Q4 2019 Earnings Call
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Well good morning.
<unk>, President and CEO or do you see resources Inc. welcome and thank you for joining us as we discuss or do you see resources fourth quarter 2019 results.
First I would like to cover a few administrative items.
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After the presentation is completed we will take questions.
Today's presentation is available on the Investor on financial information page of our website at Www Dot RG see resources Dot com.
We began the presentation with a quick reminder, hot forward looking statements as shown on slide warm.
Moving on to slide two today, we plan to review the operational and financial highlights our 2020 outlook and end with Q anyway.
As shown on slide three the results for fiscal 2019, well exceeded the prior year as earnings per share increased 14% to one dollar.
Our financial results will be discussed in more detail later in the presentation.
As slide four highlights we invested 5.3 million in a regulated utility in the fourth quarter, a 10% decrease compared to the same period last year, we spent approximately 3.4 million on infrastructure replacement.
Slide 8 million on customer growth and point and $1.1 million and other capital needs.
At quarter to quarter change was primarily due to timing of several 2018 customer growth and system expansion projects.
And that an increase of more than 1.5 million and save eligible infrastructure renewal and replacement.
As shown on slide five.
Our fiscal year capital spending decreased approximately 1.4 million from fiscal 2018, primarily related to several large system expansion projects that occurred during the second half of fiscal 2018.
First slide six.
We continue to experienced steady customer growth. We added another 152 customers during the fourth quarter, bringing total customer additions in fiscal 2019 to 668% to 12% increase over 2018.
As noted on slide seven total volumes for the fourth quarter 2019 increased approximately 7% compared to prior year.
This was driven by significant increase in the usage of our industrial customers.
Which increased approximately 8% compared to the same period in the prior year.
Over on slide eight slide 4% warmer weather fiscal 2019 volumes remained flat compared to the prior year commercial industrial volumes, while the same trend as total volumes experienced a 1% growth compared to fiscal 2018.
Now I'd like to introduce our Master Chief Financial Officer to review our financial results.
Thank you John for those of you following along via webcast. We are on slide nine we will begin by revealing fourth quarter results operating income decreased decreased to approximately $500000 in 2019.
During the fourth quarter, we continue to accruing a rate refund reserve based on the most recent staffing and hearing examiners reports.
Also expenses were higher in the current year related to the timing of several operating and maintenance activities.
Combination these factors offset the effects of the rate increase during the quarter.
Equity earnings in our Mountain Valley pipeline investment increased over $980000 due to continued construction.
Interesting inc. extends increase due to increased borrowings related to the mountain valley pipeline as well as the March long term debt placement by Renault gas.
Income taxes increased $242000 in 2019.
As the final adjustments related to tax reform are calculated in trued up in the fourth quarter 2018.
Let's review, our physical full year fiscal 2019 results.
Operating income increased to approximately 11.6 million, primarily due to revenue lift from the rate case, offsetting higher depreciation and other increases in various operating and maintenance expenses.
Equity earnings in the MDP investment increased from $939000 to approximately $3 million.
Related to the significant pipeline construction in 2019.
Income taxes decreased in fiscal 2019, as the company transition to the 21% federal tax rate from a 2018 federal blended tax rate of 24.3%.
Net income increased over $1.4 million or 19% compared to the prior fiscal year.
John will now discuss our outlook for the remainder of 2020.
Thank you Paul.
Now, let's review our capital expenditure projections on slide 10.
In fiscal 2020 were planning to invest approximately 22 million in a regulated utility with a continued focus on infrastructure replacement and customer growth.
At this level of capital spending is consistent with 2019.
In September 2019, the State Corporation Commission issued its final order approving the extension of Renault gases save plan through September 2024.
The final order included an approved save rider that was put in place in October 2019, nor provide up to 1.1 million in revenue during fiscal 2020.
As presented previously the Renault gas General rate case staff report was filed in June 2019.
The company filed a tree rebuttal in a public hearing was held in August 2019, and the hearing Examiners reported was filed in November .
And we anticipate a final order in early 2020.
Continuing on slide 11.
We can report that the MVP is now approximately 90% complete compared to 40% at the beginning of the year.
We invested approximately 4.3 million in the MVP project during the fourth quarter 2019, and approximately $20.7 million during the fiscal year.
We anticipate investing an additional 16.3 million in fiscal 2020 and at this time. The pipeline is scheduled to go in service in late 2020.
After taking all these factors into consideration for fiscal 2020 earnings guidance is $1.13 to $1.17 per share.
Finally, I want to share that I announced my retirement as president and CEO .
Which will occur in early February 2020.
The board of Directors has appointed Paul Master as President and CEO Upon my retirement.
And it has been an honor to serve in these roles.
That concludes our prepared remarks.
If you have any questions. We ask that you. Please dial star six to one mutual long.
Now I'll pouncing, sorry about that.
Yeah.
Good morning.
Good morning, Good morning, Mike.
How are you.
Congrats to you both.
Thank you. Thank you.
Yeah.
Guys just one question.
The seeing high volume growth, John you called out the industrial.
Particularly as being strong I'm wondering which industries.
Are you seeing the growth in the most in terms of the volumes.
It's too it's a steel manufacturing industry as well as we've got a.
Large cement facility here that we've seen a pretty good increase in their volume this past year.
They've had a little fuel switching actually Mike.
We're primarily coal coal fired and they are integrating more natural gas into their fuel mix we believe.
That's the cement manufacturer.
Yes.
Okay.
Other than that that's all ahead.
Look like a good nice good clean quarter.
Well. Thank you. Thank you.
So anybody else have any questions.
Alright, if there are not anymore questions. This concludes our final earnings call for 2019.
We look forward to speaking with you again in February 2020 with our.
First our Q1 results.
Thank you again for joining us and have a happy holiday season.
Okay.
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