Synthesis Energy Systems, Inc.
May 12, 2015

Synthesis Energy Systems, Inc. Reports Fiscal 2015 Third Quarter Financial Results and Provides Business Update

HOUSTON, May 12, 2015 (GLOBE NEWSWIRE) -- Synthesis Energy Systems, Inc. (SES) (Nasdaq:SYMX), a global energy and gasification technology company enabling clean, high-value energy and chemical products from multiple feedstocks, today reported financial and operating results for its fiscal 2015 third quarter, ended March 31, 2015.

"During this past quarter we have gained good traction in China especially, where three clean coal gasification projects are under construction for Aluminum Corporation of China using seven total SES Gasification Systems. Our China joint venture, Tianwo-SES Clean Energy Technologies, is supplying an expected $23 million of technology, proprietary equipment plus additional equipment related to the three gasification plants to the Innovative Coal Chemical Design Institute, or ICCDI. ICCDI is the turnkey contractor supplying all the engineering, construction and balance of plant equipment for the projects. These industrial syngas supply plants are in what we consider an emerging growth market of replacement gas, and they represent our first win by the Tianwo-SES joint venture. The construction by ICCDI is fast-tracked, in staged progression and two of the projects are expected to be completed during this calendar year, with the third following in early 2016. Tianwo-SES reports a growing pipeline of seven similar prospective projects that may follow-on as the first of these projects start-up with good results. This momentum of continuing growth is positioning our China JV to start fully covering its costs and generating earnings so SES can realize future dividends," said Robert W. Rigdon, President and CEO. "Our operating JV plants in China have also been making good progress during our fiscal third quarter. We are smartly managing the ZZ JV and navigating the current low methanol price environment, and moving towards re-purposing the ZZ JV to better utilize its capability profitably. At the Yima JV, which just this past week started back up after a scheduled maintenance shut-down, we are moving closer to our goal of gaining formal acceptance and then pursuing alternatives for monetizing some or all of the $34.8 million invested."

"Looking ahead, our priorities to accelerate growth of the Company are twofold. First, we are pursuing our strategic Technology Company partnering initiative to fully unlock the value of our technology which we believe is the key to meeting clean energy and chemical demands in the industrializing and developing world. Second, we continue to advance our partnership initiatives globally and to grow our pipeline of projects, with main regions of focus being India and China, specifically 'One Belt, One Road' partnerships and collaboration. Our initial feasibility study for Tianwo-SES's first Direct Reduced Iron (DRI) steel project, The Mongolian New Comprehensive Steel Plant Project, is a prime example. Working with our global DRI technology partner, Midrex Technologies, the integrated coal gasification DRI steel plant will be designed to use SES Gasification Technology and MIDREX® Direct Reduction Process," Mr. Rigdon continued. "Additionally, we are taking steps to establish a China-specific platform to implement power projects in China with the emergence of mini-IGCC distributed power opportunities there. In India we are leveraging our strong traction and relationships to bring in Chinese manufacturing and financing capabilities to advance our discussions for new emerging projects in markets ranging from large-scale fertilizer to DRI steel, with our longtime regional marketing partner, Simon India. Together, we also recently expanded our product offering to include fixed price turnkey gasifier islands in India where ours is the cleanest and most economical commercially available gasification technology able to process all of India's abundant coal and coal wastes."

Recent Corporate Highlights

China Joint Venture: SES's China joint venture with Suzhou Thvow Technology Co., Ltd. (STT): Tianwo-SES Clean Energy Technologies Co., Ltd. (Tianwo-SES):

Global Initiative - Distributed Power Business:

Regional Initiative - India:

Plant Operations:

Corporate News:

Fiscal Third Quarter 2015 Financial Results (Unaudited)

The Company reported $2.8 million of revenue for the three months ended March 31, 2015, versus $7.2 million revenue for the three months ended March 31, 2014. The decrease in revenue was primarily due to the shut-down of the ZZ Joint venture during February 2015 for repair and maintenance coupled with higher gasifier related equipment sale to Yima Joint Ventures in the prior year's third quarter.

The Company's operating loss for the third quarter of fiscal 2015 was $3.9 million versus an operating loss of $4.0 million for the third quarter of fiscal 2014. The decrease in operating loss was primarily due to decrease in general and administrative expenses, cost of sales and plant operating expenses.

The net loss attributable to stockholders for the third quarter of fiscal 2015 was $4.0 million, or $0.05 per share, versus a loss of $4.2 million, or $0.06 per share, for the prior year's third quarter.

As of March 31, 2015, the Company had cash and cash equivalents of $11.6 million and working capital of $0.3 million.

Conference Call Information

SES's President and CEO, Robert W. Rigdon, and CFO and Corporate Secretary, Roger L. Ondreko, will hold a conference call to review the Company's financial results and provide an update on corporate developments beginning at 4:15 p.m. EDT on May 12.

To access the live webcast, please log on to www.synthesisenergy.com. Alternatively, interested parties may participate in the SES telephone conference call by phoning (866) 652-5200 (U.S.) or (412) 317-6060 (Int'l). Callers should request the "Synthesis Energy Systems, Inc. call." Interested parties can pre-register for the call at: http://dpregister.com/10065002.

An archived version of the SES conference call webcast will be available on the company's website through June 15, 2015. A telephone replay of the call will be available beginning approximately one hour after its completion and will be available through June 15, 2015. Interested parties can access the telephonic replay by phoning (877) 344-7529 (U.S.) or (412) 317-0088 (Int'l). The PIN access code for both the live call and replay is: 10065002.

About Synthesis Energy Systems, Inc.

Synthesis Energy Systems (SES) is a Houston-based technology company focused on bringing clean high-value energy to developing countries from low-cost and low-grade coal and biomass through its proprietary gasification technology based upon U-Gas®, licensed from the Gas Technology Institute. The SES Gasification Technology enables Growth With Blue Skies, and greater fuel flexibility for both large-scale and efficient small- to medium-scale operations close to fuel sources. Fuel sources include low-rank, low-cost high ash, high moisture coals, which are significantly cheaper than higher grade coals, many coal waste products, and biomass feedstocks. For more information, please visit: www.synthesisenergy.com.

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 ability of our ZZ joint venture to effectively operate XE's methanol plant and produce methanol; the ability of our project with Yima to produce earnings and pay dividends; our ability to develop and expand business of the Tianwo-SES joint venture in the joint venture territory; our ability to successfully partner our technology business; our ability to develop our power business unit and marketing arrangement with GE and our other business verticals, including DRI steel, through our marketing arrangement with Midrex Technologies, and renewables; our ability to successfully develop the SES licensing business; events or circumstances which result in an impairment of assets, including, but not limited to, at our ZZ Joint Venture; our ability to reduce operating costs; our ability to make distributions and repatriate earnings from our Chinese operations; our limited history, and viability of our technology; commodity prices, including in particular methanol, and the availability and terms of financing; our ability to obtain the necessary approvals and permits for future projects; our ability to raise additional capital, if any, and our ability to estimate the sufficiency of existing capital resources; the sufficiency of internal controls and procedures; and our results of operations in countries outside of the U.S., where we are continuing to pursue and develop projects. Although SES believes that in making such forward-looking statements our 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 by us. SES cannot assure you that the assumptions upon which these statements are based will prove to have been correct.

Contact:

MDC Group
Investor Relations:
David Castaneda
Arsen Mugurdumov
414.351.9758
IR@synthesisenergy.com

Media Relations:
Susan Roush
747.222.7012
PR@synthesisenergy.com

TABLES FOLLOW

         
SYNTHESIS ENERGY SYSTEMS, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
         
         
  Three Months Ended Nine Months Ended
  March 31, March 31,
  2015 2014 2015 2014
Revenue:        
Product sales and other -related parties  $ 2,780  $ 4,600  $ 10,725  $ 10,514
Related party consulting and equipment sales 15 2,635 166 2,635
Total revenue 2,795 7,235 10,891 13,149
         
Costs and Expenses:        
Costs of sales and plant operating expenses 3,874 7,806 14,916 11,933
General and administrative expenses 2,226 2,536 6,594 7,141
Stock-based compensation expense 381 336 1,615 1,855
Depreciation and amortization 229 596 1,373 1,727
Impairment of long-lived assets 20,914
         
Total costs and expenses 6,710 11,274 45,412 22,656
         
Operating loss (3,915) (4,039) (34,521) (9,507)
         
Non-operating (income) expense:        
Equity in losses of joint ventures 1 2
Foreign currency (gains) losses, net 20 48 (6) 5
Interest income (33) (6) (53) (22)
Interest expense 76 101 214 292
         
Net loss (3,978) (4,183) (34,676) (9,784)
Less: net loss attributable to noncontrolling interests (45) (33) (634) (36)
Net loss attributable to stockholders  $ (3,933)  $ (4,150)  $ (34,042)  $ (9,748)
         
Net loss per share:        
Basic and diluted  $ (0.05)  $ (0.06)  $ (0.47)  $ (0.15)
         
Weighted average common shares outstanding:        
Basic and diluted 73,239 64,266 73,220 63,886
         
     
SYNTHESIS ENERGY SYSTEMS, INC.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
     
  March 31, June 30,
  2015 2014
  (Unaudited)  
ASSETS    
     
Current assets:    
Cash and cash equivalents  $ 11,573  $ 19,407
Certificate of deposit-restricted 1,628
Accounts receivable-related party, net 711 676
Prepaid expenses and other currents assets 673 873
Inventory 512 865
Total current assets 15,097 21,821
     
Property, plant and equipment, net  10,371  31,499
Intangible assets, net 965 1,049
Investment in joint ventures 34,813 34,856
Other long-term assets 1,955 2,481
   $ 63,201  $ 91,706
Total assets    
     
LIABILITIES AND EQUITY    
     
Current liabilities:    
Accrued expenses and accounts payable  $ 8,333  $ 7,167
Line of credit 3,256
Short-term bank loan 3,256 3,251
  14,845 10,418
Total current liabilities    
     
Commitment and contingencies    
     
Stockholder's Equity:    
Common stock, $0.01 par value: 200,000 shares authorized: 73,300 and 73,107 shares issued and outstanding, respectively 733 731
Additional paid-in capital 242,827 241,125
Accumulated deficit (200,026) (165,984)
Accumulated other comprehensive income 6,101 6,062
Total stockholders' equity 49,635 81,934
Noncontrolling interests in subsidiaries (1,279) (646)
  48,356 81,288
Total stockholder's equity    
   $ 66,201  $ 91,706
Total liabilities and stockholder's equity    
     

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