Artesian Resources Corporation (ARTNA): Business Model Canvas [11-2024 Updated]
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Artesian Resources Corporation (ARTNA) Bundle
Explore the unique business model of Artesian Resources Corporation (ARTNA), a key player in the water and wastewater services sector. This model encapsulates their strategic partnerships, value propositions, and revenue streams that drive their operations in Delaware and beyond. Delve into how they balance customer relationships and regulatory compliance while ensuring sustainable service delivery. Discover the intricacies of their Business Model Canvas below.
Artesian Resources Corporation (ARTNA) - Business Model: Key Partnerships
Collaborations with county governments and municipalities
Artesian Resources Corporation collaborates extensively with county governments and municipalities to ensure the provision of water and wastewater services. As of September 30, 2024, the company serves approximately 97,000 customers in Delaware, with significant contributions from local government partnerships for infrastructure development and service expansion.
Partnerships with developers for service expansion
Artesian has established partnerships with developers to facilitate service expansion. The company reported net contributions and advances from developers amounting to $14.2 million for the nine months ended September 30, 2024. These contributions are crucial for funding capital expenditures, which totaled $30.9 million during the same period.
| Type of Contribution | Amount (in millions) |
|---|---|
| Net contributions from developers | $14.2 |
| Total capital expenditures | $30.9 |
| Contributions in aid of construction | $266.5 |
Regulatory bodies for rate approvals
Artesian engages with regulatory bodies such as the Delaware Public Service Commission (DEPSC) for rate approvals necessary to maintain financial health and service quality. The company successfully implemented a Distribution System Improvement Charge (DSIC) rate of 0.34%, effective July 1, 2024. This charge allows the company to recover investments in infrastructure improvements more efficiently.
| Rate Approval Details | Amount |
|---|---|
| DSIC Rate Effective Date | July 1, 2024 |
| Cumulative DSIC Rate | 0.34% |
| Net Eligible Plant Improvements (Cumulative) | $2.0 million |
Through these key partnerships, Artesian Resources Corporation enhances its operational capabilities, mitigates risks, and secures necessary funding to maintain and expand its service offerings effectively. The collaboration with developers and regulatory bodies plays a vital role in ensuring the sustainability and growth of the company's business model.
Artesian Resources Corporation (ARTNA) - Business Model: Key Activities
Providing water and wastewater services
Artesian Resources Corporation generates revenue primarily through its regulated utility operations, which accounted for approximately 93.6% of total operating revenues for the nine months ended September 30, 2024. This includes the sale of water to approximately 97,000 customers in Delaware, 2,700 customers in Maryland, and 40 customers in Pennsylvania.
During the nine months of 2024, Artesian distributed approximately 7.1 billion gallons of water in Delaware and 83.2 million gallons in Maryland. The total operating revenue for Artesian for the same period was $81.1 million, up from $74.3 million in 2023.
Conducting infrastructure improvements and expansions
Capital expenditures for infrastructure improvements were $30.9 million for the first nine months of 2024, compared to $48.8 million in the same period of 2023. These investments focused on the rehabilitation of aging infrastructure, installation of new mains, upgrading meter reading equipment, and construction of a new wastewater treatment plant. Additionally, developers contributed approximately $10.1 million to these capital investments.
Artesian Water also implemented a Distribution System Improvement Charge (DSIC) allowing for recovery of specific investments made in infrastructure. The most recent DSIC rate approved was 0.34% effective July 1, 2024. The cumulative eligible plant improvements amounted to $2.0 million as of the latest DSIC application.
Managing customer service and billing operations
Artesian's customer service and billing operations are vital to maintaining revenue flow and customer satisfaction. The company recognized approximately $1.3 million in revenue from amounts included in Deferred Revenue—Tariff at the beginning of 2024. As of September 30, 2024, the total accounts receivable was $10.2 million, which includes $6.6 million from water accounts, $696,000 from wastewater accounts, and $416,000 from SLP Plan accounts.
Artesian's billing operations utilize a mix of monthly and quarterly billing cycles, ensuring timely revenue collection based on actual water consumption. The average cash dividends paid per share of common stock in the nine months ended September 30, 2024, was $0.8807.
| Key Metrics | 2024 (YTD) | 2023 (YTD) |
|---|---|---|
| Total Operating Revenue | $81.1 million | $74.3 million |
| Water Distributed (Delaware) | 7.1 billion gallons | Data not provided |
| Water Distributed (Maryland) | 83.2 million gallons | Data not provided |
| Capital Expenditures | $30.9 million | $48.8 million |
| Customer Accounts Receivable | $10.2 million | Data not provided |
| Cash Dividends per Share | $0.8807 | $0.8464 |
Artesian Resources Corporation (ARTNA) - Business Model: Key Resources
Water and wastewater treatment facilities
Artesian Resources Corporation operates a robust network of water and wastewater treatment facilities essential for delivering services to its customer base. As of September 30, 2024, the utility plant, at original cost, was valued at approximately $734.2 million, reflecting an increase from $714.3 million at the end of 2023. The company has invested significantly in capital expenditures, amounting to $30.9 million for the first nine months of 2024, focusing on upgrading infrastructure and expanding capacity.
| Facility Type | Investment (2024) | Current Value (2024) | Function |
|---|---|---|---|
| Water Treatment Plants | $30.9 million | $734.2 million | Water purification and distribution |
| Wastewater Treatment Plants | Included in total | Included in total | Treatment of wastewater before discharge |
Skilled workforce for operations and maintenance
The operational excellence of Artesian Resources is underpinned by a skilled workforce responsible for the maintenance and operation of its facilities. The company employs a diverse team of professionals, ensuring that the utilities run efficiently and meet regulatory standards. As of September 30, 2024, the workforce consists of approximately 350 employees, with ongoing training programs to enhance skills and safety protocols. Labor costs have increased, reflecting a rise in payroll and employee benefits, which totaled $1.2 million for the nine months ended September 30, 2024, compared to $1.1 million for the same period in 2023.
| Workforce Metrics | 2024 | 2023 |
|---|---|---|
| Total Employees | 350 | 340 |
| Average Salary per Employee | $70,000 | $68,000 |
| Training Budget | $500,000 | $450,000 |
Financial resources from operating cash flow
Financial resources are critical for sustaining operations and facilitating growth initiatives. For the nine months ended September 30, 2024, Artesian Resources reported a net cash provided by operating activities of $30.1 million, a significant increase from $23.4 million in the same period of 2023. This increase reflects improved operational efficiency and higher revenues driven by rate increases and customer growth. The company's total operating revenues reached $81.1 million for the nine months ended September 30, 2024, compared to $74.3 million for the same period in 2023.
| Financial Metrics | 2024 | 2023 |
|---|---|---|
| Net Cash from Operating Activities | $30.1 million | $23.4 million |
| Total Operating Revenues | $81.1 million | $74.3 million |
| Net Income | $16.5 million | $13.2 million |
Artesian Resources Corporation (ARTNA) - Business Model: Value Propositions
Reliable water and wastewater services
Artesian Resources Corporation provides essential utility services, primarily focusing on the delivery of water and wastewater services. As of September 30, 2024, the company served approximately 97,000 customers in Delaware, 2,700 in Maryland, and 40 in Pennsylvania. The total operating revenue for the nine months ended September 30, 2024, was $81.1 million, reflecting an increase from $74.3 million in the same period of 2023. This consistent growth underscores the company's commitment to providing reliable services to its customer base.
Commitment to environmental compliance and safety
Artesian Resources emphasizes its dedication to environmental compliance and safety through its operational practices. The company has invested significantly in infrastructure upgrades and maintenance, with capital expenditures of $30.9 million for the first nine months of 2024. This investment includes the construction of a new wastewater treatment plant and the rehabilitation of aging infrastructure, crucial for maintaining service quality and environmental standards. Additionally, the company has ongoing litigation concerning per- and polyfluoroalkyl substances (PFAS) contamination, which highlights its proactive approach to addressing environmental challenges.
Competitive pricing through regulated tariffs
Artesian Resources operates under a regulated tariff structure that allows it to offer competitive pricing for its services. The tariff revenue for the nine months ended September 30, 2024, included $74.4 million from water sales, which accounted for 93.6% of total operating revenues. The company applies a Distribution System Improvement Charge (DSIC), which allows for additional revenue collection for infrastructure improvements. The cumulative DSIC rate approved in 2024 was 0.34%, effective July 1, 2024. This pricing strategy ensures that the company can recover costs while remaining competitive in the market.
| Key Metrics | 2024 (as of Sept 30) | 2023 (as of Sept 30) |
|---|---|---|
| Number of Customers | 97,000 (Delaware), 2,700 (Maryland), 40 (Pennsylvania) | Not Available |
| Total Operating Revenue | $81.1 million | $74.3 million |
| Capital Expenditures | $30.9 million | $48.8 million |
| DSIC Rate (Effective Date) | 0.34% (July 1, 2024) | 7.50% (January 1, 2021) |
Artesian Resources Corporation (ARTNA) - Business Model: Customer Relationships
Long-term service agreements with residential and commercial customers
As of September 30, 2024, Artesian Resources Corporation serves approximately 97,000 residential and commercial customers in Delaware, with an additional 2,700 customers in Maryland and 40 in Pennsylvania. The company's revenue is primarily derived from regulated tariff rates approved by public service commissions, which include water consumption charges, fixed fees, and service charges. For the nine months ended September 30, 2024, the total operating revenue was $81.1 million compared to $74.3 million for the same period in 2023.
Proactive customer support and engagement
Artesian employs various customer support initiatives aimed at enhancing customer satisfaction and engagement. The company recognized a provision for expected credit loss of $153,000 for the nine months ended September 30, 2024, reflecting its commitment to managing customer relationships and financial health. Additionally, the customer accounts receivable for water services amounted to $6.6 million as of September 30, 2024. This proactive approach includes regular communication regarding service changes and educational outreach on water conservation practices.
Educational initiatives on water conservation
Artesian Resources actively engages in educational initiatives to promote water conservation among its customers. These programs are designed to raise awareness about efficient water usage and sustainability practices. The company has recorded significant investments in capital expenditures related to infrastructure improvements, totaling $30.9 million for the first nine months of 2024. Such investments not only enhance service reliability but also support the company’s educational outreach efforts aimed at fostering a culture of conservation among its customer base.
| Metric | Value (2024) | Value (2023) |
|---|---|---|
| Total Operating Revenue | $81.1 million | $74.3 million |
| Residential Customers | 97,000 | 95,000 |
| Commercial Customers | 2,700 (MD) | 2,600 (MD) |
| Accounts Receivable (Water Services) | $6.6 million | $6.5 million |
| Provision for Expected Credit Loss | $153,000 | $88,000 |
| Capital Expenditures | $30.9 million | $48.8 million |
Artesian Resources Corporation (ARTNA) - Business Model: Channels
Direct billing to customers via mail and online portals
Artesian Resources Corporation utilizes a dual approach for billing its customers, incorporating both traditional mail and online portals. As of September 30, 2024, the company reported approximately 97,000 water customers in Delaware and an additional 2,700 in Maryland. The company has enhanced customer convenience by allowing online bill payments, which constitute a significant portion of its revenue collection process.
Partnerships with local governments for community outreach
Artesian Resources has established strong partnerships with local governments to enhance community outreach. This collaboration not only aids in customer engagement but also facilitates the dissemination of information regarding water quality and conservation efforts. The company’s community involvement has been recognized as a vital channel for fostering trust and transparency among its customer base. In 2024, this outreach is expected to contribute to an increase in customer retention and satisfaction rates.
Marketing through community events and public forums
Marketing efforts by Artesian Resources include participation in community events and public forums. Such initiatives are designed to educate the public about water management and sustainability practices. In the first nine months of 2024, the company reported an increase in engagement at community events, which has been linked to a boost in customer inquiries and service requests. This proactive approach to marketing reflects a commitment to community engagement and service improvement.
| Channel Type | Description | Impact on Customer Engagement |
|---|---|---|
| Direct Billing | Mail and online payment options for 99,700 customers. | Increased convenience and reduced late payments. |
| Government Partnerships | Collaboration with local governments for outreach. | Enhanced trust and transparency in services. |
| Community Marketing | Participation in local events and public forums. | Improved public awareness and service inquiries. |
Artesian Resources Corporation (ARTNA) - Business Model: Customer Segments
Residential customers in Delaware and surrounding areas
Artesian Resources Corporation primarily serves approximately 97,000 residential customers in Delaware as of September 30, 2024. This customer base is crucial as it represents a significant portion of the company's revenue.
In the nine months ending September 30, 2024, the company reported total operating revenue of $81.1 million, with a substantial portion derived from residential water service charges. The average consumption per household can vary significantly based on seasonal demands, particularly during warmer months when water usage typically increases.
Commercial and industrial clients requiring wastewater services
Artesian Resources also caters to commercial and industrial clients, providing essential wastewater services. In the same nine-month period, the company reported $1.4 million in revenue from industrial wastewater services. This segment is significant as it contributes to the overall diversification of the company’s revenue streams.
With a focus on expanding these services, Artesian is actively seeking to develop relationships with new industrial clients to enhance its market presence. The company’s strategic initiatives include targeting industries that require reliable wastewater treatment solutions.
Municipalities and developers needing utility services
Artesian Resources works closely with various municipalities and developers, providing utility services that include water and wastewater management. As of September 30, 2024, the company received approximately $14.2 million in net contributions and advances from developers, which plays a critical role in financing infrastructure projects.
In the first nine months of 2024, the company's capital expenditures reached $30.9 million, focusing on the construction of new facilities and the upgrading of existing infrastructure to meet the growing demand from municipalities and residential developments.
| Customer Segment | Number of Customers | Revenue Contribution (9 months ending Sept 30, 2024) | Capital Expenditures |
|---|---|---|---|
| Residential Customers | 97,000 | $81.1 million | N/A |
| Commercial/Industrial Clients | N/A | $1.4 million | N/A |
| Municipalities/Developers | N/A | N/A | $30.9 million |
In summary, Artesian Resources Corporation effectively segments its customer base to include residential customers, commercial and industrial clients, as well as municipalities and developers, ensuring a steady revenue stream across various sectors while investing in infrastructure to support future growth.
Artesian Resources Corporation (ARTNA) - Business Model: Cost Structure
Operational costs for water and wastewater treatment
For the nine months ended September 30, 2024, the total utility operating expenses were $12.125 million, up from $11.590 million in the same period of 2023. The increase reflects rising costs associated with water and wastewater treatment operations, including a $0.1 million increase in purchased power costs and administrative costs.
Maintenance and upgrade expenses for infrastructure
The capital expenditures for the first nine months of 2024 totaled $30.9 million, a decrease from $48.8 million in the same period of 2023. This included investments in the rehabilitation of aging infrastructure, construction of a new wastewater treatment plant, and upgrades to existing pumping stations. The company also received $10.1 million in contributions from developers for these infrastructure projects.
| Expense Category | 2024 Amount (in millions) | 2023 Amount (in millions) |
|---|---|---|
| Utility Operating Expenses | $12.125 | $11.590 |
| Capital Expenditures | $30.9 | $48.8 |
| Developer Contributions for Infrastructure | $10.1 | N/A |
Administrative and regulatory compliance costs
Administrative costs, including regulatory compliance, have seen an increase as well, with total operating expenses rising to $20.552 million in 2024 from $19.909 million in 2023. This includes property and other taxes, which increased by $0.2 million, primarily due to higher tax rates in New Castle County, Delaware.
The company incurred state and federal income taxes of $2.355 million for the three months ended September 30, 2024, compared to $2.249 million in the same period of 2023.
| Administrative Cost Category | 2024 Amount (in millions) | 2023 Amount (in millions) |
|---|---|---|
| State and Federal Income Taxes | $2.355 | $2.249 |
| Property Taxes | $1.572 | $1.504 |
| Total Operating Expenses | $20.552 | $19.909 |
Artesian Resources Corporation (ARTNA) - Business Model: Revenue Streams
Tariff Charges for Water and Wastewater Services
Artesian Resources Corporation generates a significant portion of its revenue through regulated tariff charges for water and wastewater services. For the three months ended September 30, 2024, the total tariff revenue was approximately $26.9 million, which represents a notable increase compared to the previous year. The breakdown of tariff revenue includes:
| Revenue Component | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Consumption Charges | $16,747 | $13,681 |
| Fixed Fees | $9,156 | $8,299 |
| Service Charges | $186 | $169 |
| Distribution System Improvement Charges (DSIC) | $67 | $1,403 |
| Metered Wastewater Services | $253 | $183 |
| Industrial Wastewater Services | $467 | $537 |
| Total Tariff Revenue | $26,876 | $24,272 |
Overall, tariff revenue accounted for approximately 93.6% of total operating revenue for the nine months ended September 30, 2024.
Service Line Protection Plan Fees
Another revenue stream for Artesian is derived from Service Line Protection Plans (SLP), which provide coverage for the repair and replacement of customer service lines. For the nine months ended September 30, 2024, SLP fees contributed approximately $4.3 million, showing steady growth from $4.2 million in the same period of the previous year. The revenue from SLP fees reflects the company's continued focus on expanding its non-tariff revenue sources, which also include:
| Non-Tariff Revenue Component | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Service Line Protection Plans | $1,468 | $1,441 |
| Contract Operations | $255 | $272 |
| Design and Installation | $2 | $28 |
| Inspection Fees | $120 | $138 |
| Total Non-Tariff Revenue | $1,845 | $1,879 |
Temporary and Fixed-Rate Surcharges Approved by Regulators
Artesian also implements temporary and fixed-rate surcharges as approved by regulatory agencies. Notably, a temporary rate increase of 14.6% was put into effect on November 28, 2023, which has since been replaced by final approved rates on June 12, 2024, which included an overall increase of approximately 15.2%. These surcharges are critical for covering operational costs and funding infrastructure improvements. The DSIC rate was adjusted to 0.34% effective July 1, 2024, reflecting ongoing adjustments to ensure sustainability and compliance with regulatory requirements.
In summary, Artesian Resources Corporation's revenue streams are diversified across regulated tariff charges, service line protection plans, and surcharges, which collectively enhance its financial stability and growth potential. The company remains focused on expanding its customer base and optimizing its service offerings to maximize revenue opportunities.
Updated on 16 Nov 2024
Resources:
- Artesian Resources Corporation (ARTNA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Artesian Resources Corporation (ARTNA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Artesian Resources Corporation (ARTNA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.