Market Overview

Pure Cycle Corporation Announces Financial Results for its Fourth Quarter and Fiscal Year Ended August 31, 2019

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DENVER, CO / ACCESSWIRE / November 7, 2019 / Pure Cycle Corporation (NASDAQ:PCYO) ("Pure Cycle" or the "Company") today reported financial results for its fourth quarter and fiscal year ended August 31, 2019.

Fourth Quarter and Fiscal Year Ended August 31, 2019 Highlights:

  • Revenue during the fourth quarter and fiscal year ended August 31, 2019, was $9.5 million and $20.4 million, respectively
  • Operating income during the fourth quarter and fiscal year ended August 31, 2019, was $1.6 million and $3.0 million, respectively
  • Net income during the fourth quarter and fiscal year ended August 31, 2019, was $2.2 million and $4.0 million, respectively
  • Fully diluted earnings per share during the fourth quarter and fiscal year ended August 31, 2019, was $0.09 and $0.17, respectively
  • Closed the sale of 172 and 255 finished lots at Sky Ranch, receiving approximately $8 million and $18 million in aggregate proceeds during the fourth quarter and fiscal year ended August 31, 2019, respectively.

"Fiscal year 2019 was an extraordinary year for us, in which we were able to execute our land development business segment and expand our water utilities segment," commented Mark Harding, President of Pure Cycle Corporation. "We are pleased to have closed the sale of 255 finished lots, receiving in aggregate $18 million in proceeds. This amount represents an acceleration of lot deliveries to our home builder customers from our original agreements and a testament to the success of opening our initial phase of Sky Ranch. Given this acceleration, we expect to close the remaining 159 finished lots under our finished lot agreement and 92 lots under our lot development agreements during fiscal 2020, which is more than 18 months ahead of schedule. Subsequent to our fiscal year end, we have delivered and received 2 progress payments for an additional 95 lots pursuant to our lot delivery agreements and closed an additional 22 finished lot sales, due to strong demand from our home builders for us to complete lots to keep up with home sales at Sky Ranch.

In addition to lot sales we also received payments for 113 water and wastewater taps in fiscal 2019 for a combined total of $3.5 million. As of October 31, 2019, our three home builder customers have been granted over 120 building permits and closed 11 homes with the new homeowners. Sales from our home builder customers continue to exceed forecasts, and we are thrilled with the success of our Sky Ranch opening" continued Mr. Harding.

In addition, on October 25, 2019, the Sky Ranch Community Authority Board (the "CAB"), a political subdivision and a public corporation of the State of Colorado responsible for the construction, design and financing of the public improvements at Sky Ranch, filed a preliminary limited offering memorandum for the issuance of tax-exempt, fixed rate senior bonds in the aggregate principal amount of approximately $10,820,000 and tax-exempt, fixed-rate subordinate bonds in the aggregate principal amount of approximately $1,765,000. Should the offering close successfully, the net proceeds would be available to reimburse a portion of the CAB's obligations to Pure Cycle for its construction of public improvements at Sky Ranch. As of August 31, 2019, we have advanced the CAB approximately $20 million for the construction of public improvements.

Period Ended August 31,
In 000's (except per share)
Three Months Ended Year Ended
2019 2018 2019 2018
Revenue:
Water sales
$ 1,765 $ 1,728 $ 4,861 $ 4,745
Tap fees (water and wastewater)
1,789 - 3,545 50
Lot sales
5,920 2,164 11,956 2,164
Total revenue
9,474 3,892 20,362 6,959
Cost of revenues:
Water
$ (1,010 ) $ (975 ) $ (2,639 ) $ (2,148 )
Lot fee development
(5,589 ) (2,014 ) (11,305 ) (2,014 )
Total cost of revenues
(6,599 ) (2,989 ) (13,944 ) (4,162 )
Gross profit
2,875 903 6,418 2,797
Operating expenses:
General and administrative
(1,243 ) (1,039 ) (3,107 ) (2,855 )
Other
(36 ) 129 (313 ) (251 )
Income (loss) from operations
1,596 (7 ) 2,998 (309 )
Other income (expenses):
Oil and gas royalties and lease income, net
49 53 204
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