SJW
Sjw Group
NASDAQ
8-K: SJW Group Announces $200 Million At-the-Market Equity Offering
Sentiment:
Equity Offering Announcement
30 October 2024 6:38 AM
SJW Group has entered into an equity distribution agreement to potentially sell up to $200 million of its common stock through at-the-market offerings.
Capital raise
SJW Group has entered into an agreement to sell up to $200 million of its common stock.
The offering will be conducted through at-the-market sales.
The proceeds will be used for acquisitions, capital expenditures, debt repayment, and general corporate purposes.
Summary
- SJW Group has established an equity distribution agreement with several sales agents to offer and sell up to $200 million of its common stock.
- The shares will be sold through at-the-market offerings, which may include ordinary broker transactions on the New York Stock Exchange, sales at market prices, or negotiated prices.
- The sales agents will receive a commission of up to 2.0% of the gross proceeds from any shares sold through them.
- SJW Group is not obligated to sell any shares and can suspend solicitations at any time.
- The proceeds from the share sales will be used for potential future acquisitions, general corporate purposes, infrastructure improvements, capital expenditures, debt repayment, and working capital.
Sentiment
Score: 6
Explanation: The sentiment is neutral to slightly positive. The offering provides financial flexibility but also introduces potential dilution. It's a standard corporate finance activity.
Positives
- The agreement provides SJW Group with a flexible way to raise capital.
- The at-the-market offering allows the company to sell shares gradually, potentially minimizing market impact.
- The proceeds can be used for various strategic purposes, including acquisitions and infrastructure improvements.
Negatives
- The offering could dilute existing shareholders' ownership.
- There is no guarantee that the company will be able to sell all $200 million of shares.
- The company will incur costs associated with the offering, including sales agent commissions.
Risks
- The company may not be able to sell all the shares at the desired price.
- The offering could lead to a decrease in the company's stock price due to dilution.
- Market conditions could impact the success of the at-the-market offering.
- There is no guarantee that the company will be able to use the proceeds effectively.
Future Outlook
The company intends to use the proceeds from the offering for potential future acquisitions, general corporate purposes, infrastructure improvements, capital expenditures, debt repayment, and working capital.
Industry Context
At-the-market offerings are a common method for publicly traded companies to raise capital, providing flexibility and potentially minimizing market impact compared to traditional underwritten offerings. This is a common strategy for companies looking to fund growth or acquisitions.
Comparison to Industry Standards
- The 2% commission is within the typical range for at-the-market offerings.
- The use of multiple sales agents is a common practice to ensure broad market access.
- The stated use of proceeds is typical for companies seeking to grow through acquisitions and capital improvements.
- Other utility companies such as American Water Works and Essential Utilities have used similar at-the-market programs to raise capital.
Stakeholder Impact
- Shareholders may experience dilution of their ownership.
- The company may be able to pursue growth opportunities with the raised capital.
- Creditors may benefit from the potential debt repayment.
- Employees may benefit from the company's growth and stability.
Next Steps
- SJW Group will begin selling shares through the sales agents as market conditions allow.
- The company will monitor the progress of the offering and may adjust its strategy as needed.
- The company will use the proceeds for the stated purposes, including potential acquisitions and capital expenditures.
Key Dates
- October 29, 2024: Date of the Equity Distribution Agreement and prospectus supplement.
- October 30, 2024: Date the 8-K report was signed.
Keywords
equity offering, at-the-market, common stock, capital raise, SJW Group, dilution, acquisitions, infrastructure, debt repayment
SJW
Sjw Group
NASDAQ
Sector: Utilities
Filings with Classifications
Better than expected
29 April 2025 4:55 PM
Quarterly Report
- Net income increased by 41% due to rate increases in California and Connecticut.
Capital raise
29 April 2025 4:55 PM
Quarterly Report
- SJW Group issued and sold 495,900 shares of common stock with a weighted average price of $53.87 per share, receiving $26.545 million in net proceeds under the Equity Distribution Agreement.
- Since the inception of the Equity Distribution Agreement, SJW Group has issued and sold 871,413 shares of common stock at a weighted average price of $54.56 for a total net proceeds of $46,713 and has $152,460 of aggregate gross sales price of shares remaining to issue under the Equity Distribution Agreement as of March 31, 2025.
Better than expected
28 April 2025 5:15 PM
Earnings Release
- The company's net income, diluted EPS, and adjusted diluted EPS all showed significant increases compared to the same quarter last year, indicating better-than-expected performance.
- Operating revenue also increased by 12%, driven by rate increases and higher customer usage, further contributing to the better-than-expected results.
Capital raise
27 February 2025 11:00 PM
Annual Results
- SJW Group may offer and sell shares of its common stock, $0.001 par value per share, from time to time in at-the-market offerings, having an aggregate gross sales price of up to $200,000.
Better than expected
27 February 2025 12:38 AM
Annual Results
- SJW Group's 2024 adjusted diluted EPS of $2.95 exceeded the company's guidance.
Capital raise
30 October 2024 6:38 AM
Equity Offering Announcement
- SJW Group has entered into an agreement to sell up to $200 million of its common stock.
- The offering will be conducted through at-the-market sales.
- The proceeds will be used for acquisitions, capital expenditures, debt repayment, and general corporate purposes.
Capital raise
28 October 2024 5:16 PM
Quarterly Report
- SJW Group issued and sold 535,345 shares of common stock in the third quarter of 2024, generating $31.007 million in net proceeds.
- The company plans to raise approximately $35 million in long-term debt to pay down line of credit agreements, subject to market conditions.
- SJW Group intends to enter into a new equity distribution agreement to establish a new at-the-market offering program prior to the expiration of the current agreement on November 17, 2024.
Better than expected
28 October 2024 5:16 PM
Quarterly Report
- The company's net income increased by 7% year-over-year, exceeding expectations.
- Operating revenue increased by 10% year-over-year, indicating strong performance.
- The company's effective consolidated income tax rate was 5% for the three months ended September 30, 2024, lower than expected.
Better than expected
28 October 2024 9:02 AM
Quarterly Report
- The company's GAAP diluted EPS of $1.17 and adjusted diluted EPS of $1.18 for Q3 2024 both represent year-over-year increases, indicating better than expected performance.
Capital raise
25 July 2024 4:58 PM
Quarterly Report
- SJW Group issued 584,630 shares of common stock for net proceeds of $32.3 million under its equity distribution agreement during the six months ended June 30, 2024.
- SJW Group subsidiaries plan to raise approximately $160 million in long-term debt to pay down the line of credit agreements during the balance of 2024.
Better than expected
25 July 2024 4:58 PM
Quarterly Report
- The company's net income and revenue growth exceeded expectations due to rate increases and customer growth.
Better than expected
24 July 2024 8:34 PM
Quarterly Report
- The company's second quarter results exceeded expectations with a 13% increase in net income and a 14% increase in adjusted net income compared to the same period last year.
- The company also increased its full year EPS guidance, indicating a positive outlook for the remainder of the year.
Delay expected
24 June 2024 5:40 PM
SEC Form 4 Filing
- 51 shares of Common Stock that were acquired as reinvested dividends and which were inadvertently excluded due to an administrative error.
Capital raise
26 April 2024 5:27 PM
Quarterly Report
- In March 2023, SJW Group entered into Amendment No. 1 to the equity distribution agreement, dated November 17, 2021, between SJW Group and J.P. Morgan Securities LLC, Janney Montgomery Scott LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC, pursuant to which the company may offer and sell shares of its common stock, $0.001 par value per share, from time to time in at-the-market offerings, having an aggregate gross sales price of up to $240,000.
- For the three months ended March 31, 2024, SJW Group issued and sold a total of 126,025 shares of common stock with a weighted average price of $57.13 per share and received $7,006 in net proceeds under the Equity Distribution Agreement.
- Since the inception of the Equity Distribution Agreement, SJW Group has issued and sold 2,130,682 shares of common stock at a weighted average price of $72.60 for a total net proceeds of $151,004 and has $85,309 remaining under the Equity Distribution Agreement to issue into shares.
Delay expected
26 April 2024 5:27 PM
Quarterly Report
- SJWC's Saratoga Water Treatment Plant remains offline until the updated operations plan is granted approval by the California Division of Drinking Water.
Worse than expected
25 April 2024 8:04 PM
Quarterly Report
- The diluted earnings per share decreased by 3% compared to the same quarter last year, indicating a slight underperformance in profitability.
Delay expected
25 April 2024 8:04 PM
Quarterly Report
- San Jose Water received approval for a one-year deferment in their 2024 Cost of Capital (COC) filings to May 1, 2025.
Capital raise
22 February 2024 8:15 PM
Annual Results
- SJW Group issued $70 million in new long-term debt and $80.659 million in equity in 2023.
- The company has a remaining $92.509 million under the Equity Distribution Agreement to issue into shares.
Better than expected
22 February 2024 8:15 PM
Annual Results
- The company's net income increased by 15% year-over-year, indicating better than expected financial performance.
Delay expected
21 February 2024 9:00 PM
Annual Results
- The fourth quarter results were affected by the delayed decision in San Jose Water Company's 2022 general rate case (GRC) proceeding.
Better than expected
21 February 2024 9:00 PM
Annual Results
- The company's 2023 earnings per share of $2.68 exceeded the initial guidance of $2.40 to $2.50 and was in line with the updated guidance of $2.65 to $2.70.
- SJW Group's infrastructure investments of $272 million surpassed the 2023 guidance of $255 million.
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