Global Water(US:GWRS)2019-05-10 13:07Financial Data and Key Metrics Changes - Revenues increased by 4% to $7.7 million compared to Q1 2018, driven by organic connection growth and acquisitions [12][19] - Net income rose by 102.8% to $649,000 or $0.03 per share, up from $320,000 or $0.02 per share in Q1 2018 [12][23] - Adjusted EBITDA decreased by 6.8% to $3.4 million, impacted by tax reform and higher precipitation [24] Business Line Data and Key Metrics Changes - Total active connections increased by 11.7% to 44,152 as of March 31, 2019, with organic connections up 4.8% [12] - Operating expenses rose by 7.6% to $6.5 million, primarily due to increased operating and maintenance costs related to acquisitions [20][21] Market Data and Key Metrics Changes - Single-family dwelling permits in Maricopa and Pinal counties increased by 13% in 2018, with a forecast of approximately 25,000 permits for 2019 [13][14] - The City of Maricopa saw an 18% increase in permit growth in 2018, indicating a strong market for new homes [14] Company Strategy and Development Direction - The company aims to grow recurring EBITDA through revenue growth, operational efficiencies, and targeted capital improvements [15][16] - Plans to pursue accretive acquisitions to enhance core regional assets and improve industry consolidation [17] Management's Comments on Operating Environment and Future Outlook - Management noted that despite external factors like precipitation and tax reform affecting revenue, connection growth rates remain strong [27] - The company is committed to addressing utility and water resource issues in Arizona and potentially beyond [29] Other Important Information - The company extended its $8 million line of credit until April 30, 2022, previously set to expire in 2020 [25] Q&A Session Summary Question: Impact of precipitation on volumes - Management estimated a reduction of 540 gallons per month in residential usage due to precipitation, translating to a revenue impact of $150,000 to $200,000 [35] Question: Permitting activity in suburban Phoenix - Management indicated that permitting data in the specific area remains down, but overall permitting activity in Metro-Phoenix is stable or accelerating [37][38] Question: Value of FATHOM asset - The FATHOM asset is valued at less than $100,000 on the books, but management believes it holds significant potential value [45][46] Question: Acquisition activity - Management confirmed ongoing discussions with several utilities for potential acquisitions, focusing initially within Arizona [52][55]