SAN DIEGO--(BUSINESS WIRE)--June 1, 1999--Western Water Co, (Nasdaq:WWTR) announced today its results for the fiscal year ended March 31, 1999.

The company reported a net loss applicable to common stockholders for the year ended March 31, 1999 of $6,458,000, or $0.79 per share, compared to a net loss applicable to common stockholders of $2,458,000, or $.30 per share, for the year ended March 31, 1998. Revenues for the fiscal year were $1,823,000, compared to $3,922,000 for the preceding fiscal year.

The preceding fiscal year, ended March 31, 1998, included a gain of $2,456,000 recognized on the sale of the company's interest in Nevada Land & Resource Co., LLC, which took place in April 1997, as well as approximately $1.5 million of gross profit from the sale of real estate in Colorado. The fiscal year ended March 31, 1999 included an allowance of $1,294,000 for water projects under development, as well as $990,000 of preferred dividends, compared to $526,000 of preferred dividends in the preceding fiscal year.

A positive factor was the increase in revenues and gross margin from the company's water business. The company succeeded in completing two significant water transactions during the year, for the City of Inglewood and for the Santa Margarita Water District, both in southern California.

As its business shifts to the marketing of water, water sales are expected to become the major source of revenue to the Company, and the trend in the last year was one indication of this change. In the last three years, revenues from water have grown from $261,000 in the 1997 fiscal year, to $932,000 in the 1998 fiscal year, and to $1,477,000 in the latest fiscal year. At the same time, real estate sales have declined in importance to the company, and are expected to be a minor factor in the future.

The higher gross margin from water sales in the fiscal year ended March 31, 1999, compared to the previous fiscal year, was offset by the reduced gross margin from real estate sales. General and administrative costs were higher, at $5.8 million, compared to $5.6 million in the preceding year, in part due to an increase in staff as the company accelerates its marketing efforts, and the allowance of $1,294,000 for water projects under development.

Michael Patrick George, president and chief executive officer of Western Water Co., stated that, "During the latest fiscal year, our company began an important transition from a resource based company to a marketing company. We began the painstaking but necessary process of gaining permission, regulatory approval, environmental analysis and political support for complicated but valuable water transfers. Although results are not yet apparent in earnings, we moved our assets closer to value realization than they have ever been."

George continued, "Significant risks remain in our path, but we have also put many risks behind us. Our strategic relationship with Aguas de Barcelona is proving useful to both companies -- a requirement for any durable relationship. Our involvement in developing practical support for public policy favoring water transfers has also been beneficial to the company's long-term prospects. The management team we put in place this year is creatively and consistently advancing the company's mission of meeting customer needs in the context of a vibrant water market in the West."

Western Water 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.

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 purchase water rights and obtain financing and other factors and considerations detailed in the Company’s Securities and Exchange Commission filings.