Gevo Reports Second Quarter 2021 Financial Results


Gevo Reports Second Quarter 2021 Financial Results

 

ENGLEWOOD, Colo., Aug. 12, 2021 (GLOBE NEWSWIRE) — Gevo, Inc. (NASDAQ: GEVO) today announced financial results for the second quarter of 2021 and recent corporate highlights.

Recent Corporate Highlights

  • On August 9, 2021, Gevo announced that its wholly-owned renewable natural gas (“RNG”) project company, Gevo NW Iowa RNG, LLC (“Gevo RNG”), has signed binding, definitive agreements with BP Canada Energy Marketing Corp. and BP Products North America Inc. for the sale of RNG. The RNG project is on schedule and on budget with an anticipated startup early 2022. Beginning in late 2022, Gevo RNG expects to generate cash distributions to Gevo of approximately $9 to $16 million per year.

  • On August 2, 2021, Gevo announced the appointment of Jaime Guillen to its Board of Directors. Mr. Guillen is a Managing Partner at Faros Infrastructure Partners LLC, an investment firm with offices in the United Kingdom, the United States and Mexico.
  • On April 15, 2021, Gevo closed the offering of $68,155,000 in 2021 Bonds to finance the construction of its renewable natural gas project in Iowa.

2021 Second Quarter Financial Highlights

  • Ended the quarter with cash, cash equivalents, restricted cash and marketable securities totaling $567.2 million compared to $525.3 as of the end of Q1 2021 and $6.3 million as of the end of Q2 2020
  • Revenue of $0.4 million for the quarter compared to $1.0 million in Q2 2020
  • Loss from operations (which includes $5.5 million of preliminary stage project costs for Net-Zero 1) of ($19.0) million for the quarter compared to ($5.3) million in Q2 2020
  • Non-GAAP cash EBITDA loss of ($17.1) million for the quarter compared to ($3.1) million in Q2 2020
  • Net loss per share of ($0.09) for the quarter compared to ($0.40) in Q2 2020
  • Non-GAAP adjusted net loss per share of ($0.09) for the quarter compared to ($0.39) in Q2 2020

Commenting on the second quarter of 2021 and recent corporate events, Dr. Patrick R. Gruber, Gevo’s Chief Executive Officer, said “The engineering and design work for our Net-Zero 1 Project is going well. We are figuring out the optimizations and integrations for Net-Zero 1, and how to generate more cash sooner. We are looking forward to completing the next phase of the engineering work in December of this year and moving forward towards getting the financing closed in the first half of next year.”

Second Quarter 2021 Financial Results

Revenue for the three months ended June 30, 2021 was $0.4 million compared with $1.0 million in the same period in 2020.

During the three months ended June 30, 2021, hydrocarbon revenue was $0.3 million compared with $0.9 million in the same period in 2020. Hydrocarbon sales decreased because of lower production volumes at Gevo’s demonstration plant at the South Hampton Resources, Inc. facility in Silsbee, Texas (the “South Hampton Facility”). Gevo’s hydrocarbon revenue is comprised of sales of sustainable aviation fuel and renewable premium gasoline.

As a result of COVID-19 and in response to an unfavorable commodity environment, Gevo terminated its production of ethanol and distiller grains in March 2020.  As previously announced, Gevo’s production facility in Luverne, Minnesota (the “Luverne Facility”) is currently producing isobutanol.  During the second half of 2021, Gevo expects to send finished isobutanol from the Luverne Facility to the South Hampton Facility so that renewable premium gasoline or jet fuel can be produced.

Cost of goods sold was $2.8 million for the three months ended June 30, 2021, compared with $2.6 million in the same period in 2020. Cost of goods sold includes $1.6 million associated with the maintenance of the Luverne and South Hampton Facilities and approximately $1.2 million in depreciation expense for the three months ended June 30, 2021.

Gross loss was $2.4 million for the three months ended June 30, 2021, compared with a $1.7 million gross loss in the same period in 2020.

Research and development expense increased by $0.7 million during the three months ended June 30, 2021 compared with the same period in 2020, due primarily to an increase in personnel and consultant expenses as we work to improve our process for growing and fermenting yeast strains.

Selling, general and administrative expense increased by $2.1 million during the three months ended June 30, 2021, compared with the same period in 2020, due primarily to increases in personnel, professional fees and insurance to support the growth in operations and an increase in consulting related to creating our first Environmental, Social and Governance (“ESG”) report, which will be released during the third quarter 2021, and documenting our compliance with Section 404(b) of the Sarbanes-Oxley Act.

Preliminary stage project costs increased by $5.3 million during the three months ended June 30, 2021, compared with the same period in 2020, due primarily to increased consulting for preliminary engineering costs, depreciation of the right of use assets related the agreements with the fuel supply and lease agreements and personnel expenses to support the growth in business activity at our Net-Zero projects.

Loss from operations in the three months ended June 30, 2021 was ($19.0) million, compared with a ($5.3) million loss from operations in the same period in 2020.

Non-GAAP cash EBITDA loss in the three months ended June 30, 2021 was ($17.1) million, compared with a ($3.1) million non-GAAP cash EBITDA loss in the same period in 2020.

Interest expense has decreased by $0.5 million in the three months ended June 30, 2021 as compared to the same period in 2020, due to the conversion of all of Gevo’s 12% convertible senior secured notes due 2020/2021 to common stock during 2020.

In the three months ended June 30, 2021, Gevo recognized net non-cash gain totaling less than $0.1 million due to changes in the fair value of certain of its financial instruments, such as warrants.

Gevo incurred a net loss for the three months ended June 30, 2021 of ($18.3) million, compared with a net loss of ($6.0) million during the same period in 2020. Non-GAAP adjusted net loss for the three months ended June 30, 2021 was ($18.3) million, compared with a non-GAAP adjusted net loss of ($5.8) million during the same period in 2020.

Cash, cash equivalents, restricted cash and marketable securities at June 30, 2021 was $567.2 million compared to $525.3 as of the end Q1 2021.

Webcast and Conference Call Information

Hosting today’s conference call at 4:30 p.m. EDT (2:30 p.m. MDT) will be Dr. Patrick R. Gruber, Chief Executive Officer, L. Lynn Smull, Chief Financial Officer, Carolyn M. Romero, Chief Accounting Officer, and Geoffrey T. Williams, Jr., Vice President – General Counsel & Secretary. They will review Gevo’s financial results and provide an update on recent corporate highlights.

To participate in the conference call, please dial 1 (833) 729-4776 (inside the U.S.) or 1 (830) 213-7701 (outside the U.S.) and reference the access code 2267135# or through the event weblink https://edge.media-server.com/mmc/p/8w4ypxhw .

A replay of the call and webcast will be available two hours after the conference call ends on August 12, 2021. To access the replay, please dial 1 (855) 859-2056 (inside the U.S.) or 1 (404) 537-3406 (outside the U.S.) and reference the access code 2267135#. The archived webcast will be available in the Investor Relations section of Gevo’s website at www.gevo.com .

About Gevo

Gevo’s mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel, and diesel fuel, that when burned have potential to yield net-zero greenhouse gas emissions when measured across the full lifecycle of the products. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials, and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared to standard petroleum fossil-based fuels across their lifecycle). Gevo’s products perform as well or better than traditional fossil-based fuels in infrastructure and engines, but with substantially reduced greenhouse gas emissions. In addition to addressing the problems of fuels, Gevo’s technology also enables certain plastics, such as polyester, to be made with more sustainable ingredients. Gevo’s ability to penetrate the growing low-carbon fuels market depends on the price of oil and the value of abating carbon emissions that would otherwise increase greenhouse gas emissions. Gevo believes that its proven, patented, technology enabling the use of a variety of low-carbon sustainable feedstocks to produce price-competitive low carbon products such as gasoline components, jet fuel, and diesel fuel yields the potential to generate project and corporate returns that justify the build-out of a multi-billion-dollar business.

Gevo believes that Argonne National Laboratory GREET model is the best available standard of scientific based measurement for life cycle inventory or LCI.

Learn more at Gevo’s website: www.gevo.com

Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to a variety of matters, including, without limitation, Gevo’s Net-Zero Projects, Gevo’s RNG Project, the engineering and design work for the Net-Zero 1 Project, Gevo’s offtake agreements, Gevo’s plans to develop its business, Gevo’s ability to successfully construct and finance its operations and growth projects, Gevo’s ability to achieve cash flow from its planned projects, the ability of Gevo’s products to contribute to lower greenhouse gas emissions, particulate and sulfur pollution and other statements that are not purely statements of historical fact. These forward-looking statements are made based on the current beliefs, expectations and assumptions of the management of Gevo and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Gevo undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Gevo believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Gevo in general, see the risk disclosures in the Annual Report on Form 10-K of Gevo for the year ended December 31, 2020 and in subsequent reports on Forms 10-Q and 8-K and other filings made with the U.S. Securities and Exchange Commission by Gevo.

Non-GAAP Financial Information

This press release contains financial measures that do not comply with U.S. generally accepted accounting principles (GAAP), including non-GAAP cash EBITDA loss, non-GAAP adjusted net loss and non-GAAP adjusted net loss per share. Non-GAAP cash EBITDA loss excludes depreciation and amortization and non-cash stock-based compensation. Non-GAAP adjusted net loss and adjusted net loss per share excludes non-cash gains and/or losses recognized in the quarter due to the changes in the fair value of certain of Gevo’s financial instruments, such as warrants, convertible debt and embedded derivatives Management believes these measures are useful to supplement its GAAP financial statements with this non-GAAP information because management uses such information internally for its operating, budgeting and financial planning purposes. These non-GAAP financial measures also facilitate management’s internal comparisons to Gevo’s historical performance as well as comparisons to the operating results of other companies. In addition, Gevo believes these non-GAAP financial measures are useful to investors because they allow for greater transparency into the indicators used by management as a basis for its financial and operational decision making. Non-GAAP information is not prepared under a comprehensive set of accounting rules and therefore, should only be read in conjunction with financial information reported under U.S. GAAP when understanding Gevo’s operating performance. A reconciliation between GAAP and non-GAAP financial information is provided in the financial statement tables below.

Cash EBITDA loss is a non-GAAP measure calculated by adding back depreciation and amortization and non-cash stock compensation to GAAP loss from operations. A reconciliation of cash EBITDA loss to GAAP loss from operations is provided in the financial statement tables following this release.

Adjusted net loss per share is a non-GAAP measure calculated by adding back non-cash gains and/or losses recognized in the quarter due to the changes in the fair value of certain of our financial instruments, such as warrants, convertible debt and embedded derivatives, to GAAP net loss per share. A reconciliation of adjusted net loss per share to GAAP net loss per share is provided in the financial statement tables following this release.

Cash EBITDA loss is a non-GAAP measure calculated by adding back depreciation and amortization and non-cash stock compensation to GAAP loss from operations. A reconciliation of cash EBITDA loss to GAAP loss from operations is provided in the financial statement tables following this release.

Adjusted net loss is a non-GAAP measure calculated by adding back non-cash gains and/or losses recognized in the quarter due to the changes in the fair value of certain of our financial instruments, such as warrants, convertible debt and embedded derivatives, to GAAP net loss. A reconciliation of adjusted net loss to GAAP net loss is provided in the financial statement tables following this release.


 

Gevo, Inc.

Condensed Consolidated Balance Sheets Information

(Unaudited, in thousands, except share and per share amounts)

  June 30, 2021   December 31, 2020
Assets          
Current assets          
Cash and cash equivalents $ 17,085     $ 78,338  
Marketable securities (current)   246,886       ?  
Restricted cash (current)   57,645       ?  
Accounts receivable   847       527  
Inventories   2,216       2,491  
Prepaid expenses and other current assets   4,497       1,914  
Total current assets   329,176       83,270  
           
Property, plant and equipment, net   79,243       66,408  
Long-term marketable securities   175,169       ?  
Long-term restricted cash   70,464       ?  
Operating right-of-use asset   1,770       133  
Financing right-of-use asset   27,491       176  
Deposits and other assets   2,361       2,112  


Total assets


$


685,674
   

$


152,099
 
           
Liabilities          
Current liabilities          
Accounts payable and accrued liabilities $ 16,393     $ 3,943  
Operating lease liabilities (current)   ?       172  
Finance lease liabilities (current)   4,888       10  
Loans payable – other (current)   174       807  
Total current liabilities   21,455       4,932  
           
2021 Bonds payable (long-term)   66,120       ?  
Loans payable – other (long-term)   394       447  
Operating lease liabilities (long-term)   1,783       ?  
Financing lease liabilities (long-term)   19,715       162  
Other long-term liabilities   84       179  
Total liabilities   109,551       5,720  
           
Commitments and Contingencies          
           
Stockholders’ Equity          
Common Stock, $0.01 par value per share; 250,000,000 authorized,

197,964,476 and 128,138,311 shares issued and outstanding at June

30, 2021 and December 31, 2020, respectively.
  1,980       1,282  
Additional paid-in capital   1,100,932       643,269  
Accumulated other comprehensive loss   (307 )     ?  
Accumulated deficit   (526,482 )     (498,172 )
Total stockholders’ equity   576,123       146,379  


Total liabilities and stockholders’ equity


$


685,674
   

$


152,099
 
               

Gevo, Inc.

Condensed Consolidated Statements of Operations Information

(Unaudited, in thousands, except share and per share amounts)

  Three Months Ended June 30, Six Months Ended June 30,
    2021       2020       2021       2020  
Revenue and cost of goods sold              
Ethanol sales and related products, net $ ?     $ 83     $ ?     $ 3,783  
Hydrocarbon revenue   346       859       359       984  
Grant and other revenue   76       46       156       46  
Total revenues   422       988       515       4,813  
               
Cost of goods sold   2,794       2,644       4,788       10,783  
               
Gross loss   (2,372 )     (1,656 )     (4,273 )     (5,970 )
               
Operating expenses              
Research and development expense   1,404       677       2,782       1,257  
Selling, general and administrative expense   4,820       2,698       8,692       5,325  
Preliminary stage project costs   5,472       221       8,199       377  
Loss on disposal of assets   4,954       ?       4,954       38  
Restructuring expenses   ?       5       ?       304  
Total operating expenses   16,650       3,601       24,627       7,301  
               
Loss from operations   (19,022 )     (5,257 )     (28,900 )     (13,271 )
               
Other income (expense)              
Gain on forgiveness of SBA loan   641       ?       641       ?  
Interest Expense   (6 )     (541 )     (11 )     (1,086 )
(Loss) on modification of 2020 Notes   ?       (57 )     ?       (726 )
Gain (loss) from change in fair value of derivative warrant liability  



43
     



1
     



(10




)
   



8
 
(Loss) from change in fair value of 2020/21 Notes embedded derivative liability   ?       (176 )     ?       (276 )
Other income (expense)   91       (13 )     (30 )     55  
Total other income (expense), net   769       (786 )     590       (2,025 )
               
Net loss $ (18,253 )   $ (6,043 )   $ (28,310 )   $ (15,296 )
               
Net loss per share – basic and diluted $ (0.09 )   $ (0.40 )   $ (0.15 )   $ (1.04 )
Weighted-average number of common shares outstanding –

basic and diluted
 

198,137,420
      15,071,105       190,892,223       14,771,952  
               

Gevo, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited, in thousands, except share and per share amounts)

  Three Months Ended June 30, Six Months Ended June 30,
    2021       2020       2021       2020  
               
Net Loss $ (18,253 )   $ (6,043 )   $ (28,310 )   $ (15,296 )
Other comprehensive income (loss)              
Unrealized gains (losses) on available-for-sale securities, net of tax   (307 )     ?       (307 )     ?  
Total change in unrealized gains (losses) on marketable securities   (307 )     ?       (307 )     ?  
               
Comprehensive Loss $ (18,560 )   $ (6,043 )   $ (28,617 )   $ (15,296 )
               

Gevo, Inc.

Condensed Consolidated Statements of Stockholders’ Equity Information

(Unaudited, in thousands, except share amounts)

    Common Stock   Paid-In Capital   Accumulated Other Comprehensive Loss   Accumulated Deficit   Stockholders’ Equity
    Shares   Amount        
                                   
  Balance, December 31, 2020 128,138,311     $ 1,282     $ 643,269     $     $ (498,172 )   $ 146,379  
                                   
  Issuance of common stock, net of issue costs 68,170,579       682       457,008                   457,690  
  Issuance of common stock upon exercise of warrants 1,863,058       18       1,099                   1,117  
  Non-cash stock-based compensation             562                   562  
  Issuance of common stock under stock plans, net of taxes (121,499 )     (1 )     1                    
  Net loss                         (10,057 )     (10,057 )
                                   
  Balance, March 31, 2021 198,050,449       1,981       1,101,939             (508,229 )     595,691  
                                   
  Issuance of common stock, net of issue costs             (45 )                 (45 )
  Issuance of common stock upon exercise of warrants 3,700             4                   2  
  Non-cash stock-based compensation             858                   858  
  Issuance of common stock under stock plans, net of taxes (89,673 )     (1 )     (1,824 )                 (1,823 )
  Other comprehensive loss                   (307 )           (307 )
  Net loss                         (18,253 )     (18,253 )
                                   
  Balance, June 30, 2021 197,964,476     $ 1,980     $ 1,100,932     $ (307 )   $ (526,482 )   $ 576,123  
                                   
  Balance, December 31, 2019 14,083,232     $ 141     $ 530,349     $     $ (457,986 )   $ 72,504  
                                   
  Issuance of common stock, net of issue costs 425,776       4       902                   906  
  Non-cash stock-based compensation             336                   336  
  Issuance of common stock under stock plans, net of taxes 105,882                                
  Net loss                         (9,253 )     (9,253 )
                                   
  Balance, March 31, 2020 14,614,890       145       531,587             (467,239 )     64,493  
                                   
  Issuance of common stock, net of issue costs 917,345       9       1,238                   1,247  
  Non-cash stock-based compensation             497                   497  
  Issuance of common stock under stock plans, net of taxes (18,137 )           (307 )                 (307 )
  Net loss                         (6,043 )     (6,043 )
                                   
  Balance, June 30, 2020 15,514,098     $ 154     $ 533,015     $     $ (473,282 )   $ 59,887  
                                   

 

Gevo, Inc.

Condensed Consolidated Cash Flow Information

(Unaudited, in thousands)

    Three Months Ended June 30, Six Months Ended June 30,
      2021       2020       2021       2020  
Operating Activities                
Net Loss   $ (18,253 )   $ (6,043 )   $ (28,310 )   $ (15,296 )
Adjustments to reconcile net loss to net cash used in

operating activities:
               
Loss (gain) from change in fair value of derivative warrant liability   (43 )     (1 )     10       (8 )
Loss from change in fair value of 2020/21 Notes and 2020 Notes embedded derivative liability     ?       176         ?       276  
Loss on sales of property, plant and equipment     4,954       38       4,954       38  
(Gain) from forgiveness of SBA PPP loans     (641 )     ?       (641 )       ?  
Stock-based compensation     692       501       1,617       673  
Depreciation and amortization     1,223       1,629       2,372       3,278  
Non-cash lease expense     (75 )     14       (58 )     29  
Non-cash interest expense     ?       243       2       393  
Other non-cash expenses     5       ?       5         ?  
Changes in operating assets and liabilities:                
Accounts receivable     (755 )     (594 )     (320 )     389  
Inventories     236       201       275       721  
Prepaid expenses and other current assets, deposits and other assets:     1,131       331       (3,142 )     164  
Accounts payable, accrued expenses and long-term liabilities   (777 )     (338 )     3,768       (1,475 )
Net cash used in operating activities     (12,303 )     (3,843 )     (19,468 )     (10,818 )
                 
Investing Activities                
Acquisitions of property, plant and equipment     (9,537 )     (817 )     (14,167 )     (1,607 )
Purchase of marketable securities     (422,362 )     ?       (422,362 )       ?  
Net cash used in investing activities     (431,899 )     (817 )     (436,529 )     (1,607 )
                 
Financing Activities                
Proceeds from issuance of 2021 Bonds     68,995       ?       68,995         ?  
Debt and equity offering costs     (3,074 )     (63 )     (34,757 )     (115 )
Proceeds from issuance of common stock and common stock warrants   (1,824 )     1,313       487,549       2,271  
Proceeds from the exercise of warrants   2       ?       1,119         ?  
Net settlement of common stock under stock plans   27       (156 )       ?       (310 )
Payments on secured debt     (53 )     (392 )     (53 )     (392 )
Proceeds from SBA loans     ?       1,006         ?       1,006  
Net cash provided by financing activities     64,073       1,708       522,853       2,460  
                 
Net increase (decrease) in cash and cash equivalents     (380,129 )     (2,952 )     66,856       (9,965 )
                 
Cash, cash equivalents, and restricted cash                
Beginning of period     525,323       9,289       78,338       16,302  
                 
End of period   $ 145,194     $ 6,337     $ 145,194     $ 6,337  
                 

Gevo, Inc.

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited, in thousands, except share and per share amounts)

  Three Months Ended June 30,   Six Months Ended June 30,
Non-GAAP Cash EBITDA   2021       2020       2021       2020  
               
Loss from operations $ (19,022 )   $ (5,257 )   $ (28,900 )   $ (13,271 )
Depreciation and amortization   1,223       1,629       2,372       3,278  
Stock-based compensation   692       501       1,617       673  
Non-GAAP cash EBITDA $ (17,107 )   $ (3,127 )   $ (24,911 )   $ (9,320 )
               
Non-GAAP Adjusted Net Loss              
               
Net Loss $ (18,253 )   $ (6,043 )   $ (28,310 )   $ (15,296 )
Adjustments:              
(Loss) on modification of 2020 Notes   ?       (57 )     ?       (726 )
Gain (loss) from change in fair value of derivative warrant liability   43       1       (10 )     8  
(Loss) from change in fair value of 2020/21 Notes and 2020 Notes embedded derivative liability   ?       (176 )     ?       (276 )
Total adjustments   43       (232 )     (10 )     (994 )


Non-GAAP Net Income (Loss)
$ (18,296 )   $ (5,811 )   $ (28,300 )   $ (14,302 )
Non-GAAP adjusted net loss per share –

basic and diluted
$ (0.09 )   $ (0.39 )   $ (0.15 )   $ (0.97 )
Weighted-average number of common

shares outstanding – basic and diluted
  198,137,420       15,071,105       190,892,223       14,771,952  

Investor and Media Contact

+1 720-647-9605

IR@gevo.com

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Capstone Green Energy Corporation (CGRN)
June-quarter sales disappointing but growth is coming

Capstone Green Energy Corp is the producer of low-emission microturbine systems.The company develops, manufactures, markets and services microturbine technology solutions for use in stationary distributed power generation applications. Capstone Turbine’s products include onboard generation for hybrid electric vehicles; conversion of oil field and biomass waste gases into electricity; combined heat, power, and chilling solutions; capacity addition; and standby power.

Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

    June quarter sales were below our expectations. The company reported revenues of $16.1 million up 13% year over year but down 4.5% sequentially and below our $18.5 million forecast. The company is in the middle of a transition towards rental and service business, which will provide for more steady revenues but will have less of the big ticket items that sometimes boost sales in a given quarter. Management believes rentals and sales are still being negatively impacted by COVID and supply chain issues specifically pointing to Italy, India and Brazil where Capstone does business.

    Costs rose causing margins and cash flow to shrink.  Adjusted EBIDTA was ($2.3) million versus $0.1 million. Cost of goods sold rose to $13.4 million versus $10.8 million pushing gross margins down to $2.6 million (16%) versus $3.4 million (24%). We had hoped for the gross margin percent to remain at 24%. Operating costs were $6.2 million versus $3.9 million last year. Net income was ($4.8) million …



This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

InPlay Oil (IPOOF)(IPO:CA) – Outstanding quarter due to operational improvements

Thursday, August 12, 2021

InPlay Oil (IPOOF)(IPO:CA)
Outstanding quarter due to operational improvements

As of April 24, 2020, Noble Capital Markets research on InPlay Oil is published under ticker symbols (IPOOF and IPO:CA). The price target is in USD and based on ticker symbol IPOOF. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target. InPlay Oil is a junior oil and gas exploration and production company with operations in Alberta focused on light oil production. The company operates long-lived, low-decline properties with drilling development and enhanced oil recovery potential as well as undeveloped lands with exploration possibilities. The common shares of InPlay trade on the Toronto Stock Exchange under the symbol IPO and the OTCQZ Exchange under the symbol IPOOF.

Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

    Production is soaring due to the performance of recently drilled wells. InPlay reported average production of 5,380 boe/d in the June quarter, up 71% versus last year and above our forecast of 5,167 boe/d. The jump in production reflect strong performance by three Pembina wells drilled in the first quarter that continue to blow through type curve projections. Well flow shows no signs of decreasing after 120 days and the wells have paid for themselves in 3-4 months. In addition, three new wells in Pembina came on in July and are even outperforming the wells drilled in the first quarter. Management announced that it now plans to replace three wells planned for the Willesden Green with wells in the Pembina play.

    High production means high cash flow and earnings.  Adjusted funds flow (AFF) for the quarter was $8.2 million ($0.12) up 730% y-o-y and 34% sequentially and above the $6.4 million ($0.09) in our models. Net income was $0.8 million ($0.02) after excluding nonrecurring items, well surpassing previous periods and our forecast of ($0.7 million) or ($0.01). Realized prices and operating netbacks were …



This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Release – Capstone Green Energy (NASDAQ:CGRN) Reports First Quarter Fiscal 2022 Financial Results

 


Capstone Green Energy (NASDAQ:CGRN) Reports First Quarter Fiscal 2022 Financial Results

 

Total Revenue Grew 13% Year-Over-Year

Cash and Cash Equivalents of $49.2M

Book-to-Bill Ratio of 1:1 for the Quarter with New Gross Product Orders of $8.2M

Webcast to be Held Today, August 11, 2021 at 1:45 PM PT; 4:45 PM ET

VAN NUYS, CA / ACCESSWIRE / August 11, 2021 / Capstone Green Energy Corporation (NASDAQ:CGRN), formerly Capstone Turbine Corporation (NASDAQ:CPST) (“Capstone,” the “Company,” “we” or “us”), a global leader in carbon reduction and on-site resilient green energy solutions, today announced financial results for its fiscal year 2022 first quarter ended June 30, 2021.

Financial Highlights of Fiscal Year 2022 First Quarter:

  • Total revenue in the quarter was $16.1 million, up 13%, compared to $14.2 million in the first quarter last year as orders and shipments gradually started to rebound despite continued negative impacts from the ongoing COVID-19 global pandemic.
  • The book-to-bill ratio was 1:1 for the quarter, and new gross product orders were $8.2 million despite continued negative global impacts from the ongoing COVID-19 global pandemic in key markets like Europe, Latin America, Asia, and Australia.
  • The long-term microturbine rental fleet increased 1.5 megawatts (MWs) to 12.1 MWs from 10.6 MWs during the quarter as the Company continues to execute against its plan to increase the fleet to 21.1 MWs by March 31, 2022.
  • Total cash and cash equivalents as of June 30, 2021, were $49.2 million, a decrease of $0.3 million, compared to $49.5 million as of March 31, 2021.
  • Cash provided by financing activities was $11.0 million during the quarter, as the Company continued to focus on strengthening liquidity as it accelerates the expansion of the long-term rental fleet.
  • Net loss of $2.2 million for the quarter, compared to a net loss of $1.8 million in the first quarter of fiscal 2021.
  • Adjusted EBITDA of negative $2.3 million, compared to Adjusted EBITDA of $0.1 million in the first quarter of fiscal 2021.

“I am pleased that we were again able to drive year-over-year revenue growth as the global recovery from the COVID-19 global pandemic continued to evolve, and we executed upon our revenue growth strategy,” said Darren Jamison, President and Chief Executive Officer of Capstone Green Energy. “We also announced during the quarter that we expanded our long-term rental fleet from 10.6 megawatts to 12.1 megawatts as we march towards our goal of growing the fleet to 21.1 megawatts by the end of our fiscal year. This remains a key driver in our long-term strategy, as rental-related revenue drives a much higher margin than a typical product sale. This, along with our Factory Protection Plan program, are important supporting pillars in growing our Energy as a Service business,” added Mr. Jamison.

“We also took steps during the quarter to expand our direct solutions sales team as their effort in the field is creating a robust project pipeline. We are excited for the second half of the year as we expect to start to close on potential projects deploying not only our existing microturbine technology, but the new energy products and service offerings we added on the back of our evolution into Capstone Green Energy Corporation, announced on Earth Day in April 2021,” concluded Mr. Jamison.

Financial Results for Fiscal Year 2022 First Quarter

Total revenue for the quarter increased $1.9 million to $16.1 million, compared with total revenue of $14.2 million in the year-ago quarter. The increase in revenue was the result of higher MWs shipped, as the year-ago quarter was more negatively impacted by the global COVID-19 pandemic.

Gross margin decreased $0.8 million, to $2.6 million in the first quarter compared to $3.4 million in the same period last year, primarily due to lower overhead expenses in the prior period as a result of the Company’s COVID-19 Business Continuity Plan, which consisted of pay cuts, furloughs, and other cost-cutting measures.

Gross margin as a percentage of revenue decreased to 16% in the first quarter, compared to 24% in the same period last year, primarily due to lower overhead expenses in the prior period as a result of the Company’s COVID-19 Business Continuity Plan. Additionally, Factory Protection Plan margins were higher in the prior-year period primarily due to site shutdowns caused by the pandemic, which delayed servicing events.

Operating expenses in the first quarter of fiscal year 2022 were $6.2 million, an increase of $2.3 million from $3.9 million in the year-ago quarter, as the year-ago quarter had reduced expenses from the COVID-19 Business Continuity Plan, which reduced operating expenses and increased working capital during the pandemic.

Net loss was $2.2 million for the first quarter of fiscal year 2022, compared to a net loss of $1.8 million in the year-ago quarter. Net loss per share improved to $0.16 cents per share compared to $0.17 cents in the year-ago quarter. Adjusted EBITDA was negative $2.3 million for the first quarter of fiscal year 2022, compared to an adjusted EBITDA of $0.1 million in the year-ago quarter.

Cash and cash equivalents were $49.2 million as of June 30, 2021, compared to $49.5 million as of March 31, 2021.

Conference Call and Webcast

Capstone will host a live webcast on August 11, 2021, at 1:45 PM Pacific Time (4:45 PM Eastern Time) to provide the results of the fiscal year 2022 first quarter ended June 30, 2021. Capstone will discuss its financial results and will provide an update on its business activities. At the end of the conference call, Capstone will host a question-and-answer session to provide an opportunity for financial analysts to ask questions. Investors and interested individuals are invited to listen to the webcast by logging on to Capstone’s investor relation’s webpage at www.CapstoneGreenEnergy.com. A replay of the webcast will be available on the website for 30 days.

About Capstone Green Energy

Capstone Green Energy (NASDAQ:CGRN) is a leading provider of customized microgrid solutions and on-site energy technology systems focused on helping customers around the globe meet their environmental, energy savings, and resiliency goals. Capstone Green Energy focuses on four key business lines. Through its Energy as a Service (EaaS) business, it offers rental solutions utilizing its microturbine energy systems and battery storage systems, comprehensive Factory Protection Plan (FPP) service contracts that guarantee life-cycle costs, as well as aftermarket parts. Energy Conversion Products are driven by the Company’s industry-leading, highly efficient, low-emission, resilient microturbine energy systems offering scalable solutions in addition to a broad range of customer-tailored solutions, including hybrid energy systems and larger frame industrial turbines. The Energy Storage Products business line designs and installs microgrid storage systems creating customized solutions using a combination of battery technologies and monitoring software. Through Hydrogen Energy Solutions, Capstone Green Energy offers customers a variety of hydrogen products, including the Company’s microturbine energy systems.

For customers with limited capital or short-term needs, Capstone offers rental systems; for more information, contact: rentals@CGRNenergy.com. To date, Capstone has shipped over 10,000 units to 83 countries and estimates that, in FY21, it saved customers over $217 million in annual energy costs and approximately 397,000 tons of carbon. Total savings over the last three years are estimated to be approximately $698 million in energy savings and approximately 1,115,100 tons of carbon savings.

For more information about the Company, please visit: www.CapstoneGreenEnergy.com. Follow Capstone Green Energy on TwitterLinkedInInstagramFacebook, and YouTube.

Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements regarding expectations for green initiatives and execution on the Company’s growth strategy and other statements regarding the Company’s expectations, beliefs, plans, intentions, and strategies. The Company has tried to identify these forward-looking statements by using words such as “expect,” “anticipate,” “believe,” “could,” “should,” “estimate,” “intend,” “may,” “will,” “plan,” “goal” and similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements. Actual results, performance and achievements could differ materially from those expressed in, or implied by, these forward-looking statements due to a variety of risks, uncertainties and other factors, including, but not limited to, the following: the ongoing effects of the COVID-19 pandemic; the availability of credit and compliance with the agreements governing the Company’s indebtedness; the Company’s ability to develop new products and enhance existing products; product quality issues, including the adequacy of reserves therefor and warranty cost exposure; intense competition; financial performance of the oil and natural gas industry and other general business, industry and economic conditions; the Company’s ability to adequately protect its intellectual property rights; and the impact of pending or threatened litigation. For a detailed discussion of factors that could affect the Company’s future operating results, please see the Company’s filings with the Securities and Exchange Commission, including the disclosures under “Risk Factors” in those filings. Except as expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events, or for any other reason.

Financial Tables to Follow

CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
June 30, March 31,
2021 2021
Assets
Current Assets:
Cash and cash equivalents
$ 49,216 $ 49,533
Accounts receivable, net of allowances of $324 at June 30, 2021 and $314 at March 31, 2021
23,871 20,593
Inventories, net
14,937 11,829
Prepaid expenses and other current assets
5,718 4,953
Total current assets
93,742 86,908
Property, plant, equipment and rental assets, net
10,669 9,630
Non-current portion of inventories
1,802 1,845
Other assets
7,497 7,639
Total assets
$ 113,710 $ 106,022
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued expenses
$ 22,396 $ 19,767
Accrued salaries and wages
1,565 1,889
Accrued warranty reserve
3,904 5,850
Deferred revenue
6,000 6,374
Current portion of notes payable and lease obligations
1,097 576
Total current liabilities
34,962 34,456
Deferred revenue – non-current
734 765
Term note payable, net
50,923 52,865
Long-term portion of notes payable and lease obligations
4,589 4,762
Total liabilities
91,208 92,848
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $.001 par value; 1,000,000 shares authorized; none issued
Common stock, $.001 par value; 51,500,000 shares authorized, 15,206,891 shares issued and 15,128,731 shares outstanding at June 30, 2021; 12,898,144 shares issued and 12,824,190 shares outstanding at March 31, 2021
15 13
Additional paid-in capital
945,918 934,381
Accumulated deficit
(921,453 ) (919,271 )
Treasury stock, at cost; 78,160 shares at June 30, 2021 and 73,954 shares at March 31, 2021
(1,978 ) (1,949 )
Total stockholders’ equity
22,502 13,174
Total liabilities and stockholders’ equity
$ 113,710 $ 106,022
CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,
2021 2020
Revenue:
Product and accessories
$ 8,389 $ 6,606
Parts and service
7,693 7,587
Total revenue
16,082 14,193
Cost of goods sold:
Product and accessories
8,992 6,800
Parts and service
4,442 4,020
Total cost of goods sold
13,434 10,820
Gross margin
2,648 3,373
Operating expenses:
Research and development
883 370
Selling, general and administrative
5,324 3,546
Total operating expenses
6,207 3,916
Loss from operations
(3,559 ) (543 )
Other income
665 4
Interest income
5 8
Interest expense
(1,235 ) (1,291 )
Gain on debt extinguishment
1,950
Loss before provision for income taxes
(2,174 ) (1,822 )
Provision for income taxes
8 1
Net loss
(2,182 ) (1,823 )
Net loss per common share attributable to common stockholders-basic and diluted
$ (0.16 ) $ (0.17 )
Weighted average shares used to calculate basic and diluted net loss per common share attributable to common stockholders
13,226 10,598
CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(In thousands, except per share data)
(Unaudited)

Three months ended
Reconciliation of Reported Net Loss to EBITDA and Adjusted EBITDA
June 30,
2021 2020
Net loss, as reported
$ (2,182 ) $ (1,823 )
Interest expense
1,235 1,291
Provision for income taxes
8 1
Depreciation and amortization
386 354
EBITDA
$ (553 ) $ (177 )
Gain on debt extinguishment
(1,950 )
Additional PPP loan forgiveness
(660 )
Stock-based compensation and other expense
870 298
Adjusted EBITDA
$ (2,293 ) $ 121

To supplement the company’s unaudited financial data presented on a generally accepted accounting principles (GAAP) basis, management has presented Adjusted EBITDA, a non-GAAP financial measure. This non-GAAP financial measure is among the indicators management uses as a basis for evaluating the company’s financial performance as well as for forecasting future periods. Management establishes performance targets, annual budgets and makes operating decisions based in part upon this metric. Accordingly, disclosure of this non-GAAP financial measure provides investors with the same information that management uses to understand the company’s economic performance year-over-year.

EBITDA is defined as net income before interest, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA before gain on debt extinguishment, additional PPP loan forgiveness and stock-based compensation and other expense. Gain on debt extinguishment and additional PPP loan forgiveness relates to the Paycheck Protection Program loan forgiveness. Stock-based compensation and other expense includes expense related to stock issued to employees, directors, and vendors.

Adjusted EBITDA is not a measure of the company’s liquidity or financial performance under GAAP and should not be considered as an alternative to, net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of its liquidity.

While management believes that the non-GAAP financial measure provides useful supplemental information to investors, there are limitations associated with the use of this measure. The measures are not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation. Management compensates for these limitations by relying primarily on the company’s GAAP results and by using Adjusted EBITDA only supplementally and by reviewing the reconciliations of the non-GAAP financial measure to its most comparable GAAP financial measure.

Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. The company’s non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.

CONTACT:
Capstone Green Energy
Investor and investment media inquiries:
818-407-3628
ir@CGRNenergy.com

SOURCE: Capstone Green Energy Corporation

Traditional Energy Resources Have Been Shrinking



Natural Gas Inventories are Low, Biden Administration Calls on OPEC for More Oil

 

Energy inventory levels are running below average. Heading into the heating season, the U.S. Energy Information Administration (EIA) forecasted natural gas inventories would enter November well below the five-year average. Separately, in a surprise yesterday, the U.S. National Security Adviser called on OPEC, Russia, and other oil-exporting countries to produce more oil.

 

Natural Gas

In its August 2021 Short-Term Energy Outlook, the EIA forecast that inventories of natural gas will reach 3,592 billion cubic feet (Bcf) by November 1, which is considered the beginning of the heating season. The level is 159 Bcf below its 2016-2020 average. Contributing to this forecast is the above-average use of natural gas experienced last heating season and the below-average additions since. Another factor considered is the higher natural gas exports coupled with relatively flat production.

U.S. production of dry natural gas (consumer-grade/methane) has been flat at 91.5 Bcf/d (billion cubic feet per day). This is 0.4 Bcf/d below the same period last year (January-July). Extreme cold weather in February is partly responsible as well freeze offs caused production to decline by more than 6.5 Bcf/d.

Record high levels of exports so far this year can be attributed to the increased ability to ship liquid natural gas (LNG) along with increased international LNG and natural gas prices. Through last year, U.S. LNG exports averaged 6.5 Bcf/d during a period of low global natural gas demand following pandemic-related reduced economic activity. Comparatively, U.S. LNG exports have averaged 9.4 Bcf/d so far in 2021. The EIA forecasts that LNG exports will average 9.5 Bcf/d for the remainder of the year.  Exports via natural gas pipelines are also higher in 2021. U.S. pipeline exports of natural gas have averaged 8.5 Bcf/d in 2021, compared with 7.9 Bcf/d in 2020. The EIA forecasts that U.S. pipeline exports of natural gas will average 8.8 Bcf/d for the remainder of the year.

 

Send Your Oil Please

To the surprise of many, the talk of renewables was put on hold yesterday (Aug. 11) as the U.S. national security adviser Jake Sullivan urged OPEC and other oil-exporting countries (including Russia), to increase output and urged them to produce more oil.

 

Statement by National SecurityAdvisor Jake Sullivan

on the Need for Reliable and Stable Global Energy Markets

 

AUGUST 11, 2021

Higher gasoline costs, if left unchecked, risk harming the ongoing global recovery. The price of crude oil has been higher than it was at the end of 2019, before the onset of the pandemic.

While OPEC+ recently agreed to production increases, these increases will not fully offset previous production cuts that OPEC+ imposed during the pandemic until well into 2022. At a critical moment in the global recovery, this is simply not enough.

President Biden has made clear that he wants Americans to have access to affordable and reliable energy, including at the pump. Although we are not a party to OPEC, the United States will always speak to international partners regarding issues of significance that affect our national economic and security affairs, in public and private. We are engaging with relevant OPEC+ members on the importance of competitive markets in setting prices. Competitive energy markets will ensure reliable and stable energy supplies, and OPEC+ must do more to support the recovery.

 

The reason is in part to curtail this inflation input. Today’s price of crude is higher than it was in early 2020 before the global response to the novel coronavirus. Oil prices saw little impact as WTI rose 0.1% and Brent increased by 0.2% overnight. OPEC + have been at odds with themselves on the best level of production. The market seems to understand that admonishment from the U.S. is now a small voice compared to those interests actually seated at the table.

Take-Away

As the energy industry seeks to regain its balance, there will be supply issues, (surpluses/shortfalls). Until the economy is on solid enough footing to project future needs, providing the proper output and getting it to where it is needed may continue to prove difficult.

Read more from a recent
newsletter
 provided by Channelchek reviewing the industry. 

 

Suggested Reading:



Tax Treatment for Crypto Mining May Cause Exodus from U.S.



Will the U.S. Continue to Subsidize Renewable Energy?





Why Uranium Prices Have Been Rising



Lithium Battery vs. Hydrogen Fuel Cell Vehicles

 

Sources:

https://www.eia.gov/todayinenergy/detail.php?id=47576

https://www.eia.gov/todayinenergy/detail.php?id=46896

https://www.eia.gov/todayinenergy/detail.php?id=49096

White House Briefing Room Statement

 

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Capstone Green Energy (NASDAQ:CGRN) Reports First Quarter Fiscal 2022 Financial Results

 


Capstone Green Energy (NASDAQ:CGRN) Reports First Quarter Fiscal 2022 Financial Results

 

Total Revenue Grew 13% Year-Over-Year

Cash and Cash Equivalents of $49.2M

Book-to-Bill Ratio of 1:1 for the Quarter with New Gross Product Orders of $8.2M

Webcast to be Held Today, August 11, 2021 at 1:45 PM PT; 4:45 PM ET

VAN NUYS, CA / ACCESSWIRE / August 11, 2021 / Capstone Green Energy Corporation (NASDAQ:CGRN), formerly Capstone Turbine Corporation (NASDAQ:CPST) (“Capstone,” the “Company,” “we” or “us”), a global leader in carbon reduction and on-site resilient green energy solutions, today announced financial results for its fiscal year 2022 first quarter ended June 30, 2021.

Financial Highlights of Fiscal Year 2022 First Quarter:

  • Total revenue in the quarter was $16.1 million, up 13%, compared to $14.2 million in the first quarter last year as orders and shipments gradually started to rebound despite continued negative impacts from the ongoing COVID-19 global pandemic.
  • The book-to-bill ratio was 1:1 for the quarter, and new gross product orders were $8.2 million despite continued negative global impacts from the ongoing COVID-19 global pandemic in key markets like Europe, Latin America, Asia, and Australia.
  • The long-term microturbine rental fleet increased 1.5 megawatts (MWs) to 12.1 MWs from 10.6 MWs during the quarter as the Company continues to execute against its plan to increase the fleet to 21.1 MWs by March 31, 2022.
  • Total cash and cash equivalents as of June 30, 2021, were $49.2 million, a decrease of $0.3 million, compared to $49.5 million as of March 31, 2021.
  • Cash provided by financing activities was $11.0 million during the quarter, as the Company continued to focus on strengthening liquidity as it accelerates the expansion of the long-term rental fleet.
  • Net loss of $2.2 million for the quarter, compared to a net loss of $1.8 million in the first quarter of fiscal 2021.
  • Adjusted EBITDA of negative $2.3 million, compared to Adjusted EBITDA of $0.1 million in the first quarter of fiscal 2021.

“I am pleased that we were again able to drive year-over-year revenue growth as the global recovery from the COVID-19 global pandemic continued to evolve, and we executed upon our revenue growth strategy,” said Darren Jamison, President and Chief Executive Officer of Capstone Green Energy. “We also announced during the quarter that we expanded our long-term rental fleet from 10.6 megawatts to 12.1 megawatts as we march towards our goal of growing the fleet to 21.1 megawatts by the end of our fiscal year. This remains a key driver in our long-term strategy, as rental-related revenue drives a much higher margin than a typical product sale. This, along with our Factory Protection Plan program, are important supporting pillars in growing our Energy as a Service business,” added Mr. Jamison.

“We also took steps during the quarter to expand our direct solutions sales team as their effort in the field is creating a robust project pipeline. We are excited for the second half of the year as we expect to start to close on potential projects deploying not only our existing microturbine technology, but the new energy products and service offerings we added on the back of our evolution into Capstone Green Energy Corporation, announced on Earth Day in April 2021,” concluded Mr. Jamison.

Financial Results for Fiscal Year 2022 First Quarter

Total revenue for the quarter increased $1.9 million to $16.1 million, compared with total revenue of $14.2 million in the year-ago quarter. The increase in revenue was the result of higher MWs shipped, as the year-ago quarter was more negatively impacted by the global COVID-19 pandemic.

Gross margin decreased $0.8 million, to $2.6 million in the first quarter compared to $3.4 million in the same period last year, primarily due to lower overhead expenses in the prior period as a result of the Company’s COVID-19 Business Continuity Plan, which consisted of pay cuts, furloughs, and other cost-cutting measures.

Gross margin as a percentage of revenue decreased to 16% in the first quarter, compared to 24% in the same period last year, primarily due to lower overhead expenses in the prior period as a result of the Company’s COVID-19 Business Continuity Plan. Additionally, Factory Protection Plan margins were higher in the prior-year period primarily due to site shutdowns caused by the pandemic, which delayed servicing events.

Operating expenses in the first quarter of fiscal year 2022 were $6.2 million, an increase of $2.3 million from $3.9 million in the year-ago quarter, as the year-ago quarter had reduced expenses from the COVID-19 Business Continuity Plan, which reduced operating expenses and increased working capital during the pandemic.

Net loss was $2.2 million for the first quarter of fiscal year 2022, compared to a net loss of $1.8 million in the year-ago quarter. Net loss per share improved to $0.16 cents per share compared to $0.17 cents in the year-ago quarter. Adjusted EBITDA was negative $2.3 million for the first quarter of fiscal year 2022, compared to an adjusted EBITDA of $0.1 million in the year-ago quarter.

Cash and cash equivalents were $49.2 million as of June 30, 2021, compared to $49.5 million as of March 31, 2021.

Conference Call and Webcast

Capstone will host a live webcast on August 11, 2021, at 1:45 PM Pacific Time (4:45 PM Eastern Time) to provide the results of the fiscal year 2022 first quarter ended June 30, 2021. Capstone will discuss its financial results and will provide an update on its business activities. At the end of the conference call, Capstone will host a question-and-answer session to provide an opportunity for financial analysts to ask questions. Investors and interested individuals are invited to listen to the webcast by logging on to Capstone’s investor relation’s webpage at www.CapstoneGreenEnergy.com. A replay of the webcast will be available on the website for 30 days.

About Capstone Green Energy

Capstone Green Energy (NASDAQ:CGRN) is a leading provider of customized microgrid solutions and on-site energy technology systems focused on helping customers around the globe meet their environmental, energy savings, and resiliency goals. Capstone Green Energy focuses on four key business lines. Through its Energy as a Service (EaaS) business, it offers rental solutions utilizing its microturbine energy systems and battery storage systems, comprehensive Factory Protection Plan (FPP) service contracts that guarantee life-cycle costs, as well as aftermarket parts. Energy Conversion Products are driven by the Company’s industry-leading, highly efficient, low-emission, resilient microturbine energy systems offering scalable solutions in addition to a broad range of customer-tailored solutions, including hybrid energy systems and larger frame industrial turbines. The Energy Storage Products business line designs and installs microgrid storage systems creating customized solutions using a combination of battery technologies and monitoring software. Through Hydrogen Energy Solutions, Capstone Green Energy offers customers a variety of hydrogen products, including the Company’s microturbine energy systems.

For customers with limited capital or short-term needs, Capstone offers rental systems; for more information, contact: rentals@CGRNenergy.com. To date, Capstone has shipped over 10,000 units to 83 countries and estimates that, in FY21, it saved customers over $217 million in annual energy costs and approximately 397,000 tons of carbon. Total savings over the last three years are estimated to be approximately $698 million in energy savings and approximately 1,115,100 tons of carbon savings.

For more information about the Company, please visit: www.CapstoneGreenEnergy.com. Follow Capstone Green Energy on TwitterLinkedInInstagramFacebook, and YouTube.

Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements regarding expectations for green initiatives and execution on the Company’s growth strategy and other statements regarding the Company’s expectations, beliefs, plans, intentions, and strategies. The Company has tried to identify these forward-looking statements by using words such as “expect,” “anticipate,” “believe,” “could,” “should,” “estimate,” “intend,” “may,” “will,” “plan,” “goal” and similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements. Actual results, performance and achievements could differ materially from those expressed in, or implied by, these forward-looking statements due to a variety of risks, uncertainties and other factors, including, but not limited to, the following: the ongoing effects of the COVID-19 pandemic; the availability of credit and compliance with the agreements governing the Company’s indebtedness; the Company’s ability to develop new products and enhance existing products; product quality issues, including the adequacy of reserves therefor and warranty cost exposure; intense competition; financial performance of the oil and natural gas industry and other general business, industry and economic conditions; the Company’s ability to adequately protect its intellectual property rights; and the impact of pending or threatened litigation. For a detailed discussion of factors that could affect the Company’s future operating results, please see the Company’s filings with the Securities and Exchange Commission, including the disclosures under “Risk Factors” in those filings. Except as expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events, or for any other reason.

Financial Tables to Follow

CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
June 30, March 31,
2021 2021
Assets
Current Assets:
Cash and cash equivalents
$ 49,216 $ 49,533
Accounts receivable, net of allowances of $324 at June 30, 2021 and $314 at March 31, 2021
23,871 20,593
Inventories, net
14,937 11,829
Prepaid expenses and other current assets
5,718 4,953
Total current assets
93,742 86,908
Property, plant, equipment and rental assets, net
10,669 9,630
Non-current portion of inventories
1,802 1,845
Other assets
7,497 7,639
Total assets
$ 113,710 $ 106,022
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued expenses
$ 22,396 $ 19,767
Accrued salaries and wages
1,565 1,889
Accrued warranty reserve
3,904 5,850
Deferred revenue
6,000 6,374
Current portion of notes payable and lease obligations
1,097 576
Total current liabilities
34,962 34,456
Deferred revenue – non-current
734 765
Term note payable, net
50,923 52,865
Long-term portion of notes payable and lease obligations
4,589 4,762
Total liabilities
91,208 92,848
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $.001 par value; 1,000,000 shares authorized; none issued
Common stock, $.001 par value; 51,500,000 shares authorized, 15,206,891 shares issued and 15,128,731 shares outstanding at June 30, 2021; 12,898,144 shares issued and 12,824,190 shares outstanding at March 31, 2021
15 13
Additional paid-in capital
945,918 934,381
Accumulated deficit
(921,453 ) (919,271 )
Treasury stock, at cost; 78,160 shares at June 30, 2021 and 73,954 shares at March 31, 2021
(1,978 ) (1,949 )
Total stockholders’ equity
22,502 13,174
Total liabilities and stockholders’ equity
$ 113,710 $ 106,022
CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,
2021 2020
Revenue:
Product and accessories
$ 8,389 $ 6,606
Parts and service
7,693 7,587
Total revenue
16,082 14,193
Cost of goods sold:
Product and accessories
8,992 6,800
Parts and service
4,442 4,020
Total cost of goods sold
13,434 10,820
Gross margin
2,648 3,373
Operating expenses:
Research and development
883 370
Selling, general and administrative
5,324 3,546
Total operating expenses
6,207 3,916
Loss from operations
(3,559 ) (543 )
Other income
665 4
Interest income
5 8
Interest expense
(1,235 ) (1,291 )
Gain on debt extinguishment
1,950
Loss before provision for income taxes
(2,174 ) (1,822 )
Provision for income taxes
8 1
Net loss
(2,182 ) (1,823 )
Net loss per common share attributable to common stockholders-basic and diluted
$ (0.16 ) $ (0.17 )
Weighted average shares used to calculate basic and diluted net loss per common share attributable to common stockholders
13,226 10,598
CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(In thousands, except per share data)
(Unaudited)

Three months ended
Reconciliation of Reported Net Loss to EBITDA and Adjusted EBITDA
June 30,
2021 2020
Net loss, as reported
$ (2,182 ) $ (1,823 )
Interest expense
1,235 1,291
Provision for income taxes
8 1
Depreciation and amortization
386 354
EBITDA
$ (553 ) $ (177 )
Gain on debt extinguishment
(1,950 )
Additional PPP loan forgiveness
(660 )
Stock-based compensation and other expense
870 298
Adjusted EBITDA
$ (2,293 ) $ 121

To supplement the company’s unaudited financial data presented on a generally accepted accounting principles (GAAP) basis, management has presented Adjusted EBITDA, a non-GAAP financial measure. This non-GAAP financial measure is among the indicators management uses as a basis for evaluating the company’s financial performance as well as for forecasting future periods. Management establishes performance targets, annual budgets and makes operating decisions based in part upon this metric. Accordingly, disclosure of this non-GAAP financial measure provides investors with the same information that management uses to understand the company’s economic performance year-over-year.

EBITDA is defined as net income before interest, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA before gain on debt extinguishment, additional PPP loan forgiveness and stock-based compensation and other expense. Gain on debt extinguishment and additional PPP loan forgiveness relates to the Paycheck Protection Program loan forgiveness. Stock-based compensation and other expense includes expense related to stock issued to employees, directors, and vendors.

Adjusted EBITDA is not a measure of the company’s liquidity or financial performance under GAAP and should not be considered as an alternative to, net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of its liquidity.

While management believes that the non-GAAP financial measure provides useful supplemental information to investors, there are limitations associated with the use of this measure. The measures are not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation. Management compensates for these limitations by relying primarily on the company’s GAAP results and by using Adjusted EBITDA only supplementally and by reviewing the reconciliations of the non-GAAP financial measure to its most comparable GAAP financial measure.

Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. The company’s non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.

CONTACT:
Capstone Green Energy
Investor and investment media inquiries:
818-407-3628
ir@CGRNenergy.com

SOURCE: Capstone Green Energy Corporation

Release – Dr. Chris Ryan and Lynn Smull to Participate in a Water Tower Research Fireside Chat on Wednesday August 18, 2021 at 4:00 pm EDT


Dr. Chris Ryan and Lynn Smull to Participate in a Water Tower Research Fireside Chat on Wednesday, August 18, 2021 at 4:00 pm EDT

 

ENGLEWOOD, Colo., Aug. 11, 2021 (GLOBE NEWSWIRE) — Gevo, Inc. (NASDAQ:GEVO), announced today that Dr. Chris Ryan, President, Chief Operating Officer, and Lynn Smull, Chief Financial Officer, will participate in a Water Tower Research Fireside Chat on Wednesday, August 18, 2021 at 4:00 pm EDT.
 

Topic: Progress Report on Net-Zero 1 Capex Scope & Financial Projection

Investors and other persons interested in participating in the event must register using the link below. Please note that registration for the live event is limited but may be accessed at any time for replay after the presentation ends on August 18, 2021, utilizing the same registration link.

Registration Link:

https://globalmeet.webcasts.com/starthere.jsp?ei=1483592&tp_key=bddd6d026f

About Gevo

Gevo’s mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel and diesel fuel, that when burned have potential to yield net-zero greenhouse gas emissions when measured across the full life cycle of the products. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials, and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared to standard petroleum fossil-based fuels across their life cycle). Gevo’s products perform as well or better than traditional fossil-based fuels in infrastructure and engines, but with substantially reduced greenhouse gas emissions. In addition to addressing the problems of fuels, Gevo’s technology also enables certain plastics, such as polyester, to be made with more sustainable ingredients. Gevo’s ability to penetrate the growing low-carbon fuels market depends on the price of oil and the value of abating carbon emissions that would otherwise increase greenhouse gas emissions. Gevo believes that its proven, patented technology enabling the use of a variety of low-carbon sustainable feedstocks to produce price-competitive low-carbon products such as gasoline components, jet fuel and diesel fuel yields the potential to generate project and corporate returns that justify the build-out of a multi-billion-dollar business.

Gevo believes that the Argonne National Laboratory GREET model is the best available standard of scientific-based measurement for life cycle inventory or LCI.

Learn more at Gevo’s website: www.gevo.com

Investor and Media Contact

+1 720-647-9605

IR@gevo.com

Dr. Chris Ryan and Lynn Smull to Participate in a Water Tower Research Fireside Chat on Wednesday, August 18, 2021 at 4:00 pm EDT


Dr. Chris Ryan and Lynn Smull to Participate in a Water Tower Research Fireside Chat on Wednesday, August 18, 2021 at 4:00 pm EDT

 

ENGLEWOOD, Colo., Aug. 11, 2021 (GLOBE NEWSWIRE) — Gevo, Inc. (NASDAQ:GEVO), announced today that Dr. Chris Ryan, President, Chief Operating Officer, and Lynn Smull, Chief Financial Officer, will participate in a Water Tower Research Fireside Chat on Wednesday, August 18, 2021 at 4:00 pm EDT.
 

Topic: Progress Report on Net-Zero 1 Capex Scope & Financial Projection

Investors and other persons interested in participating in the event must register using the link below. Please note that registration for the live event is limited but may be accessed at any time for replay after the presentation ends on August 18, 2021, utilizing the same registration link.

Registration Link:

https://globalmeet.webcasts.com/starthere.jsp?ei=1483592&tp_key=bddd6d026f

About Gevo

Gevo’s mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel and diesel fuel, that when burned have potential to yield net-zero greenhouse gas emissions when measured across the full life cycle of the products. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials, and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared to standard petroleum fossil-based fuels across their life cycle). Gevo’s products perform as well or better than traditional fossil-based fuels in infrastructure and engines, but with substantially reduced greenhouse gas emissions. In addition to addressing the problems of fuels, Gevo’s technology also enables certain plastics, such as polyester, to be made with more sustainable ingredients. Gevo’s ability to penetrate the growing low-carbon fuels market depends on the price of oil and the value of abating carbon emissions that would otherwise increase greenhouse gas emissions. Gevo believes that its proven, patented technology enabling the use of a variety of low-carbon sustainable feedstocks to produce price-competitive low-carbon products such as gasoline components, jet fuel and diesel fuel yields the potential to generate project and corporate returns that justify the build-out of a multi-billion-dollar business.

Gevo believes that the Argonne National Laboratory GREET model is the best available standard of scientific-based measurement for life cycle inventory or LCI.

Learn more at Gevo’s website: www.gevo.com

Investor and Media Contact

+1 720-647-9605

IR@gevo.com

Flotek Industries (FTK) – June Quarter Results – A More In Depth Look

Wednesday, August 11, 2021

Flotek Industries (FTK)
June Quarter Results – A More In Depth Look

Flotek Industries, Inc. creates solutions to reduce the environmental impact of energy on air, water, land and people. Flotek Industries, Inc. is a technology-driven, specialty chemistry and data company that helps customers across industrial, commercial and consumer markets improve their Environmental, Social and Governance performance. Flotek’s Chemistry Technologies segment develops, manufactures, packages, distributes, delivers, and markets high-quality cleaning, disinfecting and sanitizing products for commercial, governmental and personal consumer use. Additionally, Flotek empowers the energy industry to maximize the value of their hydrocarbon streams and improve return on invested capital through its real-time data platforms and green chemistry technologies. Flotek serves downstream, midstream and upstream customers, both domestic and international. Flotek is a publicly traded company headquartered in Houston, Texas, and its common shares are traded on the New York Stock Exchange under the ticker symbol “FTK.” For additional information, please visit Flotek’s web site at www.flotekind.com.

Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

    Revenues hurt by loss of two large customers.  Flotek reported revenues of $9.2 million below 2021-1Q revenues of $11.8 million and our forecast of $12.6 million due to the loss of two significant customers due to merger combinations. Management indicated that absent the loss of these two clients, business would have been up 22% and ahead of internal sales and EBITDA projections. Meanwhile, customer growth has been strong with energy chemical technology customers increasing 26% sequentially.

    Management offset lower revenues with lower costs.  Operating costs (excl. DDA) were $12.1 million down from 2021-1Q costs of $13.8 million and our estimate of $14.8 million. SG&A costs were $2.9 million versus $4.4 million in the previous quarter, which was also our estimate. By lowering costs, the company was able to report adjusted EBITDA of ($6.7) million roughly in line with previous quarters …



This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Exploration and Production Review and Outlook – Noble Capital Markets Energy Sector Review – Q2 2021

Energy Industry – Exploration and Production: 2021 2Q Review and Outlook

Noble Capital Markets Energy Sector Review – August 2021

Source: Capital IQ as of 06/30/2021

Source: Energy Information Administration as of 06/30/2021

ENERGY INDUSTRY OUTLOOK

Exploration and Production: 2021-2Q Review and Outlook

Oil Prices

Oil prices continued their upward trend in the first quarter with WTI prices crossing $75/bbl. at the end of the quarter. Oil prices have reached levels not seen since 2018 and show no signs of letting up. Brent prices are trading closer to $76/bbl. The spread between WTI and Brent prices has narrowed as U.S. producers have been slower to accelerate drilling than other parts of the world. We would attribute the delays to transmission issues in the Permian Basin during extremely cold temperatures in Texas in February. The delay also reflects the impact that low oil prices in 2020 have had upon the health of smaller domestic producers.

OPEC, which initiated supply reductions last year, has maintained those reductions through the first half of 2021 despite the improved demand outlook. A tentative agreement between Saudi Arabia and Russia will gradually increase production by 2 million barrels/day over the rest of the year. We believe the increase will offset growing demand associated with post-pandemic global economic expansion and that it will not have an adverse impact on oil prices. The oil futures curve shows oil prices declining on the out months but staying above $70/bbl. through December.

Meanwhile, domestic producers have been slow to react to higher oil prices but have begun to accelerate drilling in recent months. There are 77% more than half the number of active oil rigs in the United States versus this time last year (470 verses 265). That said, there are only half the number of active rigs in the United States as compared to pre-pandemic levels. The figure below shows the contrast in rig count and oil prices over the last three years. The lack of a supply response to higher prices has meant, and will most likely continue to mean, that oil prices could stay at levels above what we consider to be the long-term normalized price for quite some time.

High oil prices, combined with improved operating efficiencies mean that production companies are facing very favorable returns on their investment. We look for companies to start reporting strong positive cash flow and to use cash flow to increase drilling and improve balance sheets. We do not expect companies to raise dividend payments given the cyclical nature of recent oil price trends but would not rule out share repurchases if stock prices do not rebound further.

Source: Capital IQ as of 06/30/2021

Natural Gas Prices

Natural Gas prices have also been exceptionally strong in recent months climbing above $3.60/mcf. Recent heat waves across much of the country has meant that gas-fired turbines are running at full speed. Storage levels, which exited the winter heating season below historical averages, have returned to normal levels. Drilling activity has started to pick up but remains well below pre-pandemic levels. There were 98 natural gas rigs drilling in the United States, up 30% from a year ago. As is the case with oil, we believe the lack of a supply response could mean that natural gas prices remain at elevated levels for several quarters. The gas futures curve is flat, dipping only a few cents into the fall months but then rising back above $3.60/mcf. during the winter months.

Longer-term Energy Trends 

Energy sources in the United States are undergoing a significant transformation away from carbon-based fuels. While this should not be a surprise to anyone, it is worth taking a long-term view of energy consumption to highlight how the transformation has acerated in recent years. The chart below energy sources over the last 250 years. As one might expect, coal consumption has fallen sharply in the last ten years. Coal consumption has been replaced by renewable, nuclear, and natural gas. Worth noting, petroleum consumption, which grew dramatically in the last 50 years, has maintained the levels reached at the end of the century. We believe this trend will continue with petroleum providing a smaller portion of the overall energy picture, but not necessarily declining in absolute value.

Outlook 

The rebound in oil and natural prices came faster than expected and is staying higher than we would have expected. We have been adjusting our models to reflect higher prices but are maintaining our long-term oil price forecast of $50 per barrel and $2.50 per mcf. Energy companies should start reporting positive cash flow at these prices and increasing drilling budgets. Our near-term outlook for energy stocks remains positive. We expect companies to report favorable results for the next few quarters. Longer-term, we have concern that oil demand will be constrained by power generation competition from renewable energy and decreased demand for gasoline and diesel due to a growth in electric vehicles. At the same time, increased supply from OPEC and continued drilling productivity will mean lower energy prices. We recommend investors stay focused on energy companies with solid balance sheets, low operating costs and protected prices.

Source: Michael Heim 07/02/2021; Energy Information Agency (EIA)

Oil & Gas – Comparable Tables 

Source: Capital IQ as of 06/30/2021

Oil & Gas – LTM Equity Performance 

Source: Capital IQ as of 06/30/2021

Oil & Gas – YTD Global M&A Activity 

Source: Capital IQ as of 06/30/2021

Power Generation – Comparable Tables 

Source: Capital IQ as of 06/30/2021

Power Generation – LTM Equity Performance 

Source: Capital IQ as of 06/30/2021

Power Generation – YTD Global M&A Activity 

Source: Capital IQ as of 06/30/2021

Energy Services – Comparable Tables 

Source: Capital IQ as of 06/30/2021

Energy Services – LTM Equity Performance 

Source: Capital IQ as of 06/30/2021

Energy Services – YTD Global M&A Activity 

Source: Capital IQ as of 06/30/2021

Mineral Energy – Comparable Tables 

Source: Capital IQ as of 06/30/2021

Mineral Energy – YTD Global LTM Equity Performance 

Source: Capital IQ as of 06/30/2021

Mineral Energy – YTD Global M&A Activity 

Source: Capital IQ as of 06/30/2021

Mineral Energy – YTD Energy Industry M&A Summary 

Source: Capital IQ as of 06/30/2021

NOBLE QUARTERLY HIGHLIGHTS

Gevo, Inc. – Nasdaq: GEVO

Industry: Energy – Green energy

CGevo’s mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel and diesel fuel, that when burned have potential to yield net-zero greenhouse gas emissions when measured across the full life cycle of the products. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials, and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared to standard petroleum fossil-based fuels across their life cycle).

2nd Quarter News Highlights:

June 8, 2021: Gevo announced that it expects to join the broad-market Russell 3000 Index at the conclusion of the 2021 Russell indexes annual reconstitution, effective after the US market opens on June 28, 2021, according to a preliminary list of additions posted June 4, 2021, by FTSE Russell.

encore Energy Corp. – OTCQB: ENCUF

Industry: Energy – Mineral energy; Uranium; Rare earth minerals and metals

enCore Energy Corp. is a U.S. domestic uranium developer focused on becoming a leading in-situ recovery (ISR) uranium producer. The Company is led by a team of industry experts with extensive knowledge and experience in the development and operations of in situ recovery uranium operations. enCore Energy’s opportunities are created from the Company’s transformational acquisition of its two South Texas production facilities, the changing global uranium supply/demand outlook and opportunities for industry consolidation.

2nd Quarter News Highlights:

April 6, 2021: The company announced a strategic acquisition of physical uranium with the objective of de-risking future uranium deliveries. The purchase consisted of 200,000 pounds at a spot market price of $29.65 per pound of U3O8.

Indonesia Energy Corporation – NYSE: INDO

Industry: Energy – Oil and gas; Exploration and production

Indonesia Energy Corporation Limited (NYSE American:INDO) is a publicly traded energy company engaged in the acquisition and development of strategic, high growth energy projects in Indonesia. IEC’s principal assets are its Kruh Block (63,000 acres) located onshore on the Island of Sumatra in Indonesia and its Citarum Block (1,000,000 acres) located onshore on the Island of Java in Indonesia. IEC is headquartered in Jakarta, Indonesia and has a representative office in Danville, California.

2nd Quarter News Highlights:

June 4, 2021: Indonesia Energy announced the successful completion of drilling at its first new well “Kruh Block” (also known as “Kruh 25”) to its absolute depth. Frank Ingriselli, President, commented on their positive outlook for shareholder value and cash flow growth after reaching this important milestone.

Source: Company Press Releases

DOWNLOAD THE FULL REPORT (PDF)

Noble Capital Markets Energy Newsletter Q2 2021

This newsletter was prepared and provided by Noble Capital Markets, Inc. For any questions and/or requests regarding this newsletter, please contact >Francisco Penafiel

DISCLAIMER

All statements or opinions contained herein that include the words “ we”,“ or “ are solely the responsibility of NOBLE Capital Markets, Inc and do not necessarily reflect statements or opinions expressed by any person or party affiliated with companies mentioned in this report Any opinions expressed herein are subject to change without notice All information provided herein is based on public and non public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on their own appraisal of the implications and risks of such decision This publication is intended for information purposes only and shall not constitute an offer to buy/ sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice Past performance is not indicative of future results.

Please refer to the above PDF for a complete list of disclaimers pertaining to this newsletter

Flotek Industries (FTK) – Second Quarter Results – Initial Thoughts

Tuesday, August 10, 2021

Flotek Industries (FTK)
Second Quarter Results – Initial Thoughts

Flotek Industries, Inc. creates solutions to reduce the environmental impact of energy on air, water, land and people. Flotek Industries, Inc. is a technology-driven, specialty chemistry and data company that helps customers across industrial, commercial and consumer markets improve their Environmental, Social and Governance performance. Flotek’s Chemistry Technologies segment develops, manufactures, packages, distributes, delivers, and markets high-quality cleaning, disinfecting and sanitizing products for commercial, governmental and personal consumer use. Additionally, Flotek empowers the energy industry to maximize the value of their hydrocarbon streams and improve return on invested capital through its real-time data platforms and green chemistry technologies. Flotek serves downstream, midstream and upstream customers, both domestic and international. Flotek is a publicly traded company headquartered in Houston, Texas, and its common shares are traded on the New York Stock Exchange under the ticker symbol “FTK.” For additional information, please visit Flotek’s web site at www.flotekind.com.

Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

    Revenues were disappointing. Flotek reported revenues of $9.2 million below 2021-1Q revenues of $11.8 million and our forecast of $12.6 million due to the loss of two significant customers. The loss offset a 26% sequential increase in energy chemical tech customers and 58% increase in service customers.

    Management offset lower revenues with lower costs.  Operating costs (excl. DDA) were $12.1 million down from 2021-1Q costs of $13.8 million and our estimate of $14.8 million. SG&A costs were $2.9 million versus $4.4 million in the previous quarter, which was also our estimate. By lowering costs, the company was able to report adjusted EBITDA of ($6.7) million roughly in line with previous quarters …



This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Release – Flotek Announces Second Quarter 2021 Results


Flotek Announces Second Quarter 2021 Results

 

HOUSTONAug. 9, 2021 /PRNewswire/ — Flotek Industries, Inc. (“Flotek” or the “Company”) (NYSE: FTK) today announced second quarter results for the three months ended June 30, 2021.

John W. Gibson, Jr., Chairman, President, and Chief Executive Officer stated, “Two of our most significant customers changed ownership on accelerated timelines in the second quarter, and both buyers suspended our forecasted business immediately following their closings. Excluding these events, customer growth and diversification was strong, with a 26% sequential increase of new customers in our energy chemistry technologies business. Additionally, our Data Analytics segment improved slightly, experiencing the third sequential improvement in sales and representing our highest performing quarter since our acquisition of JP3 last year.” 

“We remain focused on engaging with the industry to demonstrate the strategic benefits of our green chemistry solutions to support their ESG and operational goals. We are encouraged by the increased interest we are seeing in our value proposition; and to further accelerate these efforts, we have structurally realigned to reallocate resources to expand our sales team. This will support our strategy to diversify our customer base and expand our channels-to-market across the energy life cycle. Additionally, we are pleased that we have secured our first international sale for JP3 with a supermajor energy company in Southeast Asia, measuring hydrocarbons in their offshore operations – an exciting new frontier for our technologies.”

We also continued to improve our liquidity, supported by recent actions. We have completed a lease agreement for our Waller facility with Resolute Oil, converting it into a more marketable, income-generating property. Further, we are pleased we have attained full forgiveness of our JP3 PPP loan. Additionally, we are exploring a number of credit-enhancing options, including an asset-based line of credit.”

Second Quarter Financial Results

  • Consolidated Revenues: Flotek generated second quarter 2021 consolidated revenue of $9.2 million, up 3.4% from $8.9 million in the second quarter 2020, and was down 22.0% versus $11.8 million in the first quarter 2021. The sequential decline in sales was driven by the loss of revenue associated with two major energy customers through M&A activity. The year-over-year increase in revenue was driven by the acquisition of JP3 in May 2020.
  • Consolidated Operating Expenses: Consolidated operating expenses (excluding depreciation and amortization) were $12.1 million in the second quarter 2021, a 12.3% decline from $13.8 million in the first quarter 2021 driven by a continued reduction in costs of sales, as well as lowering operating expenses. Year over year, consolidated operating expenses (excluding depreciation and amortization) rose 4.1% and were flat as a percentage of revenue.
  • Corporate General & Administrative Expenses (CG&A): Corporate general and administrative expenses for the second quarter of 2021 were $2.9 million, compared to $5.4 million for the second quarter of 2020 and $4.4 million for the first quarter of 2021. The declines were primarily driven by lower personnel costs and the Employee Retention Credit (“ERC”) recorded in the second quarter.
  • Adjusted EBITDA:  Adjusted EBITDA for the second quarter 2021 was a loss of $6.7 million, slightly higher than the $6.5 million loss in the first quarter of 2021 and flat with the loss of $6.7 million last year. 
  • Net Loss: The Company reported a net loss for the second quarter 2021 of $6.5 million, or a loss of $0.09 per basic/diluted share, an improvement over the net loss in the second quarter 2020 of $9.6 million, or a loss of $0.14 per basic/diluted share. Net loss for the second quarter 2021 improved compared to the net loss for the first quarter of 2021 of $8.3 million, or a loss of $0.12 per basic/diluted share.

Balance Sheet and Liquidity
As of June 30, 2021, the Company had cash and equivalents of $27.8 million which were impacted by operating losses and partially offset by the ERC taken in the quarter. Flotek also had a combined $4.8 million of loans outstanding pursuant to the Paycheck Protection Program (“PPP”) related to the “Cares Act.” In the second quarter 2021, JP3 was given full forgiveness of its $881,000 loan, and recently, Flotek filed for forgiveness of its PPP loan. The Company has also completed a term sheet for an asset-based line of credit.

Chemistry Technologies Segment: Energy Chemistries and Professional Chemistries
In the second quarter 2021, sales in the Chemistry Technologies segment declined 3.4% year-over-year to $7.7 million. The decrease was primarily a result of the loss of sales from two energy customers impacted by M&A activity in the second quarter. Professional Chemistries improved sequentially driven by sales of degreasers and disinfectants.

Highlights from the quarter include:

  • Entered into a multi-year lease agreement with Resolute Oil, a leader in high-quality white mineral oil. The agreement will generate other income while offsetting costs for Flotek and will allow Resolute to utilize the Company’s chemical blending facility in Waller, Texas to manufacture and globally distribute USP-NF-grade white mineral oil. Additionally, the collaboration between Flotek and Resolute will enable the companies to leverage their expertise in adjacent market verticals for mutual benefit. The agreement includes options to renew until 2036.
  • In support of the Company’s efforts to accelerate its ESG (Environmental, Social & Governance) solutions for domestic and international E&P operators and service companies across the energy life cycle, Flotek realigned and reallocated resources to build out its sales and marketing talent. The reallocation will result in a net, annualized cost savings of more than $1 million in salaries and benefits, while doubling the headcount in the sales force.
  • Following a successful field trial for a customer in the Permian Basin, the customer expanded its green, reservoir-centric chemistry technologies to new unconventional basins and technology applications.
  • Secured multiple remediation treatment applications of its Complex nano-fluid® technologies, the Company’s bio-based, high-performance chemistry built upon non-toxic, plant-based solvents. The technology is enabling Flotek’s customers to cost effectively remove the use of BTEX (benzene, toluene, ethylbenzene and xylene) and other harmful solvents thus reducing the environmental risk of their remediation and production programs.
  • Following its strategic focus to rebuild its indirect sales channel relationships, the Company grew its customer base and domestic revenue associated with service companies by 58% and 68%, respectively, over Q1 2021.
  • Partnered with a major customer to begin an ESG scorecard assessment of their chemistry usage, identifying new opportunities to support their ESG goals.
  • Increased sales in the Professional Chemistries business, driven by strength in janitorial disinfectants and cleaning products, as well as establishing new contractual relationships with leading large-scale distributors and redistributors.

Data Analytics Segment
In the second quarter 2021, Data Analytics’ (“JP3”) sales were flat with first quarter 2021. Second quarter 2021 revenue was driven by the addition of new customers and new purchases by existing customers. Flotek acquired JP3 in May 2020, and as a result full quarter year-over-year results are not available for comparison. Highlights include:

  • In the second quarter 2021, JP3 completed the specifications and manufacturing of the international Verax analyzer prototype.
  • JP3 is currently undergoing the extensive process to secure the approvals from multiple international certifying bodies to ready the equipment for deployment.
  • JP3 received its first international purchase order supporting a supermajor energy company in Southeast Asia. This order also represents JP3’s first offshore deployment, expanding both its application use cases and geographical footprint.
  • International pilot programs that began in the first quarter remain on-track. 

Conference Call Details
Flotek will host a conference call on Tuesday, August 10, 2021, at 8:30 am CDT (9:30 a.m. EDT) to discuss its second quarter results for the three months ended June 30, 2021. Participants may access the call through Flotek’s website at www.flotekind.com under “Webcasts” or by telephone at 844-835-9986.

About Flotek Industries, Inc.
Flotek Industries, Inc. creates solutions to reduce the environmental impact of energy on air, water, land and people. A technology-driven, specialty green chemistry and data company, Flotek helps customers across industrial, commercial, and consumer markets improve their Environmental, Social, and Governance performance. Flotek’s Chemistry Technologies segment develops, manufactures, packages, distributes, delivers, and markets high-quality cleaning, disinfecting and sanitizing products for commercial, governmental and personal consumer use. Additionally, Flotek empowers the energy industry to maximize the value of their hydrocarbon streams and improve return on invested capital through its real-time data platforms and green chemistry technologies. Flotek serves downstream, midstream, and upstream customers, both domestic and international. Flotek is a publicly traded company headquartered in Houston, Texas, and its common shares are traded on the New York Stock Exchange under the ticker symbol “FTK.” For additional information, please visit www.flotekind.com.

Forward-Looking Statements
Certain statements set forth in this press release constitute forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) regarding Flotek Industries, Inc.’s business, financial condition, results of operations and prospects. Words such as will, continue, expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this press release.  Although forward-looking statements in this press release reflect the good faith judgment of management, such statements can only be based on facts and factors currently known to management.  Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements.  Further information about the risks and uncertainties that may impact the Company are set forth in the Company’s most recent filing with the Securities and Exchange Commission on Form 10-K (including, without limitation, in the “Risk Factors” section thereof), and in the Company’s other SEC filings and publicly available documents.  Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this press release.

Flotek Industries, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share data)






June 30, 2021


December 31, 2020

ASSETS




Current assets:




Cash and cash equivalents

$                     27,781


$                     38,660

Restricted cash

40


664

Accounts receivable, net of allowance for doubtful accounts of $1,329




and $1,316 at June 30, 2021 and December 31, 2020, respectively

9,713


11,764

Inventories, net

11,499


11,837

Income taxes receivable

71


403

Other current assets

3,255


3,127

Assets held for sale

546


Total current assets

52,905


66,455

Property and equipment, net

8,017


9,087

Operating lease right-of-use assets

2,162


2,320

Goodwill

8,092


8,092

Deferred tax assets, net

213


223

Other long-term assets

29


33

TOTAL ASSETS

$                     71,418


$                     86,210

LIABILITIES AND STOCKHOLDERS’ & EQUITY




Current liabilities:




Accounts payable

$                       6,587


$                       5,787

Accrued liabilities

17,221


18,275

Income taxes payable

39


21

Interest payable

58


34

Current portion of operating lease liabilities

589


636

Current portion of finance lease liabilities

55


60

Current portion of long-term debt

4,788


4,048

Total current liabilities

29,337


28,861

Deferred revenue, long-term

104


117

Long-term operating lease liabilities

8,011


8,348

Long-term finance lease liabilities

72


96

Long-term debt

0


1,617

TOTAL LIABILITIES

37,524


39,039

Stockholders’ Equity:




Preferred stock, $0.0001 par value, 100,000 shares authorized; no shares issued




and outstanding


Common stock, $0.0001 par value, 140,000,000 shares authorized; 79,606,743




shares issued and 70,152,591 shares outstanding at June 30, 2021;




78,669,414 shares issued and 73,088,494 shares outstanding at December 31, 2020

8


8

Additional paid-in capital

361,424


359,721

Accumulated other comprehensive income (loss)

13


(19)

Accumulated deficit

(293,534)


(278,688)

Treasury stock, at cost; 5,627,646 and 5,580,920 shares at June 30, 2021




and December 31, 2020, respectively

(34,017)


(33,851)

Total stockholders’ equity

33,894


47,171

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$                     71,418


$                     86,210

Flotek Industries, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)




Three Months Ended


Six Months Ended


6/30/2021


6/30/2020


3/31/2021


6/30/2021


6/30/2020











Revenue

$             9,165


$             8,880


$          11,770


$          20,935


$          28,296

Costs and expenses:










Operating expenses (excluding depreciation and amortization)

12,110


11,632


13,801


25,911


34,473

Corporate general and administrative

2,868


5,395


4,361


7,229


9,888

Depreciation and amortization

253


468


307


560


2,659

Research and development

1,466


1,638


1,542


3,008


4,193

Loss (gain) on disposal of long-lived assets

(71)


(22)


2


(69)


(55)

Impairment of fixed, long-lived and intangible assets





57,454

Total costs and expenses

16,626


19,111


20,013


36,639


108,612

Loss from operations

(7,461)


(10,231)


(8,243)


(15,704)


(80,316)

Other (expense) income:










Payment Protection Program forgiveness

881




881


      Gain on lease termination


576




576

Interest expense

(17)


(16)


(18)


(35)


(20)

Other (expense) income, net

72


78


(32)


39


31

Total other (expense) income, net

936


638


(51)


885


587

Loss before income taxes

(6,525)


(9,593)


(8,294)


(14,819)


(79,729)

Income tax (expense) benefit

(21)


32


(6)


(27)


6,201

Net loss

(6,546)


(9,561)


(8,300)


(14,846)


(73,528)











Loss per common share:










Basic

$             (0.09)


$             (0.14)


$             (0.12)


$             (0.22)


$             (1.17)

Diluted

$             (0.09)


$             (0.14)


$             (0.12)


$             (0.22)


$             (1.17)











Weighted average common shares:










Weighted average common shares used in computing basic and diluted loss per common share

69,531


66,035


68,447


69,001


62,828

Flotek Industries, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)







Six  months ended June 30,



2021


2020


Cash flows from operating activities:





Net loss

$           (14,846)


$           (73,528)


Adjustments to reconcile net loss to net cash used in operating activities:





Change in fair value of contingent consideration

(302)



Depreciation and amortization

560


2,659


Provision for doubtful accounts

(1)


474


Provision for excess and obsolete inventory

580


529


Impairment of right-of-use assets


7,434


Impairment of fixed assets


30,178


Impairment of intangible assets


19,842


Gain on sale of assets

(69)


(631)


Non-cash lease expense

163


242


Stock compensation expense

1,750


1,521


Deferred income tax provision (benefit)

10


(105)


PPP loan forgiveness

(881)



Changes in current assets and liabilities:





Accounts receivable, net

1,995


7,252


Inventories, net

(222)


6,418


Income taxes receivable

207


(6,351)


Other current assets

(672)


1,715


Other long-term assets

541



Accounts payable

801


(10,229)


Accrued liabilities

(1,048)


(16,755)


Income taxes payable

168


119


Interest payable

24



Net cash used in operating activities

(11,242)


(29,216)


Cash flows from investing activities:





Capital expenditures

(31)


(42)


Proceeds from sale of business


9,844


Proceeds from sale of assets

74


66


Purchase of JP3, net of cash acquired


(26,284)


Abandonment of patents and other intangible assets


(8)


Net cash provided by (used in) by investing activities

43


(16,424)


Cash flows from financing activities:





Proceeds from Paycheck Protection Program loan


4,798


Purchase of treasury stock

(78)


(82)


Proceeds from sale of common stock

(166)


358


Payments for finance leases

(29)


(51)


Net cash (used in) provided  by financing activities

(273)


5,023


Effect of changes in exchange rates on cash and cash equivalents

(31)


(31)


Net change in cash, cash equivalents and restricted cash

(11,503)


(40,648)


Cash and cash equivalents at beginning of period

38,660


100,575


Restricted cash at beginning of period

664


663


Cash and cash equivalents and restricted cash at beginning of period

39,324


101,238


Cash and cash equivalents at end of period

27,781


59,926


Restricted cash at the end of period

40


664


Cash, cash equivalents and restricted cash at end of period

$             27,821


$             60,590


Flotek Industries, Inc.

Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings

(in thousands)















GAAP Loss from Operations and Reconciliation to Adjusted EBITDA (Non-GAAP)

























Three Months Ended


Six Months Ended






6/30/2021


6/30/2020


3/31/2021


6/30/2021


6/30/2020





























Loss from Operations (GAAP)




$    (6,546)


$    (9,561)


$     (8,300)


$  (14,846)


$  (73,528)
















Interest Expense



17


16


18


35


20
















Interest Income




(3)


12


(5)


(8)


(257)
















Income Tax Benefit (Expense)



21


(32)


6


27


(6,201)
















Depreciation and Amortization



253


468


307


560


2,659
















Impairment of Fixed and Long Lived Assets






57,454















EBITDA (Non-GAAP)




$    (6,258)


$    (9,097)


$     (7,974)


$  (14,232)


$  (19,853)
















Stock Compensation Expense



969


1,059


738


1,707


1,521
















Severance and Retirement



946


1,227


33


979


2,765
















Inventory Write-Down







2,293
















M&A Transaction Costs



100


498


(157)


(57)


498
















Inventory Step-Up



32


155


48


80


155
















(Gain) loss on Disposal of Assets



(71)


(22)


2


(69)


(55)
















Gain on Lease Termination




(576)




(576)
















PPP Loan Forgiveness



(881)




(881)

















Employee Retention Credit



(1,923)




(1,923)

















Non-recurring Professional Fees



447



147


594

















Discontinued Legal Fees



(59)


73


518


459


322
















Winter Storm (Natural Disaster)





199


199
















Adjusted EBITDA (Non-GAAP)




$    (6,698)


$    (6,683)


$     (6,446)


$  (13,144)


$  (12,930)















(1) Management believes that adjusted EBITDA for the three and six months ended June 30, 2021 and June 30, 2020, and the three months ended March 31, 2021, is useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods. Management views the expenses noted above to be outside of the Company’s normal operating results. Management analyzes operating results without the impact of the above items as an indicator of performance, to identify underlying trends in the business and cash flow from continuing operations, and to establish operational goals.

SOURCE Flotek Industries, Inc.

Flotek Announces Second Quarter 2021 Results


Flotek Announces Second Quarter 2021 Results

 

HOUSTONAug. 9, 2021 /PRNewswire/ — Flotek Industries, Inc. (“Flotek” or the “Company”) (NYSE: FTK) today announced second quarter results for the three months ended June 30, 2021.

John W. Gibson, Jr., Chairman, President, and Chief Executive Officer stated, “Two of our most significant customers changed ownership on accelerated timelines in the second quarter, and both buyers suspended our forecasted business immediately following their closings. Excluding these events, customer growth and diversification was strong, with a 26% sequential increase of new customers in our energy chemistry technologies business. Additionally, our Data Analytics segment improved slightly, experiencing the third sequential improvement in sales and representing our highest performing quarter since our acquisition of JP3 last year.” 

“We remain focused on engaging with the industry to demonstrate the strategic benefits of our green chemistry solutions to support their ESG and operational goals. We are encouraged by the increased interest we are seeing in our value proposition; and to further accelerate these efforts, we have structurally realigned to reallocate resources to expand our sales team. This will support our strategy to diversify our customer base and expand our channels-to-market across the energy life cycle. Additionally, we are pleased that we have secured our first international sale for JP3 with a supermajor energy company in Southeast Asia, measuring hydrocarbons in their offshore operations – an exciting new frontier for our technologies.”

We also continued to improve our liquidity, supported by recent actions. We have completed a lease agreement for our Waller facility with Resolute Oil, converting it into a more marketable, income-generating property. Further, we are pleased we have attained full forgiveness of our JP3 PPP loan. Additionally, we are exploring a number of credit-enhancing options, including an asset-based line of credit.”

Second Quarter Financial Results

  • Consolidated Revenues: Flotek generated second quarter 2021 consolidated revenue of $9.2 million, up 3.4% from $8.9 million in the second quarter 2020, and was down 22.0% versus $11.8 million in the first quarter 2021. The sequential decline in sales was driven by the loss of revenue associated with two major energy customers through M&A activity. The year-over-year increase in revenue was driven by the acquisition of JP3 in May 2020.
  • Consolidated Operating Expenses: Consolidated operating expenses (excluding depreciation and amortization) were $12.1 million in the second quarter 2021, a 12.3% decline from $13.8 million in the first quarter 2021 driven by a continued reduction in costs of sales, as well as lowering operating expenses. Year over year, consolidated operating expenses (excluding depreciation and amortization) rose 4.1% and were flat as a percentage of revenue.
  • Corporate General & Administrative Expenses (CG&A): Corporate general and administrative expenses for the second quarter of 2021 were $2.9 million, compared to $5.4 million for the second quarter of 2020 and $4.4 million for the first quarter of 2021. The declines were primarily driven by lower personnel costs and the Employee Retention Credit (“ERC”) recorded in the second quarter.
  • Adjusted EBITDA:  Adjusted EBITDA for the second quarter 2021 was a loss of $6.7 million, slightly higher than the $6.5 million loss in the first quarter of 2021 and flat with the loss of $6.7 million last year. 
  • Net Loss: The Company reported a net loss for the second quarter 2021 of $6.5 million, or a loss of $0.09 per basic/diluted share, an improvement over the net loss in the second quarter 2020 of $9.6 million, or a loss of $0.14 per basic/diluted share. Net loss for the second quarter 2021 improved compared to the net loss for the first quarter of 2021 of $8.3 million, or a loss of $0.12 per basic/diluted share.

Balance Sheet and Liquidity
As of June 30, 2021, the Company had cash and equivalents of $27.8 million which were impacted by operating losses and partially offset by the ERC taken in the quarter. Flotek also had a combined $4.8 million of loans outstanding pursuant to the Paycheck Protection Program (“PPP”) related to the “Cares Act.” In the second quarter 2021, JP3 was given full forgiveness of its $881,000 loan, and recently, Flotek filed for forgiveness of its PPP loan. The Company has also completed a term sheet for an asset-based line of credit.

Chemistry Technologies Segment: Energy Chemistries and Professional Chemistries
In the second quarter 2021, sales in the Chemistry Technologies segment declined 3.4% year-over-year to $7.7 million. The decrease was primarily a result of the loss of sales from two energy customers impacted by M&A activity in the second quarter. Professional Chemistries improved sequentially driven by sales of degreasers and disinfectants.

Highlights from the quarter include:

  • Entered into a multi-year lease agreement with Resolute Oil, a leader in high-quality white mineral oil. The agreement will generate other income while offsetting costs for Flotek and will allow Resolute to utilize the Company’s chemical blending facility in Waller, Texas to manufacture and globally distribute USP-NF-grade white mineral oil. Additionally, the collaboration between Flotek and Resolute will enable the companies to leverage their expertise in adjacent market verticals for mutual benefit. The agreement includes options to renew until 2036.
  • In support of the Company’s efforts to accelerate its ESG (Environmental, Social & Governance) solutions for domestic and international E&P operators and service companies across the energy life cycle, Flotek realigned and reallocated resources to build out its sales and marketing talent. The reallocation will result in a net, annualized cost savings of more than $1 million in salaries and benefits, while doubling the headcount in the sales force.
  • Following a successful field trial for a customer in the Permian Basin, the customer expanded its green, reservoir-centric chemistry technologies to new unconventional basins and technology applications.
  • Secured multiple remediation treatment applications of its Complex nano-fluid® technologies, the Company’s bio-based, high-performance chemistry built upon non-toxic, plant-based solvents. The technology is enabling Flotek’s customers to cost effectively remove the use of BTEX (benzene, toluene, ethylbenzene and xylene) and other harmful solvents thus reducing the environmental risk of their remediation and production programs.
  • Following its strategic focus to rebuild its indirect sales channel relationships, the Company grew its customer base and domestic revenue associated with service companies by 58% and 68%, respectively, over Q1 2021.
  • Partnered with a major customer to begin an ESG scorecard assessment of their chemistry usage, identifying new opportunities to support their ESG goals.
  • Increased sales in the Professional Chemistries business, driven by strength in janitorial disinfectants and cleaning products, as well as establishing new contractual relationships with leading large-scale distributors and redistributors.

Data Analytics Segment
In the second quarter 2021, Data Analytics’ (“JP3”) sales were flat with first quarter 2021. Second quarter 2021 revenue was driven by the addition of new customers and new purchases by existing customers. Flotek acquired JP3 in May 2020, and as a result full quarter year-over-year results are not available for comparison. Highlights include:

  • In the second quarter 2021, JP3 completed the specifications and manufacturing of the international Verax analyzer prototype.
  • JP3 is currently undergoing the extensive process to secure the approvals from multiple international certifying bodies to ready the equipment for deployment.
  • JP3 received its first international purchase order supporting a supermajor energy company in Southeast Asia. This order also represents JP3’s first offshore deployment, expanding both its application use cases and geographical footprint.
  • International pilot programs that began in the first quarter remain on-track. 

Conference Call Details
Flotek will host a conference call on Tuesday, August 10, 2021, at 8:30 am CDT (9:30 a.m. EDT) to discuss its second quarter results for the three months ended June 30, 2021. Participants may access the call through Flotek’s website at www.flotekind.com under “Webcasts” or by telephone at 844-835-9986.

About Flotek Industries, Inc.
Flotek Industries, Inc. creates solutions to reduce the environmental impact of energy on air, water, land and people. A technology-driven, specialty green chemistry and data company, Flotek helps customers across industrial, commercial, and consumer markets improve their Environmental, Social, and Governance performance. Flotek’s Chemistry Technologies segment develops, manufactures, packages, distributes, delivers, and markets high-quality cleaning, disinfecting and sanitizing products for commercial, governmental and personal consumer use. Additionally, Flotek empowers the energy industry to maximize the value of their hydrocarbon streams and improve return on invested capital through its real-time data platforms and green chemistry technologies. Flotek serves downstream, midstream, and upstream customers, both domestic and international. Flotek is a publicly traded company headquartered in Houston, Texas, and its common shares are traded on the New York Stock Exchange under the ticker symbol “FTK.” For additional information, please visit www.flotekind.com.

Forward-Looking Statements
Certain statements set forth in this press release constitute forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) regarding Flotek Industries, Inc.’s business, financial condition, results of operations and prospects. Words such as will, continue, expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this press release.  Although forward-looking statements in this press release reflect the good faith judgment of management, such statements can only be based on facts and factors currently known to management.  Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements.  Further information about the risks and uncertainties that may impact the Company are set forth in the Company’s most recent filing with the Securities and Exchange Commission on Form 10-K (including, without limitation, in the “Risk Factors” section thereof), and in the Company’s other SEC filings and publicly available documents.  Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this press release.

Flotek Industries, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share data)






June 30, 2021


December 31, 2020

ASSETS




Current assets:




Cash and cash equivalents

$                     27,781


$                     38,660

Restricted cash

40


664

Accounts receivable, net of allowance for doubtful accounts of $1,329




and $1,316 at June 30, 2021 and December 31, 2020, respectively

9,713


11,764

Inventories, net

11,499


11,837

Income taxes receivable

71


403

Other current assets

3,255


3,127

Assets held for sale

546


Total current assets

52,905


66,455

Property and equipment, net

8,017


9,087

Operating lease right-of-use assets

2,162


2,320

Goodwill

8,092


8,092

Deferred tax assets, net

213


223

Other long-term assets

29


33

TOTAL ASSETS

$                     71,418


$                     86,210

LIABILITIES AND STOCKHOLDERS’ & EQUITY




Current liabilities:




Accounts payable

$                       6,587


$                       5,787

Accrued liabilities

17,221


18,275

Income taxes payable

39


21

Interest payable

58


34

Current portion of operating lease liabilities

589


636

Current portion of finance lease liabilities

55


60

Current portion of long-term debt

4,788


4,048

Total current liabilities

29,337


28,861

Deferred revenue, long-term

104


117

Long-term operating lease liabilities

8,011


8,348

Long-term finance lease liabilities

72


96

Long-term debt

0


1,617

TOTAL LIABILITIES

37,524


39,039

Stockholders’ Equity:




Preferred stock, $0.0001 par value, 100,000 shares authorized; no shares issued




and outstanding


Common stock, $0.0001 par value, 140,000,000 shares authorized; 79,606,743




shares issued and 70,152,591 shares outstanding at June 30, 2021;




78,669,414 shares issued and 73,088,494 shares outstanding at December 31, 2020

8


8

Additional paid-in capital

361,424


359,721

Accumulated other comprehensive income (loss)

13


(19)

Accumulated deficit

(293,534)


(278,688)

Treasury stock, at cost; 5,627,646 and 5,580,920 shares at June 30, 2021




and December 31, 2020, respectively

(34,017)


(33,851)

Total stockholders’ equity

33,894


47,171

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$                     71,418


$                     86,210

Flotek Industries, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)




Three Months Ended


Six Months Ended


6/30/2021


6/30/2020


3/31/2021


6/30/2021


6/30/2020











Revenue

$             9,165


$             8,880


$          11,770


$          20,935


$          28,296

Costs and expenses:










Operating expenses (excluding depreciation and amortization)

12,110


11,632


13,801


25,911


34,473

Corporate general and administrative

2,868


5,395


4,361


7,229


9,888

Depreciation and amortization

253


468


307


560


2,659

Research and development

1,466


1,638


1,542


3,008


4,193

Loss (gain) on disposal of long-lived assets

(71)


(22)


2


(69)


(55)

Impairment of fixed, long-lived and intangible assets





57,454

Total costs and expenses

16,626


19,111


20,013


36,639


108,612

Loss from operations

(7,461)


(10,231)


(8,243)


(15,704)


(80,316)

Other (expense) income:










Payment Protection Program forgiveness

881




881


      Gain on lease termination


576




576

Interest expense

(17)


(16)


(18)


(35)


(20)

Other (expense) income, net

72


78


(32)


39


31

Total other (expense) income, net

936


638


(51)


885


587

Loss before income taxes

(6,525)


(9,593)


(8,294)


(14,819)


(79,729)

Income tax (expense) benefit

(21)


32


(6)


(27)


6,201

Net loss

(6,546)


(9,561)


(8,300)


(14,846)


(73,528)











Loss per common share:










Basic

$             (0.09)


$             (0.14)


$             (0.12)


$             (0.22)


$             (1.17)

Diluted

$             (0.09)


$             (0.14)


$             (0.12)


$             (0.22)


$             (1.17)











Weighted average common shares:










Weighted average common shares used in computing basic and diluted loss per common share

69,531


66,035


68,447


69,001


62,828

Flotek Industries, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)







Six  months ended June 30,



2021


2020


Cash flows from operating activities:





Net loss

$           (14,846)


$           (73,528)


Adjustments to reconcile net loss to net cash used in operating activities:





Change in fair value of contingent consideration

(302)



Depreciation and amortization

560


2,659


Provision for doubtful accounts

(1)


474


Provision for excess and obsolete inventory

580


529


Impairment of right-of-use assets


7,434


Impairment of fixed assets


30,178


Impairment of intangible assets


19,842


Gain on sale of assets

(69)


(631)


Non-cash lease expense

163


242


Stock compensation expense

1,750


1,521


Deferred income tax provision (benefit)

10


(105)


PPP loan forgiveness

(881)



Changes in current assets and liabilities:





Accounts receivable, net

1,995


7,252


Inventories, net

(222)


6,418


Income taxes receivable

207


(6,351)


Other current assets

(672)


1,715


Other long-term assets

541



Accounts payable

801


(10,229)


Accrued liabilities

(1,048)


(16,755)


Income taxes payable

168


119


Interest payable

24



Net cash used in operating activities

(11,242)


(29,216)


Cash flows from investing activities:





Capital expenditures

(31)


(42)


Proceeds from sale of business


9,844


Proceeds from sale of assets

74


66


Purchase of JP3, net of cash acquired


(26,284)


Abandonment of patents and other intangible assets


(8)


Net cash provided by (used in) by investing activities

43


(16,424)


Cash flows from financing activities:





Proceeds from Paycheck Protection Program loan


4,798


Purchase of treasury stock

(78)


(82)


Proceeds from sale of common stock

(166)


358


Payments for finance leases

(29)


(51)


Net cash (used in) provided  by financing activities

(273)


5,023


Effect of changes in exchange rates on cash and cash equivalents

(31)


(31)


Net change in cash, cash equivalents and restricted cash

(11,503)


(40,648)


Cash and cash equivalents at beginning of period

38,660


100,575


Restricted cash at beginning of period

664


663


Cash and cash equivalents and restricted cash at beginning of period

39,324


101,238


Cash and cash equivalents at end of period

27,781


59,926


Restricted cash at the end of period

40


664


Cash, cash equivalents and restricted cash at end of period

$             27,821


$             60,590


Flotek Industries, Inc.

Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings

(in thousands)















GAAP Loss from Operations and Reconciliation to Adjusted EBITDA (Non-GAAP)

























Three Months Ended


Six Months Ended






6/30/2021


6/30/2020


3/31/2021


6/30/2021


6/30/2020





























Loss from Operations (GAAP)




$    (6,546)


$    (9,561)


$     (8,300)


$  (14,846)


$  (73,528)
















Interest Expense



17


16


18


35


20
















Interest Income




(3)


12


(5)


(8)


(257)
















Income Tax Benefit (Expense)



21


(32)


6


27


(6,201)
















Depreciation and Amortization



253


468


307


560


2,659
















Impairment of Fixed and Long Lived Assets






57,454















EBITDA (Non-GAAP)




$    (6,258)


$    (9,097)


$     (7,974)


$  (14,232)


$  (19,853)
















Stock Compensation Expense



969


1,059


738


1,707


1,521
















Severance and Retirement



946


1,227


33


979


2,765
















Inventory Write-Down







2,293
















M&A Transaction Costs



100


498


(157)


(57)


498
















Inventory Step-Up



32


155


48


80


155
















(Gain) loss on Disposal of Assets



(71)


(22)


2


(69)


(55)
















Gain on Lease Termination




(576)




(576)
















PPP Loan Forgiveness



(881)




(881)

















Employee Retention Credit



(1,923)




(1,923)

















Non-recurring Professional Fees



447



147


594

















Discontinued Legal Fees



(59)


73


518


459


322
















Winter Storm (Natural Disaster)





199


199
















Adjusted EBITDA (Non-GAAP)




$    (6,698)


$    (6,683)


$     (6,446)


$  (13,144)


$  (12,930)















(1) Management believes that adjusted EBITDA for the three and six months ended June 30, 2021 and June 30, 2020, and the three months ended March 31, 2021, is useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods. Management views the expenses noted above to be outside of the Company’s normal operating results. Management analyzes operating results without the impact of the above items as an indicator of performance, to identify underlying trends in the business and cash flow from continuing operations, and to establish operational goals.

SOURCE Flotek Industries, Inc.