GWRS - Earnings call transcript Q4 2024 | Global Water Resources, Inc.

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Operator

Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc. 2024 Year-end Conference Call. [Operator Instructions]. remind X, this XXXX, to recorded is like March on at would everyone call that being I X:XX p.m. Time. Eastern

Executive now would to Please like turn ahead. Vice Ellsworth, go the Affairs. President, I Corporate conference to Joanne over

Joanne Ellsworth

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

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

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

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

included Certain within may non-GAAP be today's measures call.

available measures, a tables see our the in of release, measures financial GAAP please these to included reconciliation yesterday's which on comparable earnings website. is the For

to I over will now turn Ron. the call

Ron Fleming

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

report to XXXX. the results of pleased are We very year-end

that yesterday, get a my filing Santa will shared just Utilities our application later More a XXXX occurred this Company Verde year. on of I operational to and Palo utilities, subsequent normal to for I information highlights, based want a the call test be on largest highlight Water on Cruz case Before the event moving very rate meaningful and Company forward. rate

provide In service. of our I will XX,XXX in X.X% connections million as and improvements service And from are highlights. reliable December invested infrastructure to our $XX.X XXXX, operational active with XX, prior. mandate, and Total to public being finally, now very XXXX, provide into of safe record. the XX increased we proud health we utilities existing months top compliance safety

continuing XXXX, we had strengths from XXXX compliance our X For significant prior. and events

compliance without significant event. In X has fact, nearly been it years a this means

increase and customer building I unit to growth the with dwelling organic XXXX. single-family this Now core The want on approximately going XX,XXX In realized XXXX, what XX.X% market XXXX, in statistical building market representing permits from is in XX,XXX further. area. greater permits, metropolitan Phoenix a issued our discuss utilities ended

dwelling In XXXX. In increase XXXX, market permits. building XXX XXXX, the XXX issued Maricopa XX.X% from representing City single-family realized of an permits, Maricopa building this

Phoenix can data strong XXXX Maricopa. see, was in City Metro you as the So of permit both the and

will met must Phoenix. a with multifamily. growth. approximately up keep Some be per year shortage XX,XXX time, This retain of And annual units thus, in units Metro immigration and housing contend there rate of a remains single-family by dwelling Phoenix demand combination run over this and an housing net Metro job to

some multifamily to will more in We commercial the level, retail single-family a complexes home is and reduction of City this supplant as note, high-density shift large-scale the businesses. and believe this at significant growth. with On there dwelling occurring Maricopa previously in along reported, be shift notable

fact, In XXX permitted, increase XXX Maricopa units to in strong with housing XX.X%. or units City just of also units multifamily permitted unit X,XXX an was This compared of represents the data permitted in XXXX, for XXXX.

is some fact stage in Arizona number requires Looking continues record development. of places booming more additional that a the areas. for and in multifamily multifamily accelerate there high people is, to and immigration why Metro and play. ahead, more our projects The net realize continue economy That large-scale Phoenix extremely commercial projects to to and live, pace an is work and at housing, in recreational service of

manufacturing from for continues. was year billion the Previously, announced. industrial billion previously addition all was that was $XX.X yet, invested billion XXXX, all to billion back XXXX, state. further development $XX industrial perspective, in the also There and invested XXXX, in the the boom with economic the $XX eclipsed has state. Additionally, additional that which time an announcements the Arizona numbers on to best in recent made they $XXX single announcement In looking significant XXXX and those the most investment way TSMC, not plant expansions in into at is been including in the XXXX,

occur in unprecedented. Frankly, to is continues Arizona here what

In together would yet the the just numbers face fact, the of announcements many and foreign the that in change the country, be history the all of Phoenix. will all-in largest Metro TSMC in one direct forever investment not it's investment of single our of $XXX billion historical

adjacent that of large are notice XXXX, would contract for with to their locate December in potential of our proceed. awaiting special discussing we on actual the Because note, did sign Port continue Of and Procter And acquired of P&G. we remain Gamble several area, P&G we land. future projects industrial things, to bullish we the firms Arizona where these & potential Inland service

of growth, do when, is a While believe we large-scale to company. not it's to our utility it hard matter be a forecast and if, will it addition industrial meaningful

industrial continued on projects. large X,XXX of progress consisting Maricopa of City of recently the the over acres Additionally, announced complex

our growth While notable this project from another still generating away for is company. several represents opportunity years that for revenue,

year will considerable large-scale that see on our years come, year these commercial, Based of we we industrial service and to the areas. strong in multifamily to growth that trends, in addition after believe all to growth continue housing continues in organic the

As in call, yes, caught cost and are drivers our I other our earnings mentioned impacting up earnings and high us with growth. have last inflation

it's However, utilities year time the for recognize our test that year all a significant was and that last important we made. XXXX. the have X new need largest XXXX over in We test whose to period to ago address was cost investments increases years rates

rate As further the as we have communities. considerable the filing rate at we now as as from discuss you and proposed between many announcements million Chris rate can growing growth will well related in base this our consideration significantly dockets, into see these over $X.X our now in under increases captured multiple invested have case ACC.

utilities; XXXX able connections; company; rate another of greenfield Global is two, for putting new our to how one, year meaning cases, acquisitions can the While Water grow and all things the these was we grow in four, considerably organic Water, going you X to utility solid be three, together, come. ways years Global see to

close it test to year was back X-year which earnings XXXX, opening look fact, a for current That case I look case to our last XXXX. the want utilities, our provide test call, In today's and from largest rate of goes year. rate is back my through portion

period XX.X%, have and EPS grown From and COVID, the XX.X%, we grown we by revenue XXXX have This by to supply inflation. XXXX, connections active was chain we XXX%. historic by of have grown issues

to rate So how well. you as over financial over rates X earnings years, not you all expense the those do turn for to next growth years see current will when investments of start can call that consider include continue adjustment the outperform can now to the over I for highlights. Mike and the

Michael Liebman

annual also down million The million, was recur ICFAs decrease primarily or largely more X.X% not XXXX revenue that for from and Thanks, offset service as A known and in quarterly result infrastructure filings. increase in ICFAs in did a revenue attributable in was as coordination of increase active everyone. to regulated Ron. by explanation in connections. $X.X XXXX. in fulsome our an XXXX compared found which Hello, a be financing X.X% Total can and revenue was revenue of was XXXX $XX.X to agreements,

homebuilders into the and and provides would agreements coordinate finance water However, entered plan, ICFAs Water and just services developers we that to infrastructure are for some wastewater background, Global whereby with with be be performed to is activities of required variable associated subcontracted timing dependent the otherwise homebuilders. ICFA and or on developers Revenue by and developer or individual homebuilder. the by

million an X.X% organic compared connection our revenue, was $X.X excludes capital X.X%. the XXXX. increase to increase This growth. Notable revenue for $XX.X $X.X in was assets due of to million, a were $XX.X operating and depreciable XXXX Regulated or attributable substantially in compared increase which depreciation Operating million related The increase expenses increased and XXXX. a approximately was was amortization, which of million is expenses to to in ICFA a as for changes million, in increase in or commissioning XXXX projects. result primarily up million of $XX.X the which XX% fixed included investments $X.X

due million, Internet increased cost increase $XXX,XXX saw purchase and maintenance lastly, we medical as G&A of in a was increases we And expenses, consumption costs IT wages Next, expense. primarily including additional operating well other power and had which to phone, to in $X.X expenses for as by salary increases services. and and increased attributable and small in

per XXXX, diluted over or million, up $X.X $X.X per was as for expense. X% $X.XX XXXX other income $X.X $X.XX higher compared of which which of share discuss $X.X ICFA-related $XXX,XXX or expense or to million in than or diluted Adjusted net for diluted in per impact $X.XX or was million was was $X.X to slightly diluted XXXX Net $X share compared share million million in as to Other income to excludes Now $X.XX share million XXXX. XXXX. other income for 'XX. and activity, expense just per

stock revenue which about items nonrecurring million XXXX. items talk as noncash increase expense. as to million or in to well Lastly, compared such such is $XX.X an adjusted restricted as in EBITDA ICFA This of X.X%. $XX.X XXXX, adjusts as was million EBITDA, Adjusted $X.X for

year-end our the I'll to the strategic XXXX financial and regulatory the on quarter. Chris pass activity results. our update initiatives This call to review now concludes for

Christopher Krygier

affairs you, hard number team Thank constructive to and our developments of spoke, a the last you we hello, thank regulatory and big of the on we regulatory work. A for front. had their Since all Mike, time acquisition everyone.

First, on step of Commission economies assets. acquisition another Corporation of acquisition the in XXXX, in purchase our proposed region unanimously January an This of attractive the XX, scale City Tucson price. Arizona represents approved building the at

acquisition finalization and on first to We XXXX. in are looking working of continue the half the close

region customers this connections from increase X,XXX closing, connections. our Upon in X,XXX will this to

had will this this XXXX. when customers we X many you recall, in in started region campaign of As we

a reached in settlement $X.X Global Water we and Second, our request to for adopted, The an of as unanimous authorizes seen may if over you release, XX% XXXX case. increase XXXX. phased revenue be have in press settlement, Farmers rate our our approximate million

The rate is new the ultimately called in process seeking appropriate step our order settled administrative for next under have a consider. for settlement judge and to we the troubled buying This track the for what's to commission of and utilities recommended commission's rate settlement successful opinion relief. demonstrates issue is policy. law the second and proving record them case The the customers

the of the heard Finally, XXXX implemented increase Global proposed new Palo requests Water our second million the phase and and mentioned XXXX. XXXX January with for we approximately $X.X Santa as Water afternoon, The in May filed case Cruz in revenue rate yesterday Ron to Utilities. be you phase Verde Global first earlier, rate

due driver The of is rate factors. X to the increase

rate operating cost mention XXXX last currently is First, because Ron capital our inflation, City the States; previous fastest-growing as investment. we're United keep of earlier Southwest recognition structure; a test under investment city Xth you'll plant with organic year in recall to third, as of in heard second, you which our up base discussions growth continued the the from Maricopa, that and

our customers application XX, requests XXXX also base case, rate over The with we post-test utilities. XXXX. rate service approved, the The XX% an is equity requests premature noted an based and on If return rate used in which, for regulatory rate helping would The component collection a issue reduce XXXX. The an the what rate change for this that approximately FERC, prior case are test XX.X%. the XX% of approach Regulatory of approximately rates company. $XXX CSA, million, revenue Energy between same type XX, Federal application which #XXXXX of rate formula a if December like innovative in through we for year-end proposes to lag rates The these the a utilities at overall enable with implement includes adjustment an decision a deal would is Commission. general or and to a of increase plant investments also us equity annually approved, cost calling cases, approximately December year create on remedy to proposal case case of

just overview for to regime. Lastly, Arizona those a the process new regulatory

process first is the to Utilities later, which called recommendations Utilities review The the approximately takes and is is in for in for this Division their issue late Division XXX step will QX rate the Staff typically report what Staff case Corporation After sufficiency, year. approximately XX days days. a that, Commission, application any of intervenors which Arizona

the rate Water in case this in Farmers settle to cases. rate Global did goal the Our case we and Saguaro Water rate is Global like

information for always, Finally, related as XX-K see Arizona disclosures Commission please additional activity. to and our the Corporation

update acquisitions regulatory to the back the I'll and activity pass for now the on concludes This call Ron. quarter.

Ron Fleming

years, our local despite our Chris. right our today, now interesting metrics how believe and is over wanted evidence last the our tailwinds last headwinds has mix plan, price the you, to of performance Thank conditions. of stock years utility of and express economy is in and I unique the such because I X there our close back Yes, our foundation This all pulled to am proud dynamics. on an of improve materially while I team. few To of people, geographical are our meaningful ability

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

Sun as investment communities we your our These Water the us remarks. highlights matters you. Global thrive. to prepared and important address grow Corridor, in development utility, along appreciate resource We Arizona economic support water of to and our conclude allowing Thank

answer available now to are your We questions.

Operator

first ROTH The question Instructions] [Operator Gerry comes with Sweeney Capital. from

Gerard Sweeney

caps big rates. to regulatory want more bit a little reducing or give on touch the wondering I terms was base important details pretty spend development this just And little I opportunity is if lag. a any on little more amount bit you be an equity could it's detail. requirements, the there CSA Obviously, think I to the a in you think debt would certain I parameters or formula note? could more because I mean bit of

Christopher Krygier

Thanks, some Gerry. This Yes, to give that. is Chris. more color on happy

and FERC on based kind investing. that So first FERC that's maybe statement at end the can basically was the so the policy continue the new toolbox and this history as of the tool of Commission making record model And due at for just a passed a success a worked the customers it to utilities track to utilities the in consider. XXXX, background, of

of is water proposed situation. our have we it made it to way utilities those we've but and the So more elements, applicable taken some

you'd each And all basically sheet year, under our and that It proposal, then of through proposal in through review income the formula. all rates the for update a essentially of the that would would our the under kind so essentially and we've put expedited we updating and investments expenses for new the annually. balance changes made go update statement be

financials investments that to an audit from but it and because each more contemporaneous the customers' there is also and to bill. Commission going to allows And of give the us so, review that's be we with to customers changes kind year, opportunities think additional to transparency the increase our

components case the of allowing certain rate for to formula. in in be elements we basically decide what finalized also the There's

we those. have So update don't to

some So through typical the capital the rate to those come structure formula from the and and would case rates, elements. more depreciation of

So through. you a those. there real things overall, But we don't to passing that have to update think here benefit is

we've as element I'll X-year program. last And is, the you proposed other with leave a it

then this case. X rate case, essentially, finished be we the requirement another running full through a have for So there formula, years rate would and

both another that's think element that we and us. So benefits customers

Gerard Sweeney

That's It's you step good super helpful. forward for guys. a

for a & industrial notice Procter what somewhat does with on moving hard question maybe I But Gamble, mean to generally revenues? or Ron. proceed, understand project the even business a if you that So predict. for get to that forward visibility and investment potential

Ron Fleming

going on longer answer anybody Gamble full addition to specifically, to & Yes. works or right what the proceed released Happy part or locates talk construct in plans that, I they're phasing this industrial bit the That to other Phase for are create of they Gerry. to process little future. a I'll is how their in can really finally term than us planning what notice plan we they that where our their Procter generically customers to ultimately ourselves. utility and as their solution so but

means to obligations. to will to then we build go will detailed the So we and that and be in infrastructure design issue into the the those then notice permit a where Later then they'll process, meet utilities. actually proceed the construct required notice move just

is So and they construct. contract and to permit upon even to design to a X- really they first go it's notice execution. step X-year when and the the depending But process. they what a issued we actually proceed, The need just that's what have say notice to the process proceed after

Gerard Sweeney

and and see environment So great regulatory the cases improve. to a rate year great to continues

Operator

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

Ron Fleming

forward Global in just I'd for you, continue call you for again. and operator. look the to to participating speaking with today Thank Water who on Resources, everybody interested thank to like we be those

Operator

This concludes call. today's conference

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

Global Water Resources (GWRS) 6 Mar 252024 Q4 Earnings call transcript