Pure Cycle Corporation · NASDAQ:PCYO
Pure Cycle — Q1 FY2022 Earnings Presentation
28 slides from Pure Cycle's earnings presentation, Jan 12, 2022
Slide 1: Pure Cycle Corporation Earnings Presentation, Three Months Ended November 30, 2021
1.COMPANY OVERVIEW PURE CYCLE CORPORATION Earnings presentation for the three months ended November 30, 2021 FINANCIAL RESULTS
Slide 2: Safe Harbor Statement
2.SAFE HARBOR STATEMENT Statements that are not historical facts contained or incorporated by reference in this presentation are "forwardlooking 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: We Operate Multiple Complementary Segments
3.WE OPERATE MULTIPLE COMPLEMENTARY SEGMENTS Driving value for stakeholders with land and water investments 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
Slide 4: Company Overview
4.COMPANY OVERVIEW PURE CYCLE CORPORATION Earnings presentation for the three months ended November 30, 2021 FINANCIAL RESULTS
Slide 5: Wholesale Water and Wastewater
5..----------------,...---.:----------=-=-=====::::;:--~------, WHOLESALE WATER AND WASTEWATER Principal business interests are to deliver wholesale water and wastewater service WELLS/DIVERSION Large water portfolio in water-short Denver 0 Company owns or controls 29,000+ acre feet of groundwater &
Slide 6: Water Infrastructure
6.WATER INFRASTRUCTURE Water Assets (Net) In millions FY 2021 FY 2020 FY 2019 FY 2018 FY 2017 Own or control over 29,000 acre-feet of water along the Denver Front Range All major infrastructure is in service to support phase 2 of the Sky Ranch Development ..c: ~ 0 ~ c., s'2 0 c.o N -o------.... -\ ,
Slide 7: Water Services Growth
7.Water Services Growth from: New Residential New service customers added with every neighborh?od Avg. residential customer generates $1,500 per year m revenue New Commercial Future Sky Ranch commercial phases Existing Residential Elbert and hwy 86 Residents Existing Commercial Elbert and Hwy 86 com
Slide 8: Oil & Gas
8.OIL&GAS We provide raw water to oil and gas operators in for drilling with 120 wells drilled to date Southern Wattenberg Niobrara Five Possible Formations Pad Development: 40 Acre spacing 16 wells/mile formation Over 10,000 well capacity Average $250,000 per well More than 200 square miles in Adam
Slide 9: Development Encroachment to Lowry Range
9.DEVELOPMENTENCROACHMENTTOLOWRYRANGE -View looking north of development encroachment on Lowry Range exclusive Service Area 111---r-.. ---. -------~ r-..... -.,-a-, .. ----·-.. ,_-:--c-~---· ---c::in.--. g:-.:..:.-..:-.:· -:=:-----.
Slide 10: Company Overview
10.COMPANY OVERVIEW PURE CYCLE CORPORATION Earnings presentation for the three months ended November 30, 2021 FINANCIAL RESULTS
Slide 11: Developing the Sky Ranch Acreage
11. Developing the 930 acre Sky Ranch Can accommodate up to 3,200 residential lots Can Accommodate up to 2 million square feet of commercial development (1,800 SFE's) 15 miles east of downtown Denver and 4 miles south of DIA
Slide 12: Sky Ranch Phase 1
12.SKY RANCH -PHASE 1 99% complete All lots delivered (509) As of 11/30/2021 there are approximately 405 residents 4 79 of 509 Taps Sold Estimated that homes will be fully sold out by the end of Q2-2022 Received $10.5 million ofreimbursables and recorded more than $20M in receivables including proje
Slide 13: Sky Ranch Phase 2 Overview
13.SKY RANCH -PHASE 2 OVERVIEW Approximately 850 lots in total 804 lots under contract with home builders 46 lots reserved for rental business with an additional 100 potential plats Initial lots expected to be delivered spring 2022 WiU include new Charter School directly north of this phase -which a
Slide 14: Sky Ranch Phase 2 Financial and Quantitative Data
14.Subphase 1 (229 LOTS) Subphase 2 (211 LOTS) Lot Revenue $ 18.4m Lot Revenue $ 17.0m Tap Revenue 5.6m Tap Revenue 5.2m Total lot costs (20.1ml Tota Lot costs (18.3ml Reimbursable* 16.7m Reimbursable* 15.2m GROSS PROCEEDS $ 20.6m GROSS PROCEEDS $ 19.lm TOTAL LOT SALES BY BUILDER 28,000,000 26,200,0
Slide 15: Lot Closing Dashboard
15.Takedown 1 DATE 8/25/2021 AMOUNT $ 3,846,000 BUILDERS 3 LOA PHASE Platted Lots 1st SUB-PHASE OF 2nd DEVELOPMENT PHASE LOT CLOSING DASHBOARD CJ Takedown 2 Takedown 3 DATE 11/30/2021 DATE 7/31/2022 AMOUNT $ 3,695,000 AMOUNT $ 10,850,000 BUILDERS 3 BUILDERS 4 LOA PHASE Wet Utilities LOA PHASE Finish
Slide 16: Company Overview
16.COMPANY OVERVIEW PURE CYCLE CORPORATION Earnings presentation for the three months ended November 30, 2021 FINANCIAL RESULTS
Slide 17: Single-Family Rentals
17.Single-Family Rentals We have contracted for the construction of single family homes with the intent to retain them for long-term rental purposes. Pure Cycle is working with experienced home builders to construct these houses, which Pure Cycle will own and maintain, taking on a new role as proper
Slide 18: Market Watch
18.Market Watch Steady increase in lease price while other rental types fell Detached and Townhomes, are more affordable per square foot and per bedroom Detached homes spend less days on market on average then other types rental units Phase I Single Family Rentals Rented first 3 homes above the aver
Slide 19: Pro Forma Income per House
19.Pro Forma Income/house Rental Income Operations, repairs and maintenance Property taxes and insurance Interest expense $ $ Assumptions Pro Forma Single house Monthly 2,820 $ Proforma Single house Annualized 33,840 150 1,800 400 4,800 950 11,400 1,320 $ 15,840 ========== Rental income is the avera
Slide 20: Phase 1-3 Rental Homes
20.PHASE 1-3 RENTAL HOMES March 2021 May 2021 Capitalized costs $368K Financed costs $333K Fair market value $547K June 2021 Flexible debt usage, up to 70% of appraised value Low cost capital (3. 75%) November 2021 House appraisal value estimated at $547,000 based on homes sold in Sky Ranch per MLS
Slide 21: Company Overview
21.COMPANY OVERVIEW PURE CYCLE CORPORATION Earnings presentation for the three months ended November 30, 2021 FINANCIAL RESULTS
Slide 22: Revenue, Net Income and EPS, Three Months Ended November 30, 2021
22.REVENUE THREE MONTHS ENDED NOVEMBER 30, 2021 EPS -Diluted NET INCOME 11M $10.4m 10M 9M 8M 7M 6M -SM $4.8m $4.27m 4M 3M $3m ' 2M i 1M $Im 0 I I F Ql 2018 F Ql 2019 F Ql 2020 F Ql 2021 F Ql 2022 W-WW Segment Land Development Single Family Rentals WATER& WASTEWATER $53.Sm in water assets (net) 650 t
Slide 23: Five Year Performance
23.26M 24M 22M 20M 18M 16M 14M 12M 10M BM 6M 4M 2M Revenue $26m $20m $17m $7m FYE2017 FYE 2018 FYE 2019 FYE 2020 FYE 2021 WWW Segment Land Development INVESTING IN BUSINESS SEGMENTS Land Water & Wastewater Single Family Rentals 11M 10M 9M BM 7M 6M 5M 4M 3M 2M 1M 5 YEAR PERFORMANCE Sim FYE 2017 Share
Slide 24: Balance Sheet
24.BALANCE SHEET {In tlw11sa11d~. excepl .\·hare and per .\·hare t1111mmt.~J ASSETS, Current assets: Cash and cash equivalents Trade accounts receivable, net Prepaid expenses and other assets Land under development Notes receivable -reimbursable public improvements -related party Total current asser
Slide 25: Income Statement
25.Three Months Ended November 30, November 30, (In thousand,;, except per share amounts) 2021 2020 INCOME STATEMENT Revenues: Metered water usage from: Municipal customers $ 321 $ 167 Oil and gas operations 386 1,199 \Vastcwater treatment fees 55 42 Water and wastewater tap fees 261 1,083 Lot sales
Slide 26: Leadership and Board of Directors
26.LEADERSHIP AND BOARD OF DIRECTORS I Mark W Harding President and CEO I Patrick J. Beirne Chairman of the Board I Arthur G. Epker III Director and Chairman of the Compensation Committee I Kevin B. McNeill Vice President and CFO I Peter C. Howell Director and Chairman of the Audit Committee I Danie
Slide 27: Contact and Company Information
27.CONTACT AND COMPANY INFORMATION CORPORATE HEADQUARTERS 34501 E. Quincy Ave, BLDG 34, Watkins, CO 80137 CONTACT INFO info@purecyclewater.com 303-292-3456 www.purecyclewater.com Follow us on twitter ~ @PureCycleCorp STOCK INFO Ticker symbol (NASDAQ Capital Market): PCYO Shares outstanding: 23.9 mil
Slide 28: Company Overview
28.COMPANY OVERVIEW PURE CYCLE CORPORATION Earnings presentation for the three months ended November 30, 2021 FINANCIAL RESULTS