Good day and welcome to the Consolidated Water Company’s Second Quarter 2017 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. The information that will be 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 the word or phrases will, will likely result, are expected to, will continue, estimate, project, potential, believe, plan, anticipate, expect, intend or similar expressions and variations of such words. 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 the 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. Actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Important factors which may affect these actual outcomes and results include, without limitation, tourism and weather conditions in the areas the company serves; the economies of the U.S. and other countries in which the company conducts business; the company’s relationships with its government it serves; regulatory matters, including resolution of the negotiations for the renewal of the company’s retail license on the Grand Cayman; the company’s ability to successfully enter new markets, including Mexico, Asia and the United States; and other factors, including those risk factors set forth under Part 1, Item 1A, Risk Factors in the company’s annual report on Form 10-K. Any forward-looking statements made during this 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 this conference call to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statements is based, except as it may be required by law. I would now like to turn the conference over to Rick McTaggart, Chief Executive Officer and President. Please go ahead.

Thanks, Brian. Good morning, ladies and gentlemen and thank you for joining us today to review our second quarter 2017 results and to provide an update on business developments. With me this morning is David Sasnett, our CFO. Overall, our financial results for the second quarter reflected the consistent profitability of our core desalination operations. Our desalination business continued at a steady state with only slight variances compared to last year’s second quarter, even in light of recent contract renegotiations. Increased gross profit in our bulk segment was primarily due to higher incremental revenues in our Bahamas operations. This increase was offset by lower gross profit in retail and services. Retail experienced a 1% drop-off in volumes sold this past quarter and the higher maintenance cost and services was compared against the period in which we had a higher gross profit from the onetime refurbishment in 2016 of the desalination plant that we operated in the Cayman Islands. Manufacturing operations revenues dipped in the second quarter and continue to be cyclical. As noted in our press release we are beginning to see some stabilization in Aerex’ business, with farm orders increasing, providing better revenue visibility into year end. Beyond its existing business, we believe that we will be able to leverage Aerex’ extensive water and wastewater customer base to create attractive O&M opportunities in the Continental United States. Earnings from continuing operations in the second quarter were $1.7 million or $0.11 per share, inclusive of $885,000 in Rosarito development expenses. Excluding Rosarito, earnings from continuing operations would have been $2.6 million. The year-on-year decline from a similar period last year was due to several factors: a modest reduction in gross profit dollars due to lower revenues and a drop in other income that resulted from reduced earnings from our OC-BVI…

Thanks Rick and good morning everyone. Some of these numbers I will discuss have already been mentioned by Rick, but I will run through our highlights quickly here. Our total revenues for 2017 with the second quarter were $15.2 million, which is slightly below the $15.4 million we reported last year. Higher revenues are both segment and they show to partially offset revenue decreases in our other three segments. Gross profit for 2017 declined to $6.5 million, a slight decline from the $6.7 million we reported for the second quarter last year. This decline is consistent with a small decrease in our revenues. Our G&A expenses on a consolidated basis were $5 million, quite consistent with the $4.9 million we reported for the second quarter last year. The slight increase this year is due to incremental employee costs that were partially offset by a decrease in professional fees that we incurred. A big portion of the variance in our results for the second quarter of this year as compared to the second quarter last year was in the component of our income statement that we call in other income which is below the operating line. Net income for the second quarter last year was a little over 21 – excuse me for the second quarter of this year was little over $21,000, which was significantly less than the $404,000 we reported for the second quarter last year. This year-on-year decline resulted from $49,000 less in interest income for 2017 due to lower interest earning balances. And the loss that we reflected from our investment in OC-BVI about $38,000 this year as compared to income from our investment in OC-BVI of about $100,000 last year. Rick had already mentioned earlier that we had a non-recurring gain in 2016 of $273,000 from…

Thank you, David. In summary, second quarter results represented a steady performance of our core desalination operations. We see a pickup in our manufacturing segment orders which should favorably impact our financial results in the second half of the year. And our key development project Rosarito continues to move closer to the construction phase. Now, I would like to open up the call for questions.

Okay. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Gerry Sweeney with ROTH Capital. Please go ahead.

Hi, good morning, Dave and Rick how are you?

Good. How are you doing?

On Rosarito, it sounds like you are – you have a high degree of confidence that construction will start by year end, it sounds like there is movement on the – on a couple of key components the financing, right of ways, etcetera, what would potentially be out there, the pushback that started. And then also if – how long would it take for revenue to start hitting the income statement post start of construction?

On the first question I mean we have listed these conditions precedent, but we need to achieve I mean any one of them could delay it at this point. I know that as I mentioned the government has been making progress, putting together the guaranteed package, which is quite complex, hopefully that is more or less resolved by the end of the summer and that’s really the big one that is out of our control. I mean the thing is that the client is responsible for the seawater allocation permit that’s another one that they are responsible for that could be delayed. But other than that I mean everybody is very committed to moving a project to financial close and the financing institutions we had a big kickoff meeting in July and everybody seemed enthusiastic, but there are still a number of conditions that we need to meet.

Got it. And then how long would construction to sort of startup take?

3 years.

3 years, okay, got it. And then switching gears a little bit back to the Caribbean, volumes in Bahamas was a new plan or you are updating your plan and new I guess new contractor there recently with one of the facilities and is there an opportunity to see growth in the Bahamas that you could potentially that you are looking forward to similar to I am sorry opportunity to see some growth in the Bahamas similar to what you are seeing in Caymans increasing tourism etcetera?

Those contracts are more or less fixed quantity contracts and we see growth by them going to tender maybe on a new contractor or asking us to expand capacities at one of the plans there Nassau which we have done in the past. I mean we essentially doubled the capacity of the Blue Hills plant back in 2011. So the potential for growth in the Bahamas I think is different. We have a lower connection rate on their public utility there and the water and sewer corporation which is a government owned utility has been pressing to get more people connected up to the public utility a lot of people still use well water and maybe rainwater catchments and that sort of thing there. So there is some potential for that, it’s a much bigger population base of 200,000 people there. So that’s the type of the potential we see, not necessarily the tourism growth, but the connection rate.

Got it.

Gerry, I would like to point out we have expanded our Blue Hills plant there to meet additional demands of the Bahamian government. So in the future I mean if they do have an increased connection rate it would seem logical they would back to us ask for further expansion of the existing plants and the contracts we have with them. I mean that would be the most cost effective solution for them.

Got it, okay, that’s helpful. And then finally, it sounds like you are gaining a little bit more confidence and I know orders try to pretty quickly there, at some point are you going to be able to provide some backlog figures or even maybe some qualitative if you can provide even some qualitative views today as to how much of that return in contracts that you are seeing are returning activity or RFPs, etcetera, just so we get a better feel for how that’s going to trend for the next two to four quarters?

Gerry, this is David, I don’t think we will ever provide backlog information. I don’t think it’s necessarily indicative of what’s going to happen. Aerex receives their purchase orders literally [ph] just a month or two months before they expect some of this production to take place. So I don’t think providing backlog information will be particularly useful. And what we have seen with Aerex is we bought them, they lost orders from their biggest customer through no fault of their own and what we are seeing now is that we are seeing that this customer is starting to order again from Aerex, which is very encouraging. And we are very optimistic about the second half of the year. For Aerex we think it will be better than the first half. And Aerex is beginning to approach sales volumes that are more consistent with what we thought they would have when we bought them. They are quite back yet, but it’s been very encouraging. We have also decided to pursue some additional business for Aerex outside of what they have done traditionally. I mean we think it’s a great company. We have hired additional sales and marketing resources to help them. So we are still bullish on Aerex, I mean we have had a hiccup there, but after we bought them, but we think it’s a very sound business. We think the guy who runs it, Tom Donnick is very professional, very confident. So I mean we think things will turnaround for Aerex, we are very encouraged about the prospects for the second half of this year.

Great, that’s very helpful, I appreciate it. Thanks David.

[Operator Instructions] This concludes our question-and-answer session, I would like to turn the conference back over to Rick McTaggart for any closing remarks.

Well, thank you very much for joining the call today. And we look forward to speaking with you again in November. Thank you.