POINT RICHMOND, Calif., Jun 29, 2001 (BUSINESS WIRE) -- Western Water Company (OTCBB:WWTR) announced today its results for the fiscal year ended March 31, 2001.

The Company reported net income available to common stockholders for the year ended March 31, 2001 of $5,395,000, or $.66 per diluted share, compared to a net loss available to common stockholders of $(4,708,000), or $(.59) per share, for the year ended March 31, 2000. The results for the year ended March 31, 2001 included in net income available to common stockholders $7,679,000, or $.85 per diluted share, representing the excess of the carrying value of the Series D Convertible Redeemable Preferred Stock, all of which the Company retired in March 2001, and a portion of the Series C Convertible Redeemable Preferred Stock, which the Company repurchased in December 2000, over the fair value of the consideration to retire those securities. Also included in net income available to common stockholders is an extraordinary gain of $1,154,000, or $.13 per diluted share, on the extinguishment of debt. During the prior year the Company had an extraordinary gain of $3,490,000, or $.44 per diluted share, on extinguishment of debt.

Water revenues for the fiscal year decreased 24% to $2,126,000, compared with $2,796,000 for the preceding fiscal year. However, the pro-forma effect of the Company's change in accounting principle relative to its revenue recognition policy, as the Company adopted SAB 101, would have reduced the prior year's revenue by $1,087,000 to $1,709,000 had that change been required in the prior year. The current year revenue includes $150,000 of water revenue that was deferred in the prior year as a result of implementing the aforementioned accounting principle. Water revenue for the current fiscal year included both water sales and income from water lease agreements with various municipalities and agricultural water districts in California. General and administrative costs were substantially lower, at $3,394,000 compared with $7,449,000 in the preceding year, due to lower payroll and corporate overhead expenses, and consulting and engineering costs.

Commenting on the results, the chairman, president & CEO of Western Water Company, Michael Patrick George, said: "We are pleased with the progress the Company has made in our restructuring, and its clear contribution to shareholder value. While we have made substantial progress in our water transfer initiatives, the Company's results of operations continue to be negatively impacted by governmental and regulatory obstacles. The current year's experience illustrates the need for meaningful legislative reform and the establishment of an orderly market for the purchase, sale and transfer of water." George went on to say, "We are deeply appreciative of the collaborative efforts of our investors, water partners, and customers during the past year, and look forward to greater progress in the coming year and profitability in the future." 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.