Connecticut Water Service, Inc. Reports Third-Quarter and Nine Month Earnings; Reports on Pending Acquisition

Connecticut Water Service, Inc. Reports Third-Quarter and Nine Month Earnings;
Reports on Pending Acquisition

Earnings Total $0.69 per Share in the Third Quarter

CLINTON, Conn., Nov. 9, 2012 (GLOBE NEWSWIRE) -- Connecticut Water Service,
Inc. (Nasdaq:CTWS) ("CTWS" or the "Company") announced net income of $6
million, or earnings per basic average share (EPS) of $0.69, on total revenues
of $26.5 million in the third quarter of 2012. This was an increase in income
of $4.3 million, or EPS of $0.26, from total revenues of $22.2 million
recorded in the third quarter of 2011. Total revenues include all revenues
generated by the Company's three business segments: Water Activities, Services
and Rentals, and Real Estate.

CTWS's results for the third quarter of 2012 include a contribution of
$567,000 to net income, or EPS of $0.07, from The Maine Water Company,
excluding CTWS's approximately $274,000 of financing costs of the acquisition.

Maine Water Acquisition and Q2 Results

On January 1, 2012, CTWS acquired from Aqua America, Inc. its former Maine
subsidiary, Aqua Maine, Inc., which was renamed The Maine Water Company
("Maine Water"). The third quarter 2011 results do not include Maine Water.

Eric W. Thornburg, Chairman, President and Chief Executive Officer, stated:
"The integration of Maine Water into CTWS continues to be seamless and
customers and shareholders are benefiting from the sharing of resources and
best practices among our operations."

Third Quarter Operating Results

In the third quarter of 2012, net income in the Company's core business, the
Water Activities Segment, was $5.7 million, or EPS of $0.65, on revenues of
$24.9 million. In the same period of 2011, net income from the segment totaled
$3.3 million, or EPS of $0.39, on revenues of $21.0 million. Excluding Maine
Water, CTWS saw an increase in revenue from the Water Activities Segment of
$838,000, which was largely attributable to warm, dry weather in the quarter
and a 2.6% increase in the WICA (Water Infrastructure and Conservation
Adjustment) surcharge since the third quarter of 2011.

The Company saw consistent performance from its Services and Rentals Segment
in the third quarter of 2012, which contributed $329,000 to net income, or EPS
of $0.04, compared to $296,000, or EPS of $0.03, in the third quarter of 2011.

Operating expenses increased $0.9 million to $16.7 million in the third
quarter of 2012. Excluding the operating expenses attributable to Maine Water,
operating expenses for the Company decreased $1.3 million, or 8.4%. The
decrease was primarily related to tax benefits associated with the recently
completed refinancing of long-term debt of The Connecticut Water Company.

Mr. Thornburg stated, "Favorable summer weather and cost containment in our
Water Activities segment drove our increased earnings for the quarter. In
October, the Company completed a refinancing of $54.6 million in long-term
debt that is anticipated to reduce expenses by approximately $1 million
annually, benefiting customers and shareholders." Mr. Thornburg added, "I am
extremely proud of our people who maintained safe, reliable water service to
families and communities during Hurricane Sandy. Despite prolonged power
outages, our capable staff provided uninterrupted service to more than 99
percent of our customers and no customer was without water service for more
than a half-day."

Nine Month Operating Results

For the first nine months of 2012, the Company reported net income of $12
million and EPS of $1.39, compared to net income of $9.5 million and EPS of
$1.10 for the same period of 2011. Total revenue for the nine month period
grew by $12.7 million to $71.2 million compared to the first nine months of
2011. CTWS's results for the first nine months of 2012 include a contribution
of $1.3 million in net income, or EPS of $0.15, from Maine Water, excluding
CTWS's approximately $820,000 of financing costs of the acquisition. The nine
month results for 2012 include EPS of $0.11 generated by the Real Estate
segment through a sale of protected open space land to the Town of Plymouth,
Connecticut.

Operating expenses in the first nine months increased $6.7 million to $48.1
million compared to $41.4 million for the same period in 2011, which was
largely attributable to the Maine Water acquisition. Excluding the operating
expenses attributable to Maine Water, operating expenses increased $85,000
over the first nine months of 2011. As with the three month results, a
decrease in tax expense associated with the refinancing of long-term debt
offset increased pension and other benefits costs.

Further Expansion in the State of Maine

On July 19, 2012, CTWS announced that it had reached an agreement to acquire
the Biddeford and Saco Water Company that serves nearly 16,000 customers in
southern Maine. Under the agreement, the acquisition will be executed through
a stock-for-stock merger transaction valued (as of July 18, 2012) at
approximately $11.4 million. Holders of Biddeford and Saco Water Company
common stock will receive shares of CTWS common stock in a tax-free
exchange.CTWS will also assume approximately $8.4 million in debt of
Biddeford and Saco Water Company. The transaction reflects a total enterprise
value of approximately $19.8 million (as of July 18, 2012).

On November 7, 2012, the Maine Public Utilities Commission approved a
stipulation agreement between the Biddeford and Saco Water Company, Maine
Water, the City of Biddeford andPublic Advocate that provides the required
state regulatory approval. The approval of the shareholders of the Biddeford
and Saco Water Company is required. CTWS anticipates a closing in the fourth
quarter of 2012. When the closing is completed, CTWS will serve nearly 32,000
customers, or a population of about 100,000 people, in Maine making it the
largest investor-owned water utility in the state, and New England's fastest
growing water utility company.

Mr. Thornburg stated, "I am pleased that we were able to secure regulatory
approval in under four months by working closely with all of the stakeholders.
Over the long-term, we expect to leverage the economies of scale and seek
opportunities to share staff, resources, systems and services between Maine
Water and Biddeford and Saco Water Company to provide the best, most cost
effective service for customers. In addition, CTWS will provide Biddeford and
Saco Water Company with access to capital to make important investments in its
water system and infrastructure to maintain water quality and enhance
reliability of service."

Connecticut Water Service, Inc. is the largest publicly traded water company
based in New England. Through its wholly-owned public water utility
subsidiaries, The Connecticut Water Company and The Maine Water Company, the
Company provides drinking water to 106,000 customers, or about 350,000 people,
throughout the states of Connecticut and Maine.

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

Forward Looking Statements

This news release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 about
Connecticut Water's proposed acquisition of the Biddeford and Saco Water
Company. These statements include statements regarding the anticipated closing
date of the transaction and anticipated future results. Forward-looking
statements can be identified by the fact that they do not relate strictly to
historical or current facts. They often include words like "believe,"
"expect," "anticipate," "estimate," and "intend" or future or conditional
verbs such as "will," "would," "should," "could" or "may." Certain factors
that could cause actual results to differ materially from expected results
include delays in completing the merger, difficulties in achieving anticipated
benefits or cost savings from the merger or in achieving such anticipated
benefits or cost savings within the expected time frame, difficulties in
integrating Biddeford and Saco Water into Connecticut Water, increased
competitive pressures, changes in general economic conditions, legislative and
regulatory changes that adversely affect the business in which the Company and
Biddeford and Saco Water are engaged, changes in the securities markets and
other risks and uncertainties disclosed from time to time in documents that
Connecticut Water files with the Securities and Exchange Commission
("SEC").We undertake no obligation to update or revise forward-looking
statements, whether as a result of new information, future events, or
otherwise.

Additional Information About the Merger and Where to Find It

In connection with the pending acquisition of BSWC, CTWS has filed a
registration statement on Form S-4 with the SEC under the Securities Act of
1933 (File No. 333-183708), containing a joint proxy statement of BSWC that
also constitutes a prospectus of CTWS (the "Joint Proxy Statement/Prospectus")
and other documents regarding the proposed transaction.

Before making any voting or investment decisions, we urge investors and
security holders to read the Joint Proxy Statement/Prospectus (including all
amendments and supplements thereto) and other documents filed with the SEC
carefully and in their entirety when they become available, because they will
contain important information about CTWS, BSWC and the proposed merger.

When available, copies of the Joint Proxy Statement/Prospectus will be mailed
to BSWC's shareholders. Copies of the Joint Proxy Statement/Prospectus may be
obtained free of charge at the SEC's web site at www.sec.gov, or by directing
a request to CTWS's Corporate Secretary, Kristen A. Johnson, at Connecticut
Water Service, Inc., 93 West Main Street, Clinton, Connecticut 06413, or by
telephone at 1-800-428-3985, ext. 3056, or on our website at
www.ctwater.com.Copies of other documents filed by CTWS with the SEC may also
be obtained free of charge at the SEC's web site or by directing a request to
CTWS at the address provided above.

CTWS and BSWC and certain of their directors and executive officers may be
deemed to be participants in the solicitation of proxies in connection with
the approval of the proposed merger. Information regarding the directors and
executive officers of CTWS and BSWC, and their respective interests in CTWS or
BSWC, respectively, by security holdings or otherwise is available in the
Joint Proxy Statement/Prospectus.

This press release shall not constitute an offer to sell or the solicitation
of an offer to buy any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
such jurisdiction. No offer or sale of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933.


Connecticut Water Service, Inc. &                           
Subsidiaries
                                                           
Condensed Consolidated Statements of                        
Income (unaudited)
                                                           
                                         Three Months Ended Nine Months Ended
                                         September 30,      September 30,
(In thousands except per share amounts)   2012      2011     2012     2011
                                                                  
Operating Revenues                        $24,461   $20,628  $64,349  $53,976
Other Water Activities Revenues           458       412      1,131    1,112
Real Estate Revenues                      ----      ----     1,450    ----
Service and Rentals Revenues              1,586     1,194    4,287    3,457
Total Revenues                            $26,505   $22,234  $71,217  $58,545
Operating Expenses                        $16,743   $15,799  $48,069  $41,417
Other Utility Income, Net of Taxes        $243      $225     $607     $613
Total Utility Operating Income            $7,961    $5,054   $16,887  $13,172
(Loss) Gain on Property Transactions, Net $(31)     $114     $951     $114
of Taxes
Non-Water Sales Earnings (Services and    $329      $296     $1,012   $708
Rentals), Net of Taxes
Net Income                                $5,974    $3,734   $12,047  $9,472
Net Income Applicable to Common           $5,964    $3,724   $12,018  $9,443
Shareholders
Basic Earnings Per Average Common Share   $0.69     $0.43    $1.39    $1.10
Diluted Earnings Per Average Common Share $0.67     $0.42    $1.36    $1.08
Basic Weighted Average Common Shares      8,689     8,622    8,669    8,601
Outstanding
Diluted Weighted Average Common Shares    8,829     8,729    8,805    8,711
Outstanding
Book Value Per Share                      $14.30    $13.50   $14.30   $13.50

Condensed Consolidated Balance Sheets                      
(unaudited)
                                                          
(In thousands)                           September 30, 2012 September 30, 2011

ASSETS                                                     
Net Utility Plant                        $422,582           $354,555
Current Assets                           31,741             24,172
Other Assets                             107,154            56,866

Total Assets                             $561,477           $435,593

CAPITALIZATION AND LIABILITIES                             
Shareholders' Equity                     $126,575           $117,986
Preferred Stock                          772                772
Long-Term Debt                           187,334            111,305
Current Liabilities                      35,785             39,587
Other Liabilities and Deferred Credits   211,011            165,943
Total Capitalization and Liabilities     $561,477           $435,593

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) 664-6016

Connecticut Water Service, Inc. Logo
 
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