Pure Cycle Corporation · NASDAQ:PCYO
Pure Cycle — Q3 2021 Earnings Presentation
30 slides from Pure Cycle's earnings presentation, May 31, 2021
Slide 1: Earnings presentation for the three and nine months ended May 31, 2021
Earnings presentation for the three and nine months ended May 31, 2021 Water & Wastewater Development Land Development / Financial § Results Presented. by Mark Harding, GEO
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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 o
Slide 3: Water and Wastewater Resource Development Segment
Water and Wastewater Resource Development Segment + Own a large and valuable portfolio of water rights + Sustainable ground and surface water rights we estimate can serve up to 60,0000 SFEs + Denver metro land development requires developers to have water service as a condition of zoning, offering u
Slide 4: 4.
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Slide 5: Water & Wastewater Development
Earnings presentation for the three and nine months ended May 31, 2021 Water & Wastewater Development Land Development / Financial § Results Presented. by Mark Harding, GEO
Slide 6: Wholesale Water and Wastewater
WHOLESALE WATER AND WASTEWATER 7 Wells/Diversion Wastewater Collection Treatment Irrigation reuse Distribution Use Large water portfolio in water-short Denver Company owns or controls 29,000+ acre feet of groundwater & surface water which we estimate can serve 60,000 taps Own rights to surface reser
Slide 7: Sky Ranch
Sky Ranch ewater lamation
Slide 8: Water Services Monthly Water Customers
Water Services Monthly Water Customers 5,000 5,000 Growth from: 4,500 all New Residential 4,070 New service customers added with every 4,000 a neighborhood 3,570 Avg. residential customer generates $1,500 3,500 = per year in revenue 3,000 3,070 New Commercial osm” Future Sky Ranch 2,500 Bes commerci
Slide 9: Investment in Water and Tap Sales
Investment in Water and Tap Sales All major infrastructure is in service Water/WW Tap Fees to support phase 2 of the Sky Ranch Development Water Assets (Net) In millions $3,544,700 $5,641,000 $4,521,200 2019 2020 2021 (Current Rates)
Slide 10: Land Development
Earnings presentation for the three and nine months ended May 31, 2021 Water & Wastewater Development Land Development / Financial § Results Presented. by Mark Harding, GEO
Slide 11: Sky Ranch
. Spee Rawaane AD 930 acre Sky Ranch + Can accommodate up to 3,400 residential lots + Can Accommodate up to 2 million square feet of commercial development (1,600 SFE's) + 15 miles east of downtown Denver and 4 miles south of DIA 11.
Slide 12: Sky Ranch - Phase 1
Sky Ranch - PHASE 1 + All lots delivered (509) + Approximately 330 residents + 446 of 506 Taps Sold + Estimated that homes will be fully sold out by December 2021 + Received $10.5 million of reimbursables and recorded more than $20M in receivable reimbursements and related interest income + Recogniz
Slide 13: Sky Ranch - Phase 2
Sky Ranch - PHASE 2 + Approximately 900 lots in total + 800 lots under contract with home builders + 100+ lots reserved for BTR purposes + Broke ground February 2021 + Dirt work almost done, utilities underway for sub-phase 1 + Initial lots expected to be delivered late calendar 2021 + Estimated lot
Slide 14: Sky Ranch Filing 1-506 Lots
SKY RANCH Filing 1-506 Lots Phase 1 & 2 Lot Sales $36.7 million Current Reimbursable $10.5 million . Future Reimbursements $ 21.1 million * Key Comparisons ie cae $ 35.8 million 0" Lots sold for 40% more ee amiteee al Net $47.4 million + 45' lots sold for 30% more . sian geri ae + Higher density and
Slide 15: Our Strategy and Projections Progress
Earnings presentation for the three and nine months ended May 31, 2021 Water & Wastewater Development Land Development / Financial § Results Presented. by Mark Harding, GEO
Slide 16: Our Strategy and Projections Progress
Our Strategy qi and Projections Progress 16.
Slide 17: Market Watch
Market Watch "Housing demand in the Denver area continues to outpace supply, and as a result of increasing costs and the need for large down payments, the single- family rental market is growing exponentially. Our national home builder customers have expressed interest in building these homes, offer
Slide 18: Sky Ranch - Life Within Reach
Sky Ranch - Life Within Reach 18.
Slide 19: Pro Forma
Pro Forma Pro Forma Single house Single house Monthly Annualized Rental income 2,800 $ 33,600 Annualized Average Estimated Rental Revenue per Home of $33K Operations, repairs and maintenance 1,800 Property Taxes and insurance — AV rage —— eee estimated cash flow per Home of $15K Annualized Assumptio
Slide 20: Per House Estimates
PER HOUSE ESTIMATES Capitalized costs Financed costs Fair market value $342K $317K $450K Assumptions 15 Year Forecast - 100 Homes + Flexible debt usage, up to 80% of appraised value + Low cost capital (3.75%) + House fair market value estimated at $450,000 based on homes sold in Sky Ranch per NMLS -
Slide 21: Build to Rent Phase Lots
BUILD TO RENT PHASE 1 3 LOTS March 2021 May 2021 June 2021 August 2021 Approval to start date Utilities complete & vertical Final stages of framing construction in progress! Projected ready to rent Asset Valuation...... $1.4m Project Budget....... $1.0m The project is on track to confirm original fo
Slide 22: Financial Results
Earnings presentation for the three and nine months ended May 31, 2021 Water & Wastewater Development Land Development / Financial § Results Presented. by Mark Harding, GEO
Slide 23: Five Possible Formations
Five Possible Formations Pad Development: 40 Acre spacing 16 wells/mile formation Over 10,000 well capacity Average $250,000 per well [DD service Area 1] Lowry Range $B sky Ranch — Gas Collection ‘Water Transmission © Wells Drilled to date 2019 Sky Ranch Arapahoe County Fairgrounds 23.
Slide 24: Financial Results
Earnings presentation for the three and nine months ended May 31, 2021 Water & Wastewater Development Land Development / Financial § Results Presented. by Mark Harding, GEO
Slide 25: Nine Months Ended May 31, 2021
Nine Months Ended May 31, 2021 Revenue* Gross Margin* Net Income* $om $26m o 18M $1am o s-2m am “aM 25 B £ 5 g £5 5S : : : : S38 58 ig z z= = Ae 8 i @ wonsegment Land Development @ www segment @ Land Development OSEEap *Amounts are approximate and rounded to the nearest million $ Since the inception
Slide 26: Condensed Consolidated Balance Sheets
PURE CYCLE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS: ‘Current assets ‘Cash, cash equivalents and resticted cash ‘Trade aecounts receivable, net Prepaid expenses and other assets ‘Land development inventories: ‘Land development - Phase 1 Land development = Phase 2 Public improvement r
Slide 27: Condensed Consolidated Statements of Operations and Comprehensive Income
PURE CYCLE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Revenues: Metered water usage from: “Municipal customers il and gas operations Wastewater treatment fees Water and wastewater tap fees Lot sales Project management fees - recognized Special facility proje
Slide 28: Contact and Company Information
CONTACT AND COMPANY INFORMATION CORPORATE HEADQUARTERS 34501 E. Quincy Ave, BLDG 34, Watkins, CO 80137 CONTACT INFO info@purecyclewater.com 303-292-3456 48 www.purecyclewater.com ae 14 Foll i ollow us on twitter yW * Questions? PCYO STOCK PRICE RANGE FYE 2016 FYE 2017 FYE2018 FYE2019 FYE2020 FQ12021
Slide 29: Leadership and Board of Directors
LEADERSHIP AND BOARD OF DIRECTORS Mark W. Harding President and CEO Patrick J. Beirne Chairman of the Board Arthur G. Epker Ill Director and Chairman of the Compensation Committee Kevin B. McNeill Vice President and CFO Jeffrey G. Sheets Director and Chairman of the Nominating and Governance Committ
Slide 30: Earnings presentation for the three and nine months ended May 31, 2021
Earnings presentation for the three and nine months ended May 31, 2021 Water & Wastewater Development Land Development / Financial § Results Presented. by Mark Harding, GEO