Beacon Power Announces Fourth-Quarter, Fiscal Year 2005 Results.WILMINGTON Wilmington. 1 City (1990 pop. 71,529), seat of New Castle co., NE Del., on the Delaware River and tributary streams, the Christina and the Brandywine; settled 1638, inc. as a city 1832. , Mass. -- Beacon Beacon, city (1990 pop. 13,243), Dutchess co., SE N.Y., on the E bank of the Hudson River; settled 1663, inc. in 1913 when Fishkill Landing and Matteawan villages were united. Power Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BCON BCON Broadcast Cross Connect (AT&T) ), a development stage company that designs and develops advanced products and services to support more stable and reliable electricity grid operation, announced its financial results for the fourth quarter and fiscal year ended December December: see month. 31, 2005. For the fiscal year ended December 31, 2005, Beacon Power reported a net loss of $9.3 million, or ($0.20) per share, compared with a net loss in 2004 of $5.3 million, or ($0.12) per share. The higher loss in 2005 is attributable to the non-recurring gain on the sale of equity investments in Evergreen Solar Evergreen Solar, Inc., founded in 1994,[1] develops, manufactures and markets solar power products enabled by its String Ribbon technology that provide environmentally clean electric power throughout the world. , Inc., of $3.6 million in 2004, as well as higher spending in 2005 on several research and development contracts and nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. expenses of $1.3 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a proposed acquisition that was terminated. For the fourth quarter of 2005, the Company reported a net loss of $3.2 million, or ($0.07) per share, compared to net income of $0.9 million, or $0.02 per share, for the fourth quarter of 2004. This result is also primarily attributable to the nonrecurring gain on the sale of equity investments in Evergreen Solar, Inc., which were reported in the fourth quarter of 2004. At December 31, 2005, the Company had $13.9 million in cash and cash equivalents, compared to $5.1 million at December 31, 2004. The Company's working capital was $13.2 million. In 2005, the Company raised approximately $17 million through new investment. These funds will be used to develop and test its next-generation flywheel system, as well as begin development on the full-scale full-scale adj. 1. Of actual or full size; not reduced: a full-scale model. 2. Employing all resources; not limited or partial: Smart Energy Matrix that is expected to provide frequency regulation services on the electricity grid. The Company's cash and cash equivalents at December 31, 2005, will support its business plan into the first quarter of 2007. The Company continues to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. losses, and will require further equity investments to continue as a going concern. Because there is no certainty of Beacon successfully completing the required financing, the Company's independent registered public accounting firm has inserted an explanatory ex·plan·a·to·ry adj. Serving or intended to explain: an explanatory paragraph. ex·plan paragraph related to a going concern uncertainty into their Audit Report on the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2005. The Company is pursuing various equity investments to alleviate Alleviate To make something easier to be endured. Mentioned in: Kinesiology, Applied these concerns. The Company's key milestones achieved during 2005 included the following: --Obtained research and development contracts with two major state agencies to demonstrate the Company's flywheel-based energy storage systems for frequency regulation of the electricity grid --Obtained a contract from the Defense Advanced Research Projects Agency Defense Advanced Research Projects Agency (DARPA), U.S. government agency administered by the Department of Defense (see Defense, United States Department of). (DARPA DARPA: see Defense Advanced Research Projects Agency. (Defense Advanced Research Projects Agency) The name given to the U.S. Advanced Research Projects Agency during the 1980s. It was later renamed back to ARPA. ) of the U.S. Department of Defense for the preliminary design of a space-based flywheel energy storage Flywheel Energy Storage (FES) works by accelerating a rotor (flywheel) to a very high speed and maintaining the energy in the system as rotational energy. The energy is converted back by slowing down the flywheel. system for satellite applications --Maintained ongoing efforts to seek additional contracts to develop other products and applications based on the Company's patented flywheel technology --Delivered the first scale-power Smart Energy Matrix for demonstration in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). --Raised $17 million to fund operations and complete development of the next-generation flywheel "2005 was a great year for Beacon Power in terms of the progress we made toward commercialization of our flywheel systems for frequency regulation," said Bill Capp, Beacon Power president and chief executive officer. "We signed several significant development contracts, designed and delivered our first demonstration system, and made substantial progress on the second system. Our plan to design, build, own and operate multiple 20-megawatt flywheel frequency regulation plants and generate long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. revenues from the services is based in part on what we'll learn from these demonstrations. Indeed, they provide invaluable opportunities to accelerate our progress toward larger-scale commercialization of high-energy high-energy adj. 1. Of or relating to elementary particles with energies exceeding hundreds of thousands of electron volts. 2. Yielding a large amount of energy upon undergoing chemical reaction. 3. Vigorous; dynamic. flywheels for frequency regulation." "In 2006, we expect to design and build our first 25kWh flywheel, which will be the core component of our Smart Energy Matrix," Capp continued. "We are hiring experienced engineers and other staff to help us complete this effort on schedule. We will also continue to pursue additional contracts, strengthen our relationships with grid operators, utilities and other potential partners, and identify new markets for our patented energy storage technologies." About Beacon Power Corporation Beacon Power Corporation designs sustainable energy
Sustainable energy sources are energy sources which are not expected to be depleted in a timeframe relevant to the human race, and which storage and power conversion solutions that would provide reliable electric power for the utility, renewable energy Renewable energy utilizes natural resources such as sunlight, wind, tides and geothermal heat, which are naturally replenished. Renewable energy technologies range from solar power, wind power, and hydroelectricity to biomass and biofuels for transportation. , and distributed generation Distributed generation generates electricity from many small energy sources. It has also been called also called on-site generation, dispersed generation, embedded generation, decentralized generation, decentralized energy or markets. Beacon's Smart Energy Matrix is a design concept for a megawatt-level, utility-grade flywheel-based energy storage solution that would provide sustainable power quality services for frequency regulation, and support the demand for reliable, distributed electrical power. Beacon is a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. with its research, development and manufacturing facility in the U.S. For more information, please contact James Spiezio, Chief Financial Officer at Beacon Power Corporation, tel. 978.694.9121; fax 978.694.9127; email spiezio@beaconpower.com, or send mail to 234 Ballardvale Street, Wilmington, MA 01887. Visit Beacon Power at www.beaconpower.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statements under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Material contained in this press release may include statements that are not historical facts and are considered "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. These 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. reflect Beacon Power Corporation's current views about future events and financial performances. These forward-looking statements are identified by the use of terms and phrases such as "believe," "expect," "plan," "anticipate," and similar expressions identifying forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from Beacon Power Corporation's expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; a need to raise additional capital combined with a questionable ability to do so; conditions in target markets; no experience manufacturing any product or supplying frequency regulation services on a commercial basis; limited commercial contracts for sales to date; the dependence of sales on the achievement of product development and commercialization milestones; the uncertainty of the political and economic climate of any foreign countries into which Beacon hopes to sell or in which it operates, including the uncertainty of enforcing contracts and the potential substantial fluctuation Fluctuation A price or interest rate change. in currency exchange rates in those countries; significant technological challenges to successfully complete product development; dependence on third-party suppliers; intense competition from companies with greater financial resources; possible government regulation that would impede im·pede tr.v. im·ped·ed, im·ped·ing, im·pedes To retard or obstruct the progress of. See Synonyms at hinder1. [Latin imped the ability to market products; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property; the possible need in the future to hire and retain key executives, particularly in light of the substantial workforce reductions during 2001 and 2002; the recent volatility in the stock price of companies operating in the same sector; These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power Corporation's filings with the Securities and Exchange Commission. Beacon Power Corporation expressly does not undertake any duty to update forward-looking statements.
BEACON POWER CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Twelve months ended
December 31, December 31,
2005 2004 2005 2004
------------ ----------- ------------ ------------
Revenue 228,756 59,901 1,487,258 324,694
Cost of goods sold 223,222 94,299 1,575,240 1,457,869
------------ ----------- ------------ ------------
Gross profit 5,534 (34,398) (87,982) (1,133,175)
Operating expenses:
Selling, general
and administrative 2,203,945 868,252 6,334,219 4,196,371
Research and
development 414,000 789,394 1,408,233 3,532,059
Loss on contract
commitments 477,732 - 1,534,298 -
Depreciation and
amortization 20,928 57,051 83,031 187,230
------------ ----------- ------------ ------------
Total operating
expenses 3,116,605 1,714,697 9,359,781 7,915,660
------------ ----------- ------------ ------------
Loss from operations (3,111,071) (1,749,095) (9,447,763) (9,048,835)
Other income, net (47,809) 14,115 135,659 156,293
Gain on sale of
equity investments - 2,674,747 - 3,562,582
------------ ----------- ------------ ------------
Loss to common
shareholders $(3,158,880) $939,767 $(9,312,104) $(5,329,960)
============ =========== ============ ============
Loss per share,
basic and diluted $(0.06) $0.02 $(0.20) $(0.12)
============ =========== ============ ============
Weighted-average
common shares
outstanding 54,364,893 43,702,485 47,665,868 43,452,727
============ =========== ============ ============
BEACON POWER CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2005 2004
------------ ------------
Assets
Current assets:
Cash and cash equivalents $13,890,162 $5,097,188
Accounts receivable, trade 588,440 52,105
Inventory - 222,593
Unbilled costs on contracts in process 437,759 -
Prepaid expenses and other current assets 777,385 817,396
------------ ------------
Total current assets 15,693,746 6,189,282
Property and equipment, net 212,296 258,647
Restricted cash 219,568 310,011
Other assets - 327,646
------------ ------------
Total assets $16,125,610 $7,085,586
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $137,290 $389,189
Accrued compensation and benefits 151,318 130,609
Other accrued expenses 844,742 393,569
Advance billings on contracts 74,820 -
Accrued contract loss 548,614 -
Restructuring reserve 713,469 1,062,644
------------ ------------
Total current liabilities 2,470,253 1,976,011
Stockholders' equity:
Common stock 587,000 437,888
Deferred stock compensation (1,063,145) (707,167)
Additional paid-in-capital 153,089,842 134,411,911
Deficit accumulated during the
development stage (138,245,501)(128,933,397)
Treasury stock, at cost (712,839) (99,660)
------------ ------------
Total stockholders' equity 13,655,357 5,109,575
------------ ------------
Total liabilities and stockholders' equity $16,125,610 $7,085,586
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