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 14.532 million in the same period of 2023[154] - Operating expenses decreased to 10.695 million, resulting in an operating income of 3.837 million year-over-year[154] - Net income for the three months ended September 30, 2024, was 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 0.11 in the same quarter of 2023[154] - Total revenues decreased by 14.3 million for the three months ended September 30, 2024, compared to 1.5 million, totaling 6.8 million for the same period in 2023[198] Revenue Sources - Water service revenue remained stable at 0.3 million, or 5.1%, to 6.5 million for the same period in 2023[161] - Water service revenue increased by 19.4 million for the nine months ended September 30, 2024, compared to 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 10.3 million for the three months ended September 30, 2024, compared to 1.4 million, or 4.6%, to 30.0 million for the same period in 2023[186] - Operations and maintenance costs rose by approximately 10.2 million for the nine months ended September 30, 2024, compared to 0.4 million, or 3.2%, 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 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 6.9 million compared to 19.2 million for the nine months ended September 30, 2024, compared to 5.7 million[207] - Net cash provided by financing activities increased by 20.7 million for the nine months ended September 30, 2024, compared 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]
Global Water(GWRS) - 2024 Q3 - Quarterly Report