Core Viewpoint - Global Water Resources, Inc. reported a mixed financial performance for the year ended December 31, 2024, with regulated revenue growth but a decline in total revenue and net income, primarily due to the absence of prior year unregulated revenue from infrastructure coordination and financing agreements [4][5][25]. Financial Highlights - Regulated revenue increased by 4.9% to $52.7 million, driven by organic growth in active water and wastewater connections and increased consumption [5][16]. - Total revenue decreased by 0.6% to $52.7 million, impacted by a $2.8 million decline in unregulated revenue from infrastructure coordination and financing agreements that did not recur in 2024 [5][16]. - Net income fell by 27.5% to $5.8 million, or $0.24 per share, compared to $0.33 per share in 2023, primarily due to the lack of ICFA revenue recognized in 2023 [5][25]. - Adjusted net income rose by 2.0% to $6.3 million, or $0.26 per share, consistent with the previous year [5][26]. - Adjusted EBITDA increased by 5.2% to $26.7 million [5][27]. - Cash and cash equivalents totaled $9.0 million at year-end [5]. Operational Highlights - Total active service connections grew by 4.4% to 64,520 as of December 31, 2024 [5][30]. - Water consumption increased by 3.3% to 4.16 billion gallons in 2024 [5]. - The company invested $32.3 million in infrastructure projects to support existing utilities and future growth [5]. - A settlement agreement related to the GW-Farmers general rate case application could provide an additional $1.1 million in annual revenue if approved [5][7]. Management Commentary - The CEO highlighted the company's growth in customer base and regulated revenue despite challenging interest rate conditions, attributing revenue increases to organic growth and scheduled rate increases [4]. - The company is focused on driving organic growth and implementing strategic rate adjustments across its service areas [13][29]. Business Strategy - The near-term growth strategy includes increasing service connections, improving operational efficiencies, and raising utility rates as approved by the Arizona Corporation Commission (ACC) [29]. - The company plans to continue aggregating water and wastewater utilities to realize benefits from consolidation and regionalization [29]. Market Trends - The Phoenix metropolitan area is projected to experience significant population growth, with an estimated increase from 5.1 million in 2020 to 5.8 million by 2030 [32]. - Job growth in Arizona is expected to exceed the national average, contributing to increased demand for water services [34][35].

Service Connections and Revenue - As of December 31, 2024, the total active service connections reached 64,491, with a significant annualized growth of 6.1% from December 2019 to December 2024, adding 13,485 connections[43]. - GW-Santa Cruz and GW-Palo Verde contributed approximately 41.0% and 50.7% of total revenue for the years ended December 31, 2024, respectively[45]. - GW-Belmont served 622 active service connections and has agreements to serve approximately 100,000 anticipated home sites at full build-out[49]. - GW-Saguaro served 1,571 active water connections, while GW-Farmers served 3,494 active connections as of December 31, 2024[52]. - The company anticipates a net increase to its annual revenue requirement of $6.5 million for GW-Santa Cruz and GW-Palo Verde, with the first phase beginning in May 2026 and the second phase in January 2027[70]. - GW-Farmers filed for a unanimous settlement agreement for an increase in annual revenue requirement of $1.1 million, with rates phased in starting May 1, 2025[70]. Regulatory Compliance and Environmental Standards - The company achieved a compliance rate of 99.9% for meeting state and federal drinking water standards in 2024[56]. - The company expects increased capital expenditures for PFAS-contaminated water treatment due to compliance with the new NPDWR regulations[64]. - The company has completed an inventory of its pipes and found no lead pipes, in line with the new Lead and Copper Rule Improvements[65]. - The company is committed to regulatory compliance and has developed cooperative relationships with regulatory agencies to ensure adherence to environmental standards[75]. - Regulatory compliance costs may increase due to new or stricter standards, potentially impacting profitability if rate increases are not approved[103]. - The company may incur significant costs to comply with environmental laws, which could adversely affect its business operations[105]. Financial Performance - Total revenue for the year ended December 31, 2024, was $52,692,000, a decrease of 0.6% from $53,028,000 in 2023[322]. - Net income for 2024 was $5,789,000, down 27.5% from $7,982,000 in 2023[322]. - Operating income decreased to $9,364,000 in 2024 from $12,286,000 in 2023, reflecting a decline of 23.5%[322]. - Total assets increased to $405,137,000 as of December 31, 2024, compared to $361,095,000 in 2023, representing an increase of 12.2%[320]. - Cash and cash equivalents rose significantly to $9,047,000 in 2024 from $3,087,000 in 2023, an increase of 194.5%[328]. - Total current liabilities increased to $22,258,000 in 2024, up from $14,217,000 in 2023, marking a rise of 56.5%[320]. - Long-term debt increased to $118,518,000 in 2024 from $101,341,000 in 2023, an increase of 16.9%[320]. - Capital expenditures for 2024 were $32,324,000, compared to $22,312,000 in 2023, reflecting a 45.0% increase[327]. - Dividends declared per common share remained steady at $0.30 for both 2024 and 2023[322]. Operational Efficiency and Technology - The company employs sophisticated technology including SCADA and automated meter infrastructure to enhance operational efficiency and customer service[90]. - The company focuses on decentralized treatment facilities to optimize efficiency in providing water and wastewater services[91]. - The company intends to increase the use of recycled water to meet future demands, although current infrastructure and permits are limited in most service areas[76]. - The company emphasizes the use of recycled water for non-potable purposes, which is critical for its business strategy[172]. Competition and Market Risks - The company faces competition from other water and wastewater utilities for new service areas and acquisitions, including EPCOR Water Arizona Inc. and Arizona Water Company[93]. - The company relies predominantly on groundwater and recycled water, which may not be sufficient to meet future demands[130]. - The company has not yet obtained material surface water rights, which may limit its ability to support customer growth[131]. - Future acquisitions may not achieve sufficient profitability, posing risks to the company's financial health and operational focus[155][156]. - The company faces competition for new service areas and acquisitions, which could limit revenue growth opportunities[164][165]. Legal and Regulatory Risks - The company is subject to comprehensive regulation by the Arizona Corporation Commission (ACC), which influences its ability to recover costs and set rates[111]. - The company faces risks related to the design, construction, and operation of its systems, which could adversely affect its financial condition[138]. - The company is exposed to various legal risks that could materially adversely affect its operating results[122]. - Changes in utility policy through legislative initiatives in Arizona could impact the company's growth and financial condition[119]. - The company’s financial statements are subject to rate regulation by the Arizona Corporation Commission (ACC), which impacts the rates charged for water and wastewater services[314]. Human Resources - The company employed 122 full-time individuals and 3 part-time employees as of December 31, 2024, representing a 15% increase from the previous year[97]. Customer Demand and Seasonal Variability - Customer demand for water is generally higher during warmer months, influenced by irrigation and outdoor water use, which can affect revenue if temperatures are cooler or rainfall is higher than normal[95]. - Seasonal fluctuations in water demand can adversely affect profitability, with cooler temperatures or excessive rainfall potentially decreasing water usage[154]. Cybersecurity and Technology Risks - The company’s information technology systems are vulnerable to cybersecurity threats, which could materially impact its financial condition[173]. - The company has obtained cyber insurance, but it may not cover all losses or damages from a security breach[174].

Core Insights - Global Water Resources, Inc. has been invited to the 37th Annual ROTH Conference, highlighting its significance in the water resource management sector [1] - The conference will feature presentations and meetings with institutional investors and analysts, indicating strong interest in the company's operations [2] Company Overview - Global Water Resources operates 32 systems providing water, wastewater, and recycled water services, primarily in metropolitan Phoenix growth corridors [6] - The company recycles over 1 billion gallons of water annually, totaling 17.4 billion gallons since 2004, showcasing its commitment to sustainability [6] Market Position and Strategy - The company is recognized for its leadership in utility consolidation, automation, and water resource management, which are key areas of discussion at the conference [3] - Global Water's Total Water Management (TWM) approach integrates water cycle management, enhancing the beneficial use of recycled water and promoting conservation [7][8] Awards and Recognition - Global Water has received multiple industry awards, including recognition as a 'Utility of the Future Today' for its water reuse practices [9] - The company has also been awarded for its excellence in public asset management strategies, reflecting its innovative operational practices [9]

Core Viewpoint - Global Water Resources, Inc. will hold a conference call on March 6, 2025, to discuss its fourth-quarter financial results for the year ended December 31, 2024, with a press release to be issued prior to the call [1] Company Overview - Global Water Resources, Inc. is a leading water resource management company that operates 32 systems providing water, wastewater, and recycled water services, primarily in growth corridors around metropolitan Phoenix [3] - The company recycles over 1 billion gallons of water annually, totaling 17.4 billion gallons recycled since 2004 [3] Total Water Management (TWM) - The company has effectively implemented Total Water Management (TWM), an integrated approach to managing the entire water cycle, which includes owning and operating water, wastewater, and recycled water utilities within the same geographic area [4] - TWM enables smart water management programs, such as remote metering infrastructure and advanced technologies, leading to real conservation and protection of water supplies in water-scarce areas experiencing population growth [4] Industry Recognition - Global Water has received numerous awards, including national recognition as a 'Utility of the Future Today' for its superior water reuse practices [5] - The company also received Cityworks' Excellence in Departmental Practice Award for demonstrating leadership in public asset management strategies [5]

Core Viewpoint - Global Water Resources, Inc. has reached a unanimous settlement regarding its general rate case application for GW-Farmers, which is expected to enhance utility services and provide a revenue increase of approximately $1.1 million annually if approved [1][2][3]. Group 1: Rate Case and Financial Impact - This is the first rate case submitted for GW-Farmers since its acquisition by Global Water in 2023 [2]. - The proposed new rates are based on 2023 test-year service connections and will be implemented in three stages: 50% on May 1, 2025, 25% on November 1, 2025, and 25% on May 1, 2026 [2]. - The agreement includes a deferral of the recovery of an acquisition premium of approximately $3 million, allowing Global Water to recover this investment in a future rate case [3]. Group 2: Regulatory Process - A hearing before an Administrative Law Judge is the next step, which will lead to a Recommended Opinion and Order for the Commission's consideration [4]. Group 3: Company Overview - Global Water Resources, Inc. operates 32 systems providing water, wastewater, and recycled water services, primarily in growth corridors around metropolitan Phoenix [5]. - The company recycles over 1 billion gallons of water annually, totaling 17.4 billion gallons since 2004 [5]. - Global Water has been recognized for its effective implementation of Total Water Management (TWM), which integrates water cycle management to maximize the beneficial use of recycled water [6]. Group 4: Industry Recognition - The company has received numerous awards, including national recognition as a 'Utility of the Future Today' for superior water reuse practices [7].

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $14.3 million, down $0.2 million or 1.5% compared to Q3 2023, primarily due to non-recurring ICFA revenue in Q3 2023 [22] - Regulated revenue, excluding ICFA revenue, was $14.3 million, up $0.3 million or 2.2% compared to Q3 2023, driven by organic connection growth [23] - Net income for Q3 2024 was $2.9 million or $0.12 per diluted share, compared to $2.6 million or $0.11 per diluted share in Q3 2023 [25] - Adjusted EBITDA was $8.2 million in Q3 2024, an increase of approximately $600,000 or 7.2% from Q3 2023 [26] Business Line Data and Key Metrics Changes - Total active service connections increased 4.7% to 63,889 as of September 30, 2024, with a year-to-date growth rate of 4.5% [8] - Year-to-date Q3 2024 permit data showed strong growth in multifamily housing units in the City of Maricopa, with 1,200 units permitted compared to 350 units in the same period in 2023, representing an increase of 281% [13] Market Data and Key Metrics Changes - The single-family dwelling unit market in the Phoenix area saw a 28% increase in building permits issued in the last nine months compared to Q3 2023 [10] - The industrial manufacturing sector in Arizona experienced a record investment of $40.7 billion in 2023, surpassing the previous best year [15] Company Strategy and Development Direction - The company aims to grow through organic connections, new greenfield utilities, acquisitions, and rate cases, focusing on efficiency and consolidation in water management [20] - The company is optimistic about the future potential of its Inland Port Arizona service area and is in discussions for potential projects with several firms [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that high inflation and other cost drivers are impacting earnings growth, but emphasized that 2024 is a test year for their largest utilities [19] - The company remains bullish on future growth due to ongoing demand for housing and industrial projects in Arizona [18] Other Important Information - The company has maintained a compliance record with zero significant compliance events for over seven years [9] - The Tucson acquisition approval application is progressing, with an estimated closing in Q1 2025 [28] Q&A Session Summary Question: Impact of political landscape changes on operations - Management agreed that the political landscape could accelerate reshoring of manufacturing and noted significant economic development investment trends in Arizona [34][35] Question: Buckeye premium for the quarter - The Buckeye premium was approximately $920,000 for the quarter, up 25% from the previous year [40]

Financial Performance - Global Water Resources, Inc. (GWRS) reported quarterly earnings of $0.12 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, and showing an increase from $0.11 per share a year ago, representing an earnings surprise of 9.09% [1] - The company posted revenues of $14.32 million for the quarter ended September 2024, which was below the Zacks Consensus Estimate by 2.25%, and a decrease from $14.53 million in the same quarter last year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - Global Water Resources shares have declined approximately 2.4% since the beginning of the year, contrasting with the S&P 500's gain of 21.2% [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate for the upcoming quarter at $0.06 on revenues of $13.2 million, and $0.27 on revenues of $53.4 million for the current fiscal year [7] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Industry Context - The Utility - Water Supply industry, to which Global Water Resources belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Service Connections and Growth - As of September 30, 2024, active service connections increased by 2,853, or 4.7%, to 63,889 compared to 61,036 active service connections as of September 30, 2023[118] - The company continues to experience an organic growth rate of 4.7% in active connections, up from 2.6% for the same period in 2023[114] - Active water connections increased by 4.4% to 35,464 as of September 30, 2024, from 33,976 as of September 30, 2023[158] Financial Performance - Revenues for the three months ended September 30, 2024, were $14.321 million, a decrease of 1.5% compared to $14.532 million in the same period of 2023[154] - Operating expenses decreased to $10.337 million from $10.695 million, resulting in an operating income of $3.984 million, up from $3.837 million year-over-year[154] - Net income for the three months ended September 30, 2024, was $2.925 million, compared to $2.634 million in the same period of 2023, reflecting an increase of 11%[154] - Basic and diluted earnings per common share for the third quarter of 2024 were both $0.12, an increase from $0.11 in the same quarter of 2023[154] - Total revenues decreased by $0.2 million, or 1.5%, to $14.3 million for the three months ended September 30, 2024, compared to $14.5 million for the same period in 2023[155] - Net income decreased by $1.5 million, totaling $5.3 million for the nine months ended September 30, 2024, compared to $6.8 million for the same period in 2023[198] Revenue Sources - Water service revenue remained stable at $7.5 million for both the three months ended September 30, 2024 and 2023[156] - Wastewater and recycled water service revenue increased by $0.3 million, or 5.1%, to $6.8 million for the three months ended September 30, 2024, compared to $6.5 million for the same period in 2023[161] - Water service revenue increased by $0.5 million, or 2.5%, to $19.4 million for the nine months ended September 30, 2024, compared to $18.9 million for the same period in 2023[179] - Wastewater service revenue increased by $1.0 million for the nine months ended September 30, 2024, driven by a 5.0% increase in active wastewater connections[183] - Recycled water service revenue increased by 40.2% with 882 million gallons delivered for the nine months ended September 30, 2024, compared to 629 million gallons for the same period in 2023[184] Expenses and Costs - Total operating expenses decreased by $0.4 million, or 3.7%, to $10.3 million for the three months ended September 30, 2024, compared to $10.7 million for the same period in 2023[165] - Total operating expenses increased by approximately $1.4 million, or 4.6%, to $31.4 million for the nine months ended September 30, 2024, compared to $30.0 million for the same period in 2023[186] - Operations and maintenance costs rose by approximately $0.6 million, or 6.9%, to $10.2 million for the nine months ended September 30, 2024, compared to $9.6 million for the same period in 2023[186] - General and administrative costs increased by $0.4 million, or 3.2%, to $12.3 million for the nine months ended September 30, 2024, compared to $11.9 million for the same period in 2023[190] Capital Expenditures and Investments - The company is in the process of complying with the National Primary Drinking Water Regulation (NPDWR) and expects increased capital expenditures for PFAS-contaminated water treatment[126][127] - The company has an established capital improvement plan to enhance infrastructure and address operational needs[132] - The company expects to complete the acquisition of seven isolated public water systems from the City of Tucson for $8.4 million in the first quarter of 2025[150] - The estimated rate base of the seven water systems to be acquired is approximately $7.8 million[150] Regulatory and Legal Matters - The company is subject to extensive regulation by the Arizona Corporation Commission (ACC), which influences its rates and financial performance[121] - The company expects to recover expenses associated with compliance for environmental and health standards through rate increases, although this may be affected by regulatory lag[127] - The company is involved in ongoing settlement talks related to the Aqueous Film-Forming Foams (AFFF) Products Liability Litigation, which could impact its financial condition[129] Cash Flow and Financing - Cash flows provided by operating activities totaled approximately $15.8 million for the nine months ended September 30, 2024, a decrease of $6.9 million compared to $22.7 million for the same period in 2023[206] - Net cash used in investing activities was approximately $19.2 million for the nine months ended September 30, 2024, compared to $24.8 million for the same period in 2023, a decrease of $5.7 million[207] - Net cash provided by financing activities increased by $18.5 million to $20.7 million for the nine months ended September 30, 2024, compared to $2.3 million for the same period in 2023[209] Debt and Compliance - The Company amended the Northern Trust Loan Agreement to extend the maturity date to July 1, 2026 and increase the maximum borrowing amount to $15.0 million[218] - The Northern Trust Loan Agreement requires a debt service coverage ratio of consolidated EBITDA to consolidated debt service of at least 1.10 to 1.00[220] - The Company was in compliance with its financial debt covenants under the Northern Trust Loan Agreement as of September 30, 2024[221] Internal Controls and Insurance - There were no material changes in the Company's internal control over financial reporting during the fiscal quarter ended September 30, 2024[228] - The Company is self-insured for losses within policy deductibles or exceeding the amount of insurance maintained, which could materially affect its financial condition[224] - The Company is not involved in any legal proceedings expected to have a material effect on its operations[230]

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $13.5 million, an increase of $500,000 or 3.9% compared to Q2 2023, primarily driven by a 4.9% organic growth in service areas [14] - Operating expenses for Q2 2024 were $10.7 million, up approximately $700,000 or 7.2% from Q2 2023 [15] - Net income for Q2 2024 was $1.7 million or $0.07 per diluted share, consistent with Q2 2023 [15] - Adjusted EBITDA for Q2 2024 was $6.8 million, slightly up from $6.7 million in Q2 2023 [16] Business Line Data and Key Metrics Changes - Total active service connections increased by 4.9% to 63,256 as of June 30, 2024, with a year-over-year regulated revenue growth rate of 5.3% [5] - The single-family dwelling unit market in the Phoenix metro area saw a 43% increase in building permits issued in the first half of 2024 compared to Q2 2023 [6] - Multifamily housing unit permits in the City of Maricopa increased by 273% in the first half of 2024 compared to the same period in 2023 [8] Market Data and Key Metrics Changes - The industrial manufacturing sector in Arizona saw $40.7 billion invested in 2023, surpassing the previous record set in 2022 [9] - The City of Maricopa is preparing a large industrial complex, indicating strong interest from businesses looking to relocate to Arizona [10] Company Strategy and Development Direction - The company aims to achieve efficiency and consolidation in the water management industry, focusing on expanding its total water management platform [22] - The company is in a test year for its largest utilities, with plans to file a rate case in the first half of 2025 [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that high inflation and cost drivers have impacted earnings growth but emphasized that 2024 is a test year for their largest utilities [12] - There is a strong consensus on a housing shortage in Metro Phoenix, which is expected to drive demand for housing units [7] Other Important Information - The Arizona Corporation Commission approved a bill credit that will reduce revenue by approximately $570,000 annually, effective August 1, 2024 [17] - The company is actively pursuing the Tucson acquisition, with a target for approval by the end of the year or early next year [26] Q&A Session Summary Question: Discussion on acquisition pipeline - Management indicated that there are still opportunities for acquisitions in Arizona, which remains highly fragmented with over 300 utilities [24] Question: Timeline for Tucson acquisition approval - The company is targeting either the end of the year or early in the first quarter for the Tucson acquisition approval [26]

Global Water Resources, Inc. (GWRS) came out with quarterly earnings of $0.07 per share, missing the Zacks Consensus Estimate of $0.08 per share. This compares to earnings of $0.07 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -12.50%. A quarter ago, it was expected that this company would post earnings of $0.03 per share when it actually produced earnings of $0.03, delivering no surprise. Over the last four quarters, the c ...