Slide 1: Q1-2024 Earnings Presentation
PURE CYCLE CORPORATION Q1-2024 EARNINGS PRESENTATION Presented by: Mark Harding
Slide 2: Forward-Looking Statements
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 2
Slide 3: Quarterly Review: Q1-2024 Results
QUARTERLY REVIEW: Q1-2024 RESULTS 1 OUR STRATEGIES 2 OUR PERFORMANCE 3 ASSETS TRAJECTORY 4 IMPORTANT UPDATES www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 3
Slide 4: Visionary Leadership of a Strong and Dedicated Team
REFLECTING ON OUR STRATEGIES Visionary Leadership of a Strong and Dedicated Team LEADERSHIP & DEDICATED TEAM STRONG DIVERSIFIED BOARD WITH DECADES OF INDUSTRY EXPERIENCE COMPLIMENTARY SEGMENTS STRATEGIC INVESTMENT AND STRONG ASSET PORTFOLIO www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg.
Slide 5: Effective Leadership
EFFECTIVE LEADERSHIP MARK W. HARDING MARC SPEZIALY RACHELLE SCOTT BEAUDRY LEHMAN DIRK LASHNITS President, CEO, and Director VP, CFO, Principal Accounting ViceHead President, of Marketing Engineering Vice President, Land Development Officer, Principal Financial Officer Mark is an exceptional leader w
Slide 6: We Operate Multiple Complimentary Segments
WE OPERATE MULTIPLE COMPLIMENTARY SEGMENTS Water and Wastewater Resource Development Segment WATER 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 WATER/WASTEWATER LAND DEVELOPMENT SINGLE FAMILY RENTALS $40m in Water Systems $9.5m in Waste Water Systems $4.43m of Land for Development $5.4m in Constructed Rental Assets $14.6m Water Rights Portfolio $7.2m Fair Market Value of Homes $64m Total Water Assets Our water rights
Slide 8: Measuring Our Performance: Financial Results and Key Performance Indicators
MEASURING OUR PERFORMANCE Financial Results and Key Performance Indicators FINANCIAL RESULTS PERFORMANCE METRICS MAJOR LEARNINGS www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 8
Slide 9: Financial Results
Financial Results Revenue (000's) Gross Profit (000's) $6,000 $3,500 $3,342 $5,387 $3,000 $5,000 $2,500 $4,000 $2,000 $3,000 $1,500 $2,000 $1,000 $1,000 $500 $0 $0 Q1-2021 Q1-2022 Q1-2023 Q1-2024 Q1-2021 Q1-2022 Q1-2023 Q1-2024 0 www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 9
Slide 10: Financial Results
Financial Results Net Income (000's) EPS $2,500 $0.1 $0.09 $2,067 $2,000 $0.08 $1,500 $0.06 $1,000 $0.04 $500 $0.02 $0 $0 Q1-2021 Q1-2022 Q1-2023 Q1-2024 Q1-2021 Q1-2022 Q1-2023 Q1-2024 0 www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 10
Slide 11: Measuring Our Performance
MEASURING OUR GROSS PROFIT QOQ BY PERFORMANCE SEGMENT (000'S) WATER 64% 1 Water/Wastewater Land Development Single Family Rentals Gross Margin 4,000 Single Family Rental 2% 3,000 LAND DEV 60% 2,000 Gross Margin Land Development 41.8% Water/WasteWater 1,000 SFR 56.2% 47% 0 Gross Margin REVENUE BY SEG
Slide 12: Water/Wastewater Segment
WATER/WASTEWATER SEGMENT WATER/WASTEWATER SEGMENT RECURRING CUSTOMER GROWTH REVENUES (000'S) Water/Wastewater O&G Tap Fees Actual Projected $3,500 5,000 $3,000 20% Customer CAGR 4,000 Avg Customer Annual Revenue $2,500 $1,500 3,000 $2,000 $1,500 2,000 $1,000 1,000 $500 0 30 21 27 22 20 29 23 26 28 2
Slide 13: We Provide Raw Water to O&G Operators for Drilling
WE PROVIDE RAW WATER TO O&G OPERATORS FOR DRILLING With existing systems, we are able to provide water REVENUE (000'S) to O&G operators. We have also made strategic investments in our Q1 Q2 Q3 Q4 system to further our ability to provide water when it is needed, where it is needed in the future. FY 2
Slide 14: Land Development
LAND DEVELOPMENT SKY RANCH DEVELOPMENT PROGRESS Phase 1 100% Phase 2a 95% LAND DEVELOPMENT REVENUE Phase 2b 43% Phase 2a 15.9% Phase 2c 18% LAND DEVELOPMENT REVENUE QOQ (000'S) 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Phase 2b Q1-2021 Q1-2022 Q1-2023 Q1-2024 84.1% www.purecyclewater.com Earnings Pr
Slide 15: Single Family Rentals
RENT REVENUE Q/Q (000S) SINGLE $120 $100 8% CAGR 14 homes FAMILY $80 32.0 $60 RENTALS $40 $20 $0 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Q1-2024 BOOK ASSETS & FMV (000'S) Rent Revenue $8,000 Book FMV $109,000 $6,000 HOMES RENTED $4,000 $2,000 14 $0 2022 2023 www.purecyclewater.com Earnings Presentation - Q1
Slide 16: SFR - Cumulative Pro Forma P&L by Phase
SFR - Cumulative Pro Forma P&L by Phase (000s) Based on actual results 14 completed homes Phase 1 Phase 2a Phase 2b Phase 2c Phase 2d SFR Projections (+4 Homes) (+10 homes) (+17 Homes) (+38 Homes) (+26 Homes) Cumulative Homes 4 14 31 69 95 Rental income 131 459 1,017 2,263 3,116 Direct operating cos
Slide 17: SFR Phase Projections
Recurring Income Growth (000s) SFR Phase PrOjections Rental Income Cash flows before G&A & tax 3,500 3,000 2,500 2,000 1,500 Completed Phases 1,000 500 0 Phase 1 Phase 2a Phase 2b Phase 2c Phase 2d Asset Growth (000s) Book Assets FMV $50,000 $40,000 Completed Phases $30,000 $20,000 $10,000 $0 Phase
Slide 18: Assets Trajectory: Portfolio Utilization and Projections
ASSETS TRAJECTORY Portfolio Utilization and Projections WATER CUSTOMERS & CAPACITY OIL & GAS INFRASTRUCTURE WATER PRODUCTION CAPACITY TAP FEES - WATER PORTFOLIO LAND DEVELOPMENT PROJECTIONS SINGLE FAMILY RENTAL PROJECTIONS www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 18
Slide 19: Well Positioned for Growth
WELL POSITIONED FOR GROWTH Capacity Greater than Utilization Water & Wastewater Land Development Single Family Rentals 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 RESIDENTIA
Slide 20: Current System Capacity
CURRENT SYSTEM CAPACITY Based on 2023 water deliveries and results Supply Demand 3.232 Total MGD From Wells 1.584 MGD The remaining supply available for use for future tap capacity is ~2.88 MGD with the potential to generate an additional $18m annual revenue. Available Capacity $3m in revenue genera
Slide 21: Tap Fees - Portfolio Capacity (60,000)
TAP FEES - PORTFOLIO CAPACITY (60,000) Supply Demand/Capacity Results 30,000 Acre Feet 60,000 Connections $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 withdraw, treat. store, deliver and collect wat
Slide 22: Sky Ranch Capacity Projections
SKY RANCH CAPACITY PROJECTIONS Development Progress Results $58om 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 - 1,800 SFEs which is the equivalent of 1,800 residential lots f
Slide 23: Single Family Rentals - Sky Ranch
SINGLE FAMILY RENTALS - SKY RANCH Annual Revenues Progress $6.6 million 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 Future Phases Each unit delivers positive cash flows with a 65% LTV Pha
Slide 24: Key Takeaways
Key Takeaways Executing our strategic approach to growing our integrated water utility, land development, and single-family rentals to maximize returns GROSS MARIN 62% for years to come Strengthening our ability to take advantage of ROA 10.04% 1 investment opportunities and single-family rentals whi
Slide 25: Important Updates: Updates and Q&A
IMPORTANT UPDATES Updates and Q&A STOCK REPURCHASE PROGRAM CORPORATE INFORMATION Q&A www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 25
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 Period Total Number of S
Slide 27: Board of Directors
Board of Directors Mark W. Harding Marc Spezialy President and CEO Vice President and CFO Patrick J. Beirne Peter C. Howell Jeffrey G. Sheets Director Chair of the Board Director and Chair of the Audit Committee Wanda J. Abel Daniel R. Kozlowski Fredrick A. Fendel III. Director Director and Chair of
Slide 28: Q&A
Q&A PURE CYCLE CORPORATION www.purecyclewater.com Earnings Presentation - Q1 -2024 Pg. 28