Pennichuck Corporation (the ?Company?) today announced that for its fourth quarter ended December 31, 2006, it earned $452,000, or $.11 per share, compared with net income of $22,000, or $.01 per share, for the same quarter in 2005. The fourth quarter 2006 increase in earnings was due to lower eminent domain defense costs, higher amounts of allowance for funds used during construction (?AFUDC?), and an increase in other income (attributable to the sale of a cell tower lease and the receipt of an insurance settlement payment), offset in part by lower water utility operating income. Fourth quarter 2006 water utility operating income was down due to the combined effects of higher operating expenses and lower water usage compared to the same period in 2005.

Commenting on the results for the quarter and reiterating his last quarter remarks, Duane C. Montopoli, Pennichuck's President and Chief Executive Officer, said, ?While no assurance can be given as to the final outcome of any rate increase filing until final order by the New Hampshire Public Utilities Commission (?NHPUC?), higher operating expenses of the types we have experienced are, in part, included in Pennichuck Water's current rate relief filing and, in part, are expected to be included in future rate relief filings.? He added that, ?No portion of the eminent domain defense costs incurred to date have been charged or allocated to the Company's three utilities.?

Eminent domain defense costs for the fourth quarter were $338,000 as compared to $789,000 for the same period last year. For the full year 2006, eminent domain defense costs totaled $2.4 million, unchanged from the full year 2005 amount. As previously disclosed, shortly after commencing a hearing before the NHPUC in January 2007 to determine the merits of the City of Nashua's eminent domain case, Pennichuck and the City announced a 120-day postponement of proceedings in order to engage in confidential discussions regarding a possible comprehensive settlement of their dispute. While a settlement could involve Nashua's acquisition of some or all of the assets of Pennichuck or one or more of its subsidiaries, or alternatively the shares of Pennichuck stock, no assurance can be given that the parties will be able to negotiate a mutually acceptable settlement. The discussions are currently ongoing.

For the full year 2006, Pennichuck earned $570,000, or $.14 per share, compared with earnings of $477,000, or $.13 per share, for 2005. The increase in earnings for the full year was attributable to higher amounts of AFUDC and other income (as described above), partially offset by a decrease in water utility operating income. Full year 2006 water utility operating income was down due to the combined effects of higher operating expenses and lower water usage, the latter due principally to 2006 weather patterns.

Consolidated revenues for the fourth quarter of 2006 were $6.1 million compared to $5.8 million for the same quarter in 2005. Consolidated revenues for the full year 2006 were $24.5 million as compared to $23.9 million for 2005. Revenues for both the fourth quarter and full year were higher due to rate relief granted during 2006 to the Company's Pennichuck Water and Pennichuck East water utility subsidiaries. Additionally, the Company experienced 5.1% combined water utility customer growth during 2006, resulting in a total combined customer base of approximately 32,100 at December 31, 2006.

Revenues from the Company's non-regulated water service business increased to $2.3 million for the full year 2006 compared to $2.1 million in 2005. The non-regulated water service business activities include providing contract operations and maintenance, water testing and billing services to four municipalities as well as a number of small, privately owned community water systems. The increase in contract revenues over the same period last year is principally due to the addition of a municipal service contract pursuant to which, during the first quarter of 2006, the Company began providing water services to the Town of Hyannis, MA for a two year period.

The Company's annual meeting of shareholders will be held at 9:00 am on Thursday, May 3, 2007 at the Nashua Marriott Hotel. The Board of Directors has fixed the close of business on Monday, March 5, 2007 as the record date for the determination of shareholders entitled to notice of, and to vote at, the annual meeting.

Pennichuck Corporation is a holding company involved principally in the supply and distribution of potable water in southern and central New Hampshire through its three regulated water utilities. Its non-regulated, water-related activities include operations and maintenance contracts with municipalities and private entities in New Hampshire and Massachusetts. The Company's real estate operations are involved in the ownership, management and development of real estate in the greater Nashua, New Hampshire areas.

Pennichuck Corporation's common stock trades on the Nasdaq Stock Exchange under the symbol "PNNW". The Company's website is at www.pennichuck.com.

This news release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Pennichuck Corporation. Forward-looking statements are based on current information and expectations available to management at the time the statements are made, and are subject to various factors, risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, timing and results of eminent domain proceedings before the NHPUC, and the impact thereof on consolidated business operations; timing and amount of regulated water utility rate relief; changes in general economic conditions, legislation or regulation and accounting factors affecting Pennichuck Corporation's financial condition and results of operations; and, the impact of weather. Investors are encouraged to access Pennichuck Corporation's annual and quarterly periodic reports filed with the Securities and Exchange Commission for financial and business information regarding Pennichuck Corporation, including a more detailed discussion of these and other risks and uncertainties that could affect Pennichuck Corporation's forward-looking statements.

Pennichuck Corporation
Comparative Operating Results
 
Quarter Ended December 31: 2006  2005 
Consolidated Revenues $6,130,000  $5,812,000 
Operating Income $746,000  $1,265,000 
Net Income $ 452,000  $ 22,000 
Earnings Per Share:
Basic $.11  $.01 
Diluted $.11  $.01 
Average Shares Outstanding:
Basic 4,212,948  4,188,917 
Diluted 4,220,997  4,205,436 
Full Year Ended December 31: 2006  2005 
Consolidated Revenues $24,481,000  $23,864,000 
Operating Income $3,653,000  $4,831,000 
Net Income $570,000  $477,000 
Earnings Per Share:
Basic $.14  $.13 
Diluted $.14  $.13 
Average Shares Outstanding:
Basic 4,204,857  3,703,412 
Diluted 4,215,724  3,709,962