York Water Co 10-Q for FY2024 Q2

York Water Co (YORW)

10-Q 2024-08-02 For: 2024-06-30

Added on April 12, 2026

About this 10-Q

York Water Co filed this 10-Q on August 2, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $18.75M; down 0.1% from $18.77M a year earlier
Net income: $4.99M; down 23.5% from net income of $6.52M a year earlier
Diluted EPS: $0.35; down 22.2% from $0.45 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	14,362,103 Shares outstanding as of August 2, 2024

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	26
Item 4.	Controls and Procedures	26

PART II	Other Information

Item 5.	Other Information	26
Item 6.	Exhibits	27

Signatures		28

	Jun. 30, 2024			Dec. 31, 2023
ASSETS
UTILITY PLANT, at original cost	$	641,188		$	620,201
Plant acquisition adjustments		(9,457	)		(9,384	)
Accumulated depreciation		(119,681	)		(117,113	)
Net utility plant		512,050			493,704

OTHER PHYSICAL PROPERTY, net of accumulated depreciation of $520 in 2024 and $501 in 2023		1,550			1,569

CURRENT ASSETS:
Cash and cash equivalents		1			1
Accounts receivable, net of reserves of $1,305 in 2024 and $1,005 in 2023		7,649			7,837
Unbilled revenues		3,741			3,484
Recoverable income taxes		–			332
Materials and supplies inventories, at cost		3,584			3,109
Prepaid expenses		1,569			821
Total current assets		16,544			15,584

OTHER LONG-TERM ASSETS:
Prepaid pension cost		24,112			23,380
Note receivable		255			255
Deferred regulatory assets		50,872			48,949
Other assets		4,996			4,764
Total other long-term assets		80,235			77,348

Total Assets	$	610,379		$	588,205

	Jun. 30, 2024		Dec. 31, 2023
STOCKHOLDERS’ EQUITY AND LIABILITIES
COMMON STOCKHOLDERS’ EQUITY:
Common stock, no par value, authorized 46,500,000 shares, issued and outstanding 14,361,225 shares in 2024 and 14,332,245 shares in 2023	$	137,138	$	136,174
Retained earnings		88,277		85,004
Total common stockholders’ equity		225,415		221,178

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

LONG-TERM DEBT		191,121		180,007

COMMITMENTS		–		–

CURRENT LIABILITIES:
Accounts payable		12,955		10,873
Dividends payable		2,761		2,754
Accrued compensation and benefits		1,599		1,629
Accrued income taxes		230		–
Accrued interest		2,492		1,741
Deferred regulatory liabilities		754		644
Other accrued expenses		441		502
Total current liabilities		21,232		18,143

DEFERRED CREDITS:
Customers’ advances for construction		20,498		18,853
Deferred income taxes		57,469		55,235
Deferred employee benefits		3,726		3,847
Deferred regulatory liabilities		43,116		42,989
Other deferred credits		397		632
Total deferred credits		125,206		121,556

Contributions in aid of construction		47,405		47,321

Total Stockholders’ Equity and Liabilities	$	610,379	$	588,205

	Three Months Ended June 30						Six Months Ended June 30
	2024			2023			2024			2023

OPERATING REVENUES:	$	18,750		$	18,767		$	36,378		$	34,168

OPERATING EXPENSES:
Operation and maintenance		4,862			4,105			9,674			8,217
Administrative and general		3,157			2,757			6,231			5,423
Depreciation and amortization		3,267			3,019			6,350			5,833
Taxes other than income taxes		402			370			846			761
		11,688			10,251			23,101			20,234

Operating income		7,062			8,516			13,277			13,934

OTHER INCOME (EXPENSES):
Interest on debt		(2,183	)		(1,678	)		(4,306	)		(3,191	)
Allowance for funds used during construction		347			844			1,481			1,593
Other pension costs		436			(239	)		206			(603	)
Other income (expenses), net		(148	)		(206	)		(215	)		(300	)
		(1,548	)		(1,279	)		(2,834	)		(2,501	)

Income before income taxes		5,514			7,237			10,443			11,433

Income tax expense		521			713			1,123			1,256

Net Income	$	4,993		$	6,524		$	9,320		$	10,177

Basic Earnings Per Share	$	0.35		$	0.45		$	0.65		$	0.71

Diluted Earnings Per Share	$	0.35		$	0.45		$	0.65		$	0.71

	Common Stock Shares		Common Stock Amount		Retained Earnings			Total

Balance, March 31, 2024		14,343,500	$	136,622	$	86,309		$	222,931
Net income		–		–		4,993			4,993
Cash dividends declared, $0.2108 per share		–		–		(3,025	)		(3,025	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		11,855		419		–			419
Stock-based compensation		5,870		97		–			97
Balance, June 30, 2024		14,361,225	$	137,138	$	88,277		$	225,415

Balance, December 31, 2023		14,332,245	$	136,174	$	85,004		$	221,178
Net income		–		–		9,320			9,320
Cash dividends declared, $0.4216 per share		–		–		(6,047	)		(6,047	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		23,623		824		–			824
Stock-based compensation		5,357		140		–			140
Balance, June 30, 2024		14,361,225	$	137,138	$	88,277		$	225,415

	As of			As of
	Jun. 30, 2024			Dec. 31, 2023			Change

Accounts receivable – customers	$	8,288		$	8,250		$	38
Other receivables		666			592			74
		8,954			8,842			112
Less: allowance for doubtful accounts		(1,305	)		(1,005	)		(300	)
Accounts receivable, net	$	7,649		$	7,837		$	(188	)

Unbilled revenue	$	3,741		$	3,484		$	257

	As of Jun. 30, 2024			As of Dec. 31, 2023

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			40,000
5.67% Senior Notes, due 2054		40,000			–
Committed Line of Credit, due September 2025		1,461			30,273
Total long-term debt		193,831			182,643
Less discount on issuance of long-term debt		(141	)		(147	)
Less unamortized debt issuance costs		(2,569	)		(2,489	)
Long-term portion	$	191,121		$	180,007

Description		June 30, 2024		Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap		$397		$397

Description		December 31, 2023		Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap		$632		$632

	Number of Shares		Grant Date Weighted Average Fair Value

Nonvested at beginning of the period	8,944		$42.32
Granted	6,149		$36.76
Vested	(5,636	)	$41.96
Forfeited	(792	)	$42.20
Nonvested at end of the period	8,665		$38.63

•	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 June 30				Six Months Ended June 30
	2024		2023		2024		2023

Weighted average common shares, basic		14,340,575		14,288,605		14,332,727		14,282,270
Effect of dilutive securities:
Employee stock-based compensation		257		1,230		214		857
Weighted average common shares, diluted		14,340,832		14,289,835		14,332,941		14,283,127

	Three Months Ended June 30				Six Months Ended June 30
	2024		2023		2024		2023
Water utility service:
Residential	$	10,422	$	10,640	$	20,266	$	19,528
Commercial and industrial		5,109		5,093		9,765		9,097
Fire protection		1,123		1,050		2,204		1,982
Wastewater utility service:
Residential		1,502		1,456		2,976		2,540
Commercial and industrial		352		267		668		488
Billing and revenue collection services		122		116		252		242
Collection services		–		9		3		16
Other revenue		6		13		16		24
Total Revenue from Contracts with Customers		18,636		18,644		36,150		33,917
Rents from regulated property		114		123		228		251
Total Operating Revenue	$	18,750	$	18,767	$	36,378	$	34,168

	Three Months Ended June 30						Six Months Ended June 30
	2024			2023			2024			2023

Service cost	$	158		$	150		$	317		$	299
Interest cost		465			469			928			938
Expected return on plan assets		(792	)		(903	)		(1,583	)		(1,806	)
Amortization of prior service cost		(3	)		(3	)		(6	)		(6	)
Rate-regulated adjustment		(106	)		676			455			1,477
Net periodic pension cost	$	(278	)	$	389		$	111		$	902

•	changes in weather or climate, including drought conditions or extended periods of heavy precipitation;
•	natural disasters, including pandemics such as the 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.

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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: August 2, 2024	Joseph T. Hand Principal Executive Officer



	/s/ Matthew E. Poff
Date: August 2, 2024	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 2, 2024	/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 2, 2024	/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.