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Consolidated Water Reports 2018 Results; Total Revenues up 11% to $65.7 million, Net Income up 84% to $11.3 million

Company Announces Record and Meeting Dates for Annual Shareholders' Meeting

GEORGE TOWN, Cayman Islands, March 18, 2019 /PRNewswire/ -- Consolidated Water Co. Ltd. (Nasdaq Global Select Market: CWCO), a leading developer and operator of seawater desalination plants, reported results for the year ended December 31, 2018. All annual comparisons are to the previous year unless otherwise noted.

(PRNewsfoto/Consolidated Water Co. Ltd.)

2018 Financial and Operational Highlights

  • Total revenues increased 11% to $65.7 million, driving gross profit up 11% to $26.7 million.
  • Net income attributable to Consolidated Water stockholders increased 84% to $11.3 million.
  • Dividend payments amounted to $5.1 million for the year ended December 31, 2018.
  • Completed capital improvements to the Windsor plant on New Providence Island in the Bahamas designed to meet performance guarantees through August 2033.
  • Advanced the company's development project in Rosarito, Baja California, Mexico involving the construction and operation of a major seawater desalination plant and distribution pipeline. Designed to produce 100 million gallons per day of potable water, the plant is expected to be the largest of its kind in the Western Hemisphere and will secure drinking water supplies for the coastal region of Baja California for the next 40 years.

Management Commentary
"2018 was a great year for Consolidated Water, as we realized revenue and gross profit growth in each segment of our business, especially in our Cayman and Bahamian operations, which improved our profitability," said company president and CEO, Rick McTaggart.

"Our momentum continued into the new year, as we obtained a new combined water supply agreement from the Water-Authority Cayman for the operation of the North Sound and Red Gate plants in the Cayman Islands," continued McTaggart. "In February, we completed the expansion of the water production and storage capacity of the Abel Castillo Water Works plant in Grand Cayman. We made further headway with the Rosarito project, securing bank approval for more than $200 million of the required financing. We also recently completed the sale of our Belize operations for $7 million, and we were able to repatriate more than $12 million in total in cash from Belize. We plan use these funds to support our growth initiatives.

"In 2019, we expect to develop new business opportunities both within our existing service areas and in new markets. We see our U.S. manufacturing operations continuing to grow and diversify our revenue streams and expect to maintain the world-class operating efficiencies of our water production and distribution systems by continuing to follow our highly-effective equipment maintenance and water loss mitigation programs. There are many water-scarce countries in the Caribbean and other select markets where we believe we can have a positive impact on their development by providing essential water supplies that support regional economies and improve the quality of life in local communities."

2018 Financial Summary
Total revenues for the full year of 2018 were $65.7 million, up 11% compared to the $59.4 million in 2017. The increase was driven by an improvement in revenues across all of the company's operating segments, which includes retail, bulk, services and manufacturing.

Gross profit for the full year of 2018 was $26.7 million, up 11% from $24.0 million in 2017.

Net income attributable to Consolidated Water stockholders for 2018 was $11.3 million or $0.75 per fully diluted share, up 84% from $6.1 million or $0.41 per fully diluted share in 2017.

Net income and diluted EPS for the full year of 2018 and 2017 included operating expenses of $2.9 million and $3.0 million, respectively, related to development costs for the Rosarito desalination plant.

The substantial rise in net income for 2018 as compared to 2017 reflects an improvement in income from operations of approximately $5.7 million. This was due in part to impairment losses recorded in 2017 that exceeded that recorded in 2018 by nearly $3 million, as well as the litigation settlement received by OC-BVI in September 2018. The settlement was the primary reason for the incremental aggregate income (i.e. earnings and profit sharing) from this equity investment of nearly $2.3 million.

Cash and cash equivalents totaled $31.3 million as of December 31, 2018, as compared to $45.5 million as of December 31, 2017. The decrease was the result of increases in accounts receivable as well as capital expenditures related to the refurbishment of the Windsor plant in the Bahamas and, to a lesser extent, retail operations in Grand Cayman.

Segment Results



Year Ended December 31, 2018



Retail


Bulk


Services


Manufacturing


Total

Revenues


$

25,621,048


$

31,031,287


$

1,811,372


$

7,256,150


$

65,719,857

Cost of revenues



11,011,456



21,551,383



1,503,034



4,911,697



38,977,570

Gross profit



14,609,592



9,479,904



308,338



2,344,453



26,742,287

General and administrative expenses



12,029,646



1,301,042



2,889,703



2,489,028



18,709,419

Loss on asset dispositions and impairments, net



12,263



-



41,180



3,331



56,774

Income (loss) from operations


$

2,567,683


$

8,178,862


$

(2,622,545)


$

(147,906)



7,976,094

Other income, net















2,740,064

Income before income taxes















10,716,158

Benefit from income taxes















(157,291)

Net income from continuing operations















10,873,449

Income from continuing operations attributable to non-controlling interests















695,787

Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders















10,177,662

Net income from discontinued operations















1,115,825

Net income attributable to Consolidated Water Co. Ltd.
stockholders














$

11,293,487

 



Year Ended December 31, 2017



Retail


Bulk


Services


Manufacturing


Total

Revenues


$

23,225,066


$

28,682,113


$

469,347


$

6,990,496


$

59,367,022

Cost of revenues



10,372,199



19,562,503



469,797



4,963,962



35,368,461

Gross profit



12,852,867



9,119,610



(450)



2,026,534



23,998,561

General and administrative expenses



11,884,659



1,108,158



3,043,078



2,646,504



18,682,399

Loss on asset dispositions and impairments, net



1,640,158



-



-



1,400,000



3,040,158

Income (loss) from operations


$

(671,950)


$

8,011,452


$

(3,043,528)


$

(2,019,970)



2,276,004

Other income, net















1,526,358

Income before income taxes















3,802,362

Benefit from income taxes















(888,977)

Net income from continuing operations















4,691,339

Loss from continuing operations attributable to non-controlling interests















(411,489)

Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders















5,102,828

Net income from discontinued operations















1,041,234

Net income attributable to Consolidated Water Co. Ltd.
stockholders














$

6,144,062

 

Revenues earned by major geographic region were:



Year ended December 31,




2018



2017


Cayman Islands


$

34,623,925



$

30,218,830


Bahamas



23,241,361




21,528,494


Indonesia



153,233




159,856


USA



7,256,150




6,990,496


Revenues earned from management services agreement with OC-BVI



445,188




469,346




$

65,719,857



$

59,367,022


 

Outlook
The company traditionally sells more water on Grand Cayman during the first and second quarters of the year when the number of tourists visiting its areas of operation is typically greater and local rainfall is less as compared to the back half of the year. For 2019, the company sees this trend continuing, and anticipates a seasonally stronger first half of the year due to favorable tourism activity.

Annual General Meeting of Shareholders
The company announced that it has set May 21, 2019 as the date of its annual meeting of shareholders to be held at 10:00 a.m. local time at the Westin Hotel on Seven Mile Beach in Grand Cayman. Holders of record of the company's stock as of March 19, 2019 will be entitled to vote at the meeting.

Conference Call
Consolidated Water management plans to host a call later today to discuss its fourth quarter and full year 2018 results, followed by a question and answer period.

Date: Monday, March 18, 2019
Time: 11:00 a.m. Eastern time (8:00 a.m. Pacific time)
Toll-free dial-in number: 1-844-875-6913
International dial-in number: 1-412-317-6709
Conference ID: 10129400

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 March 25, 2019, as well as available for replay via the Investors section of the Consolidated Water website at www.cwco.com.

Toll-free replay number: 1-877-344-7529
International replay number: 1-412-317-0088
Replay ID: 10129400

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 there are scarce amounts of naturally occurring potable water. The company operates facilities in the Cayman Islands, British Virgin Islands, The Bahamas, and Indonesia. It also manufactures and services a wide range of water-related products, and provides design, engineering, management, operating and other services applicable to commercial water production, supply and treatment. 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. For more information, visit www.cwco.com.

Consolidated Water Investor Relations Contact
Ron Both, CMA
Tel (949) 432-7566
CWCO@cma.team

Cautionary Note Regarding Forward-Looking Statements
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. 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.


 

CONSOLIDATED WATER CO. LTD.


CONSOLIDATED BALANCE SHEETS




December 31,



2018


2017

ASSETS







Current assets







Cash and cash equivalents


$

31,337,477


$

45,482,966

Accounts receivable, net



24,228,095



14,687,078

Inventory



2,232,721



1,583,553

Prepaid expenses and other current assets



1,035,796



1,069,743

Current portion of loans receivable



734,980



1,400,448

Costs and estimated earnings in excess of billings



835,669



238,435

Current assets of discontinued operations



1,959,494



2,229,174

Total current assets



62,364,232



66,691,397

Property, plant and equipment, net



58,880,818



49,683,771

Construction in progress



6,015,043



1,823,284

Inventory, non-current



4,545,198



4,462,961

Loans receivable



-



734,980

Investment in OC-BVI



2,584,987



2,783,882

Goodwill



8,003,568



8,003,568

Land and rights of way held for development



24,161,024



21,505,675

Intangible assets, net



1,891,667



3,231,667

Other assets



2,123,999



4,492,835

Long-term assets of discontinued operations



1,945,062



2,066,875

Total assets


$

172,515,598


$

165,480,895








LIABILITIES AND EQUITY







Current liabilities







Accounts payable, accrued expenses and other current liabilities


$

4,570,641


$

3,548,965

Accrued compensation



1,286,468



1,015,662

Dividends payable



1,286,493



1,281,612

Note payable to related party



-



686,000

Billings in excess of costs and estimated earnings



109,940



1,258

Current liabilities of discontinued operations



646,452



1,097,821

Total current liabilities



7,899,994



7,631,318

Deferred tax liability



659,874



1,024,893

Other liabilities



199,827



803,307

Total liabilities



8,759,695



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 34,796 and 33,488 shares, respectively



20,878



20,093

Class A common stock, $0.60 par value. Authorized 24,655,000 shares; issued and outstanding 14,982,906 and 14,918,869 shares, respectively



8,989,744



8,951,321

Class B common stock, $0.60 par value. Authorized 145,000 shares; none issued



-



-

Additional paid-in capital



87,211,953



86,405,387

Retained earnings



59,298,161



53,105,196

Cumulative translation adjustment



(549,555)



(549,555)

Total Consolidated Water Co. Ltd. stockholders' equity



154,971,181



147,932,442

Non-controlling interests



8,784,722



8,088,935

Total equity



163,755,903



156,021,377

Total liabilities and equity


$

172,515,598


$

165,480,895

 

CONSOLIDATED WATER CO. LTD.


CONSOLIDATED STATEMENTS OF INCOME




Year Ended December 31,



2018


2017

Retail revenues


$

25,621,048


$

23,225,066

Bulk revenues



31,031,287



28,682,113

Services revenues



1,811,372



469,347

Manufacturing revenues



7,256,150



6,990,496

 Total revenues



65,719,857



59,367,022








Cost of retail revenues



11,011,456



10,372,199

Cost of bulk revenues



21,551,383



19,562,503

Cost of services revenues



1,503,034



469,797

Cost of manufacturing revenues



4,911,697



4,963,962

 Total cost of revenues



38,977,570



35,368,461

Gross profit



26,742,287



23,998,561

General and administrative expenses



18,709,419



18,682,399

Loss on asset dispositions and impairments, net



56,774



3,040,158

Income from operations



7,976,094



2,276,004








Other income (expense):







Interest income



663,197



380,563

Interest expense



(8,427)



(5,722)

Profit-sharing income from OC-BVI



654,075



46,575

Equity in the earnings of OC-BVI



1,798,280



127,802

Net unrealized gain (loss) on put/call options



(256,000)



960,000

Other



(111,061)



17,140

 Other income, net



2,740,064



1,526,358

Income before income taxes



10,716,158



3,802,362

Benefit from income taxes



(157,291)



(888,977)

Net income from continuing operations



10,873,449



4,691,339

Income (loss) from continuing operations attributable to non-controlling interests



695,787



(411,489)

Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders



10,177,662



5,102,828

Net income from discontinued operations



1,115,825



1,041,234

Net income attributable to Consolidated Water Co. Ltd. stockholders


$

11,293,487


$

6,144,062








Basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders







Continuing operations


$

0.68


$

0.34

Discontinued operations


$

0.07


$

0.07

Basic earnings per share


$

0.75


$

0.41








Diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders







Continuing operations


$

0.68


$

0.34

Discontinued operations


$

0.07


$

0.07

Diluted earnings per share


$

0.75


$

0.41








Dividends declared per common share


$

0.34


$

0.31








Weighted average number of common shares used in the determination of:







Basic earnings per share



14,962,760



14,896,944

Diluted earnings per share



15,074,147



15,006,681


    

Cision

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