AquaVenture Holdings Limited (WAAS) Tops Q4 EPS by 2c, Revenues Beat; Offers FY19 EPS Mid-Point Guidance Below Consensus

AquaVenture Holdings Limited (NYSE: WAAS) reported Q4 EPS of ($0.25), $0.02 better than the analyst estimate of ($0.27). Revenue for the quarter came in at $41.8 million versus the consensus estimate of $38.72 million.

• Total revenues of $41.8 million reflected a 29.9% increase over the prior year period, comprised of 38.2% and 22.6% increases in the Seven Seas Water and Quench segments, respectively.
• Net loss of $6.7 million, or ($0.25) per share, compared to net loss of $6.3 million, or ($0.24) per share, in the prior year period.
• Adjusted EBITDA was $14.3 million, a 32.2% increase over the prior year period. Adjusted EBITDA Margin was 34.2%, an improvement of 60 basis points.
• Adjusted EBITDA plus principal collected on the Peru construction contract increased 29.9% to $15.6 million from $12.0 million in the prior year period.
• AquaVenture completed the strategic acquisitions of AUC on November 1, which is included in our Seven Seas Water segment, and Pure Health Solutions, Inc. (“PHSI”) on December 18, which is included in our Quench segment. In addition, Seven Seas Water entered into a 10-year water supply agreement with the Water Corporation of Anguilla, and Quench completed several smaller acquisitions during the quarter.
• AquaVenture accessed $150 million of incremental borrowings to fund acquisitions and reduced its interest rate.

Tony Ibarguen, AquaVenture’s President and Chief Executive Officer announced: “AquaVenture delivered another year of strong financial results highlighted by our ability to drive growth both organically and through M&A. We completed 11 transactions in 2018, including five in the fourth quarter. This success has been across both our Seven Seas Water and Quench platforms, and the fourth quarter’s results include the acquisitions of AUC and PHSI, our two largest acquisitions since we became a publicly traded company. AUC expands our offerings in the Seven Seas Water segment in the attractive wastewater treatment and water reuse businesses, and PHSI broadens both our direct and indirect sales channels within our Quench segment. During the quarter we also amended our senior secured credit agreement by increasing our borrowing capacity and reducing our interest rate. These amendments helped fund our fourth quarter acquisitions and support our future growth initiatives. In summary, we are very happy with what we were able to accomplish in 2018 as we continue to expand our water-as-a-service solutions to more customers, in more locations, and with a broader array of product offerings. Going forward, our primary focus will continue to be on growing internally generated cash flow and investing in strong, organic expansion, coupled with continued strategic M&A execution in the water-as-a-service applications of desalination, wastewater treatment and point-of-use purification. Our team brings great passion to our purpose of performing for our shareholders by creating clean water solutions for customers around the world.”

GUIDANCE:

AquaVenture Holdings Limited sees FY2019 revenue of $190-197 million, versus the consensus of $195.65 million.

• Adjusted EBITDA between $67 million and $72 million;
• Principal collected on the Peru construction contract is projected to be $5.3 million; and
• Adjusted EBITDA plus the principal collected on the Peru construction contract between $72 million and $77 million.

For earnings history and earnings-related data on AquaVenture Holdings Limited (WAAS) click here.

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