Consolidated Water Co. Ltd.

Good morning. Thank you for joining us today to discuss Consolidated Water Co.'s first quarter of 2020 results ended March 31, 2020. Joining us today is the Chief Executive Officer of Consolidated Water Co., Rick McTaggart, and the company's Chief Financial Officer, David Sasnett. Following their remarks, we will open the call to your questions. Before we conclude today's call, I'll provide some important cautions regarding the forward-looking statements made by management during the call. I'd like to remind everyone that today's call is being recorded and will be made available for telecom replay via instructions in last Friday's press release, which is available in the investor relations section of the company's website. Now, I would like to turn the call over to Consolidated Water Co.'s CEO, Rick McTaggart. Sir, please go ahead.

Thanks a lot, Sean, and good morning, everyone. Thanks for joining us on today's call. The first quarter of 2020 was a solid quarter for Consolidated Water. We made strong progress in growing our overall business and expanding our operational platform to support continued growth and market reach. Our 22% increase in revenue to a record $20.7 million was largely due to $3 million that was contributed by PERC Water are a new 51% owned subsidiary that we acquired in the fourth quarter of last year. Our retail segment and manufacturing segment also contributed to the increase in overall revenue, with these segments gross profits also up from the first quarter of last year. Water management challenges continue to create demand not only for potable water solutions like desalination, but also for wastewater treatment and reuse projects. PERC supports our pursuit of these water reuse projects and other emerging opportunities and has proven to be highly complementary and synergistic to our existing business and overall mission. PERC allows us to offer comprehensive solutions for improving water and wastewater treatment infrastructures and provides us a solid platform upon which we can expand our core business of designing, constructing, and operating desalination plants in North America. PERC also exemplifies the high-quality opportunities we are pursuing to drive continued growth and enhance shareholder value over the coming years. Also in the first quarter, we acquired the remaining 49% interest in AirX Industries, our manufacturing subsidiary based in Fort Pierce, Florida, Since we acquired our original 51% of AirX back in February 2016, we have strengthened its capabilities and resources, as well as expanded its product offerings. As a result, their performance has improved substantially, and we expect AirX to continue to enhance our shareholder value over the coming years. Now, before I go further, I'd like to turn the call over to David, who will take us through the financial details of the quarter. I'll then return to provide more information on how COVID-19 has impacted our operational activities and the company's outlook for the remainder of the year. David.

Thanks, Rick. Good morning, everyone. Hopefully everyone's had a chance to look at our press release, which we issued on Friday. This first quarter was an excellent quarter for us from a financial results perspective. Revenue increased 22% to $20.7 million. as compared to $17 million for the first quarter of 2019. Our services segment contributed most to this revenue increase. Our services segment added $3 million in revenues due to our acquisition of PERC, which occurred back in October. Our manufacturing segment grew its revenue by $823,000, and our retail segment posted a $571,000 increase in revenue. These increases were partially offset by a decrease of about $671,000 for our bulk segment. The increase in our manufacturing revenue was due to an increase in the number of projects and production activity. The increase in our retail revenue was due to a 10% increase in the volume of water sold on Grand Cayman by Cayman Water. This was primarily due to drought-like conditions that existed for the first quarter of this year as compared to last year. Rainfall for the first quarter on Grand Cayman was only 12% of what it was for the first quarter of last year and only 12% of the 30-year historical average for the first quarter. The decrease in bulk revenue was due to the lower rates that came into effect in February of 2019 for water supplied by the Red Gate and Northside plants, as well as lower rates that came into effect in last July for the Northside Water Works plant and these revenue decreases were due to the new contracts we signed for those plans. Our gross profit for the first quarter of 2020 was $8.4 million, which is a 21% increase from the $7 million we posted in the same first quarter of last year. Our net income attributable to Consolidated Water stockholders for the first quarter of 2020 was $2.9 million or $0.19 per fully deluded share. This was down 53% from the $6.2 million or 41% 41-cent fully diluted share in the same quarter of last year. But last year had a gain of $3.6 million in the first quarter for the sale of our Belize subsidiary. With respect to our balance sheet, our cash and cash equivalents totaled $32.3 million as of March 31, 2020, as compared to $42.9 million as of the end of 2019. And the decrease in our cash was primarily due to the cash we used to acquire the remaining 49% of Eric's. We believe our cash position and available funds and borrowing capabilities provide us with the sufficient liquidity we need for the rest of this year. And this wraps up my brief discussion of the financial results for the quarter. I'd like to turn the call back over to Rick.