Environmental Power Corporation Reports Third Quarter 2007 Financial Results and Provides Business Update
November 14 2007 - 8:30AM
PR Newswire (US)
PORTSMOUTH, N.H., Nov. 14 /PRNewswire-FirstCall/ -- Environmental
Power Corporation (Amex: EPG or the "Company") today announced
results for the three months and nine months ended September 30,
2007. Financial Results Nine months ended September 30, 2007
compared to nine months ended September 30, 2006 Revenues from
continuing operations decreased by $882,000, or 50%, to $886,000
for the nine months ended September 30, 2007, as compared to $1.8
million for the same period in 2006. The decrease in revenue is due
mainly to the change from a business model where anaerobic digester
equipment was sold to the farmer, to the current model whereby the
Company will own and operate anaerobic digester facilities that
will generate long term gas or electric revenue streams for the
benefit of the Company. We recognized $1.2 million from the sale of
digester equipment in 2006 whereas there were no such sales in 2007
due to the change in models. The Company reported a loss from
continuing and discontinued operations available to common
shareholders for the nine months ended September 30, 2007 of $15.0
million, or $1.51 per share, compared to net loss available to
common shareholders of $7.8 million, or loss per common share of
$0.81, for the same period in 2006. The Company's discontinued
operations experienced a loss of $0.50 per share for the nine
months ended September 30, 2007. The remaining $1.01 per share loss
from continuing operations is associated with a decrease in
revenues and an increase in expenses associated with the Company's
ownership business model as explained above. Three months ended
September 30, 2007 compared to three months ended September 30,
2006 The Company reported a loss from continuing and discontinued
operations available to common shareholders for the three months
ended September 30, 2007 of $6.2 million, or $0.61 per common
share, compared to a loss of $3.4 million, or $0.35 per common
share, for the three months ended September 30, 2006. Continuing
operations reported a loss available to common shareholders of $4.2
million, or $0.41 per share, while discontinued operations reported
a loss of $2.0 million, or $0.20 per share for the three months
ended September 30, 2007. For the same period in 2006, continuing
operations reported a loss available to common shareholders of $2.7
million, or $0.27 per share, and discontinued operations reported a
loss of $738,000, or $0.08 per share. The increase in loss is due
to a $1.0 million increase in general and administrative expenses,
primarily due to increased payroll expense, and a $335,024 increase
in preferred dividend requirements. Discontinued Operations In
accordance with previous announcements, the Company continues to
expect that its subsidiary, Buzzard Power Corporation, will
complete an agreement with Scrubgrass Generating Company, L.P., to
terminate Buzzard's leasehold interest in the Scrubgrass waste coal
facility by the end of 2007. The Company expects to recognize
approximately $5.8 million to income to reflect cancellation of
debt and recognition of deferred gain associated with the facility
once the closing occurs. Business Update Huckabay Ridge
Ribbon-Cutting On November 5th, the Company celebrated the
completion of construction at the Huckabay Ridge facility with a
ribbon cutting event attended by over a hundred investors,
suppliers, dairy owners, press and officials from the State of
Texas. The event produced a sustained level of interest in the
facility, the technology, and the Company as a whole. All systems
at Huckabay are operational following the completion of
modifications to the gas conditioning system and front-end manure
processing systems and we are ramping up the digesters, at an
expected rate, to targeted production levels of 635,000 MMBtus on
an annual basis. Management currently anticipates that the facility
will reach full capacity within the next few weeks. In addition, we
announced that we will begin deliveries of RNG(R) from the Huckabay
Ridge facility beginning in October 2008 under the existing 10-
year agreement with Pacific Gas and Electric. The facility
currently exports RNG(R) to Lower Colorado River Authority pursuant
to an agreement ending in September 2008. Other Development
Projects The Company continues to advance the development of its
previously announced project pipeline of 4.9 million MMBtus/year.
We have identified qualified contractors who are capable of
implementing our plans to build multiple projects in parallel on a
fast-track basis and have finalized our design configuration
reflecting experience gained at Huckabay. We are also working
closely with permitting agencies to ensure we obtain our permits in
the time frames necessary to support our construction schedule and
continue to work with various utilities to establish long term
off-take agreements. In addition we are preparing for financing of
the California projects using tax exempt bonds. For the JBS Swift
project in Grand Island, Nebraska, we are in the process of
completing a final agreement with The Benham Companies, LLC who
will act as our detailed engineering and construction contractor.
Groundbreaking and the start of site-work is currently expected to
occur in the fourth quarter of 2007. Management Conference Call Mr.
Richard Kessel, Chief Executive Officer, and Mr. Michael Thomas,
Chief Financial Officer, will comment on these and related items
and will also answer questions from interested investors in a
conference call scheduled for Wednesday, November 14, 2007, at 10
a.m. EDT. Conference call details: Dial-in: U.S. Toll Free:
800-391-2548 Canadian Toll Free: 866-627-1646 International Toll:
302-709-8328 Access Code: Verbal Passcode VK21236 Replay Access#:
800-355-2355 Replay Passcode: 21236# The call will be available for
3 days by accessing the number above after which it will be
available on our website http://www.environmentalpower.com/ ABOUT
ENVIRONMENTAL POWER CORPORATION Environmental Power Corporation is
a developer, owner and operator of renewable energy production
facilities. Its principal operating subsidiary, Microgy, Inc.,
holds an exclusive license in North America for the development and
deployment of a proprietary anaerobic digestion technology for the
extraction of methane gas from livestock wastes and other organic
waste for its use to generate energy. For more information visit
the Company's web site at http://www.environmentalpower.com/.
CAUTIONARY STATEMENT The Private Securities Litigation Reform Act
of 1995, referred to as the PSLRA, provides a "safe harbor" for
forward-looking statements. Certain statements contained in this
press release, such as statements concerning planned
manure-to-energy systems, our sales pipeline, our backlog, our
projected sales and financial performance, statements containing
the words "may," "assumes," "forecasts," "positions," "predicts,"
"strategy," "will," "expects," "estimates," "anticipates,"
"believes," "projects," "intends," "plans," "budgets," "potential,"
"continue," "targets" "proposed," and variations thereof, and other
statements contained in this press release regarding matters that
are not historical facts are forward-looking statements as such
term is defined in the PSLRA. Because such statements involve risks
and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors
that could cause actual results to differ materially include, but
are not limited to: uncertainties involving development-stage
companies; uncertainties regarding project financing, the lack of
binding commitments and/or the need to negotiate and execute
definitive agreements for the construction and financing of
projects, the sale of project output, the supply of substrate and
other requirements and for other matters; financing and cash flow
requirements and uncertainties; inexperience with the development
of multi-digester projects; risks relating to fluctuations in the
price of commodity fuels like natural gas, and our inexperience
with managing such risks; difficulties involved in developing and
executing a business plan; difficulties and uncertainties regarding
acquisitions; technological uncertainties; including those relating
to competing products and technologies; risks relating to managing
and integrating acquired businesses; unpredictable developments;
including plant outages and repair requirements; the difficulty of
estimating construction, development, repair and maintenance costs
and timeframes; the uncertainties involved in estimating insurance
and implied warranty recoveries, if any; the inability to predict
the course or outcome of any negotiations with parties involved
with our projects; uncertainties relating to general economic and
industry conditions, and the amount and rate of growth in expenses;
uncertainties relating to government and regulatory policies and
the legal environment; uncertainties relating to the availability
of tax credits, deductions, rebates and similar incentives;
intellectual property issues; the competitive environment in which
Environmental Power Corporation and its subsidiaries operate and
other factors, including those described in our most recent Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, well as in
other filings we make with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date that
they are made. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. For More Information
Company Contact Mark Hall, Senior Vice President Environmental
Power Corporation (630) 573-2926 Public Relations Contact John
Abrashkin, Ricochet Public Relations (212) 679-3300 x121 Investor
Relations Contact John Baldissera BPC Financial Marketing
1-800-368-1217 DATASOURCE: Environmental Power Corporation CONTACT:
Mark Hall, Senior Vice President of Environmental Power
Corporation, +1-630-573-2926, , or Public Relations Contact, John
Abrashkin of Ricochet Public Relations, +1-212-679-3300 x121, , or
Investor Relations Contact, John Baldissera of BPC Financial
Marketing, +1-800-368-1217, Web site:
http://www.environmentalpower.com/
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