Message #31 From:
NewsBot Date: October 31, 2006 05:01:00 AM
SYNM News Syntroleum Announces Third Quarter Results
TULSA, Okla.--(BUSINESS WIRE)--Syntroleum Corporation (NASDAQ: SYNM) today announced unaudited
financial results for the third quarter ended September 30, 2006. The
Company reported a net loss of $13.0 million, or ($0.23) per share, for
the current quarter compared to a net loss of $15.4 million, or ($0.28)
per share, for the third quarter of 2005. The Company incurred a net
loss of $41.6 million, or ($0.74) per share, for the nine months ended
September 30, 2006, compared to a net loss of $27.6 million, or ($0.52)
per share, during the same period of 2005. The Company’s
cash balance at September 30, 2006 was $38.3 million. This compares to a
cash balance of $69.7 million at December 31, 2005. “We
expect the substantial cost savings brought about by the completion of
our data accumulation program with regards to catalyst life and quality
of fuels and our operational streamlining to have a positive impact on
our bottom line,” said Jack Holmes, president
and CEO of Syntroleum. “We believe that the
Company’s operating life has been extended as
a result, affording us additional time to continue the job of
commercializing our technology and evaluate ways to further strengthen
our balance sheet.”
Third Quarter 2006 vs. Third Quarter 2005
Third quarter 2006 revenues were $2.9 million, an increase of $2.2
million from the third quarter of 2005. The increase in revenues is the
result of revenues related to joint development agreements with the
United States Department of Defense and GTL fuel sales to both the
United States Department of Transportation and Department of Defense.
The Company incurred expenses for the quarter ended September 30, 2006
of $5.4 million related to research, development, and engineering
programs, including $2.0 million of expenditures at its Catoosa
Demonstration Facility, compared to $5.4 million for these activities in
the quarter ended September 30, 2005. General, administrative and other
expenses for the quarter ended September 30, 2006 were $7.5 million,
including $1.7 million for non-cash equity compensation. This compares
to $4.9 million of general, administrative and other expenses for the
same period last year, including $0.5 million of non-cash equity
compensation.
Depreciation, depletion, impairment, and amortization for the quarter
ended September 30, 2006 was $2.8 million compared to $3.6 million for
the same period in 2005. Other income (expense) for the quarter ended
September 30, 2006 was an expense of $0.3 million, compared to $25,000
of other income for the same period last year. The variance is the
result of foreign currency exchange rates in the third quarter of 2006.
Nine Months ended September 30, 2006 vs. Nine Months ended September
30, 2005
Revenues for the nine months ended September 30, 2006 were $3.6 million
compared to $7.1 million for the same period in 2005. Revenues for 2006
are the result of joint development agreements with the United States
Department of Defense and GTL fuel sales to both the United States
Department of Transportation and Department of Defense. Revenues
recognized in 2005 included the recognition of $5.8 million of
previously deferred revenues in 2005 related to the delivery of fuels
under the Company’s work with the United
States Department of Energy’s (“DOE”)
Ultra-Clean Fuels Demonstration Project.
The Company incurred expenses for the nine months ended September 30,
2006 of $17.7 million related to research, development, and engineering
programs, including $7.6 million of expenditures at its Catoosa
Demonstration Facility, compared to $14.6 million, including $7.0
million of expenditures at the Catoosa Demonstration Facility, for these
activities during the nine months ended September 30, 2005. The Company
has discontinued operations at the CDF and the Pilot Plant to eliminate
ongoing expenditures; the Company will be documenting the research data
obtained from these previous research and development operations in
order to assist in commercializing its technology.
General, administrative and other expenses for the nine months ended
September 30, 2006 were $21.1 million, including $5.2 million of
non-cash equity compensation. This compares to $17.0 million of general,
administrative and other expenses for the same period last year,
including $3.8 million of non-cash equity compensation.
Depreciation, depletion, impairment and amortization expense for the
nine months ended September 30, 2006 totaled $5.3 million, compared to
$3.9 million for the nine months ended September 30, 2005. The increase
resulted from impairment of international oil and gas geophysical and
geological costs associated with certain international prospects that
are no longer being pursued. Other Income (expense) for the nine months
ended September 30, 2006 was an expense of $1.5 million, compared to
income of $4.0 million for the nine months ended September 30, 2005.
This variance resulted from the conveyance of interests in Oil Mining
Lease 113 (“Aje”)
offshore Nigeria to other project participants for $9.4 million,
resulting in a gain of $3.6 million in 2005.
The Company’s third quarter 2006 conference
call will take place Tuesday, October 31, 2006 at 10:00 AM ET, during
which Syntroleum’s senior management will
discuss financial results for the period, progress on the Company’s
commercial developments and other important activities. A web cast of
the call will be available via the Internet by accessing www.syntroleum.com.
Listeners should allow a few minutes for registration into the web site.
A replay of this conference call will be available on the web site under
the Syntroleum Investor Relations tab for a period of one year.
Syntroleum Corporation owns a proprietary GTL and coal-to-liquids
process for converting natural gas and/or coal into synthetic liquid
hydrocarbons. The Company plans to use its technologies, as well as
other third party technologies, to develop and participate in resource
monetization projects in a number of global locations.
(Tables Follow)
This document includes forward-looking statements as well as
historical information. Forward-looking statements include, but are not
limited to, statements relating to commercializing the Syntroleum
Process and related technologies and products, the Company’s
ongoing life and the effect of cost savings. When used in this document,
the words "anticipate," "believe," "estimate," "expect," "intent,"
"may," "project," "plan" "should," “could,”
and similar expressions are intended to be among the statements that
identify forward-looking statements. Although Syntroleum believes that
its expectations reflected in these forward-looking statements are
reasonable, such statements involve risks and uncertainties and no
assurance can be given that actual results will be consistent with these
forward-looking statements. Important factors that could cause actual
results to differ from these forward-looking statements include the
potential that debt or equity financing for anticipated GTL or related
natural gas liquids or oil and gas projects may not be available, the
schedule for development, construction and operation of proposed GTL
plants may not be met, anticipated appropriation and expenditure of
federal monies does not occur, commercial-scale GTL plants do not
achieve the same results as those demonstrated on a laboratory or pilot
basis or that such plants experience technological and mechanical
problems, the potential that improvements to the Syntroleum Process
currently under development may not be successful, the impact on plant
economics of operating conditions (including energy prices),
construction risks, risks associated with investments and operations in
foreign countries, our dependence on strategic relationships with
manufacturing and engineering companies, volatility of energy prices,
our ability to obtain interest in natural gas properties for our
sub-quality gas monetization projects, the ability to implement
corporate strategies, including the continued availability of adequate
working capital, competition, intellectual property risks, our ability
to obtain financing and other risks described in the Company’s
filings with the Securities and Exchange Commission.
®“Syntroleum”
is registered as a trademark and service mark in the U.S. Patent and
Trademark Office.
Syntroleum Corporation and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(Amounts in thousands, except per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2006
2005
2006
2005
Revenue
Joint Development
$ 390
$ 616
$ 1,020
$ 7,044
Other
2,470
92
2,580
98
Total Revenue
2,860
708
3,600
7,142
Operating Expenses
DOE Catoosa Project
1,988
2,456
7,642
7,039
Pilot Plant, Engineering, and R&D
3,409
2,980
10,057
7,586
Depreciation, Depletion, Impairment and Amortization
2,817
3,574
5,252
3,943
G&A and Other (includes non-cash equity compensation of $1,748 and
$551 for the three months ended September 30, 2006 and 2005,
respectively, and $5,202 and $3,788 for the nine months ended
September 30, 2006 and 2005, respectively.)
7,455
4,876
21,105
17,023
Total Operating Expenses
15,669
13,886
44,056
35,591
Income (Loss) from Operations
(12,809)
(13,178)
(40,456)
(28,449)
Investment and Interest Income
597
785
2,040
1,731
Interest Expense
(580)
(430)
(1,561)
(1,275)
Other Income (Expense)
(292)
25
(1,500)
4,023
Income (Loss) from Continuing Operations
(13,084)
(12,798)
(41,477)
(23,970)
Income (Loss) from Discontinued Domestic Oil and Gas Business
