15.08.07

15.8.2007: Meldung: Catalytica Energy Systems, Inc.: Financial Results for the Second Quarter and First Six Months of 2007 – $650,000 Order

Catalytica Energy Systems Reports Financial Results for the Second Quarter and First Six Months of 2007

TEMPE, AZ, Aug 14, 2007 -- Catalytica Energy Systems, Inc., a provider of innovative products and services to meet the growing demand for clean energy production, today reported financial results for the second quarter and six months ended June 30, 2007. The quarterly financial results for the comparable periods of 2006 have been reclassified to account for discontinued operations associated with the Company"s exit from its research and development business segment during the fourth quarter of 2006. Accordingly, total revenues for all periods presented herein are comprised solely of sales from the Company"s continuing SCR catalyst and management services business (SCR-Tech).

Total revenues for the second quarter of 2007 were $453,000, compared with total revenues of $957,000 in the same period of the prior year. Total revenues in the most recent quarter excluded approximately $592,000 of revenues associated with catalyst regeneration services completed during the quarter that will not be recognized until the third quarter of 2007, in accordance with the Company"s revenue recognition policy, due to invoice provisions set forth in the customer contract. Selling, general and administrative expenses for the quarter increased to $3,010,000, from $1,486,000 in the second quarter of 2006, and included $1,528,000 of legal, consulting and other professional expenses associated with the proposed merger of Catalytica Energy Systems with the renewable energy divisions of NZ Legacy, LLC, which was announced on May 8, 2007. Total operating expenses for the quarter, including the costs associated with both the total and deferred revenues noted above, were $4,202,000, compared with $2,419,000 in the second quarter last year. Net loss for the quarter was $3,578,000, or a loss of $0.20 per share, compared with a net loss of $2,890,000, or a loss of $0.16 per share in the corresponding period of the prior year. Net loss in the second quarter of 2007 also included a loss from discontinued operations totaling $63,000, while net loss in the second quarter of 2006 included a loss from discontinued operations totaling $1,636,000.

During the second quarter, the Company"s use of cash, cash equivalents and short-term investments (collectively referred to as "cash consumption") totaled $1,565,000, compared with cash consumption of $846,000 during the second quarter of 2006. Excluding merger-related expenditures in the most recent quarter, cash consumption from ongoing business operations totaled $786,000.

"Our second quarter financial results were negatively impacted by significant expenses we incurred relating to the proposed merger transaction, soft market conditions for SCR catalyst services and the deferral of revenues," stated Rob Zack, president and CEO of Catalytica Energy Systems. "While we continue to anticipate revenues in the second half of 2007 will outperform revenues in the first six months of the year, new orders for SCR catalyst regeneration services have proven slower to materialize than we had anticipated. Despite sluggish order activity for the year to date, we remain optimistic about the prospects for near-term market growth and the substantial commercial opportunities that lie ahead for SCR catalyst and management services. On that note, I am pleased to report that our sales efforts have gained meaningful traction over the past two months. We have recently responded to numerous requests for proposals and expect these to begin translating to firm orders later this year. While we likely will not begin to fully realize the positive impact of these revenue opportunities until next year due to the project-based nature of our SCR services business, we are encouraged to see signs of the market beginning to prepare for more stringent NOx emissions regulations and year-round SCR operation beginning in January 2009 under the EPA"s Clean Air Interstate Rule. Accordingly, we continue to anticipate revenue growth in 2008 when the market is expected to more fully develop."

For the six month period ended June 30, 2007, total revenues were $1,808,000, compared with total revenues of $3,936,000 in the corresponding period of the prior year, driven by decreased sales of SCR catalyst and management services. Net loss in the first six months of 2007 was $5,296,000, or a loss of $0.29 per share, compared with a net loss of $4,615,000, or a loss of $0.25 per share, in the first half of 2006. Net loss in the first half of 2007 included approximately $2,213,000 of legal, consulting and other professional expenses associated with the proposed merger transaction and a loss from discontinued operations totaling $38,000, while net loss in the first half of 2006 included a loss from discontinued operations totaling $3,230,000.

Total cash consumption for the six months ended June 30, 2007 was $2,623,000, down 27% from $3,601,000 in the same period last year. Excluding merger-related expenditures of $1,343,000, cash consumption from operations in the first half of 2007 totaled $1,280,000, a 64% improvement over the same period last year, reflecting the benefit of the Company"s restructuring and cost reduction activities completed in the fourth quarter of 2006. At June 30, 2007, Catalytica Energy Systems" cash position totaled $16,004,000.

2007 Financial Outlook

Catalytica Energy Systems is lowering its full-year revenue guidance due to limited order activity and revenue backlog as of June 30, 2007. The Company currently projects that 2007 revenues will range from $5.0 to $6.0 million, down from its previous guidance for revenues in the range of $6.0 to $7.0 million. Catalytica Energy Systems continues to project that its full-year cash consumption in relation to its ongoing business activities, excluding any effect of the proposed Renegy merger transaction, will total $3.0 to $4.0 million. However, this guidance previously included approximately $1.3 million in anticipated capital expenditures to increase production capacity at SCR-Tech. While the Company remains committed to expanding these facilities, it now plans to defer approximately $1.1 million of such investment until market conditions and revenue backlog justify such expansion. In addition to its cash consumption from ongoing operations, Catalytica Energy Systems has incurred and expects to continue incurring costs in 2007 associated with pursuing and consummating the proposed Renegy merger transaction, which are anticipated to range, in total, from $3.0 to $4.0 million.

Business Updates

Catalytica Energy Systems" SCR-Tech business announced today in a separate release the signing of new contracts with two leading Midwestern utility customers, including an order totaling approximately $650,000 to provide SCR catalyst regeneration services and a three-year SCR management contract. Under the terms of the first contract, SCR-Tech will clean and regenerate catalyst from an SCR system located at one of the customer"s coal-fired power plants. This order marks the fifth regeneration project that SCR-Tech has been engaged to perform for this particular customer.

The second contract is a three-year agreement signed with a new customer to provide SCR management consulting services. As part of the long-term agreement, SCR-Tech will provide ongoing evaluation and guidance on effective SCR system operation and catalyst management strategies, with the objective of assisting the customer with optimizing the performance of its SCR systems while reducing operating and maintenance costs and achieving cost-effective NOx compliance.

Including these most recent contracts, SCR-Tech completed the quarter with a revenue backlog totaling approximately $2.2 million, including $931,000 of deferred revenues. Catalytica Energy Systems defines backlog as firm purchase orders and deferred revenue expected to be recognized as revenue within 18 months.

Also during the quarter, SCR-Tech expanded its sales force in preparation for anticipated growth in market demand beginning in 2008. Ten outside sales representatives have been added to expand coverage in key regions with the greatest concentration of customers operating coal-fired plants with SCR systems.

Merger Update

On May 8, 2007, Catalytica Energy Systems announced the signing of a definitive agreement pursuant to which the renewable energy divisions of NZ Legacy, LLC (a privately owned Arizona land, mineral and energy development company), which include Snowflake White Mountain Power, LLC, Renegy, LLC, and Renegy Trucking, LLC, businesses engaged in creating and operating renewable energy power projects and harvesting biomass fuel, will combine with Catalytica Energy Systems in an all-stock transaction. The combined companies will operate under a holding company to be called Renegy Holdings, Inc. (Renegy). The mission of Renegy"s renewable energy division will be to utilize existing technology to supply clean, renewable and economical power, with the vision of becoming a leading renewable energy independent power producer (IPP) in North America. Renegy will own and operate a 24 megawatt (MW) biomass plant, which is currently under construction near Snowflake, Arizona, that will supply power to Arizona Public Service and Salt River Project, the two largest utilities in the state of Arizona, pursuant to long-term power purchase agreements currently in place for a 20-year period. Renegy will also endeavor to create multiple additional renewable energy projects over a five-year period through acquisitions, construction, installation and operation. Future projects will focus primarily on biomass, solar and wind energy power.

The transaction, which has been unanimously approved by the Board of Directors of Catalytica Energy Systems, is subject to approval by the stockholders of Catalytica Energy Systems, regulatory approvals and

customary closing conditions, and is expected to close by the end of the third quarter of 2007.

In connection with the proposed merger agreement, Renegy filed a preliminary registration statement on Form S-4 with the Securities and Exchange Commission (SEC) on June 28, 2007, and has recently filed an amended Form S-4 to address comments received from the SEC. Catalytica Energy Systems anticipates mailing proxy materials relating to the merger transaction for stockholder consideration as soon a practicable once the definitive registration statement is filed with and deemed effective by the SEC. Renegy also submitted in July an application for inclusion on the NASDAQ Market and has reserved the ticker symbol RNGY for the trading of its common stock. If the merger is adopted by the stockholders of Catalytica Energy Systems, shares of Catalytica Energy Systems" common stock will be exchanged for new shares of Renegy common stock. To increase the initial trading price of Renegy common stock to meet the $5 minimum share price requirement for initial listing on the NASDAQ Market, the exchange of Catalytica Energy Systems common stock will be subject to a merger exchange ratio, thereby reducing the total number of outstanding shares of Renegy common stock. It is currently anticipated that stockholders of Catalytica Energy Systems will receive one share of Renegy common stock for every seven shares of Catalytica Energy Systems common stock held at the effective time of the merger.

Under the terms of the merger agreement, Catalytica Energy Systems was allowed to solicit proposals from third parties for a 30-day period commencing on May 8, 2007 for an acquisition of Catalytica Energy Systems. Catalytica Energy Systems did not receive any such offers that its Board of Directors, in consultation with its advisors, deemed superior to the proposed merger transaction. However, during that period, Catalytica Energy Systems received interest from several parties in its SCR-Tech business on a stand-alone basis. The Company is continuing to have discussions and negotiations with respect to a potential sale of SCR-Tech. The Company does not anticipate disclosing developments or providing any additional information relating to a potential sale of SCR-Tech unless and until a definitive agreement is executed in this regard. There can be no assurance that such a sale of SCR-Tech will transpire.

About Catalytica Energy Systems

Catalytica Energy Systems, based in Tempe, Arizona, provides innovative products and services to meet the growing demand for clean energy production, with a focus on cost-effective emissions control solutions for the coal-fired power generation industry. Through its SCR-Tech subsidiary (www.SCR-Tech.com), the Company offers a variety of services for coal-fired power plants that use selective catalytic reduction (SCR) systems to reduce nitrogen oxides (NOx) emissions. These services include SCR catalyst management, cleaning and regeneration, as well as consulting services to help power plant operators optimize efficiency and reduce overall NOx compliance costs. Find Catalytica Energy Systems on the Worldwide Web at www.CatalyticaEnergy.com.

Additional Information and Where to Find It

This document does not constitute an offer of any securities for sale. The proposed merger transaction described herein will be submitted to the stockholders of Catalytica Energy Systems, Inc. for their consideration. In connection with the proposed merger, Renegy Holdings, Inc. has filed a registration statement, a proxy statement / prospectus and other materials with the Securities and Exchange Commission (SEC). CATALYTICA ENERGY SYSTEMS URGES INVESTORS TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT / PROSPECTUS AND THESE OTHER MATERIALS CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT CATALYTICA ENERGY SYSTEMS, SNOWFLAKE WHITE MOUNTAIN POWER, RENEGY, RENEGY TRUCKING, AND THE PROPOSED TRANSACTION. Investors also may obtain information about the proposed transaction by reviewing the Form 8-K filed by Catalytica Energy Systems on May 8, 2007 in connection with the announcement of the transaction and any other documents filed with the SEC when they become available. Investors may obtain free copies of the proxy statement / prospectus as well as other filed documents containing information about Catalytica Energy Systems at http://www.sec.gov, the SEC"s public website. These SEC filings may also be obtained free of charge on Catalytica Energy Systems" website at http://www.CatalyticaEnergy.com or by calling the Company"s investor relations department at (650) 631-2847.

Participants in the Solicitation

Catalytica Energy Systems and its executive officers and directors may be deemed, under SEC rules, to be participants in the solicitation of proxies from stockholders of Catalytica Energy Systems with respect to the proposed merger. Information regarding the officers and directors of Catalytica Energy Systems is included in Amendment No. 1 to the Company"s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the SEC on April 30, 2007. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by securities holdings or otherwise, is set forth in the proxy statement / prospectus and other materials filed with the SEC in connection with the proposed merger.


CONTACT:
Megan Meloni
Investor Relations
(650) 631-2847

SOURCE: Catalytica Energy Systems, Inc.





SCR-Tech Announces $650,000 Order for Catalyst Regeneration Services and a Three-Year SCR Management Contract

CHARLOTTE, NC, Aug 14, 2007 -- SCR-Tech, a subsidiary of Catalytica Energy Systems, Inc., announced today that it has secured contracts from two leading Midwestern utility customers, including an order totaling approximately $650,000 to provide SCR catalyst regeneration services and a three-year SCR management contract.

Under the terms of the first contract, SCR-Tech will clean and regenerate catalyst from an SCR system located at one of the customer"s coal-fired power plants. This process will extend the useful life of the existing catalyst, providing a lower cost alternative to purchasing new catalyst and eliminating the costs and environmental concerns associated with land filling spent catalyst. This order marks the fifth layer of SCR catalyst that SCR-Tech has been engaged to regenerate for this particular customer.

The second contract is a three-year agreement signed with a new customer to provide SCR management consulting services. As part of the long-term agreement, SCR-Tech will provide ongoing evaluation and guidance on effective SCR system operation and catalyst management strategies, with the objective of assisting the customer with optimizing the performance of its SCR systems while reducing operating and maintenance costs and achieving cost-effective NOx compliance.

SCR-Tech President Bill McMahon stated, "The onset of more stringent NOx emissions regulations and year-round SCR operation beginning in January 2009 under the EPA"s Clean Air Interstate Rule is creating additional challenges for our customers. In addition to our proven SCR catalyst regeneration technology that fully restores catalyst activity for significantly less cost than purchasing new, we offer a comprehensive array of SCR management services that can help customers both prepare for these new regulatory requirements and further improve the economics of plant operation. We are pleased that new and existing customers have recently begun to take advantage of these services as part of their NOx compliance strategy. We look forward to developing additional long-term SCR and catalyst management partnerships in the months ahead as we address the growing market demand for cost-effective environmental compliance solutions."

SCR-Tech, based in Charlotte, North Carolina, is the leader in catalyst regeneration technologies and management services for selective catalytic reduction (SCR) systems used by coal-fired power plants to reduce nitrogen oxides (NOx) emissions. The Company offers a wide variety of services, including SCR catalyst cleaning, rejuvenation and regeneration, as well as SCR system management and consulting services, to help power plant operators optimize their SCR system operation while reducing overall operating and maintenance costs. SCR-Tech is a wholly owned subsidiary of Catalytica Energy Systems, Inc. (NASDAQ: CESI), a provider of innovative products and services to meet the growing demand for clean energy production. For more information on SCR-Tech, please visit www.SCR-Tech.com.

Catalytica Energy Systems, based in Tempe, Arizona, provides innovative products and services to meet the growing demand for clean energy production, with a focus on cost-effective emissions control solutions for the coal-fired power generation industry. Through its SCR-Tech subsidiary (www.SCR-Tech.com), the Company offers a variety of services for coal-fired power plants that use selective catalytic reduction (SCR) systems to reduce nitrogen oxides (NOx) emissions. These services include SCR catalyst management, cleaning and regeneration, as well as consulting services to help power plant operators optimize efficiency and reduce overall NOx compliance costs. Find Catalytica Energy Systems on the Worldwide Web at www.CatalyticaEnergy.com.

CONTACT:
SCR-Tech
Bill McMahon
President
(704) 827-8933


Catalytica Energy Systems, Inc.
Megan Meloni
Investor Relations
(650) 631-2847

SOURCE: Catalytica Energy Systems, Inc.
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