BayCorp Reports Second Quarter 2005 Operating Results.PORTSMOUTH, N.H. -- BayCorp Holdings, Ltd. ("BayCorp") (AMEX AMEX See: American Stock Exchange : MWH See watt-hour. ) announced today its operating results for the second quarter ended June 30, 2005. BayCorp reported a net loss of $2,809,000, or approximately $4.98 per share, for the second quarter of 2005 as compared to net income of $95,000, or approximately $0.16 per share, for the second quarter of 2004. The increase in net loss in the second quarter of 2005 as compared to the second quarter of 2004 was attributable in part to increased operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Operating expenses increased approximately $3,142,000, to $4,765,000 in the second quarter of 2005 as compared to $1,623,000 in the second quarter of 2004. Operating expenses in the second quarter of 2005 included Nacogdoches Gas, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("Nacogdoches Gas") expenses of approximately $2,624,000, $2,116,000 of which reflected exploration expense attributable to the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of one gas well determined to be unsuccessful and $429,000 reflecting depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able expense. There were no expenses associated with Nacogdoches Gas in the second quarter of 2004. The Company's wholly- owned subsidiary, Nacogdoches Gas, owns and develops natural gas and oil assets in East Texas. In the fourth quarter of 2004, BayCorp announced that it had entered into agreements to develop natural gas and oil production wells in Nacogdoches County, Texas Nacogdoches County (pronounced nack-a-doe-chis) is a county located in the U.S. state of Texas. In 2000, its population was 59,203. Its county seat is Nacogdoches6. Nacogdoches hosts the [1] Texas Blueberry Festival the second Saturday in June. . Through its subsidiary, Nacogdoches Gas, the Company held as of June 30, 2005, an approximate 10% working interest in two wells, an approximate 90% working interest in four wells, three producing and one under development, and an approximate 76.5% working interest in one well under development. Also contributing to the increased loss in the second quarter of 2005 as compared to the same period in 2004, was an unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on the mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. of the Company's firm forward long-term energy contract of approximately $1,399,000 in the second quarter of 2005 as compared to a net unrealized loss of approximately $716,000 in the second quarter of 2004. The mark-to-market value of this long-term contract is based on current projections of power prices over the life of the contract. Forward power prices increased more significantly in the second quarter of 2005 as compared to the second quarter of 2004 primarily due to increases in the forward price of natural gas during those time periods. In the New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. Power Pool ("NEPOOL NEPOOL New England Power Pool "), power generating plants that use natural gas as a fuel source are on the margin most of the time and therefore are setting the forward price of power. Accordingly, the price of power in NEPOOL is highly dependent on the price of natural gas. Revenues increased approximately $2,031,000, to $3,474,000 in the second quarter of 2005 as compared to $1,443,000 in the second quarter of 2004. This increase was primarily attributable to revenues in the second quarter of 2005 from Nacogdoches Gas of approximately $1,397,000 and from Benton Falls Associates, L.P. ("Benton Falls") of approximately $406,000. There were no revenues from these companies in the second quarter of 2004. The Company recognized other income of approximately $711,000 in the second quarter of 2004 as compared to total other deductions of approximately $94,000 in the second quarter of 2005. This decrease in other income of approximately $805,000 was primarily due to receipts by the Company in the second quarter of 2004 of one-time payments totaling approximately $572,000 following the final reconciliation and termination of certain escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. accounts specific to the Company's sale of its interests in the Seabrook Nuclear Power Plant in November 2002. The Company also recognized approximately $225,000 in interest expense in the second quarter of 2005. On March 15, 2005 and May 24, 2005, the Company and all of its wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. entered into a $10,250,000 Convertible Note and a Pledge Agreement and a $10,000,000 Convertible Note and an Amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and Restated Pledge Agreement with Sloan Group Ltd. The debt, which accrues interest at 8% per annum Per annum Yearly. and is due and payable in full on December 15, 2005, is convertible by the Sloan Group at any time between November 15, 2005 and December 15, 2005 (or any time after the occurrence and during the continuance The adjournment or postponement of an action pending in a court to a later date of the same or another session of the court, granted by a court in response to a motion made by a party to a lawsuit. of a material event of default under the notes) into shares of BayCorp's common stock, $.01 par value at a price of $14.04 per share. There was no interest expense in the second quarter of 2004. The Company recognized an extraordinary gain of $278,000 in the second quarter of 2004 upon the consolidation of HoustonStreet Exchange, Inc. ("HoustonStreet"). As of May 1, 2004, BayCorp's ownership in HoustonStreet was 59.7%, and in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation Topic D-84, the Company followed step acquisition accounting to consolidate HoustonStreet. The fair value of current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. exceeded BayCorp's net investment in HoustonStreet by $278,000 resulting in negative goodwill upon application of step acquisition accounting. For the six months ended June 30, 2005, BayCorp reported a net loss of $4,613,000, or approximately $8.22 per share, as compared to a net loss of $2,002,000, or approximately $3.28 per share, for the six months ended June 30, 2004. The increase in net loss for the six months ended June 30, 2005 as compared to the same period in 2004 was primarily attributable to increased operating expenses. Operating expenses increased approximately $4,050,000, to $7,231,000 in the first six months of 2005 as compared to $3,181,000 in the first six months of 2004. Operating expenses in the first six months of 2005 included Nacogdoches Gas operating expenses of approximately $3,158,000, $2,116,000 of which reflected exploration expense attributable to the impairment of one gas well determined to be unsuccessful and $669,000 reflecting depletion expense. Benton Falls operating expenses for the first six months of 2005 were approximately $197,000. There were no operating expenses for these companies in the first six months of 2004. For the six months ended June 30, 2005, Great Bay Hydro Corporation ("Great Bay Hydro") expenses were approximately $269,000 and HoustonStreet operating expenses were approximately $411,000. For the six months ended June 30, 2004, Great Bay Hydro operating expenses were approximately $107,000, representing three months of operations and HoustonStreet operating expenses were approximately $162,000, representing two months of operations reflected in the Company's financial statements. The Company recorded an unrealized loss on the mark-to-market of the Company's firm forward long-term energy contract of approximately $3,388,000 in the first six months of 2005 as compared to a net unrealized loss of approximately $2,353,000 in the first six months of 2004. The mark-to-market value of this long-term contract is based on current projections of power prices over the life of the contract. Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for the six months ended June 30, 2005 increased $3,357,000, to $5,834,000 as compared to $2,477,000 for the six months ended June 30, 2004. The increase in revenues in 2005 was primarily attributable to six months of revenues in 2005 from Nacogdoches Gas, with revenues of $2,327,000, Benton Falls with revenues of $438,000, Great Bay Hydro with revenues of $533,000 and HoustonStreet with revenues of $513,000. For the six month period ended June 30, 2004, the Company recognized three months of Great Bay Hydro revenues, two months of HoustonStreet revenues and there were no revenues from Nacogdoches Gas and Benton Falls. The Company had other income of approximately $775,000 in the first six months of 2004 as compared to total other deductions of approximately $8,000 in the first six months of 2005. This decrease in other income of approximately $783,000 was primarily due to receipts by the Company in the second quarter of 2004 of one-time payments totaling approximately $572,000 following the final reconciliation and termination of certain escrow accounts specific to the Company's sale of its interests in the Seabrook Nuclear Power Plant in November 2002. The Company also recognized approximately $261,000 in interest expense in the first six months of 2005. On March 15, 2005 and May 24, 2005, the Company and all of its wholly owned subsidiaries entered into a $10,250,000 Convertible Note and a Pledge Agreement and a $10,000,000 Convertible Note and an Amended and Restated Pledge Agreement with Sloan Group Ltd. There was no interest expense in the first six months of 2004. In addition, the Company recorded a tax refund Tax refund Money back from the government when too much tax has been paid or withheld from a salary. of $225,000 in the first six months of 2005 upon receipt of a refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies from the State of New Hampshire New Hampshire, one of the New England states of the NE United States. It is bordered by Massachusetts (S), Vermont, with the Connecticut R. forming the boundary (W), the Canadian province of Quebec (NW), and Maine and a short strip of the Atlantic Ocean (E). for overpayment o·ver·pay v. o·ver·paid , o·ver·pay·ing, o·ver·pays v.tr. 1. To pay (a party) too much. 2. To pay an amount in excess of (a sum due). v.intr. To pay too much. of prior year state income taxes. About BayCorp BayCorp Holdings, Ltd. is an unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing" regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature" 2. holding company incorporated in Delaware. BayCorp currently has wholly owned subsidiaries that include Nacogdoches Gas, LLC, which owns and develops interests in natural gas and oil production assets in Nacogdoches County, Texas; Benton Falls Associates, L.P., the owner and operator of a hydroelectric generating facility in Benton, Maine Benton is a town in Kennebec County, Maine, United States. The population was 2,557 at the 2000 census. Geography According to the United States Census Bureau, the town has a total area of 75.3 km² (29.1 mi²). 73.6 km² (28.4 mi²) of it is land and 1.7 km² (0. ; Great Bay Hydro Corporation, which owns and operates a hydroelectric generating facility in Newport, Vermont Newport is the name of a town and a city in the state of Vermont:
Forward Looking Statements Any statements contained in this release regarding the Company's goals, strategies, and expectations are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ." No assurances can be given that the results in any forward-looking statements will be achieved and actual results could differ materially. Please review reports filed by BayCorp with the Securities and Exchange Commission for information and factors that could affect the Company's business.
BAYCORP HOLDINGS, LTD.
STATEMENT OF INCOME
(UNAUDITED)
(Dollars in thousands, except shares and per share data)
Three Months Six Months
Ended Ended
June 30, June 30,
2005 2004 2005 2004
Operating Revenues $3,474 $1,443 $5,834 $2,477
Operating Expenses 4,765 1,623 7,231 3,181
------ ------ ------ ------
Operating Loss Before Mark to
Market of Energy Contracts (1,291) (180) (1,397) (704)
Unrealized Loss on Energy Contracts 1,399 716 3,388 2,353
------ ------ ------ ------
Operating Loss (2,690) (896) (4,785) (3,057)
Other Income (Deductions) (94) 711 (8) 775
------ ------ ------ ------
Loss before Income Taxes
and Minority Interest (2,784) (185) (4,793) (2,282)
Income Taxes 0 0 225 0
Minority Interest Income (Expense) (25) 2 ( 45) 2
------ ------ ------ ------
Net Loss before Extraordinary Item (2,809) (183) (4,613) (2,280)
Extraordinary Item - Gain on
Consolidation of Subsidiary 0 278 0 278
------ ------ ------ ------
Net Income (Loss) ($2,809) $95 ($4,613) ($2,002)
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Weighted Average Shares
Outstanding -
Basic and Diluted 564,581 592,833 561,281 611,093
Basic and Diluted Net Loss Per
Share before Extraordinary Item ($4.98) ($0.31) ($8.22) ($3.73)
Basic and Diluted Net Income Per
Share - Extraordinary Item - $0.47 - $0.45
Basic and Diluted Net Income (Loss)
Per Share ($4.98) $0.16 ($8.22) ($3.28)
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