Good morning. And thank you for joining us today to discuss Consolidated Water Company's First Quarter ending March 31, 2019 Conference Call. With us today is the Chief Executive Officer of Consolidated Water Company, Mr. Rick McTaggart. He is joined by the company's Chief Financial Officer, David Sasnett. Following their remarks, we'll open the call to questions. But before we conclude today's call, I'll provide some important cautions regarding the forward-looking statements made on management during the call. I'd like to remind everyone that today's call is being recorded and will be made available for telecom replay via instructions in today's press release, which is available in the Investor Relations of the company's Web site. Now, I'd like to turn the call over to Consolidated Water Company's CEO, Mr. Rick McTaggart. Sir, please go ahead.

Thank you, Nancy and good morning, everyone. Thanks for joining us today on the call. As you read in the earnings release we issued earlier this morning, we've started the year with a strong quarter. In Q1, we realized double-digit growth in revenue, gross profit and net income driven largely by increased production activity in our manufacturing business segment, which I have to say has really come back strong this year. We expect this year-over-year growth in manufacturing will continue over the remainder of the year, given the order backlog we already have in place. We also made good progress in other areas of our business. But before I go further I'd like to turn the call over to David who will take us through the financial details for the quarter, after which I'll discuss our recent operational activities and outlook for the remainder of the year. David?

Thanks Rick, and good morning, everyone. As Rick mentioned, our total revenues grew 17% to $17 million in the first quarter with the increase primarily driven by an increase of $2.5 million in the manufacturing segment and slightly higher revenues from retail. Manufacturing increased as a result of an increase in the number of orders and expanded project production activity. The increase in manufacturing and retail revenues was partially offset by a slight decrease of bulk and services revenues. The decrease in bulk revenues was due to the lower rates that came into effect in February for water supplied to the Red Gate and North Sound plants in the Cayman Islands. For our third plant in Cayman Islands or actually Water-Authority’s third plant, North Side Water Works are contracted and have been set to expire in June 2019. So, during the quarter, we secured a new multi-year contract commencing on July 1st of this year. Our retail water segment represented 39% of our total revenues in the quarter and bulk water represented 42% of our revenues. Manufacturing generated about 18% of our revenues and services came in at just under 1%. Lastly, manufacturing was a big increase from last year, which was only about 4% of our revenues for the first quarter of 2018. Gross profit for the first quarter of 2019 was $7 million or 40.9% of revenues. In total dollars, this was up 13% from the $6.2 million or 42.4% of revenues in the first quarter of last year. Our G&A expenses on a consolidated basis declined slightly to $4.4 million from the $4.7 million in the first quarter of last year. Other income for the quarter increased 76% to $260,000 from $148,000. Net income from continuing operations attributable to stockholders for the first quarter of 2019 was…

Thank you, David. Our first quarter results demonstrated that the teams representing each of our business segments are working very hard to improve our operational performance by providing excellent products and services to our clients. As I mentioned earlier, we expect the results of our manufacturing segment for the remainder of this year to continue to be better than last year's results, given the healthy order backlog. Our manufacturing operations are based in Florida where we manufacture and service a wide range of water related products. We also provide design engineering, operating and other services that are applicable to water production, supply and treatment for commercial, municipal and industrial sectors. Our Bulk Water Business segment provides potable water under long-term water supply contracts in the Cayman Islands and the Bahamas, which are countries where naturally occurring potable water is scarce and where reverse osmosis desalination technology is economically feasible. During the quarter, we executed a new seven-year bulk water supply agreement with the Water-Authority Cayman, as David mentioned earlier, which is effective on July 1st of this year. This agreement, while at a lower rate, secures our position as the dominant desalinated water supplier in the Cayman Islands for the next several years. In the Cayman Islands, we also own an operator retail water utility business which supplies desalinated water directly to residential, commercial and public authority customers within the main tourist area of Grand Cayman. Completing the expansion of the Abel Castillo Water Works plant in Grand Cayman assures us that we can meet future water supply needs for our retail customers there. While there are many water scarce countries in the Caribbean and in other markets that present significant opportunities for our business model, not all areas of the world present ideal environments for further development due to…

[Operator Instructions] Our first question comes from Gerry Sweeney from ROTH Capital. Please go ahead.

A question on the Decreto 335. If I understand that correctly, that allows the State of Baja California to go out and obtain the revolvers for payment opportunities? They still have -- so that means the state still has to go out and get that facility. Decreto allows them to get it? Is that correct?

That's correct, Gerry. We authorized the permissions for them to obtain that new facility, and they're in the process of obtaining that facility.

Do you know how far down the road of obtaining that facility they are? With the caveat that I know, it's a government agency et cetera, and they could -- anything could change.

Well, we're helping them as much as we can, and . And our advisors are helping them. So, I really can't say when it's going to be finalized, but there is a bidding process that they have to go through as a government entity. I think they're in the process of preparing those documents to take it to bid.

Okay, great. That's helpful. And then on the North side facility on the Caymans, how much volume or what percent of volume is this on the bulk side? And this is more for modeling purposes I think the price of the water has gone down about 13% or so. I want to figure out how much of an impact it could have on just the overall revenue if that makes sense?

We actually don't disclose the revenues on a plant by plant basis in the bulk segment.

Yes. There are competitive issues there, Gerry. We don't disclose that information.

Okay. Anyway, biggest plant, smallest plant, and medium-sized plant or should I just stop there?

Just stop there, Gerry.

Okay, that’s fair, and then did you say on the Mexico CapEx side. I am not if I heard, did you say $5.3 million for the rest of this year?

Hang on a second, let me check the number here.

Big part of that is payments for the remaining right-of-ways, and it sounds about right. I mean I think more than half of that --

Okay because I mean obviously it was running in a smaller amount. So I was just curious. I figured there had to be a payment of a larger amount there. Got it, it makes sense. And then I think -- I mean the one final question was -- you sort of addressed this in your commentary. I tracked the tourist inbounds into Caymans, obviously, up a lot last year, up again this year and the revenue was down about 2%. So it does sound like weather was the main driver, but I guess the real question is. I know they're doing an airport expansion, is this uptick in tourism directly responsible to the airport expansion and has that been fully completed?

Yes. So the main factor that I understand is creating this more favorable tourist environment is the Hurricanes that damaged a lot of the Caribbean islands back in I guess it would be 2017 late 2017. So a lot of those places were down for quite a few months and it was driving tourists more toward Grand Cayman, Cayman Islands. The airport kind of facilitated that increase. I don't think it was the cause of it, but I already see notes in the newspaper where the government is talking about expanding the airport again within five years, so apparently they're planning on further increases and upticks in the tourist environment there.

Okay, got it, that's helpful.

Yes, Gerry, one thing, you have to remember though the primary factor for the retail business is rainfall. I mean if you have --because the incremental population attributable to tourism, well it can increase our revenues, nothing impacts us more, whether or not it's a wet season or dry season.

And I guess that's just general irrigation, et cetera, so if it is dry more irrigation, more volume, and that much larger amount than just overall tourism is that sort of the idea.

Yes. I mean because you've got a lot of people ongoing in that --in our service area that use the water on a regular basis, than our not tourists. That's the base demand for the water there and how they use the water has a big impact and obviously there's a lot of rainfall. They use us for irrigation and things like that.

The next question comes from John Bair from Ascend Wealth Advisors. Please go ahead.

Thank you and good morning. I'm just very optimistic sounding on the operations and order flow for the manufacturing side. And I was just wondering if most of this is related to orders for plants that you operate and so forth or whether this is -- are these primarily domestic orders?

These are primarily third-party domestic orders, so nothing that we're going to use which was the case earlier last year when we had to eliminate some of the revenues from Aerex. So this is all third-party stuff.

Can you say whether these are mostly like municipal type orders, trying to get a sense of public/private kind of sense of where this might be coming from?

Yes. I mean it's a mix, John. I mean there are some specialty products that we're making for the power generation industry. We're also making products for large wastewater plants. So sort of a mix and we also have some contracting work that we do from time to time through Aerex water treatment related projects that are impacting revenues this year.

Okay and to that point do you have much of any meaningful exposure to water disposal or water treatment that's related to the oil and gas business? That's seen any pick up in that area or do you have any real exposure in that area?

I mean from what I recall, we don't have any orders in that business right now. It was - there's a big part of Aerex's business maybe four or five years ago, but nothing that I can think of from that segment at this time.

Is that an area that you have looked at it to any extent and think there's some potential upside there for sales?

As I said in the past, we had clients that were interested in having us fabricate equipment for them. We haven't had any sort of inquires from them recently. They were using -- they were preparing specialty equipment to clean fracking water and that sort of thing. And that business tapered off about three, four years ago. So we're not actively chasing that right now, John. End of Q&A

This concludes the question-and-answer session. I would now like to turn the conference over to Mr. Rick McTaggart, Chief Executive Officer for closing remarks.

Thank you, Nancy. Just like to thank everybody for joining us today. And we look forward to hearing from you again and well I guess it would be August. So take care. Thank you.

Thank you, ladies and gentlemen. Now, before we conclude today’s call, I would like to provide the company’s Safe Harbor statements that include important cautions regarding forward-looking statements made 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, objective, expectations and events, assumptions and estimates. Forward-looking statements can be identified by the use of word or phrases, usually containing the words belief, 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, forecast and projections for its business and the industry end 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; continued acceptance of the company's products and services in the marketplace; changes in its relationships with the government of its jurisdictions in which it operates; the outcome of its negotiations with the Cayman government regarding a new retail license agreement; its ability to successfully secure contracts for new water projects, including the project under development in Baja California, Mexico; its ability to develop and operate such projects profitably and its ability to renew existing bulk water supply contracts; its ability to collect its delinquent accounts receivable in the Bahamas; and its ability to manage growth and other risks, 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 the 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. Before we end today's conference call, I would like to remind everyone that this call will be available for replay starting later this evening and running through May 20th. Please refer to today's earnings release for dial-in replay instructions available via the company's Web site at www.cwco.com. Thank you for joining us today. This concludes the conference call. You may now disconnect. And have a good day.