LOS ANGELES - Cadiz Inc. (NASDAQ: NASDAQ:CDZI), a California-based water solutions company, has announced through its subsidiary ATEC Water Systems, LLC, the procurement of three new contracts for iron and manganese filtration systems. These contracts, expected to generate $1.5 million in sales revenue, will serve to treat groundwater in Wisconsin, Nevada, and Washington.
ATEC's filtration technology will be employed in diverse communities, including the University of Wisconsin at Madison, suburban areas of Portland, and rural Nevada regions involved in clean energy development. This initiative is part of the company's efforts to address contaminated groundwater, a pressing issue that affects many underserved communities in the United States.
Iron and manganese, though naturally occurring in the earth's crust, can contaminate water supplies, leading to discoloration, bacterial growth, and taste and odor issues. These metals are also under scrutiny for their potential health risks, especially to children and infants, with the U.S. Environmental Protection Agency considering regulation.
ATEC's Chief Operating Officer, Lee Odell, highlighted that nearly 40% of groundwater systems in the U.S. exceed secondary drinking water standards for these metals. ATEC's in-line pressure filter systems, which will be delivered by year-end, come in various sizes and are designed to remove contaminants through adsorption using a filter media.
The company has a history of providing water treatment solutions, having delivered over four hundred systems in the last thirty years, addressing contaminants like arsenic, hexavalent chromium, and nitrates.
Cadiz Inc., established in 1983, aims to offer comprehensive water solutions, including supply, storage, and treatment, to combat the impacts of climate change on water access. The company owns substantial land and water resources in California and boasts a portfolio of pipeline assets and cost-effective water treatment technologies.
This press release statement also contains forward-looking statements regarding expectations for ATEC's revenue growth, which are subject to risks and uncertainties that could cause actual results to differ from projections. The information is based on a press release statement from Cadiz, Inc.
In other recent news, water solutions company Cadiz Inc. has undertaken several initiatives to enhance water accessibility in California. The company has signed a Letter of Intent to supply the City of Hesperia with 75,000 acre-feet of water as part of the broader "One Water" Initiative. This initiative aims at developing a coordinated water management strategy in San Bernardino County's Mojave River region.
Moreover, Cadiz has entered into water supply agreements with Solstra Communities California LLC and Golden State Water Company. Cadiz will provide Solstra with 1,275 acre-feet of water annually, supporting the development of over 4,000 homes near Vandenberg Space Force Base. Golden State Water Company will receive water for the City of Barstow from Cadiz.
These developments are part of Cadiz's strategy to leverage its existing infrastructure, particularly the Northern Pipeline, to improve water supply reliability. Cadiz anticipates generating approximately $850 per acre-foot from the water purchased by Solstra and Golden State, with net revenue calculated in 2024 dollars over the contract term. These agreements represent recent advancements in Cadiz's commitment to sustainable water supply.
InvestingPro Insights
Cadiz Inc. (NASDAQ: CDZI) continues to expand its market presence with the recent announcement of new contracts for its filtration systems. As the company capitalizes on the need for water treatment solutions, it's essential to consider the financial health and stock performance of Cadiz. Here are some key insights from InvestingPro:
The company's market capitalization stands at approximately $250.84 million, reflecting its position in the market. Despite significant sales growth in the last twelve months, with a remarkable increase of over 100%, Cadiz Inc. is currently not profitable, which is a critical factor for investors to consider. The company's gross profit margin has been in the negative, at -29.75%, indicating the cost challenges it faces in maintaining profitability.
InvestingPro Tips reveal that analysts expect sales growth in the current year, which aligns with the company's positive outlook on its new contracts. However, the same analysts do not anticipate Cadiz to be profitable this year. The stock's Relative Strength Index (RSI) suggests it is in overbought territory, which could indicate a future correction in stock price.
Investors interested in the water solutions sector may find Cadiz Inc. intriguing, especially considering its significant return over the last week, month, and three months, with respective increases of 11.78%, 25.0%, and 64.44%. On the other hand, the company's stock is trading at high revenue and Price / Book valuation multiples, which could suggest a premium is being paid for its growth prospects.
For those who want to delve deeper into Cadiz Inc.'s financials and stock performance, InvestingPro offers additional insights and tips. There are 15 more InvestingPro Tips available for Cadiz Inc., which can be accessed at Investing.com/pro/CDZI. To enhance your investment research, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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