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Consolidated Water Co. Ltd. Reports Second Quarter 2018 Results

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Consolidated Water Co. Ltd. Reports Second Quarter 2018 Results

Core Desalination Business Drives Steady Revenues and Earnings Further Progress Achieved on Rosarito Project

Second Quarter 2018 Total Revenues Increased 3.9% to $15.9 million; Gross Profit Was $6.6 Million, Up 2.2% Year-Over-Year

Net Income Attributable to Consolidated Water Stockholders Increased to $2.2 Million, or $0.14 per Fully Diluted Share

PR Newswire

GEORGE TOWN, Cayman Islands, Aug. 9, 2018 /PRNewswire/ -- Consolidated Water Co. Ltd. (NASDAQ:CWCO), a leading developer and operator of seawater desalination plants, reported financial and operating results for its second quarter ended June 30, 2018.

Management Commentary

President and CEO Rick McTaggart commented: "Our core desalination business continued to perform well in the second quarter, and revenues in our manufacturing segment nearly doubled on an unconsolidated basis. However, similar to the first quarter, a portion of our manufacturing segment's production, equivalent to $1.1 million in the second quarter and $1.8 million year-to-date, was allocated for our internal use in the refurbishment of our Windsor plant in the Bahamas and our Governor's Harbor plant in the Cayman Islands, and was not recognized as revenue. These internal projects have obscured the year-over-year improvement in our manufacturing segment. Looking forward, we expect manufacturing sales to continue to improve based on orders in hand for the remainder of this year."

"We made significant progress on our Rosarito project during the second quarter by achieving several important milestones. Specifically, (i) we signed an amended public private partnership agreement, which addressed foreign currency exchange and interest rate adjustment concerns related to the project; (ii) we obtained additional rights of way for the project's aqueduct and now have the majority of such rights of way required for the project; and (iii) we signed the turn-key engineering, procurement and construction contract with Suez for the desalination plant and aqueduct. These accomplishments have moved us forward in line with our expectations for completion of the conditions of the project," Mr. McTaggart noted.

Second Quarter 2018 Financial Results

Total revenues for the second quarter 2018 were $15.9 million, representing a 3.9% increase from $15.3 million in the second quarter of 2017. Gross profit amounted to $6.6 million, compared to $6.5 million in the year ago quarter. Inclusive of $0.7 million in Rosarito-related expenses, net income attributable to Consolidated Water stockholders was $2.2 million, or $0.14 per fully diluted share, compared to $0.6 million, or $0.04 per fully diluted share, reported in last year's comparable quarter. In the second quarter of 2017, the Company recorded an impairment loss of $1.0 million relating to its Bali operations, however this subsidiary did not have a material adverse impact on the Company's results of operations for the second quarter of 2018.

First Half 2018 Financial Results

Total revenues for the first six months of 2018 were $31.2 million, compared to the $31.0 million reported in last year's comparable period. Gross profit was $13.2 million, compared to $13.3 million for the first half of 2017. Net income attributable to Consolidated Water stockholders was $4.3 million ($0.28 per fully diluted share), an increase of 31.5% from the $3.3 million ($0.22 per fully diluted share), earned in the first six months of 2017. Net income and diluted EPS for the first half of 2018 and 2017 included operating expenses of $1.3 million and $1.6 million, respectively, related to development costs for the Rosarito desalination plant.

Segment Results



















Three Months Ended June 30, 2018 (Unaudited)



Retail


Bulk


Services


Manufacturing


Total

Revenues


$

6,268,023


$

8,488,850


$

122,912


$

992,430


$

15,872,215

Cost of revenues



2,722,650



5,793,704



104,069



655,679



9,276,102

Gross profit


$

3,545,373


$

2,695,146


$

18,843


$

336,751


$

6,596,113



















Three Months Ended June 30, 2017 (Unaudited)



Retail


Bulk


Services


Manufacturing


Total

Revenues


$

6,064,016


$

8,043,921


$

119,204


$

1,056,047


$

15,283,188

Cost of revenues



2,722,890



5,152,212



103,753



847,760



8,826,615

Gross profit


$

3,341,126


$

2,891,709


$

15,451


$

208,287


$

6,456,573

Summary and Outlook

"Our core desalination business continued its steady performance year-to-date, and the outlook for this business is favorable for volume increases in the Caribbean, particularly in the Cayman Islands, which is experiencing positive tourism industry trends. Additionally, we continue to expect improved year-over-year results from our manufacturing operations for the full 2018 fiscal year."

"We continue to maintain solid forward momentum with respect to our transformational Rosarito project, which is envisioned as the largest desalination plant in the Western Hemisphere. We remain focused on the negotiation and execution of the debt financing agreements necessary to provide the funding for the first phase of the project. As a reminder, the first phase of the project will supply 50 million gallons of water a day to Mexico, with an opportunity to expand the plant capacity in the project's second phase by an additional 50 million gallons per day."

"Our company continues to be very well capitalized, providing us with the ability to execute on our growth strategy while simultaneously returning capital to our shareholders in the form of dividends," Mr. McTaggart concluded.

Investor Conference Call

The Company will host a conference call at 8:30 a.m. Eastern Time (EDT) on Monday, August 13, 2018 to review the Company's operating results for the second 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 8:30 a.m. EDT on Monday, August 13, 2018.

A replay of the conference call will be available one hour after the call through Monday, August 20, 2018 at 8:30 a.m. EDT by dialing 877-344-7529 (international participants dial 412-317-0088) and entering the conference ID # 10122958.

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 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.

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

 

CONSOLIDATED WATER CO. LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS




June 30,



December 31,




2018



2017





(Unaudited)






ASSETS









Current assets









  Cash and cash equivalents


$

34,092,347



$

47,182,966


  Accounts receivable, net



22,161,267




15,047,846


  Inventory



2,703,806




1,744,445


  Prepaid expenses and other current assets



1,880,849




1,077,257


  Current portion of loans receivable



1,446,540




1,400,448


  Costs and estimated earnings in excess of billings



844,693




238,435


Total current assets



63,129,502




66,691,397


Property, plant and equipment, net



48,476,540




50,525,064


Construction in progress



11,397,699




1,823,284


Inventory, non-current



4,706,727




4,758,973


Loans receivable



-




734,980


Investment in OC-BVI



2,501,008




2,783,882


Goodwill



8,384,248




8,384,248


Land held for development



20,642,660




20,558,424


Intangible assets, net



3,062,337




3,765,434


Other assets



5,000,103




5,455,209


Total assets


$

167,300,824



$

165,480,895











LIABILITIES AND EQUITY









Current liabilities









  Accounts payable and other current liabilities


$

5,841,427



$

5,662,448


  Dividends payable



1,285,270




1,281,612


  Note payable to related party



294,000




686,000


  Billings in excess of costs and estimated earnings



1,971




1,258


Total current liabilities



7,422,668




7,631,318


Deferred tax liability



832,917




1,024,893


Other liabilities



778,307




803,307


Total liabilities



9,033,892




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 41,033 and 33,488 shares, respectively



24,620




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



86,717,545




86,405,387


  Retained earnings



54,835,603




53,105,196


  Cumulative translation adjustment



(549,555)




(549,555)


Total Consolidated Water Co. Ltd. stockholders' equity



150,003,798




147,932,442


Non-controlling interests



8,263,134




8,088,935


Total equity



158,266,932




156,021,377


Total liabilities and equity


$

167,300,824



$

165,480,895


 

CONSOLIDATED WATER CO. LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)




Three Months Ended June 30,



Six Months Ended June 30,




2018



2017



2018



2017


Retail revenues


$

6,268,023



$

6,064,016



$

12,699,371



$

12,540,620


Bulk revenues



8,488,850




8,043,921




16,717,365




15,734,323


Services revenues



122,912




119,204




246,676




249,456


Manufacturing revenues



992,430




1,056,047




1,545,198




2,435,895


  Total revenues



15,872,215




15,283,188




31,208,610




30,960,294



















Cost of retail revenues



2,722,650




2,722,890




5,484,204




5,407,176


Cost of bulk revenues



5,793,704




5,152,212




11,190,295




10,168,001


Cost of services revenues



104,069




103,753




238,940




205,919


Cost of manufacturing revenues



655,679




847,760




1,094,540




1,889,057


  Total cost of revenues



9,276,102




8,826,615




18,007,979




17,670,153


Gross profit



6,596,113




6,456,573




13,200,631




13,290,141


General and administrative expenses



4,554,754




5,001,669




9,322,198




9,798,861


Loss on asset dispositions and impairments, net



650




997,006




1,990




987,406


Income from operations



2,040,709




457,898




3,876,443




2,503,874



















Other income (expense):

















Interest income



170,102




108,881




331,223




231,072


Interest expense



(2,876)




(7,939)




(4,630)




(10,162)


Profit sharing income from OC-BVI



56,700




-




85,050




10,125


Equity in the earnings (losses) of OC-BVI



157,483




(37,824)




238,076




(10,958)


Net unrealized gain (loss) on put/call options



84,000




(13,000)




(122,000)




152,000


Other



(158,111)




(31,829)




(75,511)




39,991


Other income, net



307,298




18,289




452,208




412,068


Income before income taxes



2,348,007




476,187




4,328,651




2,915,942


Benefit from income taxes



(48,878)




(136,448)




(126,266)




(276,145)


Net income



2,396,885




612,635




4,454,917




3,192,087


Income (loss) attributable to non-controlling
interests



208,692




(11,913)




174,199




(63,689)


Net income attributable to Consolidated Water
Co. Ltd. stockholders


$

2,188,193



$

624,548



$

4,280,718



$

3,255,776



















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


$

0.15



$

0.04



$

0.29



$

0.22



















Diluted earnings per common share attributable to
Consolidated Water Co. Ltd. common
stockholders


$

0.14



$

0.04



$

0.28



$

0.22



















Dividends declared per common share


$

0.085



$

0.075



$

0.17



$

0.15



















Weighted average number of common shares used
in the determination of:

















Basic earnings per share



14,959,309




14,889,816




14,959,284




14,880,889


Diluted earnings per share



15,117,726




15,055,554




15,116,712




15,045,204


 

Cision View original content:http://www.prnewswire.com/news-releases/consolidated-water-co-ltd-reports-second-quarter-2018-results-300695221.html

SOURCE Consolidated Water Co. Ltd.

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