Consolidated Water Co. Ltd. (NASDAQ Global Select Market: CWCO), a
leading developer and operator of advanced water supply and
treatment plants, reported results for the first quarter ended
March 31, 2023. All comparisons are to the same prior year period
unless otherwise noted.
The company will hold a conference call at 11:00 a.m. Eastern
time tomorrow to discuss the results (see dial-in information
below).
First Quarter 2023 Financial Highlights
- Total revenue increased 68% to $32.9
million.
- Retail revenue increased 23% to $7.8
million.
- Bulk revenue increased 22% to $9.0
million.
- Services revenue increased 168% to
$12.7 million.
- Manufacturing revenue increased to
$3.4 million.
- Net income from continuing
operations attributable to company stockholders was $4.1 million or
$0.26 per basic and fully diluted share, up 75% from $2.3 million
or $0.15 per basic and diluted share in the same year-ago
period.
- Paid quarterly cash dividend of
$0.085 per share ($0.34 on an annualized basis).
- Cash and cash equivalents totaled
$51.1 million as of March 31, 2023, up from $50.7 million as of
December 31, 2022.
First Quarter 2023 Operational Highlights
- Volume of water sold in Grand Cayman
retail segment increased 20% primarily due to increased tourist
activity on Grand Cayman as tourism in 2022 was lower than
historical levels due to the lingering impact of the COVID-19
pandemic.
- Acquired remaining 39% interest to
become 100% owner of PERC Water, the company’s subsidiary that
develops, designs, builds, operates and manages water
infrastructure facilities in the Southwestern U.S.
- Recognized $6.4 million in revenue
from PERC Water’s progress on the construction of an $82 million
advanced water treatment plant in Goodyear, Arizona.
- PERC Water advanced commissioning
and startup for The City of Santa Monica Sustainable Water
Infrastructure Project, which is to provide a drought resilient
water supply to the city from one of the world’s most advanced
water treatment facilities.
Management Commentary
“In Q1, our 68% increase in revenue to $32.9 million was driven
by another quarter of strong growth across all of our business
segments, with this reflecting a return to normalcy post-pandemic
that helped drive increased activity and output across the board,”
commented Consolidated Water CEO, Rick McTaggart. “Our retail water
revenue growth was due to a 20% increase in the volume of water
sold in Grand Cayman. About a quarter of the increase was due to
direct water sales to the island’s water authority, with the rest
attributed to the continued return of tourist activity.
“Now that the pandemic effects have abated, we expect retail
water sales to return to normal seasonal patterns, with sales
typically lower during periods of higher rainfall and decreased
tourism. Historically, these lower sales periods are from May
through early November, while peak sales have historically been
from December through April.
“$6.4 million of the increase in our services segment revenue in
the quarter was due to the progress our PERC Water subsidiary has
made on its construction of an $82 million advanced water treatment
plant in Goodyear, Arizona that we announced about a year ago.
Progress on the construction continues as planned, and we
anticipate recognizing significant additional revenue from this
project until construction, commissioning and startup is completed
in mid-2024.
“In January, we acquired the remaining 39% interest in our PERC
Water subsidiary which focuses on the development, design,
building, operations and management of water infrastructure
facilities in the Southwestern U.S. After we acquired our initial
controlling interest in PERC in 2019, we strengthened its
capabilities and resources. This has resulted in greater financial
and operational performance that has far exceeded our
expectations.
“PERC’s strong operating performance, revenue growth and
synergies with other areas of our business have significantly
improved our top and bottom-line results and enhanced shareholder
value. Its strong operational presence in the Southwestern U.S., a
region that urgently needs new fresh water sources due to
unprecedented drought conditions, also positions us for further
growth in this important segment of our business.
“During the quarter, PERC continued the commissioning and
startup of the Sustainable Water Infrastructure Project (SWIP) in
Santa Monica, California, and it has been contracted to operate the
facility for the city over the next two years. Considered one of
the most advanced water treatment facilities in the world, it is a
great example of how we remain at the forefront of the
industry.
“The revenue we recognized from the design and ongoing
construction of the Red Gate desalination plant for the Water
Authority of the Cayman Islands also contributed to our
year-over-year increase in services segment revenue. During the
quarter, construction in progress increased by approximately $1.2
million, primarily due to construction activity on Cayman Water’s
new West Bay desalination plant which replaces a 30-year-old plant
and will supplement the production capacity for our retail water
business in Grand Cayman.
“We were pleased to see continued year-over-year growth in our
manufacturing segment revenue. During the quarter, we saw some
relief from supply chain constraints and challenging economic
conditions, allowing us to advance more of our order backlog
through the manufacturing and billing process.
“Over the last couple of years, we have diversified our
manufacturing base in terms of customer concentration and type of
products, and we believe this will continue to provide greater
consistency in future results. We have also seen some business
return from our historically largest manufacturing customer, which
had been suspended last year. In all, we expect improved results
for our manufacturing business and see continued growth
opportunities.
“Looking ahead, we remain very optimistic about our further
growth for numerous reasons, including the continued recovery of
tourism in Grand Cayman, our ongoing construction projects underway
there and in the U.S., and the increased project bidding activity
we are seeing in the U.S. and the Caribbean.
“We also anticipate that the more than $150 million in major
multi-year projects that we secured in 2022 will have an increasing
positive impact on our earnings in future quarters. We believe our
recent activities and successes, and current trends in our markets,
represent strong catalysts for continued growth, increasing
profitability, and further strengthening of shareholder value.”
First Quarter 2023 Financial Summary
Revenue for the first quarter of 2023 totaled $32.9 million, up
68% compared to $19.6 million in the same year-ago period. The
increase was driven by increases of $1.5 million in the retail
segment, $1.7 million in the bulk segment, $8.0 million in the
services segment and $2.2 million in the manufacturing segment.
Retail revenue increased primarily due to a 20% increase in the
volume of water sold, as well as the result of higher energy costs
that increased the energy pass-through component of the company’s
water rates and a more favorable rate mix.
The increase in bulk segment revenue was due to an increase in
energy costs for CW-Bahamas, which increased the energy
pass-through component of CW-Bahamas’ rates, as well as a 9%
increase in the volume of water sold.
The increase in services segment revenue was due to an increase
in plant design and construction revenue, with most of the revenue
increase resulting from PERC Water’s progress on its contract with
Liberty Utilities for the construction of a water treatment plant
in Goodyear, Arizona. The company recognized approximately $6.4
million in revenue for the Liberty Utilities contract in the first
quarter of 2023.
The increase in manufacturing segment revenue was due to
increased production activity.
Gross profit for the first quarter of 2023 was $10.6 million or
32.1% of total revenue, up 48% from $7.1 million or 36.5% of total
revenue for the same year-ago period.
Net income from continuing operations attributable to
stockholders for the first quarter of 2023 was $4.1 million or
$0.26 per basic and diluted share, compared to net income of $2.3
million or $0.15 per basic and diluted share for the same year-ago
period.
Net income attributable to Consolidated Water stockholders for
the first quarter of 2023, which includes the results of
discontinued operations, was $3.8 million or $0.24 per basic and
fully diluted share, up from a net income of $1.7 million or $0.11
per basic and fully diluted share for the same year-ago period.
Cash and cash equivalents totaled $51.1 million as of March 31,
2023, as compared to $50.7 million as of December 31, 2022, with
working capital at $70.6 million, debt of $0.3 million, and
stockholders’ equity totaling $163.8 million.
First Quarter Segment Results
|
|
Three Months Ended March 31, 2023 |
|
|
Retail |
|
Bulk |
|
Services |
|
Manufacturing |
|
Total |
Revenue |
|
$ |
7,771,095 |
|
|
$ |
9,004,373 |
|
$ |
12,721,701 |
|
$ |
3,371,821 |
|
$ |
32,868,990 |
|
Cost of
revenue |
|
|
3,550,794 |
|
|
|
6,243,146 |
|
|
10,044,078 |
|
|
2,471,890 |
|
|
22,309,908 |
|
Gross
profit |
|
|
4,220,301 |
|
|
|
2,761,227 |
|
|
2,677,623 |
|
|
899,931 |
|
|
10,559,082 |
|
General
and administrative expenses |
|
|
4,177,107 |
|
|
|
352,975 |
|
|
1,088,672 |
|
|
417,908 |
|
|
6,036,662 |
|
(Loss)
gain on asset dispositions and impairments, net |
|
|
(7,287 |
) |
|
|
11,270 |
|
|
— |
|
|
1,933 |
|
|
5,916 |
|
Income
from operations |
|
$ |
35,907 |
|
|
$ |
2,419,522 |
|
$ |
1,588,951 |
|
$ |
483,956 |
|
|
4,528,336 |
|
Other
income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
157,059 |
|
Income
before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,685,395 |
|
Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
449,485 |
|
Net income from continuing
operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,235,910 |
|
Income from continuing
operations attributable to non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
163,121 |
|
Net
income from continuing operations attributable to Consolidated
Water Co. Ltd. stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,072,789 |
|
Net loss
from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(259,163 |
) |
Net income attributable to
Consolidated Water Co. Ltd. stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,813,626 |
|
|
|
Three Months Ended March 31, 2022 |
|
|
Retail |
|
Bulk |
|
Services |
|
Manufacturing |
|
Total |
Revenue |
|
$ |
6,313,200 |
|
|
$ |
7,350,644 |
|
$ |
4,743,820 |
|
$ |
1,150,241 |
|
|
$ |
19,557,905 |
|
Cost of
revenue |
|
|
3,053,740 |
|
|
|
4,687,119 |
|
|
3,649,180 |
|
|
1,022,102 |
|
|
|
12,412,141 |
|
Gross
profit |
|
|
3,259,460 |
|
|
|
2,663,525 |
|
|
1,094,640 |
|
|
128,139 |
|
|
|
7,145,764 |
|
General
and administrative expenses |
|
|
3,450,406 |
|
|
|
310,303 |
|
|
779,974 |
|
|
325,434 |
|
|
|
4,866,117 |
|
Gain on
asset dispositions and impairments, net |
|
|
— |
|
|
|
— |
|
|
12,458 |
|
|
— |
|
|
|
12,458 |
|
Income
(loss) from operations |
|
$ |
(190,946 |
) |
|
$ |
2,353,222 |
|
$ |
327,124 |
|
$ |
(197,295 |
) |
|
|
2,292,105 |
|
Other
income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
319,727 |
|
Income
before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,611,832 |
|
Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,273 |
|
Net
income from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,565,559 |
|
Income
attributable to non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
241,430 |
|
Net
income from continuing operations attributable to Consolidated
Water Co. Ltd. stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,324,129 |
|
Net loss
from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(607,314 |
) |
Net
income attributable to Consolidated Water Co. Ltd.
stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,716,815 |
|
Conference Call
Consolidated Water management will host a conference call
tomorrow to discuss these results, followed by a
question-and-answer period.
Date: Tuesday, May 16, 2023Time: 11:00 a.m. Eastern time (8:00
a.m. Pacific time)Toll-free dial-in number:
1-844-875-6913International dial-in number:
1-412-317-6709Conference ID: 2665450
Please call the conference telephone number five minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact CMA at 1-949-432-7566.
A replay of the call will be available after 1:00 p.m. Eastern
time on the same day through May 23, 2023, as well as available for
replay via the Investors section of the Consolidated Water website
at www.cwco.com.
Toll-free replay number: 1-877-344-7529International replay
number: 1-412-317-0088Replay ID: 2665450
About Consolidated Water Co. Ltd.Consolidated
Water Co. Ltd. develops and operates advanced water treatment
plants and water distribution systems. The company designs, builds
and operates seawater desalination facilities in the Cayman
Islands, The Bahamas and the British Virgin Islands, and designs,
builds and operates water treatment and reuse facilities in the
United States. The company also manufactures and services a wide
range of products and provides design, engineering, management,
operating and other services applicable to commercial and municipal
water production, supply and treatment, and industrial water and
wastewater treatment. For more information,
visit www.cwco.com.
Cautionary Note Regarding Forward-Looking
StatementsThis press release includes statements that may
constitute "forward-looking" statements, usually containing the
words "believe", "estimate", "project", "intend", "expect",
"should", "will" or similar expressions. These statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements
inherently involve risks and uncertainties that could cause actual
results to differ materially from the forward-looking statements.
Factors that would cause or contribute to such differences include,
but are not limited to (i) continued acceptance of the company's
products and services in the marketplace; (ii) changes in its
relationships with the governments of the jurisdictions in which it
operates; (iii) the outcome of its negotiations with the Cayman
government regarding a new retail license agreement; (iv) the
collection of its delinquent accounts receivable in the Bahamas;
and (v) various other risks, as detailed in the company's periodic
report filings with the Securities and Exchange Commission (“SEC”).
For more information about risks and uncertainties associated with
the company’s business, please refer to the “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” and “Risk Factors” sections of the company’s SEC
filings, including, but not limited to, its annual report on Form
10-K and quarterly reports on Form 10-Q, copies of which may be
obtained by contacting the company’s Secretary at the company’s
executive offices or at the “Investors – SEC Filings” page of the
company’s website at http://ir.cwco.com/docs. Except as otherwise
required by law, the company undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise.Company
Contact:David W. SasnettExecutive Vice President and
CFOTel (954) 509-8200Email ContactInvestor Relations
ContactRon Both or Grant StudeCMA Investor RelationsTel
(949) 432-7566Email ContactMedia & ESG
Contact:Tim RandallCMA Media RelationsTel (949)
432-7572Email Contact
CONSOLIDATED WATER CO. LTD.CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
|
2023 |
|
|
2022 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
51,104,268 |
|
$ |
50,711,751 |
|
Accounts receivable, net |
|
|
29,550,063 |
|
|
27,046,182 |
|
Inventory |
|
|
9,087,365 |
|
|
5,727,842 |
|
Prepaid expenses and other current assets |
|
|
5,245,208 |
|
|
5,643,279 |
|
Contract assets |
|
|
6,127,587 |
|
|
2,913,722 |
|
Current assets of discontinued operations |
|
|
369,361 |
|
|
531,480 |
|
Total current
assets |
|
|
101,483,852 |
|
|
92,574,256 |
|
Property, plant and equipment,
net |
|
|
51,484,484 |
|
|
52,529,545 |
|
Construction in progress |
|
|
4,861,263 |
|
|
3,705,681 |
|
Inventory, noncurrent |
|
|
4,750,701 |
|
|
4,550,987 |
|
Investment in OC-BVI |
|
|
1,292,163 |
|
|
1,545,430 |
|
Goodwill |
|
|
10,425,013 |
|
|
10,425,013 |
|
Intangible assets, net |
|
|
2,682,222 |
|
|
2,818,888 |
|
Operating lease right-of-use
assets |
|
|
1,935,737 |
|
|
2,058,384 |
|
Other assets |
|
|
1,567,625 |
|
|
1,669,377 |
|
Long-term assets of
discontinued operations |
|
|
21,129,288 |
|
|
21,129,288 |
|
Total
assets |
|
$ |
201,612,348 |
|
$ |
193,006,849 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other current
liabilities |
|
$ |
9,798,095 |
|
$ |
8,438,315 |
|
Accounts payable - related parties |
|
|
— |
|
|
403,839 |
|
Accrued compensation |
|
|
2,858,268 |
|
|
2,267,583 |
|
Dividends payable |
|
|
1,410,522 |
|
|
1,375,403 |
|
Current maturities of operating leases |
|
|
538,281 |
|
|
546,851 |
|
Current portion of long-term debt |
|
|
114,964 |
|
|
114,964 |
|
Contract liabilities |
|
|
15,499,160 |
|
|
8,803,921 |
|
Deferred revenue |
|
|
306,256 |
|
|
315,825 |
|
Current liabilities of discontinued operations |
|
|
347,928 |
|
|
389,884 |
|
Total current
liabilities |
|
|
30,873,474 |
|
|
22,656,585 |
|
Long-term debt,
noncurrent |
|
|
188,899 |
|
|
216,117 |
|
Deferred tax liabilities |
|
|
522,655 |
|
|
560,306 |
|
Noncurrent operating
leases |
|
|
1,457,466 |
|
|
1,590,542 |
|
Other liabilities |
|
|
147,067 |
|
|
219,110 |
|
Total
liabilities |
|
|
33,189,561 |
|
|
25,242,660 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Consolidated Water Co. Ltd.
stockholders' equity |
|
|
|
|
|
|
|
Redeemable preferred stock, $0.60 par value. Authorized 200,000
shares; issued and outstanding 34,383 and 34,383 shares,
respectively |
|
|
20,630 |
|
|
20,630 |
|
Class A common stock, $0.60 par value. Authorized 24,655,000
shares; issued and outstanding 15,736,041 and 15,322,875 shares,
respectively |
|
|
9,441,625 |
|
|
9,193,725 |
|
Class B common stock, $0.60 par value. Authorized 145,000 shares;
none issued |
|
|
— |
|
|
— |
|
Additional paid-in capital |
|
|
90,648,430 |
|
|
89,205,159 |
|
Retained earnings |
|
|
63,719,310 |
|
|
61,247,699 |
|
Total Consolidated Water Co.
Ltd. stockholders' equity |
|
|
163,829,995 |
|
|
159,667,213 |
|
Non-controlling interests |
|
|
4,592,792 |
|
|
8,096,976 |
|
Total
equity |
|
|
168,422,787 |
|
|
167,764,189 |
|
Total liabilities and
equity |
|
$ |
201,612,348 |
|
$ |
193,006,849 |
|
CONSOLIDATED WATER CO. LTD.CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
$ |
32,868,990 |
|
|
$ |
19,557,905 |
|
Cost of
revenue (including purchases from related parties of $- in
2023 and $839,432 in 2022) |
|
|
22,309,908 |
|
|
|
12,412,141 |
|
Gross
profit |
|
|
10,559,082 |
|
|
|
7,145,764 |
|
General and administrative
expenses (including purchases from related parties of $- in 2023
and $24,231 in 2022) |
|
|
6,036,662 |
|
|
|
4,866,117 |
|
Gain on asset dispositions and
impairments, net |
|
|
5,916 |
|
|
|
12,458 |
|
Income from
operations |
|
|
4,528,336 |
|
|
|
2,292,105 |
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
Interest income |
|
|
113,644 |
|
|
|
180,687 |
|
Interest expense |
|
|
(37,844 |
) |
|
|
(4,081 |
) |
Profit-sharing income from OC-BVI |
|
|
14,175 |
|
|
|
10,125 |
|
Equity in the earnings of OC-BVI |
|
|
35,558 |
|
|
|
31,766 |
|
Net gain on put/call options |
|
|
— |
|
|
|
75,000 |
|
Other |
|
|
31,526 |
|
|
|
26,230 |
|
Other income,
net |
|
|
157,059 |
|
|
|
319,727 |
|
Income before income
taxes |
|
|
4,685,395 |
|
|
|
2,611,832 |
|
Provision for income
taxes |
|
|
449,485 |
|
|
|
46,273 |
|
Net income from
continuing operations |
|
|
4,235,910 |
|
|
|
2,565,559 |
|
Income from continuing
operations attributable to non-controlling interests |
|
|
163,121 |
|
|
|
241,430 |
|
Net income from
continuing operations attributable to Consolidated Water Co. Ltd.
stockholders |
|
|
4,072,789 |
|
|
|
2,324,129 |
|
Total loss from
discontinued operations |
|
|
(259,163 |
) |
|
|
(607,314 |
) |
Net income
attributable to Consolidated Water Co. Ltd.
stockholders |
|
$ |
3,813,626 |
|
|
$ |
1,716,815 |
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share attributable to Consolidated Water Co. Ltd. common
stockholders |
|
|
|
|
|
|
Continuing
operations |
|
$ |
0.26 |
|
|
$ |
0.15 |
|
Discontinued
operations |
|
|
(0.02 |
) |
|
|
(0.04 |
) |
Basic earnings per
share |
|
$ |
0.24 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per common share attributable to Consolidated Water Co. Ltd.
common stockholders |
|
|
|
|
|
|
Continuing
operations |
|
$ |
0.26 |
|
|
$ |
0.15 |
|
Discontinued
operations |
|
|
(0.02 |
) |
|
|
(0.04 |
) |
Diluted earnings per
share |
|
$ |
0.24 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
Dividends declared per common and redeemable preferred
shares |
|
$ |
0.085 |
|
|
$ |
0.085 |
|
|
|
|
|
|
|
|
Weighted average
number of common shares used in the determination of: |
|
|
|
|
|
|
Basic earnings per share |
|
|
15,723,595 |
|
|
|
15,285,523 |
|
Diluted earnings per share |
|
|
15,888,028 |
|
|
|
15,435,691 |
|
Consolidated Water (NASDAQ:CWCO)
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De Abr 2024 a May 2024
Consolidated Water (NASDAQ:CWCO)
Gráfica de Acción Histórica
De May 2023 a May 2024