Good morning. Thank you for joining us today to discuss Consolidated Water Co.'s third quarter of 2026, operating and financial results. Hosting the call today is Chief Executive Officer of Consolidated Water, Rick McTaggart, and the company's Chief Financial Officer, David Sasnett. Following their remarks, we'll open the call to your questions. At any time during the call, you may join the Q&A queue by pressing star, then 1 on your keypad. Before we conclude today's call, I'll provide some important cautions regarding the forward-looking statements made by management during the call. I'd like to remind everyone that today's call is being recorded and it will be made available for telecom replay. Please see the instructions in yesterday's press release that has been posted to the investor relations section of the company's website. Now, I'd like to turn the call over to Consolidated Waters CEO, Rick McTaggart. Sir, please go ahead.

Thank you, Nick, and good morning, everyone. We appreciate you joining us today. Our third quarter revenue declined as lower construction, O&M, and manufacturing revenue more than offset increases in retail and bulk revenue. Despite that decline, we've made important progress with our retail, license, manufacturing order book, and major design build projects. These developments also fit a broader theme which is we need to make water supplies more resilient. Water scarcity, population growth, and investment in treatment infrastructure create opportunities that extend beyond any single project or quarter. We believe our combination of desalination, water reuse, equipment manufacturing, and operating expertise positions us to compete for that work. After quarter end, we announced an approximately $39.8 million design-build agreement with the City of Pismo Beach, California for the Central Coast Blue Advanced Water Purification Facility. Project planning and design kicked off last month and construction is anticipated to begin in Spring 2027, with the overall project expected to span approximately 24 months. In Hawaii, the July Limited Notice to Proceed authorized approximately $6 million for long lead equipment procurement for the Kalailoa desalination facility. Recent approvals have allowed us to pursue the remaining permits and approvals, and we now anticipate beginning the construction in the first half of 2027, subject to securing those remaining permits and approvals. During the quarter, we announced approximately 10.1 million in purchase orders from a municipality on Florida's east coast for nanofiltration membrane water treatment equipment and horizontal cartridge filters. These are our largest municipal membrane equipment and cartridge filter orders to date, with deliveries scheduled for November of 2027. Before discussing these developments, our bidding opportunities and our outlook in more detail, I'll turn the call over to our Chief Financial Officer, David Sasnett, who will take us through the financial results for the quarter. David.

Thanks, Rick, and good morning, everyone. Our revenue dropped to $30.9 million for the third quarter of 2026. This represents an 11.9% decrease from the same quarter of last year. This decrease is attributable to lower services and manufacturing revenue. Our retail revenue increased 5.7% to $8.2 million, primarily due to higher energy pass-through charges and an increased rate for a major commercial water customer we have on Grand Cayman. These factors offset the impact of lower retail water rates, which became effective August 1st under our new license. With respect to water volume, water sales for the quarter increased by approximately 1% from the same quarter of last year. Our bulk revenue increased 20.8% to $10.1 million, principally due to higher energy pass-through charges at CW Bahamas, and to a lesser extent, revenue from CW Bahamas-due Cat Island plants. Our bulk gross profit increased, although higher diesel costs and incremental maintenance expenses reduced gross margin as a percentage of revenue. Our services revenue decreased 31.7% to $9.8 million. Construction revenue declined 45% to $3.5 million from the $6.4 million we reported prior quarter due to a decrease in the number and total value of construction projects. Our O&M revenue decreased 21% to $6.1 million primarily due to the expiration of contracts with three of PERC's customers in California in the first quarter of 2006, something we discussed in our previous filings. Our manufacturing revenue decreased 39.7% to $2.8 billion due to a decrease in the total dollar amount of contracts both completed and in progress. And as we commented on a number of occasions based upon current projections, we continue to expect our full year of 2026 manufacturing revenue to fall below what we reported for 2025. Our consolidated gross profit was $9.8 million or almost 32% of total revenue compared to $12.9 million or 36.9% of total revenue in the third quarter Last year, net income from continuing operations attributable to our shop stockholders was 2.4 million or 15 cents per diluted share as compared to 5.6 million or 34 cents per diluted share in the third quarter of 2025. Including discontinued operations, net income attributable to our stockholders was 2.3 million or 14 cents per diluted share as compared to 5.5 million or 34 cents per Delivered Share in the third quarter of 2025. Our balance sheet continues to be very strong. Cash and cash equivalents totaled $129.2 million as of September 30th. Our working capital grew to $145.1 million, and our equity was $226.2 million. And as you know, our balance sheet has no outstanding debt. Our projected liquidity requirements for the balance of 2026 include capital expenditures for existing operations over approximately $1.5 million. We also paid approximately $2.3 million in dividends in October 2026. And our liquidity requirements may also include future quarterly dividends. Such dividends are declared by our board. And we continue to evaluate how to best utilize our ample cash to increase shareholder value. And so with that, I'd like to turn the call back over to Rick.

Thanks, David. Cayman Water's new 25-year retail water license became effective on August 1st of this year. The license preserves Cayman Water's exclusive right to produce, distribute, and sell potable water within its licensed area in Grand Cayman. The new license provides a long-term regulatory framework for our Grand Cayman retail business provides meaningful savings to our customers through rate reductions and retains the annual inflation index-based water rate adjustment mechanism that was in our old license. It's all subject to regulatory verification and approval. That annual inflation formula has worked effectively for more than 36 years, so we're very happy that that was retained. Although lower retail rates reduce quarterly retail gross profit, our retail revenue increased, supported by higher energy pass-through charges, a 1% increase in sales volume, and an increased rate for a major commercial customer. The new license comes as Grand Cayman continues to experience strong tourism momentum, a key demand driver for all of our retail sales. As mentioned in previous calls, demand for water in the Cayman Islands is affected by stayover tourism levels and rainfall. Grand Cayman experienced significantly greater rainfall during the first nine months of 2026 compared to last year when rainfall was well below historical norms, which adversely impacted our water demand this year compared to 2025. However, tourism continued to strengthen through the third quarter. According to the Cayman Islands Department of Tourism, in an October 30th announcement, stayover arrivals reached over 375,000 for the first nine months of 2026, which is up 11.3% for the same period last year. In September, arrivals increased 18.4%, which is normally the slow season, marking the 11th consecutive month of the year-over-year stayover growth. These results were also reported by the Cayman Compass newspaper on November 2nd. The Department of Tourism attributed the year-to-date growth to stronger travel demand from the United States and Canada. While this tourism momentum is encouraging, rainfall remains an important variable for retail water demand. The Cayman News Service reported on October 8th that September rainfall in Grand Cayman was above the monthly average even though wet season rainfall through September remained below average. Changes in both tourism activity and weather conditions have historically correlated well to our retail water demand charges, although last quarter our sales went up by 1% with higher rainfall. So we would think that the tourism demand had a bigger impact on this last quarter. Beyond tourism, our retail service area includes two of Grand Cayman's most populated and rapidly developing areas. We view that development as a potential long-term demand driver while recognizing that conservation, rainfall, and the new rate structure will continue to influence water sales and financial results going forward. Our Caribbean-based bulk business continued to perform well, providing a stable source of long-term recurring revenue. Both of our Cat Island desalination plants contributed to the quarter's results, supplying potable water to the Water and Sewerage Corporation of the Bahamas. The first plant was commissioned in January of this year and the second in June. Our bulk business addresses the fundamental need for dependable municipal water supplies when naturally occurring water sources are insufficient to meet demand. While our island-based clients embraced seawater desalination decades ago because no other viable water sources were available, U.S.-based municipalities and state agencies in watershored areas are now seeing that seawater desalination must be a part of a diversified portfolio of water sources in order to ensure dependable supply during periods of drought. We believe our operating expertise and long-term utility relationships provide a foundation for pursuing additional opportunities in both the Caribbean and the U.S. markets in desalination. Turning to manufacturing, as David mentioned, we continue to expect a full year 2026 revenue to be below 2025 levels based on current projections. However, approximately 10.1 million in Florida municipal purchase orders I noted earlier and the pipeline of Florida municipal water projects support our outlook for a strong 2027. We've also submitted bids for water equipment manufacturing projects valued at approximately $10 million that are expected to be decided and awarded in the fourth quarter of this year. In addition, we are tracking approximately $45 million in Florida municipal water projects that are expected to go to bid within the next six months. Our excellent reputation, world-class manufacturing capabilities and Deep Knowledge of the Florida Water Equipment Market should help us compete successfully for these opportunities. We believe this activity bodes well for a strong 2027 for our manufacturing business. The growth opportunities for our manufacturing and new treatment capacity to upgrading existing facilities EPA's most recent drinking water infrastructure needs assessment identified $107 billion in U.S. treatment infrastructure needs over its 20-year planning horizon. That's a broad national investment need, not our addressable market or committed spending, but it does illustrate the longer-term demand for specialized treatment equipment and design-build services. Our membrane equipment and filtration capabilities give us ways to participate in this as projects move forward into procurement phase. Turning to services, I'd like to provide more color on our $39.8 million design-build agreement with Pismo Beach, including our scope of work and the facility's role in the local water supply. We were selected through a competitive public procurement process to design, construct, Test facility, train city personnel and support initial operations. Project is intended to provide a new local drought resistant water supply and help protect the groundwater basin from seawater intrusion. And this is a type of project that fits in well with what I mentioned earlier about municipal clients wanting to diversify their water supplies. Recycling is also and another diversification mechanism that they use. So project planning and design kicked off last month and construction is anticipated to begin in the spring of 2027. Design permitting, construction, startup and commissioning are expected to span approximately 24 months. Pismo Beach illustrates why we see tremendous opportunity in advanced water reuse as well as desalination. The EPA identifies drought and population growth as pressures on water availability in the western United States, increasing the importance of alternative supplies and diversification. Recycling water locally can help communities stretch existing resources, and for us that creates opportunities to compete for design-build work and where contracts included ongoing operations and maintenance. Our services and manufacturing businesses also bring complementary capabilities to these projects. In Hawaii, the July Limited Notice to Proceed authorized approximately $6 million for critical loan lead equipment for our Kalailoa desalination facility. Early procurement should help reduce scheduling pressure and lead us to advanced construction more efficiently once the remaining permits and approvals are secured. Recent approvals from the State Historical Preservation Division and the Hawaii Department of Health have allowed us to pursue the remaining permits and approvals, so we're working on them diligently right now. The Honolulu Board of Water Supply remains supportive, they're the client, and has granted schedule extensions to reflect the permitting process delays. Design and construction of the Hawaii project represents more than $150 million of contracted backlog that has not yet been recognized as revenue. Once construction commences in the first half of 2027, we believe it will have a significant impact on our revenue and earnings going forward. We anticipate beginning construction in the first half of 2027, subject to obtaining the remaining permits and approvals Following commissioning of the plant, we are contracted to operate and maintain the facility for 20 years with two additional five-year extension options at the client's discretion. More broadly, recent publication forecast the U.S. desalination market to grow at 7.9% compound annual rate to $5.2 billion by 2032. That is an industry forecast and not company guidance. We see desalination as one tool for diversifying water supplies alongside conservation and reuse. Our focus on projects where design, construction and operating experience fits customer needs is what we offer. I mean, we have a very diversified Water Recycling, Seawater Desalination, Packaged Water Desalination portfolio of qualifications. Looking ahead, we see multiple avenues for growth, including our Grand Cayman retail operations, recurring Caribbean bulk revenue, and opportunities across the U.S. in manufacturing, design, build, and O&M businesses. Together these businesses provide a diversified foundation as we serve our customers and pursue opportunities that build on our water treatment expertise. Our strong balance sheet gives us the flexibility to pursue desalination and water infrastructure opportunities across the Caribbean and North America while evaluating strategic acquisitions and partnerships that could accelerate growth. With strong demand for reliable water infrastructure, we believe we are well positioned for the future. Our focus remains on disciplined execution, delivering our projects, serving our customers, and translating these opportunities into sustainable long-term growth and enhanced shareholder value. With that, Nick, I'd like to turn the call over to questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star, and then 2. At this time, we'll pause momentarily to assemble the roster. The first question will come from Jerry Sweeney with Roth Capital. Please go ahead.

Good morning, Rick David. Thanks for taking my question. This is Brandon Rodgers on for Jerry Sweeney.

Hey, Brandon. How are you doing?

Hello. Just a few questions for me. On the Hawaii construction timeline, it's now expected for the first half of 27. If you could give any additional color on which permits are holding up the notice for seed and how likely it is for the first half, if it possibly could clip to the second half of 27. and then if it starts in the first quarter versus the second quarter, if you could quantify like what the revenue profile would be like for the year, just any color there.

Yeah, well Brandon, I think we're, I mean just in general terms, I think we're over the hump on the permits that we don't have a lot of visibility on. There's one last and all the other permits relate to just basically building permits, site clearance, that sort of thing, your typical planning and building control type permits. I mean, I'm hoping that we have some good news on the memorandum of agreement before the end of the year and then we'll really have a lot better idea of what the timeline is finally going to look like. But first half of the year I think is what we think is reasonable at this point.

Awesome. Thank you. And then in terms of the O&M market demand, I know revenues have been down. You called out the contracts rolling off from last year. Any update on the overall environment in the mainland U.S.? I know you have – you called out projects in – you've had projects in Colorado Northern California, just announced the Pismo Beach one. Is there any other areas in the U.S. that you're seeing strength?

Yeah, I mean, we're pursuing O&M opportunities in California, in Colorado, and some longer-term stuff in Arizona right now. I mean, that's where we're focused. That's where we think we have the most competitive advantage.

And then if I could just squeeze in one more, I think No, just looking for a market update in the Florida region. You called out the $10 million expected to be awarded in 4Q and 45 expected to go out within the next six months. Then you also had the $10 million that you booked during the quarter scheduled for delivery in November 27. Just any update in the Florida market and on that $10 million PO, like any Revenue or margin profile or how it's supposed to be billed, any details on that front?

Yeah, I mean, I think we're pretty clear what we've released. I mean, that's as much detail as we have. I mean, these municipal jobs are sort of longer-term deals. I mean, we could get awarded some of this work before the end of the year and it wouldn't actually start going through the shop until the end of 2027. You know, right now, you know about 10 million dollars plus some other jobs firm for orders for the year so you know we've already started on those and we'll start booking revenue on those contracted orders into 2027 and they'll be completed I think in November is when the last bits of equipment have to to be delivered so You know, that's about all the detail we got. I mean, those types of jobs are very dependent on, you know, the client's schedule and, you know, the consulting engineers that are, you know, running these projects. So, we just, we're kind of at the bottom of the food chain when it comes to the equipment orders and stuff, and we have to, you know, adjust our schedules to meet theirs.

Understood.

Thank you.

And then, if I could possibly squeeze in one more, sorry. The acquisition pipeline, your balance sheet's in great shape. Any overall appetite for M&A in the future?

Oh, absolutely, yeah. I mean, I've been spending quite a bit of time evaluating opportunities. Some of them looked good, some of them didn't, and we still continue to look at things. So I'm hoping that we have something to say in the next year, that we've expanded our market share or diversified our market either from a customer type or geographically.

All right. Thank you, Rick. I appreciate it.

No problem, Brandon.

Again, if you have a question, please press star and then 1. Please stand by as we pull for questions. All right, at this time, this concludes our question and answer session. I'd like to now turn the call back over to Mr. McTaggart. Sir, please go ahead.

All right, well, thanks, Nick. I'd just like to thank everybody for joining us today, and we look forward to updating you on our full year results in March of next year. I hope everybody has a wonderful holidays and a happy new year. We'll talk to you in a few months.

Thank you. Before we conclude today's call, I would like to provide the company's safe harbor statement that includes cautions regarding forward-looking statements made during today's call. The information that we have provided in this conference call includes statements that may constitute forward-looking statements, usually containing the words believe, estimate, project, intend, expect, should, will, or similar expressions. These forward-looking statements include, but are not limited to, statements regarding The anticipated construction schedule and completion of the Kaleoloa desalination facility The effect of permitting delays on that schedule, the Company's and the Honolulu Board of Water Supplies efforts to mitigate those delays The Company's ability to perform its design, build, operate, and maintain obligations with respect to the Kaleoloa facility, including the anticipated 20-year operating term and any exercise of the related extension options The company's ability to design, fabricate, and deliver the four purchase orders on the anticipated schedule, including by November 2027. Expected 2026 and 2027 manufacturing revenue The outcome of pending bids and anticipated future bid opportunities The anticipated Schedule 4 and the company's performance under The City of Pismo Beach Design-Build Agreement and The Expected Effects of the New Cayman Water Retail License on the Company's Retail Revenue and Operating Income These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the company's products and services in the marketplace, changes in its relationships with the government and clients of the jurisdictions in which it operates, the timing and outcome of permitting and other regulatory approvals affecting the Kaleoloa facility, the company's ability to procure equipment, and perform its contractual obligations on the anticipated timeline and budget, including with respect to the Kaleolo Facility, Pismo Beach Design-Build Agreement and the Florida Purchase Officers Orders. The collection of its delinquent accounts receivable in the Bahamas, future rate determinations by the Utility Regulation and Competition Office and Cayman Waters compliance with the terms of its retail license, and cost overruns and liquidated damages under fixed-price contracts, and various other risks, such as economic, operational, and industry-specific risks, as detailed in the company's periodic report filings with the Securities and Exchange Commission. For more information about risks and uncertainties associated with the company's business, please refer to the management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factor sections of the company's SEC filings, including but not limited to its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting the company's secretary at the company's executive officers or at the investors-sec filings page of the company's website at ir.cwco.com forward slash docs. Except as otherwise required by law, the company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Any forward-looking statements made during this conference call speak as of today's date. I would like to remind everyone that a replay of this call will be available after 1 p.m. Eastern Time today through November 17, 2026. A replay will also be available through the investors section of the company's website. Please refer to yesterday's earnings release for replay instructions. Thank you for attending today's presentation. This concludes the conference call. You may now disconnect.