Slide 1: Earnings Presentation Fiscal Year End 2024
PURE CYCLE CORPORATION Earnings Presentation F i s c a l Y e a r E n d 2 0 2 4 P r e s e n t e d b y M a r k H a r d i n g www.purecyclewater.com
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: Leadership Team
Leadership Team MARK W. HARDING MARC SPEZIALY RACHELLE SCOTT LEHMAN BEAUDRY DIRK LASHNITS President, CEO, and Director VP, CFO, Principal Accounting Officer, ViceHead President, of Marketing Engineering Vice President, Land Development Principal Financial Officer Mark is an exceptional leader who ha
Slide 4: Board of Directors
Board of Directors Mark W. Harding Jeffrey G. Sheets Fredrick A. Fendel III. President and CEO DirectorManagement team Director Patrick J. Beirne Susan Heitmann Chair of the Board Director and Chair of the Audit Committee Wanda J. Abel Daniel R. Kozlowski Director and Chair of the Nominating and Dir
Slide 5: Financials
PURE CYCLE CORPORATION LS FINANCIALS 5
Slide 6: Financial Performance Q4 Results
Financial Performance Q4 Results CONSOLIDATED METRICS Record-setting quarter and year for Pure Cycle, showing significant growth in both revenue and gross profit. For Q4 of 2024, revenue reached $12.6 million, while gross profit hit a new high of approximately $9.8million. This strong financial perf
Slide 7: Financial Performance FYE Results
Financial Performance FYE Results CONSOLIDATED METRICS Record-setting quarter and year for Pure Cycle, showing significant growth in both revenue and gross profit. For FYE of 2024, revenue reached $28.7 million, while gross profit hit a new high of approximately $19.8 million. This strong financial
Slide 8: Financial Performance
Financial Performance CONSOLIDATED METRICS Record-setting year for Pure Cycle, showing significant growth in both revenue and gross profit. For fiscal year 2024, revenue reached nearly $29 million, while gross profit hit a new high of approximately $19.8 million. This strong financial performance hi
Slide 9: Financial Performance
Financial Performance CONSOLIDATED METRICS FY 2024 marks a strong comeback in financial performance, with Net Income and EPS both achieving notable increases from the previous year. Although FY 2021 remains the peak year due to a different accounting treatment of reimbursables, FY 2024 would likely
Slide 10: Water Utilities Financial Performance
Financial Performance WATER UTILITIES Water Revenues by Type (000s) Water Utility Customer Growth $14,000 4,500 $12,000 11,561 4,000 10,052 3,500 $10,000 $3,385 3,000 21% Customer CAGR $8,000 2,500 $4,922 6,962 Avg Customer Annual Revenue $1,500 2,000 $6,000 $2,991 $5,550 1,500 $4,000 1,000 $3,844 $
Slide 11: Water Utilities Sector Performance
Sector Performance Pure Cycle’s water utilities gross margin of 54% aligns well with industry averages, reflecting efficient management and revenue generation. While Return on Assets(ROA) is above peers. We are also able to grow up to 60,000 connections, of which only about 5% is currently utilized.
Slide 12: We Provide Raw Water to O&G Operators for Drilling
WE PROVIDE RAW WATER TO O&G OPERATORS FOR DRILLING With existing systems, we provide water to O&G Revenue By Quarter (000s) operators. We have also made strategic investments in our system FY 2024 to further our ability to provide water when it is needed, where it is needed in the future. FY 2023 OI
Slide 13: Land Development Financial Performance
Financial Performance Phase Lots SFR Lots Progress LAND DEVELOPMENT Phase 1 505 4 100% Phase 2a 219 10 99% Revenue Contribution by Phase 2024 Phase 2b 194 17 92% (000s) Phase 2c 188 40 27% $1,171 Phase 2d 180 26 18% 1286 97 $2,680 Land Development Revenue YoY (000s) $18,000 16,705 $16,000 $14,000 12
Slide 14: Land Development Sector Performance
Sector Performance Thanks to our well-timed purchase of Sky Ranch, our capital investment in the land remains LAND DEVELOPMENT significantly lower than that of our peers. These figures reflect Pure Cycle's solid operational performance and its potential as a robust investment in the land development
Slide 15: Single Family Rentals Financial Performance
Financial Performance ANNUAL RENT REVENUE COMPLETED HOMES GROSS MARGIN R E N T A L S $500k 14 61% Appreciating Assets $8,000 F A M I L Y $6,000 $4,000 $2,000 $- S I N G L E FY 2022 FY 2023 FY 2024 Book Assets FMV 15
Slide 16: Single Family Rentals Sector Performance
SINGLE FAMILY RENTALS Sector Performance Since PCYO's real estate segment is newer and has less operational history in comparison, its margin performance is particularly impressive. It suggests efficient management of initial costs and potentially lucrative strategies in its real estate approach, ev
Slide 17: Overview
PURE CYCLE CORPORATION ER OVERVIEW LA 17
Slide 18: Water & Wastewater, Land Development, Single Family Rentals
SINGLE WATER & LAND FAMILY WASTEWATER DEVELOPMENT RENTALS Own over 30K acre-feet of water rights WE OPERATE Build single family homes in the Own highly-appreciated property in (surface and ground water) Denver metro area in neighborhoods attractive and easily accessible I-70 Water rights we
Slide 19: New Water Slides
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Slide 20: Water Segment
WATER SEGMENT WATER SYSTEMS Our water rights portfolio can WASTEWATER provide water to as many as 60,000 SYSTEMS connections. This would allow ample room for growth within our WATER RIGHTS current water system, which PORTFOLIO presently supports roughly 2,500 $65 M connections. TOTA L WAT E R A S S
Slide 21: Water Utilities System Capacity and Tap Fees
CURRENT SYSTEM CAPACITY TAP FEES - PORTFOLIO CAPACITY (60,000) ACRE-FOOT PRODUCTION PER YEAR AMOUNT AF Used AF Available WATER UTILITIES 1,176 1,818 For Year Ended 8/31/2024 At Buildout Current Remaining Capacity Sold To Date We continue to invest in our systems with a current book value of We estim
Slide 22: Land Development Overview
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Slide 23: Land Development History & Strategy
History & Strategy LAND DEVELOPMENT Pure Cycle Corporation has a strategic history of entering the land development industry, driven by its Metrics of Completed vision to enhance shareholder value and create integrated communities. Initially focused on water Phases utility services, the company reco
Slide 24: Land Development Phases 2A-2D
PHASE 2A PHASE 2B 229 Lots 211 Lots Land development is All paving is complete, and LAND DEVELOPMENT substantially complete. homebuilders have begun construction on homes. Land Out of 229 homes, 228 are development is estimated to be finished and occupied. completed by summer of 2025. 2A 2B 2C 2D PH
Slide 25: Sky Ranch Capacity Projections
SKY RANCH CAPACITY PROJECTIONS LAND DEVELOPMENT Remaining 18% Sold Not Started Under Construction Pure Cycle’s remaining land to Completed develop is recorded at a book value Lot Revenue (000s) of $3.7 million, but with over $600 0% million in potential development $617,250 revenue expected in the c
Slide 26: Rentals
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Slide 27: Single-Family Rental Overview of Operations
OVERVIEW OF OPERATIONS 1 SINGLE-FAMILY RENTAL Maximizing Land Development Opportunities: By developing single-family homes for rent on these properties, the company can enhance the value of its landholdings and generate consistent income. 2 Pure Cycle Corporation entered the single-family rental (SF
Slide 28: Single Family Rentals
SINGLE FAMILY RENTALS Pure Cycle contracts to build single COMPLETED HOMES family homes in its Sky Ranch Master Planned Community to hold for rentals. Lot development costs fully recovered HOMES UNDER (horizontal costs and tap fees) Each unit CONSTRUCTION covers financing costs and provides positive
Slide 29: Single-Family Rental Financial Performance
Financial Performance SINGLE-FAMILY RENTAL 29
Slide 30: Liquidity
LIQUIDITY CASH AND ST Pure Cycle has a strong balance sheet with INVESTMENT liquidity to support our business segments. Pure Cycle maintains a significant cash RESTRICTED CASH position as well as a receivable from the Sky Ranch CAB for approved reimbursements for public improvement RECEIVABLE FROM t
Slide 31: Outlook
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Slide 32: Financial Performance Forecast: Revenue and Gross Profit
Financial Performance Forecast CONSOLIDATED METRICS 2024 marked a record-setting year for Pure Cycle, which we expect to continue into fiscal year 2025, with forecasted revenues of nearly $31 million, while gross profits at a new high of approximately $23.8 million. This strong financial performance
Slide 33: Financial Performance Forecast: Net Income and EPS
Financial Performance Forecast CONSOLIDATED METRICS FY 2024 demonstrated the power of our investment into Sky Ranch and our water systems. FY 2025 looks to continue those results through the acceleration of lot development at Sky Ranch, and strong water revenues through accelerated tap connection. N
Slide 34: Company Outlook: Water Utilities
COMPANY OUTLOOK SHORT TERM OUTLOOK (3-5 YEARS) • Customer growth to 2,500 accounts consistent tap sales over the remaining phases adding to the recurring customer base • Annual tap fee increases at 3% WATER UTILITIES LONG TERM OUTLOOK (SR Buildout) • Buildout of Sky Ranch 5,000 total residential and
Slide 35: Company Outlook: Land Development
COMPANY OUTLOOK SHORT TERM OUTLOOK (3-5 YEARS) • Steady lot sales over the next 5 years through the completion of Sky Ranch with opportunities expand portfolio • Increasing lot margins as lot costs are expected to remain consistent through LAND the remainder of Sky Ranch Development • Most valuable
Slide 36: Company Outlook: Single Family Rentals
COMPANY OUTLOOK SHORT TERM OUTLOOK (3-5 YEARS) • Expansion of segment to over 100 homes in the next 5 years • Increased efficiencies as segment continues to scale SINGLE • Sustained population growth, particularly in suburban areas, will drive FAMILY continued demand for single-family rentals RENTAL
Slide 37: Phase Recap Summary
Phase 1 Recap Summary 509 Finished lots delivered in 4 years (000's) Lot Revenue $73 Reimbursables $55 Interest $10 Non-reimbursables < $28> Land Total $110 Tap Fees $30 100% Total per lot $140 37
Slide 38: Utility Connections
UTILITY UTILITY CONNECTIONS 1,431 Connections 60,000 available capacity 2% ~$40K W/WW Tap/ea ~$1,500/yr Regional Total System Development Fee Comparison $60,000 $50,000 82% $40,000 $30,000 $20,000 $10,000 98% $0 38
Slide 39: Sky Ranch Land Development Lots
LOTS Sky Ranch Land Development 18% 918 Lots Completed 4082 Lots Available Original Lot Price 82% $73K Phase 2(d) Lot Price $125K 82% 39
Slide 40: Phase 2D Overview
Phase 2D Phase 2D Overview (000’s) Lot Revenue $125 Reimbursables $ 75 Non-reimbursables < $ 25> Land Total $175 Tap Fees $ 40 Total per lot $215 40
Slide 41: Single Family Rentals
RENTALS Single Family Rentals 7% 14 Completed 186 Planned 82% ~$150K Equity/home $33,600/Annual Rent 93% 41
Slide 42: Profitability Trends
Profitability Trends Water Taps & O&G Land Development Recurring Revenue PROJECTED $60,000 62,313 $6,000 $5,174 $50,000 $5,000 Recurring Revenue $40,000 $4,000 Gross Revenue $30,000 30,988 $3,000 28,266 $2,157 $2,251 $20,000 $2,000 14,421 $1,383 $43,063 $16,705 $20,414 $10,000 $7,098 $1,000 $5,940 $
Slide 43: Shareholder Value
Shareholder Value Pure Cycle has shown consistent growth in both recurring revenue (with contributions from water services and an increasing SFR component) and total assets over recent years, suggesting a strong financial position for continued expansion and growing returns on investments Annual Rec
Slide 44: Subsequent Events
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Slide 45: Subsequent Events: Bond Event
Subsequent Events Bond Event PCYO Proceeds - $10.1m S&P Investment Grade Rating 45
Slide 46: Subsequent Events: Farm/Water Acquisition
Subsequent Events Farm/ Water Acquisition On October 21, 2024, the Company completed the purchase: • approximately 432 acres of land in Weld County; • 378 acre-feet of ditch water in the Henrylyn System • 300 acre-feet of Lost Creek Designated Basin Water • Approx. 250 net mineral acres. Purchase pr
Slide 47: Stock Repurchase Program Update
Stock Repurchase Program Update The Company continues to invest in itself, through its approved stock repurchase program. The program is open-ended and authorizes repurchases of up to an aggregate of 200,000 shares of common stock in the open market. The following table presents the number and avera
Slide 48: Q&A
PURE CYCLE CORPORATION Earnings Presentation Q&A www.purecyclewater.com