AquaVenture Holdings Limited (WAAS) Reports In-Line Q2 EPS, Miss on Revenues; Offers FY17 Revenue Outlook Below Consensus

AquaVenture Holdings Limited (NYSE: WAAS) reported Q2 EPS of ($0.21), in-line with the analyst estimate of ($0.21). Revenue for the quarter came in at $29.9 million versus the consensus estimate of $30.91 million.

2017 Outlook

When 2017 guidance was originally developed, the Company incorporated projected results from unannounced acquisitions. However, due to the episodic nature of the Company\'s acquisition activity and the unpredictability of which deals will be completed and when, the Company has decided to change its guidance policy to focus on results generated from its existing asset base. Future acquisitions will add upside to this base as they are executed.

Therefore, excluding unannounced deals, the full year 2017 outlook was revised to be:

• Revenues expected between $119 and $122 million;
• Adjusted EBITDA expected between $34 and $37 million;
• Cash collected on the design and construction contract acquired in our Peru acquisition continues to be projected at $8.1 million annually (approximately $2 million per quarter); and
• Adjusted EBITDA plus the cash collected on the design and construction contract acquired in our Peru acquisition expected between $42 and $45 million.

"With a robust pipeline and increased capacity in which to fund acquisitions, we anticipate our transaction activity will provide upside to our guidance. We remain very bullish on the opportunities within our pipeline," said Doug Brown.

GUIDANCE:

AquaVenture Holdings Limited sees FY2017 revenue of $119-122 million, versus the consensus of $128.9 million.

Highlights

• Total revenues for the three months ended June 30, 2017 were $29.9 million compared to $28.3 million in the prior year period, reflecting a 5.8% increase. On a segment basis, revenues for Seven Seas Water and Quench increased 9.1% and 2.7%, respectively, over the prior year period.
• Net loss for the three months ended June 30, 2017 was $5.5 million, compared to net loss of $4.2 million in the prior year period.
• Diluted loss per share for the three months ended June 30, 2017 was $(0.21). There were no ordinary shares outstanding prior to October 6, 2016. Therefore, no diluted loss per share information is available for the three months ended June 30, 2016.
• Adjusted EBITDA of $9.4 million for the three months ended June 30, 2017 was flat compared to the prior year period. Adjusted EBITDA Margin for the current quarter was 31.4%, compared to 33.1% in the prior year period.
• Adjusted EBITDA plus cash collected on the design and construction contract acquired in our Peru acquisition was $11.4 million for the three months ended June 30, 2017, compared to $9.4 million in the prior year period, an increase of 22.0%.
• Quench completed its first post-IPO acquisitions, acquiring substantially all the assets of Pure Water Innovations in June and Quench Water Canada in August. These asset acquisitions add approximately 2,400 units to Quench\'s installed asset base, while increasing customer density in certain areas and extending its geographic reach.
• On August 4, 2017, we completed a $150 million debt financing with a four-year, non-amortizing loan. Total loan proceeds are expected to be approximately $147 million, net of debt financing and origination fees, of which the Company used approximately $100 million to repay in full the outstanding principal on existing Trinidad, USVI, Curacao and Quench loans.
• Seven Seas Water finalized amendments to its BVI water purchase agreement and BVI loan agreement on August 4, 2017.
• The Company revised its guidance to focus on results generated from its existing asset base. Future acquisitions will provide upside to this guidance.

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

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