Slide 1: Pure Cycle Corporation Presentation Nine Months Ended 5/31/2024
PURE CYCLE CORPORATION PRESENTATION NINE MONTHS ENDED 5/31/2024 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: Q3-2024 Results
QUARTERLY REVIEW: Q3-2024 RESULTS 1 OUR STRATEGIES 2 OUR PERFORMANCE 3 ASSETS TRAJECTORY 4 IMPORTANT UPDATES PURE CYCLE CORPORATION RESULTS FOR NINE MONTHS ENDED MAY 31 st, 2024 PG. 3
Slide 4: Reflecting on Our Strategies
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
Slide 5: Effective Leadership
EFFECTIVE LEADERSHIP MARK W. HARDING MARC SPEZIALY RACHELLE SCOTT LEHMAN BEAUDRY DIRK LASHNITS President, CEO, and Director VP, CFO, Principal Accounting Vice Head President, of Marketing Engineering Vice President, Land Development Officer, Principal Financial Officer Mark is an exceptional leader
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 LIQUIDITY $40m in Water Systems $5.2m of Land for Development $5.4m in Construction Cost $20.5m in Cash and ST Invest $9.2m in Waste Water Systems $3.7m developed land for sale $2.9m in Restricted Cash $14.6m Water Rights
Slide 8: Measuring Our Performance
MEASURING OUR PERFORMANCE Financial Results and Key Performance Indicators FINANCIAL RESULTS PERFORMANCE METRICS MAJOR LEARNINGS st
Slide 9: Financial Results
Financial Results Revenue (000's) Gross Profit (000's) $9,985 $20,000 $10,000 $16,187 $8,000 $15,000 $6,000 $10,000 $4,000 $5,000 $2,000 $0 $0 Q3-2022 Q3-2023 Q3-2024 Q3-2022 Q3-2023 Q3-2024 PURE CYCLE CORPORATION RESULTS FOR NINE MONTHS ENDED MAY 31 st, 2024 PG. 9
Slide 10: Financial Results
Financial Results Net Income (000's) EPS $6,000 $0.25 $5,008 $0.21 $5,000 $0.20 $4,000 $0.15 $3,000 $0.10 $2,000 $0.05 $1,000 $0 $0.00 Q3-2022 Q3-2023 Q3-2024 Q3-2022 Q3-2023 Q3-2024 PURE CYCLE CORPORATION RESULTS FOR NINE MONTHS ENDED MAY 31 st, 2024 PG. 10
Slide 11: Measuring Our Performance: Gross Profit by Segment
MEASURING OUR GROSS PROFIT QOQ BY PERFORMANCE SEGMENT (000'S) WATER Water/Wastewater Land Development 53% Single Family Rentals Gross Margin 10000 Single Family Rental 2.2% 8000 LAND DEV 69% Gross Margin 6000 Water/WasteWater 45.1% Land Development 4000 52.7% SFR 55% 2000 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 $8000 5,000 20% Customer CAGR 4,000 Avg Customer Annual Revenue $6000 $1,500 3,000 $4000 2,000 1,000 $2000 0 30 21 27 22 20 29 23 26 28 25 24 $0 20 20 20 20 20
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 to O&G operators. REVENUE (000'S) 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
SFR LAND DEVELOPMENT PHASE LOTS LOTS PROGRESS Phase 1 505 4 100% Phase 2a 219 10 98% Phase 2b 194 17 70% CURRENT YEAR % REVENUE BY PHASE Other 8.6% Phase 2c 188 40 22% Phase 2a Phase 2d 180 26 0% 11.1% Total 1,286 97 = 1,383 LAND DEVELOPMENT REVENUE QOQ (000'S) 10000 8000 6000 4000 2000 Phase 2b 80.
Slide 15: Land development status by phase
Land development is substantially complete. Out of 229 homes, 228 are finished and All paving is complete, and homebuilders are ready to begin construction on homes. occupied. Land development is estimated to be completed by the end of the calendar year 2024. Grading is finished, and utility work ha
Slide 16: Single Family Rentals
RENT REVENUE Q/Q (000S) SINGLE $140 $120 AGR 14 homes 29% C FAMILY $100 $80 $60 RENTALS $40 $20 $0 Q1-2023 Q2-2023 Q3-2023 Q4-2023 Q1-2024 Q2-2024 Q3-2024 BOOK ASSETS & FMV (000'S) Quarterly Rent Revenue $8000 Book FMV $125,000 $6000 $4000 Homes Rented $2000 14 $0 2022 2023 www.purecyclewater.com PU
Slide 17: 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) (+40 Homes) (+26 Homes) Cumulative Homes 4 14 31 71 97 Rental income 131 459 1,017 2,263 3,116 Direct operating cos
Slide 18: 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 19: 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
Slide 20: Ongoing Housing Deficit
Ongoing Housing Deficit: Significant shortage remains despite recent construction efforts, indicating continued high demand. Stable Demand: Tens of thousands of new homes needed even without population growth, ensuring a strong market for developers. Affordability Issues: Only 5.1% of households in
Slide 21: 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 22: Acre-foot per Calendar Year capacity and usage
AF Used AF Available 3,000 Acre-foot per Calendar Yr 2,500 2,000 1,500 1,000 500 0 Capacity Usage For Nine Months ended 5/31/2024 We continue to invest in our systems with a current book value of $40.0 million which can produce over 3.4 million gallons of water per day PURE CYCLE CORPORATION RESULTS
Slide 23: Tap Fees - Portfolio Capacity
TAP FEES - PORTFOLIO CAPACITY (60,000) At Buildout Current Remaining Capacity Sold To Date We estimate our portfolio can serve approximately 60,000 connections, generating approximately $2.3 billion in revenues based on current rates. To date, we have added around 1,136 connections, representing les
Slide 24: Sky Ranch Capacity Projections
SKY RANCH CAPACITY PROJECTIONS Completed Under Construction Sold Not Started Remaining Sky Ranch is zoned to accommodate up to 800,000 5,000 SFES 3,200 single- and multi-family homes, and over 2 million square feet of retail, commercial, and light industrial space – which 600,000 Lot Revenue (000s)
Slide 25: Single Family Rentals: Planned SFR Units
Planned SFR Units (200) To produce $6.7m in Annual Revenue Units Completed 14 SINGLE FAMILY RENTALS Strategy is to retain the equity value in the land and Future Phases 103 water and deliver affordable rental units in our Sky Planned in Phase 83 Ranch Master Planned Community Each unit delivers posi
Slide 26: Key Takeaways
Key Takeaways Executing our strategic approach to growing our integrated water utility, land development, and single-family rentals to maximize returns GROSS MARGIN for years to come Strengthening our ability to take advantage of ROA 1 investment opportunities and single-family rentals while systema
Slide 27: Important Updates and Q&A
IMPORTANT UPDATES Updates and Q&A STOCK REPURCHASE PROGRAM CORPORATE INFORMATION Q&A
Slide 28: 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. Fiscal Period Total Number of Shares Purchased Average Price Paid
Slide 29: Board of Directors
Board of Directors Mark W. Harding Marc Spezialy President and CEO Vice President and CFO Patrick J. Beirne Susan Heitmann 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 30: Pure Cycle Corporation Q&A
PURE CYCLE CORPORATION Q&A