Consolidated Water Q1 2025 Earnings Report

Consolidated Water EPS Results

• Actual EPS: $0.31
• Consensus EPS: $0.22
• Beat/Miss: Beat by +$0.09
• One Year Ago EPS: N/A

Consolidated Water Revenue Results

• Actual Revenue: $33.72 million
• Expected Revenue: $32.30 million
• Beat/Miss: Beat by +$1.42 million
• YoY Revenue Growth: N/A

Consolidated Water Announcement Details

• Quarter: Q1 2025
• Date: 5/12/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, May 13, 2025
• Conference Call Time: 11:00AM ET

Consolidated Water (NASDAQ:CWCO) Co. Ltd., together with its subsidiaries, designs, constructs, manages, and operates water production and water treatment plants primarily in the Cayman Islands, the Bahamas, and the United States. The company operates through four segments: Retail, Bulk, Services, and Manufacturing. The company produces potable water from seawater utilizing reverse osmosis technology and supply water to end-users, including residential, commercial, and government customers, as well as government-owned distributors. It offers design, engineering, construction, procurement, and management services for desalination projects and water treatment plants, as well as management and engineering services relating to municipal water distribution and treatment. In addition, the company manufactures and services a range of water-related products, including reverse osmosis desalination equipment, membrane separation equipment, filtration equipment, piping systems, vessels, and custom fabricated components; and provides design, engineering, consulting, management, inspection, training, and equipment maintenance services for commercial, municipal, and industrial water production, supply, and treatment, as well as desalination and wastewater treatment. Consolidated Water Co. Ltd. was incorporated in 1973 and is headquartered in Grand Cayman, the Cayman Islands.

Consolidated Water Q1 2025 Earnings Call Transcript

Key Takeaways

• Services segment revenue and operating income declined 15% year-over-year in Q1 due to completion of two major design-build projects, but the upcoming $204 million Honolulu seawater desalination contract—now approved in pilot testing—will begin construction in early 2026 and drive significant growth in 2026–27 with ~80% inflation protection on construction costs.
• Retail water sales on Grand Cayman grew 13% in Q1, adding $0.8 million in revenue thanks to population and business growth, supported by a new exclusive utility concession and the expansion of the West Bay desalination plant by 1 million gpd plus new storage tanks.
• Manufacturing revenue rose ~10% to $5.8 million on higher production activity and a richer product mix, and the company is expanding Harex’s facility by 17,500 sq ft next month to boost capacity and pursue additional projects.
• Bulk Water segment revenue remained stable at $8.4 million, reflecting long-term recurring income from O&M contracts—especially the new Red Gate 2 plant agreement and North Sound contract amendment.
• Overall Q1 revenue was $33.7 million (down 15%), gross margin rose to 37%, and net income was $4.9 million (31¢ per share), while cash increased to $107.9 million and working capital to $436.2 million. Management is evaluating strategic uses of cash—including potential dividend increases—and plans ~$9.1 million in capex for new desalination and manufacturing projects.

Presentation

[Operator]

Good morning. Thank you for joining us today to discuss Consolidated Water Company's first quarter twenty twenty five operating and financial results. Hosting the call today is the Chief Executive Officer of Consolidated Water, Rick McTaggart and the company's Chief Financial Officer, David Sadnet. Following their remarks, we'll open the call to your questions. Before we conclude today's call, I'll provide some important cautions regarding the forward looking statements made by management during the call.

[Operator]

I'd like to remind everyone that today's call is being recorded, and it will be made available for telecom replay. Please see the instructions in yesterday's press release that has been posted to the Investor Relations section of the company's website. Now I'd like to turn the call over to Consolidated Water's CEO, Rick McTaggart. Sir, please go ahead.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Thank you, Mike, and good morning, everyone.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Our Services segment revenue and operating income declined in the first quarter of twenty twenty five compared to the year earlier due to completion of two major design build projects in the second quarter of last year. However, we did see improved performance in all three other business segments, particularly retail and manufacturing. Retail water sales in our exclusive utility service area on Grand Cayman reflected much higher sales volumes compared to a year earlier due to population growth and increased business activity within our service area. Manufacturing revenues and operating income increased by about 1044%, respectively, compared to a year earlier due to higher production activity and a higher margin product mix. Revenue and gross profit generated in our Caribbean based Bulk Water segment remained consistent year over year, reflecting the long term stable income generating nature of these businesses.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Revenue from our services segment declined significantly compared to a year earlier due to completion of the Liberty Utilities and Red Gate 2 design build projects in the second quarter of last year. The decline was partially offset by a 9% or $626,000 increase in recurring revenue from our operations and maintenance contracts in the Western U. S. This growth in O and M revenue in dollar terms was about evenly generated by FERC in California and Arizona and REC in Colorado. On April 28, the Honolulu Board of Water Supply, our client on our multiyear seawater desalination project in Hawaii, approved our pilot test reports and recommendations and concluded that the desalinated water we produced during the piloting phase is a reasonable match to their existing water supply and further concluded that the desalinated water from the new plant would not cause any detrimental impact to the distribution pipes or customer assets.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

This is a key significant milestone in the project and paves the way to begin construction once all permits have been obtained. This $2.00 $4,000,000 project to design, construct, operate and maintain a 1,700,000 gallon per day seawater desalination plant for the Honolulu border water supply commenced in 2023 in June. We expect to begin the construction of this project early next year once the we and the client have obtained the permits that are required and the client issues a notice to proceed with the construction. On a cautionary note, some of these permits are outside of our control and delays in obtaining them could also delay the construction date. The construction phase is expected to generate the largest portion of revenue from this project and be a major growth driver for our Services segment in 2026 and 2027.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

We expect to submit our 90% design for the project on schedule early next month for the client's engineer to review. The Hawaii project is a major growth driver for our Services segment. It involves a two year development phase, which concludes next month, followed by two years of construction. Once completed and commissioned, we have been contracted to operate the plant under a twenty year O and M agreement plus five year two five year extensions at the option of the client. It's important to note that particularly in this environment now, economic environment, that 80% approximately 80% of the construction costs for this project will be adjusted for inflation at the start of construction.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

This mechanism is expected to protect our gross margin and overall profitability. Now before getting more into recent developments and our outlook for the year, I would like to turn the call over to our CFO, David Fastenat, who will take us through the financial details for the quarter.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Thank you, Rick. Good morning, everyone. Our revenue was down 15% from the first quarter of twenty twenty four to $33,700,000 and this decrease was due to a decrease of $7,300,000 in the service segment, specifically the construction revenue that related to completion of the two projects Rick mentioned previously.

[David Sasnett, Executive VP & CFO at Consolidated Water]

The service segment revenue decreased, partially offset by revenue increases of $786,000 in our retail segment, 70,000 in our bulk segment and 509,000 in the manufacturing segment. Our retail revenue was up $786,000 due to a 13% increase in the volume of water sold. Our bulk segment revenue increased slightly to 8,400,000.0 due to the revenue generated by the commencement in May 2024 of the operations and maintenance contract for the new Red Gate 2 desalination plant on Grand Cayman, which we constructed, and the amendment of our company's North Sound contract with the Water Authority payment, which also became effective in February. As I mentioned earlier, the decrease in services segment revenue was due to plant and structure revenue decreasing from $9,200,000 in the first quarter of 'twenty four to $2,200,000 in the first quarter of this year. And once again, this is the result of two construction projects that were completed in the second quarter of twenty twenty four.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Our recurring revenue generated under our O and M contracts totaled 7,700,000.0 in the February, an increase of 9% over the previous year. Both PERC and RAC, our Colorado subsidiary, increased their O and M revenue this first quarter from last year. Our manufacturing segment revenue increased by $509,000 to $5,800,000 for the first quarter of twenty twenty five. Gross profit for the first quarter of twenty five was 12,300,000.0, about 37% of total revenue as compared to 13,900,000.0 or around 35% of total revenue in the first quarter of twenty four. This decrease was due, as I mentioned earlier, to a decrease in service segment gross profit of $2,700,000 as a result of decrease in construction revenue.

[David Sasnett, Executive VP & CFO at Consolidated Water]

This decrease was partially offset by an increase in gross profit for our retail bulk and manufacturing segments. Net income from continuing operations attributable to Consolidated Water shareholders for the first quarter of twenty five was 4,900,000.0 or 31¢ per diluted share. This compares to net income of 6,900,000.0 or 43¢ per diluted share in the first quarter of twenty four. Including discontinued operations, net income attributable to Consolidated Water stockholders for the February was $4,800,000 or 30¢ per diluted share as compared to a net income of 6,500,000.0 or 40¢ per diluted share the same period last year. Now turning to our balance sheet.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Cash and cash equivalents grew to 107,900,000.0 as of March 2025, and our working capital increased to 436,200,000.0, and our stockholders' equity now totals 213,300,000.0. Our projected liquidity requirements for 02/2025 include capital expenditures excuse me, of approximately excuse me. Our projected liquidity requirements for 02/2005 include capital expenditures for existing operations of approximately 9,100,000.0. This includes 800,000 to be incurred in 02/2025 for new desalination plants in The Bahamas on on Cat Island and 1,200,000.0 for the expansion of Ericsson's manufacturing facility. We paid out approximately 1,800,000.0 in dividends in April.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Our liquidity requirements may also include future quarterly dividends, if such dividends are declared by our board. Our executive management and board are currently evaluating how to best utilize our large cash balance to increase shareholder value. Such evaluation includes potentially increasing our quarterly dividend. This completes our financial summary for the year. Now I'd like to turn the call back over to Rick.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Thanks, David. So in the first quarter, we announced that our wholly owned subsidiary Cayman Water Company received a new concession from the Cayman Islands government. That concession granted it exclusive rights continued exclusive rights to produce and supply potable water within its service area on Grand Cayman. Due to regulatory changes enacted in 2018, Cayman Water is also required to obtain a new operating license from OFFREG, the island's utility regulator. Late last month, we resumed discussions with OFFREG for the new license, which we expect will involve a restructuring of the previous operating terms.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Until the new license is issued, our existing operating license will remain in effect. Cayman Water operates three seawater reverse desalination plants that produce 4,000,000 gallons of potable water per day for our service areas growing population and businesses. We are in the process of expanding our West Bay seawater desalination plant, so it can generate an additional 1,000,000 gallons per day by this summer. And we're also planning to construct additional water storage tanks over the next two years. And this is all being driven by the growth we've experienced post COVID on the island.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

As David mentioned, our manufacturing revenue increased by 10% to $5,800,000 in the quarter. This business has stabilized as promised, and we believe that we have significantly mitigated revenue and profit variability in this business segment going forward by broadening our product and client base. We are currently constructing an additional 17,500 square feet of manufacturing space for Harex and expect to complete construction next month. The additional space will allow us to take on more simultaneous projects, thereby increasing our throughput capacity. We are now pursuing additional projects that would utilize the greater floor space with this ultimately driving further manufacturing growth.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

REC, our Colorado subsidiary, has provided us a new channel to expand our design build and O and M businesses into the water stress regions of Colorado. We're currently pursuing several O and M and design build opportunities in Colorado. As I mentioned earlier, our client in Hawaii has agreed that we demonstrated in our pilot test results that we were able to achieve a reasonable match in water quality to their existing natural supply. This is an important step towards the notice to proceed for construction. We and our client are now working diligently to complete the final permitting for the project.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

As we've communicated previously, we are expecting or we are experiencing an expected decline in this year in design build work compared to 2023 and 2024. However, we anticipate design build revenues to improve in the second half of this year as three smaller projects currently under contract or nearing final contract stage are set to begin construction. The combined value of these three projects is expected to be approximately $20,000,000 1 of these projects is the construction of a wastewater scalping plant, which will provide high quality recycled water to irrigate a golf course in California. And this is certainly a great fit for Perth's capabilities. While these projects are smaller in scale than past projects, they reflect continued demand for our products and services in the Western U.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

S. We and our local partners are pursuing a sizable wastewater design build project in the Southern Caribbean. And if our bid is successful, would mark our first international wastewater treatment plant project. Similar to the Hawaii project, this new wastewater opportunity further demonstrates how PERC is being leveraged to grow our business across product lines, desalination and wastewater as well as into new geographical markets. We're also looking further out into 2026 and beyond with a growing pipeline of long term projects.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

We see the Arizona market in particular providing strong opportunities for future design build activity and our team is actively involved in several early stage discussions. We are currently preparing four customized design reports or CDRs for clients And similar to the Liberty Utilities project in Arizona, we hope that these CDRs ultimately lead to design build contracts for these important wastewater treatment facilities. Looking ahead, we remain confident in our ability to deliver steady long term growth in revenue and profit to our shareholders. Key drivers include strong retail water sales growth in Grand Cayman, the stability of long term recurring revenue from our Caribbean bulk water operations, our design build business, in particular the Hawaii project and other smaller projects currently underway and continued positive momentum in our manufacturing segment. Now with that, I'd like to open the call for questions.

[Operator]

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. And your first question comes from Gerry Sweeney with ROTH Capital.

[Operator]

Go ahead.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Good morning, Rick and David. Thanks for taking my call.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Hey, Gerry. How are doing, Gerry?

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Good. I I got a a couple or a few questions, but gonna start with Hawaii. Two questions there. 204,000,000 is, I think, the price tag for construction and O and M. Does the construction how does the construction revenue sort of flow through?

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

It sounds like a two year build beginning sort of ramp up then higher spend, and then a quarter or two ramp down. Is is that the way we should look at it? And will you get any revenue over the next quarter or two as you're still working on the part?

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

So we had to we had to file that that contract back in 2023. So and that has the full draw schedule in it if you wanna actually take a look at that.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

I mean, it's a that'll give you a very precise cash flow from the project.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Yeah. But that doesn't necessarily turn on revenue, Jerry. You understand how that works. Right?

[David Sasnett, Executive VP & CFO at Consolidated Water]

So out of the $204,000,000 contract, a hundred and 47,000,000 initially was designated as the design and construction revenue.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Yep.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Now 27,000,000 of that is Just designed. Fixed. In other words, the revenue is fixed.

[David Sasnett, Executive VP & CFO at Consolidated Water]

It can't be adjusted. But the other Okay. Hundred 20,000,000 and the $1.47 is subject to an inflation adjustment.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Yep.

[David Sasnett, Executive VP & CFO at Consolidated Water]

So we recognize that 147,000,000, which will be adjusted of the two year design and two year construction period.

[David Sasnett, Executive VP & CFO at Consolidated Water]

And today, we haven't recognized I guess, we'll disclose in the next quarter exactly how much revenue we've recognized. And we haven't we haven't even recognized 10% of the revenue under the construction contract yet because the revenue recognition is dependent upon cost incurred for the project.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Yep.

[David Sasnett, Executive VP & CFO at Consolidated Water]

And under the and under the input method, what the cost we've incurred is relatively small at this point in time.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Yeah.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

When you equip them yeah.

[David Sasnett, Executive VP & CFO at Consolidated Water]

The pilot plant testing, the upfront cost for the bonds and for the insurance and things like that, And the the the development work in this is constituted each portion of the construction cost. Most of these costs are are still to be incurred. You'll see a tremendous ramping up of revenue as soon as the costs start going into the construction. And you would what we're seeing right now, we think the structure period was going to last about two years.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Our best guess now is gonna start in the February.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Got it.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Hopefully, we can we'll have it sooner, but it's dependent upon the permitting.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Okay. Two questions.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

I suspect you're not gonna let me know how much the gross margins on that construction side of the business are.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

No. I'm not. I can't do that.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

I don't think so.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

I think I'll try. On the permitting side, who's responsible for the permitting? Is that your subsidiary, or is the one of the the local government of Hawaii also part of it or responsible for it?

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Well, it's shared. Again, there's a pretty detailed breakdown of that in the contract we filed.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

I mean, some of the permits related to archaeological studies on the site and that sort of thing are with the client. Obviously, all the the building permits and that sort of thing are with us. We I mean, we're jointly working together on everything. I mean, we have to provide a lot of information for the client to submit for his permitting. So, I mean, there are some contractual responsibilities that are detailed out, but then it's more of a collaborative effort to to try to get this all wrapped up.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Got it. Switching gears to retail. Obviously, you know, nice uptick in volumes and revenue there. And you mentioned higher population of business activity. Two things here.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

You you're expanding your your one facility, West Bay, facility by a million gallons. But that expansion that you're seeing, I would suspect that's I know you're the q one is part of the high season, I guess. So but you should see sort of a a permanent lift in in volumes because of just permanent population growth as well as more businesses, etcetera. Is that a fair way of looking at it?

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Yeah.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Yeah. I mean, I there's a new hospital in our service area. It was constructed, obviously, a big water user. The Caymana Bay development, which is right smack in the center of our service area. I mean, they can they continue to build office buildings and expand schools and midtown.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Yeah. I mean, it's it's A lot of money going there. There's a of there's a lot of investors going there in Grand Canyon right now. We don't I mean, we're very happy about it, obviously.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Yeah.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

This isn't a seasonal increase. I mean, I think it's it's firmly rooted in, you know, population growth in the service area and business growth. And there are always gonna be some seasonal variations, but, you know, this is this is pretty solid.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Well, I guess you're you're saying our base water sales have increased, Jerry. Yes.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Floor is higher than it used to be. Yeah. Rusty.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Exactly. Yeah.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

How long will it take that or you're adding a million gallons, 25% expansion. What are you running at utilization today? Maybe do you know how long it'll take to sort of absorb that extra Yeah.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

I mean, we now. Don't know.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Do we disclose the sales volumes? We I mean, we have we disclose the growth numbers, but, I mean, not as a, you know, as a percentage of production capacity. I mean, we're looking ahead for next year with this expansion because we have to design for peak demand. So we've always had our peak demands in the first three months of the year. Where it starts mid December and goes through till till April.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

So, I mean, we're looking forward to make sure that we have sufficient capacity and then, obviously, sufficient storage capacity to meet the future demand.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Got it. And then the three contracts you referenced, the 20,000,000, how long will it take to execute on this project? It sounds like they're a little bit smaller. And roughly, when would they start potentially start?

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Yeah. I mean, you know, two of them are under contract. The third one, you know, will be under contract in the next couple of months. You know, they're they're they're smaller jobs. I think they're, you know, probably look at it over maybe a twelve month time frame or something

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Realizing revenues from those projects.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Yeah. Probably the second half of this year and the first part for six months of 02/1926, Jerry. Yeah. It'll a reasonable time frame.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Yeah. And it it sounds like the overall project pipeline can is, I guess, rebalance for lack of better word. It was a little slow, but, yeah, these projects plus it sounds like you have line of sight to some other opportunities across the board.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Yeah. I mean, we did we're not we don't have a giant project that we're we did announce, but, you know, there's definitely a good pipeline of smaller jobs that that we're pursuing or that we have, as I mentioned, under contract.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

The guys would be kept certainly busy.

[Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC]

Got it. Okay. I'll jump back in queue. Thanks.

[Operator]

Again, if you have a question, please press then 1. Your next question comes from John Bear with Ascend Wealth Advisors LLC. Please go ahead.

[John H. Bair, President at Ascend Wealth Advisors, LLC]

Thank you. Thank you.

[John H. Bair, President at Ascend Wealth Advisors, LLC]

Good morning. Hey. Couple of questions. You regarding in your comments, you mentioned that some of the permitting was out of your control, and I'm just kind of wondering, I'm I'm guessing, probably environmentally related ones. You did just an answering Jerry about archaeological permits and so forth.

[John H. Bair, President at Ascend Wealth Advisors, LLC]

Can can you elaborate a little bit more on that? What are there one or two or five types of permits that might fall under that that could get hung up?

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Yeah. I mean, again, you can see them in the in the filed contract. There's, a table, and it sets up which permits are our responsibility and which permits are the client's responsibility.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

I mean, things related to the site, which was was provided by the client are typically their responsibility. You know, the building permits, know, construction permits, you know, that sort of thing. You know, we have to get approval from the Department of Health for the water quality studies and that sort of thing. I mean, those are are typically on us. I mean, you should if you want a lot of detail, it's there.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

It's in the in the filed contract.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Yeah. When we say that's beyond our yeah. When it's beyond our control, I guess we should clarify and mean that it's the client's responsibility to get those permits. Okay.

[David Sasnett, Executive VP & CFO at Consolidated Water]

Certain clients are our responsibility.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

But, I mean I mean, it's more the there's a I'll tell you, John. There's nothing that I'm concerned about except for the timing because some of these agencies move very slow. I mean, I don't think that it you know, I don't feel at this time that there's anything that would be detrimental to the project that's out there. It's just a matter of getting these permits.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

I mean, some of them take a really long time, particularly the, you know, the one that comes to mind is the archaeological permit. I mean, that just Mhmm.

[David Sasnett, Executive VP & CFO at Consolidated Water]

It's taken much longer than much longer than we expected and much longer than the client expected. Yeah. These are government agencies.

[David Sasnett, Executive VP & CFO at Consolidated Water]

There's only so much you can push them before the you know?

[John H. Bair, President at Ascend Wealth Advisors, LLC]

Are they under the EPA or what what what area of the government would they be What state agencies?

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Hawaii state agents.

[John H. Bair, President at Ascend Wealth Advisors, LLC]

Okay. Alright.

[John H. Bair, President at Ascend Wealth Advisors, LLC]

And then the other kind of a broad question, and you did somewhat touch on this with your outlook of potential wastewater facility in Barbados and kind of expanding geographically. So I'm wondering if the success with winning the Hawaii contract could potentially open up other opportunities for you in the Asia Pacific region, The Philippines or Japan or somewhere in that region. Of course, forgetting about the Bali situation a number of years back, but nonetheless, you know, things have perhaps changed some. So wondering wondering how that might play in.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Yeah.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

I mean, first of all, I didn't mention anything in Barbados. I I I put that there's a inter we have an international project that we're pursuing on a on the wastewater side, but I I didn't Out of Barbados. Yeah. I didn't mention Okay.

[John H. Bair, President at Ascend Wealth Advisors, LLC]

I then I miss misheard that then, and I apologize for that.

[John H. Bair, President at Ascend Wealth Advisors, LLC]

So okay.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

From the standpoint of looking farther east, I mean, I we're not pursuing anything in that region at this time. You know, there's sufficient opportunities, I think, closer to home that we wanna focus on. And, you know, there's actually a lot of opportunities in Florida right now that, you know, we potentially could be involved in. I mean, the growth of population here in the state has has facilitated, you know, new treatment plants for both water and wastewater.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

And our Earex manufacturing business is nicely positioned to capitalize on on that growth, and we've been, you know, making business relationships and partnerships with the companies here in Florida that I think will be bearing fruit in the next few years as well.

[John H. Bair, President at Ascend Wealth Advisors, LLC]

So K. Well, that that kind of somewhat answers one of my next questions with the general outlook with projects, you know, domestically, whatever, recent administration change and policy initiatives and all that kind of thing, probably sick to death of hearing questions about tariffs. But nonetheless, just wondering if that, you know, opportunity outlook, number of bid number of projects that are potential bidding opportunities for you, does that look fairly stable? Is it expanding?

[John H. Bair, President at Ascend Wealth Advisors, LLC]

You know, just a little more color on that. Sounds like you got a lot of stuff going on here.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Yeah. There there's there's certainly a lot of opportunities. The you know, we have obviously very detailed reviews on a weekly basis of projects that we're pursuing.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

And I sit in on those for the Western United States, and I I really haven't seen it slowing down. I mean, the size of the projects has changed, but, I mean, the number of projects that we're pursuing and potentially could get, I think, is is quite encouraging for me.

[John H. Bair, President at Ascend Wealth Advisors, LLC]

Sounds very good. Thank you very much for taking the call. Good luck.

[John H. Bair, President at Ascend Wealth Advisors, LLC]

Looking forward to the progress.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Thank you. K. Thanks, John. Yep.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Take care.

[Operator]

Again, if you have a question, please press then 1. At this time, this concludes our question and answer session. I'd like to now turn the call back over to Mr. McTaggart.

[Operator]

Sir, please go ahead.

[Frederick McTaggart, CEO, President & Director at Consolidated Water]

Thank you, everybody, for joining us today. It's always a pleasure to be able to communicate with the shareholders, And I look forward to speaking with you again in August when we announce our Q2 results. Take care.

[Operator]

Thank you.

[Operator]

Before we conclude today's call, I would like to provide the company's safe harbor statements that includes cautions regarding forward looking statements made during today's call. The information that we have provided in this conference call includes forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the company's future revenue, future plans, objectives, expectations and events, assumptions and estimates. Forward looking statements can be identified by the use of words or phrases usually containing the words believe, estimate, project, intend, expect, should, will or similar expressions. Statements that are not historical facts are based on the company's current expectations, beliefs, assumptions, estimates, forecasts and projections for its business and the industry and markets related to its business. Any forward looking statements made during this conference call are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict.

[Operator]

Actual outcomes and results may differ materially from what is expected in such forward looking statements. Factors that would cause or contribute to such differences include, but are not limited to, tourism and weather conditions in the areas we serve the economic, political and social conditions of each country in which we conduct or plan to conduct business our relationships with the government entities and other customers we serve regulatory matters, including resolution of the negotiations for the renewal of our retail license on Grand Cayman our ability to successfully enter new markets and various other risks as detailed in the company's periodic report filings with the Securities and Exchange Commission. For more information about risks and uncertainties associated with the company's business, please refer to the Management's Discussion and Analysis of Financial Conditions or Results of Operations and Risk Factors section of the company's SEC filings, including, but not limited to, its Annual Report on the Form 10 quarterly reports for Form 10 Q. Any forward looking statements made during the conference call speak as of today's date. The company expressly disclaims any obligation or undertaking to update or revise any forward looking statements made during the conference call to reflect any changes in its expectations with regard thereto or any changes in its events, conditions or circumstances of which any forward looking statement is based except as required by law.

[Operator]

I would like to remind everyone that this call will be available for replay starting later this evening. Please refer to yesterday's earnings release for dial in replay instructions available via the company's website at cwco.com. Thank you for attending today's presentation. This concludes the conference call. You may now disconnect.

Participants

Executives

• Frederick McTaggart, CEO, President & Director
• David Sasnett, Executive VP & CFO

Analysts

• Gerry Sweeney, Managing Director, Senior Research Analyst at Roth Capital Partners, LLC
• John H. Bair, President at Ascend Wealth Advisors, LLC