Consolidated Water Co. Ltd.

Good morning, and thank you for joining us today to discuss Consolidated Water Co.'s full year 2022 results. Hosting the call today is the Chief Executive Officer, Consolidated Water Co., Rick McTaggart, and the company's Chief Financial Officer, David Sasnett. Following their remarks, we'll open the call to your questions. At any time during the call, you may join the Q&A queue by pressing star 1 on your telephone keypad. If you would like to remove yourself from the queue, please press star and two. And if you need any assistance during the call, please press star, then zero. 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 it will be made available for telecom replay per the instructions in yesterday's press release, which is available in the investor relations section of the company's website. Now, I'd like to turn the call to Consolidated Water Co. CEO, Rick McTaggart. Sir, please go ahead.

Thank you, Joe, and good morning, everyone. Thanks for joining us today. As you saw in our earnings release issued yesterday afternoon, we reported a 41% increase in our revenue to a record $94.1 million for the full year of 2022. We generated increased revenues across all four of our business segments last year. Our retail water revenues benefited from a 12.5% increase in the volume of water sold in Grand Cayman, and this large increase was due to the return of tourist activity to the Cayman Islands. Our services segment revenue increased by $15 million, with most of this due to the progress of PERC Water on the construction of a new $82 million advanced water treatment plant in Goodyear, Arizona. We announced this contract in May of last year. The project is progressing as planned, and we anticipate recognizing significant additional revenue from this project this year and until the construction is completed in mid-2024. Also, in Q4, we broke ground on the new desalination plant that we designed and are presently constructing on Grand Cayman under a 10-year design, build, and operate contract with the Water Authority of the Cayman Islands. We also announced this project in May of last year. The revenue we recognized from this contract also contributed to the year-over-year increase in service segment revenues. We expect the revenue generated over the approximate 11-year term of this contract to total about $20 million based on January 2022 values. We anticipate the majority of this $20 million to be generated by the construction of the desalination plant during the first 18 months, with the rest earned from the operation of the plant over the following 10 years. So that's how we get to the In October, we announced a milestone win for PERC with the award of an expanded 10-year, $49.2 million contract to operate and maintain two advanced water treatment facilities in Southern California. This contract is the longest-term contract that PERC has ever signed. This win affirms the world-class services that PERF provides and supports our plans for growing this segment of our business in the western U.S., a region that has experienced unprecedented drought conditions over the last 10 years, certainly. In all, we secured more than $150 million in major multi-year projects in 2022. which we expect to have a positive impact on earnings over the coming quarters. Now before discussing more about these projects and our outlook for the rest of the year, I would like to turn the call over to our CFO, David Sasnett, who will take us through the financial details of the year.

Thanks, Rick, and good morning, everyone. Yesterday we issued our full 2022 fiscal year results in a press release, and you can find that press release in the investor section for our website. As Rick mentioned, revenue for 2022 totaled $94.1 million, which was up 41% compared to the $66.9 million we reported in 2021. This increase was driven by increases of the following amounts in all of our business segments, $3.8 million in our retail segment, $6.2 million in our bulk segment, $15 million in our services segment, and an additional $2.3 million and manufacturing segment revenue. As we discussed earlier, our retail revenue increased primarily due to 12.5% increase in the volume of the water we sold on Grand Cayman. Our retail revenue also increased due to higher energy costs that increased the energy pass-through component of our water rates, and it increased slightly as a result of a more favorable rate mix. The increase in our bulk segment revenue was due to an increase in energy costs for the Bahamas, with this increasing the energy pass-through component of CWL-HOMOS rates. The increase in our services segment revenue was due to increases in both plant design and construction revenue and operating and maintenance revenue, with most of the increase resulting from PERC's progress on the construction of the water treatment plant in Goodyear, Arizona. The increase in our manufacturing segment revenue was due to increased production activity. Our gross profit for the full year of 2022 was $30.4 million, or 32% of total revenue, which is up 29% from the $23.5 million, or 35% of total revenue, in 2021. Net income from continuing operations attributable to CWCO stockholders for 2022 was $8.2 million, or $54 million, and other members of the Board of Directors. The Board of Directors and the Board of Directors and the Board of Directors and the Board Our cash and cash equivalents totaled $50.7 million as of the end of the year. This compares to $51.1 million as of the end of the September 30, 2022 quarter. As of December 31, 2022, our working capital totaled $69.9 million. Our debt was only $300,000, and our stockholders' equity totaled $159.7 million. As of December 31, 2022, our projected liquidity requirements for 2023 include capital expenditures for our existing operations of approximately $14.1 million. This includes $2.8 million that is expected to be incurred in 2023 for replacing our West Bay desalination plant and approximately $7.5 million for construction of the new desalination plant on Grand Cayman. In early January this year, we exercised, well, actually in October of 2022, we exercised our option to purchase the remaining 39% equity of our subsidiary, Perk Water, and we completed this transaction in January of 2023. We paid approximately $7.8 million. This was comprised of $2.44 million in cash and 368,383 shares of common stock valued at about $5.4 million. We paid approximately $1.4 million for dividends in January 2023. And of course, our future liquidity requirements, they also include any future dividends declared by our board. In the third quarter of 2022, we obtained a $10 million revolving credit line with Social Bank in the Cayman Islands to assist us with some of our short-term financing and working capital needs. However, to date, we have not been required to utilize any of the borrowings that are available under this line. So that completes our financial summary for the quarter, and I'll turn the call back over to Rick.