Consolidated Water Reports First Quarter 2025 Results

GEORGE TOWN, Cayman Islands, May 12, 2025 (GLOBE NEWSWIRE) -- Consolidated Water Co. Ltd. (NASDAQ Global Select Market: CWCO), a leading designer, builder and operator of advanced water supply and treatment plants, reported results for the quarter ended March 31, 2025. All comparisons are to the same prior year period unless otherwise noted. Consolidated Water will hold a conference call at 11:00 a.m. Eastern time tomorrow to discuss the results (see dial-in information below). First Quarter 2025 Financial Summary Total revenue declined 15% to $33.7 million, due to a decline in services revenue as a result of two large construction projects that were completed in the second quarter of 2024. The decline in services revenue was partially offset by revenue increases in all three other operating segments.Retail revenue increased 9% to $9.4 million on higher sales volumes.Bulk revenue increased 1% to $8.4 million.Manufacturing revenue increased by 10% to $5.8 million.Services revenue declined by 42% to $10.1 million due to a $7.0 million decline in construction revenue and $980,000 decrease in design and consulting revenue that was partially offset by a $626,000 increase in operations and maintenance (O&M) revenue.Services O&M revenue increased 9% to $7.7 million.Net income from continuing operations attributable to company stockholders totaled $4.9 million or $0.31 per diluted share, compared to $6.9 million or $0.43 per diluted share in the first quarter of 2024.Net income, including discontinued operations attributable to company stockholders, totaled $4.8 million or $0.30 per diluted share, compared to $6.5 million or $0.40 per diluted share in the first quarter of 2024.Cash and cash equivalents increased to $107.9 million and working capital increased to $136.2 million as of March 31, 2025. First Quarter Operational Highlights Retail water sold by the company’s Grand Cayman water utility increased 13% due to ongoing population growth and increased business activity within the company’s service area.Completed the pilot testing for a project to design, construct, operate and maintain a seawater desalination plant in Hawaii for the Honolulu Board of Water Supply. Prepared and submitted the required pilot test reports to the client for review which were subsequently approved, thus fulfilling one significant condition precedent to the client’s issuance of the notice to proceed with construction of the project.Received a new concession from the Cayman Islands government that granted the company’s Grand Cayman water utility continued exclusive rights to produce and supply potable water within its service area. In April, resumed discussions with the utility regulator for a new operating license. The existing operating license remains in effect until the new one is received. Management Commentary “Our retail, bulk and manufacturing business segments generated meaningful growth and profitability during the first quarter,” commented Consolidated Water CEO, Rick McTaggart. “Our Services segment revenue was comparatively lower versus the same year ago quarter due to the completion of two major design-build projects in the second quarter of last year.” “The decrease in construction services revenue was partially offset by a 9% or $626,000 increase in revenue from our operations and maintenance (O&M) contracts for customer facilities in the Western U.S. The growth in O&M revenue in dollar terms was generated about evenly between our PERC Water subsidiary operating in California and Arizona, and REC, our newer acquisition, servicing customers in Colorado. The growth of these units underscores our ability to successfully acquire and scale operating businesses, particularly those that generate recurring revenue. “Our retail and manufacturing segments also produced significant growth. Retail water sales in our exclusive utility service area on Grand Cayman reflected stronger volumes of water sold. This improvement was due to ongoing population growth and increased business activity within our service area. “Manufacturing segment revenue increased 10% and its operating income increased by about 44% due to higher production activity and a favorable shift in product mix to higher margin products. The revenue and gross profit generated in our Caribbean-based bulk water segment was up marginally but basically consistent, reflecting the long-term, stable income-generating nature of the businesses in this segment. “We recently achieved a major milestone for our $204 million project to design, construct, operate and maintain a 1.7 million gallon per day seawater desalination plant in Hawaii. The Honolulu Board of Water Supply, our client for the multi-year project, approved our pilot test reports and recommendations. The board concluded that the desalinated water we produced during the piloting phase is a reasonable match to their existing water supply. They also concluded that the desalinated water from the new plant would not cause any detrimental impact to their distribution pipes or customer assets. “This approval milestone helps pave the way to begin construction after we obtain the various permits. We now expect to begin the construction of this project early next year once all permits have been received and the client issues a notice to proceed with construction. “Aside from this major project, we anticipate our design/build services revenue to improve in the second half of this year, as three smaller projects currently under contract or nearing final contract stage and set to begin construction. We expect the combined value of these three projects to be approximately $20 million.“Looking ahead, we are confident in our ability to deliver consistent, long-term revenue and profit growth. Our positive outlook is supported by strong retail water sales growth in Grand Cayman, stable recurring revenue from our Caribbean bulk water operations, our design/build activity (especially the Hawaii project), and the continued positive momentum in our manufacturing segment.” Q1 2025 Financial Results Revenue totaled $33.7 million, declining 15% from $39.7 million in the first quarter of 2024. The decrease was due to a decrease of $7.3 million in the services segment. This decrease was partially offset by increases of $786,000 in the retail segment, $70,000 in the bulk segment and $509,000 in the manufacturing segment. Retail revenue increased due to a 13% increase in the volume of water sold. The increase in bulk segment revenue was partly due to the revenue generated by the commencement on May 1, 2024, of the operations and maintenance contract for the new Red Gate II desalination plant on Grand Cayman. The increase also was due to additional revenue generated by the amendment of the company’s North Sound contract which also became effective on May 1, 2024. These increased contract revenue on Grand Cayman was partially offset by a decline in energy-related revenue in the Bahamas operations. The decrease in services segment revenue was due to plant construction revenue decreasing from $9.2 million in the first quarter of 2024 to $2.2 million in the first quarter of 2025 as a result of two construction projects that were completed in the second quarter of 2024. The construction revenue in 2024 included $4.8 million generated from PERC’s contract with Liberty Utilities. Revenue generated under operations and maintenance contracts totaled $7.7 million in the first quarter of 2025, an increase of 9% from the first quarter of 2024. The increase was a result of incremental revenue generated by both PERC and REC. Manufacturing segment revenue increased by $509,000 to $5.8 million as compared to $5.3 million in the first quarter of 2024. Gross profit for 2025 was $12.3 million (36.5% of total revenue), as compared to $13.9 million (35.0% of total revenue) in the first quarter of 2024. The decrease was due to a decrease in service segment gross profit of $2.7 million as a result of the decrease in construction revenue. This was partially offset by an increase in gross profit for the retail, bulk and manufacturing segments. Net income from continuing operations attributable to Consolidated Water stockholders for the first quarter of 2025 was $4.9 million or $0.31 per diluted share, compared to net income of $6.9 million or $0.43 per diluted share in the first quarter of 2024. Including discontinued operations, net income attributable to Consolidated Water stockholders for the first quarter of 2025 was $4.8 million or $0.30 per diluted share, compared to net income of $6.5 million or $0.40 per diluted share in the first quarter of 2024. Cash and cash equivalents totaled $107.9 million as of March 31, 2025, with working capital of $136.2 million, debt of $0.2 million, and stockholders’ equity of $213.3 million. First Quarter 2025 Segment Results Three Months Ended March 31, 2025 Retail Bulk Services Manufacturing Corporate TotalRevenue $9,411,342 $8,411,716 $10,078,268 $5,814,059 $— $33,715,385 Cost of revenue 3,706,063 5,584,089 8,061,877 4,057,069 — 21,409,098 Gross profit 5,705,279 2,827,627 2,016,391 1,756,990 — 12,306,287 General and administrative expenses 788,812 346,081 2,195,338 664,078 3,729,650 7,723,959 Gain (loss) on asset dispositions and impairments, net 29,976 — (1,541) — — 28,435 Income (loss) from operations 4,946,443 2,481,546 (180,488) 1,092,912 (3,729,650) 4,610,763 Interest income 32,866 204,103 143,319 1 236,305 616,594 Interest expense — — (1,528) — — (1,528)Income (loss) from affiliates — — — (34,004) 64,478 30,474 Other 28,308 14,933 36 74 — 43,351 Other income, net 61,174 219,036 141,827 (33,929) 300,783 688,891 Income (loss) before income taxes 5,007,617 2,700,582 (38,661) 1,058,983 (3,428,867) 5,299,654 Provision (benefit) for income taxes — — (35,893) 246,010 — 210,117 Net income (loss) from continuing operations 5,007,617 2,700,582 (2,768) 812,973 (3,428,867) 5,089,537 Income from continuing operations attributable to non-controlling interests — 165,427 — — — 165,427 Net income (loss) from continuing operations attributable to Consolidated Water Co. Ltd. stockholders $5,007,617 $2,535,155 $(2,768) $812,973 $(3,428,867) 4,924,110 Net loss from discontinued operations (133,081)Net income attributable to Consolidated Water Co. Ltd. stockholders $4,791,029 Three Months Ended March 31, 2024 Retail Bulk Services Manufacturing Corporate TotalRevenue $8,624,938 $8,342,094 $17,417,611 $5,304,747 $— $39,689,390 Cost of revenue 3,551,344 5,565,258 12,668,939 4,025,826 — 25,811,367 Gross profit 5,073,594 2,776,836 4,748,672 1,278,921 — 13,878,023 General and administrative expenses 766,698 344,141 1,597,854 517,702 3,337,634 6,564,029 Income (loss) from operations 4,306,896 2,432,695 3,150,818 761,219 (3,337,634) 7,313,994 Interest income 56,593 204,319 73,204 1 25 334,142 Interest expense (31,123) — (2,378) — — (33,501)Income from affiliate — — — — 77,566 77,566 Other 20,599 5,960 601 11,660 1,157 39,977 Other income, net 46,069 210,279 71,427 11,661 78,748 418,184 Income (loss) before income taxes 4,352,965 2,642,974 3,222,245 772,880 (3,258,886) 7,732,178 Provision (benefit) for income taxes — — 778,286 169,153 (325,743) 621,696 Net income (loss) from continuing operations 4,352,965 2,642,974 2,443,959 603,727 (2,933,143) 7,110,482 Income from continuing operations attributable to non-controlling interests — 169,068 — — — 169,068 Net income (loss) from continuing operations attributable to Consolidated Water Co. Ltd. stockholders $4,352,965 $2,473,906 $2,443,959 $603,727 $(2,933,143) 6,941,414 Net loss from discontinued operations (467,066)Net income attributable to Consolidated Water Co. Ltd. stockholders $6,474,348 The following table presents the company’s revenue disaggregated by revenue source. Three Months Ended March 31, 2025 2024 Retail revenue $9,411,342 $8,624,938 Bulk revenue 8,411,716 8,342,094 Services revenue 10,078,268 17,417,611 Manufacturing revenue 5,814,059 5,304,747 Total revenue $33,715,385 $39,689,390 Services revenue consists of the following: Three Months Ended March 31, 2025 2024 Construction revenue $2,218,230 $9,203,662 Operations and maintenance revenue 7,725,298 7,099,354 Design and consulting revenue 134,740 1,114,595 Total services revenue $10,078,268 $17,417,611 Annual General Meeting of Shareholders The company has set May 27, 2025 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) at the Westin Grand Cayman Seven Mile Beach Resort & Spa, Seven Mile Beach, Grand Cayman, Cayman Islands. Holders of record of the company’s stock as of March 28, 2025 will be entitled to vote at the meeting. Conference CallConsolidated Water management will host a conference call tomorrow to discuss these results, followed by a question-and-answer period. Date: Tuesday, May 13, 2025Time: 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: 6378486 Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you require any assistance connecting with the 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, 2025, 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: 6378486 About Consolidated Water Co. Ltd.Consolidated Water Co. Ltd. develops and operates advanced water supply and treatment plants and water distribution systems. The company designs, constructs and operates seawater desalination facilities in the Cayman Islands, The Bahamas and the British Virgin Islands, and designs, constructs and operates water treatment and reuse facilities in the United States. The company recently entered the U.S. desalination market with a contract to design, construct, operate and maintain a seawater desalination plant in Hawaii.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 cwco.com. 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 (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; and (v) various other risks such as economic, operational, and industry-specific 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 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) 509-8200Email ContactInvestor & Media Contact:Ron Both or Grant StudeCMA Investor RelationsTel (949) 432-7566Email Contact CONSOLIDATED WATER CO. LTD.CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, 2025 2024 (Unaudited) ASSETS Current assets Cash and cash equivalents $107,852,232 $99,350,121 Accounts receivable, net 36,192,112 39,580,982 Inventory 7,156,002 8,960,350 Prepaid expenses and other current assets 4,173,867 5,153,984 Contract assets 9,517,668 4,470,243 Current assets of discontinued operations 169,707 272,485 Total current assets 165,061,588 157,788,165 Property, plant and equipment, net 53,543,342 52,432,282 Construction in progress 4,477,700 5,143,717 Inventory, noncurrent 5,487,970 5,338,961 Investment in affiliates 1,262,137 1,504,363 Goodwill 12,861,404 12,861,404 Intangible assets, net 2,532,722 2,696,815 Operating lease right-of-use assets 3,050,106 3,190,985 Other assets 2,091,996 2,356,489 Total assets $250,368,965 $243,313,181 LIABILITIES AND EQUITY Current liabilities Accounts payable, accrued expenses and other current liabilities $9,618,600 $9,057,179 Accrued compensation 3,949,591 3,336,946 Dividends payable 1,788,293 1,780,841 Current maturities of operating leases 636,075 634,947 Current portion of long-term debt 97,612 126,318 Contract liabilities 12,401,797 9,126,654 Deferred revenue 146,816 365,879 Current liabilities of discontinued operations 235,057 509,745 Total current liabilities 28,873,841 24,938,509 Long-term debt, noncurrent 56,838 70,320 Deferred tax liabilities — 210,893 Noncurrent operating leases 2,473,687 2,630,812 Other liabilities 153,000 153,000 Total liabilities 31,557,366 28,003,534 Commitments and contingencies Equity Consolidated Water Co. Ltd. stockholders' equity Redeemable preferred stock, $0.60 par value. Authorized 200,000 shares; issued and outstanding 40,830 and 44,004 shares, respectively 24,498 26,402 Class A common stock, $0.60 par value. Authorized 24,655,000 shares; issued and outstanding 15,916,685 and 15,846,345 shares, respectively 9,550,011 9,507,807 Class B common stock, $0.60 par value. Authorized 145,000 shares; none issued — — Additional paid-in capital 93,813,284 93,550,905 Retained earnings 109,909,427 106,875,581 Total Consolidated Water Co. Ltd. stockholders' equity 213,297,220 209,960,695 Non-controlling interests 5,514,379 5,348,952 Total equity 218,811,599 215,309,647 Total liabilities and equity $250,368,965 $243,313,181 CONSOLIDATED WATER CO. LTD.CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended March 31, 2025 2024 Revenue $33,715,385 $39,689,390 Cost of revenue 21,409,098 25,811,367 Gross profit 12,306,287 13,878,023 General and administrative expenses 7,723,959 6,564,029 Gain on asset dispositions and impairments, net 28,435 — Income from operations 4,610,763 7,313,994 Other income (expense): Interest income 616,594 334,142 Interest expense (1,528) (33,501)Equity in the earnings of affiliates 30,474 77,566 Other 43,351 39,977 Other income, net 688,891 418,184 Income before income taxes 5,299,654 7,732,178 Provision for income taxes 210,117 621,696 Net income from continuing operations 5,089,537 7,110,482 Income from continuing operations attributable to non-controlling interests 165,427 169,068 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 4,924,110 6,941,414 Net loss from discontinued operations (133,081) (467,066)Net income attributable to Consolidated Water Co. Ltd. stockholders $4,791,029 $6,474,348 Basic earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders Continuing operations $0.31 $0.44 Discontinued operations (0.01) (0.03)Basic earnings per share $0.30 $0.41 Diluted earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders Continuing operations $0.31 $0.43 Discontinued operations (0.01) (0.03)Diluted earnings per share $0.30 $0.40 Dividends declared per common and redeemable preferred shares $0.11 $0.095 Weighted average number of common shares used in the determination of: Basic earnings per share 15,915,867 15,828,929 Diluted earnings per share 16,041,847 15,984,548

Consolidated Water Reports First Quarter 2025 Results

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