GEORGE TOWN, Cayman Islands,
May 10, 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 first quarter of 2017. The
Company will host an investor conference call on Thursday, May 11, 2017 at 11:00 a.m. eastern time (EDT) (see details below)
to discuss its operating results and other topics of interest.
First Quarter Operating Results
Net income attributable to Consolidated Water Co. Ltd.
stockholders for 2017 was $2,631,228
($0.18 per share on a fully-diluted
basis), as compared to $2,054,641
($0.14 per share on a fully-diluted
basis) for 2016. This increase of net income is attributable to
higher gross profits generated by all four of our reporting
segments.
Total revenues for 2017 increased to $15,677,106 from $14,034,772 in 2016 due to higher revenues for
the retail, bulk and manufacturing segments. Gross profit for 2017
was $6,833,568 (44% of total
revenues) as compared to $6,177,031
(44% of total revenues) for 2016 as the gross profit for all four
segments increased from 2016 to 2017.
Revenues generated by retail water operations were $6,476,604 in 2017 as compared to $5,970,238 in 2016, consistent with the 8%
increase in the volume of water sold by the retail segment from
2016 to 2017. The Company attributed this increase in sales volume
to severe drought conditions which continued into the first quarter
of 2017 in Grand Cayman.
Bulk segment revenues were $7,690,402 and $7,265,293 for 2017 and 2016, respectively. The
increase in bulk revenues from 2016 to 2017 is primarily
attributable to the Company's Bahamas operations, which generated
approximately $444,000 in incremental
revenues due to a significant increase in the prices of diesel fuel
and electricity from 2016 to 2017, which increased the energy
component of bulk water rates in the Bahamas.
Services segment revenues remained relatively consistent at
$130,252 and $180,712 for 2017 and 2016, respectively.
The Company's manufacturing segment consists of Aerex
Industries, Inc. ("Aerex"). The Company acquired its 51% interest
in this subsidiary as of February 11,
2016. Consequently, the results of the manufacturing segment
for 2017 are not comparable to those reported for 2016, as the 2017
results reflect a full three months of Aerex's operations whereas
the 2016 results reflect Aerex's operations for the partial period
that began on February 11, 2016 and
ended on March 31, 2016.
Manufacturing revenues were $1,379,848 and $618,529 for 2017 and 2016, respectively.
Retail segment gross profit was $3,792,318 (59% of retail revenues) and
$3,340,564 (56% of retail revenues)
for 2017 and 2016, respectively. The improvement in retail gross
profit as a percentage of revenues from 2016 to 2017 is due
principally to the increase in the volume of water sold.
Gross profit for the bulk segment was $2,674,613 and $2,654,969 for 2017 and 2016, respectively. Gross
profit for the bulk segment was not favorably impacted by higher
sales since these incremental sales represent energy pass through
charges to customers and were offset by approximately equal energy
expenses. Gross profit as a percentage of bulk revenues was
approximately 35% and 37% for 2017 and 2016, respectively. Energy
expense for bulk operations was approximately $473,000 more in 2017 than in 2016.
Gross profit (loss) for the services segment was $28,086 and ($16,563) for 2017 and 2016, respectively. The
improvement in the services segment's gross profit from 2016 to
2017 reflects a reduction in employee costs of approximately
$90,000.
Manufacturing segment gross profit was $338,551 (25% of manufacturing revenues) and
$198,061 (32% of manufacturing
revenues) for 2017 and 2016, respectively. Gross profit for 2017
increased in dollars from 2016 due to the incremental revenues.
General and administrative ("G&A") expenses on a
consolidated basis were $4,797,192
and $4,460,986 for 2017 and 2016,
respectively. The increase in consolidated G&A expenses from
2016 to 2017 is primarily attributable to the inclusion of Aerex's
G&A expenses for all of 2017 as opposed to the partial period
in 2016 that began on February 11,
2016, the date the Company acquired its 51% interest in this
subsidiary. Consolidated G&A expenses also increased from 2016
to 2017 due to incremental employee costs for the retail segment of
approximately $75,000 arising from
base salary increases.
Other income, net for 2017 was $403,379, as compared to $389,557 for 2016. The slight increase in this
net component of results of operations reflects an impairment loss
recorded for the Company's equity investment in OC-BVI of
($50,000) in 2016 (an impairment loss
for this equity investment was not required in 2017) and an
unrealized gain of $165,000 recorded
in 2017 to adjust the net liability for the put/call options
arising from the Aerex acquisition to fair value.
Management Comments
"Gross profits generated by all four of our reporting segments
increased this past quarter compared with the first quarter of 2016
on higher revenues, and in the case of our services segment, lower
costs. We are particularly pleased to report that the trend of
increased volume sales in our retail segment that started last year
is continuing into 2017 and that our retail sales benefited from an
8% volume sales increase this last quarter compared with the first
quarter of 2016, which is consistent with the 12% increase in sales
volumes we experienced for the full year of 2016," commented
Rick McTaggart, the Company's Chief
Executive Officer.
"Earlier this year, the Government of the Cayman Islands passed new legislation which
transferred responsibility for water utility regulation from the
Water Authority-Cayman to a new independent, multi-sector
regulatory office called OFREG. We are very pleased with this
development and expect that this major change in the Islands'
regulatory framework will facilitate the resolution of our water
utility license negotiations which have been underway since
mid-2008," continued McTaggart.
"In February we submitted proposals to our customer in
Baja California, Mexico 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. Discussions regarding these proposals continue and
we remain optimistic that a solution will be found that will allow
the project to move forward. We are also working to achieve
the various conditions precedent in the APP Contract in order to
meet our goal of commencing construction of the project in the
third quarter of this year," concluded McTaggart.
Cash Dividends
On May 1, 2017, the Company paid a
quarterly cash dividend of $0.075 per
share to shareholders of record at the close of business on
April 3, 2017. 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 Thursday, May 11, 2017 to review the Company's
annual operating results for the first quarter of 2017, 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
Thursday, May 11, 2017.
A replay of the conference call will be available one hour
after the call through Thursday, May 18,
2017 at 9:00 a.m. EDT by
dialing 877-344-7529 (international participants dial 412-317-0088)
and entering the conference ID # 10107039, 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. 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.
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
2017
|
|
|
2016
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
36,532,545
|
|
|
$
|
39,254,116
|
Accounts receivable,
net
|
|
|
22,614,301
|
|
|
|
16,500,798
|
Inventory
|
|
|
3,450,803
|
|
|
|
2,305,879
|
Prepaid expenses and other
current assets
|
|
|
1,353,451
|
|
|
|
1,096,200
|
Current portion of loans
receivable
|
|
|
1,495,831
|
|
|
|
1,633,588
|
Costs and estimated earnings
in excess of billings
|
|
|
340,890
|
|
|
|
85,211
|
Total current
assets
|
|
|
65,787,821
|
|
|
|
60,875,792
|
Property, plant and
equipment, net
|
|
|
52,077,467
|
|
|
|
53,084,105
|
Construction in
progress
|
|
|
2,383,813
|
|
|
|
885,494
|
Inventory,
non-current
|
|
|
4,648,972
|
|
|
|
4,606,088
|
Loans
receivable
|
|
|
1,793,773
|
|
|
|
2,135,428
|
Investment in
OC-BVI
|
|
|
2,987,371
|
|
|
|
4,086,630
|
Intangible assets,
net
|
|
|
4,820,078
|
|
|
|
5,195,476
|
Goodwill
|
|
|
9,784,248
|
|
|
|
9,784,248
|
Land held for
development
|
|
|
20,558,424
|
|
|
|
20,558,424
|
Other
assets
|
|
|
2,341,156
|
|
|
|
2,392,843
|
Total
assets
|
|
$
|
167,183,123
|
|
|
$
|
163,604,528
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts payable and other
current liabilities
|
|
$
|
5,414,306
|
|
|
$
|
4,898,908
|
Dividends payable
|
|
|
1,188,858
|
|
|
|
1,187,214
|
Notes payable to related
party
|
|
|
882,000
|
|
|
|
490,000
|
Billings in excess of costs
and estimated earnings
|
|
|
1,470,978
|
|
|
|
102,966
|
Total current
liabilities
|
|
|
8,956,142
|
|
|
|
6,679,088
|
Deferred tax
liability
|
|
|
1,775,544
|
|
|
|
1,915,241
|
Other
liabilities
|
|
|
739,827
|
|
|
|
904,827
|
Total
liabilities
|
|
|
11,471,513
|
|
|
|
9,499,156
|
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 35,225 shares,
respectively
|
|
|
21,135
|
|
|
|
21,135
|
Class A common stock, $0.60
par value. Authorized 24,655,000 shares; issued and
outstanding 14,889,497 and 14,871,664
shares, respectively
|
|
|
8,933,698
|
|
|
|
8,922,998
|
Class B common stock, $0.60
par value. Authorized 145,000 shares; none issued
|
|
|
-
|
|
|
|
-
|
Additional paid-in
capital
|
|
|
85,755,874
|
|
|
|
85,621,033
|
Retained earnings
|
|
|
53,101,810
|
|
|
|
51,589,337
|
Cumulative translation
adjustment
|
|
|
(549,555)
|
|
|
|
(549,555)
|
Total Consolidated
Water Co. Ltd. stockholders' equity
|
|
|
147,262,962
|
|
|
|
145,604,948
|
Non-controlling
interests
|
|
|
8,448,648
|
|
|
|
8,500,424
|
Total
equity
|
|
|
155,711,610
|
|
|
|
154,105,372
|
Total liabilities
and equity
|
|
$
|
167,183,123
|
|
|
$
|
163,604,528
|
CONSOLIDATED WATER
CO. LTD.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2017
|
|
|
2016
|
Retail
revenues
|
|
$
|
6,476,604
|
|
|
$
|
5,970,238
|
Bulk
revenues
|
|
|
7,690,402
|
|
|
|
7,265,293
|
Services
revenues
|
|
|
130,252
|
|
|
|
180,712
|
Manufacturing
revenues
|
|
|
1,379,848
|
|
|
|
618,529
|
Total
revenues
|
|
|
15,677,106
|
|
|
|
14,034,772
|
|
|
|
|
|
|
|
|
Cost of retail
revenues
|
|
|
2,684,286
|
|
|
|
2,629,674
|
Cost of bulk
revenues
|
|
|
5,015,789
|
|
|
|
4,610,324
|
Cost of services
revenues
|
|
|
102,166
|
|
|
|
197,275
|
Cost of manufacturing
revenues
|
|
|
1,041,297
|
|
|
|
420,468
|
Total cost of
revenues
|
|
|
8,843,538
|
|
|
|
7,857,741
|
Gross
profit
|
|
|
6,833,568
|
|
|
|
6,177,031
|
General and
administrative expenses
|
|
|
4,797,192
|
|
|
|
4,460,986
|
Income from
operations
|
|
|
2,036,376
|
|
|
|
1,716,045
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest income
|
|
|
122,191
|
|
|
|
216,835
|
Interest expense
|
|
|
(2,223)
|
|
|
|
(64,046)
|
Profit sharing income from
OC-BVI
|
|
|
10,125
|
|
|
|
34,425
|
Equity in earnings of
OC-BVI
|
|
|
26,866
|
|
|
|
45,364
|
Impairment loss on
investment in OC-BVI
|
|
|
-
|
|
|
|
(50,000)
|
Unrealized gain on put/call
options
|
|
|
165,000
|
|
|
|
-
|
Other
|
|
|
81,420
|
|
|
|
206,979
|
Other income,
net
|
|
|
403,379
|
|
|
|
389,557
|
Income before
income taxes
|
|
|
2,439,755
|
|
|
|
2,105,602
|
Provision for
(benefit from) income taxes
|
|
|
(139,697)
|
|
|
|
(73,269)
|
Net
income
|
|
|
2,579,452
|
|
|
|
2,178,871
|
Income (loss)
attributable to non-controlling interests
|
|
|
(51,776)
|
|
|
|
124,230
|
Net income
attributable to Consolidated Water Co. Ltd.
stockholders
|
|
$
|
2,631,228
|
|
|
$
|
2,054,641
|
|
|
|
|
|
|
|
|
Basic earnings per
common share attributable to Consolidated Water Co. Ltd. common
stockholders
|
|
$
|
0.18
|
|
|
$
|
0.14
|
Diluted earnings
per common share attributable to Consolidated Water Co. Ltd. common
stockholders
|
|
$
|
0.18
|
|
|
$
|
0.14
|
Dividends declared
per common share
|
|
$
|
0.075
|
|
|
$
|
0.075
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used in the determination
of:
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
14,871,862
|
|
|
|
14,783,380
|
Diluted earnings per
share
|
|
|
15,035,219
|
|
|
|
14,864,125
|
CONSOLIDATED WATER
CO. LTD.
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
(UNAUDITED)
|
|
|
|
Three Months
Ended March 31,
|
|
|
2017
|
|
|
2016
|
Net income
|
|
$
|
2,579,452
|
|
|
$
|
2,178,871
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
-
|
|
|
|
(3,175)
|
Total other
comprehensive income (loss)
|
|
|
-
|
|
|
|
(3,175)
|
Comprehensive
income
|
|
|
2,579,452
|
|
|
|
2,175,696
|
Comprehensive income
(loss) attributable to non-controlling interests
|
|
|
(51,776)
|
|
|
|
124,071
|
Comprehensive
income attributable to Consolidated Water Co. Ltd.
stockholders
|
|
$
|
2,631,228
|
|
|
$
|
2,051,625
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/consolidated-water-co-ltd-reports-first-quarter-operating-results-300455694.html
SOURCE Consolidated Water Co. Ltd.