HOUSTON, May 6, 2010 /PRNewswire via COMTEX/ --Synthesis Energy Systems, Inc. (the "Company") (Nasdaq: SYMX), a global energy and gasification technology company, today announced results for the quarter ended March 31, 2010.
"We are encouraged by the steady progress we are making in all areas of our business as we continue to meet milestones and execute on our strategy," said Robert Rigdon, President and CEO of the Company.
"Since we launched our licensing business late last year, we have seen significant interest in our capability to efficiently and cost effectively gasify low rank coals as well as biomass, for conversion into fuels, chemicals and power," Rigdon added.
Third Quarter Financial Results (Unaudited)
For the quarter ended March 31, 2010, the Company reported total revenue of $2.6 million. These results included revenue for product sales at the Hai Hua joint venture plant of $2.3 million, which is a decrease of $0.1 million from the prior quarter. Additionally, the Company reported other revenues of $0.3 million which was generated from feasibility studies and other technical services provided in association with technology licensing.
Cost of sales and plant operating expenses were $2.7 million for the quarter ended March 31, 2010, a slight increase of $0.1 million from the prior quarter. The increase was due to costs incurred in providing services associated with technology licensing.
General and administrative expenses were $3.4 million during the quarter ended March 31, 2010, an increase of $0.5 million from the prior quarter. The increase is a result of consulting and royalty costs related to the development of the Company's global licensing business, as well as employee severance costs.
Project and technical development expenses were $0.3 million for the quarter ended March 31, 2010 and included advanced analytical flow modeling and other technical support for U-GAS® technology development.
The Company's operating loss for the quarter, which included $1.4 million of non-cash expenses, comprised of stock-based compensation expense and depreciation and amortization, was $5.2 million. This compares to an operating loss of $11.1 million for the quarter ended December 31, 2009 which included $7.7 million of non-cash expenses comprised of a $6.6 million impairment loss and other non-cash expenses.
At March 31, 2010, the Company had cash and cash equivalents of $45.8 million and working capital of $40.2 million.
Conference Call Information
Senior management will hold a conference call today at 8:00 a.m. Eastern Time to review the Company's financial results for the quarter ended March 31, 2010 and provide an update on corporate developments.
To access the live webcast, please log onto the Company's website at www.synthesisenergy.com. Alternatively, callers may participate in the conference call by dialing (612) 332-0923. An archived version of the webcast will be available on the website through June 6, 2010. A telephone replay of the conference call will be available approximately two hours after the completion of the call through Thursday, May 13, 2010. Callers can access the replay by dialing (320) 365-3844; the PIN access number is 155181
About Synthesis Energy Systems, Inc.
The Company is an energy and technology company that builds, owns and operates coal gasification plants in China that utilize its proprietary U-GAS® fluidized bed gasification technology to convert low rank coal and coal wastes into higher value energy products, such as transportation fuel and ammonia. The Company also licenses its U-GAS® technology for biomass and coal applications worldwide and provides related services and equipment. The U-GAS® technology, which SES licenses from the Gas Technology Institute, gasifies coal 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 our ability 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) our ability to operate efficiently on a smaller scale, which enables us to construct plants more quickly, at a lower capital cost, and, in many cases, in closer proximity to coal sources. The Company 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 Company's early stage of development, 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 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 Hai Hua joint venture project, 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, and the sufficiency of internal controls and procedures. Although the Company 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. The Company cannot assure you that the assumptions upon which these statements are based will prove to have been correct.
SYNTHESIS ENERGY SYSTEMS, INC. (A Development Stage Enterprise) Consolidated Balance Sheets (In thousands) (Unaudited) March 31, June 30, 2010 2009 - ASSETS Current assets: Cash and cash equivalents $45,849 $90,420 Accounts receivable 3,384 1,333 Prepaid expenses and other currents assets 561 689 Inventory 881 780 --- --- Total current assets 50,675 93,222 Construction-in-progress 568 6,078 Property, plant and equipment, net 36,248 37,713 Intangible asset, net 1,291 1,386 Investment in Yima joint venture 32,234 1,500 Other long-term assets 3,229 6,237 ----- ----- Total assets $124,245 $146,136 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accrued expenses and accounts payable $8,261 $8,828 Current portion of long-term bank loan 2,256 2,254 ----- ----- Total current liabilities 10,517 11,082 Long-term bank loan 6,709 8,958 ----- ----- Total liabilities 17,226 20,040 Stockholders' Equity: Common stock, $0.01 par value: 200,000 and 100,000 shares authorized: 48,232 and 48,118 shares issued and outstanding, respectively 482 481 Additional paid-in capital 198,181 196,441 Deficit accumulated during development stage (93,581) (74,701) Accumulated other comprehensive income 1,613 1,598 ----- ----- Total stockholders' equity 106,695 123,819 Noncontrolling interest 324 2,277 --- ----- Total liabilities and stockholders' equity, including noncontrolling interest 107,019 126,096 ------- ------- Total liabilities and stockholders' equity $124,245 $146,136 ======== ======== SYNTHESIS ENERGY SYSTEMS, INC. (A Development Stage Enterprise) Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended December March 31, 31, March 31, 2010 2009 2009 Revenue: Product sales and other - related parties $2,297 $2,461 $76 Technology licensing and related services 324 - - Other - 146 250 --- --- --- Total revenue 2,621 2,607 326 Costs and Expenses: Costs of sales and plant operating expenses 2,736 2,609 906 General and administrative expenses 3,401 2,921 3,841 Project and technical development expenses 286 535 251 Stock-based compensation expense 741 366 (1,798) Asset impairment loss - 6,575 - Depreciation and amortization 666 720 685 --- --- --- Total costs and expenses 7,830 13,726 3,885 ----- ------ ----- Operating loss (5,209) (11,119) (3,559) Non-operating (income) expense: Equity in losses - Yima Joint Venture 4 50 - Interest income (38) (13) (195) Interest expense 178 164 243 --- --- --- Net loss (5,353) (11,320) (3,607) Less: net loss (gain) attributable to noncontrolling interest 72 2,299 (8) --- ----- --- Net loss attributable to stockholders $(5,281) $(9,021) $(3,615) ======= ======= ======= Net loss per share attributable to stockholders: Basic and diluted $(0.11) $(0.19) $(0.08) ====== ====== ====== Weighted average common shares outstanding: Basic and diluted 48,198 48,183 48,011 ====== ====== ====== SYNTHESIS ENERGY SYSTEMS, INC. (A Development Stage Enterprise) Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Nine Months Ended ----------------- March 31, March 31, 2010 2009 Revenue: Product sales and other - related parties $6,993 $684 Technology licensing and related services 390 - Other 146 250 --- --- Total revenue 7,529 934 Costs and Expenses: Costs of sales and plant operating expenses 7,083 5,243 General and administrative expenses 9,404 13,142 Project and technical development expenses 1,840 2,193 Stock-based compensation expense 1,706 1,585 Asset impairment loss 6,575 - Depreciation and amortization 2,107 2,187 ----- ----- Total costs and expenses 28,715 24,350 ------ ------ Operating loss (21,186) (23,416) Non-operating (income) expense: Equity in losses - Yima Joint Venture 54 - Interest income (90) (1,658) Interest expense 522 779 --- --- Net loss (21,672) (22,537) Less: net loss attributable to noncontrolling interest 2,792 654 ----- --- Net loss attributable to stockholders $(18,880) $(21,883) ======== ======== Net loss per share attributable to stockholders: Basic and diluted $(0.39) $(0.46) ====== ====== Weighted average common shares outstanding: Basic and diluted 48,228 48,011 ====== ======
SOURCE Synthesis Energy Systems, Inc.