January 2006 Archives

John Dickerson, President & CEO Summit Global Management, Inc., has been following the Water companies for serveral years. He has recently updated his special report on why investors should be looking at water for potential investment opportunities.

The water industry is comprised of a vast array of companies providing products and services toward the collection, conveyance, treatment and monitoring/analysis of water and wastewater for multiple purposes and end users. As you will see in the table below, investing in the U.S.-based utility component of this industry has historically worked very well, but the time has come for much broader global exposure in water stocks.

Water is the single most important economic input to the global economy, and more specifically, to individual enterprises. The disparity between supply and demand for clean water is an inexorable problem; yet the relentless demographic demand for its uninterrupted supply makes water by far the most stable of all commodities – unaffected by cyclical influences which constantly badger other more typical input commodities.

This global theme of water insufficiency relative to unrelenting demand, along with all the related trends and opportunities it has spawned, continues to benefit the prospects of a broad range of publicly traded companies which help to provide solutions to this supply/demand dilemma.. A diverse global universe of investment opportunities exists within the theme of water investing; all the while eliminating the typical resistance to sector fund investments, which are far more limited in scope and susceptible to cyclical influences: Water investing is a broad and deep global theme, and is far too diverse to be considered sector investing. [ more ]

IDEX Corp. (IEX) announced its financial results for the three- and twelve-month periods ended December 31, 2005. Orders in the fourth quarter were up 9 percent, sales increased 8 percent and net income rose 27 percent to $28.7 million. Diluted earnings per share were 54 cents versus 43 cents in the year-ago quarter. For the full year 2005, orders and sales both increased 12 percent and diluted earnings per share were $2.09, up 24 percent versus 2004.

2005 Highlights

* Orders for 2005 were $1.057 billion, 12 percent higher than a year ago; excluding foreign currency translation and acquisitions, organic growth was 10 percent.
* Full year sales of $1.043 billion rose 12 percent; excluding foreign currency translation and acquisitions, organic sales growth was 10 percent.
* Operating margins at 17.5 percent were 140 basis points higher than a year ago.
* Net income increased 27 percent to $109.8 million.
* Diluted EPS at $2.09 was 41 cents ahead of last year.
* EBITDA of $213.3 million was 20.4 percent of sales and covered interest expense by nearly 15 times.
* Free cash flow was strong at $121.2 million and 1.1 times net income.
* Operational excellence initiatives continue to fuel product innovation to drive growth.

American States Water Company (AWR) announced the acquisition of a water and wastewater system by its Pennsylvania subsidiary. Aqua Pennsylvania Inc. acquired the water and wastewater systems serving the Masthope residential community in Lackawaxen Township, Pike County for a combined purchase price of approximately $2.3 million.

In addition, Aqua Pennsylvania announced that a new growth venture was recently approved by the Pennsylvania Public Utility Commission (PUC) that will expand the company's service area in Jefferson Township, Lackawanna County to accommodate a developer's request for water service for approximately 200 residents. [ more ]

Integrated Environmental Technologies, Ltd. (IEVM) has entered into a two year supply agreement for its proprietary EcaFlo(TM) devices with Layne Christensen Company (LAYN), one of the world's leading water services providers. Under the terms of the agreement, IET plans to deliver its first EcaFlo(TM) equipment in the first quarter of 2006. EcaFlo(TM) equipment is integrated into water systems in order to control bacteria, viruses, fungi, and other microorganisms by using the process known as electro-chemical activation ("ECA"). [ more ]

AquaCell (AQUA.ob) announced today that its "Coolertising" program was included in a BusinessWeek article on out-of-home advertising in the January 23, 2006 issue, currently available on the newsstand. The article appears in the UpFront section of the magazine on page 16 and includes a photograph of the AquaCell cooler with CBS Television's ad for its new comedy "Courting Alex". [ more ]

Calgon Carbon Corp. (CCC) announced the start-up of its new activated carbon processing and packaging facility today in Tianjin, China. The facility will be operated by Calgon Carbon Company Tianjin Limited (CCT), a wholly owned subsidiary of Calgon Carbon Corporation. At nearly 35,000 square meters, this state-of-the- art facility replaces Calgon Carbon's existing 7,000 square meter Tianjin operation which was opened in mid-2002. The new operation will enable the company to better serve both new and existing customers throughout Asia and provides room for on-site expansion to meet future demand. [ more ]

HydroFlo, Inc. (HYRF.PK) announced the company's plan to dividend a certain shareholder interest of Metals and Arsenic Removal Technology, Inc. ("MARTI"), a wholly owned HydroFlo subsidiary, to HydroFlo shareholders as part of an overall plan to increase shareholder value to HydroFlo shareholders and create a public market for MARTI stock. [ more ]

Insituform Technologies Inc. (INSU) saw its shares jump nearly 15 percent to a fresh 12-month high Wednesday following a brokerage upgrade predicting higher spending for sewer rehabilitation programs.

Stifel Nicholaus analyst Jeffrey L. Beach lifted the rating to "Buy" from "Hold" saying that spending on sewer and wastewater infrastructure is in a "powerful uptrend," with an estimated 10 percent growth rate in 2005. This trend, he said, should last at least through the end of the decade. His target price for the stock is $27.

The Chesterfield, Mo.-based Insituform's core business is sewer rehabilitation, which accounts for over 75 percent of sales, and holds a dominant industry position in the United States and a leading role in Europe. [ more ]

Calgon Carbon Corp. (CCC) announced the relocation of its industrial reactivation operation and the processing of certain specialty activated carbons from its Columbus, Ohio facility to its Big Sandy plant in Catlettsburg, Kentucky. The company also announced the temporary idling of its reactivation facility in Blue Lake, California. The changes are being implemented to reduce operating costs.

Commenting on the announcement, John S. Stanik, Calgon Carbon's president and chief executive officer, said, "The consolidation of operations and associated strategic change to our service business is consistent with our re- engineering plan to optimize asset utilization, and should reduce operating costs by approximately $2 million." [ more ]

American States Water Company (AWR) announced that the California Public Utilities Commission ("CPUC") approved rate increases for Region II and Region I customer service areas of its Golden State Water Company ("GSWC") unit effective January 1, 2006. The authorized rate increases will provide GSWC additional annual revenues of approximately $5,168,500 for Region II and $537,300 for Region I. The increase for Region II represents the third year of a three-year General Rate Case increase approved by the CPUC in 2004. The increase in Region I is the second year of a three-year rate increase approved by the CPUC in 2005. [ more ]

AquaCell (AQUA.ob) nnounced today that its AquaCell Media subsidiary has expanded its water cooler advertising program beyond retail stores to hair salons and law offices.

Currently, the hair salons are carrying ads for the new CBS comedy "Courting Alex," while Esquire Deposition Service, a Hobart West company, will be advertising on the coolers installed in law offices. [ more ]

Calgon Carbon Corp. (CCC) saw its share price surge more than 15 percent on the New York Stock Exchange on Thursday. the company unveiled a new wastewater disinfection system, and on Wednesday was mentioned as a stock to watch by CNBC "Mad Money" host Jim Cramer. [ more ]

Connecticut Water Service Inc. (CTWS) announced that its Crystal Water Company of Danielson subsidiary has received approval from the Connecticut Department of Public Utility Control (DPUC) to raise rates 21.35 percent across the board. The DPUC decision allows the company a ten percent return on equity. The rate increase went into effect on December 28, 2005 and will increase revenues by approximately $600,000 per year. [ more ]

AquaCell (AQUA.ob) announced today that its AquaCell Media subsidiary has signed an agreement with Winn-Dixie Stores Inc. for installation of its patented self-filling water coolers. The roll out will be to 434 Winn-Dixie supermarkets with pharmacies. Winn-Dixie is one of the nation's largest food retailers, operating in a concentrated area in the southeastern United States. [ more ]

ZENON Enviornmental (ZNEVF.PK) received purchase orders in December to supply the company's new ZeeWeed 1000 version 3 membranes for three drinking water treatment plants. Among them is the Twin Oaks County project that the company announced earlier in October when ZENON was selected as the membrane supplier for the world's largest ultrafiltration plant. With construction underway, the plant is expected to be complete in the first half of 2008.

With the inclusion of these plants ZENON's installed water treatment capacity will exceed 2 billion gallons per day all over the world. [ more ]

For decades, water has been an extremely precious commodity in Israel. And over the years, the Jewish state has developed numerous technologies to deal with severe water shortages. Already, 60% of the country's sewage water is recycled, and in September, the world's largest desalination plant was opened along Israel's southern Mediterranean coast. Now, new ventures are sprouting up to develop technologies for a global market where demand is growing rapidly. Israel is looking to exploit its expertise and become a major player in the global market for water technology. [ more ]

Hendrx Corporation (HDRX.OB) announced the agreements to manufacture and deliver five of the Company's largest Atmospheric Water Generators in Hendrx's Big Blue product line. The Big Blue 5000, which produces 5,000 liters (1,320 gallons) of pure, healthy drinking water daily will be delivered to two countries in the Middle East; including Saudi Arabia and the United Arab Emirates. [ more ]