GWR GLOBAL WATER RESOURCES CORP. REPORTS FIRST QUARTER 2011 RESULTS

PHOENIX, AZ, May 11 /CNW/ - GWR Global Water Resources Corp. (the "Company") (TSX: GWR) today reported its financial results for the first quarter ended March 31, 2011. This is the first full quarter interim period for the Company since its initial public offering ("IPO") of common shares on December 30, 2010 and its related acquisition of an approximate 48.1% interest in Global Water Resources, Inc. ("Global Water").

Global Water is a leading water resource management and technology company based in Phoenix, Arizona that owns and operates water, wastewater and recycled water utilities, and provides data and water management services through its unique, award winning platform, FATHOM™ Utility-to-Utility (U2U™) Solutions.  The Company accounts for its investment in Global Water using the equity method of accounting; therefore the financial information of Global Water is not consolidated with that of the Company. All references in this press release to consolidated financial information refer to the accounts of Global Water and its subsidiaries on a consolidated basis and, unless otherwise indicated, all amounts are in US dollars.

Highlights for First Quarter 2011:

  • The Company closed the over-allotment option in January 2011 pursuant to the IPO underwriting agreement which resulted in additional gross proceeds of C$4.3 million, increasing total gross IPO proceeds to C$65.7 million
  • Global Water completed the FATHOM™ implementation for the City of Torrance, CA
  • Global Water contracted with the City of Grass Valley, CA for the procurement of all three FATHOM™ product lines and began executing on the related contract implementations
  • Global Water reduced debt by $7.9 million and renegotiated a new $5 million revolving line of credit borrowing facility
  • Global Water increased the number of active service connections of its water utilities business by an annualized growth rate of 5.7%
  • Global Water produced EBITDA of $3.2 million, which is effectively equivalent to $0.18 per common share of the Company
  • Global Water brought successful closure to three important contractual disputes

"We hit the ground running in the first quarter of 2011," said Trevor Hill, President and CEO. "We launched our marketing campaign for FATHOM™ in California and formalized our sales process to make it replicable and scalable to new regions.  We also launched our FATHOM™ product development group with an aim to streamline our offerings and continuously develop new products for our existing and new customers.  We believe these actions enable a broader product and service offering which enhances our intellectual property and gives us clear sustainable competitive advantages in the emerging Smart Grid for Water market place.  Further, we are in full execution mode in our regulated utilities seeing both increased organic growth this quarter and continued efficiencies in our operations."

Consolidated revenues for the three months ended March 31, 2011 totalled $9.5 million compared to $6.8 million for the same period in 2010. Excluding revenues related to the sale of stored water credits, which will not be recurring, consolidated revenues increased 107% to $9.5 million for the three months ended March 31, 2011 from $4.6 million for the three months ended March 31, 2010.

Consolidated net loss for the three months ended March 31, 2011 totalled $1.0 million compared with a net loss of $56.6 million for the same period in 2010.  The net loss reported for the three months ended March 31, 2010 primarily reflects the impact of a non-recurring charge resulting from the outcome of the 2010 Regulatory Rate Decision (defined below). See footnote 3 in Global Water's Consolidated Financial Statements for December 31, 2010 for a more complete discussion of this non-recurring charge.

Adjusted EBITDA for the three months ended March 31, 2011 totalled $3.2 million compared to $1.6 million for the same period in 2010. The improvement in Adjusted EBITDA during the period was primarily driven by the combination of growth in the FATHOM™ business, the higher rates Global Water can now charge to its water utility customers pursuant to the 2010 Regulatory Rate Decision, organic growth and the income generated from the sale of certain contractual rights.

The common stock of Global Water is not publically traded.  However, management believes that the net earnings (loss) per share and EBITDA per share data may be useful to some users of the financial statements as those users make decisions related to the Company, which holds an approximate 48.1% interest in Global Water.  Each share of Global Water is approximately equivalent to 100 shares of the Company.  Therefore, Global Water's net loss and EBITDA per share in terms of the Company's common shares is approximately $(0.06) per share and $0.18 per share, respectively.  See computation in the attached schedules to this earnings release.  EBITDA and Adjusted EBITDA do not have standardized meanings prescribed by U.S. GAAP.   See "Cautionary Note Regarding Non-GAAP Measures" below.

During the three months ended March 31, 2011, Global Water paid down its $10.2 million line of credit balance that had been outstanding as of December 31, 2010 and entered into a new revolving line of credit arrangement, providing Global Water a working capital borrowing facility of up to $5.0 million, with a $250,000 stand-by letter of credit sublimit. The line of credit matures in March 2012 and contains an interest option of Prime plus 0.50% or LIBOR plus 3.00%. Borrowings under the new revolving line of credit totalled $1.55 million as of March 31, 2011.

In addition, on March 31, 2011, Global Water made its scheduled payment of $4.75 million in connection with the 2006 West Maricopa Combine acquisition.  This payment was funded with cash from operations as well as borrowings under the new revolving line of credit discussed above.

FATHOM™ and Other Unregulated Business

Unregulated revenues increased significantly during the three months ended March 31, 2011 compared to the same period in 2010 due to the implementation and recurring revenue from customers of Global Water's unregulated business, FATHOM™, where revenues increased $2.1 million, from $0.1 million for the three months ended March 31, 2010 to $2.2 million for the three months ended March 31, 2011. Approximately $1.9 million of FATHOM™ revenues recognized during the three months ended March 31, 2011 related to implementations.

In February 2011, Global Water contracted with the City of Grass Valley, California for the procurement of all three FATHOM™ product lines: advanced metering infrastructure ("AMI"), customer service ("CIS") and Asset Management.   With the addition of Grass Valley, Global Water has now signed 10 long-term contracts with six utilities in two states for the provision of FATHOM™ services. In addition, during the three months ended March 31, 2011, Global Water completed the CIS implementation for the City of Torrance, California and also contracted a change order with the City of Covina, California for the procurement of approximately $241,000 in additional AMI installation services and equipment.

"The cities we are working with all want the technologies that we are offering.  The challenge in this business is helping them figure out how they can get it and then moving it through a complex decision making process.  Our business and strategic planning is focused on shortening this sales cycle and assisting cities through their own financing and internal approval processes.  There is no doubt that the demand for FATHOM™ is growing and that the drivers for this business, which are water scarcity and municipal budget constraint, continue to become stronger," added Hill.

Additionally, Global Water recognized $1.1 million in revenue related to the sale of certain contractual rights in its unregulated business.

Water Utilities Business

Revenues from the regulated water utilities business for the three months ended March 31, 2011 increased $1.7 million, or 39%, from $4.5 million for the same period in 2010 to $6.2 million in 2011.   As discussed in previous filings, on September 15, 2010, our primary regulator, the Arizona Corporation Commission ("ACC") issued its rate decision for the rate cases Global Water filed in 2009 for six of its utility companies (the "2010 Regulatory Rate Decision").  The ACC established new rates for the utilities retroactive to August 1, 2010, including a phase-in of rates for one of the utilities on August 1, 2010, January 1, 2011 and January 1, 2012.

"Our regulated water utilities business is growing its connection base as a function of new housing starts and an acceleration of the uptake of foreclosed homes so far in 2011.  While foreclosure rates in our service territories remain relatively high, they have been steadily declining in recent months and in April we hit our lowest level of foreclosures at 8.4% since mid 2008.  At its worst, the level had approached 12%.  We anticipate that revenue growth in our water utilities business will be primarily fuelled by rate increases in 2011 and 2012, but will also benefit from organic growth, which is tied to residential housing starts and foreclosure uptake driven by an improving economy," stated Hill.

While water utility revenue growth during the first quarter of 2011 was primarily driven by the rate increases provided by the 2010 Regulatory Rate Decision, the water utilities business also benefited from an increase in the number of active service connections. Global Water's total service connections, including active service connections and vacant home connections, increased from 42,678 as of December 31, 2010 to 42,731 as of March 31, 2011. Global Water's active service connections increased from 38,459 as of December 31, 2010 to 39,011 as of March 31, 2011, representing a 5.7% annualized growth rate for 2011.  By comparison, active service connections as of March 31, 2010 totalled 38,492.

As of April 30, 2011, active service connections had increased to 39,148 or a 5.4% annualized growth rate for 2011. "We remain encouraged by the increasing organic growth in 2011 and even more so by the rate at which foreclosed homes are being taken up by the market in our regions," said Hill.

Management is encouraged by the 2011 growth rate increase but there can be no assurance that this strong growth rate will continue at this rate consistently throughout 2011.

Business Outlook

"We continue to see strong traction and growing interest within the municipal market for our FATHOM™ solutions.  Our investments to enhance our marketing and sales efforts are having the desired result.  Feedback from the market suggests that the need for municipalities to manage their water resources more closely and drive costs out of their operations has become acute," stated Hill.

Global Water has also built a significant pipeline of municipal opportunities which management believes will result in additional sales within the fiscal year ending December 31, 2011. Currently, there are numerous municipalities in the advanced stages of contract negotiation with Global Water which management believes will close within 2011.  For these opportunities, Global Water has clear visibility into the decision process or has responded to a request for proposal or the request for proposals is being issued and Global Water has met with the decision makers. If completed, Global Water expects that the length of the contract term and amount of the implementation fees and per account recurring fees for these prospective contracts will be consistent with Global Water's existing FATHOM™ contracts. The favorable rate of adoption by the market for FATHOM™ is progressing as we expected but there can be no assurance that all of the advanced stage contracts will be consummated.

"I am hopeful that the strong organic growth experienced in our regulated utilities so far in 2011 will continue.  This kind of growth coupled with our new rates yield improved margins and cash flows and ultimately directly impacts earning per share.  Further, our water utilities business generally experiences higher demand in the summer as warmer temperatures and decreased precipitation tend to increase water usage by customers for irrigation and other outdoor uses. Weather that is cooler or wetter than average generally suppresses customer water demand and can have a downward effect on Global Water's revenue and operating income. The second and third quarters of the year are generally those in which water usage revenue in particular is the highest seasonally. The first quarter of each year generally is the quarter with the lowest level of water usage," concluded Hill.

The complete financial statements and management's discussion and analysis for the Company and Global Water will be available May 12, 2011 on the Company's SEDAR profile at www.sedar.com and on the Company's website at www.gwresources.com.

Conference Call and Webcast Information
Global Water will conduct a conference call on May 12, 2011, at 1:00 p.m. ET. You may access the call by dialing (647) 427‐7450 or toll free at 1 (888) 231‐8191. Shortly after the conclusion of the call, a replay will be available by dialing (416) 849‐0833 or 1 (800) 642‐1687. The passcode is 64721142. The replay will expire at midnight (ET) on May 18, 2011. A copy of the transcript and a live audio recording of the call, once available, will be archived at www.gwresources.com.

Cautionary Note Regarding ForwardLooking Statements
This press release includes certain forwardlooking statements. These forwardlooking statements include, but are not limited to our plans, objectives, expectations and intentions, and other statements contained in this release that are not historical facts as well as statements identified by words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", "aims", "focuses" or the negative of these terms, or other words of similar meaning. These statements are based on our current beliefs or expectations and are inherently subject to significant uncertainties and changes in circumstances, many of which are beyond our control. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors and other factors discussed under the heading "Risk Factors" in the Company's most recent annual information form, which is available on the Company's SEDAR profile at www.sedar.com. We undertake no obligation to publicly update any forwardlooking statement, except as required by law, whether as a result of new information, future developments or otherwise.

Cautionary Note Regarding NonGAAP Measures
This press release contains references to "EBITDA" and "Adjusted EBITDA". EBITDA is defined for the purposes of this press release as income or loss before interest, income taxes, depreciation and amortization. Adjusted EBITDA further excludes certain nonoperating, generally nonrecurring, activities which Global Water removes from net income (loss) to facilitate operating performance comparisons including amounts related to infrastructure coordination and financing agreement revenues and stored water credits as these amounts will not be recurring on a goforward basis. Management believes that EBITDA and Adjusted EBITDA are useful supplemental measures of Global Water's operating performance. However, EBITDA and Adjusted EBITDA are not recognized earnings measures under U.S. GAAP or Canadian GAAP and do not have standardized meanings prescribed by U.S. GAAP or Canadian GAAP. Therefore, EBITDA and Adjusted EBITDA may not be comparable to similar measures presented by other issuers. EBITDA and Adjusted EBITDA should not be construed as alternatives to net income or loss. See "EBITDA" and "Adjusted EBITDA" in the attached schedules for a reconciliation of EBITDA and Adjusted EBITDA to net loss, the nearest comparable U.S. GAAP measure.

GWR GLOBAL WATER RESOURCES CORP.
BALANCE SHEETS
As of March 31, 2011 and December 31, 2010
(Unaudited)

       
    March 31,
2011
  December 31,
2010
    (in thousands of US$, except share data)
ASSETS        
CURRENT ASSETS:        
  Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $                  -   $                  -
  Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   37   -
    Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   37   -
  Equity method investment . . . . . . . . . . . . . . . . . . . . . . . . . . . .   55,155   51,632
TOTAL  ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $           55,192   $           51,632
LIABILITIES AND SHAREHOLDERS' EQUITY        
LIABILITIES:        
  Accounts payable and accrued expenses . . . . . . . . . . . . . . . . .   $                  96   $                 17
  Due to related party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   67   -
  Other noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .   20   17
    Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   183   34
SHAREHOLDERS' EQUITY:        
  Common stock, unlimited shares authorized, 8,754,612 and 8,185,001 shares outstanding at March 31, 2011 and December 31, 2010, respectively . . . . . . . . . . . . . . . . . .   55,670   51,659
  Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (661)   (61)
    Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . .   55,009   51,598
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY . . .   $           55,192   $           51,632

   

GWR GLOBAL WATER RESOURCES CORP.
STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 2011
(Unaudited)
    Three Months Ended
March 31, 2011
 
       
    (in thousands of (US$,
except share and per
share data)
 
LOSS FROM EQUITY INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $                            (488)  
OPERATING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   112  
OPERATING LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (600)  
LOSS BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (600)  
INCOME TAX EXPENSE (BENEFIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -  
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $                            (600)  
       
WEIGHTED AVERAGE SHARES:      
  Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8,583,729  
  Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8,583,729  
       
LOSS PER SHARE:      
  Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $                           (0.07)  
  Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $                           (0.07)  

   

GLOBAL WATER RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
As of March 31, 2011 and December 31, 2010
(Unaudited)
       
    March 31, 2011   December 31, 2010
    (in thousands of US$, except share data)
ASSETS        
PROPERTY, PLANT AND EQUIPMENT:        
  Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $      314,245   $      312,841
  Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (43,174)   (40,348)
    Net property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   271,071   272,493
CURRENT ASSETS:        
  Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   815   10,163
  Accounts receivable - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,605   1,746
  Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   250   270
  Accrued revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,912   528
  Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   579   651
  Deferred tax asset - current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,257   1,244
    Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6,418   14,602
OTHER ASSETS:        
  Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13,082   13,082
  Intangible assets - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,545   1,545
  Regulatory assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   412   406
  Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   65   69
  Bond service fund and other restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9,247   9,225
  Debt issuance costs - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3,154   3,192
  Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27,485   26,848
    Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   54,990   54,367
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $        332,479   $        341,462
LIABILITIES AND EQUITY        
CURRENT LIABILITIES:        
  Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $          3,514   $          3,325
  Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5,915   5,371
  Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27   596
  Accrued acquisition payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11,163   5,114
  Customer and meter deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,045   1,969
  Long-term debt - current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3,020   11,702
    Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25,684   28,077
NONCURRENT LIABILITIES:        
  Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   118,145   117,361
  Advances in aid of construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   105,797   104,043
  Contributions in aid of construction - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   63,104   63,360
  Acquisition liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4,688   15,799
  Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   459   1,204
    Total noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   292,193   301,767
    Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   317,877   329,844
SHAREHOLDERS' EQUITY:        
  Common stock, $0.01 par value, 1,000,000 shares authorized, 182,050 and 176,354 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively   2   2
  Paid in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   55,700   51,679
  Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (41,100)   (40,063)
    Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14,602   11,618
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $        332,479   $        341,462

   

GLOBAL WATER RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2011 and 2010
(Unaudited)
    Three Months Ended March 31,
    2011   2010
    (in thousands of US$)
REVENUES:        
  Water services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $          3,424   $          2,804
  Wastewater and recycled water services . . . . . . . . . . . . . . . . . . . . .   2,771   1,660
  Sale of stored water credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   2,151
  Unregulated revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3,353   168
    Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9,548   6,783
OPERATING EXPENSES:        
  Operations and maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3,457   1,298
  Cost of stored water credits sold . . . . . . . . . . . . . . . . . . . . . . . . . . .    -   2,008
  General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,892   1,799
  Regulatory provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   55,169
  Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,612   (75)
    Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8,961   60,199
  OPERATING INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . . . . . . . .   587   (53,416)
OPERATING INCOME (EXPENSE):        
  Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2   -
  Interest expense, net of capitalized interest . . . . . . . . . . . . . . . . . . .   (2,316)   (3,274)
  Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    40   26
    Total other income (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (2,274)   (3,248)
LOSS BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . .   (1,687)   (56,664)
INCOME TAX BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (650)   (74)
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $       (1,037)   $     (56,590)



Net loss and EBITDA per share information for the three months ended March 31, 2011
(amounts in thousands of US$, except share and per share data):

   

             Net Loss         EBITDA
                        
Amount for the three months ended March 31, 2011. . . . . . . . . .   $     (1,037)   $          3,239
Weighted average number of Global Water shares outstanding during the three months ended March 31, 2011. . . . . . . . . . . . . . . .   180,341   180,341
Global Water per share amount  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $    (5.75)   $      17.96
                         

   

GLOBAL WATER RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2011 and the Quarters of the Year Ended December 31, 2010
(Unaudited)
    2011   2010
    Q1   Q1 Q2 Q3 Q4
    (in thousands of US$, except active service connections)
REVENUES:              
  Water services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $            3,424   $               2,804 $               3,550 $               4,810 $               3,836
  Wastewater and recycled water services . . . . . . . . . . . . . . . . . . . . . . . . .   2,771   1,660 1,708 2,076 2,219
  Sale of stored water credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   2,151 - - -
  Unregulated revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3,353   168 125 259 3,160
    Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9,548   6,783 5,383 7,145 9,215
OPERATING EXPENSES:              
  Operations and maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3,457   1,298 1,683 1,980 3,681
  Cost of stored water credits sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   2,008 - - -
  General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,892   1,799 1,668 1,817 1,778
  Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   - - 23,985 -
  Regulatory provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   55,169 - - -
  Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,612   (75) 2,288 2,640 2,619
    Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8,961   60,199 5,639 30,422 8,078
  OPERATING INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   587   (53,416) (256) (23,277) 1,137
OPERATING INCOME (EXPENSE):              
  Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2   - - - -
  Interest expense, net of capitalized interest . . . . . . . . . . . . . . . . . . . . . . .   (2,316)   (3,274) (3,200) (3,293) (3,428)
  Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   40   26 34 8 51
    Total other income (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (2,274)   (3,248) (3,166) (3,285) (3,377)
LOSS BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (1,687)   (56,664) (3,422) (26,562) (2,240)
INCOME TAX BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (650)   (74) (843) (323) (2,607)
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $          (1,037)   $          (56,590) $          (2,579) $          (26,239) $                 367
  Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (650)   (74) (843) (323) (2,607)
  Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (2)   - - - -
  Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,316   3,274 3,200 3,293 3,428
  Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,612   (75) 2,288 2,640 2,619
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $            3,239   $          (53,465) $          2,066 $          (20,629) $              3,807
  Sale of stored water credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   (2,151) - - -
  Cost of stored water credits sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   2,008 - - -
  Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   - - 23,985 -
  Regulatory provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   55,169 - - -
  Other regulatory and governmental fees . . . . . . . . . . . . . . . . . . . . . . . . . .   -   23 91 133 -
  Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   (26) (34) (8) (51)
ADJUSTED EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $            3,239   $               1,558 $               2,123 $               3,481 $               3,756
Active service connections at period end . . . . . . . . . . . . . . . . . . . . . . . . . . .   39,011   38,492 38,665 38,923 38,459

   

GLOBAL WATER RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2011 and 2010
(Unaudited)
    Three Months Ended March 31,
    2011   2010
    (in thousands of US$)
CASH FLOWS FROM OPERATING ACTIVITIES:        
  Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $       (1,037)   $     (56,590)
  Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
    Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   162   8
    Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,612   (75)
    Amortization of deferred debt issuance costs and discounts . . . . . . .   78   93
    Regulatory provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   55,169
    Loss on disposal of fixed and intangible assets . . . . . . . . . . . . . . . . .   24   -
    Gain on advance in aid of construction purchase . . . . . . . . . . . . . . .   (22)   (24)
    Gain on settlement of acquisition liability . . . . . . . . . . . . . . . . . . . . .   (80)   -
    Imputed interest expense on deferred payments for acquisitions - net of cash paid . . . .   (654)   (845)
    Provision for doubtful accounts receivable . . . . . . . . . . . . . . . . . . . .   32   (15)
    Deferred income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (650)   (74)
    Changes in assets and liabilities - excluding effects of acquisitions:        
    Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   109   169
    Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (1,293)   (60)
    Stored water credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -   2,005
    Accounts payable and other current liabilities . . . . . . . . . . . . . . . .   402   2,263
    Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (6)   (49)
    Other noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   440   30
    Deferred stored water credits revenue . . . . . . . . . . . . . . . . . . . . . .   -   (2,151)
      Net cash provided by (used in) operating activities . . . . . . . . . .   117   (146)
CASH FLOWS FROM INVESTING ACTIVITIES:        
    Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (1,606)   (1,153)
    Proceeds from disposal of fixed and intangible assets . . . . . . . . . . . . .   26   -
    Deposits of restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (22)   (16)
    Deposits received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5   5
    Acquisition of utilities - deferred acquisition payments . . . . . . . . . . . .   (4,381)   (2,043)
      Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . . . . . . .   (5,978)   (3,207)
CASH FLOWS FROM FINANCING ACTIVITIES:        
    Loan borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,364   3,297
    Loan repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (10,267)   (2,280)
    Related-party loan proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     -   2,300
    Debt issuance costs paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (34)   (189)
    Proceeds from the sale of stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4,011   -
    Advances in aid of construction, net of refunds paid. . . . . . . . . . . . . . .   439   261
    Contributions in aid of construction under ICFA and other agreements    -   71
      Net cash provided by (used in) financing activities . . . . . . . . . . . . . .   (3,487)   3,460
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . .   (9,348)   107
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD . . . .   10,163   6
CASH AND CASH EQUIVALENTS - END OF PERIOD . . . . . . . . . . .   $              815   $              113


 

 

For further information:

Ross Marshall
Investor Relations
Tel: 416-815-0700 ext. 238
Email: rmarshall@equicomgroup.com
www.gwresources.com
www.gwfathom.com

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