Pure Cycle Corporation · NASDAQ:PCYO
Pure Cycle — Q2 2022 Earnings Presentation
32 slides from Pure Cycle's earnings presentation, April 2022
Slide 1: Pure Cycle Corporation Earnings Presentation
NASDAQ: PCYO www.purecyclewat er.com @PureCycleCorp E CYCLE CORPORATION INGS PRESENTATION FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2022 Presented by Mark Harding, CEO I Kevin McNeil!, CFO I Dirk Lashnits, VP Land Development 1.
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: We Operate Multiple Complementary Segments
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 • De
Slide 4: Pure Cycle Corporation
NASDAQ: PCYO www.purecyclewater.com @PureCycleCorp E CYCLE CORPORATION INGS PRESENTATION FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28 , 2022 Presented by Mark Harding, CEO I Kevin McNeil!, CFO I Dirk Lashnits, VP Land Development 4.
Slide 5: Wholesale Water and Wastewater
WHOLESALE WATER AND WASTEWATER Principal business interests are to deliver wholesale water and wastewater service E WELLS/DIVERSION Large water portfolio in water-short Denver 0 Company owns or controls 29,000+ acre feet of groundwater & surface water which WASTEWATER we estimate can serve 60,000 ta
Slide 6: Water Infrastructure
OENV£R \ IH'TERNATlONAL AIRPORT WATER INFRASTRUCTURE .... \ -\..:. ,···· ) COLORADO ) AIR AND SPACE PORT All major infrastructure is in service to support phase 2 of the Sky Ranch Development F Q2· 2022 FY 2021 ,y H II.l g , Water FY 2020 Assets ..c: (Net) FY 2019 !c., l-4 Ara pahoe Courit,;: AAAPAH
Slide 7: Monthly Water Customers
Monthly Water Customers 5,000 5,000 Growth from: 4,500 4,570 4,070 4,000 New Residential 3,570 3,500 New service customers added with every neighborhood Avg. residential customer generates $1,500 per year in revenue 3,070 3,000 New Commercial Future Sky Ranch 2,570 2,500 commercial phases 2,070 Exis
Slide 8: Oil & Gas
OIL&GAS . __- ___ , r'"J' - - · • - ..... ....... ,_ We provide raw water to oil and gas operators for drilling with 120 wells drilled to date 0=:::::::.."::.. ____._. .. ,.,...- s- . ~:-..,_ • -•---·,- c ,_ □ -,-- ...- .. •·•- § ,. ____ ·--·"" c: :i --<-- ----- □ -•--·-· · ·· ..- ·--·--· , .. _ _ _
Slide 9: Development Encroachment to Lowry Range
DEVELOPMENTENCROACHMENTTOLOWRYRANGE lr.l."1ll! _ _ _. , . _ ;=:-- r.i--·,. r .. -.-..... :=~~~ c::::::::.-- _ -~:~ . 1:1-.-, .. - - c-- View looking north of development encroachment on Lowry Range exclusive Service Area 9.
Slide 10: Pure Cycle Corporation
NASDAQ: PCYO www.purecyclewater.com @PureCycleCorp E CYCLE CORPORATION INGS PRESENTATION FDR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2022 Presented by Mark Harding, CEO I Kevin McNeil!, CFO I Dirk Lashnits, VP Land Development 10.
Slide 11: Developing the Sky Ranch
+ 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 11.
Slide 12: Sky Ranch - Phase 1
SKY RANCH - PHASE 1 99% complete • All lots delivered (509) • As of 2 I 28 I 2022 there were approximately 405 occupied homes • 500 of 505 taps sold • Estimated that homes will be fully sold out by the end of Q3-2022 • Received $10.5 million of reimbursables and recorded more than $22. 7M in receiva
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Slide 14: Sky Ranch - Phase 1
SKY RANCH - PHASE 1 99% complete • All lots delivered (509) • As of 2/28/2022 there were approximately 405 residents • 500 of 505 taps sold • Estimated that homes will be fully sold out by the end of Q3-2022 • Received $10.5 million of reimbursables and recorded more than $20M in receivables includi
Slide 15: Sky Ranch - Phase 2 Overview
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 • Will include new Charter School directly north of this phase
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Slide 17: Sky Ranch - Phase 2 Overview
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 • Will include new Charter School directly north of this phase
Slide 18: Sky Ranch Phase 2 Financial and Quantitative Data
SKY RANCH PHASE 2 Financial And Quantitative Data Subphase 1(229 LOTS) Subphase 2 (211 LOTS) Subphase 3 (204 LOTS) Subphase 4 (206 LOTS) Phase 2 (850 LOTS) Lot Revenue $ 18.4m Lot Revenue $ 17.Om Lot Revenue $ 16.7m Lot Revenue $ 17.9m Lot Revenue $ 70.0m Tap Revenue 5.6m Tap Revenue 5.2m Tap Revenu
Slide 19: 1st Sub-Phase of 2nd Development Phase
1st SUB-PHASE OF 2nd DEVELOPMENT PHASE LOT CLOSING DASHBOARD ~ CJ Takedown 1 Takedown 2 Takedown 3 Total DATE 8/25/2021 DATE 11/30/2021 DATE 7/31/2022 AMOUNT $ 10,850,000 AMOUNT $ 3,846,000 AMOUNT $ 3,695,000 BUILDERS 4 $ 18,417,000 BUILDERS 3 BUILDERS 3 LDAPHASE Platted Lots LOA PHASE Wet Utilities
Slide 20: Pure Cycle Corporation
NASDAQ: PCYO www.purecyclewater.com @PureCycleCorp E CYCLE CORPORATION INGS PRESENTATION FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2022 Presented by Mark Harding, CEO I Kevin McNeil!, CFO I Dirk Lashnits, VP Land Development 20.
Slide 21: Single-Family Rentals
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, Our Strategy and taking on a new
Slide 22: Rental Market Report
Market Watch Denver Prem ier MEDIAN LEASED LEASED +4% -1% Leasing Agents PRICE LISTINGS 149 146 • Steady increase in lease price while other rental types fell RENTAL 139 MARKET • Detached and Townhomes, are more affordable per square foot and per REPORT bedroom September 2021 )019 JOl9 lOlO '°'' • D
Slide 23: Pro Forma Income/House
Pro Forma Income/house Pro Forma Proforma Single house Single house Monthly Annualized Rental Income $ 2,820 $ 33,840 Operations, repa irs and maintenance 150 1,800 Property taxes and insurance 400 4,800 Interest expense 950 11,400 $ 1,320 $ 15,840 ========== Assumptions • Rental income is the avera
Slide 24: Phase 1 - Rental Homes
PHASE 1- 4 RENTAL HOMES March 2021 May2021 June 2021 November 2021 Capitalized costs $368K • Flexible debt usage, up to 70% of appraised value • Low cost capital (3 .75%) Financed costs $333K • House appraisal value estimated at $547,000 based on homes sold in Sky Ranch per NMLS Fair market value $5
Slide 25: Pure Cycle Corporation
NASDAQ: PCYO www.purecyclewater.com @PureCycleCorp E CYCLE CORPORATION INGS PRESENTATION FDR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2022 Presented by Mark Harding, CEO I Kevin McNeil!, CFO I Dirk Lashnits, VP Land Development 25.
Slide 26: Six Months Ended February 28, 2022
SIX MONTHS ENDED FEBRUARY 28, 2022 REVENUE OPERATING INCOME NET INCOME 14M 513.9m 3.SM 20M $18.lm 3M $3m • $2.98m 18M • 12M • 16M 2.SM 14M 10M $9.6m $8.9m 8M -- 2M 12M 10M 1.SM BM 6M $5.7m > $6m ' 1M $927k 6M • >W•✓ 4M 4M $3.2m > ' 0.SM 2M $1.7m $243k / • 2M $35k • I .· 0 $-214~ 0 I I ·O.SM • 0 ·2M
Slide 27: 5 Year Performance
5VEAR PERFORMANCE Shareholder Value Revenue Gross Margin 22M Net Income* 26M $26m 11M $Um S20m 24M 10M 20M 18M • 22 M $20m 9M 16M 20M SM $8m 14M 18M $17m 7M $7m 12M $7m 16M $Sm 10M 14M 6M SM 12M 5M $7m 6M 10M $Om -------- 4M S-2m 4M SM 6M $lm- 3M $3m 2M ~ • 2M 0 4M 2M 1M ·2M ·4M • --------· 0 0 FYE
Slide 28: Balance Sheet
PUR E CYCLE CORPORATION CO SO L IDATE D BALANCE SHEETS BALANCE SHEET (In thousands, except shares) ASSETS: Current assets: Cash and cash eq ui valents $ February 28, 2022 (unaudited) 5,215 $ Augusl 3 1, 202 1 20, 117 Trade accounts receivable, net 2,03 8 1,532 Prepaid ex penses and other assets 975
Slide 29: Income Statement
~"Tl!-. " .. ',,'\.,' PURE CYC LE CORPORA TIO CO SO LIDAT ED STAT EMENTS O F OP ERATIONS (una udited) INCOME STATEMENT (In rhowwnd,;, except .s ha;-e infO rmation) Revenues: Three Months End ed Six Mo nths Ended Februa ry 281 2022 Februa ry 28 1 202 1 Fe bru ary 281 2022 Fcbrua rv 281 202 1 M etered
Slide 30: Leadership and Board of Directors
LEADERSHIP AND BOARD OF DIRECTORS Mark W Harding Kevin B. McNeill President and CEO Vice President and CFO Peter C. Howell Jeffrey G. Sheets Patrick J. Beirne Director and Chairman of Chairman of the Board Director the Audit Committee Wanda J. Abel Daniel R. Kozlowski Fredrick A. Fendel III. Directo
Slide 31: Questions?
CONTACT AND COMPANY INFORMATION CORPORATE HEADQUARTERS Questions? 34501 E. Quincy Ave, BLDG 34, Watkins, CO 80137 CONTACT INFO info@purecyclewater.com ~ .. r,....,....._c_/J"1'07,:l<ll11•:ntnc 303-292-3456 ,.,,...,)ICM~,10.KA.S0,1,Q 1u,t-0_o,,i,-0.l<1\J \fal U.7'rnl www.purecyclewater.com Follow us
Slide 32: Pure Cycle Corporation
NASDAQ: PCYO www.purecyclewater.com @PureCycleCorp E CYCLE CORPORATION INGS PRESENTATION FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2022 Presented by Mark Harding, CEO I Kevin McNeil!, CFO I Dirk Lashnits, VP Land Development 32.