SANTA BARBARA, Calif., Jan. 11, 2007 (PRIME NEWSWIRE) -- Integrated Water Resources, Inc. (Pink Sheets:IWRI) announced it paid yesterday a previously reported special common stock dividend of $0.085 per share to shareholders of record on December 20, 2006.
In connection with the payment of the special dividend, John Huston, the company's chief executive officer, sent a letter to all shareholders of record to explain the reason for the dividend and to update shareholders on the business and operations of the company. In his letter, Huston explained that, although the company's principal business has been to provide water consulting and treatment services, in 2001 the company formed a special purposes limited liability company, Integrated Farms LLC, ("Farms"), for the purpose of purchasing an irrigated ranch ("Heise Ranch") in Alpine County, California, approximately 40 miles south of Lake Tahoe. The company retained 35 percent of the ownership of Farms, with the balance owned by investors who provided funding for Farms. In 2002, Farms completed the purchase of Heise Ranch at a price of $6 million, and the South Tahoe Public Utilities District ("STPUD") filed an action in the U.S. District Court for Eastern California to take the property pursuant to its powers of eminent domain. STPUD paid Farms $5.2 million for the Heise Ranch, which amount was then paid to Farms as "just compensation," and STPUD took possession of the property in December 2002. Farms sued STPUD challenging the price paid for the property, and after a jury trial, the matter with STPUD was finally settled in December 2006, resulting in a final payment to Farms of $9.15 million. After payment of all of Farms' legal and expert fees and costs, Farms distributed $2.64 million to the Company on December 12, 2006.
The Company used the $2.64 million to pay the debts that it had incurred to cover its working capital deficits during the period that the STPUD matter was being litigated. In addition, the company also paid the dividend on its Class A preferred shares and established a small reserve for future operations and incentives. The remaining proceeds, equal to $0.085 per share, were distributed as a dividend to the company's common shareholders who owned shares on December 20, 2006.
Huston noted that the Heise Ranch and Farms transactions were a "one-time" event and there are no other investments of the same or similar kind owned or held by the company at this time. In addition, he noted that, unfortunately, the company's water consulting business has not generated a profit for the company for many years. As a result, the company is in the process of "downsizing" its consulting staff, and possibly even closing its Santa Barbara, California office.
Finally, since the Heise Ranch matter has been resolved and the company is further reducing its existing consulting operations, Daniel D. Villanueva and James Villanueva terminated their relationship with the company by resigning from the company's board of directors on December 21, 2006 and selling all of their common and preferred shares of the company. Nicolaus A. Hughes and Janice J. Cole have been appointed to the board to fill the vacancies created by the resignations of Daniel and James Villanueva.
The company currently is evaluating what, if any, business it will conduct in the future. Although it may occasionally still provide certain consulting services, the company currently only expects to conduct limited operations in the foreseeable future.
This release may contain forward-looking statements regarding the Company's future operations that involve uncertainties. Actual events or results could differ materially from the events or results described in the forward-looking statements. No assurance can be given that the Company will conduct any material operations in the future. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.