Q3 2023 Pure Cycle Corporation Earnings Call
Greetings and welcome to the pure cycle Corporation third quarter 2023 earnings call.
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A question and answer session will follow the formal presentation.
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Please note. This conference is being recorded I would now.
Now I'll turn the conference over to your host Mark Harding you may begin.
Thank you Ali I'd like to welcome you all to our third quarter earnings call.
We do have a slide deck for this so for those that want to follow along with the slide deck. You can go to our website at pure cycle water Dot com on the landing page. There you will find the ability to join the slide deck as well so with that.
So have Kevin <unk>, our CFO joining me today, Dirk Glassner, who is our vice president of land development is on family vacations. So I will pinch hit into his land development segment.
So with that let me get started.
Our first slide will be our first statement that highlights. The fact that statements here are that are not historical facts contained or incorporated by reference on this presentation are forward looking statements with the meaning.
Private Securities Litigation Reform Act of $19 95, and I think you're all familiar with the Safe Harbor statement.
Let me put a little overview of the company for those that are new or listening in to the call for the first time, we operate in three multiple complementary business segments, we operate a water or wastewater resource.
The development segment, which is kind of a utility segment. The key investment theme in this segment as we own a large amount of water in a water short area. We've owned those assets for.
Quite some time, so we have a very.
Low cost basis in that.
And those assets continue to rise in value, we develop those assets cradle to grave from developing the water resources, all the way through collection and processing of wastewater.
In our land development segment.
We own about.
900, while we're developing a 930 acre master planned community. The key investment theme here is again owning the land with a very low cost basis, we acquired this land.
During the great recession and about 2010.
Very favorable basis in the land held that for a number of years until it was timely for development started developing that in about 2018 and it happens to be in probably one of the hottest submarkets of the Denver Metropolitan area for development activities.
Great investment theme on the land development segment, and then our third segment, which is still in its infancy as our single family home rental business and we receive rental income.
From homes that we build on lots that we already own at Sky Ranch and the real key theme here is kind of the vertical construction cost.
On land that we already own it provides accelerated positive cash flows to each unit, it's a tax advantaged way.
Develop these significant appreciating assets, because we own and can carry forward the equity of the land and lots as well as the water utilities on that so it provides us some very attractive returns on a cash flow standpoint.
So with that let me kind of just briefly touch on each of these themes.
And we'll move on to some of the.
Financial metrics, and then get into some of the color through some Q&A.
The water utility wholesale water and wastewater segments again as I mentioned, we really take it from owning the water rights the wells the diversion structures, we treated we distributed to our customers.
We collect that back once they use that we processed that way.
Wastewater and then we're able to reuse that water supply. So we have a use and reuse model theme there.
Did get some very good press on that recently in the Denver market. You can go to our website. We had a feature story from the local news channel here that talked about.
Water scarcity in the Westwater scarcity in Denver, and how the company is really taking a proactive role on reusing water supply within its within its <unk>.
Development area and so.
Moving forward, we really look at our water balance system here in this kind of shows you an animated version how we take that water supply from its source, we treat it we distribute it to our customers we have a little bit of loss through evaporation, but then we collect that back and we reuse that system. So it really is a Houston reuse model we.
Really want to protect and preserve those assets in a water short regions.
So it got a little bit about the water infrastructure, we continue to grow our utility segment assets Youll continue to see more of this as we get into year end, we're making more investments into our water supply right now we're drilling additional wells to help meet the production capacity and the demand that we're seeing in the industrial.
Real segment in the oil and gas segment. So we continue to add to this in a broad category of all of our assets, whether that's wells treatments.
<unk> mission distribution collection all of those elements, we continue to add to the system.
Digging a little bit about our customer growth, we continue to have organic growth within our service areas. We have three principal service areas. The wild Pointe service area, which is a service area. We acquired a number of years ago relatively small we have about 188, Inc.
<unk> connections about 171 close to a 100 commercial connections we have a little bit more capacity in that system and that system is probably around $85, 90% built out Sky Ranch, which we'll highlight in our land development segment as well, but we've got about 700.
Now our connections on the residential side about 135 commercial irrigation connections our capacity. There is about 5000. So we're right around that 20% built out of Sky Ranch and then the Lowry Ranch, which is our service area. It's a 24000 acre service area, that's really right at the.
<unk> of the Metropolitan area, and Thats really still undeveloped.
Excellent organic growth, both at Sky Ranch, and wild point with the tremendous demand potential off the Lowry range.
Talk a little bit about.
Our oil and gas had kind of a record quarter for oil and gas deliveries.
We happen to sit right on top of.
A very prolific oil and gas play heavy oil play.
Not a lot of gas we are fully 80% of the.
Resource there is going to be oil.
We have multiple operators in the segment the largest operator of civitas, but theyre very active in that and that really kind of getting to the unincorporated areas they've been focusing in on developing the areas, which were closest to development that are going to be within the city of Aurora, where they're required.
To get their water from the city of Aurora as they get outside the city of Aurora on Lowry, which is our service area in the surrounding properties around Lowery.
Then we Aurora does not like to provide service to extra territorial areas and those are areas that are either within our service area or areas that we can assist them in writing water and so youll continue to see growth in this segment.
We continue to expand our supply side to make sure that we can continue to meet that demand, but there is tremendous amount of growth potential bill yet in this segment as well and it's likely to continue to.
E a large customer for us for decade into the future and for decades into the future.
Next slide slide 10 really has.
Depiction of kind of where our service areas are kind of the sandbox that we operate in in the metropolitan area.
Pink areas are going to be Sky ranch, and the Lowry ranch, which.
Development has significantly encroached into both of those areas as well defined and our land development segment Sky Ranch is really.
Seeing tremendous demand for housing mostly to our price point area, but this kind of illustrates the growth of the metropolitan area and the key positioning that the Lowry ranch as potential within the Denver market. It is the right place to be in the Denver market. Both of these assets in both of these development opportunities are excellently.
And within the Metropolitan area.
So with that let me highlight a little bit about the land development segment as I highlighted.
<unk> of 930 acre property, it's called Sky Ranch Master planned community and it's a well balanced masterplan community. We have multiple single family lot size products and price points, we have great trails open space recreational opportunities that are on site, we have great transportation access we're right adjacent.
We have about 160 acres, which has frontage along I 70 with outstanding proximity to AIA and other employment centers in the area great schools.
Have a charter school that we partnered with <unk> and.
And offer a charter operator out of Michigan National Heritage Academy, and we are opening.
The first phase of that school at K eight facility, we will be offering great through seven.
This August we're excited that the school is opening and it's a great regional asset that's really going to be a center pivot point for us in the community and then we have great commercial opportunity given the proximity that we have to the interchange and two on.
Interchange on the Interstate it'll.
It'll give us a terrific opportunity to continue to build out that in a multiple field master planned community.
Digging a look at some of the residential product that we've been working on.
We have our first phase, which was about 509 loss it's fully complete.
If you take a look at our single family rental segment, we had really our introduction into that kind of proof of concept on building these units.
A look at the rental side and the demand for rental side. So tremendous success on that rolling into the second phase. The second phase was a total of about 850 lots.
We have nothing but great portfolio of National publicly traded homebuilders are you can see these are all top 10 homebuilders in the Denver market as well as Mack Cali, Great partners to work with there.
Very consistent.
Able to get their product up great sales force really pulling in a tremendous amount of demand to the community.
Right now we are working on phase Iia and phase II B. So we've got two overlapping projects going on at the same time <unk> is about 90% complete from our perspective, where we've delivered a lot all of the infrastructure of the horizontal infrastructure that go into those lots, we're punching out some of the.
Landscaping in irrigation in the park in the play structures on the park right now homebuilders themselves. We've got about 200 starts in that 200, and say 30 lost there. So a lot of demand in that and what was otherwise a softer ore.
A slowing housing market, we're certainly not seeing that.
And then we're also seeing tremendous opportunity rolling into the second phase to the next 211 lots. We're right now currently developing the utility package on that which is the water. The sooner the storm drains systems on that those should be complete towards the November timeframe and in Colorado, we sort of chase.
That weather issues to make sure that we can get some payment down to start making some of those lots available in that same timeframe towards the end of our first quarter next year fiscal year and being a 31.
And then because of the demand that we're seeing we're also moving forward with our phase two C. So we've got the record nation of those plants coming up.
In August and then we would be taking a look at the Earth work on that one so what youre going to see is we're really going to have three overlapping projects going on at the same time as we're punching out phase Iia getting into the meat of the phase II B, we're really going to start phase II. So it kind of gives you an indication.
The level of interest that we have from our homebuilders as well as the sale and velocity of sales from single family units.
This is kind of a mix of the builders a little bit of detail on the lot sizes. The different product levels that we have and kind of the gross numbers on each of the phases per lots and so we have attractive margins with the well balanced land plan between the residential and commercial as you've heard us talk in the past we are.
Collect not only the revenue from the sale of the lot. But then also reimbursable from the public improvements that we put on this so when we're building the water the sewer storm drains the roads curbs and gutters all of that stuff at cruise under the governmental structure that we operate under here in Colorado, and then we get repaid.
That through.
Typically through bond offerings, we do a bond offering.
Last summer. So you did see a recollection of about $23 million. There. We continue to accrue those fees, we have an interest component associated with that so we have time value money component to that as well.
Let me move to the next slide and talk a little bit about some of the market conditions I know theres a lot of a lot of talk about what the market is in the subset of the market and really what we're seeing the biggest key driver here is that demand continues to exceed supply and particularly <unk>.
For entry level housing and so thats continuing to put wind in our sales and in our project because we're offering very affordable houses in that entry level housing here in Denver, and it's it's hard to hard to have that passed by your lips, but to say entry level house in Denver.
$400000, but but that is it in very small segment of the supply there is less than 4% of the housing product Denver Metropolitan area that can meet their price target and it's not that we're not.
Operating profitably at that level, we just have a better structured to that.
I will say, we do do a better job, but at the end of the day, we do deliver a very good product to our homebuilders in our homebuilders carryforward, our price advantage into their finished products.
We have a great relationship on meeting that market conditions in our market segment.
The other key driver in the market conditions are probably the declining sale of some of the existing pumps and those will be mortgage locked.
Product, where you've got a lot of mortgages that are at that very low mortgage rates and move up buyer is probably a little bit more cautious on those decision, making just because they have a very.
Very low basis in their interest rate.
Some of the some of the headwinds in the market.
Things have started to normalize you have that uptick in interest rates, but I think folks are recalibrating to the interest rate markets and understanding that.
The current interest rates are not be anomaly. It was maybe a 3% interest rate thats more of anomaly there.
Still in the historical averages for the last 30 years as we all know.
We're seeing traffic.
Sitewide at Sky Ranch is pretty consistent but if you look at the National Statistics, you have kind of weakening traffic.
Because of those interest rate and the mortgage lot buyers out there. So we're delighted for our price segmentation in that entry level.
Let me talk a lot we do want to highlight that don't want to not highlight.
Highlight our opportunity for opening our school that was one of the key things that when we started this project we were very cognizant about how we can provide that education alternatives here at Sky Ranch and so we are happy and delighted to partner with National Heritage on the Sky Ranch.
Got about four more than 400 students that will be opening up this August .
The school is really finished theyre, putting in furniture and in making sure. The final touches staffing has gone very well for building that into the community and we're looking forward to that Grand opening.
Move on to the single family rental segment, if you take a look at this segment.
The key investment theme here is that we're retaining lots within the community that we fully recovered the lot cost for horizontal cost as well as tap the cost from that from the sale of the loss in the land development segment and then we go vertical with that we're able to fill.
<unk> finance that vertical the additional investment in that vertical cost with mortgage type money.
It's not as cheap as it was when it was at 3%, but still it's going to be the cheapest money that we can use some very attractive leverage on that our loan to values are typically about 70% loan to asset value. There. So you know our banks that they love that product just because they know what our equity value is in that almost every single.
Home that we're putting up we've got about $200000 in equity value in that and then the whole house value. We're looking at this entry level market something in the high 400 low 500.
$1000 range continues to appreciate at that 4% per year. So we have very attractive margins, we have asset growth and we are free cash flows on each of these units. So we have kind of a triple threat in each of the single family units that we're building.
This.
Slide 19 will be a kind of a distribution of where our single family units or you see the four units that are in our first phase and then we went a little bit more aggressive in the second phase with Ted.
And then we got even more aggressive we almost doubled the portfolio or 50% increase in the portfolio from where we were in phase Iia into the rest of the project. So our next phase is going to have I think around 18 in 2020 three so we continue to increase our appetite for this product just because.
The value proposition that it provides for our shareholders.
Alright, so this will be kind of the metrics on the single family you've seen this before but the key highlights here are each unit provides approximately $20000 in free cash flow as well as.
Having our renters continue to meet or continue to provide the principal and interest payments to the.
Leverage that we have in the vertical construction site. So it is a very attractive segment for us and we're pricing. These we were pricing. These at an attractive level you know its interesting when we get these applications for every one we get up we get just a ton of applications coming in on that they are all.
Financially healthy applicants and they're typically people that don't have to rent. They just choose to rent and so we were delighted to provide this.
<unk>.
Opportunity to them, we have multiple product segments here, where they range from a townhome product and some of these to a duplex product to the larger four bedroom 253 bathroom.
Single family detached products, so we kind of price each of those accordingly, but we're seeing very strong demand in here and we like this segment a lot.
Okay, Let me turn the.
The presentation over to Kevin who can give you some highlights on the financial results for Q3, so going away at them.
Okay.
Thank you Mark the.
The first lever on here really.
Reiterate what Mark said it highlights our three segments and just shows the growth of each one obviously, the starting with the water and wastewater continue to add customers through Sky Ranch had a great year, especially the last quarter for water sales to oil and gas operators 200.
Almost 263 million gallons of water.
Land development as Mark noted, we have two of our developments got two of our sub phases and phase II building at the same time.
It was a pretty tough winter a lot of snow stayed on the ground a lot of rain. So hopefully, we'll get phase II phase II be going even faster in the summer months. That's obviously in Colorado typical development time is out in the summer when it's sunny and not raining.
And then the single family rental market as Mark pointed out continued growth in that we've got another 19 units in the next phase that we're going to start with sprint, which will once phase two is all done between the two phases.
69 rental homes in total.
Uh huh.
So an excellent firm somewhat.
From a standpoint of the financial results, which we will send out a press release last night with financial results and then we'll be issuing our Form 10-Q tomorrow.
You can see the the through the nine months ended revenue on the left pretty consistent the last three years. So we're pretty happy with the 2021 through 2023 are showing pretty consistent results, which is really indicative of the sky Ranch community continuing to grow at a typical standard pes.
What we feel pretty sustainable pays it's not additive.
Taken off it hasn't dropped despite the market challenges through the year.
2020 revenue was a little bit higher because we had the completion of phase one which by itself was larger than any of the individual sub phase of the phase two and that's how we recognize revenue under this percentage of completion method, where the more we construct and the more we develop some infrastructure of the more revenue we recognized.
And then looking out to the right you can see the segment revenue has continued to expand into the rental market rental houses of the yellow and the other two segments of the water and wastewater and land development.
Fairly consistent Nevertheless, few years, which.
We'd like.
Net income wise so this.
The nine months ended this year and last year are pretty consistent for one to $3. Six you can see in 2021, we had a very large net income year and that was because these public improvements that we get that are reimbursed we used to run those through the P&L until we were sure we're getting paid in 2021.
Based on the growth of Sky ranch or the amount of tax revenue that was coming into the community Authority Board out there we recognized all of that past due stuff through revenue and now we take that through the balance sheet. So it doesn't it won't be as lumpy through our P&L as long as we can continue to collect on that.
Diluted earnings per share same thing that 2020 won't be impacted by that pretty heavily but 2022 and 2023 of our remaining pretty consistent then.
Showing a nice nice trends there.
Our balance sheet and income statement on the next two pages next two slides that youll see obviously, when we get to the 10-Q gets issued and through our press release yesterday I won't go through this in a lot of detail just point out a few items you can see cash we've maintained a pretty good cash.
Run rate, we were at $26 million at the end of the quarter and that's not all in one bank, obviously with the bank.
The last few months, we've diversified that out pretty well we used two separate banks. We also invest in what's called the Ics product that separates all of it up into multiple banks and it gives us the FDIC insurance at literally hundreds of banks and it doesn't automatically every night. So that's a product that faces a very good interest rates.
Continuing down through the balance sheet, you'll see in the notes receivable section that reimbursable public improvements at $23 million that really is that.
The development of public improvements that are donated other studies that we get paid back for over time, whether it's through bonding or fees or property taxes to the community Authority board. So that will continue to go up as we continue to develop that property and until we get payments. We did get about 400, a little over 400000 in payments from the community Authority Board so far.
This year, so that was on top of the 23 ish million that we got last year. So that continues going and then we do have.
Revenue level from <unk>.
Builders paying us in advance and they will recognize that revenue as we.
<unk> is developing the property.
Look at the income statement, which again I won't spend a lot of time on but you can see lot sales have.
For the most part remained fairly consistent when you look at the period over period last year was a little bit slow that may 31, 2022 of the three months ended there really is a timing thing it all depends on how many phases we are going.
This year, we have two phases going phase Iia and <unk> are both growing the same time and the way we recognize revenue.
As we construct we get to recognize the revenue from the homebuilders as we sell those lots again, the public improvements don't run through through there just runs to the margin.
Continuing down our G&A expenses, if you look at those you can see a pretty sharp decline. This year for the three months ended may 31, not because we had any tremendous layoffs or anything like that it was actually the opposite we are still hiring people with some employment retention credits that we received from not not.
Laying off people and continuing to do what was right through Covid. So that was that we got a bunch of money. This quarter. We also continue to operate as streamline as we can we try to we were very efficient about the employees. We hire we do as much work in house as we can and don't try to outsource a lot of work so.
Interest income like we're talking about but you can see obviously with interest rates up quite a bit this year and we were very cognizant about getting with arguing with our bank and make sure. We had FDIC insurance at good rates. Our interest income was was pretty good.
The stock at the bottom of the weighted average common shares I'll point out we haven't had much change does not have been much dilution do we do some stock offerings to employees and board members and auctions and stuff like that but nothing tremendous we fund all of our operations with our earnings.
A few days coming up we obviously talked about the stock repurchase program before but then the 10-Q will get filed tomorrow. We're held an Investor day next week next Wednesday. So I think we have a number of people signed up for that already we will also host wholesale so as in person. So if you want to join on our website, there's a place to sign up or you can email us at <unk>.
It appears like a water dot com.
We will also have a Q&A session is over the lunch hour. So we'll broadcast that through teams and that will be available on our website next week or through E. Mail. We can also email you a link and then Mark is presenting at the ideas conference in Chicago in August and so we will get more information on that asset as it's available.
Now I'll turn it back to Mark for some questions and answers great.
So.
<unk> a great quarter.
We are thrilled that all these each segment is continuing to grow continuing to demonstrate terrific margins capitalizing on the legacy value of the assets.
And we look forward to continuing to deliver results so with that I'll turn it back to Holly as you can open it up for Q&A.
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One moment, while we pose for questions.
Your first question for today is coming from Greg Roeder Adirondack funds.
Hey, Mark can you hear me.
Good morning, Greg.
Morning, how are you.
Great.
Got a question for you on once you complete Sky Ranch.
Following the completed.
How much.
Book value of your water rights.
You have part of the west.
As a result of that project.
So we really wouldnt have partnered with them, where do I would say is that we put about 12% into service. So when you take a look at it we'll have about 5000 of 60000 connections in service, we will have collected the tap fee and the interesting thing about that segment as the recurring revenues are related.
Two it right, we're going to continue to get water and sewer revenue.
Yeah.
Is it fair to say perpetual.
But it is it is one of those asset classes that in 100 years theyre going to be doing the exact same thing with it right. I mean, we will have that revenue stream and our systems are built and maintained for those very very multi generational aspects of.
<unk> delivered yet so we're not in the business of buying and selling water rights. We wanted to provide that as a perpetual service then.
What I can tell you is we'll have we'll have customers for 12% of the total portfolio. If that's the way to think about it.
Right.
You will own.
Right.
Hum.
Subject to serve is scoring models that kind of how it works.
Yes, that's right okay.
Forever.
Why not sell that to utility correct.
Those type of transactions are.
Tommy.
Yes, they are.
Private water utilities seeing out if it would be.
A peer of ours publicly traded private water utility.
I'm in and they say I want to buy the customer base in the portfolio that goes with it whether they buy the existing customers that water would stay with the account or they buy the whole portfolio, where they want.
<unk> unallocated together with the allocated I mean, there is there is any number of combinations, but typically if you're if once we sell our tap infrastructure that goes with it there's.
Customers that go with it there as operation and maintenance responsibilities that go with it.
Okay.
And.
One last question on the 16th.
Right.
Plan too.
<unk>.
What how do you how should we look at that by product type.
Really it's all it's all single family and so the the various categories of the single family are going to range from probably a higher concentration of detached single family, but there'll be detached attached there'll be duplex attached paired product as they call. It.
There'll be town home product, where we may own a few.
<unk> of the units or we may own the entire.
These get developed in maybe five or six pack.
Building segments of that we'll take a look as to we do have multifamily as part of this development as well there'll be a transition between the commercial area in the residential area.
And we'll take a look at what opportunities exist for us to play in that field as well theres very good players in that area, where we may partner with some of those folks on how we develop some of that but right now I think our concentration is going to be on the single family right now and not the multifamily.
We'll see the multifamily together with the commercial over the next day, two or three years.
And then is there a big spread in rents between a detached.
Hum.
Not so much I mean, we do have we do have price segmentation on it.
But our spreads right now are somewhere between 2831 hundreds so.
Big four bedroom, three bedroom half or three Bath house might be at the high end of that where you might have say a two bedroom two bath.
Duplex town home that might be on the low end of that.
Okay.
Okay. That's all thanks.
You bet.
Once again, if there are any questions or comments. Please press star one on your Touchtone phone.
Your next question for today is coming from Elliot Knight at Knight Advisors.
Good morning, Marc Good morning Elliot.
Uh huh.
Two pleasant surprise.
I've heard this morning, one is I noticed capturing these are now up to $38000.
It wasn't that long ago that they were much closer to 30.
So thats just an observation.
Second surprise is.
The Denver market is Hello.
Stronger, particularly poor.
First time owners.
It's sad.
In an earlier call you.
You speculated that pure cycle might take back some watch from builders.
Has the market been strong enough so that the builders don't want a silk lots back to you.
Good question.
No.
It's not so much that they don't want to sell a lot back to us because they haven't actually paid for it at that time, what became an opportunity for both them and us was particularly when interest rates are.
Rising fast and we moved into the winter months and everybody got all dark and cold and concerned about what the market was it wasn't going to do it.
Yeah.
Made a little hay out of that and I said instead of worrying about it on the start time or next phase why don't we do this why don't I take back a few of these lots that you're yet to obtain four and I will enter into an agreement with you. So that you actually got a customer or a percentage of the next phase.
Pre sold these and it was a it was an interesting.
Exercise for both them and their management team on okay.
Do we don't have to buy a lot we can still do what we're going to do on the building side.
And it gives us confidence that if they had picked the number they had 50 lots in there that they add maybe maybe one of the builders would have had five or six lots that we would have taken and entered into a contract for them to build on those lots and so it was a great opportunity for both of us.
So that's kind of how it worked in terms of it wasn't that they were being ice to how did the opportunity. It was actually that they were getting pre sales and the opportunities. So very good relationship for both them and us.
Various due to and your observations on the tap is that one of the advantages and I think we highlight that in our investment theme, but we've had these water rights for very long time, and they've appreciated significantly in the value and where we see that value is in tap fees in our tap fees really.
Our competitive to the local markets right customers can either choose to develop in our area or not and so that tap fee.
Excuse me.
That tap is a market based reaction of the availability of water resources and we've seen a big pressure on those staff fees.
You've been with the company and tracking the company not to see tap fees go from 30% to 38, but you've seen them go from 15% to 38% so.
It has had tremendous growth and there will be continued growth in that area as resources become more constrained.
Actually I don't know where tap fees were $19 93, but that's when I started with.
With the company.
They were slightly less.
But.
It's so interesting.
The first questioner.
The very same.
Australia observation.
That 88% of the company's water reserves are still going to be available. It's the largest on dedicated water supply in the Denver area.
Multiply that by $38000 and you've got a big number.
But what you're doing.
Is your taking that water.
And making it.
Far more valuable through build to rent and that sort of thing.
It's fascinating exercise that youre going through.
And Youre doing it well thanks, Mark you also on the back like that keep it going.
[laughter].
We have reached the end of the question and answer session and I will now turn the call over to Mark for closing remarks.
For those of you that either had a technology issue in getting in for a question or that you are listening in on the replay of this and if the question Pops up don't hesitate to give me a call.
We look forward to seeing those of you who are going to come out and kick the tires next week it shows much better than in person than it does on the slide deck.
It's very.
The tremendous velocity that we've got.
<unk>.
The land side, the development side and what we continue to do to enhance the community through.
Asset, which is the investment that we make in trails and open space and.
Parks and then ultimately charter schools, the Rec centers commercial development everything we're doing and it continues to add value to the community to each individual homeowner and we're looking as Elliot highlighted we're looking to participate on vertically integrating all sides of that so.
That we're doing what we're doing we're also doing it for own account and so that helps motivate.
All of these investment decisions and we continue to expand the water utility segment.
Land development segment as I've said before we like that land development and pairing land development with water utilities.
Our nets are out for additional opportunities on land development, and bringing our water and increasing the value of the opportunity by adding water resources.
Horizontal expertise and then maybe even some of our vertical expertise. So again I want to thank you all for your continued support and confidence in the company and.
Look forward to seeing those of you that can make it next week that I'll sign off.
This concludes today's conference and you may disconnect your lines at this time.
You for your participation.
Thank you Holly.