GEORGE TOWN, Cayman Islands,
Nov. 8, 2018 /PRNewswire/
-- Consolidated Water Co. Ltd. (NASDAQ: CWCO), a leading
developer and operator of seawater desalination plants, reported
financial and operating results for its third quarter ended
September 30, 2018.
Management Commentary
President and CEO Rick McTaggart
commented: "We are pleased to report double-digit increases in
gross profit across each of our business segments in the third
quarter. Our retail desalination operations benefitted from higher
volumes and fuel pass-through charges, and our manufacturing
operations achieved operating improvements thanks to increased
order flows and higher utilization. Income from operations for the
third quarter more than doubled year-over-year to $2.6 million, and net earnings for the period
were up over 3.5 times from 2017 levels, thanks to a one-time gain
of approximately $1.9 million,
reflecting the favorable resolution of outstanding litigation in
the British Virgin Islands."
"As we previously disclosed, we are in discussions to possibly
sell our operations in Belize to
our customer there. As part of this dialogue, we were able to
repatriate $2.75 million from our
Belize operations in the third
quarter, as well as an additional $1.0
million after the quarter end, following many years of
difficulties in transferring funds due to the economic conditions
in the region."
"Subsequent to the quarter end, we re-commissioned our Windsor
plant in the Bahamas, which is our
second largest facility in our plant portfolio. This facility,
which provides 2.6 million US gallons per day to the
government-owned Water and Sewerage Corporation, was refurbished
with equipment manufactured by us and designed with embedded
operating efficiencies," Mr. McTaggart noted.
Financial Results for the Three Months Ended September 30, 2018
Total revenues for the third quarter 2018 were $18.8 million, representing a 13.6% increase from
$16.6 million in the third quarter of
2017. Gross profit amounted to $7.5
million, reflecting a 19.3% increase from $6.3 million in the year ago quarter. Inclusive
of $846,000 in Rosarito-related expenses, net income
attributable to Consolidated Water stockholders was $4.6 million, or $0.30 per fully diluted share, ahead of
$1.2 million, or $0.08 per fully diluted share, reported in last
year's comparable quarter.
Financial Results for the Nine Months Ended September 30, 2018
Total revenues for the first nine months of 2018 were
$50.0 million, up 5.3% compared to
the $47.5 million reported in last
year's comparable period. Gross profit was $20.7 million, up 5.8% from $19.6 million for the first nine months of 2017.
Net income attributable to Consolidated Water stockholders
year-to-date was $8.8 million
($0.58 per fully diluted share), an
increase of 99.9% from the $4.4
million ($0.29 per fully
diluted share) in the comparable period of 2017. Net income and
diluted EPS for the first nine months of 2018 and 2017 included
operating expenses of $2.2 million
and $2.5 million, respectively,
related to development costs for the Rosarito desalination plant.
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2018 (Unaudited)
|
|
|
Retail
|
|
Bulk
|
|
Services
|
|
Manufacturing
|
|
Total
|
Revenues
|
|
$
|
6,185,558
|
|
$
|
8,577,456
|
|
$
|
807,424
|
|
$
|
3,253,750
|
|
$
|
18,824,188
|
Cost of
revenues
|
|
|
2,750,599
|
|
|
5,658,373
|
|
|
682,713
|
|
|
2,205,830
|
|
|
11,297,515
|
Gross
profit
|
|
$
|
3,434,959
|
|
$
|
2,919,083
|
|
$
|
124,711
|
|
$
|
1,047,920
|
|
$
|
7,526,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2017 (Unaudited)
|
|
|
Retail
|
|
Bulk
|
|
Services
|
|
Manufacturing
|
|
Total
|
Revenues
|
|
$
|
5,570,654
|
|
$
|
7,881,464
|
|
$
|
111,302
|
|
$
|
3,008,783
|
|
$
|
16,572,203
|
Cost of
revenues
|
|
|
2,488,441
|
|
|
5,582,401
|
|
|
114,667
|
|
|
2,078,888
|
|
|
10,264,397
|
Gross profit
(loss)
|
|
$
|
3,082,213
|
|
$
|
2,299,063
|
|
$
|
(3,365)
|
|
$
|
929,895
|
|
$
|
6,307,806
|
Summary and Outlook
"Our year-to-date consolidated financial results demonstrate the
positive performance of our core desalination operations, and in
the third quarter we saw a recovery in manufacturing, reflecting
our ability to take on third party orders now that our Windsor
plant is completed."
"We continue to execute on the next steps with respect to the
Rosarito project, which represents
the most important initiative we have undertaken. Faced with water
shortages, Mexico is turning to
alternative solutions, such as desalination, and the Rosarito plant will secure drinking water
supplies in the coastal region of Baja
California for the next 40 years."
"Our capital allocation priorities remain the same: investing in
the business and returning the capital to our shareholders in the
form of dividends. Our capital expenditures will decrease now that
the Windsor plant is completed but will remain above last year's
levels as we also continue to work on the expansion of the Abel
Castillo Water Works plant in Grand
Cayman. The improvements to this plant will continue through
the first quarter of 2019," Mr. McTaggart concluded.
Investor Conference Call
The Company will host a conference call at 8:30 a.m. Eastern Time (EST) on Friday, November 9, 2018 to review the Company's
operating results for the third quarter of 2018, along with other
relevant 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 8:30 a.m. EST on Friday,
November 9, 2018.
A replay of the conference call will be available one hour
after the call through Friday, November 16,
2018 at 9:00 a.m. EST by
dialing 877-344-7529 (international participants dial 412-317-0088)
and entering the conference ID # 10126036.
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",
"will" 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 new water projects, including the project under
development in Baja California,
Mexico, its ability to develop and operate such projects
profitably, its ability to renew existing bulk water supply
contracts, its ability to collect its delinquent accounts
receivable in the Bahamas, 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 our investor
relations firm, AdvisIRy Partners:
Lynn Morgen: (212) 223-4147
lynn.morgen@advisiry.com
Eric Prouty: (212) 750-5800
eric.prouty@advisiry.com
Viktoriia Nakhla: (646) 625-4800
vicky.nakhla@advisiry.com
CONSOLIDATED WATER
CO. LTD.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
34,367,483
|
|
|
$
|
47,182,966
|
|
Accounts receivable,
net
|
|
|
22,996,276
|
|
|
|
15,047,846
|
|
Inventory
|
|
|
2,538,052
|
|
|
|
1,744,445
|
|
Prepaid expenses and
other current assets
|
|
|
1,598,061
|
|
|
|
1,077,257
|
|
Current portion of
loans receivable
|
|
|
1,093,641
|
|
|
|
1,400,448
|
|
Costs and estimated
earnings in excess of billings
|
|
|
1,396,166
|
|
|
|
238,435
|
|
Total current
assets
|
|
|
63,989,679
|
|
|
|
66,691,397
|
|
Property, plant and
equipment, net
|
|
|
47,342,177
|
|
|
|
50,525,064
|
|
Construction in
progress
|
|
|
16,742,806
|
|
|
|
1,823,284
|
|
Inventory,
non-current
|
|
|
4,825,253
|
|
|
|
4,758,973
|
|
Loans
receivable
|
|
|
-
|
|
|
|
734,980
|
|
Investment in
OC-BVI
|
|
|
2,464,537
|
|
|
|
2,783,882
|
|
Goodwill
|
|
|
8,384,248
|
|
|
|
8,384,248
|
|
Land and rights of
way held for development
|
|
|
23,673,855
|
|
|
|
21,505,675
|
|
Intangible assets,
net
|
|
|
2,710,790
|
|
|
|
3,765,434
|
|
Other
assets
|
|
|
2,369,214
|
|
|
|
4,507,958
|
|
Total
assets
|
|
$
|
172,502,559
|
|
|
$
|
165,480,895
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and
other current liabilities
|
|
$
|
6,539,508
|
|
|
$
|
5,662,448
|
|
Dividends
payable
|
|
|
1,284,964
|
|
|
|
1,281,612
|
|
Note payable to
related party
|
|
|
1,078,000
|
|
|
|
686,000
|
|
Billings in excess of
costs and estimated earnings
|
|
|
21,578
|
|
|
|
1,258
|
|
Total current
liabilities
|
|
|
8,924,050
|
|
|
|
7,631,318
|
|
Deferred tax
liability
|
|
|
757,447
|
|
|
|
1,024,893
|
|
Other
liabilities
|
|
|
778,307
|
|
|
|
803,307
|
|
Total
liabilities
|
|
|
10,459,804
|
|
|
|
9,459,518
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Consolidated Water
Co. Ltd. stockholders' equity
|
|
|
|
|
|
|
|
|
Redeemable preferred
stock, $0.60 par value. Authorized 200,000 shares; issued and
outstanding 36,498 and 33,488 shares, respectively
|
|
|
21,899
|
|
|
|
20,093
|
|
Class A common stock,
$0.60 par value. Authorized 24,655,000 shares; issued and
outstanding 14,964,281 and 14,918,869 shares,
respectively
|
|
|
8,978,569
|
|
|
|
8,951,321
|
|
Class B common stock,
$0.60 par value. Authorized 145,000 shares; none issued
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
86,904,523
|
|
|
|
86,405,387
|
|
Retained
earnings
|
|
|
58,113,606
|
|
|
|
53,105,196
|
|
Cumulative
translation adjustment
|
|
|
(549,555)
|
|
|
|
(549,555)
|
|
Total Consolidated
Water Co. Ltd. stockholders' equity
|
|
|
153,469,042
|
|
|
|
147,932,442
|
|
Non-controlling
interests
|
|
|
8,573,713
|
|
|
|
8,088,935
|
|
Total
equity
|
|
|
162,042,755
|
|
|
|
156,021,377
|
|
Total liabilities
and equity
|
|
$
|
172,502,559
|
|
|
$
|
165,480,895
|
|
CONSOLIDATED WATER
CO. LTD.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(UNAUDITED)
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Retail
revenues
|
|
$
|
6,185,558
|
|
|
$
|
5,570,654
|
|
|
$
|
18,884,929
|
|
|
$
|
18,111,274
|
|
Bulk
revenues
|
|
|
8,577,456
|
|
|
|
7,881,464
|
|
|
|
25,294,821
|
|
|
|
23,615,787
|
|
Services
revenues
|
|
|
807,424
|
|
|
|
111,302
|
|
|
|
1,054,100
|
|
|
|
360,758
|
|
Manufacturing
revenues
|
|
|
3,253,750
|
|
|
|
3,008,783
|
|
|
|
4,798,948
|
|
|
|
5,444,678
|
|
Total
revenues
|
|
|
18,824,188
|
|
|
|
16,572,203
|
|
|
|
50,032,798
|
|
|
|
47,532,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of retail
revenues
|
|
|
2,750,599
|
|
|
|
2,488,441
|
|
|
|
8,234,803
|
|
|
|
7,895,617
|
|
Cost of bulk
revenues
|
|
|
5,658,373
|
|
|
|
5,582,401
|
|
|
|
16,848,668
|
|
|
|
15,750,402
|
|
Cost of services
revenues
|
|
|
682,713
|
|
|
|
114,667
|
|
|
|
921,653
|
|
|
|
320,586
|
|
Cost of manufacturing
revenues
|
|
|
2,205,830
|
|
|
|
2,078,888
|
|
|
|
3,300,370
|
|
|
|
3,967,945
|
|
Total cost of
revenues
|
|
|
11,297,515
|
|
|
|
10,264,397
|
|
|
|
29,305,494
|
|
|
|
27,934,550
|
|
Gross
profit
|
|
|
7,526,673
|
|
|
|
6,307,806
|
|
|
|
20,727,304
|
|
|
|
19,597,947
|
|
General and
administrative expenses
|
|
|
4,941,564
|
|
|
|
4,896,323
|
|
|
|
14,263,762
|
|
|
|
14,695,184
|
|
Loss on asset
dispositions and impairments, net
|
|
|
12,415
|
|
|
|
578,480
|
|
|
|
14,405
|
|
|
|
1,578,480
|
|
Income from
operations
|
|
|
2,572,694
|
|
|
|
833,003
|
|
|
|
6,449,137
|
|
|
|
3,324,283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
172,805
|
|
|
|
70,741
|
|
|
|
504,028
|
|
|
|
301,813
|
|
Interest
expense
|
|
|
(2,492)
|
|
|
|
(1,016)
|
|
|
|
(7,122)
|
|
|
|
(11,178)
|
|
Profit-sharing income
from OC-BVI
|
|
|
536,625
|
|
|
|
36,450
|
|
|
|
621,675
|
|
|
|
46,575
|
|
Equity in the
earnings of OC-BVI
|
|
|
1,472,154
|
|
|
|
138,913
|
|
|
|
1,710,230
|
|
|
|
127,955
|
|
Net unrealized gain
(loss) on put/call options
|
|
|
75,000
|
|
|
|
171,000
|
|
|
|
(47,000)
|
|
|
|
323,000
|
|
Other
|
|
|
48,841
|
|
|
|
31,206
|
|
|
|
(26,670)
|
|
|
|
83,791
|
|
Other income,
net
|
|
|
2,302,933
|
|
|
|
447,294
|
|
|
|
2,755,141
|
|
|
|
871,956
|
|
Income before
income taxes
|
|
|
4,875,627
|
|
|
|
1,280,297
|
|
|
|
9,204,278
|
|
|
|
4,196,239
|
|
Provision for
(benefit from) income taxes
|
|
|
12,659
|
|
|
|
(136,447)
|
|
|
|
(113,607)
|
|
|
|
(412,592)
|
|
Net
income
|
|
|
4,862,968
|
|
|
|
1,416,744
|
|
|
|
9,317,885
|
|
|
|
4,608,831
|
|
Income
attributable to non-controlling interests
|
|
|
310,579
|
|
|
|
255,605
|
|
|
|
484,778
|
|
|
|
191,916
|
|
Net income
attributable to Consolidated Water
Co. Ltd. stockholders
|
|
$
|
4,552,389
|
|
|
$
|
1,161,139
|
|
|
$
|
8,833,107
|
|
|
$
|
4,416,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share attributable to
Consolidated Water Co. Ltd. common
stockholders
|
|
$
|
0.30
|
|
|
$
|
0.08
|
|
|
$
|
0.59
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per common share attributable
to Consolidated Water Co. Ltd. common
stockholders
|
|
$
|
0.30
|
|
|
$
|
0.08
|
|
|
$
|
0.58
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.085
|
|
|
$
|
0.075
|
|
|
$
|
0.255
|
|
|
$
|
0.225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used
in the determination of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
14,963,195
|
|
|
|
14,898,246
|
|
|
|
14,960,602
|
|
|
|
14,886,738
|
|
Diluted earnings per
share
|
|
|
15,124,720
|
|
|
|
15,072,142
|
|
|
|
15,119,415
|
|
|
|
15,054,343
|
|
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SOURCE Consolidated Water Co. Ltd.