Global Water Resources Inc (GWRS) Reports Solid Growth in Q3 2023 Earnings
Total revenue increased by 22.2% to $14.5 million in Q3 2023 compared to the same period last year.
Net income saw a significant rise of 56.2%, reaching $2.6 million, or $0.11 per share.
Active service connections grew by 8.7%, with water consumption up by 31.2%.
Adjusted EBITDA improved by 24.5% to $7.6 million, reflecting robust financial health.
On November 8, 2023, Global Water Resources Inc (NASDAQ:GWRS), a leader in water resource management, announced its financial results for the third quarter ended September 30, 2023. The company demonstrated strong financial performance, with significant increases in both revenue and net income compared to the same quarter in the previous year. The earnings release date was November 9, 2023.
Financial Performance Overview
GWRS reported a substantial increase in total revenue, which rose by $2.6 million, or 22.2%, to $14.5 million. This increase included $0.5 million of unregulated revenues, while regulated revenue alone grew by 17.8%. Net income also experienced a notable jump, increasing by $0.9 million, or 56.2%, to $2.6 million, or $0.11 per share. Adjusted EBITDA, a non-GAAP financial measure, saw a healthy increase of 24.5% to $7.6 million.
Operational Highlights and Strategic Developments
GWRS's operational achievements were marked by an 8.7% increase in total active service connections, which now stand at 61,036. The company also reported a 31.2% increase in water consumption, reflecting both organic growth and the impact of the Farmers Water acquisition completed in February 2023. The company continued to invest in infrastructure, with $4.9 million allocated to support existing utilities and growth.
President and CEO Ron Fleming commented on the results, stating,
In Q3, we achieved strong double-digit top-line and bottom-line growth."
He highlighted the contributions from organic growth, increased rates, and higher consumption, as well as the positive impact of the Farmers Water acquisition.
Financial Health and Future Outlook
CFO Mike Liebman provided insights into the company's financial resources, which exceed $20 million, including cash and cash equivalents and an unused credit line. Liebman also mentioned the anticipated $20 million from a new senior secured notes offering expected to close in January 2024, which will support capital investments and general corporate purposes.
Looking ahead, GWRS anticipates continued growth across all business areas, supported by population and job growth in its service areas. The company also expects to benefit from its acquisition strategy and the consolidation benefits it brings.
Balance Sheet and Cash Flow Statements
The balance sheet as of September 30, 2023, shows an increase in total assets to $358.452 million from $323.086 million at the end of 2022. This growth is primarily due to investments in property, plant, and equipment, as well as acquisitions. The company's liabilities also increased, mainly due to long-term debt and advances in aid of construction.
The cash flow statements for the nine months ended September 30, 2023, reveal that net cash provided by operating activities was $22.662 million, while net cash used in investing activities was $24.824 million, primarily for capital expenditures and acquisitions. Financing activities provided an additional $2.265 million.
In conclusion, GWRS's Q3 2023 earnings report reflects a company experiencing significant revenue and net income growth, operational expansion, and strategic investments that position it well for future success. With a strong financial foundation and a clear strategic direction, Global Water Resources Inc is poised to continue its growth trajectory and deliver value to its shareholders.
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Explore the complete 8-K earnings release (here) from Global Water Resources Inc for further details.
This article first appeared on GuruFocus.
