Evoqua Water Technologies Reports Fourth Quarter and Full Year 2019 Results
Fourth Quarter 2019 Financial Highlights:
Consolidated revenues of $412.5 million, an increase of 12.6% over the prior year period
Net income of $1.9 million compared to net loss of $3.1 million in the prior year period
Adjusted EBITDA of $79.3 million, up 29.6% from the prior year period
Full Year 2019 Financial Highlights:
Consolidated revenues of $1.44 billion, an increase of 7.8% over the prior year
Net loss of $8.5 million compared to net income of $7.9 million in the prior year
Adjusted EBITDA of $235.0 million, up 8.3% from the prior year
Net debt leverage ratio improved to 3.8x Adjusted EBITDA
PITTSBURGH -- Evoqua Water Technologies (NYSE:AQUA), an industry leader in mission-critical water treatment solutions, today reported results for its fourth quarter and fiscal year ended September 30, 2019.
Revenues for the fourth quarter of fiscal 2019 were $412.5 million, an increase of 12.6% as compared to the prior year period. The revenue increase was driven primarily by organic revenue growth of 11.5%, along with an increase of 2.0% from acquisitions, offset slightly by negative currency translation. Net income for the fourth quarter of fiscal 2019 was $1.9 million, an improvement of $5.0 million as compared to the prior year period, resulting in diluted earnings per share (“EPS”) of $0.01, which includes non-cash foreign currency translation losses of $6.7 million. Adjusted EBITDA for the fourth quarter of fiscal 2019 was $79.3 million, an increase of $18.1 million, or 29.6% versus the prior year period.
For fiscal 2019, revenues were $1.44 billion, 7.8% higher year-over-year. The fiscal year 2019 net loss was $8.5 million, resulting in negative EPS of ($0.08). The net loss for the full year includes $10.5 million of non-cash foreign currency translation losses. For fiscal 2019, Adjusted EBITDA was $235.0 million, an increase of $18.1 million or 8.3% from the prior year. The increase in Adjusted EBITDA for fiscal 2019 as compared to the prior year was driven primarily by higher revenue volumes and improved operational efficiencies. Adjusted EBITDA growth and strong cash generation also improved the net debt leverage ratio to 3.8x Adjusted EBITDA.
“We are pleased to report revenues and Adjusted EBITDA results at the upper end of our fiscal 2019 guidance range.” stated Ron Keating, Evoqua’s CEO. “Our fourth quarter results were strong across all key metrics driven by double-digit organic revenue growth. Our APT segment’s organic revenue results were particularly robust, increasing more than 20% year-over-year. Our order book continues to be strong, again growing by double-digits, supported by both capital and services, including outsourced water opportunities that are expected to convert into revenues over multiple years. Our total service revenues grew nearly 8% in the fourth quarter and were up over 10% for the full year.”
Mr. Keating continued, “We are making excellent progress positioning the business for long-term profitable growth. Our investment in Frontier Water Systems and the announced divestiture of the Memcor product line represent ongoing portfolio actions consistent with our strategy. We continue to expand our portfolio of solutions and services, providing sustainable and digitally connected solutions that deliver recurring revenue growth, ultimately improving our balance sheet flexibility.”
“Our fiscal 2020 outlook is positive, and we expect to build on 2019’s momentum. Customer interest in our broad portfolio of solutions is strong, and we are investing to meet that demand. We are also closely monitoring uncertainties related to global economic conditions and geopolitical risks as we move into the new fiscal year. For the full-year, we expect revenues to be in the range of $1.40 billion and $1.46 billion and adjusted EBITDA to be in the range of $230 million to $240 million. This guidance includes the loss of Memcor’s 2019 revenues of $60 million and Adjusted EBITDA of $8 million.”
Fourth Quarter Segment Results
Evoqua has two reportable operating segments - Integrated Solutions and Services and Applied Product Technologies. The results of our segments for the fourth quarter are as follows:
Integrated Solutions and Services
The Integrated Solutions and Services (ISS) segment provides tailored services and solutions in collaboration with our customers backed by life‑cycle services including on‑demand water, outsourced water, recycle / reuse and emergency response service alternatives to improve operational reliability, performance and environmental compliance. Key offerings within this segment also include equipment systems for industrial needs (influent water, boiler feed water, ultrahigh purity, process water, wastewater