Consolidated Water Co. Ltd.

Good morning. Thank you for joining us today to discuss Consolidated Water Company's third quarter 2025 operating and financial results. Hosting the call today is the Chief Executive Officer of Consolidated Water, Rick McTaggart, and the company's Chief Financial Officer, David Sassnett. Following their remarks, we'll open the call to your questions. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. At any time during the call, you may join the Q&A queue by pressing star 1 on your keypad. To withdraw your question, please press star 2. 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. Please see the instructions in yesterday's press release that has been posted to the investor relations section of the company's website. Now I'd like to turn the call over to Consolidated Waters CEO, Rick McTaggart. Sir, please go ahead.

Thank you, Chloe, and good morning, everyone. Thank you for joining us today to discuss our financial and operating results for our third quarter of 2025. In the third quarter, our diversified water business model, which encompasses regulated utility operations, design and construction services, O&M services, and manufacturing continued to deliver strong performance. This steady progress led to a notable increase in overall revenue and earnings per share from our continuing operations compared to the same period last year. Retail water sales in the exclusive utility service area on Grand Cayman were higher than the previous year because of the ongoing strength of the economy in the Cayman Islands and drier weather conditions on Grand Cayman. We experienced greater demand for water, resulting in a meaningful uptake in both sales and volume sold. Although our Caribbean-based bulk segment revenue saw a modest decline this past quarter, primarily due to lower fuel-related charges that we passed through to customers, we achieved higher profitability in this segment. This improvement was driven by our consistent commitment to operational excellence, which allowed us to further reduce costs and enhance efficiency. Our services segment also saw healthy growth resulting from two construction projects that were underway this year, as well as steady gains from our recurring O&M contracts. These positive trends were partially offset by a decrease in consulting revenue which was expected following the completion of a major plant commissioning and startup project in California last year. During the quarter, our manufacturing segment maintained its positive momentum. We saw further revenue growth and an improvement in gross margin, reflecting the production this past quarter of higher margin, specialized products for nuclear power and municipal water customers. as well as our continued focus on maximizing both production efficiency and capacity. The completion of our new 17,500 square foot manufacturing facility expansion this past quarter is expected to further enhance efficiency and throughput in that business. As previously reported, We hold NQA1 certifications from two major nuclear industry companies and see renewed interest in U.S. nuclear power solutions. These specialized manufacturing qualifications position us for continued growth. Design of the 1.7 million gallon per day seawater desalination plant for the Honolulu Board of Water Supply in Kalailoa, Hawaii, is now 100% complete, and we are focused on obtaining the remaining permits needed to allow our client to issue a notice to proceed with construction of the project. We continue to anticipate that construction of this project will commence early next year. We see this major project substantially adding to our revenue and earnings growth in 2026 and 2027. Now, before getting into recent developments and our outlook for the rest of the year and beyond, I'd like to turn the call over to David, who will take us through the financial details for the quarter.

Thank you, Rick, and good morning, everyone. Thanks for joining us today. Our revenue for the quarter totaled $35.1 million, which was up 5% from the $33.4 million we posted in the third quarter of 2024. This increase was due to revenue increases for the retail services and manufacturing segments. Retail revenue increased to $184,000 due to a 6% increase in the volume of water sold. Revenue increase was tempered somewhat by lower energy prices. which decreased the pass-through component by rates that we charge at Cayman Water. Our bulk segment decreased $373,000 to $8.4 million due to a decline in energy prices similar to the situation with Cayman Water. This decreased our rates in the Bahamas operations, but as Rick said earlier, we managed to improve profitability at our bulk segment despite the decline in revenue. Services segment revenue increased by $1.6 million primarily due to plant construction revenue increasing from $4.3 million in the third quarter of last year to $6.4 million in the third quarter of this year. Services segment revenue generated under our O&M contracts totaled $7.7 million in the third quarter of 2025, a slight increase from the amount we posted for the third quarter of 2024. Manufacturing segment Revenue increased by 305,000 or 7% to 4.7 million as compared to 4.4 million in the third quarter of 2024 and this was as a result of increased production activity. Gross profit for 2025 was 12.9 million or 37% of total revenue as compared to 11.6 million or 35% of total revenue in the third quarter of 2024. This increase was due to increases in retail services and manufacturing revenue, which enhanced our gross profit percentage. Net income from continuing operations attributable to consolidated water stockholders for the third quarter of 2025 was $5.6 million, or $0.34 per diluted share. This compares to net income of $5 million, or $0.31 per diluted share for the third quarter of last year. Including our discontinued operations, Net income attributable to consolidated water stockholders for the third quarter of 2025 was $5.5 million, or $0.34 per delivered share, as compared to net income of $4.5 million, or $0.28 per delivered share, in the third quarter of 2024. Now turning to our financial condition and balance sheet, during the quarter, Consolidated Water of the Bahamas received significant payments on its delinquent accounts receivable from the Water and Sewage Corporation, which resulted in a decrease of $12.5 million in its accounts receivable balances over the course of this quarter to $16.8 million as of September 30, 2025. This also represents an overall $5.7 million decrease in accounts receivables from the prior year end for CW Bahamas. Our cash and cash equivalents totaled $123.6 million as of September 30, 2025, Our working capital was $141.7 million, and our stockholders' equity was $220.4 million. And as we pointed out on previous calls, our company presently has no significant outstanding debt. Our cash and cash equivalents totaled, excuse me, our projected liquidity requirements for the balance of 2025 include capital expenditures for existing operations of approximately $4.5 million, and this includes approximately $1.3 million for a project in the Bahamas and $266,000 for new equipment for ERIC's manufacturing facility. We paid approximately $2.3 million in dividends in October, and our liquidity requirements may also include future quarterly dividends if such dividends are declared by our board. We continue to evaluate how to use our ample cash balances to increase shareholder value. This completes our financial summary for the quarter, and I'll turn the call back over to Rick.