Artesian Resources Corporation — Third Quarter and Year-To-Date 2026 Earnings Summary

Financial Performance:

• Diluted net income per share decreased to $0.65 in Q3 2026 from $0.68 in Q3 2025; increased 3.3% to $1.87 year-to-date (YTD) from $1.81 in the same period in 2025.
• Net income for Q3 2026 was $6.8 million, a 3.0% decrease compared to Q3 2025; YTD net income was $19.3 million, a 3.1% increase compared to the same period in 2025.
• Q3 2026 revenues totaled $31.9 million, an increase of $1.5 million (4.8%) compared to Q3 2025; YTD revenues were $90.4 million, an increase of $5.5 million (6.4%) compared to the same period in 2025.
• Q3 2026 water sales revenue increased $0.8 million (3.4%) YTD water sales revenue increased $3.7 million (5.4%).
• Q3 2026 other utility operating revenue increased $0.5 million (12.6%); YTD increase was $1.3 million (11.8%).
• Q3 2026 non-utility operating revenue increased $0.1 million (7.5%); YTD increase was $0.5 million (9.1%).
• Q3 2026 operating expenses (excluding depreciation and income taxes) increased $1.4 million (8.7%); YTD increase was $3.4 million (7.4%).
• Q3 2026 utility operating expenses increased $1.1 million (8.0%); YTD increase was $2.8 million (7.4%).
• Q3 2026 non-utility operating expenses increased $0.3 million (10.0%); YTD increase was $0.3 million (10.0%).
• Q3 2026 depreciation and amortization expense increased $0.3 million (2.7%); YTD increase was $0.3 million (2.7%).
• Q3 2026 property and other taxes increased $0.4 million; YTD increase was $0.2 million.
• Q3 2026 federal and state income tax expense decreased $0.2 million (9.0%); YTD decrease was $0.7 million.
• Q3 2026 other income decreased $0.2 million; YTD decrease was $0.7 million.
• Q3 2026 interest charges increased $0.2 million; YTD increase was $0.4 million.

Business Segments and Product Lines:

• Water sales revenue growth driven by increased overall water consumption, increased number of customers served, and Distribution System Improvement Charge (DSIC) revenue.
• DSIC rate effective July 1, 2026 was 0.62%.
• Water sales revenue also increased due to two temporary rate increases permitted under Delaware law pending permanent rate determinations by the DEPSC.
• Other utility operating revenue growth driven by increased industrial wastewater treatment services and additional residential and commercial wastewater customers.
• Non-utility operating revenue growth driven by increased Service Line Protection Plan (SLP Plan) fees effective January 1, 2026 and increased participation in SLP Plans.
• Operating expense increases in Q3 attributed to $0.4 million in supply and treatment costs, $0.2 million in payroll and employee benefits, $0.2 million in purchased power, and $0.2 million in administrative costs.
• Operating expense increases in YTD attributed to $1.3 million in payroll and employee benefits, $0.8 million in supply and treatment costs, $0.3 million in purchased power, $0.3 million in administrative costs, and $0.2 million in transmission, distribution, and collection costs.
• Non-utility operating expense increases in YTD attributed to $0.3 million in plumbing repair costs associated with SLP Plans.

Capital Expenditures:

• $40.8 million invested in water and wastewater infrastructure projects during the first nine months of 2026.
• Investments included installation of new mains, services, and hydrants; upgrading pumping and treatment stations (including PFAS treatment upgrades); construction of new wastewater treatment plants; rehabilitation of aging infrastructure; upgrading meter reading equipment; purchasing transportation equipment; and computer hardware/software upgrades.

Management Commentary and Tone:

• Nicki Taylor, Chair, President and CEO, stated that investment in treatment and infrastructure is paramount for providing safe drinking water, fire protection, and reliable service.
• Management described investments as "thoughtful" and "prudent" to protect water quality, address aging infrastructure, and ensure quality service.

Other Key Points:

• Artesian Resources Corporation is a holding company with wholly-owned subsidiaries providing water and wastewater services on the Delmarva Peninsula.
• Artesian Water Company is the principal subsidiary, noted as the oldest and largest regulated water utility on the Delmarva Peninsula, providing service since 1905.
• The company is subject to regulatory filings with the Delaware Public Service Commission regarding rate recovery and increased operating costs.
• Forward-looking statements include expectations regarding infrastructure investments, regulatory compliance, growth in customers, and service quality, with risks including weather changes, government policy shifts, and regulatory approval timing.