Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 26, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 0-25248 | ||
Entity Registrant Name | CONSOLIDATED WATER CO. LTD. | ||
Entity Incorporation, State or Country Code | KY | ||
Entity Tax Identification Number | 98-0619652 | ||
Entity Address, Address Line One | Regatta Office Park | ||
Entity Address, Address Line Two | Windward Three, 4th Floor, West Bay Road | ||
Entity Address, Address Line Three | P.O. Box 1114 | ||
Entity Address, City or Town | Grand Cayman | ||
Entity Address, Postal Zip Code | KY1-1102 | ||
Entity Address, Country | KY | ||
City Area Code | 345 | ||
Local Phone Number | 945-4277 | ||
Title of 12(b) Security | Common Stock | ||
Security Exchange Name | NASDAQ | ||
Trading Symbol | CWCO | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 15,169,687 | ||
Entity Central Index Key | 0000928340 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Public Float | $ 207,036,890 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 43,794,150 | $ 42,071,083 |
Accounts receivable, net | 21,483,976 | 22,953,659 |
Inventory | 3,214,178 | 3,287,555 |
Prepaid expenses and other current assets | 2,412,282 | 1,559,448 |
Contract assets | 516,521 | 1,677,041 |
Current assets of discontinued operations | 1,511,099 | 1,619,056 |
Total current assets | 72,932,206 | 73,167,842 |
Property, plant and equipment, net | 57,687,984 | 61,238,752 |
Construction in progress | 440,384 | 1,335,597 |
Inventory, noncurrent | 4,506,842 | 4,404,378 |
Investment in OC-BVI | 2,092,146 | 1,903,602 |
Goodwill | 13,325,013 | 13,325,013 |
Intangible assets, net | 4,148,333 | 5,040,000 |
Operating lease right-of-use assets | 1,329,561 | 1,811,516 |
Other assets | 1,926,594 | 2,120,708 |
Long-term assets of discontinued operations | 21,166,489 | 27,669,966 |
Total assets | 179,555,552 | 192,017,374 |
Current liabilities | ||
Accounts payable, accrued expenses and other current liabilities | 2,856,127 | 3,503,561 |
Accounts payable - related parties | 200,558 | 57,410 |
Accrued compensation | 1,434,106 | 1,821,395 |
Dividends payable | 1,300,022 | 1,292,187 |
Current maturities of operating leases | 455,788 | 688,540 |
Current portion of long-term debt | 42,211 | 17,753 |
Contract liabilities | 461,870 | 339,616 |
Current liabilities of discontinued operations | 188,434 | 178,382 |
Total current liabilities | 6,939,116 | 7,898,844 |
Long-term debt, noncurrent | 126,338 | 61,146 |
Deferred tax liabilities | 1,440,809 | 1,529,035 |
Noncurrent operating leases | 982,076 | 1,156,543 |
Net liability arising from put/call options | 690,000 | 664,000 |
Other liabilities | 362,165 | 75,000 |
Long-term liabilities of discontinued operations | 2,499 | 2,679,932 |
Total liabilities | 10,543,003 | 14,064,500 |
Commitments and contingencies | ||
Consolidated Water Co. Ltd. stockholders' equity | ||
Redeemable preferred stock, $0.60 par value. Authorized 200,000 shares; issued and outstanding 31,068 and 33,751 shares, respectively | 18,641 | 20,251 |
Additional paid-in capital | 86,893,486 | 88,356,509 |
Retained earnings | 64,910,709 | 66,352,733 |
Total Consolidated Water Co. Ltd. stockholders' equity | 160,909,046 | 163,759,258 |
Non-controlling interests | 8,103,503 | 14,193,616 |
Total equity | 169,012,549 | 177,952,874 |
Total liabilities and equity | 179,555,552 | 192,017,374 |
Common Class A [Member] | ||
Consolidated Water Co. Ltd. stockholders' equity | ||
Common stock value | 9,086,210 | 9,029,765 |
Common Class B [Member] | ||
Consolidated Water Co. Ltd. stockholders' equity | ||
Common stock value | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Redeemable preferred stock, par value (in dollars per share) | $ 0.60 | $ 0.60 |
Redeemable preferred stock, authorized | 200,000 | 200,000 |
Redeemable preferred stock, issued | 31,068 | 33,751 |
Redeemable preferred stock, outstanding | 31,068 | 33,751 |
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $ 0.60 | $ 0.60 |
Common stock, authorized | 24,655,000 | 24,655,000 |
Common stock, issued | 15,143,683 | 15,049,608 |
Common stock, outstanding | 15,143,683 | 15,049,608 |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 0.60 | $ 0.60 |
Common stock, authorized | 145,000 | 145,000 |
Common stock, issued | 0 | 0 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF INCOME | ||
Total revenue | $ 72,628,126 | $ 68,793,651 |
Total cost of revenue | 45,859,671 | 40,519,303 |
Gross profit | 26,768,455 | 28,274,348 |
General and administrative expenses | 18,434,898 | 17,001,164 |
Gain on asset dispositions and impairments, net | 13,997 | 445,041 |
Income from operations | 8,347,554 | 11,718,225 |
Other income (expense): | ||
Interest income | 540,096 | 588,509 |
Interest expense | (9,669) | (1,332) |
Profit-sharing income from OC-BVI | 135,675 | 16,200 |
Equity in the earnings of OC-BVI | 371,019 | 44,765 |
Net unrealized gain (loss) on put/call options | (26,000) | 56,000 |
Other | 71,825 | 82,410 |
Other income, net | 1,082,946 | 786,552 |
Income before income taxes | 9,430,500 | 12,504,777 |
Provision for income taxes | 86,724 | 66,621 |
Net income from continuing operations | 9,343,776 | 12,438,156 |
Income from continuing operations attributable to non-controlling interests | 730,005 | 1,549,978 |
Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | 8,613,771 | 10,888,178 |
Gain on sale of discontinued operations | 0 | 3,621,170 |
Net loss from discontinued operations | (4,902,243) | (2,333,255) |
Total income (loss) from discontinued operations | (4,902,243) | 1,287,915 |
Net income attributable to Consolidated Water Co. Ltd. stockholders | $ 3,711,528 | $ 12,176,093 |
Basic earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders | ||
Continuing operations | $ 0.56 | $ 0.72 |
Discontinued operations | (0.32) | 0.09 |
Basic earnings (loss) per share | 0.24 | 0.81 |
Diluted earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders | ||
Continuing operations | 0.56 | 0.72 |
Discontinued operations | (0.32) | 0.08 |
Diluted earnings (loss) per share | 0.24 | 0.80 |
Dividends declared per common and redeemable preferred shares | $ 0.34 | $ 0.34 |
Weighted average number of common shares used in the determination of: | ||
Basic earnings per share | 15,119,305 | 15,025,639 |
Diluted earnings per share | 15,223,955 | 15,137,076 |
CONSOLIDATED STATEMENTS OF IN_2
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED STATEMENTS OF INCOME | ||
Total cost of revenue (including purchases from related parties of $1,349,331 in 2020 and $10,295 in 2019) | $ 1,349,331 | $ 10,295 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Redeemable preferred stock [Member] | Common stock [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Cumulative translation adjustment [Member] | Non controlling interests [Member] | Total |
Balance at Dec. 31, 2018 | $ 20,878 | $ 8,989,744 | $ 87,211,953 | $ 59,298,161 | $ (549,555) | $ 8,784,722 | $ 163,755,903 |
Balance (in shares) at Dec. 31, 2018 | 34,796 | 14,982,906 | |||||
Issuance of share capital | $ 4,376 | $ 35,683 | (40,059) | 0 | 0 | 0 | 0 |
Issuance of share capital (in shares) | 7,293 | 59,472 | |||||
Conversion of preferred stock | $ (4,338) | $ 4,338 | 0 | 0 | 0 | 0 | 0 |
Conversion of preferred stock (in shares) | (7,230) | 7,230 | |||||
Buyback of preferred stock | $ (1,605) | $ 0 | (22,491) | 0 | 0 | 0 | (24,096) |
Buyback of preferred stock (in shares) | (2,674) | 0 | |||||
Net income | $ 0 | $ 0 | 0 | 12,176,093 | 0 | 1,549,978 | 13,726,071 |
Exercise of options | $ 940 | $ 0 | 14,882 | 0 | 0 | 0 | 15,822 |
Exercise of options (in shares) | 1,566 | 0 | |||||
Dividends declared | $ 0 | $ 0 | 0 | (5,121,521) | 0 | 0 | (5,121,521) |
PERC non-controlling interest at acquisition date | 0 | 0 | 0 | 0 | 0 | 3,617,634 | 3,617,634 |
Sale of CW-Bali | 0 | 0 | 0 | 0 | 549,555 | 241,282 | 790,837 |
Stock-based compensation | 0 | 0 | 1,192,224 | 0 | 0 | 0 | 1,192,224 |
Balance at Dec. 31, 2019 | $ 20,251 | $ 9,029,765 | 88,356,509 | 66,352,733 | 0 | 14,193,616 | 177,952,874 |
Balance (in shares) at Dec. 31, 2019 | 33,751 | 15,049,608 | |||||
Issuance of share capital | $ 3,674 | $ 50,766 | (54,440) | 0 | 0 | 0 | 0 |
Issuance of share capital (in shares) | 6,123 | 84,610 | |||||
Conversion of preferred stock | $ (5,679) | $ 5,679 | 0 | 0 | 0 | 0 | 0 |
Conversion of preferred stock (in shares) | (9,465) | 9,465 | |||||
Buyback of preferred stock | $ (105) | $ 0 | (1,623) | 0 | 0 | 0 | (1,728) |
Buyback of preferred stock (in shares) | (176) | 0 | |||||
Net income | $ 0 | $ 0 | 0 | 3,711,528 | 0 | 730,005 | 4,441,533 |
Exercise of options | $ 500 | $ 0 | 9,661 | 0 | 0 | 0 | $ 10,161 |
Exercise of options (in shares) | 835 | 0 | 835 | ||||
Purchase of noncontrolling interests in Aerex and PERC | $ 0 | $ 0 | (2,579,882) | 0 | 0 | (6,820,118) | $ (9,400,000) |
Dividends declared | 0 | 0 | 0 | (5,153,552) | 0 | 0 | (5,153,552) |
Stock-based compensation | 0 | 0 | 1,163,261 | 0 | 0 | 0 | 1,163,261 |
Balance at Dec. 31, 2020 | $ 18,641 | $ 9,086,210 | $ 86,893,486 | $ 64,910,709 | $ 0 | $ 8,103,503 | $ 169,012,549 |
Balance (in shares) at Dec. 31, 2020 | 31,068 | 15,143,683 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||
Net income | $ 4,441,533 | $ 13,726,071 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Impairment loss for Mexico assets - discontinued operations | 3,351,842 | 0 |
Depreciation and amortization of discontinued operations | 4,545 | 4,545 |
Foreign currency transaction adjustment - discontinued operations | 3,528 | (104,736) |
Loss from discontinued operations | 1,542,328 | 2,433,446 |
Loss on sale of discontinued operations | 0 | (3,621,170) |
Depreciation and amortization | 7,406,509 | 7,203,102 |
Deferred income tax benefit | (221,829) | (239,848) |
Provision for doubtful accounts | 129,107 | 0 |
Unrealized (gain) loss on net put/call option | 26,000 | (56,000) |
Compensation expense relating to stock and stock option grants | 1,163,261 | 1,192,224 |
Gain (Loss) on Disposition of Assets | (13,997) | (445,041) |
Foreign currency transaction adjustment | 0 | (255) |
Profit-sharing and equity in earnings of OC-BVI | (506,694) | (60,965) |
Distribution of earnings from OC-BVI | 318,150 | 742,350 |
Change in: | ||
Accounts receivable and contract assets | 2,541,096 | (356,223) |
Inventory | (102,551) | (1,357,032) |
Prepaid expenses and other assets | (629,734) | (298,611) |
Accounts payable, accrued expenses and other current liabilities, and contract liabilities | (482,156) | (1,342,463) |
Net cash provided by operating activities - continuing operations | 18,970,938 | 17,419,394 |
Net cash used in operating activities - discontinued operations | (1,635,646) | (2,215,736) |
Net cash provided by operating activities | 17,335,292 | 15,203,658 |
Cash flows from investing activities | ||
Additions to property, plant and equipment and construction in progress | (1,728,393) | (3,525,122) |
Proceeds from asset dispositions | 8,638 | 453,480 |
Proceeds from sale of discontinued operations, net of cash provided | 0 | 6,971,234 |
Acquisition of PERC, net of cash acquired | 0 | (3,147,438) |
Collections on loans receivable | 0 | 734,980 |
Net cash provided by (used in) investing activities - continuing operations | (11,119,755) | 1,487,134 |
Net cash used in investing activities - discontinued operations | 0 | (1,499) |
Net cash provided by (used in) investing activities | (11,119,755) | 1,485,635 |
Cash flows from financing activities | ||
Dividends paid to common shareholders | (5,133,727) | (5,097,602) |
Dividends paid to preferred shareholders | (11,990) | (18,225) |
Repurchase of redeemable preferred stock | (1,728) | (24,096) |
Proceeds received from exercise of stock options | 10,161 | 15,822 |
Principal repayments on long-term debt | (32,642) | 0 |
Net cash used in financing activities | (5,169,926) | (5,124,101) |
Net increase in cash and cash equivalents | 1,045,611 | 11,565,192 |
Cash and cash equivalents at beginning of period | 42,071,083 | 31,111,968 |
Cash and cash equivalents at beginning of period - discontinued operations | 831,586 | 225,509 |
Less: cash and cash equivalents at end of period - discontinued operations | (154,130) | (831,586) |
Cash and cash equivalents at end of period | 43,794,150 | 42,071,083 |
Non-cash transactions: | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | 299,992 | 2,429,305 |
Aerex | ||
Cash flows from investing activities | ||
Acquisition of noncontrolling interest in subsidiaries | (8,500,000) | 0 |
PERC Water Corporation | ||
Cash flows from investing activities | ||
Acquisition of noncontrolling interest in subsidiaries | $ (900,000) | $ 0 |
Principal activity
Principal activity | 12 Months Ended |
Dec. 31, 2020 | |
Principal activity | |
Principal activity | 1. Principal activity Consolidated Water Co. Ltd. and its subsidiaries (collectively, the “Company”) supply potable water, treat water for reuse and provide water-related products and services to customers in the Cayman Islands, The Bahamas, the United States and the British Virgin Islands. The Company produces potable water from seawater using reverse osmosis technology and sells this water to a variety of customers, including public utilities, commercial and tourist properties, residential properties and government facilities. The Company designs, builds and sells water production and water treatment infrastructure and manages water infrastructure for commercial and governmental customers. The Company also manufactures a wide range of specialized and custom water industry related products and provides design, engineering, operating and other services applicable to commercial, municipal and industrial water production, supply and treatment. |
Accounting policies
Accounting policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting policies | |
Accounting policies | 2. Accounting policies Basis of preparation: Use of estimates: Basis of consolidation: On January 24, 2020, as a result of CW-Holdings' exercise of a call option, CW-Holdings purchased the remaining 49% ownership interest in Aerex for $8,500,000 in cash. After giving effect to this purchase, CW-Holdings owns 100% of the outstanding capital stock of Aerex. On August 11, 2020, CW-Holdings purchased an additional 10% of the ownership of PERC for $900,000 , increasing its ownership of this subsidiary to 61% . Foreign currency: Cash and cash equivalents: include $8.5 million and $12.7 million, respectively, of certificates of deposits with an original maturity of three months or less. As of December 31, 2020, the Company had deposits in U.S. banks in excess of federally insured limits of approximately $10.3 million. As of December 31, 2020, the Company held cash in foreign bank accounts of approximately $32.8 million. Certain transfers from the Company’s Bahamas bank accounts to Company bank accounts in other countries require the approval of the Central Bank of The Bahamas. As of December 31, 2020, the equivalent United States dollar cash balances for deposits held in The Bahamas were approximately $15.9 million. Accounts receivable and allowance for doubtful accounts: Trade accounts receivable also represent our unconditional right, subject only to the passage of time, to receive consideration arising from our performance under contracts with customers. Trade accounts receivable include amounts billed and billable on construction contracts, service and maintenance contracts and contracts for the sale of goods. Billed contract receivables have been invoiced to customers based on contracted amounts. Inventory: Contract assets and liabilities : Billing practices for the Company’s contracts are governed by the contract terms of each project based upon costs incurred, achievement of milestones or predetermined schedules. Billings do not necessarily correlate with revenue recognized over time using the direct inputs method of accounting. Contract assets, which include costs and estimated earnings in excess of billings on uncompleted contracts, arise when the Company recognizes revenue for services performed under its construction and manufacturing contracts, but the Company is not yet entitled to bill the customer under the terms of the contract. Contract liabilities, which include billings in excess of costs and estimated earnings on uncompleted contracts, represent the Company's obligation to transfer goods or services to a customer for which the Company has been paid by the customer or for which the Company has billed the customer under the terms of the contract. Revenue for future services reflected in this account are recognized, and the liability is reduced, as the Company subsequently satisfies the performance obligation under the contract. Costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts are typically resolved within one year and are not considered The Company considers retention that is withheld on progress billings as not creating an unconditional right to payment until contractual milestones are reached (typically substantial completion). Accordingly, withheld retention is considered a component of contracts assets and liabilities until finally billed to the customer, when obligations have been satisfied and the right to receipt is subject only to the passage of time. The Company’s contract assets and liabilities are reported in a net asset or liability position on a contract-by-contract basis at the end of each reporting period. The Company classifies contract assets and liabilities related to construction and manufacturing contracts in current assets and current liabilities as they will be liquidated in the normal course of contract completion, although this may require more than one year. Property, plant and equipment, net: Buildings 5 to 40 years Plant and equipment 4 to 40 years Distribution system 3 to 40 years Office furniture, fixtures and equipment 3 to 10 years Vehicles 3 to 10 years Leasehold improvements Shorter of 5 years or lease term Lab equipment 5 to 10 years Additions to property, plant and equipment are comprised of the cost of the contracted services, direct labor and materials. Assets under construction are recorded as additions to property, plant and equipment upon completion of the projects. Depreciation commences in the month the asset is placed in service. Interest costs directly attributable to the acquisition and construction of qualifying assets, which are assets that necessarily take a substantial amount of time to be ready for their intended use, are added to the cost of those assets until such time as the assets are substantially ready for use. No interest was capitalized during the years ended December 31, 2020 or 2019. Long-lived assets: Goodwill and intangible assets: For the years ended December 31, 2020 and 2019, the Company estimated the fair value of its reporting units by applying the discounted cash flow method, which relied upon seven-year discrete projections of operating results, working capital and capital expenditures, along with a terminal value subsequent to the discrete period. These seven-year projections were based upon historical and anticipated future results, general economic and market conditions, and considered the impact of planned business and operational strategies. The discount rates for the calculations represented the estimated cost of capital for market participants at the time of each analysis. The Company also estimated the fair value of each of it reporting units for the years ended December 31, 2020 and 2019 by applying the guideline public company method. The Company also estimated the fair value of each of its reporting units for the year ended December 31, 2019 by referencing the market multiples implied by guideline merger and acquisition transactions (the mergers and acquisition method). The Company considered utilizing the mergers and acquisition method for the year ended December 31, 2020 but due to a lack of relevant meaningful mergers and acquisition activity during the year, such method was not utilized for 2020. The Company weighted the fair values estimated for each of its reporting units under each method and summed such weighted fair values to estimate the overall fair value for each reporting unit. The respective weightings the Company applied to each method for the years ended December 31 were as follows: As of December 31, 2020 Method Retail Bulk Services Manufacturing Discounted cash flow 80 % 80 % 80 % 80 % Guideline public company 20 % 20 % 20 % 20 % Mergers and acquisitions — % — % — % — % 100 % 100 % 100 % 100 % As of December 31, 2019 Method Retail Bulk Manufacturing Discounted cash flow 80 % 80 % 80 % Guideline public company 10 % 10 % 10 % Mergers and acquisitions 10 % 10 % 10 % 100 % 100 % 100 % The fair values the Company estimated for its retail, bulk, services and manufacturing reporting units exceeded their carrying amounts by 101%, 49%, 17%, and 31% respectively, as of December 31, 2020. The fair values the Company estimated for its retail and bulk reporting units exceeded their carrying amounts by 74% and 58%, respectively, as of December 31, 2019. The assets and liabilities for the Companys’ services reporting unit consist almost entirely of those for PERC, which was acquired on October 24, 2019, and therefore the Company estimated that the fair value of its services reporting unit closely approximated its carrying value as of December 31, 2019. The Company’s manufacturing reporting unit consists entirely of Aerex and the remaining 49% ownership interest of Aerex was purchased on January 24, 2020 for $8,500,000. The Company considered this purchase, the manufacturing reporting unit’s results of operations for the year ended December 31, 2019, its projected results of operations for the year ending December 31, 2020, and the amount by which its estimated fair value exceeded its carrying amount as of December 31, 2018 to determine that it is more likely than not that the fair value of the manufacturing reporting unit exceeded its carrying amount as of December 31, 2019. On February 11, 2016, the Company acquired 51% ownership interest in Aerex. In connection with this acquisition the Company recorded goodwill of $8,035,211. Aerex’s actual results of operations for the six months in 2016 following the acquisition fell significantly short of the projected results for this period that were included in the cash flow projections the Company utilized to determine the purchase price for Aerex and the fair values of its assets and liabilities. Due to this shortfall in Aerex’s results of operations, the Company tested Aerex’s goodwill for possible impairment as of September 30, 2016 by estimating its fair value using the discounted cash flow method. As a result of this impairment testing, the Company determined that the carrying value of the Aerex goodwill exceeded its fair value and recorded an impairment loss of $1,750,000 for the three months ended September 30, 2016, included in loss on long-lived asset dispositions and impairments, net in the accompanying consolidated statements of income, to reduce the carrying value of this goodwill to $6,285,211. As part of the Company’s annual impairment testing of goodwill performed during the fourth quarter, in 2017 the Company updated its projections for Aerex’s future cash flows, determined that the carrying value of the Aerex goodwill exceeded its fair value, and recorded an impairment loss of $1,400,000 for the three months ended December 31, 2017, which is included in loss on long-lived asset dispositions and impairments, net in the accompanying consolidated statements of income, to further reduce the carrying value of the goodwill to $4,885,211. Approximately 80% and 68% of Aerex’s revenue, and 89% and 68% of Aerex’s gross profit, for the years ended December 31, 2020 and 2019, respectively, were generated from sales to one customer. In October 2020, this customer verbally informed Aerex that, for inventory management purposes, it was suspending its purchases from Aerex following 2020 for a period of approximately one year. This customer has verbally informed Aerex that it presently expects to recommence its purchases from Aerex beginning with the first quarter of 2022. However, the Company can offer no assurances that this customer will recommence its purchases from Aerex at that time. Furthermore, any such future purchases (should they occur) may not generate as much revenue and gross profit as Aerex has historically earned from this customer. The Company is seeking to replace the anticipated loss in revenue and gross profit from this customer by increasing sales of other products that it manufactures to new and existing customers, however, it may not be able to do so. As a result of this anticipated loss of revenue for Aerex, the Company updated its projections for the manufacturing reporting unit’s future cash flows. Such projections assume, in part, that Aerex’s major customer will recommence its purchases from Aerex in 2022 but at a reduced aggregate amount, as compared to 2020 and 2019. Based upon these updated projections, the Company tested its manufacturing reporting unit’s goodwill for possible impairment as of December 31, 2020. As a result of this impairment testing, it determined that the estimated fair value of the manufacturing reporting unit exceeded its carrying value as of December 31, 2020. However, the Company may be required to record an impairment loss in the future to reduce the carrying value of the manufacturing reporting unit’s goodwill should it be determined that Aerex’s future net cash inflows will be less than the Company’s most current expectations. Any such impairment loss could have a material adverse impact on its consolidated financial condition and results of operations. In February 2019, the Company sold its former Belize subsidiary (see Note 8) As a result of this sale, this former subsidiary has been accounted for as discontinued operations in the consolidated financial statements, and bulk segment goodwill of approximately $380,000 as of December 31, 2018 associated with this former subsidiary was reclassified to long-term assets of discontinued operations in the consolidated statements of financial condition. Investments: Other assets: Income taxes: The Company is not presently subject to income taxes in the other countries in which it operates. Revenue recognition: The following table presents the Company’s revenue disaggregated by revenue source. Year Ended December 31, 2020 2019 Retail revenue $ 22,952,370 $ 26,456,022 Bulk revenue 24,312,546 26,986,108 Services revenue 12,937,859 1,759,446 Manufacturing revenue 12,425,351 13,592,075 Total revenue $ 72,628,126 $ 68,793,651 Retail revenue The Company produces and supplies water to end-users, including residential, commercial and governmental customers in the Cayman Islands under an exclusive retail license issued to Cayman Water by the Cayman Islands government to provide water in two of the three most populated areas on Grand Cayman Island. Customers are billed on a monthly basis based on metered consumption and bills are typically collected within 30 to 35 days after the billing date. Receivables not collected within 45 days subject the customer to disconnection from water service. In 2020 and 2019, bad debts represented less than 1% of the Company’s total retail sales. The Company recognizes revenue from water sales at the time water is supplied to the customer’s premises. The amount of water supplied is determined and invoiced based upon water meter readings performed at the end of each month. All retail water contracts are month-to-month contracts. The Company has elected the “right to invoice” practical expedient for revenue recognition on its retail water sale contracts and recognizes revenue in the amount to which the Company has a right to invoice. Bulk revenue The Company produces and supplies water to government-owned distributors in the Cayman Islands and The Bahamas. OC-Cayman provides bulk water to the Water Authority-Cayman (“WAC”), a government-owned utility and regulatory agency, under two agreements. The WAC in turn distributes such water to properties in Grand Cayman outside of Cayman Water’s retail license area. The Company sells bulk water in The Bahamas through its majority-owned subsidiary, CW-Bahamas, under two agreements with the Water and Sewerage Corporation of The Bahamas (“WSC”), which distributes such water through its own pipeline system to residential, commercial and tourist properties on the Island of New Providence. CW-Bahamas also sold water to a private resort on Bimini through December 18, 2020, which generated revenue of approximately $127,000 and $237,000 for the years ended December 31, 2020 and 2019, respectively. The Company has elected the “right to invoice” practical expedient for revenue recognition on its bulk water sale contracts and recognizes revenue in the amount to which the Company has a right to invoice. Services and Manufacturing revenue The Company provides design, engineering, management, procurement and construction services for desalination infrastructure through DesalCo, which serves customers in the Cayman Islands, The Bahamas and the British Virgin Islands. The Company also develops, builds, sells, operates and manages water, wastewater and water reuse infrastructure through PERC. All of PERC's customers are companies or governmental entities located in the U.S. The Company, through Aerex, is a custom and specialty manufacturer of water treatment-related systems and products applicable to commercial, municipal and industrial water production. Substantially all of Aerex’s customers are U.S. companies. The Company generates services revenue from DesalCo and PERC and generates manufacturing revenue from Aerex. The Company recognizes revenue for its construction and specialized/custom manufacturing contracts The Company has elected the “right to invoice” practical expedient for revenue recognition on its services agreements and recognizes revenue in the amount to which the Company has a right to invoice. Practical Expedients and Exemptions The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed. Comparative amounts: |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2020 | |
Cash and cash equivalents | |
Cash and cash equivalents | 3. Cash and cash equivalents Cash and cash equivalents are not restricted by the terms of the Company’s bank accounts as to withdrawal or use. As of December 31, 2020 and 2019, the equivalent United States dollars are denominated in the following currencies: December 31, 2020 2019 Bank accounts: United States dollar $ 14,001,264 $ 15,661,140 Cayman Islands dollar 5,650,874 6,690,274 Bahamian dollar 14,863,287 6,353,936 Bermudian dollar 2,832 3,084 34,518,257 28,708,434 Short term deposits: United States dollar 5,796,582 11,100,185 Cayman Islands dollar 2,413,547 1,209,954 Bahamian dollar 1,065,764 1,052,510 9,275,893 13,362,649 Total cash and cash equivalents $ 43,794,150 $ 42,071,083 Transfers from the Company’s Bahamas bank accounts to Company bank accounts in other countries require the approval of the Central Bank of the Bahamas. |
Accounts receivable, net
Accounts receivable, net | 12 Months Ended |
Dec. 31, 2020 | |
Accounts receivable, net. | |
Accounts receivable, net | 4. Accounts receivable, net December 31, 2020 2019 Trade accounts receivable $ 21,422,782 $ 22,862,706 Receivable from OC-BVI 62,171 10,808 Other accounts receivable 269,133 222,381 21,754,086 23,095,895 Allowance for doubtful accounts (270,110) (142,236) Accounts receivable, net $ 21,483,976 $ 22,953,659 The activity for the allowance for doubtful accounts consisted of: December 31, 2020 2019 Opening allowance for doubtful accounts $ 142,236 $ 158,902 Provision for doubtful accounts 129,107 — Accounts written off during the year (1,233) (16,666) Ending allowance for doubtful accounts $ 270,110 $ 142,236 Significant concentrations of credit risk are disclosed in Note 18. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2020 | |
Inventory | |
Inventory | 5. Inventory December 31, 2020 2019 Water stock $ 27,938 $ 33,694 Consumables stock 105,540 118,286 Spare parts stock 7,587,542 7,539,953 Total inventory 7,721,020 7,691,933 Less current portion 3,214,178 3,287,555 Inventory (non-current) $ 4,506,842 $ 4,404,378 |
Contracts in progress
Contracts in progress | 12 Months Ended |
Dec. 31, 2020 | |
Contracts in progress | |
Contracts in progress | 6. Contracts in progress Revenue recognized and amounts billed on contracts in progress are summarized as follows: December 31, 2020 2019 Revenue recognized to date on contracts in progress $ 17,534,449 $ 16,054,699 Amounts billed to date on contracts in progress (17,791,928) (15,078,830) Retainage 312,130 361,556 Net contract asset $ 54,651 $ 1,337,425 The above net balances are reflected in the accompanying consolidated balance sheet as follows: December 31, 2020 2019 Contract assets $ 516,521 $ 1,677,041 Contract liabilities (461,870) (339,616) Net contract asset $ 54,651 $ 1,337,425 As of December 31, 2020 December 31, 2021 thereafter |
Property, plant and equipment a
Property, plant and equipment and construction in progress | 12 Months Ended |
Dec. 31, 2020 | |
Property, plant and equipment and construction in progress | |
Property, plant and equipment and construction in progress | 7. Property, plant and equipment and construction in progress December 31, 2020 2019 Land $ 3,566,537 $ 3,566,537 Buildings 23,250,843 23,176,106 Plant and equipment 63,734,860 64,840,636 Distribution system 39,149,063 36,538,614 Office furniture, fixtures and equipment 3,079,362 3,038,589 Vehicles 1,999,463 1,582,053 Leasehold improvements 274,230 272,092 Lab equipment 12,456 14,958 135,066,814 133,029,585 Less accumulated depreciation 77,378,830 71,790,833 Property, plant and equipment, net $ 57,687,984 $ 61,238,752 Construction in progress $ 440,384 $ 1,335,597 As of December 31, 2020, the Company had outstanding capital commitments of $29,145. The Company maintains insurance for loss or damage to all fixed assets that it deems susceptible to loss. The Company does not insure its underground distribution system as the Company considers the possibility of material loss or damage to this system to be remote. During the years ended December 31, 2020 and 2019, $1,653,501 and $7,755,375, respectively , |
Discontinued operations
Discontinued operations | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued operations. | |
Discontinued operations | 8. Discontinued operations Mexico project development In May 2010, the Company acquired, through its wholly-owned Netherlands subsidiary, CW-Cooperatief, a 50% interest in NSC, a development stage Mexican company. CW-Cooperatief has since purchased, through the conversion of a loan it made to NSC, additional shares that increased its ownership interest in NSC to 99.99%. NSC was formed to pursue a project (the “Project”) that originally encompassed the construction, operation and minority ownership of a 100 million gallon per day seawater reverse osmosis desalination plant to be located in northern Baja California, Mexico and accompanying pipelines to deliver water to the Mexican potable water system. As discussed in paragraphs that follow, during 2015 the scope of the Project was defined by the State of Baja California (the “State”) to consist of a first phase consisting of a 50 million gallon per day plant and an aqueduct that connects to the Mexican potable water infrastructure and a second phase consisting of an additional 50 million gallons per day of production capacity. Through a series of transactions that began in 2012 In August 2014, the State enacted new legislation to regulate Public-Private Association projects which involve the type of long-term contract between a public-sector authority and a private party required for the Project (the “APP Law”). Pursuant to this new legislation, in January 2015, NSC submitted an expression of interest for its project to the Ministry of Infrastructure and Urban Development of the State of Baja California (“SIDUE”). SIDUE accepted NSC’s expression of interest and requested that NSC submit a detailed proposal for the Project that complied with the requirements of the new legislation. NSC submitted this detailed proposal (the “APP Proposal”) to SIDUE in late March 2015. The new legislation required that such proposal be evaluated by SIDUE and submitted to the Public-Private Association Projects State Committee (the “APP Committee”) for review and authorization. In response to its APP Proposal, in September 2015 NSC received a letter dated June 30, 2015 from the Director General of the Comisión Estatal del Agua de Baja California (“CEA”), the State agency with responsibility for the Project, stating that (i) the Project is in the public interest with high social benefits and is consistent with the objectives of the State development plan; and (ii) that the Project should proceed, and the required public tender should be conducted. In November 2015, the State officially commenced the tender for the Project, the scope of which the State defined as a first phase to be operational in 2019 consisting of a 50 million gallon per day plant and an aqueduct that connects to the Mexican potable water infrastructure and a second phase to be operational in 2024 consisting of an additional 50 million gallons per day of production capacity. A consortium (the “Consortium”) comprised of NSC, NuWater S.A.P.I. de C.V. (“NuWater”) and Suez Medio Ambiente México, S.A. de C.V. (“Suez MA”), a subsidiary of SUEZ International, S.A.S., submitted its tender for the Project in April 2016 and in June 2016, the State designated the Consortium as the winner of the tender process for the Project. In August 2016, NSC and NuWater incorporated Newco under the name Aguas de Rosarito S.A.P.I. de C.V. (“AdR”), a special purpose company, to complete the Project and executed a shareholders agreement for AdR agreeing among other things that (i) AdR would purchase the land and other Project assets from NSC on the date that the Project begins commercial operations and (ii) AdR would enter into a Management and Technical Services Agreement with NSC effective on the first day that the Project begins commercial operations. NSC initially owned 99.6% of the equity of AdR. In February 2018, CW-Holdings acquired the remaining 0.4% ownership in AdR from NuWater. On August 22, 2016, the Public Private Partnership Agreement for the Project (the “APP Contract”) was executed between AdR, CEA, the Government of Baja California, as represented by the Secretary of Planning and Finance and the Public Utilities Commission of Tijuana (“CESPT”). The APP Contract required AdR to design, construct, finance and operate a seawater reverse osmosis desalination plant (and accompanying aqueduct) with a capacity of up to 100 million gallons per day in two phases: the first with a capacity of 50 million gallons per day and an aqueduct to the Mexican public water system in Tijuana, Baja California and the second phase with a capacity of 50 million gallons per day. The first phase was to be operational within 36 months of commencing construction and the second phase was to be operational by January 2025. The APP Contract further required AdR to operate and maintain the plant and aqueduct for a period of 37 years starting from the commencement of operation of the first phase. At the end of the operating period, the plant and aqueduct would have been transferred to CEA. In December 2016, the Congress of the State of Baja California, Mexico (the “Congress”) passed Decreto #57 which, among other things, ratified and authorized the payment obligations of the corresponding public entities under the APP Contract and authorized the corresponding public entities to obtain a credit facility to guarantee their payment obligations. During 2017, following consultations between representatives of the State and the Ministry of Finance of the Federal Government of Mexico, it was determined that certain amendments to Decreto #57 were required to comply with recent changes to the Federal Financial Discipline Law for Federative Entities and Municipalities. In addition, an amendment of Decreto #57 was required to authorize the inclusion of revenue from the CESPT in the primary payment trust for the Project. These amendments were included in Decreto #168, which was approved by the Congress in December 2017. The authorization of the payment obligations of the public entities under the APP Contract and for the execution of the credit agreement to guarantee such payment obligations given in Decreto #57, as amended by Decreto #168, expired on December 31, 2018. During the congressional session held at the end of March 2019, the Congress passed Decreto #335, which renewed the authorizations for the various payment trusts, guaranties and bank credit lines required to be established for the Project by the State entities. Decreto #335 expired December 31, 2019. During the congressional session held at the end of December 2019, the Congress passed Decreto #37, which renewed the authorizations for the various payment trusts, guaranties and bank credit lines required to be established for the Project by the State entities. Decreto #37 expired June 30, 2020. Both the exchange rate for the Mexican peso relative to the dollar and general macroeconomic conditions in Mexico varied since the execution of the APP Contract. These changes adversely impacted the estimated construction, operating and financing costs for the Project. The APP Contract and the APP Law allowed for the parties to negotiate (but did not guarantee) modifications to the consideration (i.e. water tariff) under the APP Contract in the event of such significant macroeconomic condition changes. In February 2017, AdR submitted proposals to CEA requesting the definition of the mechanism required by the APP Contract to update the consideration under the APP Contract for changes in foreign exchange rates, lending rates and certain laws which have impacted the Project. On June 1, 2018, AdR and CEA executed an amendment to the APP Contract which, among other things, increased the scope of Phase 1 of the Project for including the aqueduct originally designated for Phase 2, and addressed AdR’s concerns regarding the impact on the Project for changes in the exchange rate for the peso relative to the dollar and changes in interest rates that occurred subsequent to the submission of the Consortium’s bid for the Project. As a result of this amendment to the APP Contract, the final cost of Phase 1 and the related consideration to be charged by AdR under the APP Contract would have been determined based upon the bid submitted by the Consortium, the changes set forth in the amendment to the APP Contract and the economic conditions (e.g. interest rates and currency exchange rates) in effect on the financial closing date for Phase 1. In February 2018, AdR executed a subscription agreement (the “Agreement”) for the equity funding required for the Project. The Agreement calls for NSC to retain a minimum of 25% of the equity in AdR. One or more affiliates of Greenfield SPV VII, S.A.P.I. de C.V. (“Greenfield”), a Mexico company managed by an affiliate of a leading U.S. asset manager, would acquire a minimum of 55% of the equity of AdR. The Agreement also provided Suez MA with the option to purchase 20% of the equity of AdR. If Suez MA did not exercise this option, NSC would retain 35% of the equity of AdR and Greenfield will acquire 65% of the equity of AdR. The Agreement became effective when the certain conditions precedent related to the Project were met. The aggregate investment to be made by the equity partners in the Project, in the form of equity and subordinated shareholder loans, is presently estimated at approximately 20% of the total cost of Phase 1 of the Project. This Agreement was scheduled to expire on September 30, 2020. NSC expected to generate a portion of its funding for its additional future equity investment in AdR through the sale to AdR of the land it had purchased for the Project. Through June 30, 2020, NSC had paid approximately $3.0 million to acquire rights of way for the aqueduct to be constructed for the Project to deliver water to the Mexico public water system. On June 29, 2020, AdR received a letter (the “Letter”) from the Director General of CEA and the Director General of CESPT terminating the APP Contract. The reasoning provided in the Letter for the decision to terminate the APP Contract is that the Project (a) is not financially feasible due to increases in the construction, operating and financing costs for the Project in addition to negative changes in economic conditions (e.g. interest rates and currency exchange rates); (b) is not sustainable for CEA and CESPT given its financial unfeasibility; (c) puts pressure to increase the rates charged to customers; (d) would force the Government of the State to cover a deficit of CEA and CESPT, thus preventing the State Government from spending on investment programs or social expenditures; and (e) negatively affects the general interest. The Letter requested that AdR provide an inventory of the assets that currently comprise the “Project Works” (as defined in the APP Contract) for the purpose of acknowledging and paying the non-recoverable expenses made by AdR in connection with the Project, with such reimbursement to be calculated in accordance with the terms of the APP Contract. The applicable law requires this list of non-recoverable expenses made by AdR in connection with the Project be submitted to CEA and CESPT within 20 business days from the date of receipt of the Letter. As a consequence of the termination of the APP Contract, the rights of way NSC and AdR acquired for the aqueduct no longer have any value due to the loss of their strategic importance derived from their incorporation in the Project. Consequently, the Company recorded an impairment loss of approximately $(3.0 million) for the three months ended June 30, 2020 to write off its investment in these rights of way. The Company also recorded adjustments during the three months ended June 30, 2020 of $2.6 million and $2.2 million to reduce its operating lease right-of-use assets and operating lease liabilities, respectively, due to the planned cancellation (or transfer to the State) of a long-term land lease associated with the Project. As a result of the cancellation of the APP Contract, during the three months ended September 30, 2020 the Company discontinued all project development activities associated with the Project and engaged a real estate broker and commenced active marketing efforts to sell the land NSC purchased for the Project. Accordingly, the assets and liabilities of CW-Cooperatief, NSC and AdR, as well as all Project development expenses and the impairment loss incurred by the Company, have been reclassified from the services segment to discontinued operations in the accompanying consolidated financial statements as of and for the year ended December 31, 2020 and 2019. Summarized financial information for the Mexico project development is as follows: December 31, 2020 2019 Cash $ 154,130 $ 831,586 Prepaid expenses and other current assets 88,978 111,220 Value added taxes receivable 1,267,991 676,250 Property, plant and equipment, net 5,682 10,227 Land and rights of way 21,126,898 24,162,523 Other assets 33,909 3,497,216 Total assets of discontinued operations $ 22,677,588 $ 29,289,022 Total liabilities of discontinued operations $ 190,933 $ 2,858,314 Year Ended December 31, 2020 2019 Revenues $ — $ — Income from operations $ — $ — Net loss from discontinued operations $ 4,902,243 $ 2,333,255 Gain on sale of discontinued operations $ — $ — Depreciation expense $ 4,545 $ 4,545 AdR initiated an amparo The Company, AdR and NSC plan to vigorously pursue all legal remedies and courses of action available under the APP Contract and applicable law (including international treaties and agreements) with respect to any rights they may have upon termination of the APP Contract, including the reimbursement of expenses and investments. However, the Company cannot provide any assurances that it will be able to obtain reimbursement for any expenses or investments made with respect to the Project. The Company, AdR and NSC will terminate the various agreements ancillary to the Project as a result of the termination of the APP Contract unless the State elects to assume such agreements. Project Litigation Immediately following CW-Cooperatief’s acquisition of its initial 50% ownership in NSC, the remaining 50% ownership interest in NSC was held by an unrelated company, Norte Sur Agua, S. de R.L. de C.V. (“NSA”). NSA subsequently transferred ownership of half of its shares in NSC to EWG Water LLC (“EWG”) and the other half of its shares in NSC to an individual (the “individual shareholder”). In February 2012, CW-Cooperatief paid $300,000 to enter into an agreement (the “Option Agreement”) that provided it with an option, exercisable through February 7, 2014, to purchase the shares of NSC owned by the individual shareholder for a price of $1.0 million along with an immediate usufruct and power of attorney to vote those shares. Such shares constituted 25% of the ownership of NSC as of February 2012. In May 2013, NSC repaid a $5.7 million loan payable to CW-Cooperatief by issuing additional shares of its stock. As a result of this share issuance to CW-Cooperatief, the Company indirectly acquired 99.99% of the ownership of NSC. The Option Agreement contained an anti-dilution provision that required CW-Cooperatief to transfer or otherwise cause the individual shareholder to acquire, for a total price of $1 (regardless of their par or market value), shares in NSC of an amount sufficient to maintain the individual shareholder’s 25% ownership interest in NSC if (i) any new shares of NSC were issued subsequent to the execution of the Option Agreement (causing the individual shareholder’s 25% ownership interest in NSC to be decreased); and (ii) CW-Cooperatief did not exercise its share purchase option by February 7, 2014. CW-Cooperatief exercised its option and paid the $1.0 million to the individual shareholder to purchase the Option Agreement shares in February 2014. In January 2018, EWG initiated an ordinary mercantile claim against the individual shareholder, NSC and CW-Cooperatief, (with AdR being named as a third party to be called to trial) before the Tenth Civil Judge in Tijuana, Baja California for Mercantile Matters (the “Tenth Civil Judge”). In the ordinary mercantile claim, EWG challenged, among other things, the transactions contemplated under the Option Agreement, and therefore, the capital investment transactions that increased the ownership interest of CW-Cooperatief in NSC to 99.99% as a consequence of the Option Agreement. EWG requested that the courts, as a preliminary matter (a) suspend the effectiveness of the challenged transactions; (b) order certain public officials in Mexico to record the pendency of the lawsuit in the public records (including a special request to register a lien over the real estate owned by NSC); (c) appoint an inspector for NSC to oversee its commercial activities; and (d) order public officials in Mexico and credit institutions abroad to refrain from authorizing or executing any legal act related with the activities of the plaintiff, the co-defendants and the third party called to trial to avoid damages to third parties, including those with whom negotiations or any form of commercial or administrative activities, or activities of any other nature related with the “Rosarito” water desalination project, are being conducted. The Tenth Civil Judge granted, ex-parte, the preliminary relief sought by EWG, which resulted in the issuance of official writs to several governmental and public entities involved with the “Rosarito” water desalination project, including the registration of the pendency of the lawsuit in certain public records. On October 16, 2018, NSC was served with the ordinary mercantile claim. On November 7, 2018, NSC filed a legal response to the claim, vigorously opposing the claims made by EWG. In addition to such legal response, NSC filed (i) a request to submit the claim to arbitration, based on certain provisions of the by-laws of NSC, (ii) an appeal remedy against the preliminary relief, and (iii) a request for the setting of a guarantee to release the preliminary relief granted in favor of EWG. On October 1, 2020, and following an order from a Federal Judge obtained by NSC, the Tenth Civil Judge resolved to (i) move the claim of EWG to arbitration, and (ii) suspend the corresponding ordinary mercantile procedure. Although EWG has certain remedies available to oppose to such resolution, at present NSC does not have knowledge of the filing thereof. Notwithstanding the resolution of the Tenth Civil Judge to move to arbitration, subparagraphs a) through e) that follow describe certain separate amparo claims, an appeal and an administrative act arising from or relating to such ordinary mercantile claim, all in chronological order. Due to the current global COVID-19 pandemic, most tribunals in Mexico have suspended their activities intermittently since March 2020, with certain such tribunals restarting activities in August 2020. As such, several resolutions are pending issuance. a) AdR amparo claim against the preliminary relief sought by EWG. In April 2018, AdR filed an amparo against the official writs issued by the Tenth Civil Judge to two governmental entities. In May 2018, the amparo claim was amended to also request protection against additional official writs issued by the Tenth Civil Judge to two other governmental entities and one banking institution. In May 2018, the Third District Court for Amparo and Federal Trials in the State of Baja California with residence in Tijuana granted a temporary suspension of the effects and consequences of the claimed official writs issued by the Tenth Civil Judge pending a further determination by the Third District Court. Such suspension was granted definitively in July 2018, and in August 2018, a resolution determining that the claimed official writs are unconstitutional, was issued. EWG appealed such resolution, and in January 2020, the Collegiate Tribunal resolving such appeal dismissed the amparo filed by AdR. However, such dismissal does not adversely impact AdR, considering the resolution to the appeal mentioned in subparagraph b) that follows. b) Appeal filed by NSC against the preliminary relief sought by EWG. The appeal remedy filed by NSC on November 7, 2018 mentioned previously, suspended the proceeding (through the posting of a guarantee by NSC) and was resolved in December 2019 and communicated to EWG in January 2020. Such resolution revoked the order of the Tenth Civil Judge whereby EWG was granted the preliminary relief c) Amparo filed by EWG against the revocation of the preliminary relief. In January 2020, EWG filed a new amparo claim against the resolution of the appeal remedy previously mentioned in item b). NSC has responded to this new amparo to vigorously oppose such amparo claim of EWG and to uphold the resolution of such appeal remedy. To this date, this amparo claim has not been resolved and, as such, it does not affect the revocation of the preliminary relief. d) Administrative cancellation of registrations before the Public Registry of Property. Despite the posting of a guarantee to release the preliminary relief sought by EWG within the ordinary mercantile claim, the Tenth Civil Judge failed to make the resolution effective, which would thereby rescind the previously mentioned preliminary relief granted to EWG Consequently, on June 19, 2019 (i.e. before obtaining a resolution revoking the preliminary relief as mentioned previously), NSC filed before the Public Registry of Property of Baja California a cancellation request for the provisional lien and the preventive annotation recorded against NSC’s property in the public real estate records. On June 24, 2019, the Public Registry of Property of Baja California issued an encumbrances cancellation resolution, approving the release of the provisional lien and the preventive annotation recorded against NSC’s property in the public real estate records. Such encumbrances cancellation resolution was registered before the Public Registry of Property of Playas de Rosarito on June 25, 2019. On June 26, 2019, the Public Registry of Property of Playas de Rosarito issued a certificate of no liens with respect to the real estate owned by NSC. e) Amparo filed by EWG against the administrative cancellation of registrations before the Public Registry of Property. In November 2019, NSC learned that EWG had filed an amparo claim before the Third District Court in Tijuana against such encumbrances cancellation resolution, and in December 2019, NSC responded to such claim, vigorously opposing it. Thereafter, NSC submitted a motion to dismiss, based on the resolution of the appeal remedy mentioned previously in subparagraph b) revoking the preliminary relief, previously mentioned in item (ii). The Court resolved in favor of such motion to dismiss, Notwithstanding the resolution to move to arbitration mentioned previously, CW-Cooperatief has not been officially served with the ordinary mercantile claim, and AdR has not been notified that it has to appear for such trial. In any event, AdR is only a named third party called to trial in this claim, and no claims have been made by EWG against AdR. The Company cannot presently determine what impact the resolution of this litigation may have on its consolidated financial condition, results of operations or cash flows. CW-Belize On February 14, 2019, the Company completed the sale of its former subsidiary, Consolidated Water (Belize) Limited ("CW-Belize") to Belize Water Services Ltd. (“BWSL”) effective January 1, 2019. After adjustments, the final price for CW-Belize was approximately $7.0 million. Pursuant to the sale and purchase agreement, BWSL initially paid the Company $6.735 million of the purchase price and approximately $265,000 was withheld to cover indemnification obligations of the Company under the agreement. The remaining $265,000 of the purchase price was paid by BWSL in August 2019. As a result of the sale of CW-Belize, the Company realized a gain of $3,621,170 , which is reported as gain on sale of discontinued operations in the accompanying consolidated statement of operations for the year ended December 31, 2019. CW-Bali Through its subsidiary, CW-Bali, the Company built a seawater reverse osmosis desalination plant located in Nusa Dua, one of the primary tourist areas of Bali, Indonesia. CW-Bali’s sales volumes were never sufficient In June 2019, the Company sold its CW-Bali assets and stock for $365,000 and $25,000, respectively. Such sales are included in gain on asset dispositions and impairments, net in the accompanying consolidated statement of income for the year ended December 31, 2019. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2020 | |
Intangible assets | |
Intangible assets | 9. Intangible assets In February 2016, the Company purchased a 51% ownership interest in Aerex Industries, Inc. The purchase transaction identified certain intangible assets with a fair value of $5,900,000 and useful lives as follows: non-compete (5 years), trade name (15 years), certifications/programs (3 years), customer backlog (1 year), and customer relationships (4 years). In January 2020, the Company acquired the remaining 49% ownership interest in Aerex. In October 2019, the Company purchased a 51% ownership interest in PERC Water Corporation. The purchase transaction identified certain intangible assets with a fair value of $3,990,000 and useful lives as follows: non-compete (3 years), trade name (15 years), customer backlog (2 years), and facility management contracts (6 years). In August 2020, the Company purchased an additional 10% of the ownership of PERC, increasing its ownership of this subsidiary to 61% . The costs and accumulated amortization for these assets were as follows: December 31, 2020 2019 Cost Non-compete agreements $ 530,000 $ 530,000 Trade names 2,700,000 2,700,000 Certifications/programs 2,000,000 2,000,000 Customer backlogs 460,000 460,000 Customer relationships 2,000,000 2,000,000 Facility management contracts 2,200,000 2,200,000 9,890,000 9,890,000 Accumulated amortization Non-compete agreements (443,889) (320,556) Trade names (560,000) (380,000) Certifications/programs (2,000,000) (2,000,000) Customer backlogs (310,000) (130,000) Customer relationships (2,000,000) (1,958,333) Facility management contracts (427,778) (61,111) (5,741,667) (4,850,000) Intangible assets, net $ 4,148,333 $ 5,040,000 Amortization of intangible assets for each of the next five years and thereafter is expected to be as follows: 2021 $ 746,667 2022 582,778 2023 546,667 2024 546,667 2025 485,556 Thereafter 1,239,998 $ 4,148,333 Amortization expense was $891,667 and $841,667 for the years ended years ended December 31, 2020 and 2019, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | 10. Leases The Company leases property and equipment under operating leases, primarily office and warehouse locations. For leases with terms greater than twelve months, the related asset and obligation are recorded at the present value of lease payments over the term. Many of these leases contain rental escalation clauses which are factored into the determination of lease payments when appropriate. When available, the lease payments are discounted using the rate implicit in the lease; however, the Company’s current leases do not provide a readily determinable implicit rate. Therefore, the Company’s incremental borrowing rate is estimated to discount the lease payments based on information available at lease commencement. These leases contain both lease and non-lease components, which the Company has elected to treat as a single lease component. The Company elected not to recognize leases that have an original lease term, including reasonably certain renewal or purchase obligations, of twelve months or less in its consolidated balance sheets for all classes of underlying assets. Lease costs for such short-term leases are expensed on a straight-line basis over the lease term. The land used by the Company to operate its seawater desalination plants in the Cayman Islands and The Bahamas are owned by the Company or leased to the Company for immaterial annual amounts and are not included in the lease amounts presented on the consolidated balance sheets. AdR entered into a lease for land to be used in the Project with an initial effective term of 20-years from the date of full operation of its proposed seawater desalination plant. The lease is cancellable by AdR should it ultimately not proceed with the Project. On June 29, 2020, AdR was notified that the APP Contract was terminated. As a result, the Company, AdR and NSC expect to terminate the various agreements ancillary to the Project or to transfer them to the State, including this land lease for the Project. As such, the lease amounts as of December 31, 2020 do not include this lease. All lease assets denominated in a foreign currency are measured using the exchange rate at the commencement of the lease. All lease liabilities denominated in a foreign currency are remeasured using the exchange rate as of the consolidated balance sheet date. Effective May 1, 2019, the Company executed a new lease for its office located in the Cayman Islands under similar terms compared to the prior lease. This new lease expires April 30, 2024. Lease assets and liabilities The following table presents the lease-related assets and liabilities and their respective classification on the consolidated balance sheets: December 31, 2020 2019 ASSETS Current Prepaid expenses and other current assets $ 108,303 $ 33,567 Current assets of discontinued operations — 2,530 Noncurrent Operating lease right-of-use assets 1,329,561 1,811,516 Long-term assets of discontinued operations 33,909 2,627,696 Total lease right-of-use assets $ 1,471,773 $ 4,475,309 LIABILITIES Current Current maturities of operating leases $ 455,788 $ 688,540 Current liabilities of discontinued operations 29,432 67,211 Noncurrent Noncurrent operating leases 982,076 1,156,543 Noncurrent liabilities of discontinued operations 2,499 2,679,932 Total lease liabilities $ 1,469,795 $ 4,592,226 Weighted average remaining lease term: Operating leases 3.4 years 3.5 years Operating leases - discontinued operations 1.1 years 24.0 years Weighted average discount rate: Operating leases 4.15% 4.37% Operating leases - discontinued operations 3.48% 4.68% The components of lease cost were as follows: Year Ended December 31, 2020 2019 Operating lease costs $ 773,756 $ 563,358 Short-term lease costs 5,518 16,469 Lease costs - discontinued operations 127,983 234,045 Total lease costs $ 907,257 $ 813,872 Supplemental cash flow information related to leases is as follows: Year Ended December 31, 2020 2019 Cash paid for amounts included in measurement of liabilities: Operating cash outflows for operating leases $ 708,095 $ 717,172 Operating cash outflows for operating leases - discontinued operations 127,153 250,833 Future lease payments relating to the Company's operating lease liabilities from continuing operations as of December 31, 2020 were as follows: Years ending December 31, Total 2021 $ 505,206 2022 402,563 2023 405,113 2024 186,670 2025 43,229 Thereafter — Total future lease payments 1,542,781 Less: imputed interest (104,917) Total lease obligations 1,437,864 Less: current obligations (455,788) Noncurrent lease obligations $ 982,076 |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income taxes | |
Income taxes | 11. Income taxes The components of income before income taxes for the years ended December 31, 2020 and 2019 are as follows: Year Ended December 31, 2020 2019 Foreign (not subject to income taxes) $ 6,475,693 $ 13,593,497 Mexico (4,903,988) (2,458,210) United States 2,956,552 2,657,405 4,528,257 13,792,692 Less gain on sale of discontinued operations — (3,621,170) Less discontinued operations 4,902,243 2,333,255 $ 9,430,500 $ 12,504,777 The Company’s provision for income taxes for the years ended December 31, 2020 and 2019, which related to U.S. operations, consisted of the following: Year Ended December 31, 2020 2019 Current: Federal $ 191,322 $ 143,567 State 87,630 171,093 Foreign — — Total 278,952 314,660 Deferred: Federal (132,957) (203,031) State (59,271) (45,008) Foreign — — Total (192,228) (248,039) Total provision $ 86,724 $ 66,621 A reconciliation of the U.S. statutory federal tax rate to the effective rate for the years ended December 31, 2020 and 2019 is as follows: Year Ended December 31, 2020 2019 U.S. statutory federal rate 21.00 % 21.00 % State taxes, net of federal effect 4.00 % 4.38 % Nontaxable foreign income (17.28) % (19.98) % Research & development tax credit (11.73) % (3.82) % Permanent items (0.67) % (0.87) % Valuation allowance for deferred tax assets 5.60 % (0.18) % 0.92 % 0.53 % The tax effects of significant items comprising the Company’s net long-term deferred tax liability as of December 31, 2020 and 2019 were as follows: December 31, 2020 2019 Continuing Operations Deferred tax assets: Research & development tax credits $ 613,003 $ 166,653 Accrued compensation 110,092 — Valuation allowances (496,343) (43,900) 226,752 122,753 Deferred tax liabilities: Property and equipment 252,800 148,707 Intangible assets 1,188,009 1,380,328 1,440,809 1,529,035 Net deferred tax liability $ 1,214,057 $ 1,406,282 Discontinued Operations Deferred tax assets: Operating loss carryforwards - Mexico $ 4,296,453 $ 3,427,295 Land basis difference - Mexico 1,262,159 1,164,365 Start-up costs - Mexico 4,904,337 4,608,990 Valuation allowances (10,462,949) (9,200,650) $ — $ — |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings per share | |
Earnings per share | 12. Earnings per share Earnings per share (“EPS”) are computed on a basic and diluted basis. Basic EPS is computed by dividing net income (less preferred stock dividends) available to common stockholders by the weighted average number of common shares outstanding during the period. The computation of diluted EPS assumes the issuance of common shares for all potential common shares outstanding during the reporting period and, if dilutive, the effect of stock options as computed under the treasury stock method. The following summarizes information related to the computation of basic and diluted EPS: Year Ended December 31, 2020 2019 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders $ 8,613,771 $ 10,888,178 Less: preferred stock dividends (11,740) (11,937) Net income from continuing operations available to common shares in the determination of basic earnings per common share 8,602,031 10,876,241 Total income (loss) from discontinued operations (4,902,243) 1,287,915 Net income available to common shares in the determination of basic earnings per common share $ 3,699,788 $ 12,164,156 Weighted average number of common shares in the determination of basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders 15,119,305 15,025,639 Plus: Weighted average number of preferred shares outstanding during the period 33,814 33,983 Potential dilutive effect of unexercised options and unvested stock grants 70,836 77,454 Weighted average number of shares used for determining diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders 15,223,955 15,137,076 |
Dividends
Dividends | 12 Months Ended |
Dec. 31, 2020 | |
Dividends. | |
Dividends | 13. Dividends Interim dividends declared on Class A common stock and redeemable preferred stock for each quarter of the respective years ended December 31, 2020 and 2019 were as follows: 2020 2019 First Quarter $ 0.085 $ 0.085 Second Quarter 0.085 0.085 Third Quarter 0.085 0.085 Fourth Quarter 0.085 0.085 $ 0.34 $ 0.34 |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2020 | |
Segment information | |
Segment information | 14. Segment information The Company has four reportable segments: retail, bulk, services and manufacturing. The retail segment operates the water utility for the Seven Mile Beach and West Bay areas of Grand Cayman Island pursuant to an exclusive license granted by the Cayman Islands government. The bulk segment supplies potable water to government utilities in Grand Cayman and The Bahamas under long-term contracts. The services segment designs, constructs and sells water infrastructure and provides management and operating services to third parties. The manufacturing segment manufactures and services a wide range of custom and specialized water-related products applicable to commercial, municipal and industrial water production, supply and treatment. Consistent with prior periods, the Company records all non-direct general and administrative expenses in its retail business segment and does not allocate any of these non-direct expenses to its other three business segments. The accounting policies of the segments are consistent with those described in Note 2. The Company evaluates each segment’s performance based upon its income (or loss) from operations. All intercompany transactions are eliminated for segment presentation purposes. The Company’s segments are strategic business units that are managed separately because each segment sells different products and/or services, serves customers with distinctly different needs and generates different gross profit margins. Year Ended December 31, 2020 Retail Bulk Services Manufacturing Total Revenue $ 22,952,370 $ 24,312,546 $ 12,937,859 $ 12,425,351 $ 72,628,126 Cost of revenue 11,080,814 16,959,563 9,698,214 8,121,080 45,859,671 Gross profit 11,871,556 7,352,983 3,239,645 4,304,271 26,768,455 General and administrative expenses 12,879,445 1,260,062 2,834,917 1,460,474 18,434,898 Gain on asset dispositions and impairments, net 2,965 7,213 3,801 18 13,997 Income (loss) from operations $ (1,004,924) $ 6,100,134 $ 408,529 $ 2,843,815 8,347,554 Other income, net 1,082,946 Income before income taxes 9,430,500 Provision for income taxes 86,724 Net income from continuing operations 9,343,776 Income from continuing operations attributable to non-controlling interests 730,005 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 8,613,771 Net loss from discontinued operations (4,902,243) Net income attributable to Consolidated Water Co. Ltd. stockholders $ 3,711,528 Depreciation and amortization expenses for the year ended December 31, 2020 for the retail, bulk, services and manufacturing segments were $2,388,781, $3,869,377, $762,182 and $386,169, respectively. As of December 31, 2020 Retail Bulk Services Manufacturing Total Accounts receivable, net $ 2,444,455 $ 17,022,813 $ 1,420,609 $ 596,099 $ 21,483,976 Inventory, current and non-current $ 2,787,163 $ 3,795,544 $ — $ 1,138,313 $ 7,721,020 Property, plant and equipment, net $ 27,947,545 $ 27,611,567 $ 487,973 $ 1,640,899 $ 57,687,984 Construction in progress $ 305,110 $ 31,737 $ — $ 103,537 $ 440,384 Intangibles, net $ — $ — $ 3,200,555 $ 947,778 $ 4,148,333 Goodwill $ 1,170,511 $ 1,948,875 $ 5,320,416 $ 4,885,211 $ 13,325,013 Total segment assets $ 56,425,159 $ 74,771,798 $ 14,470,322 $ 11,210,685 $ 156,877,964 Assets of discontinued operations $ 22,677,588 Total assets $ 179,555,552 Year Ended December 31, 2019 Retail Bulk Services Manufacturing Total Revenue $ 26,456,022 $ 26,986,108 $ 1,759,446 $ 13,592,075 $ 68,793,651 Cost of revenue 11,611,165 18,606,805 1,215,193 9,086,140 40,519,303 Gross profit 14,844,857 8,379,303 544,253 4,505,935 28,274,348 General and administrative expenses 13,422,821 1,238,296 392,425 1,947,622 17,001,164 Gain on asset dispositions and impairments, net 398,041 47,000 — — 445,041 Income from operations $ 1,820,077 $ 7,188,007 $ 151,828 $ 2,558,313 11,718,225 Other income, net 786,552 Income before income taxes 12,504,777 Provision for income taxes 66,621 Net income from continuing operations 12,438,156 Income from continuing operations attributable to non-controlling interests 1,549,978 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 10,888,178 Net income from discontinued operations 1,287,915 Net income attributable to Consolidated Water Co. Ltd. stockholders $ 12,176,093 Depreciation and amortization expenses for the year ended December 31, 2019 for the retail, bulk, services and manufacturing segments were $2,364,994, $3,795,320, $120,761 and $922,027, respectively. As of December 31, 2019 Retail Bulk Services Manufacturing Total Accounts receivable, net $ 2,891,165 $ 18,883,493 $ 678,119 $ 500,882 $ 22,953,659 Inventory, current and non-current $ 2,668,902 $ 3,628,443 $ — $ 1,394,588 $ 7,691,933 Property, plant and equipment, net $ 29,177,718 $ 30,281,647 $ 158,358 $ 1,621,029 $ 61,238,752 Construction in progress $ 396,214 $ 869,792 $ — $ 69,591 $ 1,335,597 Intangibles, net $ — $ — $ 3,877,222 $ 1,162,778 $ 5,040,000 Goodwill $ 1,170,511 $ 1,948,875 $ 5,320,416 $ 4,885,211 $ 13,325,013 Total segment assets $ 65,554,640 $ 69,423,770 $ 12,895,385 $ 14,854,557 $ 162,728,352 Assets of discontinued operations $ 29,289,022 Total assets $ 192,017,374 Revenues earned by major geographic region were: Year ended December 31, 2020 2019 Cayman Islands $ 25,640,169 $ 30,327,139 Bahamas 21,654,153 23,114,860 Indonesia — 131 United States 24,918,527 14,968,868 Revenues earned from management services agreement with OC-BVI 415,277 382,653 $ 72,628,126 $ 68,793,651 Revenues earned from major customers were: Year ended December 31, 2020 2019 Revenue earned from the Water and Sewerage Corporation ("WSC") $ 21,527,487 $ 22,877,741 Percentage of consolidated revenue earned from the WSC 30% 33% Revenue earned from one manufacturing segment customer $ 9,965,041 $ 9,238,476 Percentage of consolidated revenue earned from the one manufacturing segment customer 14% 13% Property, plant and equipment, net by major geographic region were: December 31, 2020 2019 Cayman Islands $ 28,474,748 $ 29,059,294 The Bahamas 26,975,427 30,245,741 United States 2,237,809 1,933,717 $ 57,687,984 $ 61,238,752 |
Cost of revenues and general an
Cost of revenues and general and administrative expenses | 12 Months Ended |
Dec. 31, 2020 | |
Cost of revenues and general and administrative expenses | |
Cost of revenues and general and administrative expenses | 15. Cost of revenue and general and administrative expenses Year Ended December 31, 2020 2019 Cost of revenue consist of: Electricity $ 5,389,361 $ 7,438,218 Depreciation 6,202,012 6,046,810 Fuel oil 4,157,393 5,315,676 Employee costs 11,308,833 6,597,755 Maintenance 2,859,262 2,076,501 Retail license royalties 1,489,862 1,701,724 Insurance 1,491,799 1,279,997 Materials 5,786,698 6,151,064 Other 7,174,451 3,911,558 $ 45,859,671 $ 40,519,303 Year Ended December 31, 2020 2019 General and administrative expenses consist of: Employee costs $ 10,025,658 $ 9,335,247 Insurance 1,436,957 866,457 Professional fees 1,549,878 1,178,621 Directors’ fees and expenses 865,555 969,279 Depreciation 133,477 135,272 Amortization of intangible assets 891,667 841,667 Other 3,531,706 3,674,621 $ 18,434,898 $ 17,001,164 |
Stock-based compensation
Stock-based compensation | 12 Months Ended |
Dec. 31, 2020 | |
Stock-based compensation | |
Stock-based compensation | 16. Stock-based compensation The Company has the following stock compensation plans that form part of its employees’ and Directors’ remuneration: Employee Share Incentive Plan (Preferred Stock) Employees (i.e. other than Directors and Officers), after four $nil seven days 30 days Employee Share Option Plan (Common Stock Options) The Company has an employee stock option plan for certain long-serving employees of the Company. Under the plan, these employees are granted in each calendar year, as long as the employee is a participant in the Employee Share Incentive Plan, options to purchase common shares. The price at which the option may be exercised is the closing market price on the grant date, which is the 40th day after the date of the Company’s Annual Shareholder Meeting. The number of options each employee is granted is equal to five times the sum of (i) the number of shares of preferred stock that employee receives for $nil consideration and (ii) the number of preferred stock options that employee exercises in that given year. Options may be exercised during the period commencing on the fourth anniversary of the grant date and ending on the thirtieth day after the fourth anniversary of the grant date. Options granted under this plan during the years ended December 31, 2020 and 2019 totaled 2,100 and 2,575, respectively. The fair value of each option award is estimated on the date of grant using a Black-Scholes option-pricing model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding. The Company uses historical data to estimate stock option exercises and forfeitures within its valuation model. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. 2008 Equity Incentive Plan On May 14, 2008, the Company’s stockholders approved the 2008 Equity Incentive Plan (the “2008 Plan”) and reserved 1,500,000 shares of the Company’s Class A common shares for issuance under this plan. All Directors, executives and key employees of the Company or its affiliates are eligible for participation in the 2008 Plan which provides for the issuance of options, restricted stock and stock equivalents at the discretion of the Board. Non-Executive Directors’ Share Plan This stock grant plan provides part of Directors’ remuneration. Under this plan, non-Executive Directors receive a combination of cash and common stock for their participation in Board meetings. The number of shares of common stock granted is calculated based upon the market price of the Company’s common stock on October 1 of the year preceding the grant. Common stock granted under this plan during the years ended December 31, 2020 and 2019 totaled 19,712 and 22,034 shares, respectively. The Company recognized stock-based compensation for these share grants of $318,991 and $322,036 for the years ended December 31, 2020 and 2019, respectively. The Company measures and recognizes compensation expense at fair value for all share-based payments, including stock options. Stock-based compensation for the Employee Share Incentive Plan, Employee Share Option Plan and the 2008 Equity Incentive Plan totaled $125,487 and $142,632 for the years ended December 31, 2020 and 2019, respectively, and is included in general and administrative expenses in the accompanying consolidated statements of income. The significant weighted average assumptions for the years ended December 31, 2020 and 2019 were as follows: 2020 2019 Risk free interest rate 0.17 % 2.11 % Expected option life (years) 1.1 1.1 Expected volatility 51.19 % 34.59 % Expected dividend yield 2.42 % 2.44 % A summary of the Company’s stock option activity for the year ended December 31, 2020 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value (1) Outstanding at beginning of period 10,650 $ 13.08 Granted 8,223 10.67 Exercised (835) 10.10 Forfeited/expired (8,008) 11.04 Outstanding as of December 31, 2020 10,030 $ 12.98 2.07 years $ — Exercisable as of December 31, 2020 — $ — — years $ — (1) The intrinsic value of a stock option represents the amount by which the fair value of the underlying stock, measured by reference to the closing price of the common shares of $12.05 on the Nasdaq Global Select Market on December 31, 2020, exceeds the exercise price of the option. As of December 31, 2020, 10,030 non-vested options were outstanding, with weighted average exercise price of $12.98, and average remaining contractual life of 2.07 years. The total remaining unrecognized compensation costs related to unvested stock-based arrangements were $14,427 as of December 31, 2020 and are expected to be recognized over a weighted average period of 2.07 years. As of December 31, 2020, unrecognized compensation costs relating to redeemable preferred stock rights outstanding were $142,328 and are expected to be recognized over a weighted average period of 1.15 years. The following table summarizes the weighted average fair value of options at the date of grant and the intrinsic value of options exercised during the years ended December 31, 2020 and 2019: 2020 2019 Options granted with an exercise price below market price on the date of grant: Employees — preferred stock $ 2.70 $ 3.73 Overall weighted average 2.70 3.73 Options granted with an exercise price at market price on the date of grant: Management employees $ — $ — Employees — common stock 2.45 3.23 Overall weighted average 2.45 3.23 Options granted with an exercise price above market price on the date of grant: Management employees $ — $ — Employees — preferred stock — — Overall weighted average — — Total intrinsic value of options exercised $ 3,891 $ 5,857 Executive Long-Term Incentive Compensation The Board of Directors approved changes to the long-term incentive compensation for the Company’s Executive Officers effective for 2015 and thereafter to better align the interests of its Executive Officers with those of its shareholders. The revised long-term compensation plan includes a combination of performance and non-performance-based grants of common stock from the shares of Company stock provided for issuance under the 2008 Equity Incentive Plan. The non-performance-based stock grants vest in one-third increments at the end of each year over a three and 2019, respectively and the shares associated with these grants were issued in 2021 and 2020, respectively. The Company recognized $344,940 and $337,032 in stock-based compensation expense related to these non-performance stock grants for the years ended December 31, 2020 and 2019, respectively. The performance-based grants may be earned at the end of each year based upon the Company's three three A total of 31,788 common stock grants were earned as of December 31, 2020 based upon the Company’s actual financial performance relative to the cumulative financial performance targets for the three A total of 36,007 common stock grants were earned as of December 31, 2019 based upon the Company’s actual financial performance relative to the cumulative financial performance targets for the three |
Retirement benefits
Retirement benefits | 12 Months Ended |
Dec. 31, 2020 | |
Retirement benefits | |
Retirement benefits | 17. Retirement benefits Retirement plans are offered to all employees in California, Florida, Cayman Islands and Bahamas. The plans are administered by third parties and are defined contribution plans pursuant to which the Company matches participating employees’ contributions up to certain amounts. The Company matches contributions of up to 5% of a maximum salary amount of $104,400 for Cayman Islands employees, fully matches all contributions made by employees in the Bahamas, and matches contributions of up to 6% of salary for Florida employees. For California employees, the Company matches contribution amounts up to 2% of the employee's salary and matches 25% of contributions above this 2% threshold, up to 10% of the employee’s salary. The Company’s expense for these plans was $576,096 and $450,732 for the years ended December 31, 2020 and 2019, respectively. |
Financial instruments
Financial instruments | 12 Months Ended |
Dec. 31, 2020 | |
Financial instruments | |
Financial instruments | 18. Financial instruments Credit risk: The Company is not exposed to significant credit risk on its retail customer accounts as its policy is to cease supply of water to customers’ accounts that are more than 45 days Interest rate risk: The Company is not subject to significant interest-rate risk arising from fluctuations in interest rates. Foreign exchange risk: All relevant foreign currencies other than the Mexican peso and the euro have been fixed to the dollar for more than 20 years Fair values: As of December 31, 2020 and 2019, the carrying amounts of cash equivalents, accounts receivable, accounts payable, accrued expenses, accrued compensation, dividends payable and other current liabilities approximate their fair values due to the short-term maturities of these instruments. Under US GAAP, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. US GAAP guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The Company reviews its fair value hierarchy classifications on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value as of December 31, 2020 and 2019: December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities: Recurring Net liability arising from put/call options $ — $ — $ 690,000 $ 690,000 December 31, 2019 Level 1 Level 2 Level 3 Total Liabilities: Recurring Net liability arising from put/call options $ — $ — $ 664,000 $ 664,000 The activity for the Level 3 asset for the year ended December 31, 2020: Net liability arising from put/call options Balance as of December 31, 2019 $ 664,000 Unrealized loss 26,000 Balance as of December 31, 2020 $ 690,000 Put/call options are reported at fair value as either assets or liabilities in the consolidated balance sheets. These fair values are calculated using discounted cash flow analysis valuation techniques that incorporate unobservable inputs, such as future cash flows, weighted-average cost of capital, and expected future volatility. The inputs to these valuations are considered Level 3 inputs. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and contingencies. | |
Commitments and contingencies | 19. Commitments and contingencies Commitments The Company has entered into employment agreements with certain executives, which expire through December 31, 2023 and provide for, among other things, base annual salaries in an aggregate amount of approximately $4.7 million, performance bonuses and various employee benefits. The Company has purchase obligations totaling approximately $1.8 million through December 31, 2021. Contingencies COVID-19 The worldwide coronavirus (COVID-19) pandemic was formally recognized by the World Health Organization on March 11, 2020. In response to this pandemic, the governments of the countries in which the Company operates - the Cayman Islands, The Bahamas, and the United States - implemented preventative measures to slow the spread of COVID-19, measures which have had profound adverse consequences for the economies of those countries. Tourism, a major economic driver for the Cayman Islands and The Bahamas, has temporarily ceased in those countries due to closing of these countries to air and sea travel. Overall economic activity in the United States has declined. As a result of the impact of the COVID-19 pandemic on the economies of the countries in which the Company operates, the Company has experienced, and could continue to experience decreases in consolidated revenue, cash flows generated from operations, and overall liquidity as compared to comparable prior periods. Furthermore, a prolonged extension of the economic downturn created by the COVID-19 pandemic could adversely affect the markets for the Company’s products and services. Such adverse market effects could adversely impact the Company’s expected future cash flows from its four reporting units and could require the Company to record impairment losses to reduce the carrying values of one or more of these reporting units due to a decline in their fair values. Although the Company cannot presently quantify the future financial impacts of the COVID-19 pandemic, such impacts will likely have a material adverse impact on the Company’s consolidated financial condition, results of operations, and cash flows. Given the uncertainty associated with the resolution of this pandemic, the Company cannot presently determine how long such adverse financial impacts may last. Cayman Water The Company sells water through its retail operations under a license issued in July 1990 by the Cayman Islands government (the “1990 license”) that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area. Although the 1990 license was not expressly extended after January 2018, the Company continues to supply water under the terms of the 1990 license, as further discussed in the following paragraph. Pursuant to the 1990 license, Cayman Water has the exclusive right to produce potable water and distribute it by pipeline to its licensed service area, which consists of two of the three most populated areas of Grand Cayman Island: Seven Mile Beach and West Bay. In 2020 and 2019, we generated approximately 32% and 38%, respectively, of our consolidated revenue and 44% and 53%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license. The 1990 license was originally scheduled to expire in July 2010 but was extended several times by the Cayman Islands government in order to provide the parties with additional time to negotiate the terms of a new license agreement. The most recent express extension of the 1990 license expired on January 31, 2018. The Company continues to operate under the terms of the 1990 license, providing water services to the level and quality specified in the 1990 license and in accordance with its understanding of its legal obligations, treating those obligations set forth in the 1990 license as operative notwithstanding the expiration of the express extension. The Company continues to pay the royalty required under the 1990 license. In October 2016, the Government of the Cayman Islands passed legislation which created a new utilities regulation and competition office (“OfReg”). OfReg is an independent and accountable regulatory body with a view of protecting the rights of consumers, encouraging affordable utility services and promoting competition. OfReg, which began operations in January 2017, has the ability to supervise, monitor and regulate multiple utility undertakings and markets. Supplemental legislation was passed by the Government of the Cayman Islands in April 2017, which transferred responsibility for economic regulation of the water utility sector and the negotiations with the Company for a new retail license from the WAC to OfReg in May 2017. The Company began license negotiations with OfReg in July 2017 and such negotiations are ongoing. The Company has been informed during its retail license negotiations, both by OfReg and its predecessor in these negotiations, that the Cayman Islands government seeks to restructure the terms of its license in a manner that could significantly reduce the operating income and cash flows the Company has historically generated from its retail license. The Company is presently unable to determine what impact the resolution of its retail license negotiations will have on its cash flows, financial condition or results of operations but such resolution could result in a material reduction (or the loss) of the operating income and cash flows the Company has historically generated from Cayman Water’s retail operations and could require the Company to record impairment losses to reduce the carrying values of its retail segment assets. Such impairment losses could have a material adverse impact on the Company’s consolidated financial condition and results of operations. CW-Bahamas CW-Bahamas’ accounts receivable balances (including accrued interest) due from the WSC amounted to $16.8 million and $18.4 million as of December 31, 2020 and 2019, respectively. Historically, CW-Bahamas has experienced delays in collecting its accounts receivable from the WSC. When these delays occur, the Company holds discussions and meetings with representatives of the WSC and The Bahamas government, and as a result, payment schedules are developed for WSC’s delinquent accounts receivable. All previous delinquent accounts receivable from the WSC were eventually paid in full. Based upon this payment history, CW-Bahamas has never been required to provide an allowance for doubtful accounts for any of its accounts receivable, despite the periodic accumulation of significant delinquent balances. As of December 31, 2020, the Company has not provided an allowance for doubtful accounts for CW-Bahamas’ accounts receivable from the WSC. If CW-Bahamas continues to be unable to collect a significant portion of its delinquent accounts receivable, one or more of the following events may occur: (i) CW-Bahamas may not have sufficient liquidity to meet its obligations; (ii) the Company may be required to cease the recognition of revenue on CW-Bahamas’ water supply agreements with the WSC; and (iii) the Company may be required to provide an allowance for doubtful accounts for CW-Bahamas’ accounts receivable. Any of these events could have a material adverse impact on the Company’s consolidated financial condition, results of operations, and cash flows. |
Acquisition of PERC
Acquisition of PERC | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition of PERC | |
Acquisition of PERC | 20. Acquisition of PERC On October 24, 2019, the Company, through its wholly-owned subsidiary, CW-Holdings, entered into a stock purchase agreement (the “Purchase Agreement”) with PERC and its various shareholders (collectively, the “Sellers”). Pursuant to the terms of the Purchase Agreement, CW-Holdings purchased a 51% ownership interest in PERC for approximately $4.1 million in cash. After giving effect to the transactions contemplated by the Purchase Agreement, CW-Holdings owned 51% of the outstanding capital stock of PERC, and three members of PERC's management and one additional shareholder (the “Remaining Shareholders”) owned the remaining 49% of the outstanding capital stock of PERC. In August 2020, CW-Holdings acquired an additional 10% of PERC for $900,000 increasing the Company’s ownership to 61% of the outstanding capital stock of PERC. The remaining 39% is still owned by three members of PERC's management and one additional shareholder. CW-Holdings also acquired from the Remaining Shareholders an option to compel the Remaining Shareholders to sell, and granted to the Remaining Shareholders an option to require CW-Holdings to purchase, the Remaining Shareholders’ 39% ownership interest in PERC at a price based upon the fair market value of PERC at the time of the exercise of the option. CW-Holdings’ option is exercisable on or after October 24, 2022 and the Remaining Shareholders’ option is exercisable on or after October 24, 2024. PERC is a water infrastructure company headquartered in Fountain Valley, California that develops, designs, builds, and manages wastewater and water reuse infrastructure. In connection with the Purchase Agreement, CW-Holdings, and the Remaining Shareholders entered into a shareholders' agreement, pursuant to which CW-Holdings and the Remaining Shareholders agreed to certain rights and obligations with respect to the governance of PERC. The purchase price for PERC is summarized as follows: Cash consideration Purchase price (excluding working capital) $ 4,088,817 Cash acquired (941,379) Total cash consideration $ 3,147,438 The following table summarizes the estimated fair values of the assets and liabilities assumed at the acquisition date: Financial assets $ 1,371,532 Contract assets 20,854 Property, plant and equipment 86,287 Identifiable intangible assets 3,990,000 Deferred tax liability (1,117,200) Accounts payable and accrued liabilities (1,260,722) Working capital adjustment payable (23,467) Deferred revenue (117,636) Contract liabilities (760,992) Net liability arising from put/call options (744,000) Total identifiable net assets 1,444,656 Non-controlling interest in PERC (3,617,634) Goodwill 5,320,416 $ 3,147,438 The fair value of noncontrolling interest was calculated using the discounted cash flow method. The discounted cash flow method relied upon nine-year discrete projections of operating results, working capital and capital expenditures, along with a terminal value subsequent to the discrete period. These projections were based upon historical and anticipated future results, general economic and market conditions, and considered the impact of planned business and operational strategies. The discount rates for the calculations represented the estimated cost of capital for market participants at the time of each analysis. An 8.4% discount for marketability was applied to the noncontrolling interest calculated under the discounted cash flow method. This marketability discount was calculated using an average-price put option model. The identifiable intangible assets consisted of the following items: Amount Useful life Non-compete agreement $ 130,000 3 years Trade name 1,300,000 15 years Customer backlog 360,000 2 years Facility management contracts 2,200,000 6 years $ 3,990,000 The results of operations of PERC included in the Company’s results of operations for the period October 24, 2019 to December 31, 2019 are as follows: Revenue $ 1,376,793 Gross profit 407,604 Amortization of intangibles, net of tax benefit (81,200) Net income 37,924 The following unaudited pro forma financial information presents the results of operations of the Company for the year ended December 31, 2019, as if the acquisition of PERC had taken place on January 1, 2019. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have actually occurred had the transaction taken place on January 1, 2019, nor do they purport to be indicative of future results of operations. December 31, 2019 Revenue $ 77,615,958 Cost of revenue 47,162,564 Gross profit 30,453,394 General and administrative expenses 21,620,106 Gain (loss) on asset dispositions and impairments, net 447,681 Income from operations 9,280,969 Other income (expense), net 805,093 Income before income taxes 10,086,062 Provision for (benefit from) income taxes 72,814 Net income from continuing operations 10,013,248 Income from continuing operations attributable to non-controlling interests 1,505,068 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 8,508,180 Gain on sale of discontinued operations 3,621,170 Net income from discontinued operations — Total income from discontinued operations 3,621,170 Net income attributable to Consolidated Water Co. Ltd. stockholders $ 12,129,350 Basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders Continuing operations $ 0.57 Discontinued operations 0.24 Basic earnings per share $ 0.81 Diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders Continuing operations $ 0.56 Discontinued operations 0.24 Diluted earnings per share $ 0.80 Weighted average number of common shares used in the determination of: Basic earnings per share 15,025,639 Diluted earnings per share 15,137,076 |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related party transactions | |
Related party transactions | 21. Related party transactions The Company, through PERC and the services segment, purchases engineering and technology support services from various companies with a minority shareholder who is also a minority shareholder of PERC. During the years ended December 31, 2020 and 2019, the Company made total purchases of services of approximately $1,349,000 and $10,000 from these companies, respectively. These total purchases are included in the Company’s cost of revenues in the accompanying consolidated statements of income |
Supplemental disclosure of cash
Supplemental disclosure of cash flow information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental disclosure of cash flow information | |
Supplemental disclosure of cash flow information | 22. Supplemental disclosure of cash flow information Year Ended December 31, 2020 2019 Interest paid in cash $ 9,669 $ 1,332 Non-cash transactions: Dividends declared but not paid $ 1,289,854 $ 1,282,086 Transfers from inventory to property, plant and equipment and construction in progress $ 73,464 $ 443,018 Transfers from construction in progress to property, plant and equipment $ 1,653,501 $ 7,755,375 Right-of-use assets obtained in exchange for new operating lease liabilities $ 299,992 $ 2,429,305 Purchase of equipment through issuance of long term debt $ 122,292 $ 78,899 |
Impact of recent accounting sta
Impact of recent accounting standards | 12 Months Ended |
Dec. 31, 2020 | |
Impact of recent accounting standards | |
Impact of recent accounting standards | 23. Impact of recent accounting standards Adoption of New Accounting Standards: None. Effect of newly issued but not yet effective accounting standards: In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions to the current guidance on contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements, however the adoption of this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent events | |
Subsequent events | 24. Subsequent events The Company evaluated subsequent events through the time of the filing of its Annual Report on Form 10-K. Other than as disclosed in these consolidated financial statements, the Company is not aware of any significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on its consolidated financial statements. |
Accounting policies (Policies)
Accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting policies | |
Basis of preparation | Basis of preparation: |
Use of estimates | Use of estimates: |
Basis of consolidation | Basis of consolidation: On January 24, 2020, as a result of CW-Holdings' exercise of a call option, CW-Holdings purchased the remaining 49% ownership interest in Aerex for $8,500,000 in cash. After giving effect to this purchase, CW-Holdings owns 100% of the outstanding capital stock of Aerex. On August 11, 2020, CW-Holdings purchased an additional 10% of the ownership of PERC for $900,000 , increasing its ownership of this subsidiary to 61% . |
Foreign currency | Foreign currency: |
Cash and cash equivalents | Cash and cash equivalents: include $8.5 million and $12.7 million, respectively, of certificates of deposits with an original maturity of three months or less. As of December 31, 2020, the Company had deposits in U.S. banks in excess of federally insured limits of approximately $10.3 million. As of December 31, 2020, the Company held cash in foreign bank accounts of approximately $32.8 million. Certain transfers from the Company’s Bahamas bank accounts to Company bank accounts in other countries require the approval of the Central Bank of The Bahamas. As of December 31, 2020, the equivalent United States dollar cash balances for deposits held in The Bahamas were approximately $15.9 million. |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts: Trade accounts receivable also represent our unconditional right, subject only to the passage of time, to receive consideration arising from our performance under contracts with customers. Trade accounts receivable include amounts billed and billable on construction contracts, service and maintenance contracts and contracts for the sale of goods. Billed contract receivables have been invoiced to customers based on contracted amounts. |
Inventory | Inventory: |
Contract assets and liabilities | Contract assets and liabilities : Billing practices for the Company’s contracts are governed by the contract terms of each project based upon costs incurred, achievement of milestones or predetermined schedules. Billings do not necessarily correlate with revenue recognized over time using the direct inputs method of accounting. Contract assets, which include costs and estimated earnings in excess of billings on uncompleted contracts, arise when the Company recognizes revenue for services performed under its construction and manufacturing contracts, but the Company is not yet entitled to bill the customer under the terms of the contract. Contract liabilities, which include billings in excess of costs and estimated earnings on uncompleted contracts, represent the Company's obligation to transfer goods or services to a customer for which the Company has been paid by the customer or for which the Company has billed the customer under the terms of the contract. Revenue for future services reflected in this account are recognized, and the liability is reduced, as the Company subsequently satisfies the performance obligation under the contract. Costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts are typically resolved within one year and are not considered The Company considers retention that is withheld on progress billings as not creating an unconditional right to payment until contractual milestones are reached (typically substantial completion). Accordingly, withheld retention is considered a component of contracts assets and liabilities until finally billed to the customer, when obligations have been satisfied and the right to receipt is subject only to the passage of time. The Company’s contract assets and liabilities are reported in a net asset or liability position on a contract-by-contract basis at the end of each reporting period. The Company classifies contract assets and liabilities related to construction and manufacturing contracts in current assets and current liabilities as they will be liquidated in the normal course of contract completion, although this may require more than one year. |
Property, plant and equipment, net | Property, plant and equipment, net: Buildings 5 to 40 years Plant and equipment 4 to 40 years Distribution system 3 to 40 years Office furniture, fixtures and equipment 3 to 10 years Vehicles 3 to 10 years Leasehold improvements Shorter of 5 years or lease term Lab equipment 5 to 10 years Additions to property, plant and equipment are comprised of the cost of the contracted services, direct labor and materials. Assets under construction are recorded as additions to property, plant and equipment upon completion of the projects. Depreciation commences in the month the asset is placed in service. Interest costs directly attributable to the acquisition and construction of qualifying assets, which are assets that necessarily take a substantial amount of time to be ready for their intended use, are added to the cost of those assets until such time as the assets are substantially ready for use. No interest was capitalized during the years ended December 31, 2020 or 2019. |
Long-lived assets | Long-lived assets: |
Goodwill and intangible assets | Goodwill and intangible assets: For the years ended December 31, 2020 and 2019, the Company estimated the fair value of its reporting units by applying the discounted cash flow method, which relied upon seven-year discrete projections of operating results, working capital and capital expenditures, along with a terminal value subsequent to the discrete period. These seven-year projections were based upon historical and anticipated future results, general economic and market conditions, and considered the impact of planned business and operational strategies. The discount rates for the calculations represented the estimated cost of capital for market participants at the time of each analysis. The Company also estimated the fair value of each of it reporting units for the years ended December 31, 2020 and 2019 by applying the guideline public company method. The Company also estimated the fair value of each of its reporting units for the year ended December 31, 2019 by referencing the market multiples implied by guideline merger and acquisition transactions (the mergers and acquisition method). The Company considered utilizing the mergers and acquisition method for the year ended December 31, 2020 but due to a lack of relevant meaningful mergers and acquisition activity during the year, such method was not utilized for 2020. The Company weighted the fair values estimated for each of its reporting units under each method and summed such weighted fair values to estimate the overall fair value for each reporting unit. The respective weightings the Company applied to each method for the years ended December 31 were as follows: As of December 31, 2020 Method Retail Bulk Services Manufacturing Discounted cash flow 80 % 80 % 80 % 80 % Guideline public company 20 % 20 % 20 % 20 % Mergers and acquisitions — % — % — % — % 100 % 100 % 100 % 100 % As of December 31, 2019 Method Retail Bulk Manufacturing Discounted cash flow 80 % 80 % 80 % Guideline public company 10 % 10 % 10 % Mergers and acquisitions 10 % 10 % 10 % 100 % 100 % 100 % The fair values the Company estimated for its retail, bulk, services and manufacturing reporting units exceeded their carrying amounts by 101%, 49%, 17%, and 31% respectively, as of December 31, 2020. The fair values the Company estimated for its retail and bulk reporting units exceeded their carrying amounts by 74% and 58%, respectively, as of December 31, 2019. The assets and liabilities for the Companys’ services reporting unit consist almost entirely of those for PERC, which was acquired on October 24, 2019, and therefore the Company estimated that the fair value of its services reporting unit closely approximated its carrying value as of December 31, 2019. The Company’s manufacturing reporting unit consists entirely of Aerex and the remaining 49% ownership interest of Aerex was purchased on January 24, 2020 for $8,500,000. The Company considered this purchase, the manufacturing reporting unit’s results of operations for the year ended December 31, 2019, its projected results of operations for the year ending December 31, 2020, and the amount by which its estimated fair value exceeded its carrying amount as of December 31, 2018 to determine that it is more likely than not that the fair value of the manufacturing reporting unit exceeded its carrying amount as of December 31, 2019. On February 11, 2016, the Company acquired 51% ownership interest in Aerex. In connection with this acquisition the Company recorded goodwill of $8,035,211. Aerex’s actual results of operations for the six months in 2016 following the acquisition fell significantly short of the projected results for this period that were included in the cash flow projections the Company utilized to determine the purchase price for Aerex and the fair values of its assets and liabilities. Due to this shortfall in Aerex’s results of operations, the Company tested Aerex’s goodwill for possible impairment as of September 30, 2016 by estimating its fair value using the discounted cash flow method. As a result of this impairment testing, the Company determined that the carrying value of the Aerex goodwill exceeded its fair value and recorded an impairment loss of $1,750,000 for the three months ended September 30, 2016, included in loss on long-lived asset dispositions and impairments, net in the accompanying consolidated statements of income, to reduce the carrying value of this goodwill to $6,285,211. As part of the Company’s annual impairment testing of goodwill performed during the fourth quarter, in 2017 the Company updated its projections for Aerex’s future cash flows, determined that the carrying value of the Aerex goodwill exceeded its fair value, and recorded an impairment loss of $1,400,000 for the three months ended December 31, 2017, which is included in loss on long-lived asset dispositions and impairments, net in the accompanying consolidated statements of income, to further reduce the carrying value of the goodwill to $4,885,211. Approximately 80% and 68% of Aerex’s revenue, and 89% and 68% of Aerex’s gross profit, for the years ended December 31, 2020 and 2019, respectively, were generated from sales to one customer. In October 2020, this customer verbally informed Aerex that, for inventory management purposes, it was suspending its purchases from Aerex following 2020 for a period of approximately one year. This customer has verbally informed Aerex that it presently expects to recommence its purchases from Aerex beginning with the first quarter of 2022. However, the Company can offer no assurances that this customer will recommence its purchases from Aerex at that time. Furthermore, any such future purchases (should they occur) may not generate as much revenue and gross profit as Aerex has historically earned from this customer. The Company is seeking to replace the anticipated loss in revenue and gross profit from this customer by increasing sales of other products that it manufactures to new and existing customers, however, it may not be able to do so. As a result of this anticipated loss of revenue for Aerex, the Company updated its projections for the manufacturing reporting unit’s future cash flows. Such projections assume, in part, that Aerex’s major customer will recommence its purchases from Aerex in 2022 but at a reduced aggregate amount, as compared to 2020 and 2019. Based upon these updated projections, the Company tested its manufacturing reporting unit’s goodwill for possible impairment as of December 31, 2020. As a result of this impairment testing, it determined that the estimated fair value of the manufacturing reporting unit exceeded its carrying value as of December 31, 2020. However, the Company may be required to record an impairment loss in the future to reduce the carrying value of the manufacturing reporting unit’s goodwill should it be determined that Aerex’s future net cash inflows will be less than the Company’s most current expectations. Any such impairment loss could have a material adverse impact on its consolidated financial condition and results of operations. In February 2019, the Company sold its former Belize subsidiary (see Note 8) As a result of this sale, this former subsidiary has been accounted for as discontinued operations in the consolidated financial statements, and bulk segment goodwill of approximately $380,000 as of December 31, 2018 associated with this former subsidiary was reclassified to long-term assets of discontinued operations in the consolidated statements of financial condition. |
Investments | Investments: |
Other assets | Other assets: |
Income taxes | Income taxes: The Company is not presently subject to income taxes in the other countries in which it operates. |
Revenue recognition | Revenue recognition: The following table presents the Company’s revenue disaggregated by revenue source. Year Ended December 31, 2020 2019 Retail revenue $ 22,952,370 $ 26,456,022 Bulk revenue 24,312,546 26,986,108 Services revenue 12,937,859 1,759,446 Manufacturing revenue 12,425,351 13,592,075 Total revenue $ 72,628,126 $ 68,793,651 Retail revenue The Company produces and supplies water to end-users, including residential, commercial and governmental customers in the Cayman Islands under an exclusive retail license issued to Cayman Water by the Cayman Islands government to provide water in two of the three most populated areas on Grand Cayman Island. Customers are billed on a monthly basis based on metered consumption and bills are typically collected within 30 to 35 days after the billing date. Receivables not collected within 45 days subject the customer to disconnection from water service. In 2020 and 2019, bad debts represented less than 1% of the Company’s total retail sales. The Company recognizes revenue from water sales at the time water is supplied to the customer’s premises. The amount of water supplied is determined and invoiced based upon water meter readings performed at the end of each month. All retail water contracts are month-to-month contracts. The Company has elected the “right to invoice” practical expedient for revenue recognition on its retail water sale contracts and recognizes revenue in the amount to which the Company has a right to invoice. Bulk revenue The Company produces and supplies water to government-owned distributors in the Cayman Islands and The Bahamas. OC-Cayman provides bulk water to the Water Authority-Cayman (“WAC”), a government-owned utility and regulatory agency, under two agreements. The WAC in turn distributes such water to properties in Grand Cayman outside of Cayman Water’s retail license area. The Company sells bulk water in The Bahamas through its majority-owned subsidiary, CW-Bahamas, under two agreements with the Water and Sewerage Corporation of The Bahamas (“WSC”), which distributes such water through its own pipeline system to residential, commercial and tourist properties on the Island of New Providence. CW-Bahamas also sold water to a private resort on Bimini through December 18, 2020, which generated revenue of approximately $127,000 and $237,000 for the years ended December 31, 2020 and 2019, respectively. The Company has elected the “right to invoice” practical expedient for revenue recognition on its bulk water sale contracts and recognizes revenue in the amount to which the Company has a right to invoice. Services and Manufacturing revenue The Company provides design, engineering, management, procurement and construction services for desalination infrastructure through DesalCo, which serves customers in the Cayman Islands, The Bahamas and the British Virgin Islands. The Company also develops, builds, sells, operates and manages water, wastewater and water reuse infrastructure through PERC. All of PERC's customers are companies or governmental entities located in the U.S. The Company, through Aerex, is a custom and specialty manufacturer of water treatment-related systems and products applicable to commercial, municipal and industrial water production. Substantially all of Aerex’s customers are U.S. companies. The Company generates services revenue from DesalCo and PERC and generates manufacturing revenue from Aerex. The Company recognizes revenue for its construction and specialized/custom manufacturing contracts The Company has elected the “right to invoice” practical expedient for revenue recognition on its services agreements and recognizes revenue in the amount to which the Company has a right to invoice. Practical Expedients and Exemptions The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed. |
Comparative amounts | Comparative amounts: |
Accounting policies (Tables)
Accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting policies | |
Schedule of Estimated useful lives | Rates are determined based on the estimated useful lives of the assets as follows: Buildings 5 to 40 years Plant and equipment 4 to 40 years Distribution system 3 to 40 years Office furniture, fixtures and equipment 3 to 10 years Vehicles 3 to 10 years Leasehold improvements Shorter of 5 years or lease term Lab equipment 5 to 10 years |
Schedule of Estimated fair value of reporting segment | The respective weightings the Company applied to each method for the years ended December 31 were as follows: As of December 31, 2020 Method Retail Bulk Services Manufacturing Discounted cash flow 80 % 80 % 80 % 80 % Guideline public company 20 % 20 % 20 % 20 % Mergers and acquisitions — % — % — % — % 100 % 100 % 100 % 100 % As of December 31, 2019 Method Retail Bulk Manufacturing Discounted cash flow 80 % 80 % 80 % Guideline public company 10 % 10 % 10 % Mergers and acquisitions 10 % 10 % 10 % 100 % 100 % 100 % |
Schedule of Disaggregation of revenue | The following table presents the Company’s revenue disaggregated by revenue source. Year Ended December 31, 2020 2019 Retail revenue $ 22,952,370 $ 26,456,022 Bulk revenue 24,312,546 26,986,108 Services revenue 12,937,859 1,759,446 Manufacturing revenue 12,425,351 13,592,075 Total revenue $ 72,628,126 $ 68,793,651 |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash and cash equivalents | |
Schedule of Cash and cash equivalents | Cash and cash equivalents are not restricted by the terms of the Company’s bank accounts as to withdrawal or use. As of December 31, 2020 and 2019, the equivalent United States dollars are denominated in the following currencies: December 31, 2020 2019 Bank accounts: United States dollar $ 14,001,264 $ 15,661,140 Cayman Islands dollar 5,650,874 6,690,274 Bahamian dollar 14,863,287 6,353,936 Bermudian dollar 2,832 3,084 34,518,257 28,708,434 Short term deposits: United States dollar 5,796,582 11,100,185 Cayman Islands dollar 2,413,547 1,209,954 Bahamian dollar 1,065,764 1,052,510 9,275,893 13,362,649 Total cash and cash equivalents $ 43,794,150 $ 42,071,083 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounts receivable, net. | |
Schedule of Accounts receivable | December 31, 2020 2019 Trade accounts receivable $ 21,422,782 $ 22,862,706 Receivable from OC-BVI 62,171 10,808 Other accounts receivable 269,133 222,381 21,754,086 23,095,895 Allowance for doubtful accounts (270,110) (142,236) Accounts receivable, net $ 21,483,976 $ 22,953,659 |
Schedule of Allowance for doubtful accounts | The activity for the allowance for doubtful accounts consisted of: December 31, 2020 2019 Opening allowance for doubtful accounts $ 142,236 $ 158,902 Provision for doubtful accounts 129,107 — Accounts written off during the year (1,233) (16,666) Ending allowance for doubtful accounts $ 270,110 $ 142,236 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory | |
Schedule of Inventory | December 31, 2020 2019 Water stock $ 27,938 $ 33,694 Consumables stock 105,540 118,286 Spare parts stock 7,587,542 7,539,953 Total inventory 7,721,020 7,691,933 Less current portion 3,214,178 3,287,555 Inventory (non-current) $ 4,506,842 $ 4,404,378 |
Contracts in progress (Tables)
Contracts in progress (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Contracts in progress | |
Summary of information relative to revenue recognized and amounts billed on contracts in progress | Revenue recognized and amounts billed on contracts in progress are summarized as follows: December 31, 2020 2019 Revenue recognized to date on contracts in progress $ 17,534,449 $ 16,054,699 Amounts billed to date on contracts in progress (17,791,928) (15,078,830) Retainage 312,130 361,556 Net contract asset $ 54,651 $ 1,337,425 The above net balances are reflected in the accompanying consolidated balance sheet as follows: December 31, 2020 2019 Contract assets $ 516,521 $ 1,677,041 Contract liabilities (461,870) (339,616) Net contract asset $ 54,651 $ 1,337,425 |
Property, plant and equipment_2
Property, plant and equipment and construction in progress (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, plant and equipment and construction in progress | |
Schedule of Property, plant and equipment and construction in progress | December 31, 2020 2019 Land $ 3,566,537 $ 3,566,537 Buildings 23,250,843 23,176,106 Plant and equipment 63,734,860 64,840,636 Distribution system 39,149,063 36,538,614 Office furniture, fixtures and equipment 3,079,362 3,038,589 Vehicles 1,999,463 1,582,053 Leasehold improvements 274,230 272,092 Lab equipment 12,456 14,958 135,066,814 133,029,585 Less accumulated depreciation 77,378,830 71,790,833 Property, plant and equipment, net $ 57,687,984 $ 61,238,752 Construction in progress $ 440,384 $ 1,335,597 |
Discontinued operations (Tables
Discontinued operations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued operations. | |
Schedule of financial information for Mexico project development | Summarized financial information for the Mexico project development is as follows: December 31, 2020 2019 Cash $ 154,130 $ 831,586 Prepaid expenses and other current assets 88,978 111,220 Value added taxes receivable 1,267,991 676,250 Property, plant and equipment, net 5,682 10,227 Land and rights of way 21,126,898 24,162,523 Other assets 33,909 3,497,216 Total assets of discontinued operations $ 22,677,588 $ 29,289,022 Total liabilities of discontinued operations $ 190,933 $ 2,858,314 Year Ended December 31, 2020 2019 Revenues $ — $ — Income from operations $ — $ — Net loss from discontinued operations $ 4,902,243 $ 2,333,255 Gain on sale of discontinued operations $ — $ — Depreciation expense $ 4,545 $ 4,545 |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Intangible assets | |
Schedule of Finite-Lived Intangible Assets | December 31, 2020 2019 Cost Non-compete agreements $ 530,000 $ 530,000 Trade names 2,700,000 2,700,000 Certifications/programs 2,000,000 2,000,000 Customer backlogs 460,000 460,000 Customer relationships 2,000,000 2,000,000 Facility management contracts 2,200,000 2,200,000 9,890,000 9,890,000 Accumulated amortization Non-compete agreements (443,889) (320,556) Trade names (560,000) (380,000) Certifications/programs (2,000,000) (2,000,000) Customer backlogs (310,000) (130,000) Customer relationships (2,000,000) (1,958,333) Facility management contracts (427,778) (61,111) (5,741,667) (4,850,000) Intangible assets, net $ 4,148,333 $ 5,040,000 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization of intangible assets for each of the next five years and thereafter is expected to be as follows: 2021 $ 746,667 2022 582,778 2023 546,667 2024 546,667 2025 485,556 Thereafter 1,239,998 $ 4,148,333 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of lease-related assets and liabilities | The following table presents the lease-related assets and liabilities and their respective classification on the consolidated balance sheets: December 31, 2020 2019 ASSETS Current Prepaid expenses and other current assets $ 108,303 $ 33,567 Current assets of discontinued operations — 2,530 Noncurrent Operating lease right-of-use assets 1,329,561 1,811,516 Long-term assets of discontinued operations 33,909 2,627,696 Total lease right-of-use assets $ 1,471,773 $ 4,475,309 LIABILITIES Current Current maturities of operating leases $ 455,788 $ 688,540 Current liabilities of discontinued operations 29,432 67,211 Noncurrent Noncurrent operating leases 982,076 1,156,543 Noncurrent liabilities of discontinued operations 2,499 2,679,932 Total lease liabilities $ 1,469,795 $ 4,592,226 Weighted average remaining lease term: Operating leases 3.4 years 3.5 years Operating leases - discontinued operations 1.1 years 24.0 years Weighted average discount rate: Operating leases 4.15% 4.37% Operating leases - discontinued operations 3.48% 4.68% |
Schedule of Lease, Cost | December 31, 2020 2019 ASSETS Current Prepaid expenses and other current assets $ 108,303 $ 33,567 Current assets of discontinued operations — 2,530 Noncurrent Operating lease right-of-use assets 1,329,561 1,811,516 Long-term assets of discontinued operations 33,909 2,627,696 Total lease right-of-use assets $ 1,471,773 $ 4,475,309 LIABILITIES Current Current maturities of operating leases $ 455,788 $ 688,540 Current liabilities of discontinued operations 29,432 67,211 Noncurrent Noncurrent operating leases 982,076 1,156,543 Noncurrent liabilities of discontinued operations 2,499 2,679,932 Total lease liabilities $ 1,469,795 $ 4,592,226 Weighted average remaining lease term: Operating leases 3.4 years 3.5 years Operating leases - discontinued operations 1.1 years 24.0 years Weighted average discount rate: Operating leases 4.15% 4.37% Operating leases - discontinued operations 3.48% 4.68% |
Schedule of Cash Flow, Supplemental | Supplemental cash flow information related to leases is as follows: Year Ended December 31, 2020 2019 Cash paid for amounts included in measurement of liabilities: Operating cash outflows for operating leases $ 708,095 $ 717,172 Operating cash outflows for operating leases - discontinued operations 127,153 250,833 |
Schedule of future lease payments relating to the Company's operating lease liabilities | Years ending December 31, Total 2021 $ 505,206 2022 402,563 2023 405,113 2024 186,670 2025 43,229 Thereafter — Total future lease payments 1,542,781 Less: imputed interest (104,917) Total lease obligations 1,437,864 Less: current obligations (455,788) Noncurrent lease obligations $ 982,076 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income taxes | |
Schedule of components of income before income taxes | The components of income before income taxes for the years ended December 31, 2020 and 2019 are as follows: Year Ended December 31, 2020 2019 Foreign (not subject to income taxes) $ 6,475,693 $ 13,593,497 Mexico (4,903,988) (2,458,210) United States 2,956,552 2,657,405 4,528,257 13,792,692 Less gain on sale of discontinued operations — (3,621,170) Less discontinued operations 4,902,243 2,333,255 $ 9,430,500 $ 12,504,777 |
Schedule of provision for income taxes deferred tax benefit relating to U.S. operations | The Company’s provision for income taxes for the years ended December 31, 2020 and 2019, which related to U.S. operations, consisted of the following: Year Ended December 31, 2020 2019 Current: Federal $ 191,322 $ 143,567 State 87,630 171,093 Foreign — — Total 278,952 314,660 Deferred: Federal (132,957) (203,031) State (59,271) (45,008) Foreign — — Total (192,228) (248,039) Total provision $ 86,724 $ 66,621 |
Schedule of reconciliation of federal tax rate to the effective rate | A reconciliation of the U.S. statutory federal tax rate to the effective rate for the years ended December 31, 2020 and 2019 is as follows: Year Ended December 31, 2020 2019 U.S. statutory federal rate 21.00 % 21.00 % State taxes, net of federal effect 4.00 % 4.38 % Nontaxable foreign income (17.28) % (19.98) % Research & development tax credit (11.73) % (3.82) % Permanent items (0.67) % (0.87) % Valuation allowance for deferred tax assets 5.60 % (0.18) % 0.92 % 0.53 % |
Schedule of tax effects of significant items net long-term deferred tax assets liability | The tax effects of significant items comprising the Company’s net long-term deferred tax liability as of December 31, 2020 and 2019 were as follows: December 31, 2020 2019 Continuing Operations Deferred tax assets: Research & development tax credits $ 613,003 $ 166,653 Accrued compensation 110,092 — Valuation allowances (496,343) (43,900) 226,752 122,753 Deferred tax liabilities: Property and equipment 252,800 148,707 Intangible assets 1,188,009 1,380,328 1,440,809 1,529,035 Net deferred tax liability $ 1,214,057 $ 1,406,282 Discontinued Operations Deferred tax assets: Operating loss carryforwards - Mexico $ 4,296,453 $ 3,427,295 Land basis difference - Mexico 1,262,159 1,164,365 Start-up costs - Mexico 4,904,337 4,608,990 Valuation allowances (10,462,949) (9,200,650) $ — $ — |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings per share | |
Schedule of computation of basic and diluted EPS | Year Ended December 31, 2020 2019 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders $ 8,613,771 $ 10,888,178 Less: preferred stock dividends (11,740) (11,937) Net income from continuing operations available to common shares in the determination of basic earnings per common share 8,602,031 10,876,241 Total income (loss) from discontinued operations (4,902,243) 1,287,915 Net income available to common shares in the determination of basic earnings per common share $ 3,699,788 $ 12,164,156 Weighted average number of common shares in the determination of basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders 15,119,305 15,025,639 Plus: Weighted average number of preferred shares outstanding during the period 33,814 33,983 Potential dilutive effect of unexercised options and unvested stock grants 70,836 77,454 Weighted average number of shares used for determining diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders 15,223,955 15,137,076 |
Dividends (Tables)
Dividends (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Dividends. | |
Schedule of dividends | 2020 2019 First Quarter $ 0.085 $ 0.085 Second Quarter 0.085 0.085 Third Quarter 0.085 0.085 Fourth Quarter 0.085 0.085 $ 0.34 $ 0.34 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment information | |
Schedule of segment reporting information, by segment | Year Ended December 31, 2020 Retail Bulk Services Manufacturing Total Revenue $ 22,952,370 $ 24,312,546 $ 12,937,859 $ 12,425,351 $ 72,628,126 Cost of revenue 11,080,814 16,959,563 9,698,214 8,121,080 45,859,671 Gross profit 11,871,556 7,352,983 3,239,645 4,304,271 26,768,455 General and administrative expenses 12,879,445 1,260,062 2,834,917 1,460,474 18,434,898 Gain on asset dispositions and impairments, net 2,965 7,213 3,801 18 13,997 Income (loss) from operations $ (1,004,924) $ 6,100,134 $ 408,529 $ 2,843,815 8,347,554 Other income, net 1,082,946 Income before income taxes 9,430,500 Provision for income taxes 86,724 Net income from continuing operations 9,343,776 Income from continuing operations attributable to non-controlling interests 730,005 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 8,613,771 Net loss from discontinued operations (4,902,243) Net income attributable to Consolidated Water Co. Ltd. stockholders $ 3,711,528 Depreciation and amortization expenses for the year ended December 31, 2020 for the retail, bulk, services and manufacturing segments were $2,388,781, $3,869,377, $762,182 and $386,169, respectively. As of December 31, 2020 Retail Bulk Services Manufacturing Total Accounts receivable, net $ 2,444,455 $ 17,022,813 $ 1,420,609 $ 596,099 $ 21,483,976 Inventory, current and non-current $ 2,787,163 $ 3,795,544 $ — $ 1,138,313 $ 7,721,020 Property, plant and equipment, net $ 27,947,545 $ 27,611,567 $ 487,973 $ 1,640,899 $ 57,687,984 Construction in progress $ 305,110 $ 31,737 $ — $ 103,537 $ 440,384 Intangibles, net $ — $ — $ 3,200,555 $ 947,778 $ 4,148,333 Goodwill $ 1,170,511 $ 1,948,875 $ 5,320,416 $ 4,885,211 $ 13,325,013 Total segment assets $ 56,425,159 $ 74,771,798 $ 14,470,322 $ 11,210,685 $ 156,877,964 Assets of discontinued operations $ 22,677,588 Total assets $ 179,555,552 Year Ended December 31, 2019 Retail Bulk Services Manufacturing Total Revenue $ 26,456,022 $ 26,986,108 $ 1,759,446 $ 13,592,075 $ 68,793,651 Cost of revenue 11,611,165 18,606,805 1,215,193 9,086,140 40,519,303 Gross profit 14,844,857 8,379,303 544,253 4,505,935 28,274,348 General and administrative expenses 13,422,821 1,238,296 392,425 1,947,622 17,001,164 Gain on asset dispositions and impairments, net 398,041 47,000 — — 445,041 Income from operations $ 1,820,077 $ 7,188,007 $ 151,828 $ 2,558,313 11,718,225 Other income, net 786,552 Income before income taxes 12,504,777 Provision for income taxes 66,621 Net income from continuing operations 12,438,156 Income from continuing operations attributable to non-controlling interests 1,549,978 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 10,888,178 Net income from discontinued operations 1,287,915 Net income attributable to Consolidated Water Co. Ltd. stockholders $ 12,176,093 Depreciation and amortization expenses for the year ended December 31, 2019 for the retail, bulk, services and manufacturing segments were $2,364,994, $3,795,320, $120,761 and $922,027, respectively. As of December 31, 2019 Retail Bulk Services Manufacturing Total Accounts receivable, net $ 2,891,165 $ 18,883,493 $ 678,119 $ 500,882 $ 22,953,659 Inventory, current and non-current $ 2,668,902 $ 3,628,443 $ — $ 1,394,588 $ 7,691,933 Property, plant and equipment, net $ 29,177,718 $ 30,281,647 $ 158,358 $ 1,621,029 $ 61,238,752 Construction in progress $ 396,214 $ 869,792 $ — $ 69,591 $ 1,335,597 Intangibles, net $ — $ — $ 3,877,222 $ 1,162,778 $ 5,040,000 Goodwill $ 1,170,511 $ 1,948,875 $ 5,320,416 $ 4,885,211 $ 13,325,013 Total segment assets $ 65,554,640 $ 69,423,770 $ 12,895,385 $ 14,854,557 $ 162,728,352 Assets of discontinued operations $ 29,289,022 Total assets $ 192,017,374 |
Schedule of revenues earned by major geographic region | Year ended December 31, 2020 2019 Cayman Islands $ 25,640,169 $ 30,327,139 Bahamas 21,654,153 23,114,860 Indonesia — 131 United States 24,918,527 14,968,868 Revenues earned from management services agreement with OC-BVI 415,277 382,653 $ 72,628,126 $ 68,793,651 Revenues earned from major customers were: Year ended December 31, 2020 2019 Revenue earned from the Water and Sewerage Corporation ("WSC") $ 21,527,487 $ 22,877,741 Percentage of consolidated revenue earned from the WSC 30% 33% Revenue earned from one manufacturing segment customer $ 9,965,041 $ 9,238,476 Percentage of consolidated revenue earned from the one manufacturing segment customer 14% 13% |
Schedule of long-lived assets by geographic areas | December 31, 2020 2019 Cayman Islands $ 28,474,748 $ 29,059,294 The Bahamas 26,975,427 30,245,741 United States 2,237,809 1,933,717 $ 57,687,984 $ 61,238,752 |
Cost of revenues and general _2
Cost of revenues and general and administrative expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cost of revenues and general and administrative expenses | |
Schedule of cost of revenues and general and administrative expenses | Year Ended December 31, 2020 2019 Cost of revenue consist of: Electricity $ 5,389,361 $ 7,438,218 Depreciation 6,202,012 6,046,810 Fuel oil 4,157,393 5,315,676 Employee costs 11,308,833 6,597,755 Maintenance 2,859,262 2,076,501 Retail license royalties 1,489,862 1,701,724 Insurance 1,491,799 1,279,997 Materials 5,786,698 6,151,064 Other 7,174,451 3,911,558 $ 45,859,671 $ 40,519,303 Year Ended December 31, 2020 2019 General and administrative expenses consist of: Employee costs $ 10,025,658 $ 9,335,247 Insurance 1,436,957 866,457 Professional fees 1,549,878 1,178,621 Directors’ fees and expenses 865,555 969,279 Depreciation 133,477 135,272 Amortization of intangible assets 891,667 841,667 Other 3,531,706 3,674,621 $ 18,434,898 $ 17,001,164 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock-based compensation | |
Schedule of significant weighted average assumptions | 2020 2019 Risk free interest rate 0.17 % 2.11 % Expected option life (years) 1.1 1.1 Expected volatility 51.19 % 34.59 % Expected dividend yield 2.42 % 2.44 % |
Schedule of company's stock option activity | A summary of the Company’s stock option activity for the year ended December 31, 2020 is as follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value (1) Outstanding at beginning of period 10,650 $ 13.08 Granted 8,223 10.67 Exercised (835) 10.10 Forfeited/expired (8,008) 11.04 Outstanding as of December 31, 2020 10,030 $ 12.98 2.07 years $ — Exercisable as of December 31, 2020 — $ — — years $ — (1) The intrinsic value of a stock option represents the amount by which the fair value of the underlying stock, measured by reference to the closing price of the common shares of $12.05 on the Nasdaq Global Select Market on December 31, 2020, exceeds the exercise price of the option. |
Schedule of weighted average fair value of options at the date of grant and the intrinsic value | 2020 2019 Options granted with an exercise price below market price on the date of grant: Employees — preferred stock $ 2.70 $ 3.73 Overall weighted average 2.70 3.73 Options granted with an exercise price at market price on the date of grant: Management employees $ — $ — Employees — common stock 2.45 3.23 Overall weighted average 2.45 3.23 Options granted with an exercise price above market price on the date of grant: Management employees $ — $ — Employees — preferred stock — — Overall weighted average — — Total intrinsic value of options exercised $ 3,891 $ 5,857 |
Financial instruments (Tables)
Financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Financial instruments | |
Schedule of Fair value hierarchy for assets and liabilities | The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value as of December 31, 2020 and 2019: December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities: Recurring Net liability arising from put/call options $ — $ — $ 690,000 $ 690,000 December 31, 2019 Level 1 Level 2 Level 3 Total Liabilities: Recurring Net liability arising from put/call options $ — $ — $ 664,000 $ 664,000 |
Schedule of Net liability arising from put/call options | December 31, 2019 Level 1 Level 2 Level 3 Total Liabilities: Recurring Net liability arising from put/call options $ — $ — $ 664,000 $ 664,000 |
Schedule of Net asset arising from put/call options | The activity for the Level 3 asset for the year ended December 31, 2020: Net liability arising from put/call options Balance as of December 31, 2019 $ 664,000 Unrealized loss 26,000 Balance as of December 31, 2020 $ 690,000 |
Acquisition of PERC (Tables)
Acquisition of PERC (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition of PERC | |
Summary of purchase price for PERC | Cash consideration Purchase price (excluding working capital) $ 4,088,817 Cash acquired (941,379) Total cash consideration $ 3,147,438 |
Summary of estimated fair values of the assets and liabilities assumed at the acquisition date | Financial assets $ 1,371,532 Contract assets 20,854 Property, plant and equipment 86,287 Identifiable intangible assets 3,990,000 Deferred tax liability (1,117,200) Accounts payable and accrued liabilities (1,260,722) Working capital adjustment payable (23,467) Deferred revenue (117,636) Contract liabilities (760,992) Net liability arising from put/call options (744,000) Total identifiable net assets 1,444,656 Non-controlling interest in PERC (3,617,634) Goodwill 5,320,416 $ 3,147,438 |
Summary of components of identifiable intangible assets assumed at the acquisition date | Amount Useful life Non-compete agreement $ 130,000 3 years Trade name 1,300,000 15 years Customer backlog 360,000 2 years Facility management contracts 2,200,000 6 years $ 3,990,000 |
Summary of results of operations of PERC included in the Company's results of operations | Revenue $ 1,376,793 Gross profit 407,604 Amortization of intangibles, net of tax benefit (81,200) Net income 37,924 |
Summary of pro forma financial information | December 31, 2019 Revenue $ 77,615,958 Cost of revenue 47,162,564 Gross profit 30,453,394 General and administrative expenses 21,620,106 Gain (loss) on asset dispositions and impairments, net 447,681 Income from operations 9,280,969 Other income (expense), net 805,093 Income before income taxes 10,086,062 Provision for (benefit from) income taxes 72,814 Net income from continuing operations 10,013,248 Income from continuing operations attributable to non-controlling interests 1,505,068 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 8,508,180 Gain on sale of discontinued operations 3,621,170 Net income from discontinued operations — Total income from discontinued operations 3,621,170 Net income attributable to Consolidated Water Co. Ltd. stockholders $ 12,129,350 Basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders Continuing operations $ 0.57 Discontinued operations 0.24 Basic earnings per share $ 0.81 Diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders Continuing operations $ 0.56 Discontinued operations 0.24 Diluted earnings per share $ 0.80 Weighted average number of common shares used in the determination of: Basic earnings per share 15,025,639 Diluted earnings per share 15,137,076 |
Supplemental disclosure of ca_2
Supplemental disclosure of cash flow information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental disclosure of cash flow information | |
Schedule of Supplemental disclosure of cash flow information | Year Ended December 31, 2020 2019 Interest paid in cash $ 9,669 $ 1,332 Non-cash transactions: Dividends declared but not paid $ 1,289,854 $ 1,282,086 Transfers from inventory to property, plant and equipment and construction in progress $ 73,464 $ 443,018 Transfers from construction in progress to property, plant and equipment $ 1,653,501 $ 7,755,375 Right-of-use assets obtained in exchange for new operating lease liabilities $ 299,992 $ 2,429,305 Purchase of equipment through issuance of long term debt $ 122,292 $ 78,899 |
Accounting policies - Basis of
Accounting policies - Basis of consolidation and Foreign currency (Details) - USD ($) | Aug. 11, 2020 | Jan. 24, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Foreign Currency Transaction Gain (Loss), before Tax [Abstract] | ||||
Foreign Currency Transaction Gain (Loss), before Tax | $ 68,818 | $ 71,923 | ||
Aerex | ||||
Ownership interest acquired | 49.00% | |||
Ownership interest held | 100.00% | |||
Cash | $ 8,500,000 | |||
PERC Water Corporation | ||||
Ownership interest acquired | 10.00% | |||
Ownership interest held | 61.00% | |||
Cash | $ 900,000 |
Accounting policies - Cash and
Accounting policies - Cash and cash equivalents (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||
Cash Equivalents, at Carrying Value | $ 9,275,893 | $ 13,362,649 |
Cash, Uninsured Amount | 10,300,000 | |
Cash And Restricted Cash Equivalents Held In Foreign Bank | 32,800,000 | |
Bahamas [Member] | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||
Deposits held in foreign bank | 15,900,000 | |
Certificates of Deposit [Member] | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||
Cash Equivalents, at Carrying Value | $ 8,500,000 | $ 12,700,000 |
Accounting policies - Property,
Accounting policies - Property, plant and equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Building [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 40 years |
Building [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Plant And Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 40 years |
Plant And Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 4 years |
Distribution Systems [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 40 years |
Distribution Systems [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Office furniture, fixtures and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 10 years |
Office furniture, fixtures and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 10 years |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment, Estimated Useful Lives | Shorter of 5 years or lease term |
Lab equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 10 years |
Lab equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Accounting policies - Weighted
Accounting policies - Weighted the fair values estimated (Details) | Jan. 24, 2020USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2020USD ($)customer | Dec. 31, 2019USD ($)customer | Jan. 31, 2020 | Dec. 31, 2018USD ($) | Feb. 11, 2016USD ($) |
Goodwill | $ 13,325,013 | $ 13,325,013 | ||||||
Retail [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 100.00% | 100.00% | ||||||
Estimated Fair Value Carrying Amount Exceeded Percentage | 101 | 74 | ||||||
Goodwill | $ 1,170,511 | $ 1,170,511 | ||||||
Bulk [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 100.00% | 100.00% | ||||||
Estimated Fair Value Carrying Amount Exceeded Percentage | 49 | 58 | ||||||
Goodwill | $ 1,948,875 | $ 1,948,875 | ||||||
Services [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 100.00% | |||||||
Estimated Fair Value Carrying Amount Exceeded Percentage | 17 | |||||||
Goodwill | $ 5,320,416 | $ 5,320,416 | ||||||
Manufacturing Units [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 100.00% | 100.00% | ||||||
Estimated Fair Value Carrying Amount Exceeded Percentage | 31 | |||||||
Goodwill | $ 4,885,211 | $ 4,885,211 | ||||||
Discounted Cash Flow Method [Member] | Retail [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 80.00% | 80.00% | ||||||
Discounted Cash Flow Method [Member] | Bulk [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 80.00% | 80.00% | ||||||
Discounted Cash Flow Method [Member] | Services [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 80.00% | |||||||
Discounted Cash Flow Method [Member] | Manufacturing Units [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 80.00% | 80.00% | ||||||
Guideline Public Company Method [Member] | Retail [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 20.00% | 10.00% | ||||||
Guideline Public Company Method [Member] | Bulk [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 20.00% | 10.00% | ||||||
Guideline Public Company Method [Member] | Services [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 20.00% | |||||||
Guideline Public Company Method [Member] | Manufacturing Units [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 20.00% | 10.00% | ||||||
Mergers And Acquisitions Method [Member] | Retail [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 10.00% | |||||||
Mergers And Acquisitions Method [Member] | Bulk [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 10.00% | |||||||
Mergers And Acquisitions Method [Member] | Manufacturing Units [Member] | ||||||||
Estimated Fair Value Percentage Segment Reporting Information | 10.00% | |||||||
Aerex | ||||||||
Ownership interest acquired | 49.00% | 49.00% | 51.00% | |||||
Amount of remaining ownership purchased | $ 8,500,000 | |||||||
Goodwill | $ 4,885,211 | $ 6,285,211 | $ 8,035,211 | |||||
Impairment of goodwill | $ 1,400,000 | $ 1,750,000 | ||||||
Number of customers | customer | 1 | 1 | ||||||
Aerex | Revenue Benchmark [Member] | ||||||||
Percentage of total | 80.00% | 68.00% | ||||||
Aerex | Gross Profit [Member] | ||||||||
Percentage of total | 89.00% | 68.00% | ||||||
CW Belize [Member] | ||||||||
Disposal Group, Including Discontinued Operation, Goodwill, Noncurrent | $ 380,000 |
Accounting policies - Investmen
Accounting policies - Investments and Other assets (Details) gal in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($)gal | Dec. 31, 2019USD ($) | |
Criteria for recognizing investment at cost | Investments where the Company does not exercise significant influence over the operating and financial policies of the investee and holds less than 20% of the voting stock are recorded at cost. | |
Equity Method Investment, Additional Information | The Company uses the equity method of accounting for investments in common stock where the Company holds 20% to 50% of the voting stock of the investee and has significant influence over its operating and financial policies but does not meet the criteria for consolidation. | |
Accumulated Amortization of Other Deferred Costs | $ 2,500,000 | $ 2,400,000 |
Amortization of Other Deferred Charges | $ 179,353 | 179,353 |
Amount required to reduce the amount of water lost by the public water distribution system | gal | 438 | |
Capitalized Engineering Labor and Materials Cost [Member] | ||
Other Assets | $ 3,500,000 | $ 3,500,000 |
Accounting policies - Disaggreg
Accounting policies - Disaggregated revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total Revenue | $ 72,628,126 | $ 68,793,651 |
Contracts in progress | ||
Number of days after consumption billings are considered past due | 45 days | |
Bahamas [Member] | ||
Total Revenue | $ 21,654,153 | $ 23,114,860 |
Minimum [Member] | ||
Contracts in progress | ||
Number of days after consumption billings are collected | 30 days | |
Maximum [Member] | ||
Contracts in progress | ||
Number of days after consumption billings are collected | 35 days | |
Percentage Of Bad Debts | 1.00% | 1.00% |
Retail revenue [Member] | ||
Total Revenue | $ 22,952,370 | $ 26,456,022 |
Bulk revenue [Member] | ||
Total Revenue | 24,312,546 | 26,986,108 |
Services revenue [Member] | ||
Total Revenue | 12,937,859 | 1,759,446 |
Manufacturing revenue [Member] | ||
Total Revenue | $ 12,425,351 | $ 13,592,075 |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents [Line Items] | ||
Bank accounts | $ 34,518,257 | $ 28,708,434 |
Short term deposits | 9,275,893 | 13,362,649 |
Cash and cash equivalents at end of period | 43,794,150 | 42,071,083 |
United States dollar [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Bank accounts | 14,001,264 | 15,661,140 |
Short term deposits | 5,796,582 | 11,100,185 |
Cayman Islands dollar [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Bank accounts | 5,650,874 | 6,690,274 |
Short term deposits | 2,413,547 | 1,209,954 |
Bahamian dollar [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Bank accounts | 14,863,287 | 6,353,936 |
Short term deposits | 1,065,764 | 1,052,510 |
Bermudian dollar [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Bank accounts | $ 2,832 | $ 3,084 |
Accounts receivable, net (Detai
Accounts receivable, net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts receivable, net. | |||
Trade accounts receivable | $ 21,422,782 | $ 22,862,706 | |
Receivable from OC-BVI | 62,171 | 10,808 | |
Other accounts receivable | 269,133 | 222,381 | |
Accounts Receivable, Gross, Current | 21,754,086 | 23,095,895 | |
Allowance for doubtful accounts | (270,110) | (142,236) | $ (158,902) |
Accounts receivable, net | $ 21,483,976 | $ 22,953,659 |
Accounts receivable, net - Allo
Accounts receivable, net - Allowance for doubtful accounts (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts receivable, net. | ||
Opening allowance for doubtful accounts | $ 142,236 | $ 158,902 |
Provision for doubtful accounts | 129,107 | 0 |
Accounts written off during the year | (1,233) | (16,666) |
Ending allowance for doubtful accounts | $ 270,110 | $ 142,236 |
Inventory (Details)
Inventory (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory [Line Items] | ||
Total inventory | $ 7,721,020 | $ 7,691,933 |
Less current portion | 3,214,178 | 3,287,555 |
Inventory (non-current) | 4,506,842 | 4,404,378 |
Water stock [Member] | ||
Inventory [Line Items] | ||
Total inventory | 27,938 | 33,694 |
Consumables stock [Member] | ||
Inventory [Line Items] | ||
Total inventory | 105,540 | 118,286 |
Spare parts stock [Member] | ||
Inventory [Line Items] | ||
Total inventory | $ 7,587,542 | $ 7,539,953 |
Contracts in progress (Details)
Contracts in progress (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Contracts in progress | ||
Revenues recognized to date on contracts in process | $ 17,534,449 | $ 16,054,699 |
Amounts billed to date on contracts in process | (17,791,928) | (15,078,830) |
Retainage | 312,130 | 361,556 |
Net contract asset | 54,651 | 1,337,425 |
Contract assets | 516,521 | 1,677,041 |
Contract liabilities | $ (461,870) | $ (339,616) |
Contracts in progress - Narrati
Contracts in progress - Narratives (Details) $ in Millions | Dec. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-12-31 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-12-31 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 1.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-12-31 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 0.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period |
Property, plant and equipment_3
Property, plant and equipment and construction in progress (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 135,066,814 | $ 133,029,585 |
Less accumulated depreciation | 77,378,830 | 71,790,833 |
Property, Plant and Equipment, Net, Total | 57,687,984 | 61,238,752 |
Construction in progress | 440,384 | 1,335,597 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 3,566,537 | 3,566,537 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 23,250,843 | 23,176,106 |
Plant And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 63,734,860 | 64,840,636 |
Distribution Systems [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 39,149,063 | 36,538,614 |
Office furniture, fixtures and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 3,079,362 | 3,038,589 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,999,463 | 1,582,053 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 274,230 | 272,092 |
Lab equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 12,456 | $ 14,958 |
Property, plant and equipment_4
Property, plant and equipment and construction in progress - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, plant and equipment and construction in progress | ||
Capital Commitments | $ 29,145 | |
Construction In Progress Placed In Service | 1,653,501 | $ 7,755,375 |
Depreciation | $ 6,335,489 | $ 5,510,336 |
Discontinued operations - Mexic
Discontinued operations - Mexico project development- Narratives (Details) $ / shares in Units, gal in Millions | Aug. 28, 2020USD ($) | Aug. 28, 2020MXN ($) | Jun. 29, 2020 | Aug. 22, 2016gal | Feb. 28, 2018 | Nov. 30, 2015gal | Feb. 28, 2014USD ($) | May 31, 2013USD ($)$ / shares | Feb. 29, 2012USD ($) | May 31, 2010gal | Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2015gal | Dec. 31, 2020USD ($)ha | Dec. 31, 2018 | Jan. 31, 2018 |
Schedule of Investments [Line Items] | ||||||||||||||||
Period Required To Operate And Maintain Plant And Aqueduct | 37 years | |||||||||||||||
Subscription Agreement Description | The Agreement calls for NSC to retain a minimum of 25% of the equity in AdR. One or more affiliates of Greenfield SPV VII, S.A.P.I. de C.V. (“Greenfield”), a Mexico company managed by an affiliate of a leading U.S. asset manager, would acquire a minimum of 55% of the equity of AdR. The Agreement also provided Suez MA with the option to purchase 20% of the equity of AdR. If Suez MA did not exercise this option, NSC would retain 35% of the equity of AdR and Greenfield will acquire 65% of the equity of AdR. The Agreement became effective when the certain conditions precedent related to the Project were met. The aggregate investment to be made by the equity partners in the Project, in the form of equity and subordinated shareholder loans, is presently estimated at approximately 20% of the total cost of Phase 1 of the Project. | |||||||||||||||
Number of days to submit list of non-recoverable expenses made | 20 days | |||||||||||||||
Impairment loss on long-lived assets | $ (3,000,000) | |||||||||||||||
Adjustment to reduce operating lease right of use assets | 2,600,000 | $ 2,600,000 | ||||||||||||||
Adjustment to reduce operating lease liabilities | $ 2,200,000 | 2,200,000 | ||||||||||||||
Payments For Option Exercised | $ 1,000,000 | |||||||||||||||
Share Price | $ / shares | $ 1 | |||||||||||||||
Aguas de Rosarito S.A.P.I. de C.V [Member] | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Equity Method Investment, Ownership Percentage | 50.00% | |||||||||||||||
Option agreement [Member] | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Payments To Enter Option Agreement | $ 300,000 | |||||||||||||||
NSC Agua [Member] | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 50.00% | |||||||||||||||
Total Percentage Of Ownership Interest In An Acquired Company | 99.99% | |||||||||||||||
Seawater Reverse Osmosis Desalination Plant Per Day Processing Capacity | gal | 100 | 100 | ||||||||||||||
Area of Land | ha | 20.1 | |||||||||||||||
Land | $ 21,100,000 | |||||||||||||||
Equity Method Investment, Ownership Percentage | 50.00% | |||||||||||||||
Period in which construction must be completed | 36 months | |||||||||||||||
Payments for land and rights of way held for development | $ 3,000,000 | |||||||||||||||
Amount of non-recoverable expenses | $ 51,144,525 | $ 137,333,114 | ||||||||||||||
Payments For Option Exercised | $ 1,000,000 | |||||||||||||||
Percentage of Voting Interest Acquired through Option Agreement | 25.00% | 25.00% | ||||||||||||||
NSC Agua [Member] | Aguas de Rosarito S.A.P.I. de C.V [Member] | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Equity Method Investment, Ownership Percentage | 0.40% | 99.60% | ||||||||||||||
NSC Agua [Member] | First Phase [Member] | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Seawater Reverse Osmosis Desalination Plant Per Day Processing Capacity | gal | 50 | 50 | 50 | |||||||||||||
NSC Agua [Member] | Second Phase [Member] | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Seawater Reverse Osmosis Desalination Plant Per Day Processing Capacity | gal | 50 | 50 | 50 | |||||||||||||
NSC Agua [Member] | Option agreement [Member] | ||||||||||||||||
Schedule of Investments [Line Items] | ||||||||||||||||
Total Voting Interest Percentage After Conversion Of Loan | 99.99% | 99.99% | ||||||||||||||
Repayment of inter-company loan payable | $ 5,700,000 | |||||||||||||||
Option Agreement Expiration Date | Feb. 7, 2014 |
Discontinued operations - Mex_2
Discontinued operations - Mexico project development (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total assets of discontinued operations | $ 22,677,588 | $ 29,289,022 |
Discontinued Operations | Mexico Project Development | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash | 154,130 | 831,586 |
Prepaid expenses and other current assets | 88,978 | 111,220 |
Value added taxes receivable | 1,267,991 | 676,250 |
Property, plant and equipment, net | 5,682 | 10,227 |
Land and rights of way | 21,126,898 | 24,162,523 |
Other assets | 33,909 | 3,497,216 |
Total assets of discontinued operations | 22,677,588 | 29,289,022 |
Total liabilities of discontinued operations | $ 190,933 | $ 2,858,314 |
Discontinued operations - Finan
Discontinued operations - Financial Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net loss from discontinued operations | $ 2,333,255 | |
Discontinued Operations | Mexico Project Development | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net loss from discontinued operations | $ 4,902,243 | 2,333,255 |
Depreciation expense | $ 4,545 | $ 4,545 |
Discontinued operations - CW-Be
Discontinued operations - CW-Belize - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2019 | Feb. 14, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Gain on sale of discontinued operations | $ 0 | $ 3,621,170 | ||
CW Belize [Member] | ||||
Disposal Group, Including Discontinued Operation, Consideration | $ 7,000,000 | |||
Proceeds from Divestiture of Businesses | $ 265,000 | 6,735,000 | ||
Supplemental Deferred Purchase Price | $ 265,000 | |||
Gain on sale of discontinued operations | $ 3,621,170 |
Discontinued operations - CW-Ba
Discontinued operations - CW-Bali - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ (4,902,243) | $ 1,287,915 | |
Consolidated Water Bali [Member] | |||
Sale of assets | $ 365,000 | ||
Sale of stock | $ 25,000 |
Intangible assets - Costs and a
Intangible assets - Costs and accumulated amortization (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Cost | ||
Finite-Lived Intangible Assets, Gross | $ 9,890,000 | $ 9,890,000 |
Accumulated amortization | ||
Finite-Lived Intangible Assets, Accumulated Amortization | (5,741,667) | (4,850,000) |
Intangible assets, net | 4,148,333 | 5,040,000 |
Non-compete agreements | ||
Cost | ||
Finite-Lived Intangible Assets, Gross | 530,000 | 530,000 |
Accumulated amortization | ||
Finite-Lived Intangible Assets, Accumulated Amortization | (443,889) | (320,556) |
Trade names | ||
Cost | ||
Finite-Lived Intangible Assets, Gross | 2,700,000 | 2,700,000 |
Accumulated amortization | ||
Finite-Lived Intangible Assets, Accumulated Amortization | (560,000) | (380,000) |
Certifications/programs | ||
Cost | ||
Finite-Lived Intangible Assets, Gross | 2,000,000 | 2,000,000 |
Accumulated amortization | ||
Finite-Lived Intangible Assets, Accumulated Amortization | (2,000,000) | (2,000,000) |
Customer backlogs | ||
Cost | ||
Finite-Lived Intangible Assets, Gross | 460,000 | 460,000 |
Accumulated amortization | ||
Finite-Lived Intangible Assets, Accumulated Amortization | (310,000) | (130,000) |
Customer relationships | ||
Cost | ||
Finite-Lived Intangible Assets, Gross | 2,000,000 | 2,000,000 |
Accumulated amortization | ||
Finite-Lived Intangible Assets, Accumulated Amortization | (2,000,000) | (1,958,333) |
Facility management contracts | ||
Cost | ||
Finite-Lived Intangible Assets, Gross | 2,200,000 | 2,200,000 |
Accumulated amortization | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ (427,778) | $ (61,111) |
Intangible assets - Amortizatio
Intangible assets - Amortization of intangible assets (Details) | Dec. 31, 2020USD ($) |
Intangible assets | |
2021 | $ 746,667 |
2022 | 582,778 |
2023 | 546,667 |
2024 | 546,667 |
2025 | 485,556 |
Thereafter | 1,239,998 |
Finite Lived Intangible Assets Net | $ 4,148,333 |
Intangible assets (Details)
Intangible assets (Details) - USD ($) | Oct. 24, 2019 | Feb. 11, 2016 | Oct. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2020 | Jan. 31, 2020 | Jan. 24, 2020 |
Finite-Lived Intangible Assets [Line Items] | |||||||||
Amortization of Intangible Assets | $ 891,667 | $ 841,667 | |||||||
Aerex | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 51.00% | 49.00% | 49.00% | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 5,900,000 | ||||||||
Aerex | Non-compete agreements | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years | ||||||||
Aerex | Certification Marks [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | ||||||||
Aerex | Customer-Related Intangible Assets [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 1 year | ||||||||
Aerex | Customer relationships | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years | ||||||||
PERC Water Corporation | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 51.00% | 51.00% | 61.00% | ||||||
Amortization of Intangible Assets | $ (81,200) | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 3,990,000 | ||||||||
Percentage of additional voting equity | 10.00% | ||||||||
PERC Water Corporation | Non-compete agreements | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | 3 years | |||||||
PERC Water Corporation | Customer-Related Intangible Assets [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years | ||||||||
PERC Water Corporation | Customer relationships | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years | ||||||||
Trade name | Aerex | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years | ||||||||
Trade name | PERC Water Corporation | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years |
Leases - Lease assets and liabi
Leases - Lease assets and liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current | ||
Prepaid expenses and other current assets | $ 108,303 | $ 33,567 |
Current assets of discontinued operations | 2,530 | |
Noncurrent | ||
Operating lease right-of-use assets | 1,329,561 | 1,811,516 |
Long-term assets of discontinued operations | 33,909 | 2,627,696 |
Total lease right-of-use assets | 1,471,773 | 4,475,309 |
Current | ||
Current maturities of operating leases | 455,788 | 688,540 |
Current liabilities of discontinued operations | 29,432 | 67,211 |
Noncurrent | ||
Noncurrent operating leases | 982,076 | 1,156,543 |
Noncurrent liabilities of discontinued operations | 2,499 | 2,679,932 |
Total lease obligations | $ 1,469,795 | $ 4,592,226 |
Operating leases, weighted average remaining lease term | 3 years 4 months 24 days | 3 years 6 months |
Operating leases, weighted average discount rate | 4.15% | 4.37% |
Discontinued Operations | ||
Noncurrent | ||
Operating leases, weighted average remaining lease term | 1 year 1 month 6 days | 24 years |
Operating leases, weighted average discount rate | 3.48% | 4.68% |
Leases - Components of lease co
Leases - Components of lease cost (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Operating lease costs | $ 773,756 | $ 563,358 |
Short-term lease costs | 5,518 | 16,469 |
Lease costs - discontinued operations | 127,983 | 234,045 |
Total lease costs | $ 907,257 | $ 813,872 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Operating cash outflows for operating leases | $ 708,095 | $ 717,172 |
Operating cash flows from operating leases - discontinued operations | $ 127,153 | $ 250,833 |
Leases - Future lease payments
Leases - Future lease payments (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases | ||
2021 | $ 505,206 | |
2022 | 402,563 | |
2023 | 405,113 | |
2024 | 186,670 | |
2025 | 43,229 | |
Total future lease payments | 1,542,781 | |
Less: imputed interest | (104,917) | |
Total lease obligations | 1,437,864 | |
Less: current obligations | (455,788) | $ (688,540) |
Noncurrent lease obligations | $ 982,076 | $ 1,156,543 |
Leases - Additional Information
Leases - Additional Information (Details) | Dec. 31, 2020 |
Aguas de Rosarito S.A.P.I. de C.V [Member] | |
Lessee, Operating Lease, Renewal Term | 20 years |
Income taxes - Components of in
Income taxes - Components of income before income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income taxes | ||
Foreign (not subject to income taxes) | $ 6,475,693 | $ 13,593,497 |
Mexico | (4,903,988) | (2,458,210) |
United States | 2,956,552 | 2,657,405 |
Income before income taxes | 4,528,257 | 13,792,692 |
Less gain on sale of discontinued operations | 0 | (3,621,170) |
Less discontinued operations | 2,333,255 | |
Income before income taxes | $ 9,430,500 | $ 12,504,777 |
Income taxes - Provision for in
Income taxes - Provision for income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | ||
Federal | $ 191,322 | $ 143,567 |
State | 87,630 | 171,093 |
Total | 278,952 | 314,660 |
Deferred: | ||
Federal | (132,957) | (203,031) |
State | (59,271) | (45,008) |
Total | (192,228) | (248,039) |
Total provision | $ 86,724 | $ 66,621 |
Income taxes - Reconciliation o
Income taxes - Reconciliation of federal tax rate to the effective rate (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income taxes | ||
U.S. statutory federal rate | 21.00% | 21.00% |
State taxes, net of federal effect | 4.00% | 4.38% |
Nontaxable foreign income | (17.28%) | (19.98%) |
Research & Development Tax Credit | (11.73%) | (3.82%) |
Permanent items | (0.67%) | (0.87%) |
Valuation allowance for deferred tax assets | 5.60% | (0.18%) |
Effective Income Tax Rate Reconciliation, Percent | 0.92% | 0.53% |
Income taxes - Net long-term de
Income taxes - Net long-term deferred tax liability (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Research & development tax credits | $ 613,003 | $ 166,653 |
Accrued compensation | 110,092 | 0 |
Valuation allowances | (496,343) | (43,900) |
Deferred Tax Assets, Net of Valuation Allowance | 226,752 | 122,753 |
Deferred tax liabilities: | ||
Property and equipment | 252,800 | 148,707 |
Intangible assets | 1,188,009 | 1,380,328 |
Deferred Tax Liabilities, Gross | 1,440,809 | 1,529,035 |
Net deferred tax liability | 1,214,057 | 1,406,282 |
Discontinued Operations | ||
Deferred tax assets: | ||
Operating loss carryforwards - Mexico | 4,296,453 | 3,427,295 |
Land basis difference - Mexico | 1,262,159 | 1,164,365 |
Start-up costs - Mexico | 4,904,337 | 4,608,990 |
Valuation allowances | (10,462,949) | (9,200,650) |
Deferred Tax Assets, Net of Valuation Allowance | $ 0 | $ 0 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings per share | ||
Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | $ 8,613,771 | $ 10,888,178 |
Less: preferred stock dividends | (11,740) | (11,937) |
Net income from continuing operations available to common shares in the determination of basic earnings per common share | 8,602,031 | 10,876,241 |
Total income (loss) from discontinued operations | (4,902,243) | 1,287,915 |
Net income available to common shares in the determination of basic earnings per common share | $ 3,699,788 | $ 12,164,156 |
Weighted average number of common shares in the determination of basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders (in shares) | 15,119,305 | 15,025,639 |
Weighted average number of preferred shares outstanding during the period (in shares) | 33,814 | 33,983 |
Potential dilutive effect of unexercised options and unvested stock grants | 70,836 | 77,454 |
Weighted average number of shares used for determining diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders | 15,223,955 | 15,137,076 |
Dividends (Details)
Dividends (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Dividends. | ||||||||||
Dividends Per Share Declared | $ 0.085 | $ 0.085 | $ 0.085 | $ 0.085 | $ 0.085 | $ 0.085 | $ 0.085 | $ 0.085 | $ 0.34 | $ 0.34 |
Segment information (Details)
Segment information (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of Reportable Segments | segment | 4 | |
Revenue | $ 72,628,126 | $ 68,793,651 |
Cost of revenue | 45,859,671 | 40,519,303 |
Gross profit | 26,768,455 | 28,274,348 |
General and administrative expenses | 18,434,898 | 17,001,164 |
Gain on asset dispositions and impairments, net | 13,997 | 445,041 |
Income from operations | 8,347,554 | 11,718,225 |
Other expense, net | 1,082,946 | 786,552 |
Income before income taxes | 9,430,500 | 12,504,777 |
Benefit for income taxes | 86,724 | 66,621 |
Net income from continuing operations | 9,343,776 | 12,438,156 |
Income from continuing operations attributable to non-controlling interests | 730,005 | 1,549,978 |
Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | 8,613,771 | 10,888,178 |
Net income from discontinued operations | (4,902,243) | 1,287,915 |
Net income attributable to Consolidated Water Co. Ltd. stockholders | 3,711,528 | 12,176,093 |
Accounts receivable, net | 21,483,976 | 22,953,659 |
Inventory, current and non-current | 7,721,020 | 7,691,933 |
Property, plant and equipment, net | 57,687,984 | 61,238,752 |
Construction in progress | 440,384 | 1,335,597 |
Intangibles, net | 4,148,333 | 5,040,000 |
Goodwill | 13,325,013 | 13,325,013 |
Total segment assets | 156,877,964 | 162,728,352 |
Assets of discontinued operations | 22,677,588 | 29,289,022 |
Total assets | 179,555,552 | 192,017,374 |
Retail [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 22,952,370 | 26,456,022 |
Cost of revenue | 11,080,814 | 11,611,165 |
Gross profit | 11,871,556 | 14,844,857 |
General and administrative expenses | 12,879,445 | 13,422,821 |
Gain on asset dispositions and impairments, net | 2,965 | 398,041 |
Income from operations | (1,004,924) | 1,820,077 |
Accounts receivable, net | 2,444,455 | 2,891,165 |
Inventory, current and non-current | 2,787,163 | 2,668,902 |
Property, plant and equipment, net | 27,947,545 | 29,177,718 |
Construction in progress | 305,110 | 396,214 |
Goodwill | 1,170,511 | 1,170,511 |
Total segment assets | 56,425,159 | 65,554,640 |
Bulk [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 24,312,546 | 26,986,108 |
Cost of revenue | 16,959,563 | 18,606,805 |
Gross profit | 7,352,983 | 8,379,303 |
General and administrative expenses | 1,260,062 | 1,238,296 |
Gain on asset dispositions and impairments, net | 7,213 | 47,000 |
Income from operations | 6,100,134 | 7,188,007 |
Accounts receivable, net | 17,022,813 | 18,883,493 |
Inventory, current and non-current | 3,795,544 | 3,628,443 |
Property, plant and equipment, net | 27,611,567 | 30,281,647 |
Construction in progress | 31,737 | 869,792 |
Goodwill | 1,948,875 | 1,948,875 |
Total segment assets | 74,771,798 | 69,423,770 |
Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 12,937,859 | 1,759,446 |
Cost of revenue | 9,698,214 | 1,215,193 |
Gross profit | 3,239,645 | 544,253 |
General and administrative expenses | 2,834,917 | 392,425 |
Gain on asset dispositions and impairments, net | 3,801 | |
Income from operations | 408,529 | 151,828 |
Accounts receivable, net | 1,420,609 | 678,119 |
Property, plant and equipment, net | 487,973 | 158,358 |
Intangibles, net | 3,200,555 | 3,877,222 |
Goodwill | 5,320,416 | 5,320,416 |
Total segment assets | 14,470,322 | 12,895,385 |
Manufacturing Units [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 12,425,351 | 13,592,075 |
Cost of revenue | 8,121,080 | 9,086,140 |
Gross profit | 4,304,271 | 4,505,935 |
General and administrative expenses | 1,460,474 | 1,947,622 |
Gain on asset dispositions and impairments, net | 18 | |
Income from operations | 2,843,815 | 2,558,313 |
Accounts receivable, net | 596,099 | 500,882 |
Inventory, current and non-current | 1,138,313 | 1,394,588 |
Property, plant and equipment, net | 1,640,899 | 1,621,029 |
Construction in progress | 103,537 | 69,591 |
Intangibles, net | 947,778 | 1,162,778 |
Goodwill | 4,885,211 | 4,885,211 |
Total segment assets | $ 11,210,685 | $ 14,854,557 |
Segment information - Revenues
Segment information - Revenues earned by major geographic region and major customer (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 72,628,126 | $ 68,793,651 |
Cayman Island [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 25,640,169 | 30,327,139 |
Bahamas [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 21,654,153 | 23,114,860 |
Indonesia [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 131 | |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 24,918,527 | 14,968,868 |
Revenues earned from management services agreement with OC-BVI [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 415,277 | 382,653 |
Water and Sewerage Corporation [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 21,527,487 | $ 22,877,741 |
Percentage of consolidated revenues | 30.00% | 33.00% |
One Customer [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 9,965,041 | $ 9,238,476 |
Percentage of consolidated revenues | 14.00% | 13.00% |
Segment information - Property,
Segment information - Property, plant and equipment, net by major geographic region (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Property, Plant and Equipment, Net | $ 57,687,984 | $ 61,238,752 |
Cayman Island [Member] | ||
Segment Reporting Information [Line Items] | ||
Property, Plant and Equipment, Net | 28,474,748 | 29,059,294 |
Bahamas [Member] | ||
Segment Reporting Information [Line Items] | ||
Property, Plant and Equipment, Net | 26,975,427 | 30,245,741 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Property, Plant and Equipment, Net | $ 2,237,809 | $ 1,933,717 |
Segment information - Additiona
Segment information - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retail [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation, Depletion and Amortization | $ 2,388,781 | $ 2,364,994 |
Bulk [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation, Depletion and Amortization | 3,869,377 | 3,795,320 |
Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation, Depletion and Amortization | 762,182 | 120,761 |
Manufacturing Units [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation, Depletion and Amortization | $ 386,169 | $ 922,027 |
Cost of revenues and general _3
Cost of revenues and general and administrative expenses - Cost of revenues (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cost of revenues and general and administrative expenses [Line Items] | ||
Cost of Revenue | $ 45,859,671 | $ 40,519,303 |
Electricity [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
Cost of Revenue | 5,389,361 | 7,438,218 |
Depreciation [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
Cost of Revenue | 6,202,012 | 6,046,810 |
Fuel oil [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
Cost of Revenue | 4,157,393 | 5,315,676 |
Employee costs [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
Cost of Revenue | 11,308,833 | 6,597,755 |
Maintenance [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
Cost of Revenue | 2,859,262 | 2,076,501 |
Retail license royalties [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
Cost of Revenue | 1,489,862 | 1,701,724 |
Insurance [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
Cost of Revenue | 1,491,799 | 1,279,997 |
Materials [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
Cost of Revenue | 5,786,698 | 6,151,064 |
Other [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
Cost of Revenue | $ 7,174,451 | $ 3,911,558 |
Cost of revenues and general _4
Cost of revenues and general and administrative expenses - General and administrative expenses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cost of revenues and general and administrative expenses [Line Items] | ||
General and Administrative Expense | $ 18,434,898 | $ 17,001,164 |
Employee costs [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
General and Administrative Expense | 10,025,658 | 9,335,247 |
Insurance [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
General and Administrative Expense | 1,436,957 | 866,457 |
Professional fees [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
General and Administrative Expense | 1,549,878 | 1,178,621 |
Directors' fees and expenses [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
General and Administrative Expense | 865,555 | 969,279 |
Depreciation [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
General and Administrative Expense | 133,477 | 135,272 |
Amortization of intangible assets [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
General and Administrative Expense | 891,667 | 841,667 |
Other [Member] | ||
Cost of revenues and general and administrative expenses [Line Items] | ||
General and Administrative Expense | $ 3,531,706 | $ 3,674,621 |
Stock-based compensation - Sign
Stock-based compensation - Significant weighted average assumptions (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-based compensation | ||
Risk free interest rate | 0.17% | 2.11% |
Expected option life (years) | 1 year 1 month 6 days | 1 year 1 month 6 days |
Expected volatility | 51.19% | 34.59% |
Expected dividend yield | 2.42% | 2.44% |
Stock-based compensation - Stoc
Stock-based compensation - Stock option activity (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the beginning of period -Options | shares | 10,650 |
Granted - Options | shares | 8,223 |
Exercised - Options | shares | (835) |
Forfeited/expired - Options | shares | (8,008) |
Outstanding at the ending of period -Options | shares | 10,030 |
Outstanding-Weighted Average Exercise Price at the beginning of period - Options | $ / shares | $ 13.08 |
Granted-Weighted Average Exercise Price | $ / shares | 10.67 |
Exercised-Weighted Average Exercise Price | $ / shares | 10.10 |
Forfeited/expired-Weighted Average Exercise Price | $ / shares | 11.04 |
Outstanding-Weighted Average Exercise Price at the ending of period - Options | $ / shares | $ 12.98 |
Outstanding-Weighted Average Remaining Contractual Life (Years) | 2 years 25 days |
Stock-based compensation - Weig
Stock-based compensation - Weighted average fair value of options at the date of grant and the intrinsic value of options exercised (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 3,891 | $ 5,857 |
Below Market Price [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 2.70 | $ 3.73 |
Below Market Price [Member] | Employees [Member] | Preferred Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | 2.70 | 3.73 |
At Market Price [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | 2.45 | 3.23 |
At Market Price [Member] | Management Employees [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | 0 | 0 |
At Market Price [Member] | Employees [Member] | Common stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | 2.45 | 3.23 |
Above Market Price [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | 0 | 0 |
Above Market Price [Member] | Management Employees [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | 0 | 0 |
Above Market Price [Member] | Employees [Member] | Preferred Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0 | $ 0 |
Stock-based compensation (Detai
Stock-based compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | May 14, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cumulative financial performance targets measurement period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 8,223 | ||
Allocated Share-based Compensation Expense, Net of Tax | $ 125,487 | $ 142,632 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 10,030 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Option, Nonvested, Weighted Average Exercise Price | $ 12.98 | ||
Share Based Compensation Arrangement By Share Based Payment Award Options Non Vested Outstanding Weighted Average Remaining Contractual Term | 2 years 25 days | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 25 days | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 14,427 | ||
Preferred stock value | $ 18,641 | 20,251 | |
Number of days employee option to purchase preferred stock must be exercised | 30 days | ||
Share-based Compensation | $ 1,163,261 | $ 1,192,224 | |
Closing Price of Common Shares | $ 12.05 | ||
Non Executive Directors Share Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 19,712 | 22,034 | |
Share-based Compensation | $ 318,991 | $ 322,036 | |
Non-Performance-Based Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||
Cumulative financial performance targets measurement period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 25,789 | 28,891 | |
Allocated Share-based Compensation Expense | $ 344,940 | $ 337,032 | |
Performance-Based Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cumulative financial performance targets measurement period | 3 years | 3 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 31,788 | 36,007 | |
Allocated Share-based Compensation Expense | $ 373,843 | $ 390,524 | |
Employee Stock Option [Member] | Common Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,100 | 2,575 | |
Equity Incentive Plan2008 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common Stock, Capital Shares Reserved for Future Issuance | 1,500,000 | ||
Redeemable preferred stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Based Compensation Arrangement By Share Based Payment Award Options Non Vested Outstanding Weighted Average Remaining Contractual Term | 1 year 1 month 24 days | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 142,328 | ||
Preferred stock value | $ 0 | ||
Additional consecutive individual requisite service period required for eligibility in Employee Share Incentive Plan | 4 years | ||
Number of preferred shares converted to common shares dependent upon specific criteria | 1 | ||
Number of common shares received upon conversion of preferred shares dependent upon specific criteria | 1 | ||
Number of average trading price of the common stock | 7 days | ||
Stock Issued During Period, Shares, Issued for Services | 6,123 | 7,293 |
Retirement benefits (Details)
Retirement benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Pension Expense | $ 576,096 | $ 450,732 |
Cayman Island [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 5.00% | |
Maximum annual contribution amount | $ 104,400 | |
Florida | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 6.00% | |
California [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer Matching Contribution, Percent of Employees' Gross Pay | 2.00% | |
California [Member] | Defined Contribution Plan, Employer Matching Contribution, 25 Percent of Match [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer Matching Contribution, Percent of Match | 25.00% | |
California [Member] | Defined Contribution Plan, Employer Matching Contribution, 25 Percent of Match [Member] | Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer Matching Contribution, Percent of Match | 10.00% |
Financial instruments (Details)
Financial instruments (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Recurring | ||
Net liability arising from put/call options | $ 690,000 | $ 664,000 |
Fair Value, Inputs, Level 3 [Member] | ||
Recurring | ||
Net liability arising from put/call options | $ 690,000 | $ 664,000 |
Financial instruments - Level 3
Financial instruments - Level 3 activity (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Net liability arising from put/call options | |
Balance as of December 31, 2019 | $ 664,000 |
Unrealized loss | (26,000) |
Balance as of December 31, 2020 | $ 690,000 |
Financial instruments - Additio
Financial instruments - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Number of days after consumption billings are considered past due | 45 days |
Minimum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Duration certain foreign currencies are fixed to the dollar | 20 years |
Commitments and contingencies -
Commitments and contingencies - Additional Information (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Contingencies | ||
Employment Agreement Base Annual Salaries | $ 4.7 | |
Number of reporting units | item | 4 | |
Cayman Water Retail Operations, Percentage Of Revenue | 32.00% | 38.00% |
Cayman Water Retail Operations, Percentage Of Gross Profit | 44.00% | 53.00% |
Long-term Purchase Commitment, Amount | $ 1.8 | |
WSC [Member] | ||
Contingencies | ||
Accounts Receivable, Net | $ 16.8 | $ 18.4 |
Acquisition of PERC - Purchase
Acquisition of PERC - Purchase agreement and summary of purchase price (Details) - USD ($) | Aug. 11, 2020 | Oct. 24, 2019 | Aug. 31, 2020 | Dec. 31, 2020 | Oct. 31, 2019 |
Cash consideration | |||||
Discount for marketability of noncontrolling interest | 8.40% | ||||
PERC Water Corporation | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 10.00% | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 61.00% | ||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 39.00% | ||||
Cash consideration | |||||
Total cash consideration | $ 900,000 | ||||
PERC Water Corporation | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 51.00% | 61.00% | 51.00% | ||
Percentage of additional voting equity | 10.00% | ||||
Cash consideration | |||||
Purchase price (excluding working capital) | $ 4,088,817 | ||||
Cash acquired | (941,379) | ||||
Total cash consideration | $ 3,147,438 | $ 900,000 | |||
PERC Water Corporation | Consolidated Water U S Holdings [Member] | |||||
Business Acquisition [Line Items] | |||||
Noncontrolling Interest, Ownership Percentage by Parent | 51.00% | ||||
PERC Water Corporation | Three Executives [Member] | |||||
Business Acquisition [Line Items] | |||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 49.00% |
Acquisition of PERC - Estimated
Acquisition of PERC - Estimated fair values of the assets and liabilities assumed at the acquisition date (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 24, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 13,325,013 | $ 13,325,013 | |
PERC Water Corporation | |||
Business Acquisition [Line Items] | |||
Financial assets | $ 1,371,532 | ||
Costs and estimated earnings in excess of billings | 20,854 | ||
Property, plant and equipment | 86,287 | ||
Identifiable intangible assets | 3,990,000 | ||
Deferred tax liability | (1,117,200) | ||
Accounts payable and accrued liabilities | (1,260,722) | ||
Working capital adjustment payable | (23,467) | ||
Deferred revenue | (117,636) | ||
Billings in excess of costs and estimated earnings | (760,992) | ||
Net liability arising from put/call options | (744,000) | ||
Total identifiable net assets | 1,444,656 | ||
Non-controlling interest in PERC | (3,617,634) | ||
Goodwill | 5,320,416 | ||
Total cash consideration | $ 3,147,438 |
Acquisition of PERC - Component
Acquisition of PERC - Components of identifiable intangible assets assumed at the acquisition date (Details) - PERC Water Corporation - USD ($) | Oct. 24, 2019 | Oct. 31, 2019 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 3,990,000 | |
Non-compete agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 130,000 | |
Useful life | 3 years | 3 years |
Trade name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 1,300,000 | |
Useful life | 15 years | |
Customer backlogs | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 360,000 | |
Useful life | 2 years | |
Facility management contracts | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 2,200,000 | |
Useful life | 6 years |
Acquisition of PERC - Results o
Acquisition of PERC - Results of operations of PERC included in the Company's results of operations (Details) - USD ($) | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Revenue | $ 72,628,126 | $ 68,793,651 | |
Gross profit | 26,768,455 | 28,274,348 | |
Amortization of intangibles, net of tax benefit | 891,667 | 841,667 | |
Net income | $ 3,711,528 | $ 12,176,093 | |
PERC Water Corporation | |||
Business Acquisition [Line Items] | |||
Revenue | $ 1,376,793 | ||
Gross profit | 407,604 | ||
Amortization of intangibles, net of tax benefit | (81,200) | ||
Net income | $ 37,924 |
Acquisition of PERC - Financial
Acquisition of PERC - Financial Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 72,628,126 | $ 68,793,651 |
Cost of revenue | 45,859,671 | 40,519,303 |
Gross profit | 26,768,455 | 28,274,348 |
General and administrative expenses | 18,434,898 | 17,001,164 |
Gain (loss) on asset dispositions and impairments, net | 13,997 | 445,041 |
Income from operations | 8,347,554 | 11,718,225 |
Other income (expense): | ||
Other expense, net | 1,082,946 | 786,552 |
Income before income taxes | 9,430,500 | 12,504,777 |
Provision for income taxes | 86,724 | 66,621 |
Net income from continuing operations | 9,343,776 | 12,438,156 |
Income from continuing operations attributable to non-controlling interests | 730,005 | 1,549,978 |
Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | 8,613,771 | 10,888,178 |
Gain on sale of discontinued operations | 0 | 3,621,170 |
Less discontinued operations | 2,333,255 | |
Total income (loss) from discontinued operations | (4,902,243) | 1,287,915 |
Net income attributable to Consolidated Water Co. Ltd. stockholders | $ 3,711,528 | $ 12,176,093 |
Basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders | ||
Continuing operations | $ 0.56 | $ 0.72 |
Discontinued operations | (0.32) | 0.09 |
Basic earnings per share | 0.24 | 0.81 |
Diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders | ||
Continuing operations | 0.56 | 0.72 |
Discontinued operations | (0.32) | 0.08 |
Diluted earnings per share | $ 0.24 | $ 0.80 |
Weighted average number of common shares used in the determination of: | ||
Basic earnings per share | 15,119,305 | 15,025,639 |
Diluted earnings per share | 15,223,955 | 15,137,076 |
Pro Forma | ||
Revenue | $ 77,615,958 | |
Cost of revenue | 47,162,564 | |
Gross profit | 30,453,394 | |
General and administrative expenses | 21,620,106 | |
Gain (loss) on asset dispositions and impairments, net | 447,681 | |
Income from operations | 9,280,969 | |
Other income (expense): | ||
Other expense, net | 805,093 | |
Income before income taxes | 10,086,062 | |
Provision for income taxes | 72,814 | |
Net income from continuing operations | 10,013,248 | |
Income from continuing operations attributable to non-controlling interests | 1,505,068 | |
Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | 8,508,180 | |
Gain on sale of discontinued operations | 3,621,170 | |
Total income (loss) from discontinued operations | 3,621,170 | |
Net income attributable to Consolidated Water Co. Ltd. stockholders | $ 12,129,350 | |
Basic earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders | ||
Continuing operations | $ 0.57 | |
Discontinued operations | 0.24 | |
Basic earnings per share | 0.81 | |
Diluted earnings per common share attributable to Consolidated Water Co. Ltd. common stockholders | ||
Continuing operations | 0.56 | |
Discontinued operations | 0.24 | |
Diluted earnings per share | $ 0.80 | |
Weighted average number of common shares used in the determination of: | ||
Basic earnings per share | 15,025,639 | |
Diluted earnings per share | 15,137,076 |
Related party transactions (Det
Related party transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||
Accounts payable outstanding | $ 200,558 | $ 57,410 |
PERC Water Corporation | ||
Related Party Transaction [Line Items] | ||
Purchases of services | 1,349,000 | 10,000 |
Accounts payable outstanding | $ 201,000 | $ 57,000 |
Supplemental disclosure of ca_3
Supplemental disclosure of cash flow information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental disclosure of cash flow information | ||
Interest paid in cash | $ 9,669 | $ 1,332 |
Non-cash transactions: | ||
Dividends declared but not paid | 1,289,854 | 1,282,086 |
Transfers from inventory to property, plant and equipment and construction in progress | 73,464 | 443,018 |
Transfers from construction in progress to property, plant and equipment | 1,653,501 | 7,755,375 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 299,992 | 2,429,305 |
Purchase of equipment through issuance of long-term debt | $ 122,292 | $ 78,899 |