News
EWING, N.J.--(BUSINESS WIRE)--
WorldWater & Solar Technologies Corp. (OTC BB: WWAT.OB), developer and marketer of proprietary large-scale solar systems, today announced results for the second quarter and six months ended June 30, 2008.
Financial Highlights:
-- Revenue for the second quarter was $7.6 million, compared with
$2.2 million reported in the second quarter of 2007. The
increase in revenue was driven by the Company's project at
Denver International Airport and the recently-dedicated
installation at Fresno International Airport.
-- The Company recorded a gross loss for the quarter of $2.9
million, versus a gross profit of $0.3 million in the
prior-year quarter. The gross loss in 2008 was primarily the
result of additional loss provisions recorded on the Fresno
and Denver airport projects, along with a loss provision of
approximately $2.2 million related to the solar installation
project for the Valley Center Municipal Water District in
California that was formally awarded on June 30, 2008. In
accordance with generally accepted accounting principles, the
total estimated loss for Valley Center was recorded even
though no revenue was recognized during the second quarter.
-- Operating expenses were $5.6 million in the second quarter,
versus $3.1 million in 2007. The major contributors to the
$2.5 million increase were salaries and benefits related to
higher headcount, professional fees attributable to
Sarbanes-Oxley, and amortization and depreciation expense
related to the acquisition of ENTECH and the move to new
facilities in New Jersey.
-- The Company's net loss attributable to common shareholders for
the second quarter of 2008 was $24 million, or $(0.12) per
share, compared with a loss of $2.8 million, or $(0.02) per
share, in the second quarter of 2007. The 2008 results include
a non-operating charge of $15.5 million which represents the
non-cash expense associated with conversion of the Quercus
Trust's Series F Convertible Preferred Stock into common
stock.
"WorldWater & Solar Technologies continued to show improvement in its core operations this quarter, even as we posted a loss related to contracts bid in the past several years," said Frank Smith, CEO. "The Valley Center project was revamped and renegotiated based upon our experience with Denver and Fresno, but we still anticipate a loss on this installation. Given the strategic importance of the California municipal water market and our investment in preparing for this project, we felt it was appropriate to proceed even with the expected poor return. These quarterly results are obviously unacceptable, and the Company continues to focus on improving its project management and cost estimating capabilities.
"The build-out of the Company's new ENTECH manufacturing center remains on schedule, opening in July, and all staff have now moved into the facility, with key equipment already in place. As previously reported, we expect to have prototype units available by September for certification, and we are experiencing strong interest in our concentrator modules and systems for both photovoltaic and thermal energy applications. Our strategy to supply concentrator modules and dual-axis tracking to third-party installers and other strategic partners in the U.S. and overseas is proceeding as planned. In addition, we continue to develop our engineering, construction management, and project financing capabilities to support the execution of solar installation projects using ENTECH hardware.
"Operationally, we continue to seek ways to lower overhead even as we expand our operations in Texas and execute on existing flat-plate awards. Our current contracts in progress include Ocean City, Windsor, and Contra Costa, along with the aforementioned Denver airport and Valley Center. Our Denver installation will be dedicated on August 19, prior to the Democratic Convention, and many political leaders are expected to attend this significant achievement. The 2 MW solar system will supply Denver's airport with 3.5 million kilowatt-hours of clean electricity annually.
"In addition, the Borough of Hightstown has finalized its power purchase agreement with WorldWater, and construction will take place when acceptable financing is secured. Project funding for this, as with many installations across the solar sector, depends upon the extension of the U.S. investment tax credit, or ITC.
"While the Company is on track with regard to ENTECH, the near-term uncertainty caused by the expiring ITC has slowed down the financing for new projects and is clearly a problem facing the entire industry. In the meantime, WorldWater is building a pipeline of sales prospects that leverage our experience and technology and which can be finalized once the ITC is extended. We are also taking advantage of this period to redeploy key engineering, project management, and sales resources towards ENTECH's manufacturing readiness, product development and certification, and growth plans. With market demand strong, and our ENTECH strategy in place, we remain cautiously optimistic about the outlook for 2009."
Conference Call
WorldWater will host its earnings conference call at 10:00 a.m. Eastern on August 18, 2008 for the second quarter ended June 30, 2008. During the call, Frank Smith, CEO, will review the Company's operations and financial results. The telephone number for the conference call is 617-213-8896, conference ID #49720164. A live webcast of the call will also be available on the Company's website, www.WorldWater.com, and will be archived there. Investors will be able to access an encore recording of the conference call for thirty days by calling 617-801-6888, conference ID #22074871. The encore recording will be available two hours after the conference call has concluded.
About WorldWater & Solar Technologies Corp:
WorldWater & Solar Technologies Corp. is a full-service, international solar electric engineering and water management company with unique, high-powered and patented solar technology that can not only generate and distribute electricity, but can drive 1000 horsepower motors and pumps from sunshine independently or in conjunction with the electric grid, providing solutions to a broad spectrum of the world's electricity and water supply problems. For more information about WorldWater & Solar Technologies Corp., visit the website at www.worldwater.com.
About ENTECH, Inc:
ENTECH, a unit of WorldWater & Solar Technologies, provides advanced solar energy technology for a variety of applications, ranging from day lighting systems for commercial buildings to solar power arrays for spacecraft. The company's patented solar power systems produce electricity from sunlight for applications on Earth (terrestrial power) and in space (spacecraft power). ENTECH's Fresnel lenses capture sunlight and focus it onto small solar cells, thereby reducing electricity costs compared to conventional flat-plate (planar) solar energy approaches. Additional information can be found at www.entechsolar.com.
Forward Looking Statements:
Except for historical information contained herein, this document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks and uncertainties that may cause the Company's actual results or outcomes to be materially different from those anticipated and discussed herein. Further, the Company operates in industries where securities values may be volatile and may be influenced by regulatory and other factors beyond the Company's control. Other important factors that the Company believes might cause such differences are discussed in the risk factors detailed in the Company's 10-KSB and its quarterly reports on Form 10-QSB both as filed with the Securities and Exchange Commission, which include the Company's cash flow difficulties, dependence on significant customers, and rapid development of technology, among other risks. In assessing forward-looking statements contained herein, readers are urged to carefully read all cautionary statements contained in the Company's filings with the Securities and Exchange Commission.
WORLDWATER & SOLAR TECHNOLOGIES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007
(UNAUDITED)
Three Months
---------------------------
6/30/08 6/30/07
------------- -------------
Revenues:
Contract $ 7,596,189 $ 2,238,064
Related Party - -
------------- -------------
Total 7,596,189 2,238,064
------------- -------------
Cost of Revenues:
Contract 10,522,374 1,900,799
Related Party - -
------------- -------------
Total 10,522,374 1,900,799
------------- -------------
Gross Profit (Loss):
Contract (2,926,185) 337,265
Related Party -
------------- -------------
Total (2,926,185) 337,265
------------- -------------
Operating Expenses:
Marketing, general and administrative
expenses 5,537,863 3,005,812
Research and development expense 57,056 70,023
------------- -------------
Total Operating Expenses 5,594,919 3,075,835
------------- -------------
------------- -------------
Loss from Operations (8,521,104) (2,738,570)
------------- -------------
Other (Expense) Income
Beneficial Conversion and Warrant
Amortization (18,473) (31,352)
Interest Income/(Expense), net 62,188 (36,990)
------------- -------------
Total Other Income (Expense), Net 43,715 (68,342)
------------- -------------
Net Loss (8,477,389) (2,806,912)
Accretion of preferred stock
dividends - Series C (4,539) (11,250)
Accretion of preferred stock
dividends - Series F (15,512,226) -
------------- -------------
Net Loss Attributable to Common
Shareholders $(23,994,154) $ (2,818,162)
============= =============
Net Loss applicable per Common Share
(basic and diluted) $ (0.12) $ (0.02)
============= =============
Weighted Average Common Shares
Outstanding used in Per Share
Calculation (Basic and Diluted) 193,877,020 163,575,474
============= =============
Six Months
---------------------------
6/30/08 6/30/07
------------- -------------
Revenues:
Contract $ 15,825,363 $ 3,187,341
Related Party 775,000 -
------------- -------------
Total 16,600,363 3,187,341
------------- -------------
Cost of Revenues:
Contract 21,153,384 2,650,685
Related Party 673,433 -
------------- -------------
Total 21,826,817 2,650,685
------------- -------------
Gross Profit (Loss):
Contract (5,328,021) 536,656
Related Party 101,567 -
------------- -------------
Total (5,226,454) 536,656
------------- -------------
Operating Expenses:
Marketing, general and administrative
expenses 10,741,658 5,305,434
Research and development expense 97,769 117,501
------------- -------------
Total Operating Expenses 10,839,427 5,422,935
------------- -------------
------------- -------------
Loss from Operations (16,065,881) (4,886,279)
------------- -------------
Other (Expense) Income
Beneficial Conversion and Warrant
Amortization
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