Financial Data and Key Metrics Changes - Revenue decreased by 15% year-over-year to $33.7 million, primarily due to a $7.3 million decline in the services segment related to completed construction projects [10][12] - Net income from continuing operations attributable to shareholders was $4.9 million or $0.31 per diluted share, down from $6.9 million or $0.43 per diluted share in the same period last year [13] - Gross profit for the first quarter was $12.3 million, approximately 37% of total revenue, compared to $13.9 million or around 35% in the prior year [12][13] Business Segment Data and Key Metrics Changes - Services segment revenue declined significantly due to the completion of major design-build projects, partially offset by a 9% increase in recurring revenue from operations and maintenance contracts [4][5] - Retail segment revenue increased by $786,000, driven by a 13% rise in water sales volume [11] - Manufacturing segment revenue rose by $509,000 to $5.8 million, reflecting improved production activity and a higher margin product mix [12][19] Market Data and Key Metrics Changes - Retail water sales in Grand Cayman saw much higher volumes due to population growth and increased business activity [4] - The Caribbean-based Bulk Water segment revenue remained stable year-over-year, indicating the long-term stable income-generating nature of these operations [4] Company Strategy and Development Direction - The company is focusing on expanding its services in Hawaii, with a significant seawater desalination project expected to be a major growth driver for the services segment in 2026 and 2027 [6][20] - The company is pursuing additional projects in the Western U.S. and exploring opportunities in wastewater treatment, particularly in Arizona and the Southern Caribbean [21][22] - The management is evaluating how to best utilize the large cash balance to increase shareholder value, including potentially increasing quarterly dividends [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver steady long-term growth in revenue and profit, driven by strong retail water sales growth, stability in bulk water operations, and ongoing design-build projects [23] - The company anticipates a decline in design-build work in 2025 compared to previous years but expects improvement in the second half of the year as smaller projects commence [21][23] Other Important Information - The company received a new concession from the Cayman Islands government, granting exclusive rights to produce and supply potable water in its service area [16][17] - The expansion of the West Bay seawater desalination plant is underway to meet growing demand, with plans for additional water storage tanks [18] Q&A Session Summary Question: Construction revenue flow for Hawaii project - Management explained that the construction revenue will ramp up as costs are incurred, with a significant portion of revenue expected to be recognized during the construction phase [26][32] Question: Retail segment growth sustainability - Management confirmed that the increase in retail water sales is rooted in permanent population growth and business activity, not just seasonal variations [44][48] Question: Permitting responsibilities for Hawaii project - Management clarified that permitting responsibilities are shared between the company and the client, with some permits taking longer than expected due to government agency processes [60][64] Question: Future opportunities in Asia Pacific - Management indicated that there are no current plans to pursue projects in the Asia Pacific region, focusing instead on opportunities closer to home, particularly in Florida [71][72]

Core Insights - The desalination industry in China is experiencing significant growth, with a total of 156 desalination projects in operation by the end of 2023, achieving a processing capacity of 2.523 million tons per day, representing a year-on-year increase of 7% [1][4][8] Industry Overview - Desalination is a technology that converts seawater into freshwater, providing a stable water supply for coastal residents and industries, unaffected by time and climate [1] - The cost of desalination has been decreasing due to advancements in technology, with energy consumption for processing one cubic meter of seawater dropping from 5 kWh to less than 3 kWh over the past 20 years [1] Project Scale and Distribution - Among the existing desalination projects, those with a capacity of 1 million tons per day or more account for 230,000 tons per day, which is 92% of the total capacity [2] - The top three provinces in terms of desalination capacity are Zhejiang (800,000 tons/day), Shandong (710,000 tons/day), and Hebei (390,000 tons/day) [4][6] Regional Concentration - Zhejiang, Shandong, and Hebei together account for 75% of the total desalination capacity in China, highlighting a significant regional concentration in the industry [6] Growth Trends - In 2023, five provinces saw growth in desalination capacity, with Fujian leading at a 26% increase, followed by Shandong at 18%, and Guangdong at 10% [9] Technology Utilization - The predominant technology used in desalination projects includes reverse osmosis, which accounts for approximately 66% of the total capacity, while low-temperature multi-effect and multi-stage flash technologies account for about 32% and 0.2%, respectively [11]