Catalytica Energy Systems Reports Third Quarter Financial Results.Business Editors MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Oct. 30, 2001 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 production, today reported financial results for the third quarter ended September 30, 2001. Revenues for the third quarter of 2001 were $1,177,000, compared with $1,457,000 reported for the same period of the prior year. Third quarter revenue for 2001 was lower due to an increase in program efforts associated with the Company's Xonon(TM) 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 experienced in the second quarter of this year. Selling, general and administrative expenses during the quarter of $1,536,000 reflected a decrease from $2,066,000 reported during the third quarter last year, due to an increased focus on managing costs. Third quarter results were also positively impacted through the reversal of previously recorded spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. and related transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). , totaling $875,000, as a result of final determination of these transaction costs. The recording of a one-time $3,000,000 charge associated with the Company's recent settlement with AGC AGC Automatic Gain Control AGC Automotive Glass Cartridge (fuse) AGC Associated General Contractors AGC Associated General Contractors of America AGC Atypical Glandular Cells AGC Attorney-General's Chambers , resulted in an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $6,288,000, compared with an operating loss during the third quarter last year of $4,882,000. Net loss for the quarter was $5,860,000, or a loss of $0.37 per share. Net loss for the same period of the prior year was $4,923,000. Craig 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, commented, "Excluding the $3.0 million settlement charge we incurred this quarter, these results remain in line with our expectations. Our top line reflects a continued increase in revenues received from government agencies in support of various research and development efforts, which partially offset the decrease in 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. We also increased our investment in research and development during the quarter in anticipation of the scheduled launch of new program initiatives in the fourth quarter. This increased spending was primarily associated with the addition of engineering and technical staff to support these efforts." Kitchen continued, "The third quarter was marked by exciting new developments and progress on a number of fronts. The completion of our recent stock offering with net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $47.6 million has strengthened our financial position. Our strong cash position of $91.3 million at the close of the third quarter positions us to fund the expansion of our commercial manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. in 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). , and provides us with additional resources to scale up our development and commercial activities for Xonon. Also during the quarter, we demonstrated continued progress in our strategy to broaden the application of our Xonon technology and expand the addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be market for our product. Following the receipt of significant awards from the U.S. Department of Energy and the California Energy Commission The California Energy Commission is California’s primary energy policy and planning agency. Created in 1974 and headquartered in Sacramento, the Commission has responsibility for activities that include forecasting future energy needs, promoting energy efficiency through , we announced plans for initiation of three new development programs in the fourth quarter. These programs include work on a fuel processing system for use with fuel cells in automotive applications, and the application of Xonon to both a multi-combustor 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 to Solar Turbines' Taurus(TM) 60, a 5 MW gas turbine." "Of course, one of the most noteworthy events of the quarter was the shipment of our first three commercial Xonon units to Kawasaki," Kitchen stated. "Since shipping these units, a series of verification tests have been performed on the total gas turbine system at the final assembly point with very positive results. I am pleased to report that all pre-installation guarantees have been met, and the Xonon-equipped Kawasaki turbines are now ready for delivery to the project site. Recent news of an updated project schedule for commissioning of the Jamaica Plain, Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. site, however,
indicates a new installation date anticipated for mid- mid-pref. Middle: midbrain. 2002." The Company will host a conference call Tuesday, October 30, 2001 at 1:45 PM (PST PST Paroxysmal supraventricular tachycardia, see there ) to discuss its financial results along with its outlook for the remainder of 2001. 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 Investor Relations Investor relations The process by which the corporation communicates with its investors. section of 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 and develops 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's first product, Xonon Cool Combustion, is a breakthrough combustion technology that achieves ultra-low emissions 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 the scheduled launch and funding of Catalytica Energy Systems' new development programs, the construction of a new commercial manufacturing operation, the deployment of Xonon-equipped gas turbines at project sites, and the Company's ability to broaden the application of Xonon in the market. These statements involve 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 the demand for Catalytica Energy Systems' products, the fact that there may be unanticipated technical, commercial or other setbacks related to the incorporation of Xonon into gas turbines and other development programs, that a market may not develop or be maintained for Catalytic Energy Systems' products, that marketing, project development and installation timelines This article or section contains self-references. For other uses of "Timeline", see Timeline (disambiguation). The following is an index of timelines found on Wikipedia. and regulatory review outcomes are uncertain and that anticipated deadlines may not be met, that construction of the new commercial manufacturing operation may be delayed by financial, labor or other factors and that results may differ from those stated and the other risks set forth in the Catalytica Energy Systems' prospectus and Form 10-Q Form 10-Q See 10-Q. filed with the Securities and Exchange Commission (SEC) on August 8, 2001 and August 14, 2001 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.
Condensed and Consolidated Statements of Operations (1.)
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2001 2000 2001 2000
---- ---- ---- ----
Revenues:
Research and development
contracts $ 1,177 $ 1,457 $ 4,835 $ 3,890
Costs and expenses:
Research and development 3,804 3,060 11,412 7,304
Selling, general and
administrative 1,536 2,066 5,217 4,153
Spin-off and related
transaction costs (875) 1,213 (875) 1,213
Legal Settlement 3,000 -- 3,000 --
-------- -------- -------- --------
Total costs and expenses 7,465 6,339 18,754 12,670
Operating loss (6,288) (4,882) (13,919) (8,780)
Interest income 681 195 2,074 596
Interest expense (10) -- (33) (106)
Loss on equity
investments (243) (236) (578) (236)
-------- -------- -------- --------
Net loss $ (5,860) $ (4,923) $(12,456) $ (8,526)
======== ======== ======== ========
Basic and diluted net
loss per share: $ (0.37) $ (9.53) $ (0.90) $ (16.65)
======== ======== ======== ========
Shares used in computing
net loss per share: (2.) 15,854 517 13,856 512
======== ======== ======== ========
Note (1.) In December 2000, Catalytica Advanced Technologies, Inc.
was merged into Catalytica Energy Systems, Inc. The results for all
periods presented in these financial statements represent the combined
balance sheets and combined statements of operations of Catalytica
Advanced Technologies, Inc. and Catalytica Energy Systems, Inc.
Note (2.) In August 2001, Catalytica Energy Systems, Inc. sold
4,250,000 shares of its Common Stock through an underwritten follow-on
offering. Accordingly, shares used to compute the net loss per share
for the three and nine months ended September 30, 2001, were the
weighted average number of shares. Prior to December 2000, Catalytica
Energy Systems operated as a subsidiary of Catalytica, Inc.
Accordingly, shares used to compute the net loss per share for the
three and nine months ended September 30, 2000, were the actual number
of shares in existence prior to the spin-off.
Catalytica Energy Systems, Inc.
Condensed Consolidated Balance Sheet(a)
(in thousands)
(unaudited)
Sept. 30, 2001 Dec. 31, 2000
-------------- -------------
ASSETS:
Cash and short-term investments $ 91,334 $ 58,713
Accounts and notes receivable, net 1,482 2,348
Inventory 373 180
Other current assets 417 524
------ ------
Total current assets 93,606 61,765
Property and equipment 14,175 13,592
Less accumulated depreciation and
amortization
(9,342) (8,062)
--------- ---------
4,833 5,530
Other assets 2,535 478
$ 100,974 $ 67,772
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 7,077 $ 10,058
Current portion of long-term debt 57 155
----- ------
Total current liabilities 7,134 10,213
Long-term debt 79 89
Stockholders' equity 93,761 57,470
--------- ---------
$ 100,974 $ 67,772
========= =========
Note(a): In December 2000, Catalytica Advanced Technologies, Inc.
was merged into Catalytica Energy Systems, Inc. The results for all
periods presented in these financial statements represent the combined
balance sheets and combined statements of operations of Catalytica
Advanced Technologies, Inc. and Catalytica Energy Systems, Inc.
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