Consolidated Water Reports Second Quarter 2023 Revenue up 110% to $44.2 Million and Net Income of $7.3 Million or $0.46 per Diluted Share

About this update from Consolidated Water Co. Ltd.

GEORGE TOWN, Cayman Islands , Aug. 10, 2023 (GLOBE NEWSWIRE) -- Consolidated Water Co. Ltd. (NASDAQ Global Select Market: CWCO), a leading developer and operator of advanced water supply and treatment plants, reported results for the second quarter ended June 30, 2023 . All comparisons are to the same prior year period unless otherwise noted. The company will hold a conference call at 11:00 a.m. Eastern time tomorrow to discuss the results (see dial-in information below). Second Quarter 2023 Financial Highlights Total revenue increased 110% to $44.2 million . Retail revenue increased 16% to $7.6 million . Services revenue increased 377% to $24.1 million , with recurring services revenue generated from operation and maintenance contracts up 11% to $3.9 million . Manufacturing revenue increased to $4.1 million . Net income from continuing operations attributable to company stockholders was $7.5 million or $0.47 per diluted share, up 178% from $2.7 million or $0.18 per diluted share in the same year-ago period. Paid quarterly cash dividend of $0.085 per share ( $0.34 on an annualized basis). Cash and cash equivalents totaled $47.7 million as of June 30, 2023 . Second Quarter 2023 Operational Highlights Signed $204 million contract to design, build, operate and maintain a seawater desalination plant in Hawaii . Volume of water sold in Grand Cayman retail segment increased 14% primarily due to increased tourist activity on Grand Cayman , with tourism in 2022 was lower than historical levels due to the lingering impact of the COVID-19 pandemic. Recognized $17.6 million in revenue from PERC Water’s progress on the construction of a $82 million advanced water treatment plant in Goodyear, Arizona . The construction is on track for completion next year. Management Commentary “I‘m truly gratified and excited to mark the company’s 50th anniversary this month by reporting record quarterly and six-month financial results,” commented Consolidated Water CEO, Rick McTaggart . “In Q2, our revenue increased by 110% to $44.2 million , reflecting another strong period of growth across all four of our business segments. Our retail water segment benefited from a 14% increase in the volume of water sold in Grand Cayman , which we attribute to improved tourist activity over last year when tourism was lower than historical levels due to the lingering impact of the pandemic. “Our services revenue grew by $19 million , mostly due to the progress our PERC Water subsidiary has made on the construction of an $82 million advanced water treatment plant in Goodyear, Arizona that we announced in May of last year. Construction is progressing as planned, and we anticipate generating significant additional revenue from this project until the plant’s anticipated commissioning and startup in mid-2024. “PERC’s continued strong operating performance, revenue growth and synergies with other areas of our business have significantly improved our overall top and bottom line. Its strong operational presence in the Southwestern U.S. — a region that urgently needs new fresh water sources due to unprecedented drought conditions — has positioned us for further growth and development in this important segment of our business. “In our Caribbean seawater desalination business, the revenue we recognized from the design and construction of the 2.6 million gallon per day Red Gate desalination plant for the Water Authority of the Cayman Islands also contributed to the year-over-year increase in services revenue. Construction remains on track and is expected to be completed in early 2024. “Our new Cayman Water 1 million gallon per day West Bay desalination plant is replacing a 30-year-old plant and supplements production capacity for our retail water business in Grand Cayman . The plant is expected to go online next month in time to meet the higher retail water demand we typically experience from mid-December through April in Grand Cayman . “In July, we entered the U.S. desalination market for the first time with a $204 million contract to design, build, operate and maintain a seawater desalination plant in Hawaii . We believe winning this contract was due to our proven ability in designing, building and operating some of the world’s most energy-efficient seawater desalination plants, as well as the exceptional project track record that our team was able to demonstrate to our new client, the Board of Water Supply of Honolulu . We also believe this entrance into the U.S. desalination plant market positions us well for the additional opportunities we are pursuing in the Western U.S. “We will be commemorating our 50th year of operating with the ringing of the Nasdaq opening bell on Monday. From our humble beginnings, Consolidated Water has pursued a mission to provide state-of-the-art water services to areas of the world where the supply of potable water is scarce. Our dedicated team of engineers, builders and operators have long recognized that fresh water is the most precious resource in the world. Today, we produce more than 25 million gallons of potable water daily from our 11 seawater desalination plants in the Caribbean , and operate 27 water and wastewater treatment facilities in the Western U.S. “We remain very optimistic about our further growth for numerous reasons. This includes the recovery of tourism in Grand Cayman and our ongoing construction projects underway there and in the U.S. , as well as the increased project bidding activity we are seeing in the U.S. We also anticipate that the more than $350 million in major multi-year projects that we secured over the last 18 months will have an increasing positive impact on our earnings in future quarters. “We believe these activities and achievements, combined with the current positive trends in our markets, represent strong drivers for continued growth, increased profitability, and further strengthening of shareholder value.” Second Quarter 2023 Financial Summary Revenue for the second quarter of 2023 totaled $44.2 million , up 110% compared to $21.1 million in the same year-ago period. The increase was driven by increases of $1.0 million in the retail segment, $59,000 in the bulk segment, $19.0 million in the services segment and $3.0 million in the manufacturing segment. Retail revenue increased primarily due to a 14% increase in the volume of water sold, as well as the result of higher energy costs that increased the energy pass-through component of the company’s water rates and a more favorable rate mix. The increase in services segment revenue was due to an increase in plant design and construction revenue. The company recognized approximately $17.6 million in revenue in the second quarter of 2023 for the construction of a water treatment plant in Goodyear, Arizona . Revenue generated under operations and maintenance contracts totaled $3.9 million in the second quarter of 2023, up 11% as compared to $3.5 million in the same year-ago period. The increase in manufacturing segment revenue was due to increased production activity. Gross profit for the second quarter of 2023 was $15.5 million or 35.0% of total revenue, up 107% from $7.5 million or 35.5% of total revenue for the same year-ago period. Net income from continuing operations attributable to stockholders for the second quarter of 2023 was $7.5 million or $0.47 per diluted share, compared to net income of $2.7 million or $0.18 per diluted share for the same year-ago period. Net income attributable to Consolidated Water stockholders for the second quarter of 2023, which includes the results of discontinued operations, was $7.3 million or $0.46 per fully diluted share, up from a net income of $2.3 million or $0.15 per basic and fully diluted share for the same year-ago period. Cash and cash equivalents totaled $47.7 million as of June 30, 2023 , as compared to $51.1 million as of March 31, 2023 , with working capital at $75.5 million , debt of $0.3 million , and stockholders’ equity totaling $170.3 million . First Half 2023 Financial Summary Revenue for the first half of 2023 was $77.1 million , up 90% compared to $40.6 million in the same year-ago period. The increase was primarily driven by increases of $2.5 million in the retail segment, $1.7 million in the bulk segment, $27.0 million in the services segment and $5.2 million in the manufacturing segment. Retail revenue increased primarily due to a 17% increase in the volume of water sold. The volume of water sold in the Cayman Water license area increased by 15% and the remaining 2% increase in the volume of water sold was due to water sales made by Cayman Water directly to the WAC in January and February of 2023. The retail revenue increased also as a result of higher energy costs that increased the energy pass-through component of the company’s retail water rates, as well as a more favorable rate mix. The increase in bulk segment revenue was due to an increase in energy costs for CW-Bahamas, which increased the energy pass-through component of CW-Bahamas’ rates and, to a lesser extent, an increase of 9% in the volume of water sold by CW-Bahamas. The increase in services segment revenue was due to an increase in plant design and construction revenue. The company recognized approximately $24.1 million in revenue for the construction of a water treatment plant in Goodyear, Arizona in the first half of 2023. Revenue generated under operations and maintenance contracts totaled $7.5 million in the first half of 2023, up 5% as compared to $7.1 million in the same year-ago period. The increase in manufacturing segment revenue was due to higher project activity. Gross profit for the first half of 2023 was $26.0 million or 33.7% of total revenue, up 78% from $14.6 million or 36.0% of total revenue in the same year-ago period. Net income from continuing operations attributable to stockholders for the first half of 2023 was $11.6 million or $0.73 per diluted share, compared to net income of $5.0 million or $0.33 per diluted share in the same year-ago period. Net income attributable to Consolidated Water stockholders for the half of 2023, which includes the results of discontinued operations, was $11.1 million or $0.70 per fully diluted share, up from net income of $4.0 million or $0.26 per fully diluted share in the same year-ago period. Second Quarter Segment Results Three Months Ended June 30, 2023 Retail Bulk Services Manufacturing Total Revenue $ 7,573,329 $ 8,482,495 $ 24,093,963 $ 4,087,476 $ 44,237,263 Cost of revenue 3,433,132 5,931,735 16,248,141 3,160,706 28,773,714 Gross profit 4,140,197 2,550,760 7,845,822 926,770 15,463,549 General and administrative expenses 4,265,535 379,900 904,560 434,920 5,984,915 Gain on asset dispositions and impairments, net — 1,000 — — 1,000 Income (loss) from operations $ (125,338 ) $ 2,171,860 $ 6,941,262 $ 491,850 9,479,634 Other income, net 129,131 Income before income taxes 9,608,765 Provision for income taxes 1,940,067 Net income from continuing operations 7,668,698 Income from continuing operations attributable to non-controlling interests 137,226 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 7,531,472 Net loss from discontinued operations (207,701 ) Net income attributable to Consolidated Water Co. Ltd. stockholders $ 7,323,771 Three Months Ended June 30, 2022 Retail Bulk Services Manufacturing Total Revenue $ 6,526,803 $ 8,423,749 $ 5,055,483 $ 1,061,092 $ 21,067,127 Cost of revenue 3,118,411 5,647,583 3,865,867 959,769 13,591,630 Gross profit 3,408,392 2,776,166 1,189,616 101,323 7,475,497 General and administrative expenses 3,345,109 404,072 838,040 339,470 4,926,691 Gain on asset dispositions and impairments, net 1,200 — 4,080 — 5,280 Income (loss) from operations $ 64,483 $ 2,372,094 $ 355,656 $ (238,147 ) 2,554,086 Other income, net 397,982 Income before income taxes 2,952,068 Provision for income taxes 10,152 Net income from continuing operations 2,941,916 Income attributable to non-controlling interests 232,197 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 2,709,719 Net loss from discontinued operations (419,833 ) Net income attributable to Consolidated Water Co. Ltd. stockholders $ 2,289,886 First Half Segment Results Six Months Ended June 30, 2023 Retail Bulk Services Manufacturing Total Revenue $ 15,344,424 $ 17,486,868 $ 36,815,664 $ 7,459,297 $ 77,106,253 Cost of revenue 6,983,926 12,174,881 26,292,219 5,632,596 51,083,622 Gross profit 8,360,498 5,311,987 10,523,445 1,826,701 26,022,631 General and administrative expenses 8,442,642 732,875 1,993,232 852,828 12,021,577 Gain (loss) on asset dispositions and impairments, net (7,287 ) 12,270 — 1,933 6,916 Income (loss) from operations $ (89,431 ) $ 4,591,382 $ 8,530,213 $ 975,806 14,007,970 Other income, net 286,190 Income before income taxes 14,294,160 Provision for income taxes 2,389,552 Net income from continuing operations 11,904,608 Income from continuing operations attributable to non-controlling interests 300,347 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 11,604,261 Net loss from discontinued operations (466,864 ) Net income attributable to Consolidated Water Co. Ltd. stockholders $ 11,137,397 Six Months Ended June 30, 2022 Retail Bulk Services Manufacturing Total Revenue $ 12,840,003 $ 15,774,393 $ 9,799,303 $ 2,211,333 $ 40,625,032 Cost of revenue 6,172,151 10,334,702 7,515,047 1,981,871 26,003,771 Gross profit 6,667,852 5,439,691 2,284,256 229,462 14,621,261 General and administrative expenses 6,795,515 714,375 1,618,014 664,904 9,792,808 Gain on asset dispositions and impairments, net 1,200 — 16,538 — 17,738 Income (loss) from operations $ (126,463 ) $ 4,725,316 $ 682,780 $ (435,442 ) 4,846,191 Other income, net 717,709 Income before income taxes 5,563,900 Benefit from income taxes 56,425 Net income from continuing operations 5,507,475 Income from continuing operations attributable to non-controlling interests 473,627 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 5,033,848 Net loss from discontinued operations (1,027,147 ) Net income attributable to Consolidated Water Co. Ltd. stockholders $ 4,006,701 Conference Call Consolidated Water management will host a conference call tomorrow to discuss these results, which will include a question-and-answer period. Date: Friday, August 11, 2023 Time: 11:00 a.m. Eastern time ( 8:00 a.m. Pacific time )Toll-free dial-in number: 1-844-875-6913International dial-in number: 1-412-317-6709Conference ID: 5868888 Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you require any assistance connecting with the call, please contact CMA at 1-949-432-7566. A replay of the call will be available after 1:00 p.m. Eastern time on the same day through August 18, 2023 , as well as available for replay via the Investors section of the Consolidated Water website at www.cwco.com . Toll-free replay number: 1-877-344-7529International replay number: 1-412-317-0088Replay ID: 5868888 About Consolidated Water Co. Ltd. Consolidated Water Co. Ltd. develops and operates advanced water supply and treatment plants and water distribution systems. The company designs, builds and operates seawater desalination facilities in the Cayman Islands , The Bahamas and the British Virgin Islands , and designs, builds and operates water treatment and reuse facilities in the United States . The company recently entered the U.S. desalination market with a contract to design, build, operate and maintain a seawater desalination plant in Hawaii .The company also manufactures and services a wide range of products and provides design, engineering, management, operating and other services applicable to commercial and municipal water production, supply and treatment, and industrial water and wastewater treatment. For more information, visit www.cwco.com . Cautionary Note Regarding Forward-Looking Statements This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe", "estimate", "project", "intend", "expect", "should", "will" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to (i) continued acceptance of the company's products and services in the marketplace; (ii) changes in its relationships with the governments of the jurisdictions in which it operates; (iii) the outcome of its negotiations with the Cayman government regarding a new retail license agreement; (iv) the collection of its delinquent accounts receivable in the Bahamas ; and (v) various other risks, as detailed in the company's periodic report filings with the Securities and Exchange Commission (“SEC”). For more information about risks and uncertainties associated with the company’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the company’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting the company’s Secretary at the company’s executive offices or at the “Investors – SEC Filings” page of the company’s website at http://ir.cwco.com/docs . Except as otherwise required by law, the company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Company Contact: David W. Sasnett Executive Vice President and CFOTel (954) 509-8200 Email Contact Investor Relations Contact Ron Both or Grant Stude CMA Investor RelationsTel (949) 432-7566 Email Contact Media Contact: Tim Randall CMA Media RelationsTel (949) 432-7572 Email Contact CONSOLIDATED WATER CO. LTD. CONDENSED CONSOLIDATED BALANCE SHEETS June 30 , December 31 , 2023 2022 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 47,691,699 $ 50,711,751 Accounts receivable, net 30,302,638 27,046,182 Inventory 9,844,600 5,727,842 Prepaid expenses and other current assets 6,873,183 5,643,279 Contract assets 8,192,770 2,913,722 Current assets of discontinued operations 320,427 531,480 Total current assets 103,225,317 92,574,256 Property, plant and equipment, net 50,733,041 52,529,545 Construction in progress 5,890,363 3,705,681 Inventory, noncurrent 5,004,956 4,550,987 Investment in OC-BVI 1,339,585 1,545,430 Goodwill 10,425,013 10,425,013 Intangible assets, net 2,545,556 2,818,888 Operating lease right-of-use assets 1,785,865 2,058,384 Other assets 3,001,292 1,669,377 Long-term assets of discontinued operations 21,129,288 21,129,288 Total assets $ 205,080,276 $ 193,006,849 LIABILITIES AND EQUITY Current liabilities Accounts payable, accrued expenses and other current liabilities $ 10,156,003 $ 8,438,315 Accounts payable - related parties — 403,839 Accrued compensation 1,869,351 2,267,583 Dividends payable 1,411,753 1,375,403 Current maturities of operating leases 547,297 546,851 Current portion of long-term debt 114,964 114,964 Contract liabilities 12,928,490 8,803,921 Deferred revenue 409,670 315,825 Current liabilities of discontinued operations 280,695 389,884 Total current liabilities 27,718,223 22,656,585 Long-term debt, noncurrent 161,409 216,117 Deferred tax liabilities 485,008 560,306 Noncurrent operating leases 1,552,708 1,590,542 Other liabilities 153,000 219,110 Total liabilities 30,070,348 25,242,660 Commitments and contingencies Equity Consolidated Water Co. Ltd. stockholders' equity Redeemable preferred stock, $0.60 par value. Authorized 200,000 shares; issued and outstanding 48,088 and 34,383 shares, respectively 28,853 20,630 Class A common stock, $0.60 par value. Authorized 24,655,000 shares; issued and outstanding 15,736,041 and 15,322,875 shares, respectively 9,441,625 9,193,725 Class B common stock, $0.60 par value. Authorized 145,000 shares; none issued — — Additional paid-in capital 91,107,323 89,205,159 Retained earnings 69,702,109 61,247,699 Total Consolidated Water Co. Ltd. stockholders' equity 170,279,910 159,667,213 Non-controlling interests 4,730,018 8,096,976 Total equity 175,009,928 167,764,189 Total liabilities and equity $ 205,080,276 $ 193,006,849 CONSOLIDATED WATER CO. LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended June 30 , Six Months Ended June 30 , 2023 2022 2023 2022 Revenue $ 44,237,263 $ 21,067,127 $ 77,106,253 $ 40,625,032 Cost of revenue (including related party expenses of $0 and $640,937 for the three months ended, and $0 and $1,480,369 for the six months ended, June 30, 2023 and 2022, respectively) 28,773,714 13,591,630 51,083,622 26,003,771 Gross profit 15,463,549 7,475,497 26,022,631 14,621,261 General and administrative expenses (including related party expenses of $0 and $24,231 for the three months ended, and $0 and $48,462 for the six months ended, June 30, 2023 and 2022, respectively) 5,984,915 4,926,691 12,021,577 9,792,808 Gain on asset dispositions and impairments, net 1,000 5,280 6,916 17,738 Income from operations 9,479,634 2,554,086 14,007,970 4,846,191 Other income (expense): Interest income 86,137 110,916 199,781 291,603 Interest expense (36,247 ) (2,724 ) (74,091 ) (6,805 ) Profit-sharing income from OC-BVI 12,150 8,100 26,325 18,225 Equity in the earnings of OC-BVI 35,272 19,551 70,830 51,317 Net gain on put/call options — 201,000 — 276,000 Other 31,819 61,139 63,345 87,369 Other income, net 129,131 397,982 286,190 717,709 Income before income taxes 9,608,765 2,952,068 14,294,160 5,563,900 Provision for income taxes 1,940,067 10,152 2,389,552 56,425 Net income from continuing operations 7,668,698 2,941,916 11,904,608 5,507,475 Income from continuing operations attributable to non-controlling interests 137,226 232,197 300,347 473,627 Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders 7,531,472 2,709,719 11,604,261 5,033,848 Total loss from discontinued operations (207,701 ) (419,833 ) (466,864 ) (1,027,147 ) Net income attributable to Consolidated Water Co. Ltd. stockholders $ 7,323,771 $ 2,289,886 $ 11,137,397 $ 4,006,701 Basic earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders Continuing operations $ 0.48 $ 0.18 $ 0.74 $ 0.33 Discontinued operations (0.01 ) (0.03 ) (0.03 ) (0.07 ) Basic earnings per share $ 0.47 $ 0.15 $ 0.71 $ 0.26 Diluted earnings (loss) per common share attributable to Consolidated Water Co. Ltd. common stockholders Continuing operations $ 0.47 $ 0.18 $ 0.73 $ 0.33 Discontinued operations (0.01 ) (0.03 ) (0.03 ) (0.07 ) Diluted earnings per share $ 0.46 $ 0.15 $ 0.70 $ 0.26 Dividends declared per common and redeemable preferred shares $ 0.085 $ 0.085 $ 0.17 $ 0.17 Weighted average number of common shares used in the determination of: Basic earnings per share 15,736,041 15,285,523 15,729,852 15,285,523 Diluted earnings per share 15,907,440 15,436,421 15,899,923 15,435,956 Source: Consolidated Water Co. Ltd.

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