DENVER, Nov. 14, 2011 (GLOBE NEWSWIRE) -- Pure Cycle Corporation (Nasdaq:PCYO) announced the following summary results of operations:
Summary Statements
Our summarized results of operations for the fiscal years ended August 31, 2011 and 2010 are as follows:
| Fiscal Years Ended | |||
| August 31, 2011 | August 31, 2010 | Change | |
| Revenues | $ 282,100 | $ 264,100 | $ 18,000 |
| Cost of revenues | (159,700) | (161,800) | 2,100 |
| Gross margin | 122,400 | 102,300 | 20,100 |
| Operating expenses: | |||
| General and administrative | (2,212,000) | (1,808,200) | (403,800) |
| Other | (212,200) | (166,500) | (45,700) |
| Loss from operations | (2,301,800) | (1,872,400) | (429,400) |
| Other (expense) income: | |||
| Interest imputed on TPF | (3,847,000) | (3,620,000) | (227,000) |
| Interest on Convertible Debt | (151,700) | -- | 151,700 |
| Oil and gas lease income | 199,300 | -- | 199,300 |
| Other | 85,000 | 101,100 | (85,000) |
| Net loss | $ (6,016,200) | $ (5,391,300) | $ (390,400) |
| Weighted average shares outstanding (basic and diluted) | 23,168,450 | 20,206,566 | |
| Loss per share | $ (0.26) | $ (0.27) | |
Our summarized financial position as of August 31, 2011 and 2010 is as follows:
| August 31, 2011 | August 31, 2010 | $ Change | |
| Assets | |||
| Cash, cash equivalents and marketable securities | $ 4,660,400 | $ 1,446,100 | $ 3,214,300 |
| Other current assets | 405,200 | 373,500 | 31,700 |
| Total current assets | 5,065,600 | 1,819,600 | 3,246,000 |
| Investments in water and water systems, net | 106,476,400 | 102,931,300 | 3,545,100 |
| Land - Sky Ranch | 3,739,000 | – | 3,739,000 |
| Other long-term assets | 841,700 | 1,626,900 | (785,200) |
| Total assets | $ 116,122,700 | $ 106,377,800 | $ 9,744,900 |
| Liabilities and Shareholders' Equity | |||
| Current liabilities | $ 658,300 | $ 171,300 | $ 487,000 |
| Tap participation fee payable to HP A&M | 64,988,300 | 61,141,300 | 3,847,000 |
| Other long-term liabilities | 3,185,800 | 2,605,200 | 580,600 |
| Total liabilities | 68,832,400 | 63,917,800 | 4,914,600 |
| Total shareholders' equity | 47,290,300 | 42,460,000 | 4,830,300 |
| Total liabilities and shareholders' equity | $ 116,122,700 | $ 106,377,800 | $ 9,744,900 |
Summary of Significant Events and Changes
Revenues increased 7% during the fiscal year ended August 31, 2011, compared to the fiscal year ended August 31, 2010. The increase was mainly due to increases in water and wastewater monthly usage fees effective July 1, 2010. However, we also experienced an increase in demand attributable to oil and gas companies using water for drilling oil wells utilizing hydraulic fracturing. Hydraulic fracturing is a process where drillers use water to inject particles of sand and other items into the oil formation to enable oil to flow more freely. Due to increasing interest in the Niobrara Oil Formation on and around our Sky Ranch property and the Lowry Range, we expect to increase our water production capacities in 2012 to meet the anticipated increase in demand for drilling and frack water.
General and administrative expenses increased 22% during the fiscal year ended August 31, 2011 compared to the fiscal year ended August 31, 2010. The increase was mainly due to the payment of $180,000 of bonuses for the successful completion of the Sky Ranch acquisition and related financings, which is described further below; $136,500 of expenses associated with our ownership of Sky Ranch (majority of this is property taxes); and an increase of $109,600 in the fees paid to the Fort Lyon Canal Company related to our ownership of the Arkansas River water.
During the fiscal year ended August 31, 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. 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).
Levels of cash, cash equivalents and marketable securities increased substantially as a result of the stock issuance and issuance of the $5.2 million convertible note, which was offset by our acquisition of Sky Ranch and use of cash for operations during the fiscal year ended August 31, 2011. In addition, we received $1.3 million related to an oil and gas lease entered into with Anadarko E&P Company, L.P. (a wholly-owned subsidiary of Anadarko Petroleum Company) on March 14, 2011, as further detailed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2011, filed with the Securities and Exchange Commission on November 14, 2011. We deferred recognition of the upfront payment received from Anadarko (of which $414,500 is included with current liabilities) and we are recognizing the upfront payment as income over the initial three year term of the oil and gas lease.
We will host a conference call on Tuesday November 15, 2011 at 4PM Eastern (2PM Mountain) to discuss the results of this call. Call details are below. Additionally, we have posted a detailed slide presentation which overviews the Company and presents summary financial results on our website which can be accessed at www.purecyclewater.com.
| CALL DETAILS | |
| When: | 4PM Eastern on Tuesday November 15, 2011 |
| Call in number: | 1-877-293-5456 (no pass codes required) |
| Replay available until: | November 22, 2011 |
| Replay call in number: | 1-855-859-2056 |
| Passcode: | 26797906 |
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.
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1985. Forward-looking statements are all statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, such as statements regarding expected increases in production capacities and demand for drilling and frack water. The words "anticipate," "believe," "estimate," "expect," "plan," "intend" and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed or implied by such statements. We cannot assure you that any of our expectations will be realized. Factors that could cause actual results to differ from projected results include, without limitation, the market price of water, changes in customer consumption patterns, changes in applicable statutory and regulatory requirements; costs of delivery of water; costs of construction; the strength and financial resources of our competitors; weather conditions, availability and cost of material and equipment, delays in permits, environmental risks and regulations, our ability to negotiate contracts with new customers, and those factors discussed in our latest Annual Report on Form 10-K and other documents filed with the U.S. Securities and Exchange Commission. Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated or intended. Except as required by law, we disclaim any obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.