American States Water Co Earnings Call Insights: Fort Bragg, ASUS
On Monday, American States Water Co (NYSE:AWR) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Michael Roomberg – Ladenburg Thalmann: I want to be clear on this Fort Bragg pull forward of construction. I understand that you pulled forward in the quarter from later in the year, but are you expecting that you will pull forward projects from 2013 into 2012 as you go throughout the remainder of the year to replace the projects you’ve already completed there?
Robert J. Sprowls – President and CEO: It’s not clear at this point whether work will be pulled forward from 2013, but clearly, we’ve had a lot of work done in the first quarter and work will continue on that project.
Eva G. Tang – SVP, Finance and CFO: Michael, our commitment to the government is to complete this in 2014. So if we have other activity going on at the same bases, we may move around the crew to just do that.
Michael Roomberg – Ladenburg Thalmann: Then just one follow-up on the regulated ops, if I could. We were a bit surprised by the increased consumption from your customers that are not on tiered rates and the benefit that that caused in the quarter. Can you just update us on the number of customers and the size or the portion of your revenue that is attributable to those customers?
Eva G. Tang – SVP, Finance and CFO: I think in general, Michael, I think about 95% of our entire water customers are on rent. So about 4% to 5% is not on rent. Also the severance charge is fixed, doesn’t impact by the consumption. So I think, you can kind of estimate using 5% as the non-rent customers.
Michael Roomberg – Ladenburg Thalmann: Okay. Any idea what percentage of those customers’ consumption was up versus last year?
Eva G. Tang – SVP, Finance and CFO: I think in general the first quarter consumption increased by 7% compared to last year first quarter.
Heike Doerr – Robert W. Baird: Congrats on a solid quarter. I wanted to go back to this Fort Bragg’s contract. Is there any way you can share with us what percentage of the project is completed, this contract that goes into 2014. So we might be able to quantify how much revenue is attached to that as we look ahead?
Robert J. Sprowls – President and CEO: Difficult to do at this point. At this point we believe that it’s just sort of a pull forward. So the work that was sort of projected for the entire year, we still think we’re on target for that. Now as we move through the quarters, we may find out, but we will obviously have better appreciation for where this project is. But so far it’s a function of better weather conditions and we’re just ahead of schedule.
Heike Doerr – Robert W. Baird: Can you maybe share with us on year-over-year basis what level of contribution you expect from ASUS, either percentage as a whole, or what kind of an earnings year-over-year improvement we would expect to see as a result of what’s occurred in the first quarter already?
Robert J. Sprowls – President and CEO: Well, as you know, ASUS had reported $0.38 per share of contribution in 2011, with very few large one-time adjustments. We believe ASUS has a good chance of posting another year of solid earnings, particularly with such a strong first quarter. It’s difficult to say with much certainty at this time whether we’re going to exceed last year. But we do expect very solid performance out of ASUS.