updated 5/9/2011 8:48:12 AM ET 2011-05-09T12:48:12

CLINTON, Conn., May 9, 2011 (GLOBE NEWSWIRE) -- Connecticut Water Service, Inc. (Nasdaq:CTWS) announced income of $2.3 million, or $0.26 per basic common share, on total revenues of $17.5 million in the first quarter of 2011. This was an increase of $1.2 million, or $0.14 per basic common share, on total revenues of $15.2 million recorded in the first quarter of 2010. Total revenues include all revenues generated by the Company's three business segments: Water Activities, Services and Rentals, and Real Estate.

In the first quarter of 2011, income in the Company's core business, the Water Activities Segment, was $2.1 million, or $0.24 per basic common share, on revenues of $16.3 million. In the same period of 2010, income from the segment totaled $834,000, or $0.10 per basic common share, on revenues of $14.1 million. The increase in revenues for the Water Activities Segment was largely attributable to an approximate 13% rate increase approved in July 2010 and a Water Infrastructure and Conservation Adjustment (WICA) surcharge of approximately 1.6%.

The Company saw consistent performance from its Services and Rentals Segment in the first quarter of 2011 that contributed more than $0.02 per basic common share, which was approximately the same as the first quarter of 2010. There was no activity in the Real Estate Segment in the first quarter of 2011 or 2010.

Operation and maintenance (O&M) expenses in the first quarter decreased $80,000, or about 1%, over the same period in 2010 to $8 million. The largest O&M expense decreases came from a reduction in outside service costs associated with the implementation of an Enterprise Resource Planning information system that was largely completed in the first quarter of 2010. Cost containment measures related to property and liability insurance and energy management resulted in additional expense reductions. The O&M reductions were partially offset by increases in labor and benefit costs and regulatory expenses related to the 2010 rate case.

Eric W. Thornburg, Chairman, President and Chief Executive Officer, stated: "The increase in income from our core business, the Water Activities segment, is largely a result of new rates approved last July. Our people continue to focus on cost reduction and containment efforts without compromising our commitment to water quality and customer satisfaction. As a result we saw a 1% decline in O&M expenses. One example of cost containment is utility costs where quarter-over-quarter costs are down $65,000, or about 7%, due to new electric power suppliers solicited through a competitive bid process and more efficient operation as a result of energy audits."

Connecticut Water Service, Inc. is New England's largest locally based investor-owned water company. Through its wholly owned public water utility subsidiary, the Connecticut Water Company, the Company provides drinking water to approximately 90,000 customers, or 300,000 people, in 55 towns throughout Connecticut.

The Connecticut Water Service, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2893

This news release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company's results of operation, financial position and long-term strategy. These forward-looking statements are based on current information and expectations, and are subject to risks and uncertainties discussed in our filings with the Securities and Exchange Commission, which could cause the Company's actual results to differ materially from expected results. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.

Connecticut Water Service, Inc. & Subsidiaries
     
Condensed Consolidated Statements of Income (unaudited)
     
  Three Months Ended
(In thousands except per share amounts) March 31, 2011 March 31, 2010
     
Operating Revenues $15,989 $13,801
Other Water Activities Revenues 334 331
Real Estate Revenues -- --
Service and Rentals Revenues 1,167 1,080
Total Revenues $17,490 $15,212
Total Operating Expenses $12,629 $11,698
Other Utility Income, Net of Taxes $178 $180
Total Utility Operating Income $3,538 $2,283
Gain on Property Transactions, Net of Taxes $-- $--
Non-Water Sales Earnings (Services and Rentals), Net of Taxes $193 $236
Net Income $2,268 $1,070
Net Income Applicable to Common Shareholders $2,259 $1,061
Basic Earnings Per Average Common Share $0.26 $0.12
Diluted Earnings Per Average Common Share $0.26 $0.12
Basic Weighted Average Common Shares Outstanding 8,579 8,502
Diluted Weighted Average Common Shares Outstanding 8,694 8,599
Book Value Per Share $13.09 $12.57
 
Condensed Consolidated Balance Sheets (unaudited)
     
(In thousands) March 31, 2011 March 31, 2010
     
ASSETS    
Net Utility Plant $344,506 $326,769
Current Assets 21,205 15,670
Other Assets 61,338 69,665
     
Total Assets  $427,049 $412,104
     
CAPITALIZATION AND LIABILITIES    
Shareholders' Equity $113,916 $108,244
Preferred Stock 772 772
Long-Term Debt 111,485 111,780
Current Liabilities 34,100 29,448
Other Liabilities and Deferred Credits 166,776 161,860
Total Capitalization and Liabilities $427,049 $412,104
CONTACT: News media contact:
         Daniel J Meaney, APR,
         Director of Corporate Communications
         Connecticut Water Service, Inc.
         93 West Main Street, Clinton, CT 06413-1600
         (860) 669 8630 Ext. 3016

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