Consolidated Water Reports Q1 2019 Results; Total Revenues up 17% to $17.0 million, Net Income Increased to $6.2 million or $0.41 per Share

GEORGE TOWN, Cayman Islands, May 13, 2019 /PRNewswire/ -- Consolidated Water Co. Ltd. (Nasdaq Global Select Market: CWCO), a leading developer and operator of seawater desalination plants, reported results for the quarter ended March 31, 2019. Quarterly comparisons are to the year-ago quarter unless otherwise noted.

(PRNewsfoto/Consolidated Water Co. Ltd.)

Q1 2019 Financial Highlights

  • Total revenues increased 17% to $17.0 million.
  • Gross profit up 13% to $7.0 million.
  • Net income attributable to stockholders increased to $6.2 million or $0.41 per diluted share.
  • $1.3 million in dividends paid.

Q1 2019 Operational Highlights

  • Awarded a new seven-year bulk water supply agreement from the Water-Authority Cayman for its North Side Water Works desalination plant, effective July 1.
  • Completed the sale of the company's Belize subsidiary for $7 million and repatriated more than $12 million in cash to be used to support growth and M&A initiatives.
  • Completed the expansion of the water production and storage capacity of the Abel Castillo Water Works plant in Grand Cayman and began utilizing these new capabilities in March.
  • Advanced the development of the project in Rosarito, Baja California, Mexico involving the construction and operation of a major seawater desalination plant and distribution pipeline. Company received notice of lender approval of up to $200 million of the debt financing required for the project. 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 a major, much-needed new source of drinking water for the coastal region of Baja California for at least 37 years.

Management Commentary

"In Q1, we realized double-digit revenue and gross profit growth, which was driven primarily by increased production activity in our manufacturing business segment," commented Consolidated Water CEO, Rick McTaggart. "We expect this growth in manufacturing activity, as compared to last year, to be maintained over the remainder of the year.

"During the quarter, we executed a new agreement with the Water-Authority Cayman for the North Side Water Works desalination plant. The agreement secures our position as the dominant desalinated water producer in the Cayman Islands for the next several years. Completing the expansion of the Abel Castillo Water Works plant ensures that we can meet future water supply needs of our retail water customers in Grand Cayman. The sale of our Belize subsidiary allowed us to repatriate more than $12 million in cash that we can use to fund our growth initiatives.

"Our Rosarito project had two major positive developments during the quarter: we were informed by a major lender that their credit committee had approved up to $200 million in debt financing for the project , and the Congress of the State of Baja California, Mexico renewed key authorizations required for the project. The authorizations allow the State to obtain the credit facility it needs for the project. We can now proceed to several important next steps before beginning the construction phase, including securing the remaining required debt financing and aqueduct rights-of-ways.

"Supported by a strong balance sheet and ample liquidity, both of which have continued to improve, we are focused on expanding our businesses into new markets and complementary product lines. This includes actively evaluating acquisition targets in North America that would expand our geographic footprint and diversify our revenue streams."

Q1 2019 Financial Summary

Total revenues for the first quarter of 2019 were $17.0 million, up 17% compared to $14.6 million in the same year-ago quarter. The increase was primarily driven by an increase of $2.5 million in the manufacturing segment and slightly higher retail revenues. Manufacturing revenues increased due to an increase in the number of orders and expanded project production activity. The increase in manufacturing and retail revenues was partially offset by a slight decrease in bulk and services revenues. The decrease in bulk revenues is due to the lower rates that came into effect in February for water supplied from the Red Gate and North Sound plants.

Gross profit for the first quarter of 2019 was $7.0 million, up 13% from $6.2 million in the same year-ago quarter.

Net income attributable to Consolidated Water stockholders for the first quarter of 2019 was $6.2 million or $0.41 per fully diluted share, up 196% from $2.1 million or $0.14 per fully diluted share in 2018.

Net income and diluted EPS for the first quarter of 2019 and 2018 included operating expenses of $0.5 million and $0.6 million, respectively, related to development costs for the Rosarito desalination plant.

The rise in net income for the first quarter of 2019 as compared to the same year-ago quarter reflects an improvement in income from operations of approximately $1.1 million and the gain on the sale of the company's discontinued Belize operations of approximately $3.6 million.

Cash and cash equivalents totaled $38.0 million as of March 31, 2019, as compared to $31.3 million as of December 31, 2018. The increase resulted primarily from the sale of our discontinued Belize operations and to a lesser extent lower accounts receivable for the Bahamas operations.

Segment Results





Three Months Ended March 31, 2019 (Unaudited)







Retail





Bulk





Services





Manufacturing





Total



Revenues



$

6,686,660





$

7,111,313





$

100,577





$

3,089,974





$

16,988,524



Cost of revenues





2,825,604







4,954,591







121,919







2,124,107







10,026,221



Gross profit (loss)





3,861,056







2,156,722







(21,342)







965,867







6,962,303



General and administrative expenses





3,117,278







261,412







485,885







513,459







4,378,034



Gain (loss) on asset dispositions and

impairments, net





(2,731)







46,500







-







-







43,769



Income (loss) from operations



$

741,047





$

1,941,810





$

(507,227)





$

452,408







2,628,038



Other income, net





































260,090



Income before income taxes





































2,888,128



Provision for income taxes





































48,959



Net income from continuing operations





































2,839,169



Income from continuing operations attributable to non-controlling interests

















273,908



Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders







2,565,261



Total income from discontinued operations



























3,621,170



Net income attributable to Consolidated Water Co. Ltd. stockholders















$

6,186,431











Three Months Ended March 31, 2018 (Unaudited)







Retail





Bulk





Services





Manufacturing





Total



Revenues



$

6,431,348





$

7,446,783





$

123,764





$

552,768





$

14,554,663



Cost of revenues





2,761,554







5,050,336







134,871







438,861







8,385,622



Gross profit (loss)





3,669,794







2,396,447







(11,107)







113,907







6,169,041



General and administrative expenses





3,145,483







236,234







650,636







629,358







4,661,711



Gain (loss) on asset dispositions and impairments, net





(1,340)







-







-







-







(1,340)



Income (loss) from operations



$

522,971





$

2,160,213





$

(661,743)





$

(515,451)







1,505,990



Other income, net





































147,597



Income before income taxes





































1,653,587



(Benefit from) income taxes





































(77,388)



Net income from continuing operations





































1,730,975



Loss from continuing operations attributable to non-controlling interests

















(34,493)



Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders







1,765,468



Total income from discontinued operations



























327,057



Net income attributable to Consolidated Water Co. Ltd. stockholders















$

2,092,525



Outlook

Based on committed purchase orders, Consolidated Water expects the performance of its manufacturing segment for the remainder of 2019 to exceed its performance for the comparable 2018 period.

The company traditionally sells more water on Grand Cayman during the first half of the calendar year when the number of tourists visiting its area of operation is typically greater and local rainfall is less as compared to the back half of the year.

Conference Call

Consolidated Water management plans to host a call later today to discuss its first quarter of 2019 results, followed by a question and answer period.

Date: Monday, May 13, 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: 10131212

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 20, 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: 10131212

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. 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.

Company Contact:

David Sasnett

Executive Vice President and CFO

Tel (954) 509-8200

dsasnett@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.

CONDENSED CONSOLIDATED BALANCE SHEETS







March 31,





December 31,







2019





2018







(Unaudited)









ASSETS













Current assets

















Cash and cash equivalents



$

38,016,963





$

31,337,477



Restricted cash





1,500,000







-



Accounts receivable, net





22,452,168







24,228,095



Inventory





3,974,413







2,232,721



Prepaid expenses and other current assets





995,480







1,035,796



Current portion of loans receivable





370,465







734,980



Costs and estimated earnings in excess of billings





2,826,388







835,669



Current assets of discontinued operations





-







1,959,494



Total current assets





70,135,877







62,364,232



Property, plant and equipment, net





64,294,070







58,880,818



Construction in progress





406,280







6,015,043



Inventory, non-current





4,435,235







4,545,198



Investment in OC-BVI





2,604,523







2,584,987



Goodwill





8,004,597







8,004,597



Land and rights of way held for development





24,161,024







24,161,024



Intangible assets, net





1,667,778







1,891,667



Operating lease right-of-use assets





3,409,930







-



Other assets





2,111,412







2,123,999



Long-term assets of discontinued operations





-







1,944,033



Total assets



$

181,230,726





$

172,515,598





















LIABILITIES AND EQUITY

















Current liabilities

















Accounts payable, accrued expenses and other current liabilities



$

5,025,051





$

4,570,641



Accrued compensation





1,585,817







1,286,468



Dividends payable





1,288,607







1,286,493



Current maturities of operating leases





433,560







-



Billings in excess of costs and estimated earnings





-







109,940



Current liabilities of discontinued operations





-







646,452



Total current liabilities





8,333,035







7,899,994



Deferred tax liability





592,468







659,874



Noncurrent operating leases





3,031,110







-



Other liabilities





199,827







199,827



Total liabilities





12,156,440







8,759,695



Commitments and contingencies

















Equity

















Consolidated Water Co. Ltd. stockholders' equity

















Redeemable preferred stock, $0.60 par value. Authorized 200,000 shares; issued

and outstanding 32,813 and 34,796 shares, respectively





19,688







20,878



Class A common stock, $0.60 par value. Authorized 24,655,000 shares; issued

and outstanding 15,009,770 and 14,982,906 shares, respectively





9,005,862







8,989,744



Class B common stock, $0.60 par value. Authorized 145,000 shares; none issued





-







-



Additional paid-in capital





87,335,292







87,211,953



Retained earnings





64,204,369







59,298,161



Cumulative translation adjustment





(549,555)







(549,555)



Total Consolidated Water Co. Ltd. stockholders' equity





160,015,656







154,971,181



Non-controlling interests





9,058,630







8,784,722



Total equity





169,074,286







163,755,903



Total liabilities and equity



$

181,230,726





$

172,515,598



  

CONSOLIDATED WATER CO. LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)







Three Months Ended

March 31,







2019





2018



Total revenues



$

16,988,524





$

14,554,663



Total cost of revenues





10,026,221







8,385,622



Gross profit





6,962,303







6,169,041



General and administrative expenses





4,378,034







4,661,711



Gain (loss) on asset dispositions and impairments, net





43,769







(1,340)



Income from operations





2,628,038







1,505,990





















Other income (expense):

















Interest income





150,185







161,121



Interest expense





-







(1,754)



Profit-sharing income from OC-BVI





6,075







28,350



Equity in the earnings of OC-BVI





13,461







80,593



Net unrealized loss on put/call options





(24,000)







(206,000)



Other





114,369







85,287



       Other income, net





260,090







147,597



Income before income taxes





2,888,128







1,653,587



Provision for (benefit from) income taxes





48,959







(77,388)



Net income from continuing operations





2,839,169







1,730,975



Income (loss) from continuing operations attributable to non-controlling

interests





273,908







(34,493)



Net income from continuing operations attributable to Consolidated Water

Co. Ltd. stockholders





2,565,261







1,765,468



Gain on sale of discontinued operations





3,621,170







-



Net income from discontinued operations





-







327,057



Total income from discontinued operations





3,621,170







327,057



Net income attributable to Consolidated Water Co. Ltd. stockholders



$

6,186,431





$

2,092,525







































Basic earnings per common share attributable to Consolidated Water Co. Ltd.

common stockholders

















Continuing operations



$

0.17





$

0.12



Discontinued operations



$

0.24





$

0.02



Basic earnings per share



$

0.41





$

0.14





















Diluted earnings per common share attributable to Consolidated Water Co.

Ltd. common stockholders

















Continuing operations



$

0.17





$

0.12



Discontinued operations



$

0.24





$

0.02



Diluted earnings per share



$

0.41





$

0.14





















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





15,020,344







14,959,259



Diluted earnings per share





15,129,401







15,114,477



 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/consolidated-water-reports-q1-2019-results-total-revenues-up-17-to-17-0-million-net-income-increased-to-6-2-million-or-0-41-per-share-300848384.html

SOURCE Consolidated Water Co. Ltd.

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