Catalytica Energy Systems Reports Second Quarter Financial Results.Business Editors MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Aug. 8, 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 second quarter ended June June: see month. 30, 2002. The results continue to reflect the Company's 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. For the second quarter ended June 30, revenues were $1,123,000, compared with revenues of $2,212,000 in the same period of the prior year. Net loss for the quarter was $5,317,000, or a loss of $0.30 per share, compared with a net loss in the second quarter last year of $2,871,000, or a loss of $0.22 per share. The increase in net loss was primarily 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 and government agencies, which varies from quarter to quarter 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 program schedules, combined with an increase in selling, general and administrative and research and development expenses. This increased spending during the quarter supported the Company's ongoing expansion of operations in its new Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). facility, a higher level of Xonon test activity, and the build-out Build-out is an urban planner’s estimate of the amount and location of potential development for an area. Build-out is one step of the land use planning process. Evaluation of potential development impacts begins with a build-out analysis. of production capacity. 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 June 30, 2002 totaled $74.1 million, reflecting a total cash burn during the quarter of $6.3 million. "We continue to maintain a strong cash position at the close of the second quarter," stated Ricardo Ri·car·do , David 1772-1823. British economist whose major work, Principles of Political Economy and Taxation (1817), supported the laws of supply and demand in a free market. Noun 1. Levy, interim 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. "Our cash consumption during the quarter brings our total burn for the six months ended June 30 to $13.6 million, which is in line with our projections for the first half of the year. We expect this rate to decline somewhat throughout the remainder of the year now that a number of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. expenses are behind us. Excluding non-operating payments during the quarter, our cash burn from operations approximated $4.3 million, which is more closely in line with our expectations for a normalized quarterly run rate." Levy continued, "On the sales front, weak economic conditions and delayed capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. decisions have continued to impact the timing for orders. Nevertheless, we continue to build momentum in our sales activities and remain confident that some of our ongoing negotiations will translate to firm orders for Xonon-equipped turbines in the second half of the year." "Meanwhile, we continue to make progress in our commercial programs for Xonon and in advancing our other technology development efforts. In fact, a heightened level of activity in these areas during the quarter contributed to the recent completion of our manufacturing facility in Arizona and helped to support test activity currently underway at various OEM facilities. A second round of pre-launch testing associated with the GE10 commenced in late April. Testing is expected to wrap up with GE in the fourth quarter in support of offering this product commercially with Xonon. We have also shipped Xonon test modules to another 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. manufacturer in anticipation of completing a 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. demonstration in the third quarter, and are in the process of finalizing a prototype of our diesel product, which will soon be available for engine testing by a diesel OEM." The Company will host a conference call Thursday Thursday: see week. , August 8, 2002 at 1:45 PM (PST PST Paroxysmal supraventricular tachycardia, see there ) 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 two hours following the conclusion of the live call, and continuing for a period of one week following the call. Catalytica Energy Systems designs, develops, and manufactures advanced products for cleaner, more effective energy production. Its proprietary technologies include the use of catalysts to create solutions to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the environmental impact of power generation. The
Company is marketing its first product, Xonon(R) Cool Combustion, a
breakthrough combustion technology that achieves ultra-low emissions emissions npl → émissions fplemissions 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 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 reduce its cash burn and maintain a reduced run rate going forward, the prospects for product sales in the second half of the year, the timing and outcome of pre-production testing associated with Catalytica Energy Systems' Xonon Cool Combustion system for the GE10, the commercial launch of Xonon-equipped GE10s, the ability to complete a catalyst demonstration in the third quarter, and the timing for shipment of a prototype diesel product for engine testing. 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; and that results may differ from those stated and the other risks set forth in the Catalytica Energy Systems' Forms 10-K and 10-Q filed with the Securities and Exchange Commission on April 1, 2002 and May 14, 2002 respectively. 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 occurring 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.
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
-------- -------- -------- --------
Revenues:
Research and
development contracts $ 1,123 $ 2,212 $ 1,772 $ 3,658
-------- -------- -------- --------
Costs and expenses:
Research and development 3,827 3,514 7,059 7,608
Selling, general
and administrative 2,932 1,939 5,950 3,681
-------- -------- -------- --------
Total costs and expenses 6,759 5,453 13,009 11,289
-------- -------- -------- --------
Operating loss (5,636) (3,241) (11,237) (7,631)
Interest income, net 319 581 700 1,370
Loss on equity
investments -- (211) -- (335)
-------- -------- -------- --------
Net loss $ (5,317) $ (2,871) $(10,537) $ (6,596)
======== ======== ======== ========
Basic and diluted
net loss per share $ (0.30) $ (0.22) $ (0.60) $ (0.51)
======== ======== ======== ========
Shares used in
computing net
loss per share 17,510 12,905 17,509 12,911
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Catalytica Energy Systems, Inc.
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)
June 30, 2002 December 31, 2001
------------- -----------------
ASSETS:
Cash and short-term investments $ 74,076 $ 87,647
Accounts receivable, net 892 1,324
Inventory 410 178
Other current assets 393 536
-------- --------
Total current assets 75,771 89,685
-------- --------
Property and equipment 18,969 14,682
Less accumulated
depreciation and amortization (10,824) (9,905)
-------- --------
8,145 4,777
Other assets 687 678
-------- --------
$ 84,603 $ 95,140
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 4,876 $ 8,295
Current portion of long-term debt 190 60
-------- --------
Total current liabilities 5,066 8,355
Long-term debt 3,109 63
-------- --------
Total liabilities 8,175 8,418
Stockholders' equity 76,428 86,722
-------- --------
$ 84,603 $ 95,140
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