Consolidated Water Co. Ltd. (NASDAQ Global Select Market: CWCO), a
leading developer and operator of advanced water supply and
treatment plants, reported results for the year ended December 31,
2021. All comparisons are to the same year-ago period unless
otherwise noted.
The company will hold a conference call at 11:00 a.m. Eastern
time tomorrow to discuss the results (see dial-in information
below).
2021 Highlights
- Bulk revenue increased 10.2% to
$26.8 million.
- Services revenue increased 7.3% to
$13.9 million.
- Net income from continuing
operations attributable to company stockholders was $3.4 million or
$0.23 per share.
- As of December 31, 2021, cash and
cash equivalents totaled $40.4 million, working capital was $69.2
million, debt was $0.2 million, with stockholders’ equity at $157.6
million.
- Paid quarterly cash dividend of
$0.085 per share ($0.34 on an annualized basis), totaling $5.8
million in dividends paid in the full year of 2021.
- PERC Water continued to expand its
recurring revenues by signing a five-year wastewater plant
maintenance services contract with a gaming and live entertainment
business in Southern California.
Management Commentary
“2021 was a year of both progress and unprecedented challenges,”
commented Consolidated Water CEO, Rick McTaggart. “Our retail
segment performed below historical levels due to the continued
impact of the pandemic on tourism to Grand Cayman, while our
manufacturing segment revenue declined due to challenging economic
conditions. However, we made strong progress in other areas. We
further diversified our manufacturing customer base and product
offerings, revenue generated in our bulk segment increased by $2.5
million, and our services segment revenue was up by $947,000.
“Also in 2021, we integrated our sales teams across our four
business segments, which are now led by our recently promoted
executive vice president of business development, Brent Brodie.
This integrated sales approach is supporting further
diversification of Aerex’s client base and geographical market,
which will improve its future performance.
“Our sales team has been focused on developing or redeveloping
Aerex relationships with large engineering consultants and general
contractors who provide design and construction services to the
municipal water market. In 2021, about 77% of our manufacturing
revenues came from various municipal water projects. As a result,
Aerex has developed an order backlog that is considerably higher
than this time last year. Aerex is presently pursuing projects in
the southwest United States in addition to its primary sales market
in Florida. Altogether, these factors give us confidence that our
manufacturing business will continue to improve over the coming
months.
“For our desalination business, Aerex has become fully
integrated with three projects we are pursuing in Hawaii,
California and Grand Cayman. We believe Aerex’s design and
manufacturing capabilities make us more competitive for these
important projects, which includes design, construction and
long-term operation of seawater desalination plants for municipal
customers.
“We are very encouraged by the return of tourism to the Cayman
Islands as the country’s Phase 5 reopening plan continues. Several
major airlines resumed their flights to the islands earlier this
month, and cruise ships were welcomed back last week. We saw a 7%
year-over-year increase in water sales in our Grand Cayman retail
service areas during the first two months of 2022, and we have
already produced nearly 15% more water in March of this year
compared to March of last year.
“We expect the resurgence of tourism to help our retail water
sales return to normal levels over the coming months, as hotels and
businesses begin to serve the thousands of tourists and vacationers
coming back to the islands.
“Our services segment, led by our California-based PERC Water,
has also seen increased activity. Project bidding in primary
markets for new plants and asset management contracts has picked
up, with PERC currently pursuing more than a dozen potential
design, build and asset management projects. In January, we
submitted a multi-million dollar bid to design, build and operate a
new 2.6 million gallon per day desalination plant in Grand Cayman,
and we anticipate hearing the results by mid-April.
“Looking to the year ahead, we believe we have charted the best
course to grow our business, with a particular focus on water-short
regions of the western United States. We believe our extensive
experience, excellent track record and novel approach to designing,
building and operating both seawater desalination facilities and
wastewater treatment and recycling plants—as well as our strong
cash position and relatively low overhead burden—continues to
afford us numerous competitive advantages.
“Along with these advantages, our optimism about our growth
prospects ahead is buoyed by the ongoing return of tourism to Grand
Cayman and the increased project bidding activity in the U.S. and
internationally. We see each of these factors as strong catalysts
for growth in 2022 and beyond.”
2021 Financial Summary
Revenue for the full year 2021 was $66.9 million, down 7.9%
compared to $72.6 million for 2020. The decrease was primarily
driven by decreases of $847,000 in the retail segment and $8.4
million in the manufacturing segment. The decrease in total revenue
was partially offset by increases of $2.5 million in the bulk
segment and $947,000 in the services segment.
The reduction in retail revenue reflects a 4% decrease in the
volume of water sold by Cayman Water due to the closing of Grand
Cayman Island to all tourist travel in March 2020 in response to
the COVID-19 pandemic.
The decrease in manufacturing segment revenue was due to the
loss of orders from Aerex’s former largest customer.
The increase in services segment revenue was due to an increase
of approximately $3.2 million from operating and maintenance
contracts attributable to new contracts, which more than offset a
decline in plant construction revenue.
The increase in bulk segment revenue is attributable to an
increase in energy costs for CW-Bahamas, which increased the energy
pass-through component of CW-Bahamas’ rates and, to a lesser
extent, a 5% increase in the volume of water sold by
CW-Bahamas.
Gross profit for the full year 2021 was $23.5 million or 35.2%
of total revenue, down 12% from $26.8 million or 36.9% of total
revenue for 2020.
Net income from continuing operations attributable to
Consolidated Water stockholders for the full year 2021 was $3.4
million or $0.23 per basic and diluted share, compared to net
income of $8.6 million or $0.56 per basic and diluted share for
2020.
Net income attributable to Consolidated Water stockholders for
the full year 2021, which includes the results of discontinued
operations, was $876,000 or $0.06 per basic and fully diluted
share, down from net income of $3.7 million or $0.24 per basic and
fully diluted share for the same year-ago period.
Cash and cash equivalents totaled $40.4 million as of December
31, 2021, as compared to $43.8 million as of December 31, 2020. The
decrease in cash was due to a decline in cash provided by operating
activities.
2021 Segment Results
|
|
Year Ended December 31, 2021 |
|
|
Retail |
|
Bulk |
|
Services |
|
Manufacturing |
|
Total |
Revenue |
|
$ |
22,104,953 |
|
|
$ |
26,800,869 |
|
|
$ |
13,884,857 |
|
|
$ |
4,072,823 |
|
|
$ |
66,863,502 |
|
Cost of revenue |
|
|
11,060,937 |
|
|
|
17,759,272 |
|
|
|
10,707,243 |
|
|
|
3,828,859 |
|
|
|
43,356,311 |
|
Gross profit |
|
|
11,044,016 |
|
|
|
9,041,597 |
|
|
|
3,177,614 |
|
|
|
243,964 |
|
|
|
23,507,191 |
|
General and administrative
expenses |
|
|
12,841,259 |
|
|
|
1,365,735 |
|
|
|
2,762,735 |
|
|
|
1,380,630 |
|
|
|
18,350,359 |
|
Gain (loss) on asset
dispositions and impairments, net |
|
|
(246,851 |
) |
|
|
1,500 |
|
|
|
(485 |
) |
|
|
(2,900,000 |
) |
|
|
(3,145,836 |
) |
Income (loss) from
operations |
|
$ |
(2,044,094 |
) |
|
$ |
7,677,362 |
|
|
$ |
414,394 |
|
|
$ |
(4,036,666 |
) |
|
|
2,010,996 |
|
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,623,595 |
|
Income before income
taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,634,591 |
|
Benefit from income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(447,982 |
) |
Net income from continuing
operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,082,573 |
|
Income from continuing
operations attributable to non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
632,915 |
|
Net
income from continuing operations attributable to Consolidated
Water Co. Ltd. stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,449,658 |
|
Net loss
from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,574,079 |
) |
Net income attributable to
Consolidated Water Co. Ltd. stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
875,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2020 |
|
|
Retail |
|
Bulk |
|
Services |
|
Manufacturing |
|
Total |
Revenue |
|
$ |
22,952,370 |
|
|
$ |
24,312,546 |
|
|
$ |
12,937,859 |
|
|
$ |
12,425,351 |
|
|
$ |
72,628,126 |
|
Cost of
revenue |
|
|
11,080,814 |
|
|
|
16,959,563 |
|
|
|
9,698,214 |
|
|
|
8,121,080 |
|
|
|
45,859,671 |
|
Gross
profit |
|
|
11,871,556 |
|
|
|
7,352,983 |
|
|
|
3,239,645 |
|
|
|
4,304,271 |
|
|
|
26,768,455 |
|
General
and administrative expenses |
|
|
12,879,445 |
|
|
|
1,260,062 |
|
|
|
2,834,917 |
|
|
|
1,460,474 |
|
|
|
18,434,898 |
|
Gain on
asset dispositions and impairments, net |
|
|
2,965 |
|
|
|
7,213 |
|
|
|
3,801 |
|
|
|
18 |
|
|
|
13,997 |
|
Income
(loss) from operations |
|
$ |
(1,004,924 |
) |
|
$ |
6,100,134 |
|
|
$ |
408,529 |
|
|
$ |
2,843,815 |
|
|
|
8,347,554 |
|
Other
income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,082,946 |
|
Income
before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,430,500 |
|
Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
86,724 |
|
Net
income from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,343,776 |
|
Income
from continuing operations attributable to non-controlling
interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
730,005 |
|
Net
income from continuing operations attributable to Consolidated
Water Co. Ltd. stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,613,771 |
|
Net loss
from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,902,243 |
) |
Net
income attributable to Consolidated Water Co. Ltd.
stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,711,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Geographic
Region
|
|
Year ended December 31, |
|
|
2021 |
|
2020 |
Cayman
Islands |
|
$ |
24,935,746 |
|
|
$ |
25,640,169 |
|
Bahamas |
|
|
24,031,547 |
|
|
|
21,654,153 |
|
United
States |
|
|
17,489,851 |
|
|
|
24,918,527 |
|
Revenues
earned from management services agreement with OC-BVI |
|
|
406,358 |
|
|
|
415,277 |
|
|
|
$ |
66,863,502 |
|
|
$ |
72,628,126 |
|
|
|
|
|
|
|
|
|
|
Annual General Meeting of Shareholders
The company has set May 23, 2022 as the date of its Annual
General Meeting of Shareholders to be held at 3:00 p.m. Cayman
Islands time (4:00 p.m. EDT). The Annual General Meeting will be a
“hybrid” meeting of shareholders, meaning shareholders will be able
to attend the Annual General Meeting as well as vote during the
live webcast of the meeting by
visiting www.virtualshareholdermeeting.com/cwco2022 or
attend the meeting in person at the offices of Consolidated Water
Co. Ltd., Regatta Office Park, Windward Three, 4th Floor, West Bay
Road, Grand Cayman, KY1-1102, Cayman Islands. Holders of record of
the company’s stock as of March 24, 2022 will be entitled to vote
at the meeting.
Conference Call
Consolidated Water management will host a conference call
tomorrow to discuss these results, followed by a
question-and-answer period.
Date: Wednesday, March 30, 2022Time: 11:00 a.m. Eastern time
(8:00 a.m. Pacific time)Toll-free dial-in number:
1-844-875-6913International dial-in number:
1-412-317-6709Conference ID: 1019828
Please call the conference telephone number five minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact CMA at 1-949-432-7566.
A replay of the call will be available after 1:00 p.m. Eastern
time on the same day through April 6, 2022, as well as available
for replay via the Investors section of the Consolidated Water
website at www.cwco.com.
Toll-free replay number: 1-877-344-7529International replay
number: 1-412-317-0088Replay ID: 1019828
About Consolidated Water Co. Ltd.Consolidated
Water Co. Ltd. develops and operates advanced water supply and
treatment plants and water distribution systems. The company
operates water production facilities in the Cayman Islands, The
Bahamas and the British Virgin Islands and operates water treatment
facilities in the United States. 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. For more information,
visit www.cwco.com.
Cautionary Note Regarding Forward-Looking
StatementsThis 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 (i) continued acceptance of the company's
products and services in the marketplace; (ii) changes in its
relationships with the governments of the jurisdictions in which it
operates; (iii) the outcome of its negotiations with the Cayman
government regarding a new retail license agreement; (iv) the
collection of its delinquent accounts receivable in the Bahamas;
(v) the possible adverse impact of the COVID-19 virus on the
company’s business; and (vi) various other risks, as detailed in
the company's periodic report filings with the Securities and
Exchange Commission (“SEC”). For more information about risks and
uncertainties associated with the company’s business, please refer
to the “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and “Risk Factors” sections of the
company’s SEC filings, including, but not limited to, its annual
report on Form 10-K and quarterly reports on Form 10-Q, copies of
which may be obtained by contacting the company’s Secretary at the
company’s executive offices or at the “Investors – SEC Filings”
page of the company’s website at http://ir.cwco.com/docs. Except as
otherwise required by law, the company undertakes no obligation to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.
Company Contact:David W. SasnettExecutive Vice
President and CFOTel (954) 509-8200dsasnett@cwco.com
Investor Relations ContactRon Both or Justin
LumleyCMATel (949) 432-7566Email Contact
Media Contact:Tim RandallCMATel (949)
432-7572Email Contact
CONSOLIDATED WATER
CO. LTD.
CONSOLIDATED BALANCE SHEETS
|
|
December 31, |
|
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
40,358,059 |
|
|
$ |
43,794,150 |
|
Certificate of deposit |
|
|
2,500,000 |
|
|
|
— |
|
Accounts receivable, net |
|
|
27,349,307 |
|
|
|
21,483,976 |
|
Inventory |
|
|
2,504,832 |
|
|
|
3,214,178 |
|
Prepaid expenses and other current assets |
|
|
2,558,822 |
|
|
|
2,412,282 |
|
Contract assets |
|
|
489,961 |
|
|
|
516,521 |
|
Current assets of discontinued operations |
|
|
1,173,741 |
|
|
|
1,511,099 |
|
Total current
assets |
|
|
76,934,722 |
|
|
|
72,932,206 |
|
Property, plant and equipment,
net |
|
|
52,946,539 |
|
|
|
57,687,984 |
|
Construction in progress |
|
|
710,863 |
|
|
|
440,384 |
|
Inventory, noncurrent |
|
|
4,733,010 |
|
|
|
4,506,842 |
|
Investment in OC-BVI |
|
|
1,715,905 |
|
|
|
2,092,146 |
|
Goodwill |
|
|
10,425,013 |
|
|
|
13,325,013 |
|
Intangible assets, net |
|
|
3,401,666 |
|
|
|
4,148,333 |
|
Operating lease right-of-use
assets |
|
|
2,681,137 |
|
|
|
1,329,561 |
|
Net asset arising from
put/call options |
|
|
128,000 |
|
|
|
— |
|
Other assets |
|
|
2,204,013 |
|
|
|
1,926,594 |
|
Long-term assets of
discontinued operations |
|
|
21,146,186 |
|
|
|
21,166,489 |
|
Total
assets |
|
$ |
177,027,054 |
|
|
$ |
179,555,552 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other current
liabilities |
|
$ |
2,831,925 |
|
|
$ |
2,740,191 |
|
Accounts payable - related parties |
|
|
163,947 |
|
|
|
200,558 |
|
Accrued compensation |
|
|
1,435,542 |
|
|
|
1,434,106 |
|
Dividends payable |
|
|
1,320,572 |
|
|
|
1,300,022 |
|
Current maturities of operating leases |
|
|
592,336 |
|
|
|
455,788 |
|
Current portion of long-term debt |
|
|
62,489 |
|
|
|
42,211 |
|
Contract liabilities |
|
|
513,878 |
|
|
|
461,870 |
|
Deferred revenue |
|
|
583,646 |
|
|
|
115,936 |
|
Current liabilities of discontinued operations |
|
|
182,322 |
|
|
|
188,434 |
|
Total current
liabilities |
|
|
7,686,657 |
|
|
|
6,939,116 |
|
Long-term debt,
noncurrent |
|
|
152,038 |
|
|
|
126,338 |
|
Deferred tax liabilities |
|
|
1,236,723 |
|
|
|
1,440,809 |
|
Noncurrent operating
leases |
|
|
2,137,394 |
|
|
|
982,076 |
|
Net liability arising from
put/call options |
|
|
— |
|
|
|
690,000 |
|
Other liabilities |
|
|
141,000 |
|
|
|
362,165 |
|
Long-term liabilities of
discontinued operations |
|
|
7,819 |
|
|
|
2,499 |
|
Total
liabilities |
|
|
11,361,631 |
|
|
|
10,543,003 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
Consolidated Water Co. Ltd.
stockholders' equity |
|
|
|
|
|
|
|
|
Redeemable preferred stock, $0.60 par value. Authorized 200,000
shares; issued and outstanding 28,635 and 31,068 shares,
respectively |
|
|
17,181 |
|
|
|
18,641 |
|
Class A common stock, $0.60 par value. Authorized 24,655,000
shares; issued and outstanding 15,243,693 and 15,143,683 shares,
respectively |
|
|
9,146,216 |
|
|
|
9,086,210 |
|
Class B common stock, $0.60 par value. Authorized 145,000 shares;
none issued |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
87,812,432 |
|
|
|
86,893,486 |
|
Retained earnings |
|
|
60,603,056 |
|
|
|
64,910,709 |
|
Total Consolidated Water Co.
Ltd. stockholders' equity |
|
|
157,578,885 |
|
|
|
160,909,046 |
|
Non-controlling interests |
|
|
8,086,538 |
|
|
|
8,103,503 |
|
Total
equity |
|
|
165,665,423 |
|
|
|
169,012,549 |
|
Total liabilities and
equity |
|
$ |
177,027,054 |
|
|
$ |
179,555,552 |
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED WATER
CO. LTD.
CONSOLIDATED STATEMENTS OF
INCOME
|
|
Year Ended December 31, |
|
|
2021 |
|
2020 |
Revenue |
|
$ |
66,863,502 |
|
|
$ |
72,628,126 |
|
Cost of
revenue (including purchases from related parties of
$437,857 in 2021 and $1,349,331 in 2020) |
|
|
43,356,311 |
|
|
|
45,859,671 |
|
Gross
profit |
|
|
23,507,191 |
|
|
|
26,768,455 |
|
General and administrative
expenses (including purchases from related parties of $77,190 in
2021 and $0 in 2020) |
|
|
18,350,359 |
|
|
|
18,434,898 |
|
Gain (loss) on asset
dispositions and impairments, net |
|
|
(3,145,836 |
) |
|
|
13,997 |
|
Income from
operations |
|
|
2,010,996 |
|
|
|
8,347,554 |
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
Interest income |
|
|
684,809 |
|
|
|
540,096 |
|
Interest expense |
|
|
(10,248 |
) |
|
|
(9,669 |
) |
Profit-sharing income from OC-BVI |
|
|
22,275 |
|
|
|
135,675 |
|
Equity in the earnings of OC-BVI |
|
|
55,984 |
|
|
|
371,019 |
|
Net unrealized gain (loss) on put/call options |
|
|
818,000 |
|
|
|
(26,000 |
) |
Other |
|
|
52,775 |
|
|
|
71,825 |
|
Other income,
net |
|
|
1,623,595 |
|
|
|
1,082,946 |
|
Income before income
taxes |
|
|
3,634,591 |
|
|
|
9,430,500 |
|
Provision (benefit)
for income taxes |
|
|
(447,982 |
) |
|
|
86,724 |
|
Net income from
continuing operations |
|
|
4,082,573 |
|
|
|
9,343,776 |
|
Income from continuing
operations attributable to non-controlling interests |
|
|
632,915 |
|
|
|
730,005 |
|
Net income from
continuing operations attributable to Consolidated Water Co. Ltd.
stockholders |
|
|
3,449,658 |
|
|
|
8,613,771 |
|
Total loss from
discontinued operations |
|
|
(2,574,079 |
) |
|
|
(4,902,243 |
) |
Net income
attributable to Consolidated Water Co. Ltd.
stockholders |
|
$ |
875,579 |
|
|
$ |
3,711,528 |
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share attributable to Consolidated Water Co. Ltd. common
stockholders |
|
|
|
|
|
|
Continuing
operations |
|
$ |
0.23 |
|
|
$ |
0.56 |
|
Discontinued
operations |
|
|
(0.17 |
) |
|
|
(0.32 |
) |
Basic earnings per
share |
|
$ |
0.06 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per common share attributable to Consolidated Water Co. Ltd.
common stockholders |
|
|
|
|
|
|
Continuing
operations |
|
$ |
0.23 |
|
|
$ |
0.56 |
|
Discontinued
operations |
|
|
(0.17 |
) |
|
|
(0.32 |
) |
Diluted earnings per
share |
|
$ |
0.06 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
Dividends declared per
common and redeemable preferred shares |
|
$ |
0.34 |
|
|
$ |
0.34 |
|
|
|
|
|
|
|
|
Weighted average
number of common shares used in the determination of: |
|
|
|
|
|
|
Basic earnings per share |
|
|
15,213,816 |
|
|
|
15,119,305 |
|
Diluted earnings per share |
|
|
15,310,145 |
|
|
|
15,223,955 |
|
|
|
|
|
|
|
|
|
|
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