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8-K - FORM 8-K - SYNTHESIS ENERGY SYSTEMS INC | c12034e8vk.htm |
EX-99.2 - EXHIBIT 99.2 - SYNTHESIS ENERGY SYSTEMS INC | c12034exv99w2.htm |
Exhibit 99.1
P R E S S R E L E A S E |
SYNTHESIS ENERGY SYSTEMS, INC. ANNOUNCES FINANCIAL RESULTS FOR
THE SECOND QUARTER OF FISCAL 2011
THE SECOND QUARTER OF FISCAL 2011
Reports Improved Operating Performance
HOUSTON, February 8, 2011 Synthesis Energy Systems, Inc. (Nasdaq: SYMX), a global energy and
gasification technology company that provides products and solutions to the energy and chemicals
industries, today announced financial results and improved operating performance for the second
quarter of fiscal 2011 ended December 31, 2010.
We continue to make progress in our operating performance and in our licensing business, stated
Robert Rigdon, President and CEO. Our licensing business is being bolstered by technology
advancements that we have demonstrated on a commercial scale at our Zaozhuang (ZZ) joint venture
plant in China. Our partners, customers and licensees, as well as other groups were talking to in
China and other emerging markets, are taking note of the significant competitive advantages of our
technology, including reduced emissions and improved margins.
Second Quarter 2011 Financial Results (Unaudited)
Total revenue increased $0.3 million for the three months ended December 31, 2010, to $2.9 million,
versus $2.6 million for the three months ended December 31, 2009.
Product sales from the Companys ZZ joint venture plant increased to $2.6 million for the three
months ended December 31, 2010, compared to $2.5 million for the three months ended December 31,
2009. For the three month periods ended December 31, 2010 and 2009, the plant operated for 73% and
83% of the time, respectively. For both of the three month periods ended December 31, 2010 and
2009, the plants availability for production was 97%.
Technology licensing and related services revenues for the three months ended December 31, 2010
were $0.3 million, reflecting the value of the coal contributed by Ambre Energy in exchange for
testing of the coal at the ZZ joint venture plant. There were no technology licensing and related
services revenues for the three month ended December 31, 2009.
There were no other revenues for the three months ended December 31, 2010. There were $0.1 million
of other revenues for the three months ended December 31, 2009, related to a sponsorship grant
pertaining to lignite testing at the ZZ joint venture plant.
The Company reduced its operating loss for the second quarter of fiscal 2011 to $3.5 million, a
decrease from the $11.1 million reported in the second quarter of fiscal 2010. The $7.6 million
improvement was primarily due to a $6.6 million asset impairment loss recorded in the prior year
second fiscal quarter related to our Golden Concord joint venture project, an improved operating
margin at the ZZ joint venture plant, and lower project and technical development and stock-based
compensation expenses. These
items were partially offset by an increase in G&A expenses resulting from new business development
activities.
The net loss attributable to stockholders for the second quarter of fiscal 2011 declined to $3.6
million, or $0.07 per share, versus a net loss of $8.2 million, or $0.17 per share, for the prior
years second quarter.
At December 31, 2010, the Company had cash and cash equivalents of $34.2 million and working
capital of $31.1 million.
Corporate Highlights
| Added William E. Preston as Senior Vice President of Global Business
Development and Licensing, replacing Don Bunnell, a founder of the
Company, who is leaving to pursue other long-standing interests. Mr.
Bunnell will remain a shareholder and director of the Company and
also serve as a consultant following his departure at the end of
February, |
| Successfully developed and implemented the fines management system
(FMS), a new technology modification, to the U-GAS®
system at the ZZ joint venture plant. This modification increases
gasification efficiency thereby increasing the utilization of low
rank coal to more than 99% and reducing the cost of syngas
production of some coals by up to 7%, |
| Presented results of the FMS operation at the Gasification
Technologies Conference in Washington, DC, and |
| In collaboration with Ambre Energy of Australia, the Company
demonstrated excellent results at its ZZ joint venture plant
gasifying approximately 3,000 tons of Ambres low-to-medium rank,
high ash content coal. |
| Coal conversions of over 98% were achieved, |
| We are moving into the license negotiation stage for Ambres planned CTG
project in Australia utilizing the U-GAS® coal gasification technology, |
| Advanced business development discussions in China, India, and other emerging markets. |
Conference Call Information
Senior management will hold a conference call to review the Companys financial results for this
period and provide an update on corporate developments today at 4:30 p.m. Eastern Time.
To access the live webcast, please log on to the Companys Web site at www.synthesisenergy.com.
Alternatively, domestic callers may participate in the live conference call by dialing (800)
860-2442 and international callers should dial (412) 858-4600. An archived version of the webcast
will be available on the SES Web site through March 8, 2011. A telephone replay of the conference
call will be available approximately one hour after the completion of the call through Tuesday,
March 8, 2011. Domestic callers can access the replay by dialing (877) 344-7529. International
callers should dial (412) 317-0088. The PIN access number for the live call and the replay is
447750#.
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About Synthesis Energy Systems, Inc.
SES provides technology, equipment and engineering services for the conversion of low rank, low
cost coal and biomass feedstocks into energy and chemical products. Its strategy is to create
value through providing technology and equipment in regions where low rank coals and biomass
feedstocks can be profitably converted into high value products through its proprietary
U-GAS® fluidized bed gasification technology, which
SES licenses from the Gas Technology Institute. U-GAS® gasifies coal cost effectively,
without many of the harmful emissions normally associated with coal combustion plants. The primary
advantages of U-GAS® relative to other gasification technologies are (a) greater fuel
flexibility provided by the ability of SES to use all ranks of coal (including low rank, high ash
and high moisture coals, which are significantly cheaper than higher grade coals), many coal waste
products and biomass feed stocks; and (b) the ability of SES to operate efficiently on a smaller
scale, which enables the construction of plants more quickly, at a lower capital cost, and, in many
cases, in closer proximity to coal sources. SES currently has offices in Houston, Texas, and
Shanghai, China. For more information on SES, visit www.synthesisenergy.com or call (713)
579-0600.
Forward Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical fact are forward-looking statements.
Forward-looking statements are subject to certain risks, trends and uncertainties that could cause
actual results to differ materially from those projected. Among those risks, trends and
uncertainties are the early stage of development of SES, its estimate of the sufficiency of
existing capital sources, its ability to successfully develop its licensing business, its ability
to raise additional capital to fund cash requirements for future investments and operations, its
ability to reduce operating costs, the limited history and viability of its technology, the effect
of the current international financial crisis on its business, commodity prices and the
availability and terms of financing opportunities, its results of operations in foreign countries
and its ability to diversify, its ability to maintain production from its first plant in the ZZ
joint venture, its ability to complete the expansion of the ZZ project, its ability to obtain the
necessary approvals and permits for its Yima project and other future projects, the estimated
timetables for achieving mechanical completion and commencing commercial operations for the Yima
project, its ability to negotiate the terms of the conversion of the Yima project from methanol to
glycol and the sufficiency of internal controls and procedures. Although SES believes that in
making such forward-looking statements its expectations are based upon reasonable assumptions, such
statements may be influenced by factors that could cause actual outcomes and results to be
materially different from those projected. SES cannot assure you that the assumptions upon which
these statements are based will prove to have been correct.
Contact:
Synthesis Energy Systems, Inc.
|
MBS Value Partners, LLC | |
Kevin Kelly
|
Matthew D. Haines | |
Chief Accounting Officer
|
Managing Director | |
(713) 579-0600
|
(212) 710-9686 | |
Kevin.Kelly@synthesisenergy.com
|
Matt.Haines@mbsvalue.com |
- TABLES FOLLOW -
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SYNTHESIS ENERGY SYSTEMS, INC.
(A Development Stage Enterprise)
(A Development Stage Enterprise)
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue: |
||||||||||||||||
Product sales and other related parties |
$ | 2,579 | $ | 2,461 | $ | 3,997 | $ | 4,697 | ||||||||
Technology licensing and related services |
302 | | 506 | 65 | ||||||||||||
Other |
| 146 | | 146 | ||||||||||||
Total revenue |
2,881 | 2,607 | 4,503 | 4,908 | ||||||||||||
Costs and Expenses: |
||||||||||||||||
Costs of sales and plant operating expenses |
2,564 | 2,609 | 3,870 | 4,346 | ||||||||||||
General and administrative expenses |
3,131 | 2,922 | 6,318 | 6,005 | ||||||||||||
Project and technical development expenses |
44 | 535 | 129 | 1,555 | ||||||||||||
Asset impairment losses |
| 6,575 | | 6,575 | ||||||||||||
Stock-based compensation expense |
37 | 366 | 264 | 964 | ||||||||||||
Depreciation and amortization |
650 | 720 | 1,330 | 1,442 | ||||||||||||
Total costs and expenses |
6,426 | 13,727 | 11,911 | 20,887 | ||||||||||||
Operating loss |
(3,545 | ) | (11,120 | ) | (7,408 | ) | (15,979 | ) | ||||||||
Non-operating (income) expense: |
||||||||||||||||
Equity in losses of Yima joint ventures |
172 | 50 | 226 | 50 | ||||||||||||
Foreign currency gains |
(242 | ) | (1 | ) | (497 | ) | (1 | ) | ||||||||
Interest income |
(51 | ) | (13 | ) | (91 | ) | (52 | ) | ||||||||
Interest expense |
170 | 164 | 316 | 344 | ||||||||||||
Net loss |
(3,594 | ) | (11,320 | ) | (7,362 | ) | (16,320 | ) | ||||||||
Less: net loss attributable to noncontrolling interests |
33 | 3,121 | 59 | 3,543 | ||||||||||||
Net loss attributable to stockholders |
$ | (3,561 | ) | $ | (8,199 | ) | $ | (7,303 | ) | $ | (12,777 | ) | ||||
Net loss per share: |
||||||||||||||||
Basic and diluted |
$ | (0.07 | ) | $ | (0.17 | ) | $ | (0.15 | ) | $ | (0.27 | ) | ||||
Weighted average common shares outstanding: |
||||||||||||||||
Basic and diluted |
48,429 | 48,183 | 48,390 | 48,183 | ||||||||||||
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SYNTHESIS ENERGY SYSTEMS, INC.
(A Development Stage Enterprise)
(A Development Stage Enterprise)
Consolidated Balance Sheets
(In thousands)
(Unaudited)
(In thousands)
(Unaudited)
December 31, | June 30, | |||||||
2010 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 34,174 | $ | 42,573 | ||||
Accounts receivable |
2,554 | 2,672 | ||||||
Prepaid expenses and other currents assets |
1,393 | 1,875 | ||||||
Inventory |
1,037 | 983 | ||||||
Total current assets |
39,158 | 48,103 | ||||||
Construction-in-progress |
427 | 565 | ||||||
Property, plant and equipment, net |
35,067 | 35,316 | ||||||
Intangible asset, net |
1,256 | 1,272 | ||||||
Investment in Yima joint ventures |
32,932 | 32,430 | ||||||
Other long-term assets |
3,011 | 2,895 | ||||||
Total assets |
$ | 111,851 | $ | 120,581 | ||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Accrued expenses and accounts payable |
$ | 5,244 | $ | 7,008 | ||||
Deferred revenue |
497 | 522 | ||||||
Current portion of long-term bank loan |
2,325 | 2,268 | ||||||
Total current liabilities |
8,066 | 9,798 | ||||||
Long-term bank loan |
5,753 | 6,744 | ||||||
Total liabilities |
13,819 | 16,542 | ||||||
Equity: |
||||||||
Common stock, $0.01 par value: 200,000 shares authorized: 48,429 and 48,337 shares issued and outstanding, respectively |
484 | 483 | ||||||
Additional paid-in capital |
199,030 | 198,720 | ||||||
Deficit accumulated during development stage |
(103,752 | ) | (96,449 | ) | ||||
Accumulated other comprehensive income |
2,880 | 1,836 | ||||||
Total stockholders equity |
98,642 | 104,590 | ||||||
Noncontrolling interests in subsidiaries |
(610 | ) | (551 | ) | ||||
Total equity |
98,032 | 104,039 | ||||||
Total liabilities and equity |
$ | 111,851 | $ | 120,581 | ||||
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