York Water Co 10-Q for FY2021 Q1

York Water Co (YORW)

10-Q 2021-05-04 For: 2021-03-31

Added on April 12, 2026

About this 10-Q

York Water Co filed this 10-Q on May 4, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $13.08M; up 1.6% from $12.88M a year earlier
Net income: $3.71M; down 7.4% from net income of $4M a year earlier
Diluted EPS: $0.28; down 9.7% from $0.31 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)

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	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II	Other Information

Item 6.	Exhibits	25

Signatures		26

	Mar. 31, 2021			Dec. 31, 2020
ASSETS
UTILITY PLANT, at original cost	$	447,247		$	438,670
Plant acquisition adjustments		(3,690	)		(3,707	)
Accumulated depreciation		(93,009	)		(91,340	)
Net utility plant		350,548			343,623

OTHER PHYSICAL PROPERTY, net of accumulated depreciation of $465 in 2021 and $458 in 2020		735			742

CURRENT ASSETS:
Cash and cash equivalents		55			2
Restricted cash		–			5,000
Accounts receivable, net of reserves of $714 in 2021 and $655 in 2020		4,016			5,184
Unbilled revenues		2,876			2,847
Recoverable income taxes		582			721
Materials and supplies inventories, at cost		1,020			1,010
Prepaid expenses		1,888			1,526
Total current assets		10,437			16,290

OTHER LONG-TERM ASSETS:
Prepaid pension cost		3,006			2,209
Note receivable		255			255
Deferred regulatory assets		40,318			39,893
Other assets		4,090			3,945
Total other long-term assets		47,669			46,302

Total Assets	$	409,389		$	406,957

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	13,073,062 Shares outstanding as of May 4, 2021

	Mar. 31, 2021		Dec. 31, 2020
STOCKHOLDERS' EQUITY AND LIABILITIES
COMMON STOCKHOLDERS' EQUITY:
Common stock, no par value, authorized 46,500,000 shares, issued and outstanding 13,071,733 shares in 2021 and 13,060,817 shares in 2020	$	86,436	$	85,935
Retained earnings		58,574		57,317
Total common stockholders' equity		145,010		143,252

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

LONG-TERM DEBT		122,087		123,573

COMMITMENTS		–		–

CURRENT LIABILITIES:
Accounts payable		6,623		6,540
Dividends payable		2,192		2,192
Accrued compensation and benefits		1,410		1,417
Accrued interest		1,068		959
Deferred regulatory liabilities		549		525
Other accrued expenses		514		360
Total current liabilities		12,356		11,993

DEFERRED CREDITS:
Customers' advances for construction		10,828		10,326
Deferred income taxes		44,261		43,538
Deferred employee benefits		4,809		4,793
Deferred regulatory liabilities		26,369		25,444
Other deferred credits		2,209		2,731
Total deferred credits		88,476		86,832

Contributions in aid of construction		41,460		41,307

Total Stockholders' Equity and Liabilities	$	409,389	$	406,957

	Three Months Ended March 31
	2021			2020

OPERATING REVENUES:	$	13,081		$	12,877

OPERATING EXPENSES:
Operation and maintenance		2,806			2,663
Administrative and general		2,411			2,244
Depreciation and amortization		2,174			2,024
Taxes other than income taxes		336			330
		7,727			7,261

Operating income		5,354			5,616

OTHER INCOME (EXPENSES):
Interest on debt		(1,214	)		(1,195	)
Allowance for funds used during construction		262			101
Other pension costs		(304	)		(341	)
Gain on life insurance		–			515
Other income (expenses), net		(101	)		(125	)
		(1,357	)		(1,045	)

Income before income taxes		3,997			4,571

Income taxes		292			569

Net Income	$	3,705		$	4,002

Basic Earnings Per Share	$	0.28		$	0.31

Diluted Earnings Per Share	$	0.28		$	0.31

	Common Stock Shares		Common Stock Amount		Retained Earnings			Total

Balance, December 31, 2020		13,060,817	$	85,935	$	57,317		$	143,252
Net income		–		–		3,705			3,705
Cash dividends declared, $0.1874 per share		–		–		(2,448	)		(2,448	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		10,916		473		–			473
Stock-based compensation		–		28		–			28
Balance, March 31, 2021		13,071,733	$	86,436	$	58,574		$	145,010

	As of Mar. 31, 2021			As of Dec. 31, 2020			Change

Accounts receivable – customers	$	4,416		$	5,633		$	(1,217	)
Other receivables		314			206			108
		4,730			5,839			(1,109	)
Less: allowance for doubtful accounts		(714	)		(655	)		(59	)
Accounts receivable, net	$	4,016		$	5,184		$	(1,168	)

Unbilled revenue	$	2,876		$	2,847		$	29

	As of Mar. 31, 2021			As of Dec. 31, 2020

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			30,000
Committed Line of Credit, due 2022		5,170			6,700
Total long-term debt		125,040			126,570
Less discount on issuance of long-term debt		(178	)		(181	)
Less unamortized debt issuance costs		(2,775	)		(2,816	)
Long-term portion	$	122,087		$	123,573

Description	March 31, 2021	Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap	$2,209	$2,209

Description	December 31, 2020	Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap	$2,731	$2,731

•	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.

•	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.

	Three Months Ended March 31
	2021		2020

Weighted average common shares, basic		13,055,871		13,009,596
Effect of dilutive securities:
Employee stock-based compensation		2,690		2,263
Weighted average common shares, diluted		13,058,561		13,011,859

	Three Months Ended March 31
	2021		2020
Water utility service:
Residential	$	8,145	$	8,077
Commercial and industrial		3,310		3,341
Fire protection		806		801
Wastewater utility service:
Residential		471		410
Commercial and industrial		79		76
Billing and revenue collection services		119		15
Collection services		–		14
Other revenue		10		5
Total Revenue from Contracts with Customers		12,940		12,739
Rents from regulated property		141		138
Total Operating Revenue	$	13,081	$	12,877

	Three Months Ended March 31
	2021			2020

Service cost	$	271		$	234
Interest cost		302			364
Expected return on plan assets		(913	)		(799	)
Amortization of actuarial loss		121			92
Amortization of prior service credit		(3	)		(3	)
Rate-regulated adjustment		797			687
Net periodic pension expense	$	575		$	575

	THE YORK WATER COMPANY


	/s/ Joseph T. Hand
Date: May 4, 2021	Joseph T. Hand Principal Executive Officer



	/s/ Matthew E. Poff
Date: May 4, 2021	Matthew E. Poff Principal Financial and Accounting Officer

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.
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

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: May 4, 2021	/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: May 4, 2021	/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.