Pure Cycle Corp. (PCYO, Financial) filed Quarterly Report for the period ended 2010-05-31.
Pure Cycle Corp. has a market cap of $52.5 million; its shares were traded at around $2.6 with and P/S ratio of 202.1. Pure Cycle Corp. had an annual average earning growth of 9.8% over the past 5 years.
Interest income totaled approximately $18,200 and $55,400 for the three and nine months ended May 31, 2010, respectively. Interest income totaled approximately $12,900 and $70,500 for the three and nine months ended May 31, 2009, respectively. This represents interest earned on the temporary investment of capital, interest accrued on our notes receivable from related parties and interest accrued on the construction proceeds receivable from Arapahoe County. The decrease is due to the continued decline in interest rates both on our invested capital and for the notes receivable from related parties as well as reductions in invested capital due to the use of capital for operations. Our temporary investments were invested in overnight money market funds related to treasury obligations until March 2009 when we transferred approximately $3.0 million into federally insured certificates of deposit with scheduled maturities and set interest rates which are not subject to market risk. Our certificates of deposit are held by various financial institutions in amounts less than federally insured limits.
The imputed interest expense is related to the Tap Participation Fee payable to High Plains A&M, LLC (HP A&M) (as defined in the Liquidity and Capital Resources section below). This represents the expensed portion of the difference between the estimated fair value of the liability and the net present value of the liability recognized under the effective interest method. For the three and nine months ended May 31, 2010, we imputed interest on the Tap Participation Fee of approximately $912,000 and $2.7 million, respectively. For the three and nine months ended May 31, 2009, we imputed interest on the Tap Participation Fee of approximately $858,000 and $2.9 million, respectively. See also Note 1 to the accompanying financial statements for discussion on the revaluation of the Tap Participation Fee in fiscal 2009.
We are obligated to pay annual water assessment charges to various canal systems for the upkeep and maintenance of the agricultural delivery canals for our Arkansas River water. These water assessment charges are assessed on all shareholders of the canal systems on a pro-rata basis. The majority of our water assessment charges are paid to the FLCC and are due in three installment 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.
Investing activities provided approximately $956,200 during the nine months ended May 31, 2010, predominately from the sale of marketable securities which totaled $975,800 which was offset by investments in water systems of approximately $19,600. Investing activities used approximately $3.1 million during the nine months ended May 31, 2009, predominately for the purchase of marketable securities ($3.0 million) and investments in water supplies and systems ($110,400).
Financing activities provided approximately $59,400 during the nine months ended May 31, 2010, predominately due to approximately $61,600 of construction proceed payments received from Arapahoe County, which were partially offset by payments to the CAA holders. Financing activities provided approximately $22,200 during the nine months ended May 31, 2009, predominately due to approximately $61,600 of construction proceed payments received from Arapahoe County, which were partially offset by the approximately $37,500 Tap Participation Fee payments made to HP A&M related to the sale of the non-irrigated land.
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Pure Cycle Corp. has a market cap of $52.5 million; its shares were traded at around $2.6 with and P/S ratio of 202.1. Pure Cycle Corp. had an annual average earning growth of 9.8% over the past 5 years.
Highlight of Business Operations:
We did not sell any water taps or wastewater taps during the three or nine months ended May 31, 2010 and 2009. We received approximately $27,300 and $76,700 from the sale of water during the three and nine months ended May 31, 2010, respectively. We received approximately $31,800 and $88,400 from the sale of water during the three and nine months ended May 31, 2009, respectively. We received approximately $16,700 and $50,200 from monthly wastewater service fees during each of the three and nine month periods ended May 31, 2010 and 2009, respectively. 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.Interest income totaled approximately $18,200 and $55,400 for the three and nine months ended May 31, 2010, respectively. Interest income totaled approximately $12,900 and $70,500 for the three and nine months ended May 31, 2009, respectively. This represents interest earned on the temporary investment of capital, interest accrued on our notes receivable from related parties and interest accrued on the construction proceeds receivable from Arapahoe County. The decrease is due to the continued decline in interest rates both on our invested capital and for the notes receivable from related parties as well as reductions in invested capital due to the use of capital for operations. Our temporary investments were invested in overnight money market funds related to treasury obligations until March 2009 when we transferred approximately $3.0 million into federally insured certificates of deposit with scheduled maturities and set interest rates which are not subject to market risk. Our certificates of deposit are held by various financial institutions in amounts less than federally insured limits.
The imputed interest expense is related to the Tap Participation Fee payable to High Plains A&M, LLC (HP A&M) (as defined in the Liquidity and Capital Resources section below). This represents the expensed portion of the difference between the estimated fair value of the liability and the net present value of the liability recognized under the effective interest method. For the three and nine months ended May 31, 2010, we imputed interest on the Tap Participation Fee of approximately $912,000 and $2.7 million, respectively. For the three and nine months ended May 31, 2009, we imputed interest on the Tap Participation Fee of approximately $858,000 and $2.9 million, respectively. See also Note 1 to the accompanying financial statements for discussion on the revaluation of the Tap Participation Fee in fiscal 2009.
We are obligated to pay annual water assessment charges to various canal systems for the upkeep and maintenance of the agricultural delivery canals for our Arkansas River water. These water assessment charges are assessed on all shareholders of the canal systems on a pro-rata basis. The majority of our water assessment charges are paid to the FLCC and are due in three installment 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.
Investing activities provided approximately $956,200 during the nine months ended May 31, 2010, predominately from the sale of marketable securities which totaled $975,800 which was offset by investments in water systems of approximately $19,600. Investing activities used approximately $3.1 million during the nine months ended May 31, 2009, predominately for the purchase of marketable securities ($3.0 million) and investments in water supplies and systems ($110,400).
Financing activities provided approximately $59,400 during the nine months ended May 31, 2010, predominately due to approximately $61,600 of construction proceed payments received from Arapahoe County, which were partially offset by payments to the CAA holders. Financing activities provided approximately $22,200 during the nine months ended May 31, 2009, predominately due to approximately $61,600 of construction proceed payments received from Arapahoe County, which were partially offset by the approximately $37,500 Tap Participation Fee payments made to HP A&M related to the sale of the non-irrigated land.
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