Global Water Resources, Inc.

Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc. 2020 first quarter conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, Please press star zero for operator assistance at any time. I would like to remind everyone that this call is being recorded on May 7, 2020 at 1 p.m. Eastern Time. I would now like to turn the conference over to Heather Krupa, Vice President and Controller. Please go ahead.

Welcome, everyone, and thank you for joining us on today's call. Yesterday, we issued our 2020 first quarter financial results by press release. A copy of which is available on our website at www.gwresources.com. Speaking today is Ron Fleming, President and Chief Executive Officer, and Mike Liebman, Chief Financial Officer. Mr. Fleming will summarize the key events of the quarter, following which Mr. Liebman will review the financial results for the quarter. Mr. Fleming and Mr. Liebman will be available for questions at the end of the call. Before we begin, I would like to remind you that certain information presented today may include forward looking statements. Such statements reflect the company's current expectations, estimates, projections, and assumptions regarding future events. These forward looking statements involve a number of assumptions, risks, uncertainties, estimates, and other factors that could cause actual results to differ materially from those contained in the forward looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements, which reflect management's views as of the date hereof and are not guarantees of future performance. For additional information regarding factors that may affect future results, please read the sections Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations, included within our latest Form 10-K filed with the SEC. and latest form 10Q filed with the SEC. Such filings are available at www.sec.gov. Certain non-GAAP measures may be included within today's call. For a reconciliation of these measures to the comparable GAAP financial measures, please see the tables included in yesterday's earnings release, which is available on our website. Unless otherwise stated, all amounts discussed are in U.S. dollars. I will now turn the call over to Mr. Ron Fleming.

Thank you, Heather. Good morning everyone and thank you for joining us today. We are very pleased to report the results for first quarter 2020. First and foremost, I always begin by discussing our top priority, which is the health and safety of our employees and our customers. Considering the COVID-19 pandemic we are currently navigating, it is appropriate to start here once again. In short, As an essential utility whose services are vital during a health pandemic, our company moved quickly and early to implement all national, local, and industry-specific guidance to maximize social distancing and other measures to protect the health and safety of our employees and customers and safeguard our operations. These proactive measures have gone well. and we have not incurred any significant disruptions in the first quarter resulting from the pandemic, either operationally or financially. However, at this point, we cannot predict the impact it could have on our operations and financial results going forward. It is worth noting that since our customer base is over 90% residential connections, we may see an increase in water usage due to more people working or staying at home. We do expect some customers to eventually have difficulty paying their utility bills due to COVID-19 related unemployment, but we're ready to work with them to set up payment plans and offer other options. For example, we recently rolled out an expanded customer assistance program. In the meantime, we voluntarily have suspended disconnections for nonpayment and eliminated late fees. Currently, our State Public Utility Commission is discussing options with the industry to determine how best to track and recover costs related to the pandemic at a future date. Moving back to our typical operational highlights, I am very pleased to announce that we continue to extend our employee safety and regulatory compliance non-recordable incident streaks As of last weekend, our staff hit the 1,000 consecutive day mark without a recordable safety accident. Also, it has been nearly 1,500 days since our last significant compliance violation. We also continue to realize benefits from bringing customer service and billing in-house last December, including better control of long-term service costs and benefits derived from a deeper focus on customer experience and enhance scalability of operations as we continue to grow. On the growth front, total active connections increased 4.7% to 46,227 as of the end of the quarter over the 12 months prior. Q1 annualized active connection growth rate slowed a bit to 3.5%. Turning to financial highlights, revenues increased 6.6% to 8.2 million and adjusted EBITDA increased 0.6 million or 18.4% to 4.1 million. Following our effort to raise net proceeds of approximately 11.5 million from an equity offering to provide working capital for acquisitions and other general corporate purposes, cash and cash equivalents totaled 17.1 million at the end of the quarter. Further, subsequent to the end of the quarter, the company secured a new two-year revolving $10 million credit line to support its growth strategy, replacing the previous line at better terms. These remarkable achievements show the dedication and care of our employees as we continue to deliver exceptional performance both financially and operationally and position ourselves for long-term success. Next, I typically highlight single-family dwelling permit growth in Maricopa and Pinal counties, generally the Metro Phoenix area. As a reminder, in 2019, we realized a 14% increase as permits grew to 25,127. It was projected that 2020 would see an increase to 26,000 permits. Clearly, this growth will be impacted by the pandemic, so all projections will need to be reassessed. Regardless, looking ahead, we believe Arizona, and especially the communities we serve in Maricopa and Pinal counties, will continue to see strong growth over time despite the current and largely viewed as temporary economic and social challenges. Given the many economic and practical benefits Arizona offers businesses of all size, we expect our region to benefit from the ongoing business and population net emigration that has put our state at or near the top of the list nationally for many years. In addition to the current call to return important manufacturing and supply chains back to the US, we are prepared to support the growth of our region with our total water management solution that helps create sustainable communities. I will now turn the call over to Mike. Thank you, Ron.