GEORGE TOWN, Cayman Islands,
Aug. 9, 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, today reported its
operating results for the second quarter of 2016. The Company will
host an investor conference call on Wednesday, August 10, 2016 at 11:00 a.m. EDT (see details below) to discuss its
operating results and other topics of interest.
Second Quarter Operating Results
Net income attributable to Consolidated Water Co. Ltd.
stockholders for the quarter ended June 30,
2016 was $2,204,333
($0.15 per share on a fully-diluted
basis), as compared to $2,228,100
($0.15 per share on a fully-diluted
basis) for the quarter ended June 30,
2015.
Revenues generated by retail water operations were $6,292,833 in 2016 as compared to $6,152,185 in 2015. Although the volume of water
sold by the retail segment increased by approximately 10% from 2015
to 2016, retail revenues increased by only approximately 2% in 2016
due to (i) lower energy costs, which reduced the energy component
of the rates charged to the Cayman retail customers by $172,437 from 2015; and (ii) the annual first
quarter adjustment of base rates under the Company's retail
license, which were lowered in 2016 by 4.4% due to downward
movement in the price indices used as the basis for such rate
adjustments.
Bulk segment revenues were $7,441,061 and $8,187,273 for 2016 and 2015, respectively. The
decrease in bulk revenues from 2015 to 2016 is attributable to the
Company's Bahamas and Cayman
operations, which generated approximately $587,000 and $210,000 less in revenues, respectively, in 2016
than in 2015 due to a significant decrease in the prices of diesel
fuel and electricity from 2015 to 2016, which reduced the energy
component of bulk water rates.
Services segment revenues were $1,664,741 and $146,211 for 2016 and 2015, respectively.
Services revenues increased in 2016 primarily as a result of the
addition of the revenues of Aerex Industries, Inc. ("Aerex") after
the acquisition of 51% of this company on February 11, 2016.
Consolidated gross profit increased to $6,592,379 (43% of total revenues) in 2016,
versus $5,965,294 (41% of total
revenues) in 2015. Gross profit for retail revenues was
$3,607,517 (57% of retail revenues)
and $3,494,487 (57% of retail
revenues) in 2016 and 2015, respectively. Gross profit on bulk
revenues was $2,627,800 (35% of bulk
revenues), compared with $2,537,344
(31% of bulk revenues) for the prior year period. The services
segment generated gross profit of $357,062 in 2016, while incurring a negative
gross profit of ($66,537) in
2015.
Consolidated general and administrative expenses ("G&A")
increased to approximately $4.9
million in 2016 from approximately $3.7 million in 2015 due to the addition of the
G&A expenses of Aerex and an increase in the project
development expenses incurred by the Company's Mexican subsidiary,
N.S.C. Agua S.A. de C.V. ("NSC").
Other income (expense), net for 2016 was $418,837 as compared to $28,195 for 2015. The fluctuation in this net
component of results of operations reflects (i) the impairment
charge recorded for the Company's equity investment in Ocean
Conversion (BVI) Ltd. ("OC-BVI") in 2015 of $275,000, as no impairment charge was recorded
for this investment in 2016; and (ii) foreign currency gains
recorded for PT Consolidated Water Bali ("CW-Bali") in 2016 as
compared to foreign currency losses recorded for this subsidiary in
2015.
Management Comments
"Our gross profit, both in dollars and as a percentage of
revenues increased for all three of our business segments this past
quarter compared to the second quarter of 2015, resulting in a
total gross profit increase this past quarter of approximately
$627,000, or 11%, compared to the
same period of 2015," stated CEO Rick
McTaggart.
"Our newly-acquired Aerex subsidiary contributed approximately
$1.3 million in revenues to our
services segment this past quarter. Aerex is an original
equipment manufacturer of a wide range of products and services
applicable to the water industry, and consequently its revenues and
earnings are dependent on the timing and size of purchase orders
for these products and services. While Aerex's financial
performance during the four months following its acquisition has
not been consistent on average with its 2015 financial performance,
we remain extremely positive about the contribution that Aerex will
make to our Company.
We were very pleased to announce in mid-June that our consortium
was declared the winner of the bidding process for the 100 million
gallon per day seawater desalination plant in Rosarito, Mexico. We are currently in
the process of finalizing a public-private partnership agreement
with the State of Baja California,
Mexico which we expect to execute in the coming
weeks.
We believe that our negotiations with the Cayman Islands Water
Authority for a new water utility license in Grand Cayman are nearing an end, and although
a few important differences have yet to be resolved, we remain
hopeful that these negotiations will be concluded before the end of
this year," concluded Mr. McTaggart.
Six Months Operating Results
Net income attributable to Consolidated Water Co. Ltd.
stockholders for 2016 was $4,258,974
($0.29 per share on a fully-diluted
basis), as compared to $4,149,361
($0.28 per share on a fully-diluted
basis) for 2015.
Total revenues for 2016 and 2015 were $29,433,407 and $29,151,781, respectively. Higher revenues for
the services segment in 2016 served to offset a decline in bulk
segment revenues as retail revenue remained relatively consistent
in 2016 from 2015. Gross profit for 2016 was $12,769,410 or 43% of total revenues, as compared
to $12,113,596 or 42% of total
revenues, for 2015. Gross profit for the retail and services
segments increased while the bulk segment gross profit declined in
2016 from 2015.
G&A expenses on a consolidated basis were $9,396,760 and $7,554,540 for 2016 and 2015, respectively. The
increase in consolidated G&A expenses from 2015 to 2016 is
primarily attributable to the addition of approximately
$1,022,000 in expenses for Aerex
after the Company's acquisition of a 51% ownership interest in this
company in February 2016 and an
increase of approximately $629,000 in
the project development expenses incurred by the Company's Mexican
subsidiary, NSC.
Other income (expense), net for 2016 was $808,394 as compared to ($191,362) for 2015. The fluctuation in this net
component of results of operations reflects (i) a decrease in the
impairment charge recorded for the Company's equity investment in
OC-BVI in 2016 as compared to 2015 of $535,000; and (ii) foreign currency gains
recorded for CW-Bali in 2016 of approximately $174,000 as compared to foreign currency losses
recorded for this subsidiary in 2015 of approximately ($233,000).
Cash Dividends
On July 31, 2016, the Company paid
a quarterly cash dividend of $0.075
per share to shareholders of record at the close of business on
July 1, 2016. The Company has paid
cash dividends to shareholders since 1985.
Investor Conference Call
The Company will host a conference call at 11:00 a.m. Eastern Time (EDT) on Wednesday, August 10, 2016 to discuss its second
quarter operating results and other topics of interest.
Shareholders and other interested parties may participate in the
conference call by dialing
844-875-6913 (international/local participants dial
412-317-6709) and requesting participation in the "Consolidated
Water Company Call" a few minutes before 11:00 a.m. EDT on Wednesday, August 10, 2016.
A replay of the conference call will be available one hour
after the call through August 17,
2016 by dialing
877-344-7529 (international/local participants dial
412-317-0088) and entering the conference ID # 10091314, and on the
Company's website at www.cwco.com.
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. The Company operates water production and
distribution facilities and provides water-related products and
services to customers in the Cayman
Islands, Belize, the
British Virgin Islands,
The Commonwealth of The Bahamas,
Indonesia and 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.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
37,081,272
|
|
|
$
|
44,792,734
|
|
Certificate of
deposit
|
|
|
-
|
|
|
|
5,637,538
|
|
Restricted
cash
|
|
|
-
|
|
|
|
428,203
|
|
Accounts receivable,
net
|
|
|
13,717,123
|
|
|
|
9,529,016
|
|
Inventory
|
|
|
1,988,249
|
|
|
|
1,918,728
|
|
Prepaid expenses and
other current assets
|
|
|
837,947
|
|
|
|
1,282,660
|
|
Current portion of
loans receivable
|
|
|
1,902,490
|
|
|
|
1,841,851
|
|
Costs and estimated
earnings in excess of billings
|
|
|
1,066,367
|
|
|
|
-
|
|
Total current
assets
|
|
|
56,593,448
|
|
|
|
65,430,730
|
|
Property, plant and
equipment, net
|
|
|
54,251,554
|
|
|
|
53,743,170
|
|
Construction in
progress
|
|
|
2,163,548
|
|
|
|
1,928,610
|
|
Inventory,
non-current
|
|
|
4,508,940
|
|
|
|
4,558,374
|
|
Loans
receivable
|
|
|
2,802,365
|
|
|
|
3,769,016
|
|
Investment in
OC-BVI
|
|
|
4,678,093
|
|
|
|
4,548,271
|
|
Intangible assets,
net
|
|
|
5,993,644
|
|
|
|
771,811
|
|
Goodwill
|
|
|
11,534,248
|
|
|
|
3,499,037
|
|
Land held for
development
|
|
|
20,558,424
|
|
|
|
20,558,424
|
|
Other
assets
|
|
|
2,717,744
|
|
|
|
2,767,583
|
|
Total
assets
|
|
$
|
165,802,008
|
|
|
$
|
161,575,026
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and
other current liabilities
|
|
$
|
4,060,956
|
|
|
$
|
4,829,535
|
|
Dividends
payable
|
|
|
1,183,134
|
|
|
|
1,177,246
|
|
Note payable to
related party
|
|
|
490,000
|
|
|
|
-
|
|
Demand loan
payable
|
|
|
-
|
|
|
|
6,958,328
|
|
Billings in excess of
costs and estimated earnings
|
|
|
1,469
|
|
|
|
189,985
|
|
Total current
liabilities
|
|
|
5,735,559
|
|
|
|
13,155,094
|
|
Deferred tax
liability
|
|
|
2,207,636
|
|
|
|
-
|
|
Other
liabilities
|
|
|
557,827
|
|
|
|
224,827
|
|
Total
liabilities
|
|
|
8,501,022
|
|
|
|
13,379,921
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Consolidated Water
Co. Ltd. stockholders' equity
|
|
|
|
|
|
|
|
|
Redeemable preferred
stock, $0.60 par value. Authorized 200,000
shares; issued and outstanding 45,206 and 38,804 shares,
respectively
|
|
|
27,124
|
|
|
|
23,282
|
|
Class A common stock,
$0.60 par value. Authorized 24,655,000 shares; issued and
outstanding 14,806,040 and 14,781,201 shares,
respectively
|
|
|
8,883,624
|
|
|
|
8,868,721
|
|
Class B common stock,
$0.60 par value. Authorized 145,000 shares; none issued
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
84,960,531
|
|
|
|
84,597,349
|
|
Retained
earnings
|
|
|
54,118,710
|
|
|
|
52,084,175
|
|
Cumulative
translation adjustment
|
|
|
(538,907)
|
|
|
|
(533,365)
|
|
Total Consolidated
Water Co. Ltd. stockholders' equity
|
|
|
147,451,082
|
|
|
|
145,040,162
|
|
Non-controlling
interests
|
|
|
9,849,904
|
|
|
|
3,154,943
|
|
Total
equity
|
|
|
157,300,986
|
|
|
|
148,195,105
|
|
Total liabilities
and equity
|
|
$
|
165,802,008
|
|
|
$
|
161,575,026
|
|
CONSOLIDATED WATER
CO. LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(UNAUDITED)
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Retail
revenues
|
|
$
|
6,292,833
|
|
|
$
|
6,152,185
|
|
|
$
|
12,263,071
|
|
|
$
|
12,287,823
|
|
Bulk
revenues
|
|
|
7,441,061
|
|
|
|
8,187,273
|
|
|
|
14,706,354
|
|
|
|
16,569,589
|
|
Services
revenues
|
|
|
1,664,741
|
|
|
|
146,211
|
|
|
|
2,463,982
|
|
|
|
294,369
|
|
Total
revenues
|
|
|
15,398,635
|
|
|
|
14,485,669
|
|
|
|
29,433,407
|
|
|
|
29,151,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of retail
revenues
|
|
|
2,685,316
|
|
|
|
2,657,698
|
|
|
|
5,314,990
|
|
|
|
5,424,561
|
|
Cost of bulk
revenues
|
|
|
4,813,261
|
|
|
|
5,649,929
|
|
|
|
9,423,585
|
|
|
|
11,115,989
|
|
Cost of services
revenues
|
|
|
1,307,679
|
|
|
|
212,748
|
|
|
|
1,925,422
|
|
|
|
497,635
|
|
Total cost of
revenues
|
|
|
8,806,256
|
|
|
|
8,520,375
|
|
|
|
16,663,997
|
|
|
|
17,038,185
|
|
Gross
profit
|
|
|
6,592,379
|
|
|
|
5,965,294
|
|
|
|
12,769,410
|
|
|
|
12,113,596
|
|
General and
administrative expenses
|
|
|
4,935,774
|
|
|
|
3,661,574
|
|
|
|
9,396,760
|
|
|
|
7,554,540
|
|
Income from
operations
|
|
|
1,656,605
|
|
|
|
2,303,720
|
|
|
|
3,372,650
|
|
|
|
4,559,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
159,891
|
|
|
|
258,201
|
|
|
|
376,726
|
|
|
|
491,783
|
|
Interest
expense
|
|
|
(30,323)
|
|
|
|
(67,929)
|
|
|
|
(94,369)
|
|
|
|
(137,461)
|
|
Profit sharing income
from OC-BVI
|
|
|
14,175
|
|
|
|
22,275
|
|
|
|
48,600
|
|
|
|
48,600
|
|
Equity in earnings of
OC-BVI
|
|
|
85,858
|
|
|
|
62,668
|
|
|
|
131,222
|
|
|
|
137,823
|
|
Impairment of
investment in OC-BVI
|
|
|
-
|
|
|
|
(275,000)
|
|
|
|
(50,000)
|
|
|
|
(585,000)
|
|
Other
|
|
|
189,236
|
|
|
|
27,980
|
|
|
|
396,215
|
|
|
|
(147,107)
|
|
Other income
(expense), net
|
|
|
418,837
|
|
|
|
28,195
|
|
|
|
808,394
|
|
|
|
(191,362)
|
|
Income before
income taxes
|
|
|
2,075,442
|
|
|
|
2,331,915
|
|
|
|
4,181,044
|
|
|
|
4,367,694
|
|
Provision for
(benefit from) income taxes
|
|
|
(170,393)
|
|
|
|
-
|
|
|
|
(243,662)
|
|
|
|
-
|
|
Net
income
|
|
|
2,245,835
|
|
|
|
2,331,915
|
|
|
|
4,424,706
|
|
|
|
4,367,694
|
|
Income
attributable to non-controlling interests
|
|
|
41,502
|
|
|
|
103,815
|
|
|
|
165,732
|
|
|
|
218,333
|
|
Net income
attributable to Consolidated Water Co. Ltd.
stockholders
|
|
$
|
2,204,333
|
|
|
$
|
2,228,100
|
|
|
$
|
4,258,974
|
|
|
$
|
4,149,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share attributable to Consolidated Water Co. Ltd. common
stockholders
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
$
|
0.29
|
|
|
$
|
0.28
|
|
Diluted earnings
per common share attributable to Consolidated Water Co. Ltd. common
stockholders
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
$
|
0.29
|
|
|
$
|
0.28
|
|
Dividends declared
per common share
|
|
$
|
0.075
|
|
|
$
|
0.075
|
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used in the determination
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
14,792,053
|
|
|
|
14,736,057
|
|
|
|
14,787,716
|
|
|
|
14,727,455
|
|
Diluted earnings per
share
|
|
|
14,871,119
|
|
|
|
14,793,298
|
|
|
|
14,863,791
|
|
|
|
14,780,269
|
|
CONSOLIDATED WATER
CO. LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
|
(UNAUDITED)
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net income
|
|
$
|
2,245,835
|
|
|
$
|
2,331,915
|
|
|
$
|
4,424,706
|
|
|
$
|
4,367,694
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(2,659)
|
|
|
|
(7,202)
|
|
|
|
(5,834)
|
|
|
|
(42,751)
|
|
Total other
comprehensive income (loss)
|
|
|
(2,659)
|
|
|
|
(7,202)
|
|
|
|
(5,834)
|
|
|
|
(42,751)
|
|
Comprehensive
income
|
|
|
2,243,176
|
|
|
|
2,324,713
|
|
|
|
4,418,872
|
|
|
|
4,324,943
|
|
Comprehensive income
attributable to non-controlling interests
|
|
|
41,369
|
|
|
|
103,454
|
|
|
|
165,440
|
|
|
|
216,195
|
|
Comprehensive
income attributable to Consolidated Water Co. Ltd.
stockholders
|
|
$
|
2,201,807
|
|
|
$
|
2,221,259
|
|
|
$
|
4,253,432
|
|
|
$
|
4,108,748
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/consolidated-water-co-ltd-reports-second-quarter-operating-results-300311516.html
SOURCE Consolidated Water Co. Ltd.