Beacon Power Announces Second-Quarter 2006 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 second quarter ended June June: see month. 30, 2006. For the second quarter of 2006, Beacon Power reported revenue of $209,000 and a net loss of $3,273,000, or ($0.06) per share, compared to revenue of $318,000 and a net loss of $1,765,000, or ($0.04) per share, for the second quarter of 2005. For the six months ended June 30, 2006, the Company reported revenue of $498,000 and a net loss of $6,094,000, or ($0.10) per share, compared to revenue of $954,000 and a net loss of $4,010,000, or ($0.09) per share, for the same period ended June 30, 2005. During the quarter ended June 30, 2006, Beacon Power incurred costs of $1,628,000 in selling, general and administrative expense, compared to $1,109,000 in the second quarter of 2005. Research and development expense was $1,087,000 during the second quarter of 2006, compared to $150,000 in the second quarter of 2005. Total 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. for the three months ended June 30, 2006 were $3,429,000 compared to $1,791,000 for the same period in 2005. At June 30, 2006, the Company had $10.2 million in cash and cash equivalents, with working capital of $8.5 million. On January January: see month. 1, 2006, Beacon Power adopted the provisions of Statement of Financial Accounting Standards No. 123(R), which requires the expensing of share-based awards. The Company recorded a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $1,349,000 for the six months ended June 30, 2006, and $483,000 for the six months ending June 30, 2005, for share-based compensation expense, which is reflected in research and development expense and selling, general and administrative expenses. "This quarter brought us closer to our goal of designing and building our first flywheel-based frequency regulation power plant," said Bill Capp Capp , Al Originally Alfred Gerald Caplin. 1909-1979. American cartoonist noted for his comic strip L'il Abner (1934-1977). , Beacon president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "During the quarter we began the formal field trial of our Smart Energy Matrix demonstration system in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , and just last week we reached the same milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. 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). . Both systems are now being evaluated by the respective energy authorities, with results expected before the end of this year. At the same time, we continue to make good progress on the development of our next-generation Smart Energy 25 flywheel system, which necessitated increased R&D expenditures for staff and materials during the quarter." About Beacon Power Corporation Beacon Power Corporation designs and develops advanced products and services to support stable, reliable and efficient electricity grid operation. The Company's primary business strategy is to commercialize its patented 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. technology to perform frequency regulation services on the grid. Beacon's Smart Energy Matrix, now being demonstrated on a scale-power level in two states, is a prototype for a non-polluting, megawatt-level, utility-grade Adj. 1. utility-grade - used of beef; usable but inferior utility inferior - of low or inferior quality flywheel-based solution that would provide sustainable frequency regulation services. 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, visit www.beaconpower.com. For more information, please contact James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States 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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " 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, including uncertainty about the effect that regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes might have on market size or characteristics; 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, and the different electrical grid characteristics and requirements of any foreign countries into which Beacon hopes to sell or operate, including the uncertainty of enforcing contracts, the different market structures, 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, especially from companies that are already in the frequency regulation market; 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 or services; the complexity and other challenges of arranging project finance and resources for one or more frequency regulation power plants; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property; retaining key executives and the possible need in the future to hire and retain key executives; the recent volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the 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
(unaudited)
Three months ended Six months ended June
June 30, June 30,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenue 209,439 318,304 498,034 954,438
Cost of goods sold 206,418 333,956 451,343 1,004,464
------------ ------------ ------------ ------------
Gross profit 3,021 (15,652) 46,691 (50,026)
Operating
expenses:
Selling, general
and
administrative 1,627,718 1,108,571 3,557,250 2,280,949
Research and
development 1,086,553 150,293 2,147,998 636,531
Loss on sales
and contract
commitments 687,786 508,859 687,786 1,056,566
Depreciation and
amortization 27,189 22,918 48,418 41,109
------------ ------------ ------------ ------------
Total
operating
expenses 3,429,246 1,790,641 6,441,452 4,015,155
------------ ------------ ------------ ------------
Loss from
operations (3,426,225) (1,806,293) (6,394,761) (4,065,181)
Other income, net 153,624 41,512 300,510 55,399
------------ ------------ ------------ ------------
Loss to common
shareholders $(3,272,601) $(1,764,781) $(6,094,251) $(4,009,782)
============ ============ ============ ============
Loss per share,
basic and diluted $(0.06) $(0.04) $(0.10) $(0.09)
============ ============ ============ ============
Weighted-average
common shares
outstanding 58,950,147 44,801,287 58,825,782 44,299,825
============ ============ ============ ============
BEACON POWER CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
June 30 December 31,
2006 2005
(unaudited) (audited)
------------- -------------
Assets
Current assets:
Cash and cash equivalents $10,227,461 $13,890,162
Accounts receivable, trade 176,737 588,440
Unbilled costs on government contracts 207,249 437,759
Prepaid expenses and other current
assets 478,643 777,385
------------- -------------
Total current assets 11,090,090 15,693,746
------------- -------------
Property and equipment, net 259,003 212,296
Restricted cash 219,568 219,568
------------- -------------
Total assets $11,568,661 $16,125,610
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $135,905 $137,290
Accrued compensation and benefits 474,161 151,318
Other accrued expenses 604,776 844,742
Advance billings on contracts 324,548 74,820
Accrued contract loss 560,842 548,614
Restructuring reserve 530,439 713,469
------------- -------------
Total current liabilities 2,630,671 2,470,253
------------- -------------
Stockholders' equity:
Common stock 591,350 587,000
Deferred stock compensation (262,834) (1,063,145)
Additional paid-in-capital 153,662,065 153,089,842
Deficit accumulated during the
development stage (144,339,752) (138,245,501)
Less: treasury stock, at cost (712,839) (712,839)
------------- -------------
Total stockholders' equity 8,937,990 13,655,357
------------- -------------
Total liabilities and stockholders' equity $11,568,661 $16,125,610
============= =============
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