Global Water Resources (GWRS) 9 Nov 232023 Q3 Earnings call transcript

Greetings, ladies and gentlemen, and thank you for standing by. Welcome to the Global Water Resources, Inc. 2023 Third Quarter Conference Call. [Operator Instructions] I would now like to remind everyone that this call is being recorded on November 9, 2023, at 1:00 p.m. Eastern Time. I would now like to turn the conference over to Joanne Ellsworth, Executive Vice President of Corporate Affairs. ahead. go Please

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

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

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

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

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

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

the the of results We to third are for quarter very report pleased XXXX.

celebrated Water our in XX-year occurred, a milestone First, that anniversary. Resources recognize Global I wanted October, recently as significant to

As are here this from honored celebration, Nasdaq ring It's XX the in today, XXXX. we time incredible those market earnings be the Times bell. listed over journey site the where in ring call later on including first the to we Nasdaq and from closing will an been part of opening Square, holding bell the years, we

utilities As allows started we is up I stewardship shaping to by benefits getting regionalization provided only evidenced scarcity. in earnings our clear water information year our is continue today release, best aggregate manner a to that water recycled to on experience are yet. realize believe our communities and to we is that the the momentum of the It wastewater be by our face XXXX and in mission the in and environmental water, consolidation, of here

highest highlights, outcome earnings mentioned Phoenix the to the shattered I discuss several normal discussing on locally over briefly summer. I records our a our prior of experienced before As degrees and days number and XXX that pump single-day records period, of degrees. Because repeatedly records for volume records set months is calendar broken, records of were highs prolonged just and for this throughout. high broke Global weather pumped total not average for temperature daytime XXX that around throughout record consecutive Phoenix occurred high as over volume call, last want it numerous in the Water

for and Water to billion reliable our that us allowed water own service totaling gallons entire Water all to I in consumption recognize X.X to to Global automated and for planning customer recycled record reading, permitting, thank able Management is us hard the increased gallons. the maintain demand and that maximizing systems. More quarter. I'm it notifications our pleased for want on customers resource safe For automated unprecedented our also use resulted all-time water, This to and to be the resulted recycle of throughout. worth regional broadly, wave unprecedented rate billion heat report of approach our Total and conservation allows was team X.X XX.X% meter work commitment and their structures. Global including demands, noting year-over-year, and for pumped peak shattering QX, ultimately ready gallons our this during utilization the smart Water water in as that

to X.X% from last active as total operational XX, Turning increased time XX,XXX September XXXX, highlights. connections year. same Those service include the to of

X.X%. In established. invested July investment as area, connection to support rate, large million put is of Maricopa, in service off wastewater water of plan just The million. excluding infrastructure in XXXX new of will the remaining our of flows of a community utility growth in southwest $X.X infrastructure area. Home support is started Water sufficient are service utility Southwest the the that active a this acquisition in was significant development value existing and Pinal annualized we Farmers the of of into service master have growth portion residential Our strong. once and in the $XX.X put was the plants third and total approximately Company, to projects sales this service into quarter, quarter Ultimately, continued be County city area

Water We issued our the Management. leadership highlights governance also and company's annual report, in first sustainability and social environmental, which Total

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

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

well surpassed X have growth. but over compliance whose without have me preventable significant In fact, gone positioned update pause, here OSHA team so and us XX years highlight this reportable such means now months since our and want a X of for only company, wonderful a allows years event, we and after last also and event. I performance our X incredible exceptional thank has month Water not years to provide the Global X now to at

more single-family building areas. and this single-family national is middle permits. In permits to with for home into what is local places for large-scale and but high we recreational people a play. That to the a pace city I at our was continued housing, continue continued increase. This but as in housing development and to we seen our early as X,XXX reduction slowdown, significantly XXXX, well on XXXX, the currently and similar is, customer constructed in why booming housing migration the and going and all local XXX as year well, over The accelerate in and actually in live, economy net quarter seeing multifamily face higher trend to permits organic XX% in XXXX. slowdown, period that what did issued has in nearly of saw compared but Now pipeline continue to the Maricopa of of a still is building our largest number third represents quarter Metro Despite XXXX the job the units In Phoenix service started does going also XXXX utilities, realize being a Maricopa suggests extremely and in experience across have as third permits of is the Metro multifamily same net requires of market towards and Metro a rates This data permits activity in XX% continues our areas Phoenix XXXX. City and fact want in Arizona of utilities. Despite the Phoenix XXXX, projects on the around number the the has Maricopa, come. based record still the work to commercial, growth in the discuss record further on XX,XXX stabilized years creation. Metro of that in core for this XXX for with the more in recovery migration slowdown and service a interest Phoenix,

it American welcome from Population Community to XXX,XXXth Maricopa Review. Survey In U.S. Census an of today. was XX,XXX expected resident is just XXXX residents compiled its by by fact, according That's the increase reported from that over data to World

region. XXXX Arizona time being the make strong in manufacturing years Valley perspective, where from come, these to for & located single that economic and areas, the this, the an of to see land. to located believe continued boom initial all of Procter in has the We've trends, continues, West projects and continue also we into will inquiries also begun facility we considerable year fielding engineering, best acquired Additionally, on XXXX. Because multifamily on commercial investment Based new our large-scale Motor housing Port Corp. is growth. Thank for excellent all industrial development construction and progress the financial industrial that addition of Gamble highlights. continue Arizona, where I to organic Nikola and permitting you. service including call will housing Inland we now turn return with the industrial Mike growth in for to over

recognition as primarily attributable escalation compared significantly revenue everyone. and quarter consumption same revenue was $X.X higher-than-average Ron. the annual as XXXX. The period for XXXX. in coordination to coupled of our up quarterly fulsome of temperatures The $XX.X was in to known the causing be in Thanks, which compared more explanation $XXX,XXX was million, an million agreements, Total lower XXXX Hello, third increase precipitation ICFAs. XX.X% due filings. the was of also to QX financing of or with of under to and can ICFAs A found increase infrastructure also revenue

and the tied XXXX. $XX.X in Water increase of to or million related with most XXXX agreements expenses factors an compared Farmers expenses otherwise QX XX.X%. contributing acquisition $X.X homebuilders Notable the connection of depreciation of be total rate of and in organic in by $X.X excludes associated last rates which our XX.X% or or water approved program, compared organic or services and developer homebuilder. Other connections year-over-year subcontracted acquisition capital decision, included for rate finance for our be developers Water XXXX, expenditure Regulated of million case and This QX to operating in infrastructure to rates XXXX or consumption, a that increase into million our portion recent plant. in QX to were Southwest Farmers of revenue revenue, we included driven expense by increased plan, and which is However, was and XXXX. required the coordinate is ICFA to background, increase the for an would of $X.X $XXX,XXX of increased new with This whereby connection Company, some the just approximately in wastewater February Global increase increased revenue amortization increase growth. to entered ICFAs growth. Operating the performed provides in million QX the activation to to related changes

increase, payments ICFA-related are tax increased by direct expense. increased the higher was power of also ICFAs, result cost certain addition, primarily cost acquisition, personnel contributed when and consumption, of amortization $XXX,XXX, property maintenance expense and operating additional occurs to a to intangible increased as related Farmers to assets In attributable the received which for purchase which costs

$XXX,XXX the of Other Now $XXX,XXX, in was to expense income which QX XXXX other was XXXX. expense discuss to of QX lower slightly expense. for compared

net to QX $X.X net share Water of Turning compared or an QX income. $X.XX of $XXX,XXX million diluted or increase per in income to Global had XXXX, XX% XXXX.

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

talk on purchase agreement recently I'd liquidity This our financing We recent interest-only our $XX an to executed Lastly, like X.XX%. about loan note fixed rate is position. October at a a of XX. debt XX-year and million

average with of our outstanding is weighted rate and now of is approximately cost Our debt our revolver. fixed all of X.XX%, debt exception the debt

thus until our so incremental January We million our plus liquidity pass this to a the concludes expense purchase and a XXXX. not note of call line XXXX the the of be support the will $XX agreement, received to of incurring case I'll approximately and needed in our delayed strategic Chris review quarter. any of in interest now the $XX feature $X cash results. investments From our over us update the million perspective, couple financial million existing we'll third the credit for to million rate $XX million have $XX years. This and mission on gives of funding XXXX initiatives future liquidity and next quarter the not

Thank Hello, everyone. Mike. you,

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

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

Now Commission. on at Arizona to activity the Corporation

approximately filed excludes rate will Farmers approximately revenue earlier cases you in This outlines we over as this regional issuing Pima that on the in scheduled of County. and in and this including XXXX. It consolidation XXXX. the will -- January of Saguaro year. rates which for case. the utility case for comprises recall, quarter, filed region The utilities, the The and acquired the rate rate commission case legal around expected, case commission case case with we March phased the we is testimony As their also It rate steps. next proceeding entities. In be hearing case, staff procedural customers requests comprises discovery in X,XXX requests the the X received Water the is increase a requests in June $XXX,XXX order year, staff

pass also initiatives would back to to decrease the effect. This go can quarter. note described call take the there into result ACC regulatory and will approve as the rate if be any rates I on when determine the may rate could other rate Ron. will as can increase actions no timing above, is ACC no for be increase activity that I'll assurance Finally, ACC the a assurance to rates. it possible the now any, or future There water update the the consolidation that of strategic case. Further, concludes increase, and of for of the requested the the

Thank this mission for journey yous. you conclude possible and would our have today you, been dedication commitment thank work family. and able Global in entire your the We believing None XX-year thank and with be each or continue few the of amazing without hard to Water I other. a want Chris. would of to

the would we our customers partners, our over to with pursue Nasdaq. We regulators, many our contributions in our next possible shareholders and success from and look us. years shared have also appreciate continue important partnership consultants forward to working including to your without Our not been municipal beyond support and XX ongoing as these and success. stakeholders, together here our trust others, We many contractors, and of developers, relationships value the

We our just started. That highlight prepared you. are getting truly concludes remarks. Thank

questions. any We are answer now to available

from first ROTH [Operator come Sweeney Capital. question Gerry with Instructions] Our will

went Ron questions lot Ron front. went my growth, over that on I in on had the really depth a of potential some but --

part about the maybe there's some positioned well but discuss not in your maybe that can you sources always back, So taking growth. of availability support know a and you're headlines, they're Colorado necessarily to I step to concerns water Compact. availability water that, how

know incentives news, and do with That's it's Yes. reason in that the created the issue Happy reason what water, concept we created worth because of Total headlines and we always technology, talking reason to to fundamentally, Water company. that. continue the and I about recycled do is the be those do we Management, we the this rates, everything.

to these around was of decades, issue Phoenix out So impending going for and the Metro the grow job possible. idea continue decades as it's that and are water kind emerging push far to as communities as our of supply utility to

water we the in that true communities go those solutions. more the specifically, of years secured to we what of permits XX So be that's implemented have of serve it. we kind all allowed with kind done and over is large portfolios the along And that

subdivide assured Arizona, to businesses and in supply. land, and a So you if you XXX-year homes called to build have water get what's want

largest out area to around then designation of an as Maricopa feet and our gone example, it acre roughly a than supply, use year, water a but we're specifically just assured in acre currently service XX,XXX year bit per per X,XXX speak to feet we've that. little I'll less of city built So and pumping the

I So per just country, continuously the all that those continue capita solutions fastest-growing even we're one the driving kind mentioned, though we to of water down to conservation continues cities grow, Maricopa of and the perfect it's in demand.

today years can have we more that X in even acre frankly, ago. could fit feet years XX So ago we or XX,XXX homes number than

the the Yes, southwest, runway there. Colorado on we've state not but on have of Point or just our continue of utilities reliant River. communities for it. scale not and term, at always long-term in the to an that's of continually a that's growth are where active our and in challenge positioned kind immediate for the issue So even we lots opportunity We're faster. current we lots the being,

the I that answers So question. hope

does. It

XX,XXX? or XX,XXX say you did -- to Just just

it? Is XX,XXX. it's Mike. Rounded, looking at I'm

like It's XX,XXX XX,XXX, to yes. less. but change, little close A and

with Ron. go I'll

I'm I I the in do it's higher up, Gerry, but end, allowed rounded that. think to so

there income. That be I this maybe payment up. what some on you're seeing but upon to quarter front other but question. a infrastructure you that the Buckeye Buckeye, region, that believe picking other down, slowed made touch investments seems in exactly how much was the in it's on One the were and Can go...

Gerry, Yes, to answer Mike. this is Happy that question.

pickup similar up, So the of in the where City Maricopa to side saw a permit similar on picked actually we QX Buckeye.

Buckeye in And we about we $XXX,XXX this year, So to tied had had come last $XXX,XXX QX. in. year,

over $XXX,XXX it's quarter. XX% year about So or increase prior

how up runway like looking looking there's there to it's it's feels year, really it a and nice but shape stabilization going continued and the forward to good. for So

I runway? tell as on think Buckeye. on positioned it's know. I you steady-state of know you -- Do much a to as can -- sort

stabilized, or increased, feel pretty Yes. good knows. the exactly we mean and good do definitely feels negatively, future may but It positively that what it's on like rates Interest perspective. impact of kind holds, who pretty feel it's so we it. a like I runway about it's

Got it.

on Congrats bell. on great a ringing the quarter Okay. and

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

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

call. This concludes today's conference

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