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May 31, 2021
Pure Cycle Q3 2021 Earnings Report
Pure Cycle reported a revenue increase of 44% due to increased water and wastewater tap sales, with land development revenues expected to increase in the next quarter.
Key Takeaways
Pure Cycle Corporation reported increased revenue driven by water and wastewater tap sales. The company is progressing with its Sky Ranch development, expecting to deliver platted lots in the next fiscal quarter. They are also on schedule with their Build-to-Rent project.
Total revenue increased 44% compared to the three months ended May 31, 2020.
59 water and wastewater taps were sold at Sky Ranch for $1.9 million during the three months ended May 31, 2021.
Land development revenues are expected to increase beginning in the fourth fiscal quarter, with the delivery of platted lots.
As of May 31, 2021, more than 330 homes are currently occupied and another 100+ are under construction at Sky Ranch.
Pure Cycle
Pure Cycle
Forward Guidance
Pure Cycle anticipates delivering the first round of platted lots in the fourth fiscal quarter of 2021 and expects land development revenues to increase.
Positive Outlook
- Grading is nearing completion in the second development phase at Sky Ranch.
- Expected delivery of the first round of platted lots in the fourth fiscal quarter of 2021.
- Contractors are making great progress with the dirt work and utilities.
- Three BTR houses are on schedule and on budget.
- Expect these three homes to be completed and ready for renters in the fall of 2021.
Challenges Ahead
- Delays out of the company's control in the second development phase at Sky Ranch have delayed revenue recognition and slowed cash flows being generated from operations for the period.
- Error discovered in prior issued financial statements related to the spreadsheet used to record the recognized reimbursables and related interest income.
- COVID-19 impacts have caused unavoidable delays in the permitting process for the next phase of development.
- Land development revenues and expenses decreased in the third fiscal quarter of 2021 compared to fiscal 2020.
- Company is working to correct an error which was discovered in their prior issued financial statements.