Pure Cycle(US:PCYO)2020-04-07 23:57Financial Data and Key Metrics Changes - Operating revenues for the first six months reached $14 million, showing an increase compared to the previous year [34] - Income from continuing operations per share is reported at $0.25, indicating profitability despite the challenges faced [35] - The company has a strong cash position and increasing assets, which is a positive indicator of financial health [32][33] Business Line Data and Key Metrics Changes - The Land Development segment generated over $10.8 million from lot sales and $2.8 million from tap fee revenue, demonstrating effective monetization of assets [36] - Fracking water revenue has significantly decreased, with only $57,000 reported for incidental water usage, highlighting a shift in revenue sources [36] Market Data and Key Metrics Changes - The company has seen strong demand in the I-70 Corridor, with builders averaging about six homes per month, indicating a robust housing market [15][107] - There is a noted increase in interest for the commercial component of the property, although it remains in early stages of development [58][63] Company Strategy and Development Direction - The company plans to diversify its residential offerings in the next phase, including smaller lots and paired products, to attract a broader customer base [20][21] - There is a focus on being opportunistic in acquisitions, particularly in distressed markets, to enhance growth potential [86][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the housing market's resilience, anticipating a rush of demand post-pandemic as families seek larger homes [110] - The company is well-positioned to capitalize on its liquidity and strong asset base during challenging market conditions [92][117] Other Important Information - The company is actively engaging with multiple builders for future phases, aiming to finalize agreements within the next 90 days [49] - Management emphasized the importance of maintaining a disciplined approach to cash management and investment opportunities [84][88] Q&A Session Summary Question: What are the plans for the commercial component of the property? - Management highlighted increased interest in the commercial segment but noted that it typically lags behind residential development, with expectations for growth in the next 18 months [58][63] Question: What percentage of revenue will be recurring in three years? - Management indicated that they expect to double the number of water connections, leading to a significant increase in recurring revenue from water services [76][81] Question: Are there any acquisition opportunities available? - Management is actively looking for acquisition opportunities, particularly in stressed markets, to enhance the company's asset base and revenue potential [86][88] Question: What is the outlook for contract signings in the housing market? - Management reported strong demand with no cancellations in contracts, indicating a healthy market despite current challenges [104][110] Question: How does the company view its oil and gas revenue? - Management noted that while fracking revenue is down, any income generated is beneficial as it incurs no fixed costs, making it a valuable segment [112][113]