Global Water Resources, Inc.

Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Resources, Inc. 2024 first quarter conference call. At this time, all participants will be in 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 9th, 2024 at 1 p.m. Eastern time. I would now like to turn the conference over to Joanne Ellsworth, Executive Vice President, Corporate Affairs. Please go ahead.

Welcome, everyone, and thank you for joining us on today's call. Yesterday, we issued our 2024 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, Mike Liebman, Chief Financial Officer, and Chris Krieger, Chief Operating Officer. Ron will summarize the key operational events of the quarter, Mike will review the financial results for the first quarter, and Chris will review strategic initiatives in Arizona Corporation Commission activity for the quarter. Ron, Mike, and Chris 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 conditions and results of operations included within our latest Form 10-Q 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. I will now turn the call over to Ron. Thank you, Joanne.

Good morning, everyone, and thank you for joining us today. We are very pleased to report the results for the first quarter of 2024. I will start with some operational highlights. Total active service connections increased 4.4% to 62,451 as of the end of the quarter from 12 months prior. the 2024 annualized growth rate is 4.3%. So while our organic growth rates remain strong in the face of higher interest rates, it's also important to highlight that our year-over-year regulated revenue growth continues to trend even higher and is up 6.9%. Mike will provide the details on regulated revenue growth drivers. Year to date, we have invested $5.8 million into infrastructure improvements and existing utilities to provide safe and reliable service. Finally, with public health and safety being our top mandate, we are very proud of our compliance record. For the quarter, we had zero significant compliance events, continuing our streak from 2023 and prior. In fact, this means we have now surpassed six years and nine months without a significant compliance event. I also wanted to mention the transaction with the City of Tucson that was announced subsequent to quarter close. Per the press release from earlier this week, we are proud to announce the partnership that was reached with the City of Tucson, resulting in our acquisition of approximately 2,200 customers and seven separate water systems around the City of Tucson within Pima County. We look forward to welcoming these customers to our growing family of utility companies once we receive commission approval. Chris will provide more details on the transaction. Now I want to discuss organic customer growth and what is going on in our core utilities further. The single-family dwelling unit market ended 2023 with approximately 22,582 building permits issued in the Phoenix Greater Metropolitan Area. For Q1 2024, this market realized 7,535 building permits, representing a 74% increase from Q1, 2023. In 2023, the City of Maricopa issued 888 single-family building permits. For Q1, 2024, this market realized 326 building permits, and this represents a 131% increase from Q1, 2023. So as you can see, the Q1 2024 permit data was strong in both Metro Phoenix and the City of Maricopa. However, with interest rates inching back up because of the continued inflation fight, it is hard to anticipate the potential significance this will have on the housing market in the near term. However, there is strong consensus that there remains a housing shortage in Metro Phoenix And thus, over time, Metro Phoenix will retain an annual run rate approaching 30,000 housing units per year to keep pace with net immigration and job growth. This demand must be met by a combination of single-family dwelling units and multifamily. On this note, as previously reported, there is a significant shift occurring in the City of Maricopa to large-scale, high-density, multifamily dwelling complexes, along with more commercial and retail businesses. We believe this shift will be notable and at some level supplant the reduction in single-family home growth. In fact, the Q1 2024 multifamily housing unit data was strong in the City of Maricopa with 400 units permitted compared to 214 units permitted in Q1 2023. So this represents an increase of 186 units permitted or 87%. Looking ahead, there is a record number of additional multifamily projects in some stage of development. The fact is, the booming economy and net emigration that Arizona continues to realize requires more and more places for people to live, work, and play. This is why large-scale multifamily housing, commercial, and recreational projects continue to accelerate at an extremely high pace in Metro Phoenix and in our service areas. Additionally, the industrial manufacturing boom also continues. Previously, 2022 was the single best year for Arizona all time from an industrial economic development investment perspective, and that was eclipsed in 2023 with $40.7 billion invested in the state just last year. I want to say that again, $40.7 billion invested in the state just last year. This has been significant. And there's been further announcements made in 2024, including additional planned expansions at TSMC and Intel, as the chip industry continues to explode here. Frankly, what continues to occur in Arizona is unprecedented. Because of these things, we remain bullish on the future potential of Inland Port, Arizona service area, where Nikola Motor Corp facilities located, and where Procter & Gamble acquired land. Additionally, the City of Maricopa recently announced and gave public presentation on a very large industrial complex they are preparing to bring to market right in the center of the City of Maricopa. Initial plans include 640 acres of an industrial corridor with a smart rail park as it is adjacent to a double railroad. In the future, there is an additional 840 acres that may be added to the industrial corridor. More information to come on this exciting project in the future. Based on all these trends, we believe that in the years to come, we will continue to see considerable large-scale commercial, multifamily, and industrial growth. And this is all in addition to the strong organic housing growth that continues. Putting all these elements together, we believe 2024 will be another incredible year for global water as we continue to advance our mission of growing and aggregating water and wastewater utilities so that our customers can realize the benefits of consolidation, regionalization, and environmental stewardship in the face of water scarcity, challenging regulations, and aging infrastructure. So with that, I will now turn the call over to Mike for financial highlights.