SAN DIEGO--(BUSINESS WIRE)--Aug. 9, 1999--Western Water Co. (Nasdaq:WWTR) announced today its results for the first quarter ended June 30, 1999.

The company reported a net loss applicable to common stockholders for the quarter ended June 30, 1999 of $1,768,000, or $0.22 per share, compared to a net loss applicable to common stockholders of $402,000, or $.05 per share, for the quarter ended June 30, 1998. Revenues for the quarter were $472,000, compared to $359,000 for the preceding fiscal year.

The quarter ended June 30, 1999 included an allowance of $358,000 for water projects under development, as well as $188,000 of preferred stock dividends, as compared to no amounts for either item for the quarter ended June 30, 1998. The fiscal quarter ended June 30, 1998 included a one-time gain of $291,000 recognized from the reversal of a severance accrual, as well as $150,000 of gross profit from the sale of real estate in Colorado.

The results for the quarter ended June 30, 1999 reflected continued increase in revenues and gross margin from the company's water business. 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 first quarter of 1999 was an indication of this change. Water revenues for the quarter ended June 30, 1999 were $472,000 as compared to $81,000 for the quarter ended June 30, 1998. There were no real estate sales in the quarter ended June 30, 1999, compared to $278,000 in the quarter ended June 30, 1998.

Michael Patrick George, president and chief executive officer of Western Water Co., stated that: "The company continues to pursue a wide variety of water sales with a broad array of potential customers. To complete these transactions, however, we need to break the price barriers that hinder our use of available capacity in public conveyance facilities. Accordingly, we are continuing to pursue legislative changes in California to clarify the pricing of conveyance rights available to private companies like Western Water, and are exploring alternative solutions in the event there is a delay in obtaining relief from these price barriers."

The company also announced that since the end of the quarter ended June 30, 1999 it had repurchased $5 million principal amount of its 9% convertible debentures due in 2005. The debentures were purchased at a price of $1.5 million, and the company will report an extraordinary gain of approximately $3.5 million from the transaction in the quarter ending Sept. 30, 1999.

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.