Global Water Resources (GWRS) 8 Aug 242024 Q2 Earnings call transcript

Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc. 2024 Second Quarter Conference Call. [Operator Instructions] I would like to remind everyone that this call is being recorded on August 8, 2024, at 1:00 p.m. like Vice the President, now Joanne over would Executive Ellsworth, Corporate Time. I to conference turn to Eastern Affairs. Please go ahead.

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

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

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

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

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

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

from highlights. some will XXXX. rate XXXX pleased growth the We prior. Total of increased X.X% second for the of XXXX, with are to very connections start quarter active to The as operational XX X.X%. report I service XX, months is XX,XXX results the annualized June

rate drivers. Year-to-date, existing very being regulated safe regulated trend safety utilities our face of $XX.X and also year-over-year with X.X%. revenue rate our service. finally, improving growth in our growth we mandate, higher continues And revenue we've our important into proud to organic the top interest record. higher, it's growth highlight infrastructure, provide invested health reliable Mike to remains which is that details to While rates, are public compliance of provide even will million on up the and strong our

had nearly been For prior, compliance continuing compliance our the X this and and quarter, XXXX fact, streak a means we in event. years from events, it without X significant significant has

what core growth approximately greater permits XX,XXX is organic Phoenix and want The area. ended dwelling I market unit to utilities. building on metro issued the discuss our in Now single-family customer going XXXX with in

dwelling XX% building of this the half the City from single-family issued Maricopa XXXX. In year, For of of XXXX, market permits. increase building this XX,XXX permits, a representing QX XXX realized first

a For year, from the permits, building the first first the market half of representing XX% of XXX realized XXXX. this half increase

Maricopa. strong the City was XXXX the As data QX Metro Phoenix can in both and year-to-date you permit of see,

market this term. with the hard to However, interest back the housing it inflation anticipate rates on the in is will inching have near fight, the because significance of up continued potential

must large-scale, to immigration annual growth. some will and retain dwelling occurring shift supplant of there this and, units with this a single-family more there time, of demand reported, an notable, multifamily. On a will Metro in the This note, home a is at is strong significant previously Maricopa by believe with be businesses. run shortage a complexes thus, retail shift there level, Metro XX,XXX housing However, commercial and multifamily consensus reduction We and keep high-density the housing the and job units along pace approaching year met Phoenix rate as growth. single-family dwelling combination remains City per Phoenix, in in to over be that net

fact, housing data half the represented the Maricopa, the units was in compared or units X,XXX City also an In XXX%. XXXX. strong permitted year-to-date of XXX permitted multifamily XXXX This of in with XXX permitted increase units first unit to of

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

and to where with Motor just planned boom Arizona Corp state chip Previously, the land. Additionally, Because facility eclipsed unprecedented. of continues. from is Port There continues acquired here Frankly, & time additional to these has things, made $XX.X in occur industrial invested potential industrial an of best including been investment announcements manufacturing and our Procter Nikola was all Intel Inland industry perspective, Arizona the single Arizona on last recently XXXX year significant service also here. XXXX, and as future XXXX remain the Gamble in expansions at TSMC that billion the we explode was development the for area, what further bullish year. continues in in economic

to a City businesses available. Respondents property in had center double relocate looking dozen is request large Recently, city X,XXX included reputable on for the process Maricopa land and they the railroad. half land, Initial announced adjacent of corridor are ran with Maricopa. existing park interest on to of an market acres recently smart as a a to preparing more a the for Additionally, are large it than that they interest Arizona to. of presentation and gave industrial large very the include a in to bring complex rail industrial over public of a City plans right the

more, in the July this on recommend City in watch Horst in XX. visit video I years and exciting YouTube More you project on the to the recording information and housing we of continue Council to see interested presentation commercial, will Rick multifamily addition growth organic come even to believe industrial trends, the City on to come, the we of these of page that the all learning you're large-scale future. Based stronger considerable growth. of If in Maricopa's to return

year. and As other yes, up drivers earnings with I and have mentioned a this high our growth impacted earnings inflation in far us cost bit so caught our release,

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

come can So solid for ways infrastructure. I new the we to scarcity, wastewater that Water, and highlights. water earnings consolidation, to grow: stewardship acquisitions while growth, water advance and Water years to now of the areas, Mike be for is and aging how the able grow X face and our of customers in of to realize aggregating year organic, call of growing and mission environmental XXXX be another all over regionalization continue things these rate Global the benefits challenging see all means going Global regulations the utilities cases can putting financial this the so will to service of turn together, as you on subsequent rapid considerably that will and that, in we the

expense to in and XXXX. an This $XX.X $XXX,XXX of X.X% XXXX. plant QX approximately Thanks, X.X%. to up Ron. related Southwest include Hello, XXXX. consumption by of of a everyone. $XXX,XXX XXXX QX compared in million was growth XXXX organic quarter service increase $XXX,XXX compared expenses Total lower portion expenditure which the which million, in and for is changes our program, increase and of or irrigation to depreciation expenses Notable second tied the primarily revenue to increase million capital areas, X.X% from to $XX.X July of of construction is revenue our in activation the is the in customers. Operating operating for was attributable or amortization $XX.X QX offset The were

increase as general we of costs, and we wages to increased and which well increased expenses, to by medical maintenance and attributable and assets and is as primarily chemical operating primarily was by which higher expense. moving offset expenses, which grow. Increased salary were maintenance hiring XXXX amortized as in deferred $XXX,XXX, $XXX,XXX, QX partially in administrative utility compensation These didn't costs XXXX. Increased and wages intangible Additionally, repairs and by QX expenses. attributable lower occur approximately salaries $XX,XXX and that costs

an for Now expense and in lower increase income interest reduction $XXX,XXX $X.X to was expense. QX XXXX offset to driven with XXXX. XXXX. This share, million QX $XXX,XXX, note QX discuss $XX income, Other by year. Net expense of the was higher other per expense the compared in which or million tied of diluted $X.XX for QX executed by the was the consistent is income beginning to interest we at XXXX which was

talk depreciation part as as current and to about such as $X.X XXXX items Southwest QX our Southwest for plant of stock restricted expense. lastly, $X.X nonrecurring purposes. XXXX, included earnings we of discovered $X.X call, I well adjusts revenue infrastructure our deferral million plant as ICFA as EBITDA million EBITDA, and previous for Adjusted in such adjusted was plant that service prematurely mentioned ratemaking on our Now docket, million in items which as XXXX. And noncash as was in was QX

filed March place As costs our Verde X, X XX, customer until Water, which XX, that XXXX on inadvertently by will orders. to to file bill The would no revenue credit part of to Corporation bill well subsequently the the the subsequent #XXXXX credit bring requires revenues XXXX, approximately on a year. by and were be these our rate XXXX. XXXX the approving with XXXX as than Water, as staff monthly $XXX,XXX Arizona which Palo of The an in requesting Arizona on result, a decision this XX, #XXXXX order Palo our met will then with as earned Global December an to Commission ACC the of rates rate approximately August reduce rate And Global the in order case, credit XXXX, effective July we next $XX,XXX. bill included decision application later attention. Verde Commission conclusion their Corporation a issued date April with We reduce

stakeholders, the initiatives the predicted amicably be quarter. approval the on to is quarter and cannot now our that I'll the regulatory update call including outcome in and this and pass our positive a results. could activity of exact resolving be and this material, a the strategic is step of in shareholders. This believe we bill Chris fair XXXX first all to resolution credit way for remaining financial While concludes customers the review to second issue

the at quarter Thank Corporation the Mike. busy spoke. Arizona you, everyone. a It has been we time Commission Hello, since very last

commission rates X. We with commission District approved by We First, charging commission Water, the since for received The Global to hard unanimously by the minor we appreciate decision commission utility settlement settlement it effective started the first was final agreement these of a the approve new division this modifications. the voted the saguaro years. agreement rate July the especially case, staff work and on the number case. in

typical underway that we a XX, Second, division filing XXXX, the administrative process. sufficiency in rate XXXX. Water case determined for utility. estimates filed XX, now December of XXXX, actively that On case July the were we testimony a as we case is million. the case approximately revenue our with mentioned meant Farmers the commission, Global their ACC last staff requesting The On quarter, utilities and June rate following rate increase staff preparing $X.X the

guarantee always cannot not we with As case action the rate may take. what commission filings, is or may the case

and heard X Cruz, Third, Global year discussed, Ron a Santa utilities. and you earlier, Global Palo as in largest Verde, are previously Water, Water, test we mention for our

to and filing first efforts reliable providing the of efforts growth. and to that our investments on the safe, the XXXX. in We community ensure educate continue are outreach customer we stay anticipate case continue service we We proactive making stakeholder half of outreach ahead

call of approval concludes XX, my May application strategic an Ron. that as activity requesting well. This the initiatives the on to update now I'll we and Finally, the Tucson quarter. for processing at case acquisition, the on is and now regulatory pass filed back XXXX, ACC,

headwinds. we you, It remains Chris. the meaningful to Thank despite growth clear achieve continue

Global that to grow and communities you. plan, We your our mission to appreciate investment As expanding industry, management at and the we stakeholders prepared concludes as to water Water believe of execute and resource applying matters management us We expertise service intend available growth our be along of and Arizona remarks. the of we economic beneficial Corridor, total and the our efficiency allowing our water water advance platform involved. questions. to achieving answer consolidation. thrive. That to our to support forefront Sun throughout regional new and our will our utilities truly areas address all we We're now highlight utility, your important development Thank remain

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

and space. I anything only to question, acquisition if that wanted pipeline had discuss one could you real and in that's happening acquisition, see

is this question. Yes, for right there still Gerry, out are Chris. now, Thanks the there. opportunities

Arizona As highly you is know, fragmented.

I look journey. in what think about process state. that that closer focused the us Right still next the the the Tucson at number reference think quarter. start acquisition they And in for then getting earlier number in finish is in that I is steps to on integrating We the we filed we'll XXX the it, utilities think go getting line, the continuing to over the pretty the approved through now, commission. commission we're that as

Got when an you. be do have and If indication think one? the acquisition you you give Did you you of would approved closed? Tucson didn't,

Yes. Good question.

end around then. we're or generally early targeting of So year in quarter, the first the sometime either

call questions, no I'd turn Fleming. now please go Sir, to Seeing further Mr. Instructions] over ahead. to back [Operator like the

operator. you, Thank

the Just with to and participating Water. thank want on look speaking ongoing you to we of again. everybody forward Thanks, support your for and call for Global

concludes This call. conference today's

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