Pure Cycle Corporation · NASDAQ:PCYO
Pure Cycle — Investor Presentation (2023)
34 slides from Pure Cycle's investor presentation, 2023
Slide 1: Pure Cycle Corporation Year End 2023
€ PURE CYCLE CORPORATION YEAR END 2023 Presented by: Mark Harding
Slide 2: Forward-looking statements
Statements that are not historical facts contained or incorporated by reference in this presentation are “forward-looking statements” (“FLS”) within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21C of the Securities Exchan
Slide 3: Forward: Measuring Our Performance
a 1 | FORWARD e MEASURING OUR PERFORMANCE e ASSETS TRAJECTORY e CLEAR OBJECTIVES & CAPITAL PLAN
Slide 4: Reflecting on Our Strategies
REFLECTING ON OUR STRATEGIES Visionary Leadership ofa strong and Dedicated Team LEADERSHIP & DEDICATED TEAM STRONG DIVERSIFIED BOARD WITH DECADES OF INDUSTRY EXPERIENCE COMPLIMENTARY SEGMENTS STRATEGIC INVESTMENT AND STRONG ASSET PORTFOLIO
Slide 5: Effective Leadership
7 _ FFRECTIVELEADERSHIP aS: MARK W. HARDING MARC SPEZIALY SCOTT LEHMAN DIRK LASHNITS President, CEO, and Director Vp, CFO, Principal Accounting Vice President, Engineering Officer, Principal Financial Officer Vice President, Land Development Mark is an exceptional leader who Marc brings over 20 year
Slide 6: We Operate Multiple Complimentary Segments
WE OPERATE MULTIPLE COMPLIMENTARY SEGMENTS Water and Wastewater Resource Development Segment © Own nearly 30K acre-feet of water rights (surface and ground water) * Sustainable water rights we estimate can serve up to 60,000 SFEs * Denver metro land development requires developers to have water serv
Slide 7: Strong Asset Portfolio
STRONG ASSET PORTFOLIO ¢ $40m in Water Systems ¢ $9.5m in Waste Water Systems ¢ $14.6m Water Rights Portfolio ¢ $64m Total Water Assets Our water rights portfolio can provide water to as many as 60,000 connections. This would allow ample room for growth within our current water system, which present
Slide 8: Financial Results and Key Performance Indicators
Financial Results and Key Performance Indicators < FINANCIAL RESULTS 62%) PERFORMANCE METRICS “gs MAJOR LEARNINGS
Slide 9: Financial Results
Financial Results Revenue (000's) Gross Profit (000's) $30,000 $20,000 $25,000 $15,000 $20,000 14,586 $15,000 $14, $10,000 $10,000 $6,000 $5,000 $0 = Us I $0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
Slide 10: Financial Results
Financial Results Net Income (000's) EPS $25,000 $1 $20,000 $0.8 $15,000 $0.6 $10,000 $0.4 $5,000 $4,699 $0.2 $0.19 0) uy u LI || so = = 7 | 2019 2020 2021 2022 2023 2019 2020 2021 = 2022-2023
Slide 11: Revenue and Gross Profit by Segment
Single Family Rental 11% Water/WasteWater Land Development 502% 48.7% REVENUE BY SEGMENT 1 Gross Margin for Water and Wastewater excludes depreciation WATER 60% ' Gross Margin LAND DEV 73% Gross Margin SFR 56% Gross Margin 12,000 10,000 8,000 6,000 4,000 GROSS PROFIT BY YEAR BY SEGMENT (000'S) = Wat
Slide 12: Water/Wastewater
WATER/WASTEWATER WATER USAGE REVENUE (000'S) Residential Tap Usage $503 Water Treatment Tap Usage $301 Commercial Tap Usage $296 Commercial Non Tap Usage $3,232 ANNUAL TAP FEES (000'S) $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 ° 2019 2020 2021 2022 2023 RECURRING CUSTOMER GROWTH = Actual =m Projecte
Slide 13: Land Development Sky Ranch Development Progress
LAND DEVELOPMENT SKY RANCH DEVELOPMENT PROGRESS vo 100% 2023 LAND DEVELOPMENT REVENUE proso2a 93% = oo > I 31%, > A 18% LAND DEVELOPMENT REVENUE BY YEAR te (00'S) $20,000 Phase 2b 48.8% $15,000 $10,000 a a i $0 2019 2021 2020 2022 2023 13
Slide 14: Single Family Rentals
SINGLE FAMILY RENTALS BOOK ASSETS & FMV (000'S) $8,000 =Book =FMV REVENUE 2023 $6,000 $165,000 foie = - - 2022 2023 14
Slide 15: Assets Trajectory
ASSETS TRAJECTORY WATER CUSTOMERS & CAPACITY OIL & GAS INFRASTRUCTURE WATER PRODUCTION CAPACITY TAP FEES - WATER PORTFOLIO LAND DEVELOPMENT PROJECTIONS SINGLE FAMILY RENTAL PROJECTIONS
Slide 16: Well Positioned Against Growing Opportunities
WELL POSITIONED AGAINST GROWING OPPORTUNITIES 14 COMPLETED/RENTED HOMES WATER PORTFOLIO - 60,000 CONNECTIONS 930 ACRE MASTER DEVELOPMENT 200 PLANNED HOMES IN SKY RANCH WATER SYSTEMS CAN SERVICE 3,600 TAPS UP TO 3,200 RESIDENTIAL LOTS EXPANDING OUR PRODUCT MIX TO INCLUDE: STATE OF THE ART WASTEWATER
Slide 17: Customers
CUSTOMERS WATER AND WASTEWATER CUSTOMERS AND CAPACITY EXISTING RESIDENTIAL SKY RANCH PHASE 1 All taps sold for 509 homes (4 are our SFRs) SKY RANCH PHASE 2A 192 taps sold as of year end (10 are our SFRs) ELBERT AND HWY 86 More than 200 residents NEW RESIDENTIAL Residential water and wastewater custo
Slide 18: We Provide Raw Water to Operators for Drilling
WE PROVIDE RAW WATER TO 026 OPERATORS FOR DRILLING With existing systems, we are able to provide water to O&G operators. We have also made strategic investments in our system to further our ability to provide water when it is needed, where it is needed in the future. 120 WELLS OIL RIG CAN DRILL DRIL
Slide 19: Current System Capacity
1584 MGD 1.022 MGD 367 MGD 259 MGD 15 MGD CURRENT SYSTEM CAPACITY Supply 3,232 Total MGD From Wells 49% Box Elder Wells _ Available Sky Ranch —=. = = DHS/ AFG — WISE Demand = Demand Results Potential of ~ $88m in water revenues at developed capacity The remaining supply available for use for future
Slide 20: Tap Fees - Portfolio Capacity
Supply 30,000 Acre Feet TAP FEES - PORTFOLIO CAPACITY (60,000) Demand/Capacity 60,000 Connections Available Capacity Current System Capacity Results $2.3 Billion Type Fee Per SFE Water Tap $ 30.977 SewerTap = $7,250 Total $ 38,227 We own or control the water rights and infrastructure required to wit
Slide 21: Sky Ranch Capacity Projections
SKY RANCH CAPACITY PROJECTIONS Development Progress Results 80m S 5,000 SFEs Sky Ranch is zoned to accommodate up to 3.200 single- and multi-family homes, and over 2 million square feet of retail, commercial. and light industrial space ~ which is the equivalent of 1,800 residential lots for a total
Slide 22: Single Family Rentals - Sky Ranch
Annual Revenues $6.6 million SINGLE FAMILY RENTALS - SKY RANCH Progress 200 Units Results Strategy is to retain the equity value in the land and water and deliver affordable rental units in our Sky Ranch Master Planned Community Each unit delivers positive cash flows with a 65% LTV On average each u
Slide 23: Single Family Rentals - Operations and Cash Flows
Single Family Rentals - Operations and Cash Flows SFR PROJECTIONS ACTUAL RESULTS 14 PROJECTED 10 PROJECTED TO 200 ; tars AVG PER HOM/YR PHASE 2 83 UNITS HOMES (000'S) HOMES/YR ADD BACK H ITEMS CASH FLOWS BEFORE GAA 8 TAX | | $9820 | 23
Slide 24: Key Takeaways
Key Takeaways our integrated water utility, land development, and single-family rentals to maximize returns for years to come GROSSMARIN 55% to take advantage of investment opportunities and single-family rentals while systematically developing in land and water ROA 13.09% with our large asset portf
Slide 25: Clear Objectives and Capital Plan
CLEAR OBJECTIVES AND CAPITAL PLAN Clear Objectives to Measure Cu Strategy's Success MEASURABLE OBJECTIVES IMPORTANT UPDATES AX | fs f fi CORPORATE INFORMATION > 2, See
Slide 26: Stock Repurchase Program Update
STOCK REPURCHASE PROGRAM UPDATE As announced in the press release on November 14, 2022, our board approved an open-ended stock repurchase program which authorizes our CEO and CFO to repurchase up to 200,000 shares in the open market. 20,000 shares have been purchased to date Total Number of Shares P
Slide 27: Board of Directors
Board of Directors Mark W. Harding President and CEO Patrick J. Beirne Chair of the Board Wanda J. Abel Director and Chair of the Nominating and Governance Committee Marc Spezialy Vice President and CFO Peter C. Howell Director and Chair of the Audit Committee Daniel R. Kozlowski Director and Chair
Slide 28: Pure Cycle Corporation
PURE CYCLE CORPORATION 28
Slide 29: Appendix
Slide 30: Wholesale Water & Wastewater
Wholesale Water & Wastewater Wastewater Treatment Well/Diversion Build Typical Usage + Vertically integrated, meaning we + Capacity to serve 60,000 taps + Base fee = $32.74 own, treat and sell water then + Capital Capacity = $2.3 billion + Consumption fee = Tiered collect, treat, and resuse wastewat
Slide 31: Water System
Water System Balance With Losses and Required Discharges ))) ‘ater System kvaporatid) oo. Surface Water Outdoor Irrigation Supply Discharge to Stream Ground Water Supply vee >) ue Evaporation
Slide 32: View looking north of development
View looking north of development encroachment on Lowry Range exclusive Service Area
Slide 33: Land Development
LAND D Phase 1 - 509 lots 100% Complete - Completed 2022 Rental lots - 4 lots PARTNERING HOMEBUILDERS LENNAR taylor | morrison — kb D-R-HORTON SJ uerica’s Builder E CHALLENGER HOMES &®RICHVIOND AMERICAN HOMES K-7 opening in 8/2023 High School opening in 2025 IRE SOLE iy FAMILY Phase 2A - 229 lots 90
Slide 34: Pure Cycle Corporation
€ PURE CYCLE CORPORATION YEAR END 2023 Presented by: Mark Harding