TULSA, Okla.--(BUSINESS WIRE)--Aug. 1, 2006--Syntroleum
Corporation (NASDAQ:SYNM) today announced unaudited financial results
for the second quarter ended June 30, 2006. The Company reported a net
loss of $15.0 million, or ($0.27) per share, for the current quarter
compared to a net loss of $0.6 million, or ($0.01) per share, for the
second quarter of 2005. The Company incurred a net loss of $28.0
million, or ($0.50) per share, for the six months ended June 30, 2006,
compared to a net loss of $12.2 million, or ($0.24) per share, during
the same period of 2005. The increase in the net loss during the
current year compared to the same period in 2005 is the result of
several factors, including: 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 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; impairment in 2006 of certain prospects in Nigeria
and Indonesia that are no longer being pursued; financing costs in
2006; and increased costs during 2006 associated with research and
development activities necessary for preparation of commercial
deployment of our GTL and CTL technology. The Company's cash balance
at June 30, 2006 was $46.4 million. This compares to a cash balance of
$69.7 million at December 31, 2005.
Second Quarter 2006 vs. Second Quarter 2005
Second quarter 2006 revenues were $0.3 million, a decrease of $5.9
million from the second quarter of 2005. This decrease in revenues is
the result of the recognition of previously deferred revenue noted
above for the completion of production and delivery of ultra-clean GTL
fuels to the DOE in the second quarter of 2005. Current revenues
relate to joint development agreements with the United States
Department of Defense and GTL fuel sales to the United States
Department of Transportation.
The Company incurred expenses for the quarter ended June 30, 2006
of $6.3 million related to research, development, and engineering
programs, including $2.7 million of expenditures at its Catoosa
Demonstration Facility, compared to $4.9 million for these activities
in the quarter ended June 30, 2005. General, administrative and other
expenses for the quarter ended June 30, 2006 were $6.8 million,
including $1.7 million for non-cash equity compensation. This compares
to $4.8 million of general, administrative and other expenses for the
same period last year, including $0.2 million of non-cash equity
compensation.
Depreciation, depletion, impairment, and amortization for the
quarter ended June 30, 2006 was $0.9 million compared to $0.2 million
for the same period, 2005. Other income for the quarter ended June 30,
2006 was a loss of $1.5 million, compared to $3.8 million of other
income for the same period last year. The variance is the result of
the receipt of the Aje bonus payment from other project participants
in 2005 and costs associated with financing activities in 2006.
Six Months ended June 30, 2006 vs. Six Months ended June 30, 2005
Revenues for the six months ended June 30, 2006 were $0.7 million
compared to $6.4 million for the same period in 2005. Revenues
recognized in 2005 included the $5.8 million related to fuels delivery
to the DOE.
The Company incurred expenses for the six months ended June 30,
2006 of $12.3 million related to research, development, and
engineering programs, including $5.7 million of expenditures at its
Catoosa Demonstration Facility, compared to $9.2 million, including
$4.6 million of expenditures at the Catoosa Demonstration Facility,
for these activities during the six months ended June 30, 2005. The
increased expenditures in these areas are related to our operations at
our Tulsa Pilot Plant, which was not operating during this period in
2005, and other work being completed on our GTL and CTL technologies.
General, administrative and other expenses for the six months
ended June 30, 2006 were $13.7 million, including $3.5 million of
non-cash equity compensation. This compares to $12.1 million of
general, administrative and other expenses for the same period last
year, including $3.2 million of non-cash equity compensation.
Depreciation, depletion, impairment and amortization expense for
the six months ended June 30, 2006 totaled $1.8 million, compared to
$0.4 million for the six months ended June 30, 2005. The increase
resulted from impairment of international oil and gas geophysical and
geological costs associated with certain prospects in Nigeria and
Indonesia that are no longer being pursued. Other Income for the six
months ended June 30, 2006 was a loss of $1.2 million, compared to
income of $4.0 million for the six months ended June 30, 2005. This
variance resulted from the Aje transaction in 2005 and costs
associated with financing activities in 2006.
The Company's second quarter 2006 conference call will take place
Tuesday, August 1, 2006 at 10:00 AM EDT, 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.
This document includes forward-looking statements as well as
historical information. Forward-looking statements include, but are
not limited to, statements relating to proposed projects the
Syntroleum Process and related technologies and products. 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.
(R) "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 Six Months Ended
June 30, June 30,
------------------ -------------------
2006 2005 2006 2005
--------- -------- --------- ---------
Revenue
Joint Development $ 256 $ 6,208 $ 630 $ 6,428
Other 56 3 110 6
--------- -------- --------- ---------
Total Revenue 312 6,211 740 6,434
--------- -------- --------- ---------
Operating Expenses
DOE Catoosa Project 2,734 2,373 5,654 4,583
Pilot Plant, Engineering, and
R&D 3,569 2,521 6,648 4,606
Depreciation, Depletion,
Impairment and
Amortization 904 201 1,782 369
G&A and Other
(includes non-cash equity
compensation of $1,700 and
$241 for the three months
ended June 30, 2006 and
2005, respectively, and
$3,454 and $3,237 for the
six months ended June 30,
2006 and 2005, respectively.) 6,828 4,825 13,650 12,147
--------- -------- --------- ---------
Total Operating Expenses 14,035 9,920 27,734 21,705
--------- -------- --------- ---------
Income (Loss) from Operations (13,723) (3,709) (26,994) (15,271)
--------- -------- --------- ---------
Investment and Interest
Income 656 734 1,443 946
Interest Expense (493) (425) (982) (845)
Other Income (Expense) (1,489) 3,846 (1,207) 3,998
--------- -------- --------- ---------
Income (Loss) from Continuing
Operations (15,049) 446 (27,740) (11,172)
--------- -------- --------- ---------
Income (Loss) from Discontinued
Domestic Oil and Gas Business - (1,010) (213) (1,026)
--------- ------- --------- ---------
Net Income (Loss) $(15,049) $ (564) $(27,953) $(12,198)
========= ======== ========= =========
Earnings (Loss) Per Share
(Basic and Diluted):
Continuing Operations $ (0.27) $ 0.01 $ (0.50) $ (0.22)
========= ======== ========= =========
Discontinued Operations $ - $ (0.02) $ - $ (0.02)
========= ======== ========= =========
Net Income $ (0.27) $ (0.01) $ (0.50) $ (0.24)
========= ======== ========= =========
Weighted Average Shares
Outstanding 55,829 55,181 55,770 51,590
========= ======== ========= =========
Syntroleum Corporation and Subsidiaries
Condensed Balance Sheets (Unaudited)
(Amounts in thousands)
June 30, December 31,
2006 2005
------------ ------------
Assets
Cash and Cash Equivalents $ 46,423 $ 69,663
Restricted Cash 3,571 1,684
Other Current Assets 1,885 6,111
Property and Equipment Held for Sale 1,150 1,927
Total Non-Current Assets 10,912 10,410
------------ ------------
Total Assets $ 63,941 $ 89,795
============ ============
Liabilities and Stockholders' Equity
Current Liabilities $ 3,191 $ 5,438
Current Maturities of Convertible Debt 26,770 25,925
Non-Current Liabilities 64 114
Stranded Gas Venture 4,730 4,247
Deferred Revenue 20,952 20,952
Minority Interests 706 706
------------ ------------
Total Liabilities 56,413 57,382
Total Stockholders' Equity 7,528 32,413
------------ ------------
Total Liabilities and Stockholders'
Equity $ 63,941 $ 89,795
============ ============
CONTACT: Syntroleum Corporation, Tulsa
Mel Scott, 918-592-7900
www.syntroleum.com
SOURCE: Syntroleum Corporation
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