Synthesis Energy Systems, Inc. Announces Financial Results for the Third Quarter of Fiscal 2012
"During the third quarter of 2012, we have made good progress on our Yima Phase 1 joint venture project in
Third Quarter 2012 Financial Results (Unaudited)
In
Technology licensing and related services revenues for the three months ended
Total revenue for the three months ended
The operating loss for the third quarter of fiscal 2012 was
The net loss attributable to stockholders for the third quarter of fiscal 2012 was
At
Corporate Highlights
- Construction of the Yima Joint Venture plant continues to advance on schedule. Production of syngas is expected to begin this summer. Once fully operational, the Company believes that the Yima project should provide significant positive impact to the Company's financials and should be a major catalyst for further commercialization of its technology.
- Based on progress made in the quarter, SES agreed with ZJX and China Energy to continue the ongoing discussions related to the proposed
$83.8 million equity investment into SES. - Definitive steps have been taken to form SES China, intended to manage all of the Company's
China operations and developments. In connection with this, SES has entered into an agreement with Crystal Vision Energy, based inHong Kong andBeijing , under whichColin S. Tam , Executive Chairman of CVE, will lead SES China as Managing Director.Mr. Tam is an internationally recognized energy industry veteran with more than 30 years of experience. Other executives from CVE will provide additional managerial and support functions to SES China. - SES and Hai Hua have advanced negotiations on a definitive agreement to restructure the ZZ Joint Venture, which is expected to result in improved financial performance of the plant by sharing in profits from the integration of Hai Hua's methanol unit with SES' syngas unit.
- SES has identified an ammonia retrofit business vertical in
China that we believe represents a major near-term opportunity. Today inChina there are approximately 3,500 old generation gasifiers that are highly polluting and that must use expensive anthracite coals in their processes to make ammonia. Our technology can significantly lower the production cost of these facilities through our ability to retrofit these facilities to gasify very low cost coals. On average, one of our gasifiers replaces five of these old gasifiers and each replacement project has the potential for approximately$20 million to $35 million in revenue with attractive margins. - SES Resource Solutions, SES' joint venture with Midas Resources, continues to advance integrated coal resources and gasification project development opportunities in
Asia and Africa. Recently, SES and SRS announced a feasibility study agreement with Ncondezi Coal Company to explore opportunities to mine and ship low volatility coal fromMozambique . The three-month feasibility study is progressing. - SES has developed a very robust pipeline of licensing projects over the last six to 12 months. The five most well developed projects in this pipeline have substantial revenue potential starting in the next 12 to 18 months and extending across the next 3 to 5 years. During the quarter, SES completed feasibility studies, performed coal testing, and was in active commercial discussions with these most likely prospects.
Conference Call Information
Senior management will hold a conference call to review the Company's financial results for the third quarter of 2012 and provide a corporate update this morning at
To access the live webcast, please log on to SES' website at www.synthesisenergy.com. Alternatively, domestic callers may participate in the live telephone conference call by dialing (800) 860-2442. International callers should dial (412) 858-4600. An archived version of the webcast will be available on SES' website through
About
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
SES 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 including its
Important Notice from SES
In connection with the proposed ZJX/China Energy transaction, SES has filed a preliminary proxy statement, and intends to file a definitive proxy statement, with the
You may obtain the preliminary statement and, when available, the definitive proxy statement, for free by visiting EDGAR on the
- TABLES FOLLOW -
(A Development Stage Enterprise) Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) | |||||||||
Three Months Ended |
Nine Months Ended |
||||||||
|
March 31, |
||||||||
2012 |
2011 |
2012 |
2011 |
||||||
Revenue: |
|||||||||
Product sales and other — related parties |
$ — |
$ 2,626 |
$ 2,121 |
$ 6,622 |
|||||
Technology licensing and related services |
100 |
506 |
571 |
1,013 |
|||||
Other |
— |
— |
86 |
— |
|||||
Total revenue |
100 |
3,132 |
2,778 |
7,635 |
|||||
Costs and Expenses: |
|||||||||
Costs of sales and plant operating expenses |
246 |
2,384 |
4,330 |
6,254 |
|||||
General and administrative expenses |
3,638 |
3,329 |
9,709 |
9,646 |
|||||
Project and technical development expenses |
64 |
58 |
192 |
187 |
|||||
Stock-based compensation expense |
348 |
312 |
707 |
577 |
|||||
Depreciation and amortization |
622 |
653 |
1,903 |
1,983 |
|||||
Total costs and expenses |
4,918 |
6,736 |
16,841 |
18,647 |
|||||
Operating loss |
(4,818) |
(3,604) |
(14,063) |
(11,012) |
|||||
Non-operating (income) expense: |
|||||||||
Equity in losses of joint ventures |
410 |
60 |
1,244 |
286 |
|||||
Foreign currency gains |
(2) |
(223) |
(617) |
(719) |
|||||
Interest income |
(15) |
(41) |
(78) |
(132) |
|||||
Interest expense |
140 |
196 |
466 |
512 |
|||||
Net loss |
(5,351) |
(3,596) |
(15,078) |
(10,959) |
|||||
Less: net loss (income) attributable to noncontrolling interests |
(9) |
37 |
132 |
96 |
|||||
Net loss attributable to stockholders |
$ (5,360) |
$ (3,559) |
$ (14,946) |
$ (10,863) |
|||||
Net loss per share: |
|||||||||
|
$ (0.11) |
$ (0.07) |
$ (0.29) |
$ (0.22) |
|||||
Weighted average common shares outstanding: |
|||||||||
|
50,864 |
48,429 |
50,861 |
48,403 |
(A Development Stage Enterprise) Consolidated Balance Sheets (In thousands) (Unaudited) | |||
March 31, 2012 |
June 30, 2011 | ||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 19,846 |
$ 32,176 | |
Accounts receivable |
137 |
2,574 | |
Prepaid expenses and other currents assets |
2,151 |
1,382 | |
Inventory |
948 |
913 | |
Total current assets |
23,082 |
37,045 | |
Property, plant and equipment, net |
34,019 |
35,183 | |
Intangible assets, net |
1,145 |
1,226 | |
Investment in Yima joint ventures |
33,773 |
33,520 | |
Other long-term assets |
3,988 |
3,000 | |
Total assets |
$ 96,007 |
$ 109,974 | |
LIABILITIES AND EQUITY |
|||
Current liabilities: |
|||
Accrued expenses and accounts payable |
|
| |
Current portion of long-term bank loan |
2,447 |
2,380 | |
Total current liabilities |
10,017 |
8,493 | |
Long-term bank loan |
2,383 |
4,697 | |
Total liabilities |
12,440 |
13,190 | |
Equity: |
|||
Common stock, authorized: 51,017 and 50,850 shares issued and outstanding, respectively |
510 |
509 | |
Additional paid-in capital |
205,776 |
205,055 | |
Deficit accumulated during development stage |
(126,858) |
(111,912) | |
Accumulated other comprehensive income |
5,035 |
3,848 | |
Total stockholders' equity |
84,463 |
97,500 | |
Noncontrolling interests in subsidiaries |
(856) |
(716) | |
Total equity |
83,607 |
96,784 | |
Total liabilities and equity |
$ 96,007 |
$ 109,974 |
SOURCE
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