16.5.2007: Meldung: Catalytica Energy Systems, Inc.: First Quarter Financial Results
TEMPE, AZ, May 15, 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 first quarter ended March 31, 2007. The quarterly financial results for the comparable period 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 first quarter of 2007 were $1,355,000, compared with total revenues of $2,979,000 in the same period of the prior year. Revenues during the first quarter of 2006 were unusually high as a result of the timing of individual catalyst cleaning and regeneration projects and represented 40% of the Company"s full-year revenues in 2006. Selling, general and administrative expenses for the quarter increased to $2,446,000, from $1,765,000 in the first quarter of 2006. The significant increase in selling, general and administrative expenses during the most recent quarter was primarily attributable to legal and consulting 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 cost of revenues, were $3,350,000, compared with $3,357,000 in the first quarter last year. The resulting net loss for the quarter was $1,718,000, or a loss of $0.09 per share, compared with a net loss of $1,726,000, or a loss of $0.10 per share in the corresponding period of the prior year. Net loss in the first quarter of 2007 included a gain from discontinued operations totaling $25,000, while net loss in the first quarter of 2006 included a loss from discontinued operations totaling $1,595,000.
During the first quarter of 2007, the Company"s use of cash, cash equivalents and short-term investments (collectively referred to as "cash consumption") declined to $1,058,000, from cash consumption of $2,755,000 during the first quarter of 2006. This improvement primarily reflects the benefit of the Company"s restructuring and cost reduction activities completed in the fourth quarter of 2006. At March 31, 2007, Catalytica Energy Systems" cash position totaled $17,569,000.
Rob Zack, president and CEO of Catalytica Energy Systems, commented, "The expected decline in our first quarter revenues resulted from lower backlog levels at the beginning of the year driven primarily by less demand for emergency catalyst cleaning services, which represented a significant amount of our total cleaning and regeneration revenues in the first quarter last year. We believe the slower pace of order activity we have been experiencing over the past several months is temporary as the market is less in need of emergency cleaning work and is now beginning to transition to planned regeneration cycles for installed SCR catalyst that we expect may soon be in need of replenishment. While we expect revenues to continue to be soft for the next several months, the industry is currently preparing for the onset of more stringent NOx emissions regulations and year-round SCR operation beginning in January 2009, which we anticipate will result in meaningful market growth during 2008. We are also encouraged by today"s separate announcement of the signing of two new catalyst regeneration contracts totaling approximately $1.0 million, and a pipeline of new order prospects that remains strong."
Other Recent Developments
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 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.
Upon completion of the proposed transaction, the combined company will operate under two divisions focused on clean energy, with one division focused on becoming an independent power producer (IPP) of renewable energy, and the other division providing emissions compliance services for the coal-fired power generation industry. 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 IPP in the U.S. Renegy will own and operate a 24 megawatt (MW) biomass plant, which is currently under construction in 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 acquisition, construction, installation and operation. Future projects will focus primarily on biomass, solar and wind power. The second division will focus on growing its SCR-Tech business, and continuing to explore strategic opportunities to broaden its reach in the growing market for clean coal technologies.
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 during the third quarter of 2007.
Recent Business Highlights
In a separate release issued today, Catalytica Energy Systems" SCR-Tech business announced new catalyst regeneration contracts totaling approximately $1.0 million received from a leading independent power producer in the Southeast and a top Midwestern utility. Notably, one of the contracts marks the fifth catalyst regeneration order placed with SCR-Tech by the same customer, and the second contract is from a new customer, reflecting SCR-Tech"s continued progress in broadening its customer base and building industry confidence in its technology and service capabilities.
2007 Financial Outlook
Catalytica Energy Systems continues to project that its full year 2007 revenues will range from $6.0 to $7.0 million. Additionally, 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, subject to achieving the revenue projections noted above. This guidance includes anticipated capital expenditures of approximately $1.3 million required to increase production capacity at SCR-Tech in preparation for anticipated market growth beginning in 2008, but does not include costs the Company has incurred and expects to incur associated with pursuing and consummating the proposed Renegy merger transaction.
Catalytica Energy Systems will host a conference call and webcast today, May 15, at 4:45 PM Eastern Time (1:45 PM Pacific Time) to discuss its financial results, an update on the business, and its outlook for 2007. Interested parties are invited to listen to the call over the Internet by accessing the Company"s website at www.CatalyticaEnergy.com. Webcast participants should allot extra time before the webcast begins to register and, if necessary, download and install audio software. Alternatively, interested parties may access the call by dialing 1-800-659-2056 (1-617-614-2714 for international callers), using passcode 78305760. An archived version of the webcast will be available for replay on the Company"s website beginning approximately two hours following the conclusion of the live call and continuing for a period of 30 days. A replay of the call will also be available via telephone through May 22, 2007. To access the replay, dial 1-888-286-8010 (1-617-801-6888 for international callers), using passcode 31797228.
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.
SOURCE: Catalytica Energy Systems, Inc.