Pure Cycle Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

SEGMENT INFORMATION

SEGMENT INFORMATION

9 Months Ended

May 31, 2021

NOTE 13 – SEGMENT INFORMATION

Based on the methods used by the Chief Operating Decision Maker (the “CODM”) to allocate resources, the Company has identified two operating segments which meet GAAP segment disclosure requirements, namely the water and wastewater resource development segment and the land development segment. A third segment, Build-to-Rent (“BTR”), will be presented once material to operations.

The water and wastewater resource development business includes selling water services to customers, which water is provided by the Company using water rights owned or controlled by the Company, and developing infrastructure to divert, treat and distribute that water and collect, treat and reuse wastewater. The land development segment includes all the activities necessary to develop and sell finished lots, which as of and for the nine months ended May 31, 2021 and 2020, was done exclusively at the Company’s Sky Ranch Master Planned Community.

Oil and gas operations, although material in certain years, are deemed a passive activity as the CODM does not actively allocate resources to these projects; therefore, this is not classified as a reportable segment.

The tables below present the measure of profit and assets the CODM uses to assess the performance of the segment for the periods presented:


	Three Months Ended May 31, 2021
	Water and
	wastewater
	resource
	development		Land development		Corporate		Total

	(In thousands)
Total revenue	$	2,198	$	468	$	—	$	2,666
Cost of revenue		(483)		(99)		—		(582)
Depreciation and depletion		(358)		—		—		(358)
Total cost of revenue		(841)		(99)		—		(940)
Gross profit	$	1,357	$	369	$	—	$	1,726


	Three Months Ended May 31, 2020
	Water and
	wastewater
	resource
	development		Land development		Corporate		Total

	(In thousands)
Total revenue	$	1,154	$	696	$	—	$	1,850
Cost of revenue		(164)		(556)		—		(720)
Depreciation and depletion		(386)		—		—		(386)
Total cost of revenue		(550)		(556)		—		(1,106)
Gross profit	$	604	$	140	$	—	$	744


	Nine Months Ended May 31, 2021
	Water and
	wastewater
	resource
	development		Land development		Corporate		Total

	(In thousands)
Total revenue	$	7,386	$	4,887	$	—	$	12,273
Cost of revenue		(1,785)		(2,087)		—		(3,872)
Depreciation and depletion		(1,077)		—		—		(1,077)
Total cost of revenue		(2,862)		(2,087)		—		(4,949)
Gross profit	$	4,524	$	2,800	$	—	$	7,324


	Nine Months Ended May 31, 2020
	Water and
	wastewater
	resource
	development		Land development		Corporate		Total

	(In thousands)
Total revenue	$	4,326	$	11,503	$	—	$	15,829
Cost of revenue		(716)		(10,436)		—		(11,152)
Depreciation and depletion		(988)		—		—		(988)
Total cost of revenue		(1,704)		(10,436)		—		(12,140)
Gross profit	$	2,622	$	1,067	$	—	$	3,689

The following table summarizes total assets for the Company’s water and wastewater resource development business and land development business by segment. The assets consist of water rights and water and wastewater systems in the Company’s water and wastewater resource development segment and land, inventories and deposits in the Company’s land development segment. The Company’s other assets (“Corporate”) primarily consist of cash, cash equivalents and restricted cash, equipment, and related party notes receivables.


	May 31, 2021		August 31, 2020

	(In thousands)
Water and wastewater resource development	$	55,832	$	56,267
Land development		28,897		6,975
Corporate		24,381		26,519
Total assets	$	109,110	$	89,761

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details