Consolidated Water Co Ltd (CWCO) 2025 Q2 法說會逐字稿

Good morning. Thank you for joining us today to discuss Consolidated Water Company's second-quarter 2025 operating and financial results. Hosting the call today is the Chief Executive Officer of Consolidated Water, Fred McTaggart; and the company's Chief Financial Officer, David Sasnett. (Operator Instructions)

早安.感謝您今天加入我們討論聯合水務公司 2025 年第二季的營運與財務表現。今天主持電話會議的是 Consolidated Water 執行長 Fred McTaggart 和公司財務長 David Sasnett。（操作員指示）

Before we conclude today's call, I'll provide some important cautions regarding the forward-looking statements made by the management during the call. I would 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 Investor Relations section of the company's website.

在我們結束今天的電話會議之前，我將對管理層在電話會議期間做出的前瞻性陳述提出一些重要的警告。我想提醒大家，今天的通話將被錄音，並將提供電話重播。請參閱昨天發佈到公司網站投資者關係部分的新聞稿中的說明。

Now I would like to turn the call over to Consolidated Water CEO, Frederick McTaggart. Sir, please go ahead.

現在我想將電話轉給 Consolidated Water 執行長 Frederick McTaggart。先生，請繼續。

Thank you, Steve, and good morning, everyone. Thank you for joining us today to discuss our financial and operating results for our second quarter of 2025. As mentioned in our press release issued yesterday, our diversified water business model, encompassing regulated utility, O&M services, and manufacturing performed well this past quarter with total revenues increasing by 3% and fully diluted earnings per share from continuing operations increasing by 23% compared to the same quarter of last year. The retail and manufacturing segments in particular reported quarter-over-quarter revenue increases of 6% and 33%, respectively. Retail water sales in our exclusive utility service area in Grand Cayman were higher than the previous year, primarily due to reduced rainfall during this past quarter.

謝謝你，史蒂夫，大家早安。感謝您今天加入我們討論我們 2025 年第二季的財務和營運表現。正如我們昨天發布的新聞稿中提到的那樣，我們的多元化水務業務模式（涵蓋受監管的公用事業、營運和維護服務以及製造業）在過去的一個季度表現良好，總收入增長了 3%，持續經營產生的每股完全攤薄收益與去年同期相比增長了 23%。零售和製造部門的營收則是月增 6% 和 33%。我們在大開曼島的獨家公用事業服務區的零售水銷售額高於上一年，這主要是由於上個季度降雨減少。

Manufacturing revenue and operating income rose due to increased production and higher margin products. Recent tariffs enacted by the United States government have not materially impacted our manufacturing business. Our Caribbean-based bulk water segment revenue declined slightly this past quarter due to lower fuel pass-through charges However, bulk profitability rose both in dollar terms and gross profit percentage as a result of improved plant efficiencies and reduced operating costs. Our services segment revenue decreased in the second quarter of 2025 compared with the previous year, largely due to the completion of the pilot plant testing phase of the Hawaii project, which resulted in a decrease in project expenditures pending commencement of the construction phase of the project. This reduction was partially offset by higher revenue from recurring operations and maintenance contracts in both California and Colorado.

由於產量增加和產品利潤率提高，製造收入和營業收入有所增長。美國政府最近實施的關稅並未對我們的製造業務產生實質影響。由於燃料轉嫁費用降低，我們位於加勒比地區的散裝水部門收入上個季度略有下降。然而，由於工廠效率提高和營運成本降低，散裝水部門的獲利能力以美元計算和毛利率均上升。我們的服務部門收入在 2025 年第二季與前一年相比有所下降，這主要是由於夏威夷項目中試工廠測試階段的完成，導致項目建設階段開始前的項目支出減少。加州和科羅拉多州的經常性營運和維護合約收入增加部分抵消了這一減少。

In April, the Honolulu Board of Water Supply or BWS, 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 that desalinated water from the new plant would not cause any detrimental impact to their distribution pipes or customer assets. So this significant milestone in the project paves the way to begin construction once final design approval and the requisite permits have been obtained. In June, we submitted our 90% design for the project to BWS and very shortly afterwards received comments from their engineer and various consultants. We are currently addressing these comments and plan to submit our responses shortly in keeping with the project schedule.

今年 4 月，我們在夏威夷的多年期海水淡化計畫的客戶——檀香山供水委員會 (BWS) 批准了我們的試點測試報告和建議，並得出結論，我們在試點階段生產的淡化水與他們現有的供水量合理匹配。此外，新工廠生產的淡化水不會對其配送管道或客戶資產造成任何不利影響。因此，該專案的這一重要里程碑為在獲得最終設計批准和必要許可後開始施工鋪平了道路。6 月份，我們向 BWS 提交了該專案的 90% 設計，不久後就收到了他們的工程師和各位顧問的意見。我們目前正在處理這些評論，並計劃按照專案進度盡快提交回應。

So that should advance the design process. We presently expect to begin construction of this project early next year once BWS issues a notice to proceed with construction. And on a cautionary note, some of the permits required before construction can start must be obtained by our client and are therefore, outside of our control and delays in obtaining any of these permits could also delay the construction start date. The construction phase of the Hawaii project is expected to generate the largest portion of revenue from this project and once commenced, will be a major growth driver for our Services segment in 2026 and 2027.

因此這應該會推進設計進程。我們目前預計，一旦 BWS 發出開工通知，該項目將於明年初開始施工。需要注意的是，施工開始前所需的一些許可證必須由我們的客戶獲得，因此我們無法控制，而延遲獲得任何這些許可證也可能會延遲施工開始日期。夏威夷計畫的建設階段預計將產生該計畫的最大部分收入，一旦開始，將成為我們2026年和2027年服務部門的主要成長動力。

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 Sasnett, who will take us through the financial details for the quarter.

現在，在進一步了解最新進展和今年的展望之前，我想先將電話轉給我們的財務長 David Sasnett，他將向我們介紹本季的財務細節。

Thank you, Rick. Good morning, everyone. Thank you for joining us today. I'll go through the numbers, some of the numbers which Rick mentioned earlier in more detail here. Our revenue totaled $33.6 million for this quarter, which was up 3% from the second quarter last year, and this was due to revenue increases for both our retail and manufacturing segments.

謝謝你，里克。大家早安。感謝您今天加入我們。我將詳細地介紹一下這些數字，其中一些是 Rick 之前提到的。本季我們的營收總計 3,360 萬美元，比去年第二季成長 3%，這是由於我們的零售和製造部門的收入均有所增長。

Our retail revenue was up $456,000 due to a 7% increase in the volume of water sold, and we attribute that volume increase to lower rainfall amounts on Grand Cayman for the second quarter of this year as compared to last year. Our bulk segment revenue actually decreased slightly to $8.3 million, but this was due to a decline in energy cost for CW-Bahamas that reduced the energy pass-through components of the water rates that we charge. Our Services segment decreased -- revenues decreased by $474,000 due to plant construction revenue that decreased from $4 million in the second quarter of last year to $2.8 million in the second quarter of this year. And this decrease in construction revenue was a result of a $1 million increase in the revenue we recognized for the Hawaii project. This was due to the completion of the pilot plant testing phase of the project, which resulted in a decrease in project expenditures pending commencement of the construction phase for the project.

由於水銷量增加了 7%，我們的零售收入增加了 456,000 美元，我們將銷售增加歸因於今年第二季大開曼島的降雨量與去年相比有所下降。我們的散裝運輸部門收入實際上略有下降，為 830 萬美元，但這是由於 CW-Bahamas 的能源成本下降，從而減少了我們收取的水費中的能源轉嫁部分。我們的服務部門收入減少——由於工廠建設收入從去年第二季的 400 萬美元減少到今年第二季的 280 萬美元，收入減少了 474,000 美元。建築收入的減少是由於我們確認的夏威夷項目收入增加了 100 萬美元。這是由於該專案中試工廠測試階段的完成，導致專案建設階段開始前的專案支出減少。

Recurring services segment revenue generated under our O&M contracts totaled $8.3 million in the second quarter of this year, which represents an increase of 17% over the previous year. Both PERC and REC, our Colorado subsidiary, increased their O&M revenue in this second quarter as compared to the second quarter of 2024. Our manufacturing segment revenue increased by $1.3 million or 33% to $5.2 million from the second quarter of last year as a result of increased production activity. Gross profit for the second quarter of 2025 was $12.8 million or 38% of total revenue as compared to $11.6 million or 36% of total revenue in the second quarter of 2024. The increase in gross profit, both in dollars and in terms of gross profit percentage was due to increases in the retail and manufacturing segment as well as decreased relative to operating costs for our bulk segment.

今年第二季度，我們根據 O&M 合約產生的經常性服務部門收入總計 830 萬美元，比上一年增長 17%。與 2024 年第二季相比，PERC 和我們位於科羅拉多州的子公司 REC 在第二季的營運和維護收入均增加。由於生產活動的增加，我們的製造部門收入比去年第二季增加了 130 萬美元，即 33%，達到 520 萬美元。2025 年第二季的毛利為 1,280 萬美元，佔總營收的 38%，而 2024 年第二季的毛利為 1,160 萬美元，佔總營收的 36%。毛利的增加（無論是以美元還是以毛利百分比計算）是由於零售和製造部門的成長以及散裝部門營運成本的下降。

Net income from continuing operations attributable to Consolidated Water stockholders for the second quarter of 2025 was $5.2 million or $0.32 per diluted share. This compares to net income of $4.2 million or $0.26 per diluted share in the second quarter of 2024. Including our discontinued operations, net income attributable to Consolidated Water stockholders for the second quarter of 2025 was $5.1 million, which represents a return of $0.32 per diluted share as compared to net income of $15.9 million or $0.99 per diluted share in the second quarter of 2024. This decrease in net income and EPS from 2024 to 2005 was due to our discontinued operations as we recognized a gain on the sale of the land and project documentation for our discontinued project in Mexico that totaled $12.1 million in the second quarter of last year.

2025 年第二季歸屬於聯合水務股東的持續經營淨收入為 520 萬美元，即每股稀釋收益 0.32 美元。相比之下，2024 年第二季的淨收入為 420 萬美元，即每股攤薄收益 0.26 美元。包括我們已終止的業務在內，2025 年第二季歸屬於 Consolidated Water 股東的淨收入為 510 萬美元，相當於每股稀釋收益 0.32 美元，而 2024 年第二季的淨收入為 1,590 萬美元或每股稀釋收益 0.99 美元。2024 年至 2005 年淨收入和每股收益的下降是由於我們停止了經營，因為我們確認了出售墨西哥已停止項目的土地和項目文件獲得的收益，去年第二季度總計 1,210 萬美元。

Turning to our balance sheet. Our cash and cash equivalents continued to grow to total approximately $112.2 million as of June 30, our working capital was $137.4 million as of that date, and our stockholders' equity grew to $216.6 million. Our projected liquidity requirements for the balance of this year include capital expenditures for our existing operations of approximately $85 million. This includes $1.5 million to be incurred in 2025 for new desalination plants to be built for the Water and Sewage Corporation of the Bahamas on Cat Island and $700,000 for the expansion of Aerex's manufacturing facility, which is almost complete. We increased our quarterly cash dividend and declared a dividend of $0.14 per share for the third quarter of this year. This third quarter dividend of $0.14 per share represents an increase of 27% from the previous dividend of this year.

轉向我們的資產負債表。截至 6 月 30 日，我們的現金和現金等價物持續成長至約 1.122 億美元，截至該日，我們的營運資本為 1.374 億美元，股東權益成長至 2.166 億美元。我們預計今年餘額的流動性需求包括現有業務約 8,500 萬美元的資本支出。其中包括 2025 年為巴哈馬水務和污水處理公司在卡特島建造新的海水淡化廠而投入的 150 萬美元，以及為 Aerex 製造工廠擴建而投入的 70 萬美元，該工廠目前已接近完工。我們增加了季度現金股息，並宣布今年第三季每股股息為 0.14 美元。第三季每股股息為 0.14 美元，較今年上一季的股息成長 27%。

And we paid out approximately $2.3 million in dividends in July. Our future liquidity requirements may also include quarterly dividends as such dividends declared are by the Board. And we continue to evaluate how to best utilize our large cash balance and ample liquidity to increase shareholder value.

我們在七月支付了約 230 萬美元的股息。我們未來的流動性需求可能還包括季度股息，因為此類股息是由董事會宣布的。我們將繼續評估如何最好地利用我們的大量現金餘額和充足的流動性來增加股東價值。

And this completes our financial details for the quarter, and I'll turn the call back over to Rick.

這就完成了我們本季的財務細節，我會將電話轉回給里克。

Thanks, David. So earlier this year, we completed an expansion of our West Bay seawater desalination plant to meet growing demand for water in our Grand Cayman utility service area. This expansion added an additional 1 million gallons per day of desalinated water production capacity to the already existing 1 million gallons of daily production capacity that was commissioned only two years ago. To keep pace with growing demand over the next two to three years, we plan to construct additional water storage at our West Bay site as well as build new water production and storage on land. We are in the process of purchasing located at the southern end of our service area in Grand Cayman to keep pace with demand growth.

謝謝，大衛。因此，今年早些時候，我們完成了西灣海水淡化廠的擴建，以滿足大開曼島公用事業服務區日益增長的用水需求。此次擴建將使每天的淡化水生產能力在兩年前投入使用的現有 100 萬加侖日生產能力基礎上額外增加 100 萬加侖。為了滿足未來兩到三年不斷增長的需求，我們計劃在西灣工廠建造額外的蓄水設施，並在陸地上建造新的水生產和儲存設施。我們正在位於大開曼島服務區南端進行採購，以滿足需求成長的步伐。

Enabled by an exceptionally strong balance sheet, we will continue to invest in these new assets and long-term projects, including the new desalination plants on Cat Island and the Bahamas, which we expect to complete later this year. These investments, which are needed to meet the growing water needs of our customers in the Cayman Islands and the Bahamas are expected to ultimately support future revenue growth in both the retail and bulk segments. Our manufacturing business has stabilized as promised, and we believe that we have successfully mitigated revenue and profit variability in this business segment going forward by broadening our product and client base. A meaningful part of our manufacturing revenue is generated by water purification and other equipment that we fabricate for the nuclear power industry. We have been ASME NQA-1 certified by two large nuclear industry players for many years and have been cleared by a third potential client to go through the requisite audit process needed to obtain a third ASME NQA-1 certification.

憑藉著異常強勁的資產負債表，我們將繼續投資這些新資產和長期項目，包括位於卡特島和巴哈馬的新海水淡化廠，預計這些項目將於今年稍後完工。這些投資是為了滿足開曼群島和巴哈馬客戶日益增長的用水需求，預計最終將支持零售和散裝業務未來的收入成長。我們的製造業務已如承諾的那樣穩定下來，我們相信，透過擴大我們的產品和客戶群，我們已經成功地減輕了該業務部門未來的收入和利潤波動。我們的製造收入很大一部分來自為核電產業製造的水淨化和其他設備。多年來，我們一直獲得兩家大型核工業企業的 ASME NQA-1 認證，並且已獲得第三家潛在客戶的批准，可以透過必要的審核流程獲得第三個 ASME NQA-1 認證。

Given the recent strong interest in nuclear power solutions to meet growing demand for 24/7 electrical power in the US, we are hopeful that our unique manufacturing qualifications will provide opportunities to further grow our manufacturing business through this important sector. During the quarter, we substantially completed construction of an additional 17,500 square feet of manufacturing space at our Fort Pierce, Florida facility and expect to occupy the new space later this month, subject to final inspections and permitting. The additional space will allow us to take on more simultaneous and larger projects thereby increasing our throughput capacity. REC, our Colorado subsidiary continues to perform well with quarterly revenue up more than 17%. Earlier this year, we entered the Colorado design build market by winning our first construction contract in Lochbuie, Colorado.

鑑於最近人們對核電解決方案的濃厚興趣，以滿足美國對全天候電力日益增長的需求，我們希望我們獨特的製造資格將為透過這一重要領域進一步發展我們的製造業務提供機會。在本季度，我們基本上完成了位於佛羅裡達州皮爾斯堡工廠的另外 17,500 平方英尺製造空間的建設，並預計將於本月晚些時候投入使用，但需經過最終檢查和許可。額外的空間將使我們能夠同時承擔更多更大的項目，從而提高我們的吞吐量。我們的科羅拉多子公司 REC 繼續表現良好，季度收入成長超過 17%。今年早些時候，我們贏得了科羅拉多州洛克布伊的首份建築合同，從而進入了科羅拉多州的設計建造市場。

This $4.5 million drinking water plant expansion, while relatively small in comparison to some of our recent design build projects, is a great start and helps us to pursue larger design build opportunities in Colorado. In addition to Colorado, the Arizona market continues to present significant opportunities for future design build projects. Our team is currently engaged in multiple preliminary discussions with potential clients and recently submitted four customized design reports or CDRs, as we refer to them, to residential developers and industrial clients near Phoenix. Similar to the Liberty Utilities project in Arizona, we believe that some or all of these CDRs will ultimately lead to design-build contracts for these important wastewater treatment facilities in Arizona. We're confident that our award-winning designs, cost-efficient delivery models and extensive industry experience will help us win upcoming projects.

這個耗資 450 萬美元的飲用水廠擴建項目雖然與我們最近的一些設計建造項目相比規模相對較小，但卻是一個很好的開始，有助於我們在科羅拉多州尋求更大的設計建造機會。除了科羅拉多州之外，亞利桑那州市場也繼續為未來的設計建造項目提供重大機會。我們的團隊目前正在與潛在客戶進行多次初步討論，並最近向鳳凰城附近的住宅開發商和工業客戶提交了四份客製化設計報告或稱為 CDR。與亞利桑那州的 Liberty Utilities 專案類似，我們相信這些 CDR 中的部分或全部最終將導致亞利桑那州這些重要廢水處理設施的設計-建造合約。我們相信，我們屢獲殊榮的設計、經濟高效的交付模式和豐富的行業經驗將幫助我們贏得即將到來的項目。

Our decision to diversify beyond the Caribbean seawater desalination market many years ago has been successful and positions us for continued growth. We now have a diverse portfolio across four business segments, delivering consistent value to shareholders through strategic acquisitions over the last decade. As we finish 2025 and look ahead, we expect these positive factors to sustain steady long-term growth, enhance profitability and increase shareholder value.

多年前，我們決定在加勒比海水淡化市場以外實現多元化發展，這項決定取得了成功，並為我們持續成長奠定了基礎。我們目前擁有涵蓋四個業務部門的多元化投資組合，透過過去十年的策略性收購為股東提供持續的價值。展望2025年，我們預期這些正面因素將維持長期穩定成長、提高獲利能力並增加股東價值。

Now with that, I'd like to open the call up for questions.

現在，我想開始回答問題。

(Operator Instructions)

（操作員指示）

Gerry Sweeney, ROTH Capital.

羅仕資本（ROTH Capital）的格里·斯威​​尼（Gerry Sweeney）。

Congrats on a nice quarter. I don't have too many questions, but other than maybe some higher-level understanding of maybe the market opportunities and to segment them into, let's say, the Caribbean and then sort of US. On the US front, PERC and REC, how is that pipeline developing? Obviously, a lot of talk in the West and Southwest about water, water scarcity, and et cetera.

恭喜本季取得良好業績。我沒有太多問題，但除了可能對市場機會有更高層次的理解，並將其細分為加勒比地區和美國。在美國方面，PERC 和 REC 的研發進展如何？顯然，西部和西南地區有很多關於水、水資源短缺等問題的討論。

And I think the market was hotter, then maybe some lead times got extended, but I'm just curious what the pipeline is looking like? And what are your thoughts on just the market tenor in general?

我認為市場更加火爆，因此交貨時間可能會延長，但我只是好奇管道是什麼樣的？您對整個市場基調有何看法？

Well, on the wastewater side, certainly, we're seeing continued interest. And as I mentioned, in these projects generated by developments and small industrial projects that we've been pursuing through these customized design reports. So I mean, these projects could range anywhere from sort of $10 million to $30 million in size It would be design build jobs for wastewater treatment plants. So the Phoenix area continues to grow there, and they continue to need wastewater treatment solutions. On the California side, I mean, it's been mostly O&M contract renewals and opportunities there, not much happening on the design build side in California at this point.

嗯，在廢水方面，我們當然看到人們持續的興趣。正如我所提到的，在這些由開發項目和小型工業項目產生的項目中，我們一直在透過這些客製化的設計報告進行研究。所以我的意思是，這些項目的規模可能在 1000 萬美元到 3000 萬美元之間，這將是污水處理廠的設計建造工作。因此，鳳凰城地區繼續發展，並且他們繼續需要廢水處理解決方案。就加州而言，我的意思是，那裡主要是 O&M 合約續約和機會，目前加州的設計建造方面沒有太多進展。

Got it. And Colorado, what's that market look like? Obviously, you had that small design win at $4.5 million one, but does a win in the state create a little bit more opportunity for you guys?

知道了。科羅拉多州的市場情況怎麼樣？顯然，你們以 450 萬美元的價格贏得了那個小設計勝利，但在州一級獲勝是否會為你們創造更多的機會？

Absolutely. I mean it gives us a good base. We knew the client at Lochbuie through many years operating their wastewater plant there. So there's other opportunities. There's a lot of small towns and areas north of Denver that require upgrades, expansions to their wastewater and water treatment facilities just because of natural growth around that area. So we see a number of similar opportunities to Lochbuie.

絕對地。我的意思是它為我們提供了良好的基礎。我們多年來一直在那裡經營污水處理廠，因此認識 Lochbuie 的客戶。所以還有其他機會。丹佛北部有許多小城鎮和地區，由於週邊地區的自然發展，需要升級和擴大廢水和水處理設施。因此，我們看到了許多與 Lochbuie 類似的機會。

Got it. Switching gears to the Caribbean. Obviously, the Cayman is getting nice, consistent growth there. I mean, I think evidenced by the expansion of your West Bay plants. Maybe two questions.

知道了。轉向加勒比海。顯然，開曼群島正在取得良好、持續的成長。我的意思是，我認為這從你們西灣工廠的擴張就可以看出。也許有兩個問題。

Bahamas, they seem to be -- I think in previous conversations, the way I described it was a little bit water constrained and at some point, they'll have to do something. So maybe opportunity in the Bahamas and then any other opportunities throughout the region.

巴哈馬，他們似乎——我想在之前的談話中，我描述的方式是他們受到了一些水資源的限制，在某個時候，他們必須採取一些措施。所以也許是巴哈馬的機會，然後是整個地區的任何其他機會。

Yes. I mean, I think you covered it. We're very focused just on the Cayman Islands market and the Bahamas at this point in the Caribbean. The Bahamas, we're building these two plants on Cat Island, which is our first contract outside of New Providence, Nassau for water supply. We're very excited about that.

是的。我的意思是，我認為你已經涵蓋了它。目前，我們主要關注加勒比海地區的開曼群島市場和巴哈馬市場。巴哈馬，我們正在卡特島建造這兩座工廠，這是我們在新普羅維登斯、拿騷以外的第一個供水合約。我們對此感到非常興奮。

So we want to get those wrapped up and see what comes next because there's certainly needs throughout the Bahamas for additional water supply. We hope that they talk to us about that.

因此，我們希望盡快解決這些問題，看看接下來會發生什麼，因為整個巴哈馬確實需要額外的供水。我們希望他們與我們討論此事。

Got it. One last question. Manufacturing, you highlighted the expansion of the Aerex facility in Fort Pierce. Just curious, does this expansion open up? It sounded like -- maybe let me take a half a step back.

知道了。最後一個問題。製造業，您強調了位於皮爾斯堡的 Aerex 工廠的擴建。只是好奇，這個擴充會開放嗎？這聽起來像是——也許讓我退後半步。

It sounds as though maybe you were space constrained, and maybe this limited the number of jobs and the size of jobs you could go after. Does this expansion open up a larger market and maybe a different layer or different opportunity for growth?

聽起來好像您的空間受到限制，也許這限制了您可以從事的工作數量和工作規模。這次擴張是否會開闢更大的市場，甚至開闢不同的成長層次或不同的成長機會？

Yes. Absolutely, Gerry. I mean, the -- when you're building these big pieces of equipment, you got to have somewhere to put them, right? So what this is going to do is free up our shop floor for higher throughput on the actual fabrication side, and we'll be able to put some of these larger pieces of equipment over in the warehouse and do complex assembly work and that sort of thing on water treatment skids in the warehouse area, and we won't be taking up the welder space and all that sort of stuff in the shop. So we definitely think it's a big plus for the facility, and it will ultimately allow us to generate more revenue from that business because of the additional space.

是的。當然，格里。我的意思是，當你建造這些大型設備時，你必須有地方放置它們，對嗎？因此，這樣做可以釋放我們的車間空間，從而提高實際製造方面的產量，並且我們能夠將一些較大的設備放置在倉庫中，並在倉庫區域的水處理滑軌上進行複雜的裝配工作等，並且我們不會佔用車間裡的焊工空間和所有這類東西。因此，我們絕對認為這對設施來說是一個很大的優勢，而且由於額外的空間，它最終將使我們能夠從該業務中獲得更多收入。

It absolutely increases our capacity, Gerry, and that's something we needed given what we think is going to happen with the business in the coming years.

這絕對提高了我們的產能，格里，考慮到我們對未來幾年業務發展的預測，這是我們所需要的。

Yes. Biggest growth driver in the manufacturing Aerex side, is that -- I mean, nuclear has definitely gotten a lot of attention lately. But what is maybe some of the drivers behind Aerex?

是的。製造業 Aerex 方面最大的成長動力是——核能最近確實受到了許多關注。但 Aerex 背後的驅動因素可能是什麼呢？

Well, as I mentioned, we have a very diversified business there now. I mean the nuclear work obviously plays a big part of it. There's a lot of -- Aerex is very well known in Florida, and there's a lot of new municipal work for water treatment plants, membrane treatment plants going on in the Florida area. So we've been busy bidding some jobs, some nice sized jobs here. And then we're -- we always have the pipe fabrication business, which can run the gamut of high-pressure piping for membrane plants to just stainless steel piping -- large stainless steel piping for wastewater plants.

嗯，正如我所提到的，我們現在在那裡擁有非常多元化的業務。我的意思是核子工作顯然在其中發揮了重要作用。有很多——Aerex 在佛羅裡達州非常有名，佛羅裡達地區正在進行許多新的市政工程，包括水處理廠、膜處理廠。因此，我們一直忙於競標一些工作，一些規模不錯的工作。然後，我們 - 我們一直都有管道製造業務，其範圍可以從薄膜工廠的高壓管道到不銹鋼管道 - 污水處理廠的大型不銹鋼管道。

That continues to be a good base for our revenues in the Aerex business. So it's really the nuclear, the municipal and the pipe that is keeping us quite busy right now.

這繼續為我們在 Aerex 業務中的收入奠定了良好的基礎。所以，目前真正讓我們忙碌的是核能、市政和管道。

(Operator Instructions)

（操作員指示）

John Bair, Ascend Wealth Advisors.

約翰貝爾 (John Bair)，Ascend Wealth Advisors。

I wanted to circle back on the nuclear. And is this business that you're addressing primarily domestic? And do you have any international opportunities with supplying product or material to other plants?

我想重新回到核子問題。您所針對的這個業務主要在國內嗎？您是否有向其他工廠供應產品或材料的國際機會？

The customers are all domestic. Some of the final products are going overseas. But just one product that we actually make is -- two products are going overseas. But all of our customers are domestic customers.

顧客都是國內的。部分最終產品銷往海外。但我們其實只生產一種產品──兩種產品銷往海外。但我們所有客戶都是國內客戶。

So is there opportunity or do you see opportunity to expand this for international? Because internationally, they're looking at increasing nuclear capability as well. So just kind of curious how that trend is playing out.

那麼，是否有機會或您是否看到將其擴展到國際的機會？因為在國際上，他們也在考慮增強核子能力。所以我只是有點好奇這種趨勢是如何發展的。

Yes. So I mean, just, John, so you understand, we're not selling directly to the clients. I mean we're qualified by companies that they're nuclear solution companies, so we're doing fabrication work for them. So we're not selling directly into the facilities or the end users. So -- I mean, they -- these clients do work overseas.

是的。所以我的意思是，約翰，你明白，我們不是直接向客戶銷售。我的意思是，我們獲得了核子解決方案公司的認可，因此我們為他們進行製造工作。因此，我們不會直接向設施或最終用戶銷售產品。所以——我的意思是，這些客戶確實在海外工作。

And if they need us to do some fabrication work for them, we're certainly qualified to do that. But I can't really say that we're pursuing international work because of the arrangements that we have with our customers. We don't serve the end users in this market.

如果他們需要我們為他們做一些製造工作，我們當然有資格去做。但我不能說我們正在進行國際業務，因為我們與客戶已經達成了協議。我們不為這個市場的最終用戶提供服務。

Okay. Okay. Fair enough. And then is a lot of this addressing like retrofit or upgrade as opposed to actual new builds?

好的。好的。很公平。那麼，這些解決方案是否大多類似於改造或升級，而不是實際的新建？

I'm not aware of any new builds. This is water treatment equipment for existing facilities.

我不知道有任何新版本。這是現有設施的水處理設備。

Maintenance. Okay. And can any of this apply towards the smaller -- the SMR market that seems to be gaining some interest?

維護。好的。這些是否也適用於規模較小、似乎正在引起人們興趣的 SMR 市場？

It certainly could, yes.

是的，當然可以。

Okay. All right. And then I wanted to ask another area. Are you seeing more interest or bidding opportunities for -- based on reshoring of manufacturing across the geographic US, not just necessarily in the West Coast or elsewhere? Is -- do you see opportunities there?

好的。好的。然後我想問另一個領域。您是否看到了更多的興趣或競標機會——基於美國各地製造業的回流，而不一定僅限於西海岸或其他地方？您在那裡看到機會了嗎？

We have not been involved in anything like that yet. I can't say that that's been an area that we see opportunity in at the moment.

我們還沒有參與過類似的事情。我不能說這是我們目前看到機會的領域。

Okay. And then another question on future CapEx needs for existing installations, upgrades or replacement. What do you see in that regard?

好的。然後另一個問題是關於現有安裝、升級或更換的未來資本支出需求。您對此有何看法？

Yes. Let me just jump back one second here about the onshoring manufacturing. We're -- one of the things I just want to explain to investors, the -- so we don't have like a product line that we can market to engineering companies and those sorts of groups that design these large plants. I mean we're more of a custom shop, particularly with Aerex. We are looking at potentially developing some standardized products, which will fit better with the industrial market.

是的。請容許我稍微回顧一下有關在岸製造業的情況。我想向投資者解釋的一件事是，我們沒有可以向工程公司和設計大型工廠的團體推銷的產品線。我的意思是，我們更像是一家定製商店，特別是與 Aerex 合作。我們正在考慮開發一些標準化產品，以更好地適應工業市場。

You can take your specs and your brochures and things over and talk to one of the big consulting engineers and they can spec it into a new chip plant or a new auto plant or whatever they're working on. So that is something that we are looking at. Now your second question about the CapEx. I mean, I think most of our asset -- new assets and CapEx expenditures are going to be in the Cayman utility just because of growth in that business, we need to build some new water storage tanks and eventually build a new RO plant on the southern end of the system there. Outside of that, it would be projects like Cat Island that are using capital right now for long-term investments.

您可以帶著您的規格、宣傳冊和其他東西去和一位大型諮詢工程師交談，他們可以將其應用到新的晶片工廠或新的汽車工廠或他們正在進行的任何專案中。這就是我們正在關注的事情。現在您的第二個問題是關於資本支出。我的意思是，我認為我們的大部分資產——新資產和資本支出都將用於開曼公用事業，因為該業務的增長，我們需要建造一些新的儲水罐，並最終在那裡系統的南端建造一個新的 RO 工廠。除此之外，還有像 Cat Island 這樣的計畫正在利用資本進行長期投資。

Okay. And one last question. I didn't see anything in the press release, and I haven't had a chance to look into the queue. But I know in the past, your friends in the Bahamas tend to be a little bit slow in paying their bills. What have you seen there? How has that been working out?

好的。最後一個問題。我在新聞稿中沒有看到任何內容，而且我也沒有機會查看隊列。但我知道，過去你們巴哈馬的朋友往往付帳有點慢。你在那裡看到了什麼？進展如何？

So we've obviously been very focused on getting that resolved. We've had a number of discussions and meetings over the last several months, and we are seeing an increase in payments coming through now. So there have been -- on the Bahamas side, there's been an undertaking for some time to bring that account current, and we are seeing some progress now on that.

因此我們顯然非常注重解決這個問題。過去幾個月我們進行了多次討論和會議，現在我們看到付款金額增加。因此，巴哈馬方面已經承諾一段時間將帳戶更新，現在我們看到了一些進展。

It didn't show up in the Q, John, but hopefully, when we report the next quarter's results (technical difficulty) that's favorable.

它沒有出現在 Q 中，約翰，但希望當我們報告下一季的結果（技術難度）時，這是有利的。

(Operator Instructions)

（操作員指示）

Matt, Western Standard.

馬特，《西部標準報》。

Couple of questions here. My first is the real standout for me was the gross margin on the manufacturing side of the business. Can you talk about that a little bit, whether -- what was really driving that?

這裡有幾個問題。首先，對我來說真正突出的是業務製造方面的毛利率。您能否稍微談論一下，真正的推動因素是什麼？

I mean, it's pretty simple. I think we got some jobs that were higher margin. We were able to price them better. And we're utilizing our resources there at the facility pretty much at peak right now for that -- for the size of the facility that we have. So we were very busy.

我的意思是，這很簡單。我認為我們得到了一些利潤更高的工作。我們能夠為它們提供更優惠的價格。就我們現有的設施規模而言，我們現在正在最大限度地利用該設施的資源。所以我們非常忙。

There wasn't any downtime during the quarter, and we were able to get better pricing on some of these projects that went through the shop.

本季度沒有任何停機時間，我們能夠對透過該商店的一些項目獲得更好的定價。

But Matt, we've also focused -- it's been a strategic initiative of ours to focus on the higher-margin projects to begin with. And I think our people involved in sales in our manufacturing segment are really focused on that and been more aggressive going after some of the higher-margin jobs. But just like Rick said, facility itself is very efficient. It's operating pretty close to capacity and that fixed overhead gets spread out over a much larger amount of revenue and margins go up. So it's both sales and productivity.

但馬特，我們也一直關注──這是我們的策略性舉措，首先關注利潤率較高的項目。我認為我們製造部門的銷售人員確實非常關注這一點，並且更加積極地追求一些利潤更高的工作。但就像瑞克說的，設施本身非常有效率。它的營運非常接近產能，固定成本被分攤到更大的收入中，利潤率也上升了。所以它既是銷售，也是生產力。

But keep in mind, I mean, when we get this new building online this month, that's going to change the game. I think that will significantly increase the capacity of that facility.

但請記住，當我們本月將這座新建築投入使用時，情況將會改變。我認為這將大大提高該設施的容量。

Okay. Great. Is there a time period that you're hoping to fill the incremental capacity?

好的。偉大的。您希望在某個時間段內填滿增量容量嗎？

We're bidding on some larger jobs right now. So I mean, depending on whether we're successful or not, I mean, it will certainly be put to use as soon as we hear about some of these new jobs. I mean these are bigger municipal jobs that may take a little bit more time to go through the process, but they would certainly impact 2026 revenues if we were successful.

我們目前正在競標一些更大的工作。所以我的意思是，這取決於我們是否成功，我的意思是，一旦我們聽到一些新的工作，它肯定會被投入使用。我的意思是，這些都是更大的市政工作，可能需要更多時間來完成整個過程，但如果我們成功了，它們肯定會影響 2026 年的收入。

Yes, they would use the all capacity, Matt, more or less. So we've got potential out there to fully utilize everything we're building very quickly.

是的，他們會或多或少地使用全部容量，馬特。因此，我們有潛力迅速充分利用我們正在建立的一切。

That's great. All right. Secondly is on the O&M revs. There was a pretty nice sequential increase there. I don't know if I missed it in your prepared remarks, but can you talk about if there was one or multiple incremental wins there?

那太棒了。好的。其次是關於 O&M 轉速。那裡有一個相當不錯的連續增長。我不知道我是否錯過了您準備好的發言，但您能否談談那裡是否有一個或多個漸進式勝利？

And any color on the business for the rest of the year?

今年剩餘時間的業務狀況如何？

I mean, one of the projects that we had -- that we have -- we had negotiated a change in terms of the contract for 24/7 operation. I think that favorably impacted the revenues for that project. And then just incremental cost increases in some of the other projects. There weren't any big projects or a number of small projects that we put online. I think it's just a matter of revenue growth in a number of projects -- in a number of existing contracts, I should say, not projects.

我的意思是，我們曾經就其中一個專案——全天候營運的合約條款進行了協商變更。我認為這對該項目的收入產生了積極影響。然後其他一些項目的成本也隨之增加。我們上線的沒有大項目，只有一些小項目。我認為這只是一些專案收入成長的問題——我應該說是一些現有合約的收入成長，而不是專案收入成長的問題。

Yes, contracts.

是的，合約。

Okay. Two more quick ones. One is Hawaii. I think in the past, you talked about waiting on some permits. Are we still waiting on the same permits?

好的。再來兩個快的。一個是夏威夷。我想過去您曾談到等待一些許可證。我們還在等待相同的許可證嗎？

Or what is remaining before we've got the green light?

或者說，在我們獲得綠燈之前，還剩下什麼？

Well, so there's two big things -- two big permitting issues at this point. I'll give you a little bit more detail. So there's the archeological permit that we need for the site. And we always expected that, that was going to take a long time to get. We had to do studies to ensure that we weren't going to damage any historical artifacts or areas on the site or there weren't any ancient grades or anything like that on the site.

嗯，目前有兩件大事——兩個重大許可問題。我會給你更多細節。所以我們需要該遺址的考古許可證。我們一直預料到，這將需要很長時間才能實現。我們必須進行研究，以確保我們不會損壞遺址上的任何歷史文物或區域，或遺址上沒有任何古代等級或類似的東西。

So those studies have been done, and we're just working its way through the regulator and the approval process. So we always knew that was going to take a while, and that's kind of what we've always talked about being the critical path on the permits. The second thing, I think that's very important is now that the design is essentially finished, we have to submit that to the health department there to get final approval for the water supply. And that could take some time. It may go quickly.

這些研究已經完成，我們正努力通過監管機構和審批程序。所以我們一直都知道這需要一段時間，這就是我們一直在談論的許可證的關鍵路徑。第二件事，我認為非常重要的一點是，現在設計基本上完成，我們必須將其提交給那裡的衛生部門以獲得供水的最終批准。這可能需要一些時間。它可能很快就會過去。

I couldn't really tell you, Matt. But I mean, we haven't been to the point that we could do that until we finish the design, which is going to happen, I think, in the next month or two.

我真的無法告訴你，馬特。但我的意思是，在我們完成設計之前，我們還沒有達到可以做到這一點的程度，我認為這將在未來一兩個月內完成。

Okay. All right. Great. Lastly is the good old Bahamas receivable. I think it seems to be kind of holding the line, but is there any additional color from the government there?

好的。好的。偉大的。最後是古老的巴哈馬應收帳款。我認為這似乎是在堅持底線，但政府方面有其他說法嗎？

Yes. I mentioned earlier when John asked the question. Although it's not reflected in the Q, we had some progress since the end of the quarter. We have an understanding with the government that they're going to make some scheduled payments there. And we're positive about the outlook for reducing that over the next month.

是的。當約翰問這個問題時我之前提到過。雖然這沒有反映在 Q 中，但自本季末以來我們取得了一些進展。我們與政府達成諒解，他們將在那裡進行一些定期付款。我們對下個月減少這一數字的前景持樂觀態度。

This has never been an issue with them as far as whether or not we throw the money back. I mean, they're very with their position that yes, they're going to pay. They don't have a problem with the invoices or anything. So -- I mean, this has been their situation with us for a number of years.

至於我們是否退還這筆錢，這對他們來說從來都不是問題。我的意思是，他們非常堅持自己的立場，是的，他們會付出代價。他們對發票或其他東西都沒有問題。所以——我的意思是，多年來他們和我們的情況一直是如此。

I'm sorry, I missed that comment earlier. The last -- I'll squeeze one more quick one in. So it's -- you've got this war chest of cash. You are about to enter a period where your cash generation may be the strongest in your company's history, right? You've also got cash coming in the door from Bahamas.

抱歉，我之前錯過了那則評論。最後——我再快速說一點。所以——你已經擁有這筆現金了。您即將進入公司歷史上現金創造能力最強的時期，對嗎？你還會收到來自巴哈馬的現金。

So -- I mean, your cash generation is going to be pretty darn strong for the next several years. I know you've been looking at some M&A, but it seems to me like you could probably balance multiple capital allocation moves on a go-forward basis. Any thoughts around that?

所以——我的意思是，未來幾年你的現金創造能力將會非常強大。我知道您一直在關註一些併購，但在我看來，您可能可以在未來平衡多項資本配置舉措。對此有什麼想法嗎？

Well, I mean, I'd say right now, we are actively looking at a couple of interesting M&A targets. And I can't really say how that's going to work out, Matt, but I mean, they'd be great additions to the company. So it's -- we're not just sort of generally looking. I mean, we do have some specific targets in mind, and we've had some discussions. Beyond that, I mean, there is an appetite or beginning to be an appetite in the US.

嗯，我的意思是，我想說現在我們正在積極尋找幾個有趣的併購目標。馬特，我真的無法說出這會有什麼結果，但我的意思是，他們會為公司帶來很大的幫助。所以——我們不只是進行一般性的觀察。我的意思是，我們確實有一些具體的目標，我們已經進行了一些討論。除此之外，我的意思是，美國對此有需求，或開始有需求。

for these 3P type projects to address some of the water shortages in the Southwest, in Texas, and we are exploring those types of opportunities as well, which with that cash in the bank, that -- I mean, in my view, that gives us a leg up on some other competitors that may not be in that position because these are longer-term capital investments in public-private partnership type projects. So we are well aware that we need to put that to work. And every day, I'm evaluating ways to do that and looking at potential M&A-type deals. So we raised the dividend last quarter, which hopefully everybody appreciates. And if we continue to generate high levels of cash from operations, then we're always reevaluating what we can do to that to return that to the shareholders.

這些 3P 類型的項目可以解決德克薩斯州西南部的一些水資源短缺問題，我們也在探索這些類型的機會，有了銀行里的現金，我認為，這可以讓我們比其他一些可能沒有這種優勢的競爭對手更有優勢，因為這些都是對公私合作類型項目的長期資本投資。因此，我們非常清楚我們需要將其付諸實踐。我每天都在評估實現這一目標的方法並尋找潛在的併購類交易。因此，我們上個季度提高了股息，希望大家能理解。如果我們繼續從營運中產生大量現金，那麼我們就會一直重新評估我們可以做些什麼來回報股東。

All right. At this time, this concludes our question-and-answer session. I would like to turn the call back over to Mr. McTaggart. Sir, please go ahead.

好的。至此，我們的問答環節就結束了。我想把電話轉回麥克塔格特先生。先生，請繼續。

Thanks, Steve. Just thank everybody again for joining us today to discuss our results, and we certainly look forward to speaking with you again to go over our third quarter results in November. Thanks, everybody.

謝謝，史蒂夫。再次感謝大家今天加入我們討論我們的業績，我們當然期待著 11 月份再次與您交談，討論我們的第三季業績。謝謝大家。

Thank you. Before we conclude today's call, I would like to provide the company's safe harbor statement that includes caution regarding the forward-looking statements made during this -- 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 revenues, future plans, objectives, expectations and events, assumptions and estimates. Forward-looking statements can be identified by the use of words or phrase 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 industries and market related to its business.

謝謝。在我們結束今天的電話會議之前，我想提供公司的安全港聲明，其中包括對今天電話會議期間所作的前瞻性陳述的警告。我們在本次電話會議中提供的資訊包括《1995 年私人證券訴訟改革法案》所定義的前瞻性陳述，包括但不限於有關公司未來收入、未來計劃、目標、預期和事件、假設和估計的陳述。前瞻性陳述可以透過使用通常包含相信、估計、預測、打算、期望、應該、將或類似表達的詞語或短語來識別。非歷史事實的陳述是基於公司對其業務以及與其業務相關的行業和市場的當前預期、信念、假設、估計、預測和預期。

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. Actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Factors that could 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 condition of each country in which we conduct or plan to conduct business, our relationship with the government entities and other customers we serve, regulatory matters, including resolution of negotiation for the renewal of our retail license of Grand Cayman, our ability to successfully enter new markets and various other risks as detailed in the company's periodic report filings with Securities and Exchange Commission, SEC. For more information about risks and uncertainties associated with the company's business, please refer to the Management Discussion and Analysis of Financial Condition, our 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-K and quarterly report for Form 10-Q. Any forward-looking statements made during the conference call speaks as of today's date.

本次電話會議中所做的任何前瞻性陳述均不保證未來的業績，並涉及某些難以預測的風險、不確定性和假設。實際結果可能與此類前瞻性陳述所表達的內容有重大差異。可能導致或造成此類差異的因素包括但不限於：我們服務地區的旅遊和天氣狀況、我們開展或計劃開展業務的每個國家的經濟、政治和社會狀況、我們與政府實體和我們服務的其他客戶的關係、監管事項（包括解決續簽大開曼島零售許可證的談判）、我們成功進入新市場的能力以及公司向美國證券交易委員會的定期報告 (SEC) 提交的其他定期報告。有關公司業務的風險和不確定性的更多信息，請參閱公司向美國證券交易委員會提交的文件中“管理層對財務狀況的討論和分析”和“經營成果和風險因素”部分，包括但不限於 10-K 表年度報告和 10-Q 表季度報告。電話會議期間所做的任何前瞻性陳述均截至今日有效。

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 are required by the law. I would like to remind everyone this call is available for replay starting later this evening. Please refer to yesterday's earnings release for dial-in replay instructions available via the company website at cwco.com.

本公司明確表示不承擔任何義務或承諾更新或修改電話會議期間所作的任何前瞻性陳述，以反映其對此預期的任何變化或任何前瞻性陳述所依據的事件、條件或情況的任何變化，除非法律另有規定。我想提醒大家，今晚晚點開始可以重播此通話。請參閱昨天的收益報告，以了解可透過公司網站 cwco.com 取得的撥入重播說明。

Thank you for attending today's presentation. This concludes the conference call. You may now disconnect. Thank you.

感謝您參加今天的演講。電話會議到此結束。您現在可以斷開連線。謝謝。