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Richmond, California (November 14, 2003) -- Western Water Company
(OTCBB: WWTR) announced
today its results for the quarter ended September 30, 2003 . On
Thursday, November 13, the Company also filed with the SEC its
quarterly report on Form 10-Q. The Form 10-Q is available through
the “Investor Relations” link on the Company's website at www.wwtr.com.
The
Company reported a net loss applicable to common stockholders
for the quarter ended September 30, 2003 of ($578,104), or ($0.07)
per basic and diluted share, compared to a net loss applicable
to common stockholders for the quarter ended September 30, 2002
of ($1,004,805), or ($0.12) per basic and diluted share. Quarterly
water sales dropped, but gross profits from such sales were essentially
flat on a year over year basis. General and administrative expenses
for the quarter and for the fist six months of the current fiscal
year increased year over year as operating cost savings were more
than offset by higher legal and professional fees. Operating income
and net loss applicable to common shareholders for the September
2003 quarter improved from the year earlier period, primarily
reflecting the one-time benefit from the 2003 settlement of a
condemnation action in Colorado . However, during the September
2003 quarter, the Company completed its five-year water lease/sale
agreement with the City of Inglewood, California, and, therefore,
the Company will not have recurring revenues from that source
in the future.
Although
operating results for the second fiscal quarter of 2003 were improved
over operating results for the same period in the prior year,
the Company's financial results for the second fiscal quarter
of 2002 include the declaration and payment of $291,071 in dividends
on the Company's Series C convertible redeemable preferred stock.
The Company declared and paid the corresponding Series C dividend
in this fiscal year's first quarter (ending June 30, 2003 ). The
slight timing difference on payment of the dividend is eliminated
in a comparison of results for the first half of the two fiscal
years. The Series C dividend scheduled for July 15, 2003 has been
deferred to preserve the Company's cash resources.
Commenting
on the results, the Chairman, President & CEO of the Company,
Michael Patrick George, said: “Regulatory uncertainty and impediments,
particularly in California , continue to negatively affect operating
results. In fact, during the September quarter, federal and California
water agencies announced their intention to allocate virtually
all of the conveyance capacity in the Sacramento/San Joaqin River
Delta and virtually all of the storage capacity above the Delta
among themselves and their contractors. If implemented, this plan
would effectively eliminate opportunities for market-based water
transfers from Northern California to Southern California . Along
with prior administrative actions, implementation of this plan
would essentially strand the Company's water rights that originate
north of the Delta, substantially reducing their prospective value.
As a result, the Company is exploring the sale of some or all
of its assets in Northern California , but values achieved in
such sales are likely to be far less than the Company had once
anticipated, based on the previously expected development of the
associated water rights.”
Although
the regulatory impediments described by Mr. George negatively
affect the Company's assets in California , the Company is continuing
to make progress in development of the Cherry Creek Project in
Colorado .
Looking
to the future, Mr. George said, “The Company's inability to generate
operating revenues requires that we continue to reduce expenditures
and preserve cash. However, until the Company realizes revenue
from the Cherry Creek Project, even the radical downsizing of
the Company which we are pursuing will not result in an operating
profit. Because no material revenues are expected to be generated
from the Cherry Creek Project until next year, subsequent to the
end of the September quarter, the Company arranged for a short-term
working capital loan secured by our Yuba County farm properties.
That loan represents the Company's only secured debt. Prior to
the time the working capital loan comes due in April, 2004, the
Company will continue to market its Northern California assets
and consider other alternatives to protect shareholder value.
In the Company's current condition, the Board is also evaluating
corporate alternatives in light of the interests of all of its
investors.”
Western
Water Company is engaged in the identification, development, transportation,
sale and lease of water rights and water to municipalities and
other end users in the western United States and owns water rights
and real estate in California and Colorado .
Contact:
James
E. Sherman, CFO
Western
Water Company
(510)
234-7400
Statements
contained in this release which are not historical facts are forward
looking statements that involve risks and uncertainties that could
cause actual results or future events to differ from those contained
herein. Factors that could cause actual results or events to differ
include the Company's ability to fund its on-going operations,
develop and market its water and water rights, and the various
other factors and considerations detailed in the Company's Securities
and Exchange Commission filings.
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