On March 6, 2024, Global Water Resources Inc (GWRS, Financial) released its 8-K filing, detailing a robust financial performance for the fourth quarter and the full year ended December 31, 2023. The company, a leading water resource management entity operating primarily in the Phoenix metropolitan area, has reported significant increases in both revenue and net income, reflecting successful expansion efforts and heightened water consumption.
Financial and Operational Highlights
Global Water Resources Inc's total revenue for Q4 2023 reached $12.4 million, an 11.4% increase from the previous year, mainly due to rate increases and the acquisition of Farmers Water. The full-year revenue saw an even more impressive rise of 18.6% to $53.0 million, with a notable contribution from unregulated revenues. Net income for the quarter stood at $1.1 million, a 38.5% increase, and $8.0 million for the full year, marking a 45.0% rise, translating to $0.33 per share.
The company's adjusted EBITDA, a key metric for assessing its operating performance, also saw growth. Q4 adjusted EBITDA increased by 5.9% to $5.8 million, while the full-year figure climbed by 10.8% to $25.3 million. This growth in profitability is a testament to the company's effective management and strategic initiatives.
Global Water Resources Inc's operational achievements include a 9.8% increase in active service connections, reaching 61,791 by year-end 2023. This growth was fueled by the acquisition of Farmers Water and organic expansion. Water consumption and recycled water volume also saw significant increases, indicative of the company's ability to meet the rising demand in its service areas.
Strategic Developments and Management Commentary
The company's strategic moves, such as the acquisition of Farmers Water and investments in infrastructure, have positioned it well for sustained growth. In addition, the company entered into a note purchase agreement for $20 million of Senior Secured Notes, bolstering its capital resources to approximately $35 million, including cash and cash equivalents and available borrowing under its revolving line of credit.
"2023 was another year of strong progress across our business, including safety and compliance, business development, and top-line growth with increased profitability," commented Ron Fleming, president and CEO of Global Water Resources. He also highlighted the company's strong financial results driven by increased rates and organic growth in connections.
Mike Liebman, CFO of Global Water Resources, emphasized the company's solid capital resources and growth initiatives, indicating a robust financial position to support community partnerships and expansion efforts.
Financial Statements Analysis
The company's balance sheet shows a healthy increase in net property, plant, and equipment, from $287.7 million in 2022 to $323.3 million in 2023. Current assets decreased slightly from $14.2 million to $11.7 million, while total assets grew from $323.1 million to $361.1 million. The increase in total liabilities from $278.7 million to $312.5 million is reflective of the company's growth financing strategies.
Global Water Resources Inc's income statement reveals a solid increase in operating income from $7.8 million in 2022 to $12.3 million in 2023. The company managed to keep its operating expenses in check, with a moderate increase from $36.9 million to $40.7 million, despite the expansion of operations.
The cash flow statement indicates a strong net cash provided by operating activities, which increased from $23.3 million in 2022 to $25.4 million in 2023. However, net cash used in investing activities also rose, mainly due to capital expenditures and acquisitions, highlighting the company's commitment to growth and infrastructure development.
Conclusion
Global Water Resources Inc's financial performance in 2023 demonstrates the company's resilience and strategic execution in a challenging environment. With a focus on expanding service connections, improving operating efficiencies, and increasing utility rates, the company is well-positioned to capitalize on the growth opportunities within Arizona's burgeoning economic landscape.
For detailed financial figures and management's discussion, investors and stakeholders are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Global Water Resources Inc for further details.
