Catalytica Energy Systems Reports First Quarter Financial Results.Business Editors MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--May 2, 2002 Catalytica Energy Systems, Inc. (Nasdaq:CESI CESI Centro Elettrotecnico Sperimentale Italiano (Italy) CESI Chauffe-Eau Solaire Individuel CESI Centre d'Etudes Superieures Industrielles (French) CESI Canadian Educational Standards Institute ), a provider of advanced energy products that enable environmentally friendly Environmentally friendly, also referred to as nature friendly, is a term used to refer to goods and services considered to inflict minimal harm on the environment.[1] power generation, today reported financial results for the first quarter ended March 31, 2002. The results reflect the Company's continued investment in advancing the development and commercialization of its Xonon(R) Cool Combustion combustion, rapid chemical reaction of two or more substances with a characteristic liberation of heat and light; it is commonly called burning. The burning of a fuel (e.g., wood, coal, oil, or natural gas) in air is a familiar example of combustion. system and the development of other innovative technologies for more effective energy production. Revenues for the first quarter of 2002 were $649,000, compared with revenues of $1,446,000 for the same period of the prior year. The decline in first quarter revenues for 2002 was the result of reduced funding from OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and partners associated with program timing, which varies from quarter to quarter. The decrease in OEM funding was partially offset by an increase in government funding for expanded development of the Company's Xonon technology for gas turbine turbine, rotary engine that uses a continuous stream of fluid (gas or liquid) to turn a shaft that can drive machinery. A water, or hydraulic, turbine is used to drive electric generators in hydroelectric power stations. and fuel processing applications. Net loss for the quarter was $5,220,000, or a loss of $0.30 per share, compared with a net loss of $3,725,000, or a loss of $0.29 per share in the first quarter last year. Cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments at March 31, 2002 totaled $80.4 million. "Our cash position remains strong at the close of the first quarter, reflecting our continued focus on managing our cash burn and controlling expenses," stated Craig Craig , Edward Gordon 1872-1966. British theatrical producer, director, and designer whose innovative productions and simplified stage designs influenced modern theater. Kitchen, 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. of Catalytica Energy Systems. "Excluding the purchase of our Gilbert, Arizona Gilbert is a town in Maricopa County, Arizona, USA. According to 2006 Census Bureau estimates, the population of the city is 191,517. [1] Although it is large and growing rapidly, Gilbert is still incorporated as a town rather than as a city; it has the highest commercial manufacturing facility and other non-recurring expenses, we maintained an operating cash burn of $5 million, in line with our projections for the quarter. Managing our cash remains a key objective for the business in light of current market conditions. Demand for electricity has slowed over the past several months as the result of a weak economy, mild weather, and lower commodity prices. We believe these factors have impacted somewhat the timing for sales of our Xonon Cool Combustion system. Nevertheless, we continue to believe that the 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. prospects for environmentally-friendly power generation remain substantial, and will regain momentum as normalized weather patterns return and economic conditions improve." "While securing firm orders for Xonon is progressing more slowly than anticipated, interest in our product remains strong, with a number of power projects currently considering Xonon-equipped gas turbines for various 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 and combined heat and power applications. During the quarter, we stepped up our marketing efforts to identify new power projects for Xonon-equipped gas turbines, expand awareness of Xonon's commercial availability, and develop a growing network of distribution channels for our product. We believe that these ongoing initiatives combined with our continued progress in advancing our commercial programs, will position us for a projected ramp-up in order flow beginning in the second half of the year, and for the anticipated commercial launch of the Xonon-equipped GE10 gas turbine. In fact, last week we initiated on schedule with GE the second round of pre-production testing related to this effort. A series of tests associated with our catalyst catalyst, substance that can cause a change in the rate of a chemical reaction without itself being consumed in the reaction; the changing of the reaction rate by use of a catalyst is called catalysis. module and various system components are scheduled to continue throughout the summer in support of a projected offering of the GE10 with Xonon on a full commercial basis in the fall." The Company will host a conference call today, Thursday Thursday: see week. , May 2, 2002 at 4:45 PM Eastern Time (1:45 PM Pacific Time) to discuss its financial results along with a more detailed update on the business and its outlook for the remainder of 2002. The call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and can be accessed via the Company's website at www.CatalyticaEnergy.com. An archived version of the webcast will be available for replay on the Company's website beginning approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two hours following the conclusion of the live call, and continuing for a period of one week following the call. About Catalytica Energy Systems Catalytica Energy Systems designs, develops, and manufactures advanced products for more effective energy production. Its proprietary technologies include the use of catalysts to create solutions to ease the environmental impact of power generation. The Company is marketing its first product, Xonon(R) Cool Combustion, a combustion technology that achieves ultra-low emissions emissions npl → émissions fpl emissions npl → Emissionen pl levels for gas turbine power production. Xonon prevents the formation of pollution, particularly nitrogen oxides Noun 1. nitrogen oxide - any of several oxides of nitrogen formed by the action of nitric acid on oxidizable materials; present in car exhausts pollutant - waste matter that contaminates the water or air or soil (NOx), a primary contributor to smog, through a proprietary catalytic cat·a·lyt·ic adj. Of, involving, or acting as a catalyst: "Deregulation's catalytic power . . . is still reshaping the banking, communications, and transportation industries" Ellyn E. combustion process. Additional technology development efforts include work on fuel processing for fuel cells, as well as adaptation adaptation, in biology, has several meanings. It can mean the adjustment of living matter to environmental conditions and to other living things either in an organism's lifetime (physiological adaptation) or in a population over many many generations (evolutionary of Xonon technology to micro-turbines, hybrid gas turbine fuel cells, and diesel applications. Find Catalytica Energy Systems on the Worldwide Web at www.CatalyticaEnergy.com. This news release contains 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. regarding Catalytica Energy Systems' ability to manage its cash burn and control expenses, the prospects for environmentally friendly power generation, Xonon's commercial availability, the securing of orders for the Xonon Cool Combustion system, the incorporation of Catalytica Energy Systems' Xonon Cool Combustion system into the GE10, the timing and outcome of pre-production testing for the GE10, the commercial launch of Xonon-equipped GE10s, Catalytica Energy Systems' ability to develop distribution channels for its Xonon Cool Combustion system, Catalytica Energy Systems' growth prospects, and the market demand for clean burning gas-fired gas-fired adj → de gas gas-fired adj → au gaz gas-fired adj (heater etc) → Gas- generation. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those expressed in the forward-looking statements. These risks and uncertainties include, among others: possible fluctuations in economic conditions affecting the markets for Catalytica Energy Systems' products; the risk that a market may not develop or be maintained for Catalytica Energy Systems' products; changes in the environmental requirements for ultra-low NOx emissions; that marketing, project development and commercial or other setbacks may occur related to the incorporation of Xonon into the GE10; that changes may occur in the arrangements between GE Power Systems or other OEMs and Catalytica Energy Systems for the supply of GE10 gas turbines or other products; that Catalytica Energy Systems may be unable to maintain current or develop future strategic relationships or distribution channels; and the other risks set forth in the Catalytica Energy Systems' 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. filed with the Securities and Exchange Commission on April 1, 2002. Catalytica Energy Systems undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release. Editor's Note Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : Xonon and Xonon Cool Combustion are registered trademarks of Catalytica Energy Systems, Inc. Mountain View, CA, USA
Catalytica Energy Systems, Inc.
Condensed and Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
2002 2001
---- ----
Revenues:
Research and development contracts $ 649 $ 1,446
Costs and expenses:
Research and development 3,232 4,093
Selling, general and
administrative 3,018 1,743
-------- --------
Total costs and expenses 6,250 5,836
Operating loss (5,601) (4,390)
Interest income, net 381 789
Loss on equity investments -- (124)
Net loss $ (5,220) $ (3,725)
======== ========
Basic and diluted net
loss per share $ (0.30) $ (0.29)
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Shares used in computing
net loss per share: 17,509 12,827
Catalytica Energy Systems, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
March 31, Dec. 31,
2002 2001
--------- --------
ASSETS:
Cash and short-term investments $ 80,406 $ 87,647
Accounts and notes receivable, net 727 1,324
Inventory 214 178
Other current assets 1,725 536
-------- --------
Total current assets 83,072 89,685
Property and equipment 18,869 14,682
Less accumulated depreciation and
amortization
(10,498) (9,905)
-------- --------
8,371 4,777
Other assets 644 678
-------- --------
$ 92,087 $ 95,140
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 7,261 $ 8,295
Current portion of long-term debt 91 60
-------- --------
Total current liabilities 7,352 8,355
Long-term debt 3,027 63
Stockholders' equity 81,708 86,722
-------- --------
$ 92,087 $ 95,140
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