GEORGE TOWN, Cayman Islands, May 10, 2018 /PRNewswire/ -- Consolidated Water Co. Ltd. (NASDAQ: CWCO), a leading developer and operator of seawater desalination plants, reported financial and operating results for its first quarter ended March 31, 2018.
Management Commentary
President and CEO Rick McTaggart commented: "Our core desalination business in the first quarter of 2018 remained consistent and in line with our expectations. A highlight was the strong performance of our Bulk segment, which experienced a 7% sales increase year-over-year due to higher volumes and energy pass-through charges in the Bahamas. Revenues in our Retail segment remained stable year-on-year as slightly higher sales volumes were offset by a shift in the sales mix to larger customers in Grand Cayman with a lower effective water rate.
"The timing of order bookings and the allocation of a portion of our manufacturing capacity to internal component production resulted in lower first quarter comparisons in our manufacturing segment. Our manufacturing operations produced approximately $700,000 worth of components for the refurbishment of our Bahamas Windsor plant. This project and the expansion of our Governor's Harbour plant in Grand Cayman resulted in higher capital expenditures in the first quarter but will lead to improved efficiencies for these plants," Mr. McTaggart noted.
First Quarter 2018 Financial Results
Total revenues for the first quarter of 2018 were $15.3 million, compared to $15.7 million in the first quarter of 2017. Gross profit amounted to $6.6 million, compared to $6.8 million in the year ago quarter. Inclusive of $0.7 millionRosarito-related expenses, net income attributable to Consolidated Water stockholders was $2.1 million, or $0.14 per fully diluted share, compared to $2.6 million, or $0.18 per fully diluted share, reported in last year's first quarter.
Net cash provided by operating activities was $0.7 million, a significant improvement when compared to last year's $0.7 million of negative operating cash flow. Capital expenditures amounted to $2.9 million. Cash and cash equivalents were $43.7 million as of March 31, 2018.
Segment Results
|
| Three Months Ended March 31, 2018 (Unaudited) |
|
|
| Retail |
|
| Bulk |
|
| Services |
|
| Manufacturing |
|
| Total |
|
Revenues |
| $ | 6,431,348 |
|
| $ | 8,228,515 |
|
| $ | 123,764 |
|
| $ | 552,768 |
|
| $ | 15,336,395 |
|
Cost of revenues |
|
| 2,761,554 |
|
|
| 5,396,591 |
|
|
| 134,871 |
|
|
| 438,861 |
|
|
| 8,731,877 |
|
Gross profit (loss) |
| $ | 3,669,794 |
|
| $ | 2,831,924 |
|
| $ | (11,107) |
|
| $ | 113,907 |
|
| $ | 6,604,518 |
|
|
|
|
|
|
|
|
|
|
| Three Months Ended March 31, 2017 (Unaudited) |
|
|
| Retail |
|
| Bulk |
|
| Services |
|
| Manufacturing |
|
| Total |
|
Revenues |
| $ | 6,476,604 |
|
| $ | 7,690,402 |
|
| $ | 130,252 |
|
| $ | 1,379,848 |
|
| $ | 15,677,106 |
|
Cost of revenues |
|
| 2,684,286 |
|
|
| 5,015,789 |
|
|
| 102,166 |
|
|
| 1,041,297 |
|
|
| 8,843,538 |
|
Gross profit |
| $ | 3,792,318 |
|
| $ | 2,674,613 |
|
| $ | 28,086 |
|
| $ | 338,551 |
|
| $ | 6,833,568 |
|
Summary and Outlook
"Our first quarter laid the groundwork for successes to come in the remainder of 2018.
- The financial results from our core retail and bulk operations will continue to provide a solid foundation for other initiatives, and our capital expenditures in 2018 for these businesses will ensure their ongoing efficiency and reliability.
- Our manufacturing segment is anticipated to experience year-over-year revenue growth for the remainder of the year due to a significant pickup in orders during the first quarter from both existing and new customers.
- We will continue our progress with respect to the Rosarito project. In the first quarter, we executed a subscription agreement for the equity funding of Rosarito with SUEZ, a global leader in water treatment, and Greenfield, an affiliate of a leading U.S. asset management firm. The aggregate funding to be provided in the form of equity and subordinated shareholder loans is presently estimated at approximately 20% of the total cost of Phase 1 of the Project. NSC expects to generate a portion of its funding for AdR through the sale to AdR of the land it has purchased for the Project. Going forward, we expect to complete the negotiation and execution of the debt financing agreements and be able to obtain all outstanding permits from the federal, state and municipal authorities.
"Given our strong balance sheet and cash position supporting our growth opportunities and dividend payments, our capital allocation priorities remain the same," Mr. McTaggart concluded.
Investor Conference Call
The Company will host a conference call at 11:00 a.m. Eastern Time (EDT) on Friday, May 11, 2018 to review the Company's operating results for the first quarter of 2018, along with other relevant topics of interest. Shareholders and other interested parties may participate in the conference call by dialing 844-875-6913 (international participants dial 412-317-6709) and requesting participation in the "Consolidated Water Company Call" a few minutes before 11:00 a.m. EDT on Friday, May 11, 2018.
A replay of the conference call will be available one hour after the call through Friday, May 18, 2018 at 9:00 a.m. EDT by dialing 877-344-7529 (international participants dial 412-317-0088) and entering the conference ID #10120185.
About Consolidated Water Co. Ltd.
Consolidated Water Co. Ltd. develops and operates seawater desalination plants and water distribution systems in areas of the world where naturally occurring supplies of potable water are scarce. The Company operates water production and/or distribution facilities in the Cayman Islands, Belize, the British Virgin Islands, The Commonwealth of The Bahamas, and Bali, Indonesia. 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 in the United States.
Consolidated Water Co. Ltd. is headquartered in George Town, Grand Cayman, in the Cayman Islands. The Company's ordinary (common) stock is traded on the NASDAQ Global Select Market under the symbol "CWCO". Additional information on the Company is available on its website at http://www.cwco.com.
This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe", "estimate", "project", "intend", "expect", "should" 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, continued acceptance of the Company's products and services in the marketplace, changes in its relationships with the governments of the jurisdictions in which it operates, the outcome of its negotiations with the Cayman government regarding a new retail license agreement, its ability to successfully secure contracts for water projects, including the project under development in Baja California, Mexico, its ability to develop and operate such projects profitably, and its ability to manage growth and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission ("SEC").
By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
For further information, please contact our investor relations firm, AdvisIRy Partners:
Lynn Morgen: (212) 223-4147 lynn.morgen@advisiry.com
Eric Prouty: (212) 750-5800 eric.prouty@advisiry.com
Viktoriia Nakhla: (646) 625-4800 vicky.nakhla@advisiry.com
(Financial Highlights Follow)
CONSOLIDATED WATER CO. LTD. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
| March 31, |
|
| December 31, |
|
|
| 2018 |
|
| 2017 |
|
|
| (Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 43,680,866 |
|
| $ | 47,182,966 |
|
Accounts receivable, net |
|
| 17,840,028 |
|
|
| 15,047,846 |
|
Inventory |
|
| 1,745,594 |
|
|
| 1,744,445 |
|
Prepaid expenses and other current assets |
|
| 950,232 |
|
|
| 1,077,257 |
|
Current portion of loans receivable |
|
| 1,423,308 |
|
|
| 1,400,448 |
|
Costs and estimated earnings in excess of billings |
|
| 199,018 |
|
|
| 238,435 |
|
Total current assets |
|
| 65,839,046 |
|
|
| 66,691,397 |
|
Property, plant and equipment, net |
|
| 49,519,137 |
|
|
| 50,525,064 |
|
Construction in progress |
|
| 5,230,707 |
|
|
| 1,823,284 |
|
Inventory, non-current |
|
| 4,800,005 |
|
|
| 4,758,973 |
|
Loans receivable |
|
| 370,465 |
|
|
| 734,980 |
|
Investment in OC-BVI |
|
| 2,892,825 |
|
|
| 2,783,882 |
|
Goodwill |
|
| 8,384,248 |
|
|
| 8,384,248 |
|
Land held for development |
|
| 20,558,424 |
|
|
| 20,558,424 |
|
Intangible assets, net |
|
| 3,413,886 |
|
|
| 3,765,434 |
|
Other assets |
|
| 4,905,152 |
|
|
| 5,455,209 |
|
Total assets |
| $ | 165,913,895 |
|
| $ | 165,480,895 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and other current liabilities |
| $ | 5,637,338 |
|
| $ | 5,662,448 |
|
Dividends payable |
|
| 1,285,031 |
|
|
| 1,281,612 |
|
Note payable to related party |
|
| 294,000 |
|
|
| 686,000 |
|
Billings in excess of costs and estimated earnings |
|
| - |
|
|
| 1,258 |
|
Total current liabilities |
|
| 7,216,369 |
|
|
| 7,631,318 |
|
Deferred tax liability |
|
| 928,876 |
|
|
| 1,024,893 |
|
Other liabilities |
|
| 803,307 |
|
|
| 803,307 |
|
Total liabilities |
|
| 8,948,552 |
|
|
| 9,459,518 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
Consolidated Water Co. Ltd. stockholders' equity |
|
|
|
|
|
|
|
|
Redeemable preferred stock, $0.60 par value. Authorized 200,000 shares; issued and
outstanding 33,034 and 33,488 shares, respectively |
|
| 19,820 |
|
|
| 20,093 |
|
Class A common stock, $0.60 par value. Authorized 24,655,000 shares; issued and
outstanding 14,959,309 and 14,918,869 shares, respectively |
|
| 8,975,585 |
|
|
| 8,951,321 |
|
Class B common stock, $0.60 par value. Authorized 145,000 shares; none issued |
|
| - |
|
|
| - |
|
Additional paid-in capital |
|
| 86,543,291 |
|
|
| 86,405,387 |
|
Retained earnings |
|
| 53,921,760 |
|
|
| 53,105,196 |
|
Cumulative translation adjustment |
|
| (549,555) |
|
|
| (549,555) |
|
Total Consolidated Water Co. Ltd. stockholders' equity |
|
| 148,910,901 |
|
|
| 147,932,442 |
|
Non-controlling interests |
|
| 8,054,442 |
|
|
| 8,088,935 |
|
Total equity |
|
| 156,965,343 |
|
|
| 156,021,377 |
|
Total liabilities and equity |
| $ | 165,913,895 |
|
| $ | 165,480,895 |
|
CONSOLIDATED WATER CO. LTD. |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(UNAUDITED) |
|
|
| Three Months Ended March 31, |
|
|
| 2018 |
|
| 2017 |
|
Retail revenues |
| $ | 6,431,348 |
|
| $ | 6,476,604 |
|
Bulk revenues |
|
| 8,228,515 |
|
|
| 7,690,402 |
|
Services revenues |
|
| 123,764 |
|
|
| 130,252 |
|
Manufacturing revenues |
|
| 552,768 |
|
|
| 1,379,848 |
|
Total revenues |
|
| 15,336,395 |
|
|
| 15,677,106 |
|
|
|
|
|
|
|
|
|
|
Cost of retail revenues |
|
| 2,761,554 |
|
|
| 2,684,286 |
|
Cost of bulk revenues |
|
| 5,396,591 |
|
|
| 5,015,789 |
|
Cost of services revenues |
|
| 134,871 |
|
|
| 102,166 |
|
Cost of manufacturing revenues |
|
| 438,861 |
|
|
| 1,041,297 |
|
Total cost of revenues |
|
| 8,731,877 |
|
|
| 8,843,538 |
|
Gross profit |
|
| 6,604,518 |
|
|
| 6,833,568 |
|
General and administrative expenses |
|
| 4,767,444 |
|
|
| 4,797,192 |
|
Loss (gain) on asset dispositions and impairments, net |
|
| 1,340 |
|
|
| (9,627) |
|
Income from operations |
|
| 1,835,734 |
|
|
| 2,046,003 |
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
|
| 161,121 |
|
|
| 122,191 |
|
Interest expense |
|
| (1,754) |
|
|
| (2,223) |
|
Profit sharing income from OC-BVI |
|
| 28,350 |
|
|
| 10,125 |
|
Equity in the earnings of OC-BVI |
|
| 80,593 |
|
|
| 26,866 |
|
Net unrealized gain (loss) on put/call options |
|
| (206,000) |
|
|
| 165,000 |
|
Other |
|
| 82,600 |
|
|
| 71,793 |
|
Other income, net |
|
| 144,910 |
|
|
| 393,752 |
|
Income before income taxes |
|
| 1,980,644 |
|
|
| 2,439,755 |
|
Provision for (benefit from) income taxes |
|
| (77,388) |
|
|
| (139,697) |
|
Net income |
|
| 2,058,032 |
|
|
| 2,579,452 |
|
Income (loss) attributable to non-controlling interests |
|
| (34,493) |
|
|
| (51,776) |
|
Net income attributable to Consolidated Water Co. Ltd. stockholders |
| $ | 2,092,525 |
|
| $ | 2,631,228 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share attributable to Consolidated Water Co. Ltd. common
stockholders |
| $ | 0.14 |
|
| $ | 0.18 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share attributable to Consolidated Water Co. Ltd.
common stockholders |
| $ | 0.14 |
|
| $ | 0.18 |
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
| $ | 0.085 |
|
| $ | 0.075 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares used in the determination of: |
|
|
|
|
|
|
|
|
Basic earnings per share |
|
| 14,959,259 |
|
|
| 14,871,862 |
|
Diluted earnings per share |
|
| 15,114,477 |
|
|
| 15,035,219 |
|
View original content:http://www.prnewswire.com/news-releases/consolidated-water-co-ltd-reports-first-quarter-2018-results-300646747.html
SOURCE Consolidated Water Co. Ltd.