On August 8, 2024, Global Water Resources Inc (GWRS, Financial) released its 8-K filing for the second quarter ended June 30, 2024. Global Water Resources Inc operates as a water resources management company that owns, operates, and manages water, wastewater, and recycled water utilities in strategically located communities, principally in metropolitan Phoenix, Arizona.
Performance Overview
Global Water Resources Inc (GWRS, Financial) reported a 3.9% increase in total revenue to $13.5 million, slightly below the analyst estimate of $13.60 million. Net income decreased marginally by 0.5% to $1.7 million, or $0.07 per share, aligning with the analyst estimate of $0.07 per share. Adjusted net income also increased by 3.0% to $1.8 million, or $0.07 per share.
Operational Highlights
During Q2 2024, Global Water Resources Inc (GWRS, Financial) saw a 4.9% increase in total active service connections, reaching 63,256. However, water consumption decreased by 1.7% to 1.11 billion gallons. The company invested $6.4 million in infrastructure projects to support existing utilities and continued growth. Additionally, the Arizona Corporation Commission (ACC) approved a revenue increase for seven of the company’s regulated utilities in Pima County, which will be phased in over five periods starting July 1, 2024.
Financial Achievements
Global Water Resources Inc (GWRS, Financial) declared three monthly cash dividends of $0.02508 per common share, or $0.30096 per common share on an annualized basis. The company also entered into a 20-year, $2.4 million loan agreement with the Water Infrastructure Finance Authority of Arizona for infrastructure improvement for the company’s GW-Rincon utility, with $0.7 million of the loan to be forgivable. Furthermore, the company secured an extension of its $15 million revolving line of credit to July 1, 2026.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $13.5 million | $13.0 million |
| Net Income | $1.7 million | $1.7 million |
| Adjusted EBITDA | $6.8 million | $6.7 million |
Balance Sheet and Cash Flow
As of June 30, 2024, Global Water Resources Inc (GWRS, Financial) had cash and cash equivalents totaling $18.1 million, a significant increase from $3.1 million at the end of 2023. The company had no notable near-term cash expenditures other than semiannual principal payments on Series B senior secured notes amounting to $1.9 million due in both December 2024 and June 2025.
Management Commentary
"Q2 was another quarter of topline regulated revenue growth generated by our core water, wastewater and recycled water services," commented Global Water Resources president and CEO, Ron Fleming. "While our operating expenses have increased due to inflation and the growth we’ve been experiencing, it is important to remind our stakeholders that we are filing a rate case for our two largest utilities in 2025, with 2024 being the test year."
Analysis
Global Water Resources Inc (GWRS, Financial) continues to show resilience with steady revenue growth and strategic investments in infrastructure. However, the slight decrease in net income and increased operating expenses due to inflation pose challenges. The company's focus on organic growth and strategic acquisitions, such as the planned acquisition of seven water systems from the City of Tucson, positions it well for future expansion. The favorable macro trends in Arizona's Sun Corridor, including significant population and job growth, further support the company's growth prospects.
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Explore the complete 8-K earnings release (here) from Global Water Resources Inc for further details.
