Pure Cycle Corporation Announces Financial Results for Six Months Ended February 29, 2012
DENVER, April 13, 2012 (GLOBE NEWSWIRE) -- Pure Cycle Corporation (Nasdaq:PCYO) announced the following summary results of operations:
Summary Statements
Our summarized results of operations for the six months ended February 29, 2012 and February 28, 2011 were as follows:
| Six Months Ended: | ||||
| February 29, 2012 | February 28, 2011 | $ Change | % Change | |
| Revenues | $ 117,500 | $ 124,900 | $ (7,400) | -6% |
| Cost of revenues | (86,400) | (75,300) | (11,100) | 15% |
| Gross margin | 31,100 | 49,600 | (18,500) | -37% |
| Operating expenses: | ||||
| General and administrative | (1,183,200) | (1,188,600) | 5,400 | 0% |
| Other | (108,500) | (106,200) | (2,300) | 2% |
| Loss from operations | (1,260,600) | (1,245,200) | (15,400) | 1% |
| Other (expense) income: | ||||
| Interest imputed on TPF | (1,713,800) | (1,894,000) | 180,200 | -10% |
| Interest on Convertible Debt | -- | (151,700) | 151,700 | -100% |
| Oil and gas lease income | 207,200 | -- | 207,200 | 100% |
| Other | 41,900 | 49,100 | (7,200) | -15% |
| Net loss | $ (2,725,300) | $ (3,241,800) | $ 516,500 | -16% |
| Weighted average shares outstanding (basic and diluted) | 24,037,596 | 22,284,899 | ||
| Loss per share | $ (0.11) | $ (0.15) | ||
Our summarized financial position as of February 29, 2012 and August 31, 2011 were follows:
| February 29, 2012 | August 31, 2011 | $ Change | % Change | |
| Assets | ||||
| Cash, cash equivalents and marketable securities | $ 3,599,900 | $ 4,660,300 | $ (1,060,400) | -23% |
| Other current assets | 324,200 | 405,300 | (81,100) | -20% |
| Total current assets | 3,924,100 | 5,065,600 | (1,141,500) | -23% |
| Investments in water and water systems, net | 106,330,100 | 106,472,100 | (142,000) | 0% |
| Land and improvements - Sky Ranch | 3,786,600 | 3,743,300 | 43,300 | 1% |
| Other long-term assets | 822,700 | 841,700 | (19,000) | -2% |
| Total assets | $ 114,863,500 | $ 116,122,700 | $ (1,259,200) | -1% |
| Liabilities and Shareholders' Equity | ||||
| Current liabilities | $ 603,300 | $ 658,300 | $ (55,000) | -8% |
| Tap participation fee payable to HP A&M | 66,598,400 | 64,988,300 | 1,610,100 | 2% |
| Other long-term liabilities | 2,949,500 | 3,185,800 | (236,300) | -7% |
| Total liabilities | 70,151,200 | 68,832,400 | 1,318,800 | 2% |
| Total shareholders' equity | 44,712,300 | 47,290,300 | (2,578,000) | -5% |
| Total liabilities and shareholders' equity | $ 114,863,500 | $ 116,122,700 | $ (1,259,200) | -1% |
Summary of Significant Events and Changes
Revenues decreased 6% during the six months ended February 29, 2012 compared with the six months ended February 28, 2011. The decline was mainly attributable to a change in how we bill our wastewater customer. The customer used to be charged a flat monthly fee based on the number of tap connections; however, beginning July 1, 2011, we agreed to charge our wastewater customer based on the amount of wastewater treated due to a reduction in their water consumption which lead to a significant reduction in the amount of wastewater we were treating. Costs of providing services increased 15% during the six months ended February 29, 2012 compared with the six months ended February 28, 2011. This was due primarily to increased energy costs as a result of higher pumping demands to produce water for oil and gas well drilling and fracking activities and the acquisition of additional water to meet the short term demands of such drilling and fracking activities.
During the six months ended February 28, 2011, we expensed $151,700 of interest on a $5.2 million convertible note that we issued in September 2010, which was part of the financing of the Sky Ranch land and water acquisition completed in our fiscal 2011. Interest on this note ceased on January 11, 2011, when we issued 1,982,099 shares of restricted common stock upon conversion of the note (approved by our shareholders at the January 11, 2011 annual shareholders' meeting).
The oil and gas lease income recognized during the six months ended February 29, 2012 relates to a oil and gas lease we entered into with Anadarko E&P Company, L.P., a wholly-owned subsidiary of Anadarko Petroleum Company. During our fiscal 2011, we received payments of $1,243,400 from Anadarko for the purpose of exploring for, developing, producing and marketing oil and gas on 634 acres of mineral estate we owned at our Sky Ranch property. The oil and gas rights under the remaining approximately 304 acres at Sky Ranch are already owned by Anadarko. We began recognizing payments received from Anadarko as income on a straight-line basis over three years, the initial term of the O&G Lease.
Levels of cash, cash equivalents and marketable securities decreased as a result of operational needs. Other current assets declined due to decreases in trade receivables due to the timing of the balance sheet dates in relation to the irrigation season.
Financial Release Call
We will hold a conference call to discuss the results and latest information on Tuesday, April 17, 2012 at 4PM Eastern (2PM Mountain). Call details are below. We will also simultaneously webcast the call through our website and have a summary slide presentation available on our website at www.purecyclewater.com.
| CALL IN NUMBER: | 877-293-5456 (no passcode required) | |
| A replay of the call will be available until April 24, 2012 at 11:59PM Eastern. | ||
| REPLAY NUMBER: | 855-859-2056 | |
| REPLAY ID: | 69693635 | |
Company Information
Pure Cycle owns water rights, storage rights and land in several river basins in the State of Colorado. Pure Cycle provides water and wastewater services, including the design, construction, operation and maintenance of water and wastewater systems, to wholesale customers, which are local governmental entities who provide water and wastewater services to their end-use customers located in the greater Denver metropolitan area.
Additional information including our recent press releases and Annual Reports are available at www.purecyclewater.com, or you may contact our President, Mark W. Harding, at 303-292-3456 or at info@purecyclewater.com.
CONTACT: Pure Cycle Corporation
President, Mark W. Harding
303-292-3456
info@purecyclewater.com
www.purecyclewater.com
Released April 13, 2012