Pure Cycle(US:PCYO)2024-01-16 16:04Financial Data and Key Metrics Changes - The company reported a net income of over $2 million, translating to approximately $0.09 per share, with combined segments delivering over 38% profit margin [12][29] - Q1 revenues reached nearly $5.4 million, with gross margins exceeding 60% [89] Business Segment Data and Key Metrics Changes - The water/wastewater segment holds more than $2 billion in top-line revenue, with the ability to provide 60,000 single-family connections [9] - The land development segment, particularly the Sky Ranch project, holds over $500 million in value, with a low basis of about $4.5 million [10] - The single-family rental segment has approximately 30% equity value per completed home, with a recorded book value of about $5.4 million and $2 million of equity in that segment [11] Market Data and Key Metrics Changes - The company continues to grow its customer base, delivering water and wastewater services to approximately 1,400 customer connections each month [14] - Oil and gas operations achieved a record quarter with nearly $2 million in revenue from deliveries, averaging over $250,000 per well [15][41] Company Strategy and Development Direction - The company emphasizes vertical integration across its business segments, which enhances the value of its assets and maximizes returns [6][29] - The strategic approach focuses on growing water utilities, land development, and single-family rentals to generate significant recurring revenues and high gross margins [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the stability of the oil and gas market and the continued investment in Colorado, projecting similar results for Q2 as seen in Q1 [42] - The company is looking to accelerate the development of single-family rentals, with plans to double the capacity from 40 to 90 units in Phase 2 [73] Other Important Information - The company is actively pursuing acquisitions to enhance its portfolio, particularly in water rights [36] - There is ongoing discussion regarding the potential initiation of a cash dividend, contingent on the growth of recurring revenues [71][76] Q&A Session All Questions and Answers Question: Inquiry about fracking revenue and future guidance - Management confirmed that fracking operations continue through winter, with optimistic projections for Q2 revenue similar to Q1 [41][42] Question: Status of Sky Ranch development phases - Management indicated that Phase 2b is progressing, with builders eager to start selling homes, and incremental deliveries are expected [50][51] Question: Timing on commercial development - Management projected that commercial activity could begin in late 2025, contingent on infrastructure completion and market demand [62][63] Question: Discussion on potential cash dividends - Management acknowledged the possibility of initiating a dividend, with discussions planned for the January Board meeting next year [71][76]