EnergyConnect Group Reports Third Quarter 2008 Results
Posts Record $11.6 Million in Revenue and Over $2 Million in Net Income for the Quarter
Lake Oswego, OR – November 4, 2008 – EnergyConnect Group, Inc. (OTCBB: ECNG - News, formerly known as Microfield Group, Inc.) announced financial results today for the third quarter ended September 27, 2008. The Company generated record revenues of $11,641,000 for the third quarter 2008, approximately 2.5 times third quarter 2007 revenues of $4,691,000.
“The increase between comparative periods is mainly the result of an extremely successful push to generate revenue from a capacity program in the PJM grid,” Randy Reed, EnergyConnect’s Chief Financial Officer, noted. “We also benefited from favorable margins in this program which helped us reach record profitability in the quarter.”
Income from continuing operations for the third quarter of 2008 was $2,164,000 compared to income from continuing operations of $687,000 for the third quarter of 2007. This increased income was due to record revenues from the ongoing Interruptible Load for Reliability (ILR) program in PJM in which we recorded $8,010,000.
The Company recorded net income of $2,164,000 or $0.02 per share for the three months ended September 27, 2008, compared to net income of $851,000 or $0.01 per share for the three months ended September 29, 2007. The 2007 net income amount includes income from discontinued operations of $164,000.
Operating expenses for the three months ended September 27, 2008 were $3,024,000, compared to $2,008,000 in the three months ended September 29, 2007 and also compared to $3,196,000 in the second quarter of this year. Included in these totals are non cash charges for stock-based compensation of $172,000, $184,000 and $274,000 for the three months ended September 27, 2008, September 29, 2007 and June 28, 2008, respectively. The increase in 2008 third quarter over 2007 third quarter expenses was primarily due to salaries, benefits and related costs associated with new hires and development expenses in this year’s third quarter that were not in last year’s third quarter.
With respect to the balance sheet, quarter ending unrestricted cash was $2,142,000 compared to $758,000 at December 29, 2007. This increase is due to cash received from the May 2008 financing, an increase in monthly cash receipts from the ILR program as well as continued careful cash management. The Company ended the quarter with $2.5 million in working capital.
Commenting on the third quarter, Rod Boucher, EnergyConnect’s Chief Executive Officer, said, “The third quarter results are generally in line with our expectations for revenue and expenses considering our seasonality, increasing activity from existing participants plus substantial contributions from new participating electric consumers. Recording $24 million in revenue through the first three quarters matches our growth expectations, and is a credit to the dedication of our employees.”
About EnergyConnect, Inc.
EnergyConnect, Inc. provides industry leading demand response technologies and services that enable a smarter, more sustainable power grid while creating additional income for participating companies. The EnergyConnect web-based automated platform enables consumers of energy to participate in unprecedented incentive opportunities by cutting back power when the grid needs it the most. Demand response is the cleanest, most efficient and lowest cost solution for meeting the nation’s growing power needs. For more information about this next generation technology, visit: www.energyconnectinc.com. For investor information, visit: www.energyconnectinc.com/investors/. EnergyConnect is headquartered in Portland, Oregon and its common stock is traded on the OTC Bulletin Board under the symbol “ECNG”.
Forward-Looking Statements
This press release includes statements that may constitute “forward-looking” statements. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause or contribute to such differences that include, but are not limited to, competitive factors, the success of new products in the marketplace, dependence upon third party vendors, and the ability to obtain financing. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
| ENERGYCONNECT GROUP, INC. | |||||
| CONSOLIDATED BALANCE SHEET ($000′S) | |||||
| September 27, | December 29, | ||||
| 2008 | 2007 | ||||
| (Unaudited) | |||||
| Cash | $ | 2,142 | $ | 759 | |
| Restricted cash | 300 | 133 | |||
| Accounts receivable | 7,165 | 1,533 | |||
| Other current assets | 587 | 552 | |||
| Discontinued operations | - | 12,666 | |||
| Total current assets | 10,194 | 15,643 | |||
| Goodwill and intangibles | 31,047 | 31,226 | |||
| Other long term assets | 392 | 246 | |||
| Discontinued operations | - | 971 | |||
| Total assets | $ | 41,633 | $ | 48,086 | |
| Accounts payable | $ | 7,309 | $ | 2,976 | |
| Bank line of credit | 117 | 118 | |||
| Other current liabilities | 242 | 123 | |||
| Discontinued operations | - | 13,549 | |||
| Total current liabilities | 7,668 | 16,766 | |||
| Long term liabilities-discontinued operations | - | 61 | |||
| Total liabilities | 7,667 | 16,827 | |||
| Shareholders’ equity | 33,965 | 31,258 | |||
| Total liabilities and shareholders’ equity | $ | 41,633 | $ | 48,086 | |
|
ENERGYCONNECT GROUP, INC. |
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| CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||
| ($000’s, except share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three months ended | Nine months ended | |||||||||||
| Sept. 27, | Sept. 29, | Sept. 27, | Sept. 29, | |||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||
| Revenue | $ | 11,641 | $ | 4,691 | $ | 24,083 | $ | 10,408 | ||||
| Cost of goods sold | 6,458 | 2,244 | 16,945 | 6,913 | ||||||||
| Gross profit | 5,183 | 2,446 | 7,138 | 3,495 | ||||||||
| Sales, general and administrative | 2,852 | 1,824 | 8,678 | 5,065 | ||||||||
| Stock-based compensation | 172 | 184 | 644 | 668 | ||||||||
| Total operating expenses | 3,024 | 2,008 | 9,322 | 5,733 | ||||||||
| Income (loss) from operations | 2,159 | 438 | (2,184) | (2,238) | ||||||||
| Other income | 5 | 249 | 51 | 263 | ||||||||
| Income (loss) from continuing operations |
2,164 |
687 |
(2,133) |
(1,975) |
||||||||
| Gain (loss) on discontinued operations | - | 164 | (11) | (207) | ||||||||
| Net income (loss) | $ | 2,164 | $ | 851 | $ | (2,144) | $ | (2,182) | ||||
| Net income (loss) per share: | ||||||||||||
| Basic | $ | 0.02 | $ | 0.01 | $ | (0.02) | $ | (0.03) | ||||
| Diluted | $ | 0.02 | $ | 0.01 | $ | (0.02) | $ | (0.03) | ||||
| Shares used in per share calculations: | ||||||||||||
| Basic | 94,684,424 | 83,135,867 | 89,941,134 | 82,023,503 | ||||||||
| Diluted | 94,697,281 | 86,052,443 | 89,941,134 | 82,023,503 | ||||||||
Contact:
Randy Reed
Chief Financial Officer
EnergyConnect Group, Inc.
503.419.3580
or
Glen Akselrod
Bristol Capital
glen@bristolir.com
905.326.1888
Posted on Tuesday, November 4th, 2008 - Press Releases