GEORGE TOWN, Cayman Islands, March 18, 2019 /PRNewswire/ -- Consolidated Water Co. Ltd. (Nasdaq Global Select Market: CWCO), a leading developer and operator of seawater desalination plants, reported results for the year ended December 31, 2018. All annual comparisons are to the previous year unless otherwise noted.
2018 Financial and Operational Highlights
- Total revenues increased 11% to $65.7 million, driving gross profit up 11% to $26.7 million.
- Net income attributable to Consolidated Water stockholders increased 84% to $11.3 million.
- Dividend payments amounted to $5.1 million for the year ended December 31, 2018.
- Completed capital improvements to the Windsor plant on New Providence Island in the Bahamas designed to meet performance guarantees through August 2033.
- Advanced the company's development project in Rosarito, Baja California, Mexico involving the construction and operation of a major seawater desalination plant and distribution pipeline. Designed to produce 100 million gallons per day of potable water, the plant is expected to be the largest of its kind in the Western Hemisphere and will secure drinking water supplies for the coastal region of Baja California for the next 40 years.
Management Commentary
"2018 was a great year for Consolidated Water, as we realized revenue and gross profit growth in each segment of our business, especially in our Cayman and Bahamian operations, which improved our profitability," said company president and CEO, Rick McTaggart.
"Our momentum continued into the new year, as we obtained a new combined water supply agreement from the Water-Authority Cayman for the operation of the North Sound and Red Gate plants in the Cayman Islands," continued McTaggart. "In February, we completed the expansion of the water production and storage capacity of the Abel Castillo Water Works plant in Grand Cayman. We made further headway with the Rosarito project, securing bank approval for more than $200 million of the required financing. We also recently completed the sale of our Belize operations for $7 million, and we were able to repatriate more than $12 million in total in cash from Belize. We plan use these funds to support our growth initiatives.
"In 2019, we expect to develop new business opportunities both within our existing service areas and in new markets. We see our U.S. manufacturing operations continuing to grow and diversify our revenue streams and expect to maintain the world-class operating efficiencies of our water production and distribution systems by continuing to follow our highly-effective equipment maintenance and water loss mitigation programs. There are many water-scarce countries in the Caribbean and other select markets where we believe we can have a positive impact on their development by providing essential water supplies that support regional economies and improve the quality of life in local communities."
2018 Financial Summary
Total revenues for the full year of 2018 were $65.7 million, up 11% compared to the $59.4 million in 2017. The increase was driven by an improvement in revenues across all of the company's operating segments, which includes retail, bulk, services and manufacturing.
Gross profit for the full year of 2018 was $26.7 million, up 11% from $24.0 million in 2017.
Net income attributable to Consolidated Water stockholders for 2018 was $11.3 million or $0.75 per fully diluted share, up 84% from $6.1 million or $0.41 per fully diluted share in 2017.
Net income and diluted EPS for the full year of 2018 and 2017 included operating expenses of $2.9 million and $3.0 million, respectively, related to development costs for the Rosarito desalination plant.
The substantial rise in net income for 2018 as compared to 2017 reflects an improvement in income from operations of approximately $5.7 million. This was due in part to impairment losses recorded in 2017 that exceeded that recorded in 2018 by nearly $3 million, as well as the litigation settlement received by OC-BVI in September 2018. The settlement was the primary reason for the incremental aggregate income (i.e. earnings and profit sharing) from this equity investment of nearly $2.3 million.
Cash and cash equivalents totaled $31.3 million as of December 31, 2018, as compared to $45.5 million as of December 31, 2017. The decrease was the result of increases in accounts receivable as well as capital expenditures related to the refurbishment of the Windsor plant in the Bahamas and, to a lesser extent, retail operations in Grand Cayman.
Segment Results
|
| Year Ended December 31, 2018 |
|
| Retail |
| Bulk |
| Services |
| Manufacturing |
| Total |
Revenues |
| $ | 25,621,048 |
| $ | 31,031,287 |
| $ | 1,811,372 |
| $ | 7,256,150 |
| $ | 65,719,857 |
Cost of revenues |
|
| 11,011,456 |
|
| 21,551,383 |
|
| 1,503,034 |
|
| 4,911,697 |
|
| 38,977,570 |
Gross profit |
|
| 14,609,592 |
|
| 9,479,904 |
|
| 308,338 |
|
| 2,344,453 |
|
| 26,742,287 |
General and administrative expenses |
|
| 12,029,646 |
|
| 1,301,042 |
|
| 2,889,703 |
|
| 2,489,028 |
|
| 18,709,419 |
Loss on asset dispositions and impairments, net |
|
| 12,263 |
|
| - |
|
| 41,180 |
|
| 3,331 |
|
| 56,774 |
Income (loss) from operations |
| $ | 2,567,683 |
| $ | 8,178,862 |
| $ | (2,622,545) |
| $ | (147,906) |
|
| 7,976,094 |
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,740,064 |
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,716,158 |
Benefit from income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (157,291) |
Net income from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,873,449 |
Income from continuing operations attributable to non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 695,787 |
Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,177,662 |
Net income from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,115,825 |
Net income attributable to Consolidated Water Co. Ltd.
stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 11,293,487 |
|
| Year Ended December 31, 2017 |
|
| Retail |
| Bulk |
| Services |
| Manufacturing |
| Total |
Revenues |
| $ | 23,225,066 |
| $ | 28,682,113 |
| $ | 469,347 |
| $ | 6,990,496 |
| $ | 59,367,022 |
Cost of revenues |
|
| 10,372,199 |
|
| 19,562,503 |
|
| 469,797 |
|
| 4,963,962 |
|
| 35,368,461 |
Gross profit |
|
| 12,852,867 |
|
| 9,119,610 |
|
| (450) |
|
| 2,026,534 |
|
| 23,998,561 |
General and administrative expenses |
|
| 11,884,659 |
|
| 1,108,158 |
|
| 3,043,078 |
|
| 2,646,504 |
|
| 18,682,399 |
Loss on asset dispositions and impairments, net |
|
| 1,640,158 |
|
| - |
|
| - |
|
| 1,400,000 |
|
| 3,040,158 |
Income (loss) from operations |
| $ | (671,950) |
| $ | 8,011,452 |
| $ | (3,043,528) |
| $ | (2,019,970) |
|
| 2,276,004 |
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,526,358 |
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,802,362 |
Benefit from income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (888,977) |
Net income from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,691,339 |
Loss from continuing operations attributable to non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (411,489) |
Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,102,828 |
Net income from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,041,234 |
Net income attributable to Consolidated Water Co. Ltd.
stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 6,144,062 |
Revenues earned by major geographic region were:
|
| Year ended December 31, |
|
|
| 2018 |
|
| 2017 |
|
Cayman Islands |
| $ | 34,623,925 |
|
| $ | 30,218,830 |
|
Bahamas |
|
| 23,241,361 |
|
|
| 21,528,494 |
|
Indonesia |
|
| 153,233 |
|
|
| 159,856 |
|
USA |
|
| 7,256,150 |
|
|
| 6,990,496 |
|
Revenues earned from management services agreement with OC-BVI |
|
| 445,188 |
|
|
| 469,346 |
|
|
| $ | 65,719,857 |
|
| $ | 59,367,022 |
|
Outlook
The company traditionally sells more water on Grand Cayman during the first and second quarters of the year when the number of tourists visiting its areas of operation is typically greater and local rainfall is less as compared to the back half of the year. For 2019, the company sees this trend continuing, and anticipates a seasonally stronger first half of the year due to favorable tourism activity.
Annual General Meeting of Shareholders
The company announced that it has set May 21, 2019 as the date of its annual meeting of shareholders to be held at 10:00 a.m. local time at the Westin Hotel on Seven Mile Beach in Grand Cayman. Holders of record of the company's stock as of March 19, 2019 will be entitled to vote at the meeting.
Conference Call
Consolidated Water management plans to host a call later today to discuss its fourth quarter and full year 2018 results, followed by a question and answer period.
Date: Monday, March 18, 2019
Time: 11:00 a.m. Eastern time (8:00 a.m. Pacific time)
Toll-free dial-in number: 1-844-875-6913
International dial-in number: 1-412-317-6709
Conference ID: 10129400
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 March 25, 2019, as well as available for replay via the Investors section of the Consolidated Water website at www.cwco.com.
Toll-free replay number: 1-877-344-7529
International replay number: 1-412-317-0088
Replay ID: 10129400
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 there are scarce amounts of naturally occurring potable water. The company operates facilities in the Cayman Islands, British Virgin Islands, The Bahamas, and Indonesia. It also manufactures and services a wide range of water-related products, and provides design, engineering, management, operating and other services applicable to commercial water production, supply and treatment. 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. For more information, visit www.cwco.com.
Consolidated Water Investor Relations Contact
Ron Both, CMA
Tel (949) 432-7566
CWCO@cma.team
Cautionary Note Regarding Forward-Looking Statements
This 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, 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 new water projects, including the project under development in Baja California, Mexico, its ability to develop and operate such projects profitably, its ability to renew existing bulk water supply contracts, its ability to collect its delinquent accounts receivable in the Bahamas, and its ability to manage growth and other risks detailed in the company's periodic report filings with the Securities and Exchange Commission. 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.
CONSOLIDATED WATER CO. LTD. |
|
CONSOLIDATED BALANCE SHEETS |
|
|
| December 31, |
|
| 2018 |
| 2017 |
ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 31,337,477 |
| $ | 45,482,966 |
Accounts receivable, net |
|
| 24,228,095 |
|
| 14,687,078 |
Inventory |
|
| 2,232,721 |
|
| 1,583,553 |
Prepaid expenses and other current assets |
|
| 1,035,796 |
|
| 1,069,743 |
Current portion of loans receivable |
|
| 734,980 |
|
| 1,400,448 |
Costs and estimated earnings in excess of billings |
|
| 835,669 |
|
| 238,435 |
Current assets of discontinued operations |
|
| 1,959,494 |
|
| 2,229,174 |
Total current assets |
|
| 62,364,232 |
|
| 66,691,397 |
Property, plant and equipment, net |
|
| 58,880,818 |
|
| 49,683,771 |
Construction in progress |
|
| 6,015,043 |
|
| 1,823,284 |
Inventory, non-current |
|
| 4,545,198 |
|
| 4,462,961 |
Loans receivable |
|
| - |
|
| 734,980 |
Investment in OC-BVI |
|
| 2,584,987 |
|
| 2,783,882 |
Goodwill |
|
| 8,003,568 |
|
| 8,003,568 |
Land and rights of way held for development |
|
| 24,161,024 |
|
| 21,505,675 |
Intangible assets, net |
|
| 1,891,667 |
|
| 3,231,667 |
Other assets |
|
| 2,123,999 |
|
| 4,492,835 |
Long-term assets of discontinued operations |
|
| 1,945,062 |
|
| 2,066,875 |
Total assets |
| $ | 172,515,598 |
| $ | 165,480,895 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable, accrued expenses and other current liabilities |
| $ | 4,570,641 |
| $ | 3,548,965 |
Accrued compensation |
|
| 1,286,468 |
|
| 1,015,662 |
Dividends payable |
|
| 1,286,493 |
|
| 1,281,612 |
Note payable to related party |
|
| - |
|
| 686,000 |
Billings in excess of costs and estimated earnings |
|
| 109,940 |
|
| 1,258 |
Current liabilities of discontinued operations |
|
| 646,452 |
|
| 1,097,821 |
Total current liabilities |
|
| 7,899,994 |
|
| 7,631,318 |
Deferred tax liability |
|
| 659,874 |
|
| 1,024,893 |
Other liabilities |
|
| 199,827 |
|
| 803,307 |
Total liabilities |
|
| 8,759,695 |
|
| 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 34,796 and 33,488 shares, respectively |
|
| 20,878 |
|
| 20,093 |
Class A common stock, $0.60 par value. Authorized 24,655,000 shares; issued and outstanding 14,982,906 and 14,918,869 shares, respectively |
|
| 8,989,744 |
|
| 8,951,321 |
Class B common stock, $0.60 par value. Authorized 145,000 shares; none issued |
|
| - |
|
| - |
Additional paid-in capital |
|
| 87,211,953 |
|
| 86,405,387 |
Retained earnings |
|
| 59,298,161 |
|
| 53,105,196 |
Cumulative translation adjustment |
|
| (549,555) |
|
| (549,555) |
Total Consolidated Water Co. Ltd. stockholders' equity |
|
| 154,971,181 |
|
| 147,932,442 |
Non-controlling interests |
|
| 8,784,722 |
|
| 8,088,935 |
Total equity |
|
| 163,755,903 |
|
| 156,021,377 |
Total liabilities and equity |
| $ | 172,515,598 |
| $ | 165,480,895 |
CONSOLIDATED WATER CO. LTD. |
|
CONSOLIDATED STATEMENTS OF INCOME |
|
|
| Year Ended December 31, |
|
| 2018 |
| 2017 |
Retail revenues |
| $ | 25,621,048 |
| $ | 23,225,066 |
Bulk revenues |
|
| 31,031,287 |
|
| 28,682,113 |
Services revenues |
|
| 1,811,372 |
|
| 469,347 |
Manufacturing revenues |
|
| 7,256,150 |
|
| 6,990,496 |
Total revenues |
|
| 65,719,857 |
|
| 59,367,022 |
|
|
|
|
|
|
|
Cost of retail revenues |
|
| 11,011,456 |
|
| 10,372,199 |
Cost of bulk revenues |
|
| 21,551,383 |
|
| 19,562,503 |
Cost of services revenues |
|
| 1,503,034 |
|
| 469,797 |
Cost of manufacturing revenues |
|
| 4,911,697 |
|
| 4,963,962 |
Total cost of revenues |
|
| 38,977,570 |
|
| 35,368,461 |
Gross profit |
|
| 26,742,287 |
|
| 23,998,561 |
General and administrative expenses |
|
| 18,709,419 |
|
| 18,682,399 |
Loss on asset dispositions and impairments, net |
|
| 56,774 |
|
| 3,040,158 |
Income from operations |
|
| 7,976,094 |
|
| 2,276,004 |
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
Interest income |
|
| 663,197 |
|
| 380,563 |
Interest expense |
|
| (8,427) |
|
| (5,722) |
Profit-sharing income from OC-BVI |
|
| 654,075 |
|
| 46,575 |
Equity in the earnings of OC-BVI |
|
| 1,798,280 |
|
| 127,802 |
Net unrealized gain (loss) on put/call options |
|
| (256,000) |
|
| 960,000 |
Other |
|
| (111,061) |
|
| 17,140 |
Other income, net |
|
| 2,740,064 |
|
| 1,526,358 |
Income before income taxes |
|
| 10,716,158 |
|
| 3,802,362 |
Benefit from income taxes |
|
| (157,291) |
|
| (888,977) |
Net income from continuing operations |
|
| 10,873,449 |
|
| 4,691,339 |
Income (loss) from continuing operations attributable to non-controlling interests |
|
| 695,787 |
|
| (411,489) |
Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders |
|
| 10,177,662 |
|
| 5,102,828 |
Net income from discontinued operations |
|
| 1,115,825 |
|
| 1,041,234 |
Net income attributable to Consolidated Water Co. Ltd. stockholders |
| $ | 11,293,487 |
| $ | 6,144,062 |
|
|
|
|
|
|
|
Basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders |
|
|
|
|
|
|
Continuing operations |
| $ | 0.68 |
| $ | 0.34 |
Discontinued operations |
| $ | 0.07 |
| $ | 0.07 |
Basic earnings per share |
| $ | 0.75 |
| $ | 0.41 |
|
|
|
|
|
|
|
Diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders |
|
|
|
|
|
|
Continuing operations |
| $ | 0.68 |
| $ | 0.34 |
Discontinued operations |
| $ | 0.07 |
| $ | 0.07 |
Diluted earnings per share |
| $ | 0.75 |
| $ | 0.41 |
|
|
|
|
|
|
|
Dividends declared per common share |
| $ | 0.34 |
| $ | 0.31 |
|
|
|
|
|
|
|
Weighted average number of common shares used in the determination of: |
|
|
|
|
|
|
Basic earnings per share |
|
| 14,962,760 |
|
| 14,896,944 |
Diluted earnings per share |
|
| 15,074,147 |
|
| 15,006,681 |
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SOURCE Consolidated Water Co. Ltd.