NEW YORK, Nov. 14, 2008 (GLOBE NEWSWIRE) -- MMC Energy, Inc. (Nasdaq:MMCE) announced that for the three months ended September 30, 2008, it had a net loss of approximately $1.62 million, or $0.12 per share, compared to net income of approximately $0.7 million, or $0.05 per share, for the three months ended September 30, 2007. For the nine months ended September 30, 2008 the net loss was approximately $4.98 million compared to $1.66 million for the nine months ended September 30, 2007. Revenues for the three months ended September 30, 2008 were approximately $1.30 million compared to $2.75 million for the three months ended September 30, 2007. Revenues for the nine months ended September 30, 2008 were approximately $3.04 million compared to $5.36 million for the nine months ended September 30, 2007. The decrease in revenues from 2007 was due primarily to a $1 million settlement negotiated with the California Independent System Operators ("CAISO") relating to the Company's spinning reserve qualification which was charged directly against revenues and the cessation of spinning reserve ancillary services revenues in October 2007.
Revenues for the three months ended September 30, 2008 consisted primarily of resource adequacy capacity revenues of approximately $1,782,000, ancillary services of negative $887,000, which reflects the impact of the $1 million settlement with the CAISO, and energy production revenues of approximately $466,000. For the nine-month period ended September 30, 2008 adequacy capacity revenues were $2.99 million, ancillary services were negative $554,000 and energy production revenues were $652,000.
The Company believes that adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization, as adjusted for non-cash compensation charges and re-commissioning expenses, which are non-recurring charges on an asset by asset basis that the Company considers a component of its acquisition cost for internal reporting purposes) serves as a more meaningful measure of the Company's performance on an ongoing basis. While the Company expects growth in revenues and adjusted EBITDA as it completes targeted power plant acquisitions and expansion projects, net earnings may not grow as aggressively in the near term due to anticipated depreciation expenses, interest expense and additional re-commissioning costs associated with future acquisitions. Tables are included in this release providing reconciliation between GAAP and non-GAAP financial results.
Adjusted EBITDA decreased to a loss of approximately ($1.12 million) for the three months ended September 30, 2008 from approximately $590,000 for the same period ended September 30, 2007, and for the nine months ended September 30, 2008 adjusted EBITDA decreased to a loss of ($4.19 million) from ($825,000) for the same period ended September 30, 2007. The decrease was due primarily to the decrease in revenues noted above as well as higher general and administrative expenses, most of which were driven by compensation, professional fees and investor relations incurred in connection with the Company's annual stockholders meeting held in May 2008 and the related proxy fight.
The United States credit markets have recently experienced significant price volatility, dislocations and liquidity disruptions, which have caused the spreads on prospective debt financings to widen considerably, and materially impacted liquidity in the financial markets, making terms for certain financings less attractive, and in some cases have resulted in the unavailability of financing. A prolonged downturn in the financial markets may cause us to seek alternative sources of potentially less attractive financing and there can be no assurance that financing will be available on any terms. These circumstances would require us to adjust our business plan accordingly. Planning for this contingency, we have entered into discussions with certain third parties interested in either acquiring certain of our assets or partnering with us on the development of our upgrade projects, which would be expected to significantly alleviate our cash requirements.
See below for a cautionary note on forward looking statements.
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
----------- ----------- ----------- ------------
Operating revenues:
Resource
adequacy
capacity $ 1,781,650 $ 791,250 $ 2,991,300 $ 2,274,750
Ancillary
services (886,605) 1,496,289 (553,986) 2,500,676
Energy
production 404,601 462,224 600,560 580,417
----------- ----------- ----------- ------------
Total
operating
revenues 1,299,646 2,749,763 3,037,874 5,355,843
Costs of sales:
Costs of
resource
adequacy
capacity 129,170 63,300 216,869 181,980
Costs of
ancillary
services (10,669) 201,550 37,571 381,641
Costs of
energy
production 240,547 147,897 358,483 249,994
----------- ----------- ----------- ------------
Total costs
of sales 359,048 412,747 612,923 813,615
----------- ----------- ----------- ------------
Gross Profit 940,598 2,337,016 2,424,951 4,542,228
Operating expenses:
Depreciation 305,319 284,814 899,980 800,999
Operations
and
maintenance 573,604 652,576 1,986,937 1,864,201
Re-commissioning
expenses -- (5,231) -- 413,904
General and
administrative
expenses 1,571,280 1,146,620 4,848,968 3,701,162
----------- ----------- ----------- ------------
Total
operating
expenses 2,450,203 2,078,779 7,735,885 6,780,266
----------- ----------- ----------- ------------
Loss from
operations (1,509,605) 258,237 (5,310,934) (2,238,038)
----------- ----------- ----------- ------------
Interest
and
other
expenses
Interest
expense (199,551) (65,911) (320,350) (176,163)
Interest
income 87,844 512,688 648,577 616,420
----------- ----------- ----------- ------------
Interest
income
(expense),
net (111,707) 446,777 328,227 440,257
Other
income, net -- -- -- 135,995
----------- ----------- ----------- ------------
Total
interest
and
other
income
(expense) (111,707) 446,777 328,227 576,252
----------- ----------- ----------- ------------
Net loss
before
provision
for
income taxes (1,621,312) 705,014 (4,982,707) (1,661,786)
----------- ----------- ----------- ------------
Provision
for
income
taxes -- -- -- --
----------- ----------- ----------- ------------
Net loss $(1,621,312) $ 705,014 $ (4,982,707) $(1,661,786)
----------- ----------- ----------- ------------
Basic (loss) earnings
per common share
Net (loss)
earnings
per share $ (0.12) $ 0.05 $ (0.35) $ (0.22)
Weighted
average
shares
outstanding 14,086,792 13,413,277 14,143,808 7,708,467
========== ========== ========== ===========
Diluted (loss)
earnings per
common share
Net (loss)
earnings
per share $ (0.12) $ 0.05 $ (0.35) $ (0.22)
Weighted
average
shares
outstanding 14,086,792 13,413,277 14,143,808 7,708,467
========== ========== ========== ===========
Weighted
average
shares
outstanding
- basic 14,086,792 13,413,277 14,143,808 7,708,467
Dilutive
effect of
assumed
exercise of
employee
stock
options,
warrants
and
immediate
vesting of
unvested
stock awards -- -- -- --
----------- ----------- ----------- ------------
Weighted
average
shares
outstanding
- diluted 14,086,792 13,413,277 14,143,808 7,708,467
Anti-dilutive
shares
excluded
from
diluted EPS
computations 555,201 227,547 540,306 211,858
Reconciliation of Losses
from operations to
Adjusted EBITDA
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
----------- --------- ----------- -----------
Losses from
Operations $(1,509,605) $ 258,237 $(5,310,934) $ (2,238,038)
Add:
Depreciation
Expense 305,319 284,814 899,980 800,999
Add:
Re-commissioning
expenses -- (5,231) -- 413,904
Add:
Stock-based
compensation 86,582 52,640 220,231 198,027
Add:
non-recurring
financing
costs -- -- -- --
----------- --------- ----------- -----------
Adjusted
EBITDA $(1,117,704) $ 590,460 $(4,190,723) $ (825,108)
----------- --------- ----------- -----------
About MMC Energy, Inc.:
The Company acquires and actively manages electricity generating and energy infrastructure-related assets in the United States. The Company is traded on the NASDAQ Global Market in the United States.
The Company's mission is to acquire, directly or through joint ventures, a portfolio of small to mid-size natural gas fueled electricity generating assets, generally below 250 megawatts or "MW."
The Company creates long-term value for its stockholders through disciplined asset acquisitions and hands-on post-acquisition asset management. The Company actively invests in electricity assets that provide essential services to key transmission-constrained markets such as California, where regulatory capacity requirements and a lack of local electricity supplies make peak electricity generation facilities valuable.
To date, the Company has acquired three electricity generating assets in California, totaling 110 MW of capacity. The Company is currently in the process of upgrading two of these assets, the 100 MW MMC Chula Vista Energy Upgrade Project and the 50 MW MMC Escondido Upgrade, both located in San Diego County, California, replacing the existing 44 MW facilities at each site.
Forward Looking Statements:
This press release contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, including those statements regarding the Company's ability to expand existing generating facilities and exploit acquisition opportunities. Although the forward-looking statements in this release reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements including, but not limited to, those risks described in the Company's Annual Report on Form 10-K, its most recent prospectus filed with the SEC on November 19, 2007 and in its other public filings. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update these forward-looking statements.