• Net income was $3.5 million, or $0.37 per share, for the quarter ended June 30, 2011, compared to $3.3 million, or $0.35 per share, for the quarter ended June 30, 2010.
  • Customer growth in the natural gas distribution operations and continued expansion of its transmission system generated $1.6 million of additional gross margin.
  • Improved margins from the propane distribution and wholesale marketing operations added $972,000 to gross margin.

Dover, Delaware — Chesapeake Utilities Corporation (NYSE: CPK) today announced increased financial results for the quarter ended June 30, 2011. The Company’s net income for the quarter ended June 30, 2011 was $3.5 million, or $0.37 per share, an increase in net income of $200,000, or $0.02 per share, over net income of $3.3 million, or $0.35 per share, for the quarter ended June 30, 2010. The higher earnings for the second quarter of 2011 reflect additional margins generated from continued growth of the Company’s natural gas distribution and transmission operations on the Delmarva Peninsula and in Florida and increased margins in its propane distribution and wholesale marketing operations. These increases more than offset one-time charges associated with a voluntary workforce reduction in Florida of $549,000 and $341,000 in additional costs related to the roll-out and initial implementations of a new product, ProfitZoomTM, by the Company’s advanced information services subsidiary.

On a year-to-date basis, the Company reported net income of $17.3 million for the six months ended June 30, 2011, or $1.79 per share. The year-to-date net income in 2011 decreased slightly by $47,000, compared to the same period in 2010, and earnings per share declined by $0.03 per share due to additional shares outstanding in 2011. The combined effect of continued growth and expansion of the Company’s natural gas business, increased margins per gallon in its propane distribution operations, a one-time gain related to proceeds from a propane supply litigation settlement, and lower interest expense largely offset the effects of warmer temperatures during the recent heating season both on the Delmarva Peninsula and in Florida. These warmer temperatures reduced customer consumption of natural gas and propane, as compared to the previous heating season.

“Our strong performance in the second quarter of 2011 reflects our ongoing commitment to serve new markets safely, reliably and cost effectively while maintaining operational excellence in our regulated operations and successfully executing our business plans in our unregulated energy segment,” stated Michael P. McMasters, President and Chief Executive Officer of Chesapeake Utilities Corporation. “Our continuing commitment to further extend our natural gas systems to customers and communities seeking such service has positioned us well for future growth in spite of the challenging economic conditions we face. We are moving forward on the Delmarva Peninsula to extend our services to southern Delaware and Cecil and Worcester Counties in Maryland. We are also pursuing multiple growth opportunities throughout our Florida energy operations and are working diligently to transform these opportunities into value added services. We have taken steps to further integrate our Florida operations and expect to see additional cost savings there in the second half of the year. We have substantially completed the development of the ProfitZoomTM product and are excited about its sales prospects. All of these opportunities position our Company for continued long-term growth.”

The discussions of the results for the periods ended June 30, 2011 and 2010, use the term “gross margin,” a non-Generally Accepted Accounting Principles (“GAAP”) financial measure, which management uses to evaluate the performance of the Company’s business segments. For an explanation of the calculation of “gross margin,” see the footnote to the Supplemental Income Statement Data chart.

Unless otherwise noted, earnings per share information is presented on a diluted basis.

Highlights for the second quarter of 2011 included:

  • Eastern Shore Natural Gas Company (“Eastern Shore”), the Company’s natural