Two Rivers Doubles Revenues
20 Março 2014 - 8:15AM
Marketwired
Two Rivers Doubles Revenues
Cuts Expenses by 55%
DENVER, CO--(Marketwired - Mar 20, 2014) - Two Rivers
Water & Farming Company (OTCQB: TURV) ("Two Rivers")
(www.2riverswater.com) reported a doubling of revenues,
year-over-year from 2012 to 2013. In the same periods, total
operating expenses decreased over 55%, from $7.8 million to $3.5
million.
Two Rivers generated farm revenues in excess of $2.0 million in
2013, more than doubling from $979,000 in 2012. In 2013, Two
Rivers farmed a total of 1,385 gross acres, of which 868 gross
acres (820 net acres) were planted and 517 acres received federal
crop insurance due to drought conditions. A total of 690 of
the 1,385 gross acres were irrigated. The crop production
consisted of cabbage; pumpkins and squash grown for human
consumption; as well as feed crops, such as alfalfa, corn, oats and
sorghum, planted as part of its crop rotation
practice. Produce marketing operations package and ship
produce for its farms and for a network of farmers who grow crops
for Two Rivers, and to date, Two Rivers has sold fruits and
vegetables principally to national accounts through its wholly
owned subsidiary Dionisio Farms & Produce.
John McKowen, CEO of Two Rivers, stated, "We've developed a
business model that is different from first generation western
water business models. Unlike first generation water
businesses in the southwestern United States, we reinvigorate
agriculture communities rather than trying to dry them up in order
to move water to water short municipalities."
In its recently filed annual report, Two Rivers gives an
overview of its business model, stating that currently, there is a
significant arbitrage between the value of irrigation water and
municipal water in the semi-arid regions of the southwestern United
States. The arbitrage is amplified by a predicted water supply
shortage for municipalities in the near future. The arbitrage
results in a 5-10 fold increase in the price of municipal water
over irrigation water. First generation western water business
models attempted to capture the arbitrage by "buying and drying"
irrigated farmland in order to sell the irrigation water to
municipalities. The practice fallowed some of the most
productive irrigated farmland and decimated entire agricultural
communities.
The buy and dry model failed to generate any significant
revenues and earnings for investors as political and legal
challenges developed. The buy and dry model became
politically, economically and legally untenable. In the late
19th century, 85% of all water rights were granted to and are still
primarily held by agriculture interests. Since then,
populations have increased and people have moved from the farm to
the city. This has resulted in a water shortage for
municipalities, for which there must be a solution. Two Rivers
has developed a more viable and sustainable solution than the buy
and dry practices of the past.
Two Rivers business model reinvigorates, rather than decimates,
agricultural communities and provides excess water to
municipalities through market forces. Two Rivers' core
business converts irrigated farmland, which is marginally
profitable growing low value feed crops, into highly profitable
irrigated farmland growing high yield, high value, fruit and
vegetable crops. Fruit and vegetable crops generate six times
the revenue of feed crops with better margins.
As a result of Two Rivers' higher revenue and better margins, it
can afford to and is willing to pay a higher price for
water. As the price of water increases, so does the
supply. Farmers receive more for their crops and
water. Municipal consumers pay more for excess water and make
better water choices. The water arbitrage shrinks. Water
supply and demand reaches equilibrium. Market action, between
satisfied buyers and sellers from both the agricultural and
municipal communities, rather than insurmountable political and
legal processes, is the driving force of Two Rivers
business.
Two Rivers' financial returns far outpace the revenues and
margins generated by first generation western water business
models. In the agricultural communities where it operates, Two
Rivers creates new and better paying jobs for farming, marketing,
handling and processing vegetables. In the municipal
communities, Two Rivers provide wholesale water not necessary for
our core business, agriculture. Two Rivers concentrates
acquisitions on water rights and infrastructure that are, in part,
owned by municipalities, thereby letting the municipalities do the
heavy legal and political lifting necessary to obtain excess
water.
In 2009, Two Rivers began acquiring and developing irrigated
farmland and associated water rights and infrastructure. As of
December 31, 2013, it owned 7,465 gross acres. Gross acres
owned increased from 5,211 gross acres at December 31, 2012 and
4,600 gross acres at December 31, 2011. Two Rivers will seek
to expand its holdings by strategically acquiring or leasing
irrigable farmland in the Arkansas River Basin. Two Rivers
intends to develop and bring into production more of its currently
held gross acres as it acquires additional water rights. Two
Rivers also expects to increase the variety of crops produced as it
expands farming operations through acreage it manages and through
its network of growers.
About Two Rivers:
Two Rivers has developed and operates a new farming and water
business model suitable for arid regions in the Southwestern United
States whereby the Company synergistically integrates high value
fruit and vegetable farming and wholesale water distribution into
one company. Two Rivers business model reinvigorates, rather
than decimates, agricultural communities and provides excess water
to municipalities through market forces. Two Rivers' core
business converts irrigated farmland, which is marginally
profitable growing low value feed crops, into highly profitable
irrigated farmland growing high yield, high value, fruit and
vegetable crops. Fruit and vegetable crops generate six times
the revenue of feed crops with better margins. The Company's
initial area of focus is in the Arkansas River basin and its
tributaries on the southern Front Range of Colorado.
This news release contains "forward-looking statements," as
that term is defined in Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. Statements
that are not purely historical are forward-looking statements and
include any statements regarding beliefs, plans, expectations or
intentions regarding the future. Actual results could differ
from those projected in any forward-looking statements due to
numerous factors. Such factors include, among others, the inherent
uncertainties associated with developing and acquiring land and
water resources. There can be no assurance Two Rivers will be
able to raise additional capital, that it will be able to increase
the scale of its business, or that its existing resources will be
sufficient to meet all of its cash needs. These
forward-looking statements are made as of the date of this news
release, and Two Rivers assumes no obligation to update the
forward-looking statements, or to update the reasons why actual
results could differ from those projected in the forward-looking
statements.
Contact: Wayne Harding Two Rivers Water & Farming Company
(303) 222-1000 info@2riverswater.com
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