Earnings call transcript Q1 2023

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Operator

Greetings, ladies and gentlemen, and thank you for standing by. Welcome to the Global Water Resources Inc. 2023 First Quarter Conference Call. At this time, all participants are in listen-only mode.

Following the presentation, we will conduct a question-and-answer session. at question for [Operator provided up to be a for Instructions]. will that you time queue Instructions

I would X:XX like the President, is I being Corporate to now conference remind everyone on would go Ellsworth, X, that over May Affairs. to XXXX Executive to Please at like PM Joanne time. recorded Eastern turn this Vice call ahead.

Joanne Ellsworth

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

and Fleming, today is Krygier, and Speaking Arizona will initiatives quarter, call. events of review Mike Officer; quarter. review results available will Liebman, the for Officer. quarter, Operating Financial end for Ron summarize Corporate activity Chris President and the Chief Mike questions Chris key and and Ron, Chris the for operational will for be Executive Officer; the strategic the will the Commission Ron at Chief Mike Chief the financial

But statements begin, today statements. events. assumptions certain future forward-looking that may current include to information Such like before regarding remind I the estimates, projections presented company's expectations, and we reflect you would

of that These in to a uncertainties, involve number other statements. factors forward-looking risks, the forward-looking materially and from could statements estimates results actual contained cause assumptions, differ those

performance. guarantees future management's which investors of are of Accordingly, cautioned the are not reliance on views as reflect not hereof to forward-looking statements, undue any place date and

are within www.sec.gov. discussion Form at the and analysis filed condition For our risk additional of information regarding management's included Such the affect SEC. XX-Q of please that factors and latest operations filings with results sections results, available may factors and future read financial

included a these within our yesterday's comparable non-GAAP in website. on today's to included tables earnings please measures, call be the Certain see which release, available reconciliation the may is of for GAAP financial measures measures

the turn to Ron. will I call now over

Ron Fleming

results report start. very quarter for XXXX today. off Thank great you thank for us In joining short, to you, Joanne. pleased of Good XXXX. morning, the We're is the a everyone, and to first

incredible advanced and our mission Global It regionalization so as challenging regulations our of benefits face wastewater of consolidation, stewardship be aggregating the for the utilities, we in another that Water aging realize will environmental year customers of and and and infrastructure. can water water growing scarcity, continue to

Total active service the to from at February Included up XX in Company XX,XXX in closed XX,XXX connections these Water months prior. increased the is XX, March of X.X% numbers of XXXX. from Farmers that acquisition XXXX,

and XX.X acquisition certificate County. total of approximately The a added active area unincorporated of service in area square of the convenience miles of and Sahuarita Pima service connections necessity of town water X,XXX surrounding and the

to increased Global water X,XXX. service nearly base. on safe, utilities and has infrastructure acquisition focused This improvements invested into provide total and to in existing million service expenses Pima $X.X reliable revenues, increasing We rate reducing active building connections Water's County and

safety And and are with top and of records. compliance compliance mandate, finally, being ongoing safety very we our proud our

OSHA streaks events, XXXX For events had quarter, zero no compliance the reportable and significant continuing and our from preventable prior. we

and now team OSHA wonderful allows highlight compliance performance event. want I gone have we reportable Water, our last since me three six significant years pause, for means this company. surpassed such thank fact, preventable and exceptional at have to our without In event a and to X,XXX the whose updates Global days months over now here provide

housing what Metro slowdown, continue core activity organic development want and I to local in and and in our the growth, on Now is and our customer does in Despite discuss Phoenix utilities. service going national areas.

over XXXX. family family the XX,XXX was Phoenix building home same period building XXXX, a of did single reduction permits. still XX% single In experience this Metro But permits in nearly

XXXX. in but our the also X,XXX we utilities, largest slowdown, a saw still Maricopa In permits city issued

April, year-to-date the XXX of more entire year. have in six last than we permits Now months seen saw last which permits the Maricopa, through XXX is we

uptick we're from numbers. So an last year's seeing

more said to commercial continues to scale work at is constructed units booming of in places and that and requires number an pace with Arizona our on Metro extremely for Maricopa. more With multifamily housing, housing, the the high That and live, recreational economy Phoenix migration of and continue in play. net people why projects city multifamily in record areas service being realize to accelerate and large a in that

also Additionally, continues, the from for all the development Arizona perspective. with industrial XXXX boom single time best investment being industrial an manufacturing year economic

of of we Corp. new Arizona, Motor progress land. recently facility make be permitting and expanded And areas service the Proctor to been into XXXX. this, This excellent including engineering, continue where Nikola Gamble on & acquired has to continuing where the Port because construction seems and Inland

to Based Putting the growth. housing years see these to elements return together, organic large continue come, on strong all Global we well-positioned. trends, of addition considerable in that of all in growth Water commercial believe will the we multifamily housing industrial to remains these and scale

now turn will financial Mike to over I the for call highlights.

Mike Liebman

the XXXX be agreements known Total as XX.X% quarterly can infrastructure ICFAs. and $X.X everyone. was to of revenue ICFAs our coordination fulsome of QX is compared filings. in revenue million, A primarily also more which of or Hello, for of first and million This XXXX. annual driven explanation Ron. recognition under quarter the up $XX.X found by financing Thanks, increase is

the agreements subcontracted water ICFAs coordinate Global and services would homebuilder. whereby just However, plan, performed otherwise provides are be developer for to developers wastewater infrastructure the to homebuilders, or we finance Water some into that required and and entered or with by background, be

And city our which agreements. revenue plant met we us to quarter, for as of in allowed wastewater contractual all we recognize the capacity the certain under of during deferred ICFA a Maricopa obligations expanded the

growth ICFA connection and organic for approved $X.X Water of driven million the the to and by This XXXX, XXXX. acquisition wastewater Water QX, increase in revenue, increased rate X.X% increased which excludes QX or revenue Farmers last compared of was our rates case, Company.

in depreciation and expenditure million million is amortization increase $X.X $X.X included Farmers. of acquisition Notable $X.X This an the expense in Operating increase tied changes expenses XXXX QX, or operating for our expenses program, of to capital of in $XXX,XXX million XXXX. X.X%. QX compared and to were

and increased $XXX,XXX, with Operating associated the increased which expenses costs, $XXX,XXX. and was manage by continues as with by combined grow G&A to also company maintenance increased approximately primarily personnel increased costs inflation. expense

to Other higher due $XXX,XXX capitalized with income the Now offset QX for XXXX partially to the $XXX,XXX interest of The QX, associated discuss Buckeye due costs. XXXX. to growth $XXX,XXX other lower interest to was expense. in primarily expense expense compared increase premium, lower by was

income QX increase in per $X.X of a net million This equated XXXX. Turning $X.XX million to to XXX% of had or income. Global is share. to net QX compared $X.X and diluted Water XXXX

for million such of to a non X.X% as be payments, or XXXX, non-recurring XXXX. talk ICFA less in was and cash well were such XXXX, restricted QX to in QX as QX EBITDA of from the as $XXX,XXX EBITDA to $XXX,XXX of Buckeye compared about as decrease to growth adjust revenue, XXXX directly compared of premium QX Now tied Adjusted adjusted income $X.X stock which can items items which expense. the reduced of

the in inflation. on like past, as touch Lastly, to briefly I'd

some given been we to primarily to periods manage the costs. do related increases have expenses in we well, While see personnel inflation quite future able to expect situation,

in cost as of result capital as inflation. a Additionally, direct would you an experienced expect, increase we have

the now update the strategic in results. on the our This to review to call quarter. pass Arizona Commission quarter Chris initiatives first XXXX activity I'll financial Corporation our for concludes

Chris Krygier

Thanks, Mike. everyone. Hello,

Just a brief few updates.

acquisitions announce On any have at this and growth time. specific acquisition the to front, we don't

of number opportunities a different good exploring continue our we for However, may that strategic fits company. be

our are we planning in safe, of On to several to Commission ability support the service the continue Arizona ensuring our early filings front, designed regulatory Corporation stages to reliable customers.

future detail calls. more provide will We in

back pass call that, the to now I'll Ron. With

Ron Fleming

Thank Chris. you,

growth, across we handling the rapid are times macro Water term on economic company value the benefit year-over-year will long challenging to while Global As that on still creation. improvements experiencing continues focus front, also

we be As efficiency and plan, our the mission that achieving management to applying and our areas advance remain total service stakeholders the involved. We will beneficial we to new our truly execute water our of our of consolidation. expanding utilities throughout industry and platform all intend management water forefront and expertise at to growth regional believe

us beyond. to important in development water and we address and utility, resource economic investment your of issues Water as potentially appreciate We grow Arizona Global and support

So prepared conclude remarks. our highlights Thank these you.

We are now available to answer questions. your

Operator

[Operator We question session. and from will question with ROTH Instructions]. answer first Today's Sweeney now go Please ahead. begin Gerry comes the Capital.

Gerry Sweeney

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

Ron Fleming

Hey Gerry.

Gerry Sweeney

been It some is that two it's of of connections, a you've with the about acquisition think portfolio you about a these of could integration. little months. Maybe Farmers. in talk bit made. I quick A larger the than tokens couple questions. started smaller XXXX Maybe

over see more XX in area? you the to or two Then XX integration. one expand out opportunities just maybe maybe the maybe continue expansion course or build months of you investment for foundation some lay to of , are that that So the

Chris Krygier

Yes. Gerry, Be this happy Chris. to tackle is that.

I'll first the integration peace. on So focus

You'll of number got benefits kind recall a our a And with seeing each on learned go in Farmers. that approach where actually and really few at acquired in process we're of we and smaller very County, around. lot improved the the the utilities, of was pay last the and Pima of that kind started with here utilities of off years, lessons we've from thoughtful, team,

of that goes customer to everything. really billing of so, team, line the And of are credit a lot front kind the the operations service

been to kind the we event, council, of integrate able a what do couple to and make we've So presentations really community large of attend employees, do.

really And exciting. so, that's

going. happy do Always So We're it's it's I'd going to where say, more with progress. well. but with happy the

second investment of there. And part the then and your regarding transitioning expansion to question opportunities

next diligence think started out start We starting and the expand about initial and needed to getting CapEx work on the on have program already implemented. the to our that steps

of community actively it's the what discussions planning implement now, something to we're there. basically kind really and at talking bring it really we're down so, to and off kicking right the about detailed And good

thesis to say and I best bring dollars something would investment we're from now cents, major how into right about about no it's talking on the but and the thinking actively So, specifics community.

Gerry Sweeney

Port gears on talked it. theme, Got Switching think little a particular development Inland about the to I Thanks. bit past. Arizona, we've and of in the

as the bit does I the to get going of Procter to I just cetera? - is in building. size impacting, I that's to starts to & think when think committed timeline Gamble it think, there? curious a development that revenue, & Nikola, are well, Nikola curious think Gamble, it start And the place seeing there. of Just sort take and that is we But maybe et Procter little I

Ron Fleming

Yes. ahead a bit little that I'll more want and one. those this before talking to mentioned, Ron. two and you specifically broadly. projects go take talk about just Hey, that is back Jerry, And step

the since than people time in Arizona. points last we But understand few I see think what's growth that about new just this. even the on going out all data anything been talking this can that see came say. I They thesis we talked, better think, They support headlines. we've a

large invested of capital to these from the attract they out came scale an numbers those helps XXXX. Authority, Commerce was new to And here in on them, the released according the years. numbers. over billion which called that's industrial an three that plus really of capital like amount purely percent Arizona XXXX And But there's perspective. in a there increase governor's XXX And is Arizona from part office being of That's the projects. organization prior $XX.X Arizona invested

that not there's of So is it's curve this macro but issues. slowing really only down that's up, And stick. despite a some economic the slope like going the evidence hockey no of

industrial, projects. scale So large lots of

that boiling the IPAZ already then and XXXX Nikola They in that into to them doing small place. a being first already port, two mega acre now. So get calling they're And down P&G. serving projects would industrial expansion into right [ph] going it, then today. are it We're plus

themselves available they've So we're announced. have about to P&G, publicly going obviously talk information that

one bought so, project XXX by right have their And XXXX. acres, current phase XXX their And and million one is mid or open plan they're phase now, $XXX investment. to a they is

now ultimate will phase your significant question. answers the believe again, the ultimately I other is, one. they be think that out, not Nikola P&G it be their that and that's of want we're timeline on really semiconductor we And acquire. property going which customers off taken companies and manufacturing industrial co-locate that near that a talking industrial like build the of And the that's part all based sites on But to size host other the part here. that's of So and of bigger boom to that

is five going from I to it it's It's years come, being XX in years I'll a that. the us leave So super keeping to to exciting. active. Yes, couple our it's out in seen And think financials, be meaningful but meaningful. at

Gerry Sweeney

IPAZ. say running, like Got acre answer Nikola phase it. let's acre of was question, &Gamble of And and and Procter But facilities a your of were and obviously, I could outline much but see numbers just at or trying how up it Not facility into would if one water a two XX of utilize? have? know running. or up trying to you is running, up believe XX back those have capacity you do impact this can kind this what qualitative sure you if they to facility,

Chris Krygier

few difficult like, phasing It's and they there's again, talk and things. there, because products what And we that, to depends on want a give early, to about. Yes. about you actually they and information only a publicly this what it manufacture bit other on it's element, talk

But industrial can in just we ground lot provide a that the Gerry, were up, Inland integrated larger thing. this this do from the not what so really that. capacity sort to early. scale too for is really for is for we when type you, build which a entire projects, permit region It's perspective, capacity it's the Port. these state-of-the-art we that let's just apologize on ground -- we're brought And we utility do, from not than is brand of utility about, for from up what information So, of for new a just new talking the really but it's remember,

a that perspective, gallons million we the perspective, build actually big can talking So well be day, water bought That's from about a is XX you from a property we're permit beyond from here. that and called XX facilities [ph] enough a itself, It's Resource infrastructure site. acre wastewater which what reference. to what's Water growth really XXX north that of and

scratch is turn substantial to So, what permitting And planning some new put and utilities first really a over from to these all time. projects it's the are going these place foundational in into long-term just be.

Gerry Sweeney

for That's the I it it. Got Thanks for it. appreciate me. detail.

Chris Krygier

Great. Thanks Gerry.

Operator

I'd [Operator this turn go session. now to like this time, ahead. Instructions] right. All At question-and-answer Fleming. our Sir, to call over please concludes Mr. the

Ron Fleming

participating interest you, look today again in ongoing quarter. and everybody to to the and talking Water. I'd for call to thank Thank like next forward operator. on Global you your for Thanks

Operator

conference concludes call. today's This

a You great may your of disconnect your and day. lines. rest participating Thank for have you

Global Water Resources (GWRS) 3 May 232023 Q1 Earnings call transcript