Consolidated Water Reports Q3 2021 Results
Consolidated Water Co. Ltd. (CWCO) reported Q3 2021 results with a 7% revenue decline to $16.4 million compared to Q3 2020. Retail revenue rose 5% to $5.2 million with a slight increase in sales volume, while bulk revenue increased 13% to $6.9 million. Year-to-date revenue reached $50.2 million, down 13% year-over-year. Net income from continuing operations decreased to $1.4 million, or $0.09 per share. The company highlights an expanding backlog and improved bidding activity for water treatment projects, anticipating growth catalysts in 2022.
- Bulk revenue increased 13% to $6.9 million in Q3 2021.
- Retail revenue grew 5% to $5.2 million in Q3 2021.
- PERC Water secured a five-year contract for wastewater plant maintenance.
- Strengthened manufacturing sales team at Aerex generated $3.2 million from new customers in 2021.
- Overall revenue declined 7% to $16.4 million in Q3 2021 compared to Q3 2020.
- Net income from continuing operations decreased to $1.4 million, down from $1.8 million in Q3 2020.
- Retail revenue decreased 9% year-to-date due to lower tourism.
- Manufacturing segment revenue dropped significantly due to lost orders from its largest customer.
GEORGE TOWN, Cayman Islands, Nov. 15, 2021 (GLOBE NEWSWIRE) -- Consolidated Water Co. Ltd. (Nasdaq Global Select Market: CWCO), a leading developer and operator of advanced water supply and treatment plants, reported results for the three and nine months ended September 30, 2021. Quarterly and first nine-month comparisons are to the same year-ago period unless otherwise noted.
The company will hold a conference call at 11:00 a.m. Eastern time tomorrow to discuss the results (see dial-in information below).
Financial and Operational Highlights
- Retail revenue for the third quarter of 2021 increased
5% to$5.2 million and bulk revenue increased13% to$6.9 million . - For the first nine months of 2021, revenue totaled
$50.2 million , which included bulk revenue up8% to$19.8 million and services revenue up6% to$10.5 million . - As of September 30, 2021, cash and cash equivalents totaled
$40.4 million , working capital was$69.3 million , debt was$0.2 million , with stockholders’ equity at$157.4 million . - Paid
$1.3 million in dividends in Q3 2021. - PERC Water continued to expand its recurring revenues by signing a five-year wastewater plant maintenance services contract with a gaming and live entertainment business in Southern California.
Management Commentary
“The continued cessation of tourism on Grand Cayman due to the global pandemic resulted in our retail segment revenue up only about
“Our manufacturing segment revenue generated by our Aerex subsidiary decreased as a result of reduced orders from a major customer. Although it is important to note that all the manufacturing revenue we recognized for the quarter was from new customers and/or products. In fact, we generated manufacturing revenue of
“Like many companies, our manufacturing segment has been adversely affected by supply chain challenges, including material shortages, price increases and logistical delays. This has pushed out to next year certain orders we had expected to complete in the last half of 2021. As a result, we expect revenue for our manufacturing segment for the second half of 2021 to be about equal to the first half.
“We continue to build manufacturing backlog and have refocused on the municipal water market which has been active and is expected to benefit significantly from the recently passed federal infrastructure funding bill. We are actively rebuilding our municipality relationships and sales channels, with this supporting greater revenue diversification.
“Our services revenue increased
“During the quarter, PERC continued to grow its recurring revenues by signing a five-year contract to provide operating and maintenance services for the wastewater plant of a gaming and live entertainment business in Southern California. New project opportunities for PERC, both sole-sourced and competitively bid, continue to be strong and include bids for two major projects that were submitted in the first nine months of this year.
“We expect to hear whether PERC was selected for these projects by early next year. But based on this overall increased bidding activity that reflects strengthening market demand, we believe PERC’s performance for 2022 will exceed this year as new water treatment projects come to market after the lull due to the pandemic.
“Near the end of October, the Cayman Islands government announced that the country will reopen its borders for nearly all vaccinated travelers this Saturday, November 20th. We see the reopening as a major step toward the reopening of hotels and resorts in Grand Cayman and expect a gradual return to normalcy for our retail water segment. The Bahamas remains open to tourism, and we are seeing increased marketing activity to tourists.
“We believe our strong balance sheet and liquidity enables us to ride out the continued adverse economic impacts of the pandemic, while enabling us to fund growth initiatives. We see the increase in PERC’s bidding activity and the increased project activity in our markets as potential major catalysts for our growth in 2022 and thereafter.”
Q3 2021 Financial Summary
Revenue for the third quarter of 2021 declined by
Retail revenue increased due to a
The increase in bulk segment revenue was attributable to an increase in energy costs for CW-Bahamas, which increased the energy pass-through component of CW-Bahamas’ rates.
The decrease in services revenue was due to a decline in plant construction revenue of
The decrease in manufacturing revenue for the third quarter of 2021 was due to the loss of orders from Aerex’s former largest customer.
Gross profit decreased
Net income from continuing operations attributable to stockholders was
Net income attributable to Consolidated Water stockholders for the third quarter of 2021, which includes the results of discontinued operations, was
Cash and cash equivalents totaled
First Nine Months 2021 Financial Summary
Revenue for the first nine months of 2021 was
Retail revenue decreased due to the volume of water sold, which decreased by
The decrease in manufacturing segment revenue was due to the loss of orders from Aerex’s former largest customer.
The increase in services segment revenue was due to an increase of
The increase in bulk segment revenue is attributable to an increase of
Gross profit for the first nine months of 2021 was
Net income from continuing operations attributable to stockholders for the first nine months of 2021 was
Net loss attributable to Consolidated Water stockholders for the first nine months of 2021, which includes the results of discontinued operations, was
Third Quarter Segment Results
| Three Months Ended September 30, 2021 | ||||||||||||||||||||
| Retail | Bulk | Services | Manufacturing | Total | ||||||||||||||||
| Revenue | $ | 5,247,042 | $ | 6,868,134 | $ | 3,210,584 | $ | 1,087,386 | $ | 16,413,146 | ||||||||||
| Cost of revenue | 2,745,796 | 4,628,386 | 2,410,430 | 937,935 | 10,722,547 | |||||||||||||||
| Gross profit | 2,501,246 | 2,239,748 | 800,154 | 149,451 | 5,690,599 | |||||||||||||||
| General and administrative expenses | 3,067,696 | 313,420 | 758,540 | 219,384 | 4,359,040 | |||||||||||||||
| Gain on asset dispositions and impairments, net | 612 | — | — | — | 612 | |||||||||||||||
| Income (loss) from operations | $ | (565,838 | ) | $ | 1,926,328 | $ | 41,614 | $ | (69,933 | ) | 1,332,171 | |||||||||
| Other income, net | 152,168 | |||||||||||||||||||
| Income before income taxes | 1,484,339 | |||||||||||||||||||
| Benefit from income taxes | (11,230 | ) | ||||||||||||||||||
| Net income from continuing operations | 1,495,569 | |||||||||||||||||||
| Income from continuing operations attributable to non-controlling interests | 131,609 | |||||||||||||||||||
| Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | 1,363,960 | |||||||||||||||||||
| Net loss from discontinued operations | (1,078,367 | ) | ||||||||||||||||||
| Net income attributable to Consolidated Water Co. Ltd. stockholders | $ | 285,593 | ||||||||||||||||||
| Three Months Ended September 30, 2020 | ||||||||||||||||||||
| Retail | Bulk | Services | Manufacturing | Total | ||||||||||||||||
| Revenue | $ | 4,993,069 | $ | 6,061,475 | $ | 3,351,935 | $ | 3,259,778 | $ | 17,666,257 | ||||||||||
| Cost of revenue | 2,586,901 | 4,400,717 | 2,513,272 | 1,949,731 | 11,450,621 | |||||||||||||||
| Gross profit | 2,406,168 | 1,660,758 | 838,663 | 1,310,047 | 6,215,636 | |||||||||||||||
| General and administrative expenses | 3,367,802 | 382,662 | 728,829 | 330,723 | 4,810,016 | |||||||||||||||
| Loss on asset dispositions and impairments, net | — | — | (984 | ) | — | (984 | ) | |||||||||||||
| Income (loss) from operations | $ | (961,634 | ) | $ | 1,278,096 | $ | 108,850 | $ | 979,324 | 1,404,636 | ||||||||||
| Other income, net | 245,492 | |||||||||||||||||||
| Income before income taxes | 1,650,128 | |||||||||||||||||||
| Benefit from income taxes | (263,165 | ) | ||||||||||||||||||
| Net income from continuing operations | 1,913,293 | |||||||||||||||||||
| Income attributable to non-controlling interests | 101,137 | |||||||||||||||||||
| Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | 1,812,156 | |||||||||||||||||||
| Net loss from discontinued operations | (377,321 | ) | ||||||||||||||||||
| Net income attributable to Consolidated Water Co. Ltd. stockholders | $ | 1,434,835 | ||||||||||||||||||
First Nine Months Segment Results
| Nine Months Ended September 30, 2021 | ||||||||||||||||||||
| Retail | Bulk | Services | Manufacturing | Total | ||||||||||||||||
| Revenue | $ | 16,633,137 | $ | 19,826,075 | $ | 10,514,669 | $ | 3,244,106 | $ | 50,217,987 | ||||||||||
| Cost of revenue | 8,235,699 | 13,170,333 | 8,010,767 | 2,919,226 | 32,336,025 | |||||||||||||||
| Gross profit | 8,397,438 | 6,655,742 | 2,503,902 | 324,880 | 17,881,962 | |||||||||||||||
| General and administrative expenses | 9,757,179 | 994,779 | 2,152,145 | 943,727 | 13,847,830 | |||||||||||||||
| Gain (loss) on asset dispositions and impairments, net | (246,028 | ) | 1,500 | (433 | ) | (2,900,000 | ) | (3,144,961 | ) | |||||||||||
| Income (loss) from operations | $ | (1,605,769 | ) | $ | 5,662,463 | $ | 351,324 | $ | (3,518,847 | ) | 889,171 | |||||||||
| Other income, net | 699,890 | |||||||||||||||||||
| Income before income taxes | 1,589,061 | |||||||||||||||||||
| Benefit from income taxes | (20,735 | ) | ||||||||||||||||||
| Net income from continuing operations | 1,609,796 | |||||||||||||||||||
| Income from continuing operations attributable to non-controlling interests | 457,540 | |||||||||||||||||||
| Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | 1,152,256 | |||||||||||||||||||
| Net loss from discontinued operations | (1,542,540 | ) | ||||||||||||||||||
| Net loss attributable to Consolidated Water Co. Ltd. stockholders | $ | (390,284 | ) | |||||||||||||||||
| Nine Months Ended September 30, 2020 | ||||||||||||||||||||
| Retail | Bulk | Services | Manufacturing | Total | ||||||||||||||||
| Revenue | $ | 18,216,797 | $ | 18,368,156 | $ | 9,942,748 | $ | 10,951,524 | $ | 57,479,225 | ||||||||||
| Cost of revenue | 8,343,018 | 12,906,606 | 7,418,305 | 6,852,196 | 35,520,125 | |||||||||||||||
| Gross profit | 9,873,779 | 5,461,550 | 2,524,443 | 4,099,328 | 21,959,100 | |||||||||||||||
| General and administrative expenses | 10,008,423 | 935,808 | 2,112,869 | 1,005,838 | 14,062,938 | |||||||||||||||
| Gain on asset dispositions and impairments, net | — | 200 | 3,801 | — | 4,001 | |||||||||||||||
| Income (loss) from operations | $ | (134,644 | ) | $ | 4,525,942 | $ | 415,375 | $ | 3,093,490 | 7,900,163 | ||||||||||
| Other income, net | 533,710 | |||||||||||||||||||
| Income before income taxes | 8,433,873 | |||||||||||||||||||
| Provision for income taxes | 147,186 | |||||||||||||||||||
| Net income from continuing operations | 8,286,687 | |||||||||||||||||||
| Income from continuing operations attributable to non-controlling interests | 642,289 | |||||||||||||||||||
| Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | 7,644,398 | |||||||||||||||||||
| Net loss from discontinued operations | (4,448,798 | ) | ||||||||||||||||||
| Net income attributable to Consolidated Water Co. Ltd. stockholders | $ | 3,195,600 | ||||||||||||||||||
Conference Call
Consolidated Water management will host a conference call tomorrow to discuss these results, followed by a question-and-answer period.
Date: Tuesday, November 16, 2021
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: 10161781
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 November 23, 2021, 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: 10161781
About Consolidated Water Co. Ltd.
Consolidated Water Co. Ltd. develops and operates advanced water supply and treatment plants and water distribution systems. The company operates water production facilities in the Cayman Islands, The Bahamas and the British Virgin Islands and operates water treatment facilities in the United States. 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 www.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; (v) the possible adverse impact of the COVID-19 virus on the company’s business; and (vi) various other 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 http://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. Sasnett
Executive Vice President and CFO
Tel (954) 509-8200
dsasnett@cwco.com
Investor & Media Relations Contact
Ron Both or Justin Lumley
CMA
Tel (949) 432-7566
Email Contact
CONSOLIDATED WATER CO. LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 40,397,593 | $ | 43,794,150 | ||||
| Certificate of deposit | 2,500,000 | — | ||||||
| Accounts receivable, net | 26,381,981 | 21,483,976 | ||||||
| Inventory | 2,545,998 | 3,214,178 | ||||||
| Prepaid expenses and other current assets | 3,300,999 | 2,412,282 | ||||||
| Contract assets | 483,190 | 516,521 | ||||||
| Current assets of discontinued operations | 770,645 | 1,511,099 | ||||||
| Total current assets | 76,380,406 | 72,932,206 | ||||||
| Property, plant and equipment, net | 53,720,792 | 57,687,984 | ||||||
| Construction in progress | 760,079 | 440,384 | ||||||
| Inventory, noncurrent | 4,485,284 | 4,506,842 | ||||||
| Investment in OC-BVI | 1,698,069 | 2,092,146 | ||||||
| Goodwill | 10,425,013 | 13,325,013 | ||||||
| Intangible assets, net | 3,564,166 | 4,148,333 | ||||||
| Operating lease right-of-use assets | 2,855,346 | 1,329,561 | ||||||
| Other assets | 1,796,287 | 1,926,594 | ||||||
| Long-term assets of discontinued operations | 21,129,171 | 21,166,489 | ||||||
| Total assets | $ | 176,814,613 | $ | 179,555,552 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable, accrued expenses and other current liabilities | $ | 3,151,005 | $ | 2,856,127 | ||||
| Accounts payable - related parties | 204,285 | 200,558 | ||||||
| Accrued compensation | 1,488,891 | 1,434,106 | ||||||
| Dividends payable | 1,317,987 | 1,300,022 | ||||||
| Current maturities of operating leases | 563,154 | 455,788 | ||||||
| Current portion of long-term debt | 54,698 | 42,211 | ||||||
| Contract liabilities | 45,232 | 461,870 | ||||||
| Current liabilities of discontinued operations | 252,720 | 188,434 | ||||||
| Total current liabilities | 7,077,972 | 6,939,116 | ||||||
| Long-term debt, noncurrent | 136,231 | 126,338 | ||||||
| Deferred tax liabilities | 1,279,910 | 1,440,809 | ||||||
| Noncurrent operating leases | 2,321,551 | 982,076 | ||||||
| Net liability arising from put/call options | 582,000 | 690,000 | ||||||
| Other liabilities | 141,000 | 362,165 | ||||||
| Long-term liabilities of discontinued operations | — | 2,499 | ||||||
| Total liabilities | 11,538,664 | 10,543,003 | ||||||
| Commitments and contingencies | ||||||||
| Equity | ||||||||
| Consolidated Water Co. Ltd. stockholders' equity | ||||||||
| Redeemable preferred stock, | 18,550 | 18,641 | ||||||
| Class A common stock, | 9,126,419 | 9,086,210 | ||||||
| Class B common stock, | — | — | ||||||
| Additional paid-in capital | 87,585,156 | 86,893,486 | ||||||
| Retained earnings | 60,634,661 | 64,910,709 | ||||||
| Total Consolidated Water Co. Ltd. stockholders' equity | 157,364,786 | 160,909,046 | ||||||
| Non-controlling interests | 7,911,163 | 8,103,503 | ||||||
| Total equity | 165,275,949 | 169,012,549 | ||||||
| Total liabilities and equity | $ | 176,814,613 | $ | 179,555,552 | ||||
CONSOLIDATED WATER CO. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue | $ | 16,413,146 | $ | 17,666,257 | $ | 50,217,987 | $ | 57,479,225 | ||||||||
| Cost of revenue (including purchases from related parties of | 10,722,547 | 11,450,621 | 32,336,025 | 35,520,125 | ||||||||||||
| Gross profit | 5,690,599 | 6,215,636 | 17,881,962 | 21,959,100 | ||||||||||||
| General and administrative expenses (including purchases from related parties of | 4,359,040 | 4,810,016 | 13,847,830 | 14,062,938 | ||||||||||||
| Gain (loss) on asset dispositions and impairments, net | 612 | (984 | ) | (3,144,961 | ) | 4,001 | ||||||||||
| Income from operations | 1,332,171 | 1,404,636 | 889,171 | 7,900,163 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 168,880 | 164,761 | 503,889 | 411,020 | ||||||||||||
| Interest expense | (2,216 | ) | (2,069 | ) | (7,714 | ) | (7,413 | ) | ||||||||
| Profit-sharing income from OC-BVI | 6,075 | 6,075 | 16,200 | 30,375 | ||||||||||||
| Equity in the earnings of OC-BVI | 17,717 | 22,411 | 44,223 | 82,387 | ||||||||||||
| Net unrealized gain (loss) on put/call options | (54,000 | ) | 39,000 | 108,000 | (42,000 | ) | ||||||||||
| Other | 15,712 | 15,314 | 35,292 | 59,341 | ||||||||||||
| Other income, net | 152,168 | 245,492 | 699,890 | 533,710 | ||||||||||||
| Income before income taxes | 1,484,339 | 1,650,128 | 1,589,061 | 8,433,873 | ||||||||||||
| Provision (benefit) for income taxes | (11,230 | ) | (263,165 | ) | (20,735 | ) | 147,186 | |||||||||
| Net income from continuing operations | 1,495,569 | 1,913,293 | 1,609,796 | 8,286,687 | ||||||||||||
| Income from continuing operations attributable to non-controlling interests | 131,609 | 101,137 | 457,540 | 642,289 | ||||||||||||
| Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | 1,363,960 | 1,812,156 | 1,152,256 | 7,644,398 | ||||||||||||
| Total loss from discontinued operations | (1,078,367 | ) | (377,321 | ) | (1,542,540 | ) | (4,448,798 | ) | ||||||||
| Net income (loss) attributable to Consolidated Water Co. Ltd. stockholders | $ | 285,593 | $ | 1,434,835 | $ | (390,284 | ) | $ | 3,195,600 | |||||||
| Basic earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders | ||||||||||||||||
| Continuing operations | $ | 0.09 | $ | 0.12 | $ | 0.07 | $ | 0.51 | ||||||||
| Discontinued operations | (0.07 | ) | (0.03 | ) | (0.10 | ) | (0.30 | ) | ||||||||
| Basic earnings (loss) per share | $ | 0.02 | $ | 0.09 | $ | (0.03 | ) | $ | 0.21 | |||||||
| Diluted earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders | ||||||||||||||||
| Continuing operations | $ | 0.09 | $ | 0.12 | $ | 0.07 | $ | 0.50 | ||||||||
| Discontinued operations | (0.07 | ) | (0.03 | ) | (0.10 | ) | (0.29 | ) | ||||||||
| Diluted earnings (loss) per share | $ | 0.02 | $ | 0.09 | $ | (0.03 | ) | $ | 0.21 | |||||||
| Dividends declared per common and redeemable preferred shares | $ | 0.085 | $ | 0.085 | $ | 0.26 | $ | 0.26 | ||||||||
| Weighted average number of common shares used in the determination of: | ||||||||||||||||
| Basic earnings per share | 15,209,432 | 15,120,983 | 15,204,220 | 15,116,681 | ||||||||||||
| Diluted earnings per share | 15,351,882 | 15,273,529 | 15,345,120 | 15,270,494 | ||||||||||||
FAQ
What were Consolidated Water Co. Ltd.'s revenue figures for Q3 2021?
How did retail revenue perform in Q3 2021 for CWCO?
What is the net income for CWCO in Q3 2021?
How much did bulk revenue increase for CWCO in Q3 2021?
What are the key growth prospects for CWCO in 2022?
