,870			104,042
Less discount on issuance of long-term debt		(184	)		(192	)
Less unamortized debt issuance costs		(2,857	)		(2,815	)
Less current maturities		–			(6,500	)
Long-term portion	$	116,829		$	94,535

Description	September 30, 2020	Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap	$2,919	$2,919

Description	December 31, 2019	Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap	$2,248	$2,248

	Number of Shares	Grant Date Weighted Average Fair Value
Nonvested at beginning of the period	7,342	$33.57
Granted	4,912	$44.07
Vested	(5,491)	$36.00
Forfeited	(82)	$33.61
Nonvested at end of the period	6,681	$39.30

•	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
	2020		2019		2020		2019

Weighted average common shares, basic		13,032,389		12,968,540		13,021,398		12,955,602
Effect of dilutive securities:
Employee stock-based compensation		1,164		2,131		565		1,506
Weighted average common shares, diluted		13,033,553		12,970,671		13,021,963		12,957,108

	Three Months Ended September 30				Nine Months Ended September 30
	2020		2019		2020		2019
Water utility service
Residential	$	8,902	$	8,460	$	25,643	$	24,060
Commercial and industrial		3,774		3,864		10,331		10,630
Fire protection		795		780		2,379		2,290
Wastewater utility service
Residential		446		334		1,281		878
Commercial and industrial		78		72		229		203
Billing and revenue collection services		118		19		147		56
Collection services		–		16		14		48
Other revenue		4		4		14		11
Total Revenue from Contracts with Customers		14,117		13,549		40,038		38,176
Rents from regulated property		140		131		416		383
Total Operating Revenue	$	14,257	$	13,680	$	40,454	$	38,559

	Three Months Ended September 30						Nine Months Ended September 30
	2020			2019			2020			2019

Service cost	$	234		$	213		$	703		$	637
Interest cost		365			412			1,093			1,234
Expected return on plan assets		(800	)		(684	)		(2,399	)		(2,050	)
Amortization of actuarial loss		92			106			277			316
Amortization of prior service cost		(3	)		(4	)		(9	)		(10	)
Rate-regulated adjustment		687			532			2,060			1,598
Net periodic pension expense	$	575		$	575		$	1,725		$	1,725

•	changes in weather, including drought conditions or extended periods of heavy rainfall;
•	natural disasters, including pandemics such as the current outbreak of the novel strain of coronavirus known as “COVID-19” 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 reduce 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.

Item 6.		Exhibits.
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.
10.1	Note Agreement relative to the $30,000,000 3.24% Senior Notes, dated September 30, 2020. Incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 2, 2020
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	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

	THE YORK WATER COMPANY


	/s/ Joseph T. Hand
Date: November 6, 2020	Joseph T. Hand Principal Executive Officer



	/s/ Matthew E. Poff
Date: November 6, 2020	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: November 6, 2020	/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: November 6, 2020	/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.