GEORGE TOWN, Cayman
Islands, March 15, 2016 /PRNewswire/
-- Consolidated Water Co. Ltd. (NASDAQ Global Select Market:
"CWCO") ("Consolidated Water" or "the Company"), which develops and
operates seawater desalination plants and water distribution
systems in areas of the world where naturally occurring supplies of
potable water are scarce or nonexistent and manufactures water
treatment systems, today reported its operating results for the
year ended December 31, 2015. The
Company will host an investor conference call on Wednesday, March 16, 2016 at 11:00 a.m. EDT (see details below) to discuss its
operating results and other topics of interest.
2015 Operating Results
Net income attributable to the Company's stockholders increased
in 2015 to $7,518,701 ($0.51 per share on a fully-diluted basis), as
compared to $6,265,358 ($0.42 per share on a fully-diluted basis) for
2014.
Total revenues for 2015 decreased to $57,116,202 from $65,559,078 in 2014 due to decreases in revenues
for all three business segments.
Revenues generated by retail water operations were $23,254,757 in 2015 as compared to $24,104,932 for 2014. The drop in retail revenues
in 2015 is attributable to a decrease in electricity prices from
2014 to 2015 that reduced the energy component of retail water
rates.
Bulk water revenues declined to $31,854,255 for 2015 as compared to $39,201,011 for 2014. The decrease in bulk
revenues from 2014 to 2015 is principally attributable to the
Company's Bahamas and Cayman
operations, whose revenues decreased by approximately $5,641,000 and $1,532,000, respectively. The 2015 revenue
decrease for bulk water operations resulted from significant
decreases in the prices of diesel fuel and electricity from 2014 to
2015 that reduced the energy component of bulk water rates,
declines of 13% and 3% in the volumes of water sold by the
Bahamas and Cayman operations,
respectively, a reallocation of production to the Red Gate plant
from the North Sound plant while the North Sound plant was being
refurbished, and a reduction in rates charged for water produced
from the North Sound Plant under the terms of the two-year
operating agreement extension. The lower volumes of water sold by
bulk operations in 2015 reflects the continuing water conservation
and loss mitigation efforts of the Water and Sewerage Corporation
of the Bahamas and a decrease in
purchases by the Water Authority-Cayman.
Services segment revenues decreased to $2,007,190 for 2015 as compared to $2,253,135 for 2014 due to a decline in
procurement services fees of approximately $221,000.
Consolidated gross profit declined slightly to approximately
$22.9 million (40% of total revenues)
in 2015, versus approximately $23.1
million (35% of total revenues) in 2014. Retail segment
gross profit was $12,329,123 (53% of
retail revenues) for 2015, up from $12,160,861 (50% of retail revenues) for 2014.
The improvement in retail gross profit as a percentage of revenues
from 2014 to 2015 is due to energy prices, maintenance expenses and
water system losses for 2015 that were less than those for 2014.
Gross profit for the bulk segment was $10,219,466 (32% of revenues) for 2015 as
compared to $11,281,762 (29% of
revenues) for 2014. Total gross profit dollars for the bulk segment
decreased in 2015 due to maintenance and repairs expenses that
exceeded those for 2014 by approximately $363,000 and the lower revenues generated in
2015. The services segment generated a gross profit of $377,969 in 2015 as opposed to a gross loss in
2014 of ($327,125), as a result of
improved gross profit margins for construction activities.
Consolidated general and administrative ("G&A") expenses
decreased to $14,458,494 for 2015, as
compared to $16,654,439 for 2014. The
decline in consolidated G&A expenses from 2014 to 2015 reflects
(i) a decrease in professional fees of almost $484,000, as the Company incurred added fees in
2014 for the judicial review conducted in connection with its
retail license negotiations; and (ii) a decrease of approximately
$1,534,000 in the project development
expenses incurred by NSC, the Company's Mexico subsidiary.
Interest expense decreased to $269,090 in 2015 from $488,770 in 2014 as interest expense for 2014
reflects the prepayment premium paid for the early redemption in
February 2014 of the remaining
outstanding balance on bonds payable and the amortization of the
related bond discount and deferred issuance costs.
As a result of the declining cash flows projected from OC-BVI's
Bar Bay contract, the Company recorded impairment charges
aggregating $1,060,000 in 2015 to
reduce the carrying value of its investment in OC-BVI to its
estimated fair value.
Other expense increased to $626,400 for 2015 from $203,135 for 2014 due to incremental foreign
currency losses recorded for the Company's Bali subsidiary of approximately $223,000.
Management Comments
"We are pleased to report an increase in net income for 2015
despite significantly lower revenues arising from declines in
energy prices that decreased our rates and a reduction in the
volume of water sold by our bulk operations," commented Chief
Executive Officer Rick McTaggart.
"This increase in net income reflects (i) operating efficiencies,
water loss mitigation efforts and construction activities that
enabled us to maintain our gross profit at an amount essentially
equal to that for 2014 despite the drop in revenues; and (ii) a
reduction in our G&A expenses arising principally from the
culmination of our development activities with respect to our
proposed project to build a desalination plant in Rosarito Beach, Mexico. With respect to the
Rosarito project, our Mexico subsidiary and its partners are on
track to submit their tender for the project by the March 23, 2016 submission deadline established
under the tender process initiated by the State of Baja California, Mexico."
"Negotiations with the Water Authority-Cayman for a new retail
license recommenced during the third quarter of 2015 and we remain
encouraged by our recent discussions with the WAC. However, we
remain unable to predict the completion date or final resolution of
these negotiations. The most recent extension of our retail license
was scheduled to expire December 31,
2015. However, we have been informed by the WAC that the
license will be extended to June 30,
2016 and that formal documentation of this extension is in
process."
"During the latter half of 2015, we identified and commenced due
diligence on a potential acquisition and subsequently announced in
February 2016 our purchase for
$7.7 million of 51% of the ownership
of Aerex Industries, Inc., an original equipment manufacturer and
service provider of a wide range of products and services
applicable to municipal water and industrial water treatment. The
Aerex acquisition represents a significant first step in our
strategy to expand our products, service offerings and customer
base and provides us with the capabilities of pursuing
complementary water related business in the U.S. market."
"Our operating activities generated $17.3
million in cash during 2015, we increased our working
capital by almost $9.3 million over
the course of the year to approximately $52.2 million, and our stockholders' equity
totaled $145 million at December 31, 2015. We are confident that our
strong financial condition and liquidity position will enable us to
aggressively pursue strategic opportunities as they arise in 2016
and thereafter," concluded Mr. McTaggart.
Annual General Meeting of Shareholders
The Company announced that it has set May
25, 2016 as the date of its annual meeting of shareholders
to be held at 10:00 a.m. at the
Westin Hotel on Seven Mile Beach in Grand
Cayman. Holders of record of the Company's stock as of
March 23, 2016 will be entitled to
vote at the meeting.
Investor Conference Call
The Company will host a conference call at 11:00 a.m. EDT on Wednesday, March 16, 2016 to discuss its 2015
operating results and other topics of interest. Shareholders and
other interested parties may participate in the conference call by
dialing 877-317-6789 (international participants dial 412-317-6789)
and requesting participation in the "Consolidated Water Company
Call" a few minutes before 11:00 a.m.
EDT on Wednesday, March 16,
2016.
A replay of the conference call will be available one hour
after the call through Wednesday, March 23,
2016 at 9:00 a.m. EDT by
dialing 877-344-7529 (international participants dial 412-317-0088)
and entering the conference ID # 10082174.
The replay will also be available on the Company's website at
www.cwco.com through March 23,
2016.
CWCO-E
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 or nonexistent and manufactures water treatment systems. 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 and a water industry equipment manufacturing and
service business 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 projects under development in
Baja California, Mexico and
Bali, Indonesia, 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:
Frederick W.
McTaggart, President and CEO, at (345) 945-4277 or
David W. Sasnett, Executive Vice
President and CFO, at (954) 509-8200 or via e-mail at
info@cwco.com
(Financial Highlights Follow)
CONSOLIDATED WATER
CO. LTD.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
December
31,
|
|
|
|
2015
|
|
|
2014
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
44,792,734
|
|
|
$
|
35,713,689
|
|
Certificate of
deposit
|
|
|
5,637,538
|
|
|
|
5,000,000
|
|
Restricted
cash
|
|
|
428,203
|
|
|
|
456,083
|
|
Accounts receivable,
net
|
|
|
9,529,016
|
|
|
|
11,773,744
|
|
Inventory
|
|
|
1,918,728
|
|
|
|
1,738,382
|
|
Prepaid expenses and
other current assets
|
|
|
1,282,660
|
|
|
|
1,612,860
|
|
Current portion of
loans receivable
|
|
|
1,841,851
|
|
|
|
1,726,310
|
|
Costs and estimated
earnings in excess of billings - construction projects
|
|
|
-
|
|
|
|
1,090,489
|
|
Total current
assets
|
|
|
65,430,730
|
|
|
|
59,111,557
|
|
Property, plant and
equipment, net
|
|
|
53,743,170
|
|
|
|
56,396,988
|
|
Construction in
progress
|
|
|
1,928,610
|
|
|
|
1,900,016
|
|
Inventory,
non-current
|
|
|
4,558,374
|
|
|
|
4,240,977
|
|
Loans
receivable
|
|
|
3,769,016
|
|
|
|
5,610,867
|
|
Investment in
OC-BVI
|
|
|
4,548,271
|
|
|
|
5,208,603
|
|
Intangible assets,
net
|
|
|
771,811
|
|
|
|
927,900
|
|
Goodwill
|
|
|
3,499,037
|
|
|
|
3,499,037
|
|
Land held for
development
|
|
|
20,558,424
|
|
|
|
20,558,424
|
|
Other
assets
|
|
|
2,809,255
|
|
|
|
3,005,462
|
|
Total
assets
|
|
$
|
161,616,698
|
|
|
$
|
160,459,831
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and
other current liabilities
|
|
$
|
4,829,535
|
|
|
$
|
5,962,015
|
|
Dividends
payable
|
|
|
1,177,246
|
|
|
|
1,190,325
|
|
Demand loan
payable
|
|
|
7,000,000
|
|
|
|
9,000,000
|
|
Billings in excess of
costs and estimated earnings - construction project
|
|
|
189,985
|
|
|
|
-
|
|
Total current
liabilities
|
|
|
13,196,766
|
|
|
|
16,152,340
|
|
Other
liabilities
|
|
|
224,827
|
|
|
|
224,827
|
|
Total
liabilities
|
|
|
13,421,593
|
|
|
|
16,377,167
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Consolidated Water
Co. Ltd. stockholders' equity
|
|
|
|
|
|
|
|
|
Redeemable preferred
stock, $0.60 par value. Authorized 200,000 shares; issued and
outstanding 38,804 and 36,840 shares, respectively
|
|
|
23,282
|
|
|
|
22,104
|
|
Class A common stock,
$0.60 par value. Authorized 24,655,000 shares; issued and
outstanding 14,781,201 and 14,715,899 shares,
respectively
|
|
|
8,868,721
|
|
|
|
8,829,539
|
|
Class B common stock,
$0.60 par value. Authorized 145,000 shares; none issued
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
84,597,349
|
|
|
|
83,779,292
|
|
Retained
earnings
|
|
|
52,084,175
|
|
|
|
49,000,621
|
|
Cumulative
translation adjustment
|
|
|
(533,365)
|
|
|
|
(482,388)
|
|
Total Consolidated
Water Co. Ltd. stockholders' equity
|
|
|
145,040,162
|
|
|
|
141,149,168
|
|
Non-controlling
interests
|
|
|
3,154,943
|
|
|
|
2,933,496
|
|
Total
equity
|
|
|
148,195,105
|
|
|
|
144,082,664
|
|
Total liabilities
and equity
|
|
$
|
161,616,698
|
|
|
$
|
160,459,831
|
|
CONSOLIDATED WATER
CO. LTD.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
Retail
revenues
|
|
$
|
23,254,757
|
|
|
$
|
24,104,932
|
|
|
$
|
23,018,498
|
|
Bulk
revenues
|
|
|
31,854,255
|
|
|
|
39,201,011
|
|
|
|
39,960,220
|
|
Services
revenues
|
|
|
2,007,190
|
|
|
|
2,253,135
|
|
|
|
843,413
|
|
Total
revenues
|
|
|
57,116,202
|
|
|
|
65,559,078
|
|
|
|
63,822,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of retail
revenues
|
|
|
10,925,634
|
|
|
|
11,944,071
|
|
|
|
10,956,904
|
|
Cost of bulk
revenues
|
|
|
21,634,789
|
|
|
|
27,919,249
|
|
|
|
28,279,088
|
|
Cost of services
revenues
|
|
|
1,629,221
|
|
|
|
2,580,260
|
|
|
|
1,080,260
|
|
Total cost of
revenues
|
|
|
34,189,644
|
|
|
|
42,443,580
|
|
|
|
40,316,252
|
|
Gross
profit
|
|
|
22,926,558
|
|
|
|
23,115,498
|
|
|
|
23,505,879
|
|
General and
administrative expenses
|
|
|
14,458,494
|
|
|
|
16,654,439
|
|
|
|
15,844,303
|
|
Income from
operations
|
|
|
8,468,064
|
|
|
|
6,461,059
|
|
|
|
7,661,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
1,013,252
|
|
|
|
1,440,631
|
|
|
|
826,570
|
|
Interest
expense
|
|
|
(269,090)
|
|
|
|
(488,770)
|
|
|
|
(484,057)
|
|
Profit sharing income
from OC-BVI
|
|
|
105,300
|
|
|
|
111,375
|
|
|
|
357,636
|
|
Equity in earnings of
OC-BVI
|
|
|
294,368
|
|
|
|
303,380
|
|
|
|
979,716
|
|
Impairment of
investment in OC-BVI
|
|
|
(1,060,000)
|
|
|
|
(860,000)
|
|
|
|
(200,000)
|
|
Other
|
|
|
(626,400)
|
|
|
|
(203,135)
|
|
|
|
7,048
|
|
Other income
(expense), net
|
|
|
(542,570)
|
|
|
|
303,481
|
|
|
|
1,486,913
|
|
Net
income
|
|
|
7,925,494
|
|
|
|
6,764,540
|
|
|
|
9,148,489
|
|
Income
attributable to non-controlling interests
|
|
|
406,793
|
|
|
|
499,182
|
|
|
|
553,970
|
|
Net income
attributable to Consolidated Water Co. Ltd.
stockholders
|
|
$
|
7,518,701
|
|
|
$
|
6,265,358
|
|
|
$
|
8,594,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share attributable to Consolidated Water Co. Ltd. common
stockholders
|
|
$
|
0.51
|
|
|
$
|
0.43
|
|
|
$
|
0.59
|
|
Diluted earnings
per common share attributable to Consolidated Water Co. Ltd. common
stockholders
|
|
$
|
0.51
|
|
|
$
|
0.42
|
|
|
$
|
0.58
|
|
Dividends declared
per common share
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used in the determination
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
14,741,748
|
|
|
|
14,697,896
|
|
|
|
14,633,884
|
|
Diluted earnings per
share
|
|
|
14,827,755
|
|
|
|
14,764,323
|
|
|
|
14,703,880
|
|
CONSOLIDATED WATER
CO. LTD.
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
Net income
|
|
$
|
7,925,494
|
|
|
$
|
6,764,540
|
|
|
$
|
9,148,489
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(53,660)
|
|
|
|
(10,953)
|
|
|
|
(480,614)
|
|
Total other
comprehensive income (loss)
|
|
|
(53,660)
|
|
|
|
(10,953)
|
|
|
|
(480,614)
|
|
Comprehensive
income
|
|
|
7,871,834
|
|
|
|
6,753,587
|
|
|
|
8,667,875
|
|
Comprehensive income
attributable to non-controlling interests
|
|
|
404,110
|
|
|
|
498,634
|
|
|
|
529,939
|
|
Comprehensive
income attributable to Consolidated Water Co. Ltd.
stockholders
|
|
$
|
7,467,724
|
|
|
$
|
6,254,953
|
|
|
$
|
8,137,936
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/consolidated-water-co-ltd-reports-improved-2015-operating-results-300236622.html
SOURCE Consolidated Water Co. Ltd.