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]
Global Water(GWRS) - 2024 Q3 - Quarterly Report