GWRS - Earnings call transcript Q1 2019 | Global Water Resources, Inc.

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Operator

Good morning ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc. 2019 First Quarter Conference Call. At this time, all participants are in a listen-only mode.

will question-and-answer we presentation, the conduct session. a Following that you to will be up for at provided Instructions queue time for questions. would recorded XXXX, [Operator call I like everyone remind Instructions] that is being X:XX on at Xth, May P.M. to this Eastern Time. conference like Krupa, the to Heather I would turn over now to Controller. ahead. go Please

Heather Krupa

at on on copy first Good results quarter www.gwresources.com. us for by morning our of we Yesterday, press you thank call. everyone a which financial available is issued website and release, joining today's our XXXX

Ron summarize is Chief quarter, Officer; the at events be today quarter. will and Speaking Fleming, Officer. the Fleming of the Executive end for Liebman the Mr. and will President available Financial review and Chief for Mr. of results Liebman call. the following Mr. questions Mike the Liebman, which Fleming financial will key Mr.

I'd presented information risks, statements reflect projections, and begin, factors These future that we Such today other uncertainties, company's events. may like and current to to reflect you statements of actual forward-looking of assumptions, expectations, date a contained undue that future estimates, of not hereof on are place in number statements, investors are differ statements. statements. as regarding results materially the cautioned to remind from certain estimates, Before assumptions involve include could reliance forward-looking not guarantees any the management's cause views forward-looking which those Accordingly, and the performance. forward-looking

latest today's -- www.sec.gov. with measures future of filings that information Results of at be Management's Certain affect within Condition please Analysis cause filed additional the are the included that may included Factors may Financial may Operations XX-K Such sections and and within non-GAAP For available our Discussion call. regarding factors SEC. read results, Risk Form and

otherwise tables call turn these of Unless Mr. earnings in over yesterday's on all Ron the Fleming. in U.S. will which included a GAAP now amounts the For I see dollars. our are measures is to website. available stated, discussed measures, release, comparable please financial the reconciliation to

Ron Fleming

Heather. you Thank everyone and us today. you, thank morning Good for joining

to our quarter pleased very first are results. XXXX We report

million $X.X due XXX.X% the connections income. our dedication net quarter, trailing continued sold rate First of and with other achievements care up And having XXXX, XXX remarkable high to the XXXX, reflected show employees $X.XXX our Loop or now in $X employee our X,XXX highlights that a safety violation. include; share; accident exceptional active in growth last safety financial total days X% the collected operational and we X.X%. per XX both non-recordable annualized X.X% the income XX.X% million payment and operationally. equating over for organic is and which connections million $X.XX to months, as extended of compliance $X.X increased per which an period. annualized consecutive XX,XXX financially foremost, precipitation deliver our as increased monthly QX, of or since increased we the $X.X our levels, in and for we days and share; XXst, In was XXX recordable million; in incident nearly contract, payouts dividend we abnormally to to despite final compliance March regulatory revenues without performance, streaks, achieved again Further These

to want I on, which organic Moving precursor highlight growth. activity, is a permitting to

XX,XXX XX,XXX to strong approximately see Maricopa XXXX projected forecast XXXX. permits in single-family with XXXX, and dwelling counties permits. The units over or dwelling remains XX% Pinal For were up single-family to

and growth than continues that lot larger time XXXX, be the and long-stated market on -- another position was of X,XXX a larger permit of City capacity the strong. homes Importantly, we was Maricopa of share in submarket greater up with X,XXX growth In seen issued. that supports the XX% acceleration for This to XXXX recession. will data permits This exists. before first continues over sustained the permits City since infrastructure new amount X,XXX have our great as the of get based Maricopa significant we the

Mike performance value to to again customers over in service taking will to disciplined partners, the review growth call I and the and to our our approach Global XXXX reliable want continue meet a creation. detail, financial our to greater year-end lay objectives. safe, primary turning provide primary to to mandates and Before Water while out sustainable

We will means. the do through this following

finally, and and expenses by routinely will and and with and process we small. EBITDA will are policy; and acquisitions as driving on our we and creating big this Accretive will opportunities, controllable We we will pursue to the of return consolidation a we strong assets, improvements tuck-ins, rate and seek core as analyze our to all will such targeted position accretive similar dividend we work complement applications will to growth and recovery rate appropriate, regional necessary efficiencies operational while growth topline invested grow pursue both as expenses; reoccurring revenue continue make benefits. managing all capital; capital for committed

consolidation many customers by improve we have communities and Mike. as to acquisitions, a our privilege the benefits call the over to industry can will Additionally, serve. turn whole the this proven recent as now to our help I and provide

Mike Liebman

the This or million, the driven compared increase was QX of $X.X XXXX. tax to benefits connection Ron. for acquisition primarily connection as X% Rock. by These XXXX result in everyone. from which Thank XXXX. as you, Hello, reduction up QX offset $XXX,XXX quarter Red of Turner addition higher revenue a QX organic precipitation to a by in as is growth well were growth and Total reform Ranches were revenues of versus to

Rock in inch million $X.X QX impact $XXX,XXX in in you of of if XXXX have in revenue rain QX would compared were tax On QX for reform, include saw or was X.X compared $X.X operating all and Operating of increased of costs in well increase This acquisition XXXX. changes inches This the contract maintenance property $XXX,XXX as and the Red to an of QX increased we increases. of with is $XXX,XXX of an X.X%. to million revenues of costs revenue of as reduction increased reform, additional or which Specifically, remove by tax XXXX. the increase expenses tax XXXX driven X.X%. X.X utilities, the to services, by operating increase Turner expenses primarily and $XXX,XXX. in Notable as Ranches associated

fixed as Additionally, Ranches. and expense increased plan well Rock by in acquisitions depreciation increase expenditure Red due we had $XXX,XXX Turner to the as associated of capital with the assets

to expense. other the income Now $XXX,XXX. Loop due Valencia XXX primarily of earn-out from The of million expense XXXX QX was $XXX,XXX decrease to the in $X offset $XXX,XXX, received contract, a of decrease compared was which for XXXX. other was of a decrease by Other discuss the to

$XXX,XXX down to income earn-out was reform QX down, of tax to $XXX,XXX. Adjusted XXXX which non-recurring of our which $XXX,XXX $X.X such X.X% Turning to investment the Water as net Adjusted adjusts is the had compared and net from in to of for Loop events, or option QX million income also or in $XXX,XXX share, $X.XX per equity QX compared impacts $X.XX primarily income. of lost the Global and Fathom, and was XXX Valencia XXXX, adjusts due for XXXX. per proceeds EBITDA, share or QX of $XXX,XXX of in of in XXXX. expense EBITDA

line acquisition Red of These Additionally, were reductions and it I'd now another XXXX. line from set X.X% in subsequent to the of XXXX $X This currently extended Previously, that is extend the call as until One on to growth Turner the were was credit well of This point XXXX, XX, QX unused. offset we on higher I'll expire years. like versus organic million update back April by the our as growth line Ranches. Ron. additional concludes precipitation of an event our in to pass results. two XXXX factor. XXXX that Rock increase April able was XX so we QX is out to

Ron Fleming

to strong. excluding the items by very Global Thank you, It precipitation, are continue rates reform be tax our the that and beyond abnormal connection line and reductions federal earn-out, slowdown rate Valencia our is Mike. growth all Water's and caused corporate of reductions control, revenue top clear,

Thank of this development all support and to and believe involved. appreciate and that As address our regional answer our service remarks. us applying you. throughout We grow utilities to platform we and the potentially the conclude available we high industry of to our prepared are Mike Global in will questions. highlights be I and These we advance at issues intend new remain important consolidation. water management your and economic Water to as areas and expanding and beyond. our expertise mission truly investment efficiency achieving stakeholders We your water our resource now Arizona growth, handle utility, to forefront of beneficial

Operator

Sweeney Gerry We question session. [Operator will Please now with ahead. Capital. first from question-and-answer go Instructions] is ROTH The the begin

Gerry Sweeney

Ron my Hey, Thanks for Mike. taking and good morning, call.

Ron Fleming

Hey, Gerry.

Mike Liebman

Gerry. morning, Good

Gerry Sweeney

side, volumes within precipitation be you affected would of bracket your operations? able sort it main out On how to much the maybe

Ron Fleming

Yeah.

Gerry, residential So XXXX, customers month side, XX,XXX were each or XXXX, gallons average on that X,XXX on in roughly X,XXX. the and using was in

residential much to a So And behavior obviously, hard specifically less pinpoint you out $XXX,XXX dollars, is to related. the estimate. extrapolate if usage in it's then to it's it's we that on but that side. coming And gallon about try precipitation, good XXX how to versus believe it's somewhere precipitation $XXX,XXX

Gerry Sweeney

just so in does precipitation the And and future? you Okay. maybe from utilities been it maybe mean, growth in the the faster Yeah. point seen if in other Phoenix? Suburban And role permitting real anything then thoughts activity ones. had I've at in past have a actually section I I any shift two Valencia, other but on flows, ebbs estate or of makes Obviously, quick mean, it, water sense. in it I you seen mean, past. the some over a play have the and watching it there

Ron Fleming

earlier that seen sell continuing call, because as pockets Yeah. and utility, same if that type down is in we've – of where last not we stats see is and whole years, area in the the permitting activity certain specific it remains It accelerating. But we for a down. remains Gerry, interesting, still is down. in to due the talked overall we're the it on area about No. exact Permitting to few data Metro-Phoenix

we have basically and to ready. on so and is the moved happened they they its earn-out run all few so while communities, what fact out that for based years the is, fast next a lots ballooned surrounding developers a think, do patterns get why that's of has location kind based growth available – the of land So and the communities on high few was through growth

we point, lot they So those probably we'll build pick there's we two say not – at prepared start where a get growth before would right? can getting home so and matter a only back a lots those, or few of that years But to a but this think year up. away. and You it's it's a can't they're see

Gerry Sweeney

are makes think benefit Gilbert mean, sense. bunch that, of lot mean, Chandler growth there's and into which area a to – I a It well of I companies Yeah. moving juxtaposed I should you're and seeing this as correct? Maricopa, in

Ron Fleming

those Absolutely. all no next are – that and Yeah, is of southeastern is things. benefit doubt. territory, Tempe, all cities Gilbert north amazing Maricopa that there doing we from, and Chandler concentric they're the

So we feel in the seeing foreseeable we're good pretty Maricopa that about future. rate the for growth

Gerry Sweeney

undrawn, And it you the for line much give know, Mike. rate. interest was what's it's detail? just can and just for a quick but one, another little the credit, one of The I – how

Mike Liebman

X.XX%, an It's LIBOR at it's plus rate. and $X line is Yes. million the

Gerry Sweeney

call. my Thanks it. taking Got appreciate Thank you. Really guys.

Ron Fleming

Thank you, Gerry.

Operator

Jon Jung is next ahead. Asset Please The from Trailhead go with Management. question

Jon Jung

it's appreciate don't for estimate asset hidden of morning, think is you you're shareholders. the I job asset, it? could FATHOM Good on is Wonder it? showing, give Good kind and It's the I what think, a the what not on any if quarter. isn't of of value And any you Mike us worth? Ron. doing books,

Ron Fleming

for it books That's correct, point than at think I this $XXX,XXX, less we in I time. have Jon. Yeah. mean, on our

do understanding us what's better value So come it's et give And on in to a they if clearly capital on not what value -- there perspective, and believe when FATHOM. there's past, but is showing. yeah. there will it with there, and we've up do cetera, clearly, the another based there's But raise, depending we happen our seen

Jon Jung

that raise own What the would last that X% did you the value have of capital been with the today? they

Mike Liebman

then, $XX can time somewhere about so remember, but last capital Ron, Yeah. wrong, was think the valuation the I you last was think, is if I'm me I the or when there. I million correct around raise

Ron Fleming

Yeah.

think it around was I $XX million.

Mike Liebman

Yeah.

Jon Jung

be X% $X worth million or $X So the million? would

Mike Liebman

That's the math, yeah.

Jon Jung

provide at math. some the good the some of think That's that growth lot hopefully company. that don't show that people point I still time a capital recognize will but in up books, doesn't on for

Ron Fleming

that's we Absolutely, Jon. what And as well. believe

Jon Jung

acquisition anything there you activity? in Is on pipeline Or give I recently. there anything now? us your seen Good. the announced or haven't is can updates color any

Ron Fleming

Yeah.

it today, the for about basically we I all and So described of we is is pipeline top that it and state, way the throughout look, the I that been just year. way we we them exists the which we're that a opportunities think, those the -- several we've through we haven't and the looking talked about sorted a for are started conversations with late criteria got in mean, four. still dozen of few dozen ranked we But while the past the closed, last talking because

So there. it's pretty good success rate

it. talk dozen, to like dozen front low of -- list. to. we just too Now be And I connection much that nature, that I or get in and be out the of attempting -- would through rate things slow sure. to would worth are do. half that There's that the But continue X% Would are general, X% to I we're double-digits, north X%, by of circling to on can in we're back organic growth if acquisition something continuing so don't a utilities kind be X% back say, and think, side XX% growth and that or on going get side

Jon Jung

at right. All or -- of And in this time, is gone Arizona you the correct it that point haven't have not Okay. -- state looking outside for at you acquisitions?

Ron Fleming

doing our that. We thought before efforts first through see correct. we'd here That's

Jon Jung

Okay.

Mike Liebman

doesn't But Jon, ... that

Jon Jung

ahead. Go right. All

Mike Liebman

on Yeah. right a going just it be but to a first presented it's determining we'd always opportunity If if good into state, play it open to within the itself, make in different to Arizona. we're focus

Jon Jung

you. Thank right. All

Ron Fleming

Jon. Thanks,

Operator

remarks. the would President This like Fleming, I closing and the concludes for session. any CEO, conference to to turn Ron over question-and-answer back

Ron Fleming

to to ongoing call everyone and look Thank Yes. you for we for and would Global like today this I you, thank in forward on operator. you with participating again. Thank interest your Water. speaking

Operator

This concludes conference today's call.

disconnect pleasant Thank may and a lines. your You for you have participating day.

Global Water Resources (GWRS) 10 May 192019 Q1 Earnings call transcript