GEORGE TOWN, Grand Cayman,
Cayman Islands, March 16, 2017 /PRNewswire/ -- Consolidated
Water Co. Ltd. (NASDAQ Global Select Market: "CWCO") ("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, today
reported its operating results for the year ended December 31, 2016. The Company will host an
investor conference call on Friday, March
17, 2017 at 11:00 a.m. eastern
time (see details below) to discuss its operating results
and other topics of interest.
2016 Operating Results
Net income attributable to Consolidated Water Co. Ltd.
stockholders for 2016 was $3,960,501,
($0.27 per share on a fully-diluted
basis), as compared to $7,518,701
($0.51 per share on a fully-diluted
basis) for 2015.
Total revenues for 2016 and 2015 were $57,875,707 and $57,116,202, respectively. Higher revenues for
the retail and services segments in 2016 served to offset a
decrease in the bulk segment revenues.
Revenues generated by retail water operations were $23,505,619 in 2016 as compared to $23,254,757 in 2015. The volume of water sold by
Cayman Water retail operations increased by 12% from 2015 to 2016
which served to offset (i) lower energy costs, which reduced the
energy component of the rates charged to Cayman Water customers by
$818,771 from 2015; (ii) a reduction
in Cayman Water base rates in the first quarter of 2016 of 4.4%
from 2015; and (iii) a decrease in sales for CW-Bali of
approximately $277,000.
Bulk segment revenues were $29,647,034 and $31,854,255 for 2016 and 2015, respectively. The
decrease in bulk revenues from 2015 to 2016 is attributable to
Bahamas and Cayman operations,
which generated approximately $1,507,000 and $893,000 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
pass-through energy component of bulk water rates.
Services segment revenues were $4,723,054 and $2,007,190 for 2016 and 2015, respectively.
Services revenues increased in 2016 due to the addition of
approximately $3.9 million of
revenues resulting from the acquisition of a 51% interest in Aerex
Industries, Inc. in February 2016.
The increase in service revenues in 2016 from the addition of Aerex
was offset by a decrease in revenues recognized on plant
construction and refurbishment projects performed for the Water
Authority-Cayman. Such revenues totaled $320,296 in 2016 as compared to $1,478,843 in 2015.
Consolidated gross profit for 2016 was $24,250,886 or 42% of total revenues, as compared
to $23,308,220 or 41% of total
revenues, for 2015. Gross profit for the retail and services
segments increased from 2015 to 2016 while bulk segment gross
profit remained relatively consistent.
Retail segment gross profit was $13,211,321 (56% of retail revenues) and
$12,710,785 (55% of retail revenues)
for 2016 and 2015, respectively.
Gross profit for the bulk segment was $10,158,484 and $10,219,466 for 2016 and 2015, respectively.
Gross profit as a percentage of bulk revenues increased to
approximately 34% in 2016 as compared to 32% in 2015 due to the
reduced energy prices, as the energy expense for bulk operations
was approximately $2,048,000 less in
2016 than in 2015
Gross profit for the services segment was $881,081 and $377,969 for 2016 and 2015, respectively. The
increase in the service segment's gross profit from 2015 to 2016
reflects incremental gross profit generated by Aerex of
$796,450 offset by a decrease of
$293,338 in gross profit generated on
plant construction and refurbishment projects.
G&A expenses on a consolidated basis were $18,677,584 and $14,840,156 for 2016 and 2015, respectively. The
increase in consolidated G&A expenses from 2015 to 2016 is
primarily attributable to the addition of approximately
$2,309,000 in expenses for Aerex and
an increase of approximately $1,036,000 in the expenses incurred in connection
with the project development activities of our Mexican
subsidiaries.
The Company recorded an impairment loss of $2 million in 2016 to reduce the carrying value
of its Bali subsidiary's
long-lived assets to their estimated fair value. The Company also
recorded an impairment loss of $1,750,000 in 2016 to reduce the carrying value
of the goodwill associated with the Aerex acquisition.
Other income (expense), net for 2016 was $417,954 as compared to ($542,570) for 2015. The fluctuation in this net
component of results of operations reflects (i) interest income
that was approximately $404,000 less
in 2016 than 2015 due to a decrease in interest earning deposit and
loan receivable balances (ii) an impairment loss recorded for the
equity investment in OC-BVI in 2016 of ($925,000) as compared to an impairment loss of
($1,060,000) for this investment in
2015; (iii) an unrealized loss of ($297,000) recorded in 2016 resulting from the
revaluation of the net put/call option value recorded in connection
with the Aerex acquisition; (iv) $271,000 relating to the gain on sale of sale of
fixed assets in 2016: and (iv) foreign currency gains relating to
the Bali subsidiary of
approximately $201,000 in 2016, as
compared to foreign currency losses of approximately ($346,000) in 2015.
Management Comments
"Our consolidated gross profit increased last year by
approximately $1.0 million, boosted
by improvements in our retail and services segments while the gross
profit of our bulk segment was flat. Gross profit as a
percentage of revenues for our retail and bulk segments improved
year over year indicating the Company's continued focus on cost
control.
Our full year operating results were adversely impacted by
non-cash impairment losses for our desalination plant in
Bali, Indonesia, our long-standing
investment in OC-BVI and the goodwill we recorded in connection
with our recent acquisition of Aerex," stated Rick McTaggart, CEO.
"We are obviously disappointed with the performance of our
Bali subsidiary which has been
adversely impacted by reduced demand for water from our plant and a
steep decline in the Bali economy
since we began developing this project more than five years ago. We
continue to seek a strategic partner for this business. But
while we initially thought this business had great potential, we
may decide later this year to discontinue our Bali operations in the event that we cannot
obtain a strategic partner for our Bali subsidiary, or if its prospects do not
improve, in the coming months.
I am pleased to announce that in February, OC-BVI executed an
amendment of the Bar Bay water supply agreement which granted a 14
year extension of this agreement in exchange for an approximately
31% reduction in the base water tariff, exclusive of electricity
costs, charged by OC-BVI to the Government of the British Virgin
Islands. Consequently we do not presently expect to incur any
further impairment losses on our equity investment in OC-BVI,"
continued Mr. McTaggart.
"Although the financial performance of our recently acquired
Aerex subsidiary was below management's expectations in 2016 due to
a delay in orders from a large customer, this customer has now
started purchasing again from Aerex and consequently we expect
Aerex's performance in 2017 to improve as compared to 2016."
"In accordance with Baja
California's public-private-partnership law and the terms of
our contract, we submitted proposals to our client requesting an
increase to the water tariff to compensate for significant changes
in foreign exchange rates, lending rates and certain changes in law
which have impacted our 100 million gallon per day desalination
plant project in Rosarito, Mexico
subsequent to the Presidential election in the United States in November. We are
currently discussing these proposals with our client and while
nothing yet has been finalized, we are encouraged by their initial
responses to our proposals. We continue to work closely with
our partners, advisors and financing institutions with the goal of
commencing construction of this very important project in the third
quarter of this year," concluded Mr. McTaggart.
Annual General Meeting of Shareholders
The Company announced that it has set May
22, 2017 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 20, 2017 will be entitled to
vote at the meeting.
Investor Conference Call
The Company will host a conference call at 11:00 a.m. eastern time on Friday, March 17, 2017 to review the Company's
annual operating results for 2016, along with other 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 11:00 a.m. on Friday,
March 17, 2017.
A replay of the conference call will be available one hour
after the call through Friday, March 24,
2017 at 9:00 a.m. by dialing
877-344-7529 (international participants dial 412-317-0088) and
entering the conference ID # 10102840, 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/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 water projects, including the project under
development in Baja California,
Mexico, 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,
|
|
|
|
2016
|
|
|
2015
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
39,254,116
|
|
|
$
|
44,792,734
|
|
Certificate of
deposit
|
|
|
-
|
|
|
|
5,637,538
|
|
Restricted
cash
|
|
|
-
|
|
|
|
428,203
|
|
Accounts receivable,
net
|
|
|
16,500,798
|
|
|
|
9,529,016
|
|
Inventory
|
|
|
2,305,879
|
|
|
|
1,918,728
|
|
Prepaid expenses and
other current assets
|
|
|
1,096,200
|
|
|
|
1,282,660
|
|
Current portion of
loans receivable
|
|
|
1,633,588
|
|
|
|
1,841,851
|
|
Costs and estimated
earnings in excess of billings
|
|
|
85,211
|
|
|
|
-
|
|
Total current
assets
|
|
|
60,875,792
|
|
|
|
65,430,730
|
|
Property, plant and
equipment, net
|
|
|
53,084,105
|
|
|
|
53,743,170
|
|
Construction in
progress
|
|
|
885,494
|
|
|
|
1,928,610
|
|
Inventory,
non-current
|
|
|
4,606,088
|
|
|
|
4,558,374
|
|
Loans
receivable
|
|
|
2,135,428
|
|
|
|
3,769,016
|
|
Investment in
OC-BVI
|
|
|
4,086,630
|
|
|
|
4,548,271
|
|
Intangible assets,
net
|
|
|
5,195,476
|
|
|
|
771,811
|
|
Goodwill
|
|
|
9,784,248
|
|
|
|
3,499,037
|
|
Land held for
development
|
|
|
20,558,424
|
|
|
|
20,558,424
|
|
Other
assets
|
|
|
2,392,843
|
|
|
|
2,767,583
|
|
Total
assets
|
|
$
|
163,604,528
|
|
|
$
|
161,575,026
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and
other current liabilities
|
|
$
|
4,898,908
|
|
|
$
|
4,829,535
|
|
Dividends
payable
|
|
|
1,187,214
|
|
|
|
1,177,246
|
|
Note payable to
related party
|
|
|
490,000
|
|
|
|
-
|
|
Demand loan
payable
|
|
|
-
|
|
|
|
6,958,328
|
|
Billings in excess of
costs and estimated earnings
|
|
|
102,966
|
|
|
|
189,985
|
|
Total current
liabilities
|
|
|
6,679,088
|
|
|
|
13,155,094
|
|
Deferred tax
liability
|
|
|
1,915,241
|
|
|
|
-
|
|
Other
liabilities
|
|
|
904,827
|
|
|
|
224,827
|
|
Total
liabilities
|
|
|
9,499,156
|
|
|
|
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 35,225 and 38,804 shares, respectively
|
|
|
21,135
|
|
|
|
23,282
|
|
Class A common stock,
$0.60 par value. Authorized 24,655,000 shares; issued and
outstanding 14,871,664 and 14,781,201 shares,
respectively
|
|
|
8,922,998
|
|
|
|
8,868,721
|
|
Class B common stock,
$0.60 par value. Authorized 145,000 shares; none issued
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
85,621,033
|
|
|
|
84,597,349
|
|
Retained
earnings
|
|
|
51,589,337
|
|
|
|
52,084,175
|
|
Cumulative translation
adjustment
|
|
|
(549,555)
|
|
|
|
(533,365)
|
|
Total Consolidated
Water Co. Ltd. stockholders' equity
|
|
|
145,604,948
|
|
|
|
145,040,162
|
|
Non-controlling
interests
|
|
|
8,500,424
|
|
|
|
3,154,943
|
|
Total
equity
|
|
|
154,105,372
|
|
|
|
148,195,105
|
|
Total liabilities
and equity
|
|
$
|
163,604,528
|
|
|
$
|
161,575,026
|
|
CONSOLIDATED WATER
CO. LTD.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
|
Year Ended
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Retail
revenues
|
|
$
|
23,505,619
|
|
|
$
|
23,254,757
|
|
|
$
|
24,104,932
|
|
Bulk
revenues
|
|
|
29,647,034
|
|
|
|
31,854,255
|
|
|
|
39,201,011
|
|
Services
revenues
|
|
|
4,723,054
|
|
|
|
2,007,190
|
|
|
|
2,253,135
|
|
Total
revenues
|
|
|
57,875,707
|
|
|
|
57,116,202
|
|
|
|
65,559,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of retail
revenues
|
|
|
10,294,298
|
|
|
|
10,543,972
|
|
|
|
11,521,277
|
|
Cost of bulk
revenues
|
|
|
19,488,550
|
|
|
|
21,634,789
|
|
|
|
27,985,441
|
|
Cost of services
revenues
|
|
|
3,841,973
|
|
|
|
1,629,221
|
|
|
|
2,580,260
|
|
Total cost of
revenues
|
|
|
33,624,821
|
|
|
|
33,807,982
|
|
|
|
42,086,978
|
|
Gross
profit
|
|
|
24,250,886
|
|
|
|
23,308,220
|
|
|
|
23,472,100
|
|
General and
administrative expenses
|
|
|
18,677,584
|
|
|
|
14,840,156
|
|
|
|
17,011,041
|
|
Impairment loss on
long-lived assets
|
|
|
2,000,000
|
|
|
|
-
|
|
|
|
-
|
|
Impairment of
goodwill
|
|
|
1,750,000
|
|
|
|
-
|
|
|
|
-
|
|
Income from
operations
|
|
|
1,823,302
|
|
|
|
8,468,064
|
|
|
|
6,461,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
609,750
|
|
|
|
1,013,252
|
|
|
|
1,440,631
|
|
Interest
expense
|
|
|
(104,048)
|
|
|
|
(269,090)
|
|
|
|
(488,770)
|
|
Profit sharing income
from OC-BVI
|
|
|
125,550
|
|
|
|
105,300
|
|
|
|
111,375
|
|
Equity in earnings of
OC-BVI
|
|
|
337,809
|
|
|
|
294,368
|
|
|
|
303,380
|
|
Impairment loss on
investment in OC-BVI
|
|
|
(925,000)
|
|
|
|
(1,060,000)
|
|
|
|
(860,000)
|
|
Unrealized loss on
put/call option
|
|
|
(297,000)
|
|
|
|
-
|
|
|
|
-
|
|
Other
|
|
|
670,893
|
|
|
|
(626,400)
|
|
|
|
(203,135)
|
|
Other income
(expense), net
|
|
|
417,954
|
|
|
|
(542,570)
|
|
|
|
303,481
|
|
Income before
income taxes
|
|
|
2,241,256
|
|
|
|
7,925,494
|
|
|
|
6,764,540
|
|
Provision for
(benefit from) income taxes
|
|
|
(536,057)
|
|
|
|
-
|
|
|
|
-
|
|
Net
income
|
|
|
2,777,313
|
|
|
|
7,925,494
|
|
|
|
6,764,540
|
|
Income (loss)
attributable to non-controlling interests
|
|
|
(1,183,188)
|
|
|
|
406,793
|
|
|
|
499,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Consolidated Water Co. Ltd.
stockholders
|
|
$
|
3,960,501
|
|
|
$
|
7,518,701
|
|
|
$
|
6,265,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share attributable to Consolidated Water
Co. Ltd. common stockholders
|
|
$
|
0.27
|
|
|
$
|
0.51
|
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per common share attributable to Consolidated Water
Co. Ltd. common stockholders
|
|
$
|
0.27
|
|
|
$
|
0.51
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
14,809,909
|
|
|
|
14,741,748
|
|
|
|
14,697,896
|
|
Diluted earnings per
share
|
|
|
14,944,028
|
|
|
|
14,827,755
|
|
|
|
14,764,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED WATER
CO. LTD.
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
Year Ended
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Net income
|
|
$
|
2,777,313
|
|
|
$
|
7,925,494
|
|
|
$
|
6,764,540
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(17,042)
|
|
|
|
(53,660)
|
|
|
|
(10,953)
|
|
Total other
comprehensive income (loss)
|
|
|
(17,042)
|
|
|
|
(53,660)
|
|
|
|
(10,953)
|
|
Comprehensive
income (loss)
|
|
|
2,760,271
|
|
|
|
7,871,834
|
|
|
|
6,753,587
|
|
Comprehensive income
(loss) attributable to non-controlling interests
|
|
|
(1,184,040)
|
|
|
|
404,110
|
|
|
|
498,634
|
|
Comprehensive
income attributable to Consolidated Water Co. Ltd.
Stockholders
|
|
$
|
3,944,311
|
|
|
$
|
7,467,724
|
|
|
$
|
6,254,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/consolidated-water-co-ltd-reports-2016-operating-results-300425255.html
SOURCE Consolidated Water Co. Ltd.