Xethanol Corp. (AMEX:XNL)
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Xethanol Corporation (AMEX: XNL), a renewable energy company, today
reported financial results for the fiscal year ended December 31, 2007.
For the twelve months ended December 31, 2007, the company reported a
net loss of $31.3 million, or ($1.09) per share, as compared to a $20.2
million net loss, or ($0.93) per share, for the same period of the prior
year. The increase in the net loss was primarily related to non-cash
charges of $18.3 million, including a $12.2 million impairment charge on
property previously held for development. For the fiscal year ended
December 31, 2007, the weighted average number of shares outstanding was
28.6 million as compared to 21.6 million weighted average shares for the
comparable period in 2006.
David Ames, President and CEO of Xethanol, commented, “2007
was a transition year for the company. It was a year in which we took
necessary and sometimes difficult actions that worsened our financial
results in the near-term, but which we believe will better position the
company for growth. 2007 was also a year in which we made progress on
initiatives undertaken in prior years.” Added
Mr. Ames, “There are numerous opportunities in
the market for alternate energy, and we are already in discussion with
some potential partners.”
Review of the Year
The company reported net sales of $11.0 million in 2007, flat with the
prior year. The company’s Blairstown, Iowa
plant produced 5.4 million gallons of ethanol during 2007 at an average
price of $1.87 per gallon. By-products generated additional revenue of
$1.0 million. This compares to 5.2 million gallons of ethanol sold at an
average price of $1.99 per gallon and $664,000 from the sale of
by-products in 2006.
Cost of goods sold was $12.7 million for the year as compared to $10.1
million in the prior year. The increase was attributable to the higher
cost of corn and fuel compared to the same period in the prior year.
General and administrative (G&A) costs were $10.1 million in 2007 as
compared to $7.9 million for the comparable period in the prior year.
The increase in G&A was primarily due to an increase in legal and
accounting fees as well as a full year of ownership in the Spring Hope,
North Carolina facility in 2007 as compared to just two months in 2006.
During 2007, the company incurred impairment losses of $12.2 million,
which were comprised of:
1. a $7.0 million impairment of the Spring Hope facility;
2. a $2.6 million impairment of a previously planned second facility at
Blairstown;
3. a $2.1 million impairment of the Augusta, Georgia facility; and
4. a $521,000 impairment loss on the Permeate assets, which was sold in
November 2007.
On December 31, 2007, the company had cash, cash equivalents and
marketable securities of $12.3 million. Cash and cash equivalents were
$9.5 million on March 14, 2008.
Business Update
During 2007, the company broadened its business strategy to pursue
opportunities in renewable energy and clean technology, including
biomass gasification for electricity production, wind power, solar
power, energy storage, energy infrastructure, energy efficiency, waste
recycling and agricultural processes. As part of this initiative,
subsequent to year-end 2007, Xethanol made an investment in Carbon
Motors Corporation, a new American automaker developing a specially
built law enforcement vehicle featuring a clean diesel engine that can
run on biodiesel fuel. The company also made a $500,000 investment in
Consus Ethanol, LLC., which has a permitted site in western
Pennsylvania, where it plans to build the first of several ethanol plants.
Its business model calls for a cogeneration plant using waste coal to
power the companion ethanol plant -- allowing significant energy cost
savings.
In addition:
As previously announced, the company is planning to build a
demonstration plant in Florida to convert citrus peel waste into
ethanol. Xethanol is pursuing financing options for this facility.
Because of the continued high prices for corn and natural gas, as well
as the changing ethanol market and volatile capital markets, the
company has indefinitely deferred construction of a second
corn-to-ethanol facility next to its Blairstown facility and is
considering cutting back its production of ethanol at its Blairstown
facility until market prices for ethanol improve and costs decline.
With the change in strategy, the company’s
Spring Hope, North Carolina and Augusta, Georgia sites no longer fit
into its long-term business plan. Xethanol recorded a $9.1 million
impairment expense for these facilities and has decided to sell both
of them.
The company has also decided not to manufacture and sell a diesel
biofuel based on technology from H2Diesel and has begun liquidating
its share position in H2Diesel.
About Xethanol Corporation
Xethanol Corporation is a renewable energy company focused on alternate
energy products and technologies as well as producing ethanol and other
co-products. Xethanol is focusing on renewable energy and clean
technology, including biomass gasification for electricity production,
wind power, solar power, energy storage, energy infrastructure, energy
efficiency, waste recycling and agricultural processes.
Xethanol has research agreements in place, including several aimed at
efficient production of cellulosic ethanol. The company is working with
some of the nation’s leading scientific
institutions, including the National Renewable Energy Lab in Golden,
Colorado; Virginia Tech in Blacksburg, Virginia; the USDA Forest
Products Lab in Madison, Wisconsin; and the Energy and Environmental
Research Lab in Grand Forks, North Dakota.
For more information about Xethanol, please visit its website at http://www.xethanol.com.
Forward Looking Statements
Some of the statements made 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 are
based on management’s current expectations and
include known and unknown risks, uncertainties and other factors, many
of which the company is unable to predict or control, that may cause the
company’s actual results or performance to
differ materially from any future results or performance expressed or
implied by such forward-looking statements. These statements involve
risks and uncertainties, including risks and uncertainties associated
with the company’s development and financing
plans, business strategy and research projects, including whether the
projects will produce the anticipated results; whether the company will
be able to sell two of its facilities as it plans; and whether the
company’s investments will prove to be
successful. These risks and uncertainties are in addition to other
factors detailed from time to time in the company’s
filings with the SEC, including the section entitled “Risk
Factors” in its annual report on Form 10-K
for the year ended December 31, 2007 filed with the SEC on March 31,
2008. The company cautions investors that any forward-looking statements
made by the company are not necessarily indicative of future
performance. The company is not responsible for updating the information
contained in this press release beyond the published date, or for
changes made to this document by wire services or Internet services.
XETHANOL CORPORATION
Consolidated Statement of Operations
(in thousands, except per share data)
Year Ended December 31,
2007
2006
Net sales
$
11,037
$
11,029
Cost of sales, including depreciation of $461 and $451 for 2007
and 2006, respectively
12,686
10,091
Gross (loss) profit
(1,649
)
938
Operating expenses:
General and administrative expenses
10,110
7,932
Equity compensation
3,974
7,022
Depreciation and amortization
338
341
Impairment loss on property
12,249
514
Research and development
601
852
Total operating expenses
27,272
16,661
Loss from operations before other (expense) income
(28,921
)
(15,723
)
Other (expense) income:
Interest income
746
1,184
Interest expense
(55
)
(217
)
Loss on marketable securities
(1,589
)
-
Impairment loss - investment in H2Diesel Holdings, Inc.
-
(2,322
)
Loss on equity of H2Diesel Holdings, Inc.
(1,236
)
(1,626
)
Loss on royalty note conversion
-
(1,967
)
Legal settlement costs
(400
)
-
Other income
178
492
Total other (expense) income
(2,356
)
(4,456
)
Net loss
$
(31,277
)
$
(20,179
)
Basic and diluted net loss per share
$
(1.09
)
$
(0.93
)
Weighted average number of
shares outstanding
28,592,919
21,604,355
XETHANOL CORPORATION
Consolidated Balance Sheets
(in thousands)
December 31,2007
December 31,2006
ASSETS
Current assets:
Cash and cash equivalents
$
12,322
$
24,183
Receivables
564
582
Inventories
294
291
Other current assets
879
846
Total current assets
14,059
25,902
Property and equipment, net
4,316
8,596
Property held for development
554
12,553
Property previously held for development
5,416
-
Investment in and advances to H2Diesel Holdings, Inc.
647
1,963
Research and license agreements, net of amortization of $409 and
$136 in 2007 and 2006, respectively
623
895
Other assets
403
1,537
TOTAL ASSETS
$
26,018
$
51,446
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
3,221
$
1,229
Accounts payable - related parties
-
318
Total current liabilities
3,221
1,547
Note payable
295
310
Minority interest
116
116
Capitalized lease obligation
14
22
Total liabilities
3,646
1,995
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized; 0
shares issued and outstanding
-
-
Common stock, $0.001 par value, 100,000,000 shares authorized;
28,609,103 and 28,497,648 shares issued and outstanding in 2007
and 2006, respectively
29
28
Additional paid-in-capital
89,171
84,974
Accumulated deficit
(66,828
)
(35,551
)
Total stockholders' equity
22,372
49,451
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
26,018
$
51,446