Pure Cycle Corp. (PCYO, Financial) filed Quarterly Report for the period ended 2009-11-30.
Pure Cycle Corp. has a market cap of $55.8 million; its shares were traded at around $2.76 with and P/S ratio of 214.5.
As further described in our 2009 Annual Report on Form 10-K, Critical Accounting Policies below and Note 1 to the accompanying financial statements, pursuant to the Arkansas River Agreement we agreed to pay HP A&M 10% of our water tap fees received on the sale of the next 40,000 water taps we sell from and after the date of the Arkansas River Agreement (the Tap Participation Fee). As of November 30, 2009, we have estimated the value of the Tap Participation Fee payable to HP A&M at approximately $113.1 million. The balance reflected on the accompanying balance sheet of approximately $58.4 million excludes the discount of $54.7 million based on a discounted cash flow valuation analysis, which was originally prepared at August 31, 2006, and was updated as of February 28, 2009 (no update was deemed necessary at November 30, 2009). See Note 1 in the accompanying financial statements for the impact of the revaluation. The actual amount to be paid will inevitably be different from our estimates. Tap participation payments are not payable to HP A&M until we receive water tap fee payments. We did not sell any taps and did not make any Tap Participation Fee payments during the three months ended November 30, 2009. There remain 38,937 taps subject to the Tap Participation Fee as of November 30, 2009.
We are obligated to pay annual water assessment charges to various canal systems, which are fees assessed to the canal shareholders for the upkeep and maintenance of the canal the agricultural delivery canals for our Arkansas River water. The majority of the payments are paid to the FLCC, which are made in three payments each calendar year. In December 2009, the board of the FLCC approved an increase to the calendar 2010 assessments from $14.50 per share to $15.50 per share, which equates to an increase in our water assessments from approximately $314,000 per year to approximately $335,000 per year.
Cash used by operating activities was approximately $302,600 and $424,500 for the three months ended November 30, 2009 and 2008, respectively. Cash used by operations decreased approximately $121,900 or 29%, period over period mainly due to the decreases in our G&A expenses as noted above, offset by decreased interest income as described above.
Investing activities used approximately $13,800 during the three months ended November 30, 2009, predominately for the purchase of marketable securities, approximately $10,000, and investments in water supplies and systems, approximately $3,800. Investing activities used approximately $40,800 for the three months ended November 30, 2008, predominately for investments in water supplies and systems and the acquisition of other property and equipment, $33,800, and the loaning of $7,000 to Well Enhancement and Recovery Systems, LLC.
Financing activities provided approximately $19,500 during the three months ended November 30, 2009, predominately due to approximately $20,500 of construction proceed payments received from Arapahoe County, which were partially offset by payments to the CAA holders. Financing activities provided approximately $19,600 during the three months ended November 30, 2008. This was mainly due to the receipt of approximately $20,500 of construction proceed payments from Arapahoe County partially offset by payments made to the CAA holders.
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Pure Cycle Corp. has a market cap of $55.8 million; its shares were traded at around $2.76 with and P/S ratio of 214.5.
Highlight of Business Operations:
We did not sell any water taps or wastewater taps during the three months ended November 30, 2009 and 2008. We received approximately $28,900 and $33,100 from the sale of water during the three months ended November 30, 2009 and 2008, respectively. We received approximately $16,700 from monthly wastewater service fees during both three month periods presented. Currently all monthly water and wastewater fees are generated utilizing our Rangeview Water Supply (defined in our 2009 Annual Report on Form 10-K). See Critical Accounting Policies below regarding our revenue recognition policies for tap fees and construction fees.As further described in our 2009 Annual Report on Form 10-K, Critical Accounting Policies below and Note 1 to the accompanying financial statements, pursuant to the Arkansas River Agreement we agreed to pay HP A&M 10% of our water tap fees received on the sale of the next 40,000 water taps we sell from and after the date of the Arkansas River Agreement (the Tap Participation Fee). As of November 30, 2009, we have estimated the value of the Tap Participation Fee payable to HP A&M at approximately $113.1 million. The balance reflected on the accompanying balance sheet of approximately $58.4 million excludes the discount of $54.7 million based on a discounted cash flow valuation analysis, which was originally prepared at August 31, 2006, and was updated as of February 28, 2009 (no update was deemed necessary at November 30, 2009). See Note 1 in the accompanying financial statements for the impact of the revaluation. The actual amount to be paid will inevitably be different from our estimates. Tap participation payments are not payable to HP A&M until we receive water tap fee payments. We did not sell any taps and did not make any Tap Participation Fee payments during the three months ended November 30, 2009. There remain 38,937 taps subject to the Tap Participation Fee as of November 30, 2009.
We are obligated to pay annual water assessment charges to various canal systems, which are fees assessed to the canal shareholders for the upkeep and maintenance of the canal the agricultural delivery canals for our Arkansas River water. The majority of the payments are paid to the FLCC, which are made in three payments each calendar year. In December 2009, the board of the FLCC approved an increase to the calendar 2010 assessments from $14.50 per share to $15.50 per share, which equates to an increase in our water assessments from approximately $314,000 per year to approximately $335,000 per year.
Cash used by operating activities was approximately $302,600 and $424,500 for the three months ended November 30, 2009 and 2008, respectively. Cash used by operations decreased approximately $121,900 or 29%, period over period mainly due to the decreases in our G&A expenses as noted above, offset by decreased interest income as described above.
Investing activities used approximately $13,800 during the three months ended November 30, 2009, predominately for the purchase of marketable securities, approximately $10,000, and investments in water supplies and systems, approximately $3,800. Investing activities used approximately $40,800 for the three months ended November 30, 2008, predominately for investments in water supplies and systems and the acquisition of other property and equipment, $33,800, and the loaning of $7,000 to Well Enhancement and Recovery Systems, LLC.
Financing activities provided approximately $19,500 during the three months ended November 30, 2009, predominately due to approximately $20,500 of construction proceed payments received from Arapahoe County, which were partially offset by payments to the CAA holders. Financing activities provided approximately $19,600 during the three months ended November 30, 2008. This was mainly due to the receipt of approximately $20,500 of construction proceed payments from Arapahoe County partially offset by payments made to the CAA holders.
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