PCYO - Earnings call transcript Q3 2024

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Operator

Greetings. Welcome to the Pure Cycle Corporation Q3 2024 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Mark Harding, President and CEO.

You may begin.

Mark Harding

Thank you, Holly. welcome May to XX. to XXXX QX like ending period I'd you our all for And

For online, a presentation. we of also those you have deck that for are listening this

there'll to page. website go the to want banner on you at If purecyclewater.com, be a landing our

on you can click with follow kind and on deck slide that. that can of through You the

deeper will post a drill you to able be look also presentation and for desire. We take a down as bit little to on our you a website

the the of note we as the through will move I So, transition slides presentation.

I by like is in Our reference you first talk the Securities performance do left slide our Statements facts second trajectories brief on strength of go familiar to -- and results historical Act. What regard of to that through in defined by some spent the and incorporated quickly this I'll are and our time QX, little Exchange presentation you give the our contained actually forward-looking are presentation, on a or then those. really not are those statements, which update forward-looking bit I'd briefly and potential some all of with. asset their as the think strategies, and and some our a bit our in the of a our assets about statements

So, we'll move and to Slide X. Very leadership Board. proud of our strong

experience wealth that segments. X operate tremendous we their with individual of company. the of amount time. some And a for provides and tremendous leadership within picture knowledge guidance. together and in heavy our We industries is here amount leaders They've me managers, our have Marc with team a been to then a Board our our with group very Spezialy, business strong a quite got our team. and CFO. primary And and bring who's of We All

with land in are but also only the strong how water have our in rights is which a are they very portfolio segment, segment of And planned Denver not those we developer in Metropolitan master valuable rights, water how interests, those second we rights development plan short in monetize water a area. master where in water water working and themselves we Area. We build of communities. position Our a where

We communities, have X active portfolio. those work we them for for to homes homebuilders about sale assets. those those have large homebuilders, able of we're streams master portfolio million have like for feet and keep revenue planned of some income which that single-family residential our will then also commercial over we additional those And fairly of our master be from our also our units space. and on planned the we square additional community, build and X,XXX developing X as to to lots appreciation to value to able is bring recurring in be with own And do and what lots keep

continue the to value those we value it add to continues As homes. build of community, to each in

well. us and So, very very successful a emerging as for that's segment

sheet. here's If segment's positioned you how Page balance the move each X, to on

liquidity. excellent have We

land then out most we that know, a strong you as cash, of horizontal of our million value continue get liquidity in segment. $XX have we our development is infrastructure, receivable receivable, and a As to we which note and of infrastructure our build excess with very our

partner we letters use with segment hard they land what that to through does million collateral how jurisdictions. periodically instruments on of that we through as earning and $XX.X note our that of for to then interest use development note value. And you that gets restricted have see municipality we So, a cash, work of bond the credit work receivable, government continue repaid as is a and little from security that we instruments us, their as receivable for assessed we build the offerings continues bit local which little over

liquidity. continues Ranch that to this We those Sky as year little And continue later more talk of presentation. that the offerings a to bit and grow, see grow we'll in bond about also later CAB the another you one should

Moving Slide our do metrics bit X. we are financial what the performance, on how to little performance Talk a and that. takeaways our about from

to moving X. So, Slide

through XX% same a to growth last see continue approximately look year. period year. profit, period Taking at significant XX% over over up our We year last from this the overall same the gross revenues, up

has performance the this at statement. really earnings that net Taking these value So, the share from increases per also as the look period Corresponding highly well. are we company up with appreciated year demonstrating assets. that over P&L year in within income last that the continued is a XX% and really same and have assets the

So, for then have and quarter-over-quarter but we continue great really a to year-over-year. trajectory not asset performance also only value,

Slide to performance to Moving XX. down I want break by segment. our

of these between water of each industrial of are oil for and segments, appreciation up as at realize really reflected in our these And We segment. a to each assets where continue water domestic we're this delivering well taking which the as margins divided is from gas. business segment look attractive how water

Our add also the our Family Single land development Sky monetizing continuing then Ranch to our liquidity asset to company, segment, Rental. and

of have segments. each to those continued great in So, performance

water and had customers segment. down and XXXX we've wastewater to deliveries our strength had water a then growth, oil in Slide year. continued Really a each little in record year drill significant bit And in adding water sales, gas. Moving XX. has in new

the slide. of to a and the really Really year out got quarters looking the at through Moving We've a X We've first segment. finish amount sold strong. taking to deliveries. water next that look industrial tremendous record

system, customers. Colorado that's aggressive continued that that climate. available our regulatory we we've for gas oil very invest the making to So, our on and state have a capacity sure water in is

And one the to a for in State think continues that on strictest And investment had the gas to level in And nation oil I allow the continued Colorado. We're how our gas. so them in they've business market markets lot to of have being controls of price had probably solidify got we've of make is the and how do and operators that segment. oil a oil that to perform operate over they the environmental strength and just the done. comfort in

very that a very be happens above attractive, are. have oil-rich right to water formation We our where resources

So, and partnership operators. oil our there's a with great us and gas

growth phase to get a development. up We've phases are Moving naming phase. got But continues of we're here Key the Land a with within land active up, finishing XXX on, -- want is phase We're period. strong talk these. really takeaway second Sky X X, second segment. we currently year-over-year Ranch results, really are was to the that our to bit development I little units. development XX% almost about finishing see for better our about how first nomenclature the sub identifying have

that. of that a component out, just and which just We the construction. Phase few of are XB. was their a lots. have under building on getting for are XB, to out that, finished punch lots first XXX are We closing Phase landscaping they're inventory permits their lots and There's in most process of of about all We few items the the builders completing

that's complete. that sewer, and we making roads, So, sure are All on curbs activity for the available gutters have active them. water

some the try sewer. portion are year the and before working get a right completed also wet summer So, utility We of certainly done selling of homes foundations work to sure out we builders and ground of their the will where on model working road going to XC, they that on then making on sub-phase have those from utilities, by their season. the now contractor really have the lots getting be actively next by building And the the have year of some started permits. into water selling can be they're We've which that, hope end of third and have up this there XA. And in those then so completed that, spring we some so the of grading out and in dirt of the end our there, on our have work. the we and all and of opened those the

production, So, of another production. And then XD, lots looking that see have component XXX XXX very instead lots a to is we hundred of closer of at what really is at lots that having fourth that's sale -- the in a we're you we're lots. which in really couple looking XXX

each component a these phases we're back of holding very for our of large have sub We that rental portfolio. single-family

phases end of able very translate months. So, get started to -- each year. dirt to really looking about issues those of for them one And Phase it's winter it's the seasonal we're by these to during very of dirt that that's lots. easy be XD move to where the the And work XXX

we're capitalize on So, to well. and that as try going

of acceleration the an you're in what Denver activities really, seeing market. the So is housing here

is and it. work a that, really to of XC, dirt look foundations then give complete see if look being is going building see into visual permits. gives can slide, no you a expand of can for which which to at next take for And the imagery XB, XA, seeing complete. you can you ready you at XD. see and an Phase This where there's that is a it. aerial Taking Just you Phase complete. we're kind of you substitute

to but stabilized market, in lots. homebuilders are segments. for growth take need what that not in to The look in, to that looking million single-family and $X.X those the that then think such in very want competitive this the be I really purchase, housing that So, be And segment able buyers than the interest market we are level for rate We'll our call, to looking at on, market. mostly rentals. really that We're on really are segment. Continuing affordable tremendous entry rate has attribute market they segment a are lots time Denver delivering a still for interest there. an in the the delivering less

just positive our to and really We're X%, which continue cash us appreciation because are of that home we're the flow We in out also rental there. continued work asset add appreciation for seeing the generating X% of values community. doing units, asset continued overall to of the portfolio

here. strong good, really growth So

the style down some opportunity some another -- classes price to drilling You're the got with lots, take going of to where give multiple that that really looking continue have own of XB, that. We've we will of XX lots, detached duplex points. if And attached home. we've with an and us product online are model our can as of you lot coming a or we've as got We've lots. help units got are at for some accelerate. a build attached got the diversity got home units XX townhome to where that We've we -- a next We're builders we builders the already. slide, single-family each look well see

see, you XD, some as going then adding And there. phases homes in in in to that values an XC asset accelerate we're where XX and homes and of appreciation in multiple XC we're XD. XX have We of another additional

going to within really portfolio So, homes next in that X close to XXX get years. we're the

And that more, illustrate as values asset appreciation This bit value so drilling company. growth, to terms growth about and of from add the well statement our we're excited continued the of the performance both on down is, the that again, the P&L as in business continue little the community segment. a home of very how to translates in income how

And become meaningful company's the really us of to so P&L. for very terms segment starting good and in

time the ] to very on, to bit, the about We Moving appreciated on [ little take talked little and from to a talk that's we've portfolio to balance continue land bit company got highly assets utilization. our whether little the that heard portfolio or you've time, increase that of fact refer the a a portfolio me water bit our those. to wanted of in provide what of value. invested color has each on sheet, I terms into and (sic)

about So as let shortages to lot market. There's really doesn't work about continue is Denver press the well locally. performing in a It we drill a what market down, doing see outline as we if matter And the me all almost Denver the as are you're are in housing the into about nationally, that, of bit supply we little of how estate market level. can real entry housing at -- equally. doing What is what segments in. see here we not how housing

the whether are have entry-level second whether of going for they're concerns, qualify of be segment, affordability but a -- buyers, second to most You a second going not be which that to pressuring to buyers move-up purchase your a home, they're really home.

competing are those really of really that shortage product, supply entry-level for that. and just All there's a of

level. are homebuilders, projects, what in is So, into for We the Denver gives demand such that imbalance you And it very delivering here each nicely that that from entry start this translating in lots inventory see of multiple to about our we us segment. find have capable phases. positioned an those confidence of particularly ourselves

Sky why us segment that's want investments, a you've continue which water about phasing accelerate to our so our about the overall seen Ranch water bit And segment. service to summarize the talk some our in development. Talk little I the here. We itself. capacity of monetize

the ability. We have

provide system about a currently X,XXX water can -- connections. can We have portfolio XX Our serve to service connections. that XX,XXX

Our current connection customers base domestic around is our right tap are -- X,XXX.

wastewater have of we land system. A our So, water our development. still little in our bit plenty left about system pedal and

early square be couple the master We units, a zoning family have space, of still little plan We're bit of commercial. of a million mix for retail. total single that'll and X,XXX on feet commercial a

by accelerating the help the go out customer demand demand then And units single-family aspects. on certainly commercial is our about the continue to base single-family where we're bit that going add We to to and rentals. a little for to planning there that accelerate

look record you at If positioned to well growth. the continue water year and that system,

So, to customers. water using developed about capacity to of in XX% our what deliver we're we've

happens for what and we to customers to so to that continue -- segment, capacity and as then available is and reallocate have the gas invest we the oil segment, we in that the side. residential And residential just we build that over the in continue

our opportunity going on new system running, tap for it as get terrific and that. and up add increases a see fees to it's So our us margins that that connections we the we're to and

fees So, to development significant portfolio, our to And the with going phases development. at building continue same as to start you'll you're to of -- to start multiple at permits. into time, those add adding the margins customers, you're are Sky we lot got customers And a a X fees, tap new the going retail going see of see favorable very Ranch. see concurrent P&L. accelerate because on we've our from continue Tap then overall to growth, phases those really

about equal permits, have have jurisdiction As to able we the to XX% of land that build home. Talking they've they building they secured local those demonstrate to bit under about overall and construction. and then in can have a that to land complete about their portfolio, our capacities, developer We're be partners purchase they development. for apply little entitlements our that amount active inventory sufficient residential all that so -- taps the

accelerate. whether going that, that's under construction zoned So were and phased were or into starting you're to see that

So, translate the that's both And project. our look we residential we're what terms about commercial in and that into a look to going would amount we to basis on seeing both that. of that excited not terms correlation, how the of units, about land valuation compared that lots to value. talk water overall very the but for is really gives monetize like capacity, direct translates that ability which available, commercial a in capacity, it us are that the Again, of to

XX% at a we're are, And how only we so about built built. look you when take

about have pedal under that that's under of delivery. We and XX% construction

seeing in and So lot have we for we're demand really of -- left tremendous a there, capacity that. we're

of our we're into that to working with are we've market try meet that them translates these out to market. more they homebuilders buyers to for construction to that. On much the looking the able there, of So, portfolio because mentioned, as their to for. some got our jump lot. be on are continuing the show about fits those market, looking buyers I portfolio, get under these models. the which continue going add aggressive tapping us what single-family studies for and demand with been to and all rental much what and And looking to into helpful They've be are the what characteristics and more directly They're in going the it to is for renters it attenuated are lots

to grow Sky XXX them, with even we'll and at and portfolio a XXX great Ranch. than to more relationship that's continue So possibly that

of is looking So, for rentals. the trajectory single-family where that's kind on our

our Just well doing continued line want as The punch here. cash with to as emphasize great margins, is company the flow.

look you gross margins. at So, XX%

Our assets with If I with equally disconnect, and know are growth our performance, there to the just growth, disconnect return we be just a disconnect a are anything, terrific continued, look and you continuing seems I And invest. as our our our do at asset all price. our our on our between outlook a seems outlook to because performance. take share looks asset been given all where appreciations frustrated to it be terrific, to where continue have just and

we're continues to doing program. disappointing repurchase with into So, lead and stock bit what that's a our

So, be in we market. the continue to

buy We week. each to stock continue

program do We that, our weakening have continue have and share so. repurchase standing to to we'll of of with the and orders continue advantage the take with accelerated price that to

we've here. segments. in continue of we its to optimistic repurchases. So were perform weakness. to that the We is focus -- going XX,XXX little on more as a continue But aggressive each And of to we're through weeks quarter fourth continues or XX,XXX you to very month market first first assets our couple see bit value our and been to we're within of business the the demonstrate in in continuing that our what to share quarter be that build

retired is company, we and the asset and the really welcome If had time. you Peter look really the as to tenureship bringing her value hit tremendous running tremendous every forward Board on we and and ground each for the She's a partner well. a experience, Sue KPMG, from want to tremendous Member, our She has welcome a Chair to retiring Heitmann Board Board. Director, newest Audit Howell, is

to a more I'll and And enough. be questions, you covered drill back happy So provide something down some just if to I little bit more I'd have color guys I quickly got with specific Holly. that, identify there it something was I if over than that too didn't or turn guess

over you, Holly. it So, to I'll turn back

Operator

for first from Water Partners. Your is with question Instructions] today Loughlin [Operator John Rosenberg

John Rosenberg

tax appreciate presentation go And actually, the you things. frustrations But and couple through I share really time. your And Could as a bit bit might about that and of I depth I you that progress. and go about how granularity detail if that hear I I'd price. more into grow improvement But you course, nice the detail about also your I that exactly company each receivable like or maybe of your to the accelerate of a more about the works? appreciate, share quarter could. And a suspect public payments good very base.

Mark Harding

authority, government a government or question. infrastructure, the will infrastructure reimbursable. And are are whether this great it's multiple county is manage case, local that the the That's are the answer by the parks drainage it's local whether own agencies build the the that entity, space particular when that that simplistic is in will our it's those roads, Ranch, of each whether Sky by own and open owned that we owned the which there agencies

so that does And that investment. make we what is

We that that, assess does that reimbursable indeed allows on statement. book our firm for qualify have that independent financial a engineering third-party note to us

build third-party reimbursements. And contribute it's a those by homes paid how is, as we that assessed that, gets the for verified value. homes to So back been qualifies there, that

home -- the each so just and numbers simple. I'll And make

translates complex really that's And we are, and is you then X back. based X,XXX my get $X.X down. The of homes The that math this on -- out we right, the implications mill it's the that paid simple assessed formula say, that answer And answer the each levy value. tax based there a assessed get is, if there, on do into mills. of rate, $XXX Let's had out million. million home is dives

offering. level the And what revenues tax district, assessed come take qualifies for property annual that revenues both value we that that's then bond pledge into and annual a and them we the So, is. those to

you the you So, and and next point that bond that build monetizes the in number of phase. bond then then bond those that a and next the offering time. And you build takes then phase, then a next phase it and certain you phase at units,

X-year down that XXX that's that look will one this at on refinancing it's those have offerings those. those. another And process. bond the so first out really about take a of there. will lag units And calls because we And on we a in our call year, Those we've which run be X-year are premium of later a typically

homes did has mill So, that to timeframe. continue capacity We XXXX-XXXX bonds. assessed running bond in grow it I to same applied in that value is the market more those down. appreciate, levies, and offering we've to got as repay But continues these the XXXX, think, there's that value, -- just to as

offering And so to that of something we we refinancing one this balance later the We out. $X year. accrue and that should see in of on continue range that bond that down, million roll then

the look One of the receivable. recoverability of things that each that at note is period we overall

on basis, And plenty so that so have independent that. comfortable we takes look an of a that with third-party And that we of have a bond at recoverability the capacity. auditors are our

overall bonding If a we at projected somewhere Ranch, capacity $XXX from bonding look And overall you to we project we'll Sky public our $XXX investment an Ranch is be million. have we close it. and build improvements worth to somewhere at But won't the total of of of out. around have accrue take Sky capacity million the

that. Colorado, plenty make I've improvements, about continue state. incremental that build where on basis, of tax as assessed bond a have to adds And talked to on even we'll sales more capacity those So, an in value we past, these value, cycle. is the in each repay out commercial those will incentive

we Xx taxes. we taxes of revenue from amount residential do get commercial the So as

has commercial see So repay. going, higher gets our balance you'll as improvements on forward lower roll because a public to overall much capacity in that retained the the

John Rosenberg

is And enlightening. Okay. very that

from housekeeping nor from -- the the can't we back looks not the your that, your I'm the like me, statements? would mill statement, rate? payment tax identify I it I in What items -- quick Because assessed sales tax a any though. or, items would excuse -- that income on from flows Just cash see in where

Mark Harding

in be the note then to It receivable, receivable. and the the note payments will

had... haven't we So

John Rosenberg

Okay.

was You quarter, revenue certainly lumpy. that in it of had this a item as but mentioned last

Mark Harding

That's It right. is exactly lumpy.

John Rosenberg

But in seeing, I'm the not guess. X month I cash flow statement,

Mark Harding

some. is There some. is There

You'll see we... because

John Rosenberg

can take sometime. We offline that

Mark Harding

that's No, okay.

John Rosenberg

Notes number. a receivable as negative But...

Mark Harding

And question question. will -- -- bond between great And will excess the very because I folks they would revenues. you not is the lot not a offerings, us your asking see, municipality pay interest question say because interimly, I local Yes. they are of get a same it's even have they're insignificant. And

there'll of do And be thousands Sometimes hundreds offering, then when we bond get we'll dollars. a of millions of dollars.

And that, so recovery that that receivable, through the note we flows. the then you'll see runs periodically book but the of -- see note you'll in when of just P&L, through statement the cash receivable

John Rosenberg

see. I

an Okay. note party. item on payment do I receivable related see

Mark Harding

Yes. Yes.

John Rosenberg

to kind right Academy just for Ranch people, the brief And now? it enrollment of what is other keep of Sky

Mark Harding

right students. Good XXX around question. It's

So, offering we limited a had grades. of

which K-X, the offers opened school, up we So K-X. middle

Next we'll eighth grade. add the year

Following year, we'll add the ninth grade.

incrementally, And add so of we per year. X students grade

John Rosenberg

sense. makes That

your to Okay. to next week, come would love can't. I but Well, appreciate I actually it. event I

luck that. with good So, with else. Good luck everything

Mark Harding

that all highlighted you've folks other webcast. will on session be that as just then a for the Q&A have a And there will listening, we

you want it on Q&A, sometimes but make helpful listen out, So of well. some if in as the that's can't to

week on take look got next at can't I out send a that. remind to another you at that announcement if make scheduled And So but X:XX, think that just folks. it, we'll also we've

John Rosenberg

well. Great. Very

Operator

Your Tucker Advisors. from is question Above Andersen next with All

Mark Harding

Tucker, nice to you. from hear

Tucker Andersen

I met when you, first than I A lot guess. company different

Mark Harding

Yes.

skeletal been bit. But more your No, and quite solo. much yes, I staff. a continued for you I may flying we had met, I you a think we've thank and And loyalty. have grown

Tucker Andersen

try even the Q&A, apologize, and on can't I get the I as on will somewhere caller, but ports. don't visiting land at Great was that on long-range point, your the once that again, think at But I development anyway, get different I'll previous be there. plan Lakes to actually point.

on So you can it'll remotely. where I you, join whether depend I'm, join

Mark Harding

One might it kind well. and all in of winter, as times ski weekend parlay have do that the into these we of can try so a you to

Tucker Andersen

sales? the drill a about you her. to helpful. And And feel first even lives I that told X worse coordinate and anyway I of prices meeting will Phase be daughter Because be me, sort happening it -- we're seems what -- my think average force price lot a the the down that, to in to But to get you on I want detail, I go escalate, Denver different you it and the the you continuing can Well, again continue for And once as able and with of irresistible to lots? sell very was I you do the to continue and object the decline. to go in phases should because affordability was I prices but too. thank think wanted to for movable as segmenting your moving through thing escalating to very, you of visit through of terms

Mark Harding

Yes, we do.

contracts ground and on in to we've each I phases. builder Phase XB Phase And XC there broken have so of and those what we're in each for of we're experiencing, specifically. built XD our my inflators the we have pricing as

our but maintain so that sure homebuilders. margins, with make And to we're we we want also partnering

the value compete sure to participation our And we're because also the competitive to offering for so we really and a want in to want high the to marketplace absorption give this. their continue but in proposition the homes. We shareholders, homebuilders make be on that do we want those opportunity

and the those. getting our right getting can for that so there's absorption our so of number development customers numbers are delicate attractive our the their aggressive the getting margins, margins so maintain And maintain and right number homebuyer to right balance builders of

walk. line So, we that's the

to we We market, at and we as but function see in look a all any no price add increase, of than X continue continue any that's to affordability just other market. different additional those phases. of Denver is

Tucker Andersen

and mean duplex builders of that that that, mix viewed that some a you Or the different movement entry-level towards as affordability your does sort of other you in see builders to in more same rowhouses? as of this keep the being of is And terms through phases? the as go

Mark Harding

a position there, mean, market it I mix that cater is and a mix, you on it them in us when that of segment. does in a there, to single-family I entry-level think that allows us renter as allows to No. broader it be that, what throw to

So, square for X,XXX and And maybe have you detached XX-foot house, have a different the a is at price point. that Xs. in X,XXX low-to-mid that entry-level square be they buyers and house may foot traditional you've if got feet, a then

you've different a point. that's If price a got duplex,

and price If the to once point. products built charter flex you've those a a you see all different have trying that comes they're that out but built, into those to community they love available And really level, that are into of entry variety you really townhome, it. we somebody and all a it. got school elements want for sure here, all that's They types. a of we've attractiveness the having what and make They're have

Tucker Andersen

any or the anticipated is mix change And there of that in you're the using? builders change

Mark Harding

The a builder isn't a We continue who thing is goes by flattering by that to week builders. almost to add there who's get revisited that that here, here. be I really don't is wants not

And Phase to Phase we move are X have the capacity X look from or in portfolio. X, that we increase We as that. X to this builders may of

lots lots have a network building we have year, looking that transportation. of very we're in portfolio. year builders be a year, growing of Instead XXX well a XXX XXX we very may and developed and to may at that established, lots X large Now we X, a

maturity to portfolio of of add to because project. the to continue the And accelerate just so, that yes, we'll and continue we'll

Tucker Andersen

that, are sort have do those are do all continuing the do And of you you been single-family single-family plan that, of outsource of rentals or to management division And you the the and rentals, you Or in-house? as to a view management? that you another outsourcing as the add company? you

Mark Harding

It done leasing as well maintenance as in-house, side. both is the XXX% the

have don't of that shows rates. maintenance homes. through because have renewal website each But really and of they're here, shows model side, coming leasing new homes to had brand have we we of that very dates each the stuff forecast network and Fortunately, online, for homes high a model are sort that the do affiliate it residential of direct much success available. have we It that the separate folks the we

And so have tenants rate there our that's we for on right that adjustments and that structures terms the make pricing investment, in for gives the attractive, as make be are a an people our return index in us right? structured market the a each at we're gives make is rental on multiple We rentals pricing, one we as that affordability to X-year us, lease can such also that. continue we're it the tenant want year another tenant to sure but that such appropriate. of we that are and of right for sure So, we renting that good a

Tucker Andersen

Any thought turning those on in any of of that rent-to-own leases terms over making inventory? rental

Mark Harding

that something -- be That's would do that. evaluate we

needs liquidity depends to that those that what to continue an acquisition where carve And then needs. portfolio. think roll liquidity if another the can or maybe look It something want need on institutional would group we is event like of I player. we the those we build have and we out and up for cash we a a to that,

like us, continues in it opportunities spin liquid returns portfolio. flow those or individually always terms appreciation we'd as cash portfolio, as a market is keep and off for on generate of to of either well to as them As very the the homes, but the to there double-digit both

Tucker Andersen

real you market been I calls cash that's your Ranch things that, but capture at project it any Well, put given the King the expand needs land cash how flow a is was exactly regard another of reasonable asked the you there possibility, bump gradual implicitly now you opportunities expand to Yes. able being and a and would tight with rental previous leg is similar you as a appreciation would like one then in if saying view land presentation, stream. on a needs was that's time in thinking and didn't the in to terms your find through one Denver increase beyond Ranch be and questions that and company with on Because what are into of, development. there your King of to environments as And the that developer?

Mark Harding

Yes.

bet. You

we've You we an But opportunity. aggressive an are about opportunity. disciplined I will but about mean, say, and highlight that, by for bet. haven't acquired the we the additional didn't I haven't token, also lost market being it been I acquisitions. very same very we in

that. more the at still we in the does want marketplace forefront more we table our of acquire to and than making excellent be land so very to water, the of that with able powder are water, the those investments much us an advantage where liquidity have opportunity land and keeping some dry towards are we And and same take do sit And on conversations to to our but provide probably down priorities that. strategic more

Tucker Andersen

the gives Well, I a think comments if that out division advantage acquirers. over perhaps as pointed I correctly, water in past, your your understood land synergistic other you've you

Mark Harding

right. Absolutely right. That's

Tucker Andersen

Yes.

Okay.

that -- be in I that keep to with you Warren what long gradually seem continue long voting well the you me, your how on a machine, a who've other share it's hand, comment about underway isn't my is have away of because thank what the Just just the those long the Buffett's Board, you. if it's market said, discussions done term, value? around you're to figure the along for be the us you admonition final But the worth. dead, company weighing In talented you out, of market's the base, long And regard, are I the you might short time, the have We're what path creating? hope shrinking appears frustration very That a But liquidity and always so in are I more think on aware value going doesn't sort just adding hope that of I and that recognize a market value stock. all And a make machine. as to of know. you significant far been there you and run. out the undervaluation in very what term, you've for doing. other it'll mind would the of you current as you point run

Mark Harding

take all non-deal can of the quarter. roadshows our And company, industry continues days, don't peers, evaluate we to capital a to that, opportunity and a me, has holders getting company look folks taking every an our in we need add because and that and folks understand taking You the peers our aspects IR that. bet. that And it we're I new that and shrink to our guess to a a that. going continue that here of conference be at strategies value, We loud investment look that, evaluate and excuse outreach, to out on at at those out, and continue participation denominator There's taking on We always calls getting -- leveraging to and the that my talking industry look hear to on look every investor at has ability clear. great would more do and being the for aggressive month. I

stock. on and try going not the the that. We're it's that. in the continue going to by the end at longer add do We are to that. tail returns of to Again, continue doing we day, and make market the to But shareholders to value a

the will at timing the be of to at and that. dividend policy dividends, look and we continue We declaring looking

closely be making it annual closer revenues where dividend annual side that that's doing at the look to is little bit on our at we're aligned like continue We our still on overhead. the exceed agenda. to what -- a that. to point a sure And We'd

very that. that us And so some And that. close to allows doing getting we're free flexibility on

metric I be up good think come as we'll into continue we So, will you're people And to results. approach. That all-of-the-above put right. weighing

Tucker Andersen

so monopolize help And detail your to think of going much for continuing to sorry the you've everything valuation. time, that's thanks I one is of to but provide the things done. I'm additional

luck. good So,

Mark Harding

Thank you, Tucker.

Operator

with question next from is for Management. Your today Geoffrey Asset Scott Scott

Geoffrey Scott

questions. quick couple A

going Is when early. XXXX activity XXXX? or said a are be you side, On you event the see to commercial we still a it bit

Mark Harding

probably to 'XX. push would I

have or would plus be that up still convenience commercial small We retail commercial be a the year -- really store. it by look a can But that's take when at you some C-store major a out. the interstate,

Geoffrey Scott

activity? XXXX So

Mark Harding

Yes.

Geoffrey Scott

is costs, building cost, fees been the land tap price a a have a The margin. home the flat. some the cost Is and profit of the like characterization? It that of water fair seems function fairly tap

Mark Harding

No.

Geoffrey Scott

last XX gone in fees the have tap months? up your Have

Mark Harding

They have. have, significantly. They

it's take think tap you Sky a of our... tap $XX,XXX. a couple it, couple, so And Ranch, fee our I by water I would And at it's around a average -- our look -- say was When started we ways. and

Geoffrey Scott

That Combined. was combined?

Mark Harding

Yes, it was combined.

Geoffrey Scott

Water and wastewater?

Mark Harding

take got we've I close Water to tap for And up this our evaluation $XX,XXX. think will and wastewater. rate that water that a Right. month fees

So, $XX,XXX.

Geoffrey Scott

Is water that $XX,XXX for and sewer?

Mark Harding

Yes. that's think the water. I

to it it's about think closer I take So, to going $XX,XXX.

Geoffrey Scott

Combined?

Mark Harding

Yes.

Geoffrey Scott

about What price the lots? Okay. selling of

Mark Harding

price to... lots Selling of continue

Geoffrey Scott

different. all are Lots

Mark Harding

footages of we're because coming that continuing different different increase a categories. They're front But the are. about see online. each They XX% the are have to there we phases or in and XX%

of as aggressive So, lots, we we to started developer. and selling out a we the that well were ourselves establishing market with knew as be needed we terms both because in

And now to so in I sold at $XX,XXX our would say the $XXX,XXX. are closer we first lots that phase

Geoffrey Scott

Okay.

nicely. continued up to creep So they have

Mark Harding

Yes. balancing we're mind, And keep that. in

are very the that that tried making home our the and making our margins money are -- the As making detail adds balancing velocity homebuilders price their margins, home. earlier, to homebuyers of that the are with sure sure I to partnering, on we're our of this, commensurate that

component that, important overall because the So, that want IRR of velocity that -- to we make is sure this.

Geoffrey Scott

Very true.

Operator

[ Vennett Instructions] question [Operator a from next ], is Investor. Private Greg Your

Unknown Attendee

the did school, for for reimbursed The How or we does get work? the school? pay school that we do

Mark Harding

Great we question. No, pay school. did dedicate some did for the not We land.

primary over schools school They the National largest called a Michigan the school land building we Academy. sits very we are out And of campuses. wanted operator. Heritage really partnered charters a have and really nationwide. XX,XXX their They they first school donated campus K-XX K-X. single So, liked actually stage, it that But full school. that over do to K-XX in well one it's on of operators the of campus, curriculum. one developed charter Most the and and group we They have a for that We in with matured, the so were students. XXX have country, continuing focused we the they're much wanted

Chair want as Board, to the charter were I of of so maintain that -- school. to value sit to the investments that partner we them. They They school demonstrate the the the to school the we do activities. continue that charter we and thrilled such we And interface handle school. into with all made

of great in been so will We've Really forward to probably XXXX with first And looking year. the continuing start operation. into year the school, construction XXXX to that partnership. high which it's school a thrilled for roll

of continue those we'll results. to update you So,

Unknown Attendee

Is The capacity you or of that correct? the K-X believe school now. said there's now, I the there we K-X, students XXX have

Mark Harding

Right. That's right.

Unknown Attendee

the the What's school? of Yes. capacity

Mark Harding

It's closer to XXX.

Unknown Attendee

next years. the might at be you in that capacity school X for So,

Mark Harding

Yes. That's right. That's the transitioning then planning school. to of high the

Unknown Attendee

school private is estate? Is school public a a or real this is the this that... this So,

Mark Harding

public school. It a public It is is school. a

as say the there. it's students grades at neighborhood a those to free It's to we And that well. we them, got Ranch school, then are that the attend non-tuition for of Sky have based kids we've the I'd coming have students we coming school live -- So the service the go school. the that from but majority outside to in

Unknown Attendee

Okay.

the but for there another there are plans K-X for school? So There's plans are plans for another? the school, high

Mark Harding

That's a good I question. don't know.

will Sky have to have we the us happens beyond we you in and We with primary a on. do live can is schools additional site conjunction that school. for typically, we serving high develop in really If this Ranch. If developed discussion feed -- the capacity, another we'd a NHA. X what And that is be other students did K-X that another students

picking so the would surrounding areas. land surrounding development we area, students up from And be

valuable do to want NHA, invest opportunity in an no How make we belief, than spill if there's so to investment that. And there's with I And education. that. and that, over, to more into do we sure but conjunction personal

and will valuable. in investment Sky continue education that so community more make more the to Ranch And

make we're their student they start -- discussion, that's be be having investment that that because having in. they'd would capacity we're they're on the as and something the to to and as make that discussion students we So then interested turn a as that willing capacity, that's side with away long Greg, are to a something willing land they NHA, at

Unknown Attendee

competitions if -- when you're if you're at -- Or it family? fine you're young so there other comes as a in a and as choices you're Okay. looking Academy? are have Are family they other there and The young any Denver, do to education

Mark Harding

a is go state, wants choice and funding follows actually student. to the can So the state Colorado go, where student So, it right? the

So it's there.

your You school. go to neighborhood local can

in charter a be would school neighborhood. to go not that can your You

You they're to all can in school not your a go on based capacity. and public neighborhood, that's

into And a a so who to school a then run if serve. you start they starts have issue, if capacity -- of priority they

you in then charters but really our in live once us. from still we it's Ranch. the Sky Sky schools, live that district so that of and Ranch at students into in dives look the And this preference that detail standpoint, And students Sky that if we meet is Academy, on Ranch all our the have capacity, needs and the the students live

School is that charters District. the district the Bennett us Now,

capacity priority. Bennett still then of then availability open the So, sit to those school those next next students of a of live is then that in the and the priority Ranch City in you have If no geographic in can district, it up the Aurora the student the neighboring there's which the And Aurora. residents priority. Sky and in district, within the District, of that live kids additional next School that get City priority

and school of it then cascades it into the that's proximity building the jurisdiction So down both the local district, students.

Unknown Attendee

Okay.

So a different question.

know in? you're going against new I'm -- that to there coming be there the Or occurred available other to Is with of are points Ranch? where think choice competitive us market. the are that's online be are Sky just if you because wondering do I of that communities none communities familiar under Denver price Or competition there's is in $XXX,XXX. else your at going absorption coming nothing

Mark Harding

tremendous a that, say we getting there. getting time would ground, coming the I and to through out to comes continue very more basis process to in online, new lag location, any of going given are of our always be that the is the and costly. the but entitlements characteristics given our have the given advantage land, against compete probably competitive project projects There

new few takes market is every project. but projects because of last what out fewer are the have just advantage to because did doing and damn I frustrating that how of you of people a there's the costs project and than that competitive developing because That's we we not handled there, transportation location, so we're longer, more stronger we good not because and schools a new say actually And access, because think do do the so it have product.

Unknown Attendee

Okay.

it is Phase X, homes? X? for property, is it section, entitlements the So you... the to Phase Or X,XXX Because the per

Mark Harding

entitled. fully it's No,

Unknown Attendee

advantage, frustrating or? a you that have process, X-year or long I guess whatever X-year So

Mark Harding

I that's would would I probably think accurate. say so.

Unknown Attendee

Okay.

Operator

Elliot question Knight for today next Knight Your Advisors. from with is

Elliot Knight

quick a Just question. very

bullet that? slide, the There Denver On Could point; a shortage. you legislative support. explain Metro real estate is

Mark Harding

on really is of housing what to have So, projects. the we envelope try They types Colorado. and continue push

is what The against has in limits. so housing to action issue for Colorado biggest young here have bright product the defects legislation been homebuilders. And and for multifamily get ability be we occupancy the class lawsuits to lawyers able

the not construction so a And a that should defect, limit get to been loophole, easy held it's I type that they But not there's it's working way so the that's be is accountable. to really trying legislature class the such if suit. Clearly, past. in of guess, action

challenge continuing -- for a of press support with a is seeing envelope affordability. smaller a on -- bit footprint, aggressive it to little is because townhome, that experiencing affordability so And on being the how we're about Colorado more getting

reduce anything is higher to less pretty If $XXX,XXX, be higher you density, And that say still have an occupancy. number. the going way that's house is than entry-level to a to high

these that's of seeing recognize the so problems. some Colorado where And legislature we're

Operator

the And over turn call the will have end We I of closing for now remarks. session. reached the Mark question-and-answer to

Mark Harding

Investor want are seeing that do week. to Thank Day next reemphasize, We've Look out Wednesday. next registered number I forward our you. you here a for So, have to, that. of folks got having we to just

will We over want website, link, web to to jump into page send the session. our of Q&A on release or if link the reminder the out just all you you the on a that'll press give

helpful hear comes to it out it. once it's and So seeing folks well. view to get are that, other it making somebody of if to for sees how And that it's you progress their here the always can't we're out make helpful as

So, out don't into to I'll and that's really meet like roadshows to going on trying or link hesitate that. bit on be Midwest investors get just Coast, in to and non-deal meet chats East Coast West and investor institutions new various just hitting that. And and a for be markets, whether things the with market more, with

a I'll forward So opportunity and this in all an as rebroadcast get we hesitate and me if person. listening to I scheduled, don't And with those look give to interest, you call. will that to your shoot you're to out see a something that, you to piques But with close.

Operator

This concludes time. Thank disconnect lines at this conference, your your you and for participation. today's you may

Pure Cycle (PCYO) 11 Jul 242024 Q3 Earnings call transcript