Consolidated Water Co. Ltd. (NASDAQ: CWCO), which develops and
operates seawater desalination plants and water distribution
systems in areas of the world where naturally occurring supplies of
potable water are scarce or nonexistent, today reported its
operating results for the third quarter and first nine months of
2012. The Company will host an investor conference call on Monday,
November 12, 2012, at 11:00 a.m. EST (see details below) to discuss
these operating results and other topics of interest.
Total revenues for the three months ended September 30, 2012
increased 24% to approximately $15.8 million, compared with
approximately $12.8 million in the third quarter of 2011.
Retail water revenues increased 8% to approximately $5.7 million
(36% of total revenues) in the most recent quarter, versus
approximately $5.3 million (41% of total revenues) in the
comparable prior-year quarter. The improvement in revenue was
primarily attributable to a 7% increase in the number of gallons
sold by the retail segment.
Bulk water revenues increased 35% to approximately $10.0 million
(63% of total revenues) in the third quarter of 2012, compared with
approximately $7.5 million (58% of total revenues) in the
year-earlier quarter, reflecting a 36% increase in the number of
gallons of water sold, which was primarily attributable to the
expansion of the Company's Blue Hills plant in the Bahamas during
the fourth quarter of 2011 and energy pass-through increases to
rates due to higher energy prices.
Services revenues increased to $105,727 in the three months
ended September 30, 2012, compared with $70,217 in the third
quarter of 2011, reflecting an increase in the management fees the
Company earned from OC-BVI (the Company's equity investment
affiliate in the British Virgin Islands).
Net income attributable to CWCO stockholders increased 1% to
$1,304,843, or $0.09 per diluted share, for the quarter ended
September 30, 2012, compared with net income of $1,286,068, or
$0.09 per diluted share, for the quarter ended September 30, 2011.
Net income attributable to CWCO stockholders during the three
months ended September 30, 2012 included $99,932 in earnings
derived from the Company's equity in OC-BVI, compared with $159,250
in the comparable 2011 period.
Consolidated gross profit rose 31% to approximately $5.2 million
(33% of total revenues) in the third quarter of 2012, compared with
approximately $4.0 million (31% of total revenues) in the
prior-year period. Gross profit on retail revenues increased 20% to
approximately $2.9 million in the most recent quarter (51% of
retail revenues), compared with approximately $2.4 million (46% of
retail revenues) in the quarter ended September 30, 2011. The
improvement in retail gross profit reflected the higher number of
gallons sold, while the increase in gross profit as a percentage of
retail revenue resulted primarily from base rate increases
implemented in the first quarter of 2012. Gross profit on bulk
revenues increased 37% to approximately $2.3 million (22% of bulk
revenues) in the most recent quarter, from approximately $1.6
million (22% of bulk revenues) a year earlier. The improvement in
the bulk segment's gross profit was due to the increase in the
volume of water sold. The services segment recorded a gross profit
of $76,392 for the three months ended September 30, 2012, compared
with a negative gross profit of ($54,970) in the third quarter of
2011. The improvement in services segment gross profits in the 2012
third quarter was due to an increase in the management fees earned
from OC-BVI and relatively lower engineering expenses when compared
with the prior-year period.
General and administrative expenses increased 35% to $4,089,575
in the third quarter of 2012, versus $3,031,951 in the
corresponding period of 2011, due to incremental employee costs of
approximately $110,000 attributable primarily to additional
management and IT personnel; approximately $76,000 in additional
research and development expenses; incremental expenses of
approximately $291,000 for the project development activities of
the Company's consolidated Mexico affiliate, N.S.C. Agua, S.A. de
C.V. ("NSC"); and an increase in other business development costs
of approximately $580,000.
Interest income decreased 25% to $198,604 for the quarter ended
September 30, 2012, versus $265,934 in the corresponding quarter of
the previous year. Interest expense decreased 14% to $146,880 in
the 2012 quarter, from $170,659 in the comparable 2011 period.
"Gross profits generated by our retail and bulk segments each
posted double-digit percentage gains in the most recent quarter,
reflecting higher water volumes sold in the Cayman Islands and
Bahamas when compared with the prior-year period," stated Rick
McTaggart, Chief Executive Officer of Consolidated Water Co. Ltd.
"The Company continues to utilize a portion of these increased
gross profits to fund its business development activities in
Mexico, Asia and the Bahamas, and consequently administrative costs
during the third quarter of 2012 increased by about $1
million."
"We received written confirmation earlier this week from the BVI
government that it will pay our BVI affiliate, OC-BVI,
approximately $6.7 million by the end of this year, which
represents the amount outstanding from the 2009 judgment relating
to the Baughers Bay plant dispute, plus legal expenses and accrued
interest. The Company expects to book approximately 43.5% of this
amount as equity earnings from our interest in the BVI affiliate
when these amounts are received. We expect our BVI affiliate to
continue to pursue the additional compensation that was awarded by
the appellate court, which relates to the value of the Baughers Bay
plant and equipment at the time operation of the plant was assumed
by the BVI government."
"On October 30, 2012, the Cayman Islands government amended the
base water and sewerage rates charged by Water Authority Cayman
("WAC") to include an annual inflation adjustment mechanism that is
functionally the same as the inflation adjustment mechanism
included in the Company's existing 1990 License agreement,"
continued Mr. McTaggart. "In addition, the rates charged by WAC for
sewerage services now include a monthly energy adjustment charge
that allows WAC to increase or decrease its sewerage charges to
reflect monthly changes in energy costs. This new energy adjustment
charge is also functionally similar to the energy adjustment charge
contained in our 1990 License agreement. And finally, WAC's base
water and sewerage rates were immediately increased by an average
of 9.2%. We believe that, as a result of these fundamental changes,
WAC's rate structure is now in line with the rate structure in our
1990 License. In our opinion, such changes are inconsistent with
WAC's previous assertion that a 'rate of return' model is in the
best interests of the public. WAC's insistence that our new license
should be based on a 'rate of return on invested capital' model has
been a point of contention in the Company's license negotiations
for some time, and the Company took legal steps to try and resolve
the issue in July of this year. On October 22, 2012, the Company
was notified that the Grand Court of the Cayman Islands had agreed
to consider the issues raised by the Company in its Application for
Leave to Apply for Judicial Review, and as a result, the Company,
the Cayman Islands government and Water Authority-Cayman will have
the opportunity to present their positions to the Court in a trial
proceeding."
"The Company's business development activities in Mexico and
Asia are proceeding as expected. On August 31, 2012, our Mexican
subsidiary, NSC Agua, and Doosan Heavy Industries and Construction
Co. Ltd. (DHIC) extended a Memorandum of Understanding for 18
months from August 19, 2012, during which time DHIC will provide,
install and operate a pilot plant and collect water quality data
from the proposed feed water source at the Presidente Juarez
Thermoelectric Plant in Rosarito Beach, Baja California, Mexico.
Several of our Directors recently visited the site of the proposed
100 million gallon per day desalination plant to review first-hand
the assembly of the pilot plant currently underway by DHIC
personnel and NSC Agua's contractor. We expect the pilot plant to
be operational in the next few weeks and are anxious to begin
collecting valuable data that will assist in the design of the
Rosarito Beach desalination plant. In Bali, Indonesia work is
proceeding on the construction of the first phase of a 1.5 million
gallon per day seawater desalination plant and distribution system
in a rapidly-growing resort area on the island, and we expect this
first phase to be operational early next year. This particular area
of Bali continues to experience chronic water shortage problems
while at the same time enjoying tremendous development growth. We
believe this provides an excellent opportunity to use a business
model that we have successfully employed in the Caribbean for
almost 40 years to provide a total water solution for residents and
businesses in this area of the World," concluded Mr. McTaggart.
Total revenues for the nine months ended September 30, 2012
increased 17% to approximately $48.8 million, compared with
approximately $41.5 million in the first nine months of 2011.
Retail water revenues declined slightly to approximately $18.1
million (37% of total revenues) in the nine months ended September
30, 2012, versus approximately $18.2 million (44% of total
revenues) in the corresponding period of the previous year,
reflecting a 6% decrease in the number of total gallons sold due to
abnormally high rainfall on Grand Cayman Island during the second
quarter of 2012, partially offset by an increase to the Company's
base rates of approximately 4% due to an upward movement in the
consumer price indices used to determine such rate adjustments in
the first quarter of each year.
Bulk water revenues increased 35% to approximately $30.3 million
(62% of total revenues) in the first nine months of 2012, compared
with approximately $22.4 million (54% of total revenues) in the
year-earlier period, reflecting a 33% increase in the number of
gallons of water sold, which was primarily attributable to the
expansion of the Company's Blue Hills plant in the Bahamas during
the fourth quarter of 2011.
Services revenues declined to $347,964 in the nine months ended
September 30, 2012, compared with $942,838 in the nine months ended
September 30, 2011, primarily due to the expiration of the
management services contract for the Bermuda plant on June 30,
2011.
Net income attributable to CWCO stockholders increased 8% to
$5,605,001, or $0.38 per diluted share, for the first nine months
of 2012, compared with net income of $5,208,740, or $0.36 per
diluted share, for the first nine months of 2011. Net income
attributable to CWCO stockholders during the nine months ended
September 30, 2012, included $201,693 in earnings on the Company's
investment in OC-BVI, compared with $791,722 in the comparable 2011
period.
Consolidated gross profit rose 14% to approximately $16.6
million (34% of total revenues) in the nine months ended September
30, 2012, compared with approximately $14.5 million (35% of total
revenues) in the prior-year period. Gross profit on retail revenues
was relatively unchanged at approximately $9.4 million (52% of
retail revenues) in the nine months ending September 30th of both
2012 and 2011. Gross profit on bulk revenues increased 51% to
approximately $7.0 million (23% of bulk revenues) in the first nine
months of 2012, from approximately $4.7 million (21% of bulk
revenues) a year earlier. The services segment recorded a gross
profit of $164,726 for the nine months ended September 30, 2012,
compared with a gross profit of approximately $463,455 in the first
nine months of 2011.
General and administrative expenses increased 10% to
approximately $11.1 million during the nine-month period ended
September 30, 2012, versus approximately $10.0 million in the nine
months ended September 30, 2011. The increase in general and
administrative expenses included incremental employee costs
attributable to additional management and IT personnel of $510,000,
approximately $244,000 in additional research and development
expenses, and an increase in non-Mexico-related business
development costs of approximately $839,000. These cost increases
were partially offset by a decrease in the expenses incurred in
2012 vs. 2011 of $707,000 for the project development activities of
NSC.
Interest income declined 30% to $649,494 for the nine months
ended September 30, 2012, compared with $927,885 in the comparable
2011 period. Interest expense decreased 15% to $737,330 in the 2012
period, from $864,944 a year earlier.
Investor Conference Call
The Company will host a conference call at
11:00 a.m. EST on Monday, November 12, 2012. Shareholders and other
interested parties may participate in the conference call by
dialing 877-374-8416 (international/local
participants dial 412-317-6716) and requesting participation in the
"Consolidated Water Conference Call" a few minutes before 11:00
a.m. EST on November 12, 2012. A replay of the conference call will
be available one hour after the call by dialing 877-344-7529
(international/local participants dial
412-317-0088) and entering the conference ID# 10020201, and on the
Company's website at www.cwco.com, through November 19,
2012.
CWCO-E
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 naturally occurring supplies of potable water are
scarce or nonexistent. The Company operates water production and/or
distribution facilities in the Cayman Islands, Belize, the British
Virgin Islands and The Commonwealth of The Bahamas.
Consolidated Water Co. Ltd. is headquartered in George Town,
Grand Cayman, in the Cayman Islands. The Company's ordinary
(common) stock is traded on the NASDAQ Global Select Market under
the symbol "CWCO". Additional information on the Company is
available on its website at http://www.cwco.com.
This press release includes statements that may constitute
"forward-looking" statements, usually containing the words
"believe", "estimate", "project", "intend", "expect", "should" 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 our products and services in the
marketplace, changes in our relationships with the governments of
the jurisdictions in which we operate, the manner in which the
disputed issues between OC-BVI and the BVI government are resolved,
the outcome of our negotiations with the Cayman government
regarding a new retail license agreement, our ability to
successfully secure contracts for water projects, including the
project under development in Rosarito, Baja California, Mexico, our
ability to develop and operate such projects profitably, and our
ability to manage growth and other risks detailed in our periodic
report filings with the Securities and Exchange Commission
("SEC").
By making these forward-looking statements, the Company
undertakes no obligation to update these statements for revisions
or changes after the date of this release.
(Financial Highlights Follow)
CONSOLIDATED WATER CO. LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2012 2011
-------------- --------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 31,644,158 $ 37,624,179
Restricted cash - 7,500,000
Marketable securities 8,561,807 8,496,372
Accounts receivable, net 11,138,296 8,537,232
Inventory 1,531,158 1,451,639
Prepaid expenses and other current assets 3,286,960 1,880,105
Current portion of loans receivable 1,822,218 1,843,600
-------------- --------------
Total current assets 57,984,597 67,333,127
Property, plant and equipment, net 60,705,031 64,185,110
Construction in progress 1,164,081 141,204
Inventory, non-current 4,565,940 3,861,470
Loans receivable 9,488,846 10,758,873
Investment in OC-BVI 6,442,391 6,634,598
Intangible assets, net 1,544,841 1,501,824
Goodwill 3,587,754 3,587,754
Other assets 2,610,596 2,855,471
-------------- --------------
Total assets $ 148,094,077 $ 160,859,431
============== ==============
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other current
liabilities $ 5,807,730 $ 4,617,770
Dividends payable 1,158,049 1,156,081
Current portion of long term debt 1,617,600 17,531,134
-------------- --------------
Total current liabilities 8,583,379 23,304,985
Long term debt 5,628,421 6,852,660
Other liabilities 411,035 420,430
-------------- --------------
Total liabilities 14,622,835 30,578,075
-------------- --------------
Equity
Consolidated Water Co. Ltd. stockholders'
equity
Redeemable preferred stock, $0.60 par value.
Authorized 200,000 shares; issued and
outstanding 30,265 and 22,427 shares,
respectively 18,159 13,456
Class A common stock, $0.60 par value.
Authorized 24,655,000 shares; issued and
outstanding 14,582,125 and 14,568,696
shares, respectively 8,749,275 8,741,217
Class B common stock, $0.60 par value.
Authorized 145,000 shares; none issued or
outstanding - -
Additional paid-in capital 82,385,735 81,939,211
Retained earnings 40,350,812 38,030,943
-------------- --------------
Total Consolidated Water Co. Ltd.
stockholders' equity 131,503,981 128,724,827
Non-controlling interests 1,967,261 1,556,529
-------------- --------------
Total equity 133,471,242 130,281,356
-------------- --------------
Total liabilities and equity $ 148,094,077 $ 160,859,431
============== ==============
CONSOLIDATED WATER CO. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2012 2011 2012 2011
----------- ----------- ----------- -----------
Retail water revenues $ 5,703,233 $ 5,283,676 $18,138,615 $18,212,067
Bulk water revenues 10,031,176 7,452,759 30,313,063 22,394,239
Services revenues 105,727 70,217 347,964 942,838
----------- ----------- ----------- -----------
Total revenues 15,840,136 12,806,652 48,799,642 41,549,144
----------- ----------- ----------- -----------
Cost of retail revenues 2,798,560 2,865,554 8,720,675 8,819,155
Cost of bulk revenues 7,777,247 5,807,061 23,301,186 17,739,995
Cost of services
revenues 29,335 125,187 183,238 479,383
----------- ----------- ----------- -----------
Total cost of revenues 10,605,142 8,797,802 32,205,099 27,038,533
----------- ----------- ----------- -----------
Gross profit 5,234,994 4,008,850 16,594,543 14,510,611
General and
administrative expenses 4,089,575 3,031,951 11,052,833 10,005,245
----------- ----------- ----------- -----------
Income from operations 1,145,419 976,899 5,541,710 4,505,366
----------- ----------- ----------- -----------
Other income (expense):
Interest income 198,604 265,934 649,494 927,885
Interest expense (146,880) (170,659) (737,330) (864,944)
Other income 69,999 70,224 225,166 211,768
Equity in earnings
of OC-BVI 99,932 159,250 201,693 791,722
----------- ----------- ----------- -----------
Other income
(expense), net 221,655 324,749 339,023 1,066,431
----------- ----------- ----------- -----------
Net income 1,367,074 1,301,648 5,880,733 5,571,797
Income attributable to
non-controlling
interests 62,231 15,580 275,732 363,057
----------- ----------- ----------- -----------
Net income attributable
to Consolidated Water
Co. Ltd. stockholders $ 1,304,843 $ 1,286,068 $ 5,605,001 $ 5,208,740
=========== =========== =========== ===========
Basic earnings per
common share
attributable to
Consolidated Water Co.
Ltd. common
stockholders $ 0.09 $ 0.09 $ 0.38 $ 0.36
=========== =========== =========== ===========
Diluted earnings per
common share
attributable to
Consolidated Water Co.
Ltd. common
stockholders $ 0.09 $ 0.09 $ 0.38 $ 0.36
=========== ========== =========== ===========
Dividends declared per
common share $ 0.075 $ 0.075 $ 0.225 $ 0.225
=========== =========== =========== ===========
Weighted average number
of common shares used
in the determination
of:
Basic earnings per
share 14,580,946 14,560,765 14,576,790 14,558,670
=========== =========== =========== ===========
Diluted earnings per
share 14,617,195 14,590,509 14,604,398 14,595,668
=========== =========== =========== ===========
For further information, please contact: Frederick W. McTaggart
President and CEO (345) 945-4277 David W. Sasnett Executive Vice
President and CFO (954) 509-8200 info@cwco.com or RJ Falkner &
Company, Inc. Investor Relations Counsel (800) 377-9893
info@rjfalkner.com
Consolidated Water (NASDAQ:CWCO)
Historical Stock Chart
From Feb 2024 to Mar 2024
Consolidated Water (NASDAQ:CWCO)
Historical Stock Chart
From Mar 2023 to Mar 2024