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Consolidated Water Reports Q1 2019 Results; Total Revenues up 17% to $17.0 million, Net Income Increased to $6.2 million or $0.41 per Share

GEORGE TOWN, Cayman Islands, May 13, 2019 /PRNewswire/ -- Consolidated Water Co. Ltd. (Nasdaq Global Select Market: CWCO), a leading developer and operator of seawater desalination plants, reported results for the quarter ended March 31, 2019. Quarterly comparisons are to the year-ago quarter unless otherwise noted.

(PRNewsfoto/Consolidated Water Co. Ltd.)

Q1 2019 Financial Highlights

  • Total revenues increased 17% to $17.0 million.
  • Gross profit up 13% to $7.0 million.
  • Net income attributable to stockholders increased to $6.2 million or $0.41 per diluted share.
  • $1.3 million in dividends paid.

Q1 2019 Operational Highlights

  • Awarded a new seven-year bulk water supply agreement from the Water-Authority Cayman for its North Side Water Works desalination plant, effective July 1.
  • Completed the sale of the company's Belize subsidiary for $7 million and repatriated more than $12 million in cash to be used to support growth and M&A initiatives.
  • Completed the expansion of the water production and storage capacity of the Abel Castillo Water Works plant in Grand Cayman and began utilizing these new capabilities in March.
  • Advanced the development of the project in Rosarito, Baja California, Mexico involving the construction and operation of a major seawater desalination plant and distribution pipeline. Company received notice of lender approval of up to $200 million of the debt financing required for the project. 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 a major, much-needed new source of drinking water for the coastal region of Baja California for at least 37 years.

Management Commentary
"In Q1, we realized double-digit revenue and gross profit growth, which was driven primarily by increased production activity in our manufacturing business segment," commented Consolidated Water CEO, Rick McTaggart. "We expect this growth in manufacturing activity, as compared to last year, to be maintained over the remainder of the year.

"During the quarter, we executed a new agreement with the Water-Authority Cayman for the North Side Water Works desalination plant. The agreement secures our position as the dominant desalinated water producer in the Cayman Islands for the next several years. Completing the expansion of the Abel Castillo Water Works plant ensures that we can meet future water supply needs of our retail water customers in Grand Cayman. The sale of our Belize subsidiary allowed us to repatriate more than $12 million in cash that we can use to fund our growth initiatives.

"Our Rosarito project had two major positive developments during the quarter: we were informed by a major lender that their credit committee had approved up to $200 million in debt financing for the project , and the Congress of the State of Baja California, Mexico renewed key authorizations required for the project. The authorizations allow the State to obtain the credit facility it needs for the project. We can now proceed to several important next steps before beginning the construction phase, including securing the remaining required debt financing and aqueduct rights-of-ways.

"Supported by a strong balance sheet and ample liquidity, both of which have continued to improve, we are focused on expanding our businesses into new markets and complementary product lines. This includes actively evaluating acquisition targets in North America that would expand our geographic footprint and diversify our revenue streams."

Q1 2019 Financial Summary
Total revenues for the first quarter of 2019 were $17.0 million, up 17% compared to $14.6 million in the same year-ago quarter. The increase was primarily driven by an increase of $2.5 million in the manufacturing segment and slightly higher retail revenues. Manufacturing revenues increased due to an increase in the number of orders and expanded project production activity. The increase in manufacturing and retail revenues was partially offset by a slight decrease in bulk and services revenues. The decrease in bulk revenues is due to the lower rates that came into effect in February for water supplied from the Red Gate and North Sound plants.

Gross profit for the first quarter of 2019 was $7.0 million, up 13% from $6.2 million in the same year-ago quarter.

Net income attributable to Consolidated Water stockholders for the first quarter of 2019 was $6.2 million or $0.41 per fully diluted share, up 196% from $2.1 million or $0.14 per fully diluted share in 2018.

Net income and diluted EPS for the first quarter of 2019 and 2018 included operating expenses of $0.5 million and $0.6 million, respectively, related to development costs for the Rosarito desalination plant.

The rise in net income for the first quarter of 2019 as compared to the same year-ago quarter reflects an improvement in income from operations of approximately $1.1 million and the gain on the sale of the company's discontinued Belize operations of approximately $3.6 million.

Cash and cash equivalents totaled $38.0 million as of March 31, 2019, as compared to $31.3 million as of December 31, 2018. The increase resulted primarily from the sale of our discontinued Belize operations and to a lesser extent lower accounts receivable for the Bahamas operations.

Segment Results



Three Months Ended March 31, 2019 (Unaudited)




Retail



Bulk



Services



Manufacturing



Total


Revenues


$

6,686,660



$

7,111,313



$

100,577



$

3,089,974



$

16,988,524


Cost of revenues



2,825,604




4,954,591




121,919




2,124,107




10,026,221


Gross profit (loss)



3,861,056




2,156,722




(21,342)




965,867




6,962,303


General and administrative expenses



3,117,278




261,412




485,885




513,459




4,378,034


Gain (loss) on asset dispositions and
impairments, net



(2,731)




46,500




-




-




43,769


Income (loss) from operations


$

741,047



$

1,941,810



$

(507,227)



$

452,408




2,628,038


Other income, net



















260,090


Income before income taxes



















2,888,128


Provision for income taxes



















48,959


Net income from continuing operations



















2,839,169


Income from continuing operations attributable to non-controlling interests









273,908


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




2,565,261


Total income from discontinued operations














3,621,170


Net income attributable to Consolidated Water Co. Ltd. stockholders








$

6,186,431






Three Months Ended March 31, 2018 (Unaudited)




Retail



Bulk



Services



Manufacturing



Total


Revenues


$

6,431,348



$

7,446,783



$

123,764



$

552,768



$

14,554,663


Cost of revenues



2,761,554




5,050,336




134,871




438,861




8,385,622


Gross profit (loss)



3,669,794




2,396,447




(11,107)




113,907




6,169,041


General and administrative expenses



3,145,483




236,234




650,636




629,358




4,661,711


Gain (loss) on asset dispositions and impairments, net



(1,340)




-




-




-




(1,340)


Income (loss) from operations


$

522,971



$

2,160,213



$

(661,743)



$

(515,451)




1,505,990


Other income, net



















147,597


Income before income taxes



















1,653,587


(Benefit from) income taxes



















(77,388)


Net income from continuing operations



















1,730,975


Loss from continuing operations attributable to non-controlling interests









(34,493)


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




1,765,468


Total income from discontinued operations














327,057


Net income attributable to Consolidated Water Co. Ltd. stockholders








$

2,092,525


Outlook
Based on committed purchase orders, Consolidated Water expects the performance of its manufacturing segment for the remainder of 2019 to exceed its performance for the comparable 2018 period.

The company traditionally sells more water on Grand Cayman during the first half of the calendar year when the number of tourists visiting its area of operation is typically greater and local rainfall is less as compared to the back half of the year.

Conference Call
Consolidated Water management plans to host a call later today to discuss its first quarter of 2019 results, followed by a question and answer period.

Date: Monday, May 13, 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: 10131212

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 May 20, 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: 10131212

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. 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.

Company Contact:
David Sasnett
Executive Vice President and CFO
Tel (954) 509-8200
dsasnett@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.

CONDENSED CONSOLIDATED BALANCE SHEETS




March 31,



December 31,




2019



2018




(Unaudited)





ASSETS







Current assets









Cash and cash equivalents


$

38,016,963



$

31,337,477


Restricted cash



1,500,000




-


Accounts receivable, net



22,452,168




24,228,095


Inventory



3,974,413




2,232,721


Prepaid expenses and other current assets



995,480




1,035,796


Current portion of loans receivable



370,465




734,980


Costs and estimated earnings in excess of billings



2,826,388




835,669


Current assets of discontinued operations



-




1,959,494


Total current assets



70,135,877




62,364,232


Property, plant and equipment, net



64,294,070




58,880,818


Construction in progress



406,280




6,015,043


Inventory, non-current



4,435,235




4,545,198


Investment in OC-BVI



2,604,523




2,584,987


Goodwill



8,004,597




8,004,597


Land and rights of way held for development



24,161,024




24,161,024


Intangible assets, net



1,667,778




1,891,667


Operating lease right-of-use assets



3,409,930




-


Other assets



2,111,412




2,123,999


Long-term assets of discontinued operations



-




1,944,033


Total assets


$

181,230,726



$

172,515,598











LIABILITIES AND EQUITY









Current liabilities









Accounts payable, accrued expenses and other current liabilities


$

5,025,051



$

4,570,641


Accrued compensation



1,585,817




1,286,468


Dividends payable



1,288,607




1,286,493


Current maturities of operating leases



433,560




-


Billings in excess of costs and estimated earnings



-




109,940


Current liabilities of discontinued operations



-




646,452


Total current liabilities



8,333,035




7,899,994


Deferred tax liability



592,468




659,874


Noncurrent operating leases



3,031,110




-


Other liabilities



199,827




199,827


Total liabilities



12,156,440




8,759,695


Commitments and contingencies









Equity









Consolidated Water Co. Ltd. stockholders' equity









Redeemable preferred stock, $0.60 par value. Authorized 200,000 shares; issued
and outstanding 32,813 and 34,796 shares, respectively



19,688




20,878


Class A common stock, $0.60 par value. Authorized 24,655,000 shares; issued
and outstanding 15,009,770 and 14,982,906 shares, respectively



9,005,862




8,989,744


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



-




-


Additional paid-in capital



87,335,292




87,211,953


Retained earnings



64,204,369




59,298,161


Cumulative translation adjustment



(549,555)




(549,555)


Total Consolidated Water Co. Ltd. stockholders' equity



160,015,656




154,971,181


Non-controlling interests



9,058,630




8,784,722


Total equity



169,074,286




163,755,903


Total liabilities and equity


$

181,230,726



$

172,515,598


  

CONSOLIDATED WATER CO. LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)




Three Months Ended
March 31,




2019



2018


Total revenues


$

16,988,524



$

14,554,663


Total cost of revenues



10,026,221




8,385,622


Gross profit



6,962,303




6,169,041


General and administrative expenses



4,378,034




4,661,711


Gain (loss) on asset dispositions and impairments, net



43,769




(1,340)


Income from operations



2,628,038




1,505,990











Other income (expense):









Interest income



150,185




161,121


Interest expense



-




(1,754)


Profit-sharing income from OC-BVI



6,075




28,350


Equity in the earnings of OC-BVI



13,461




80,593


Net unrealized loss on put/call options



(24,000)




(206,000)


Other



114,369




85,287


       Other income, net



260,090




147,597


Income before income taxes



2,888,128




1,653,587


Provision for (benefit from) income taxes



48,959




(77,388)


Net income from continuing operations



2,839,169




1,730,975


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



273,908




(34,493)


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



2,565,261




1,765,468


Gain on sale of discontinued operations



3,621,170




-


Net income from discontinued operations



-




327,057


Total income from discontinued operations



3,621,170




327,057


Net income attributable to Consolidated Water Co. Ltd. stockholders


$

6,186,431



$

2,092,525




















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









Continuing operations


$

0.17



$

0.12


Discontinued operations


$

0.24



$

0.02


Basic earnings per share


$

0.41



$

0.14











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









Continuing operations


$

0.17



$

0.12


Discontinued operations


$

0.24



$

0.02


Diluted earnings per share


$

0.41



$

0.14











Dividends declared per common and redeemable preferred shares


$

0.085



$

0.085











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









Basic earnings per share



15,020,344




14,959,259


Diluted earnings per share



15,129,401




15,114,477


 

Cision

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