Pure Cycle Corporation Announces First Quarter Fiscal 2011 Financial Results

DENVER, Jan. 7, 2011 (GLOBE NEWSWIRE) -- Pure Cycle Corporation (Nasdaq:PCYO) announced the following summary results of operations:

Summary Statements

Our summarized approximate results of operations for the three months ended November 30, 2010 and 2009 are as follows:

            Three Months Ended November 30,                              
                                                                            2010                 2009           $ Change     % Change
                                                    Revenues           $ 68,000           $ 59,600          $ 8,400          14%
                                            Cost of revenues            (41,500)            (42,500)             1,000          -2%
                                                Gross margin              26,500              17,100             9,400          12%
                                         Operating expenses:                                                                      
                                  General and administrative           (421,500)           (357,400)          (64,100)          18%
                                                       Other            (53,100)            (74,700)            21,600         -29%
                                        Loss from operations           (448,100)           (415,000)          (33,100)           1%
                                     Other (expense) income:                                                                      
                        Interest on TPF and Convertible Debt         (1,031,000)           (884,000)         (147,000)          17%
                                                       Other              18,300              20,300          (18,300)         -90%
                                                    Net loss      $ (1,460,800)      $ (1,278,700)      $ (198,400)         -73%
     Weighted average shares outstanding (basic and diluted)          21,466,277          20,206,566                              
                                              Loss per share           $ (0.07)           $ (0.06)                              

Our summarized approximate financial position as of November 30, 2010 and August 31, 2010 is as follows:

      November 30, 2010      August 31, 2010            $ Change
     Cash, cash equivalents and marketable securities         $ 5,114,300        $ 1,446,100       $ 3,668,200
                                 Other current assets              293,100             373,500           (80,400)
                                 Total current assets            5,407,400           1,819,600          3,587,800
          Investments in water and water systems, net          106,595,600         102,931,300          3,526,000
                                     Land - Sky Ranch            3,739,000                --           3,877,200
                               Other long-term assets              946,800           1,626,900          (680,100)
                                         Total assets       $ 116,688,700      $ 106,377,800      $ 10,310,900
                 Liabilities and Shareholders' Equity                                                            
                                  Current liabilities           $ 280,700          $ 171,300         $ 109,400
              Tap participation fee payable to HP A&M           62,081,300          61,141,300            940,000
                          Other long-term liabilities            7,881,700           2,605,200          5,276,500
                                  Total liabilities            70,243,700          63,917,800          6,325,900
                         Total shareholders' equity            46,445,000          42,460,000          3,985,000
           Total liabilities and shareholders' equity       $ 116,688,700      $ 106,377,800      $ 10,310,900

Summary of Significant Events and Changes

Revenues increased approximately 14% during the first quarter of our fiscal 2011 mainly due to increases in water and wastewater monthly fees which were effective July 1, 2010.

Our general and administrative expenses ("G&A expenses") increased approximately 18% mainly due to increased consulting and professional service fees related to ongoing discussions with the State Land Board and the City of Aurora and due to fees and expenses that were not capitalized as part of our acquisition of the Sky Ranch property (see below). 

During the three months ended November 30, 2010, we began expensing interest on a $5.2 million convertible note that we issued in September 2010, which was part of the financing of the Sky Ranch land and water acquisition. 

Levels of cash, cash equivalents and marketable securities increased as a result of the public stock offering and issuance of the $5.2 million convertible note, which were offset by our acquisition of Sky Ranch. 

Sky Ranch

In October 2010, we completed our acquisition of approximately 940 acres of undeveloped land located in unincorporated Arapahoe County known as Sky Ranch. The acquisition, including fees and expenses, cost approximately $7.5 million. This was paid for using the proceeds from the sale of approximately 1.8 million shares of our common stock and the issuance of a $5.2 million convertible note. Funds not utilized for the acquisition are being used for general corporate working capital purposes. This acquisition is explained in further detail in our Form 10-Q filed with the SEC on or about January 7, 2011 and on our website at www.purecyclewater.com.

Consistent with prior years, management hosts earnings calls reviewing mid-year and year end results. Our next earnings call will be hosted after the release of our second quarter results – anticipated to be in April 2011. We have posted a detailed slide presentation which overviews the Company and presents summary financial results on our website which can be accessed at www.purecyclewater.com

The Company will be holding its annual shareholders' meeting on Tuesday, January 11, 2011 at 2PM Mountain. The meeting will be held at the offices of Davis, Graham & Stubbs, LLP, at 1550 17th Street, Suite 500, Denver, CO 80202. Additional details can be found on our website.

Company Information

Pure Cycle owns water assets in several river basins in the State of Colorado as well as certain aquifers in the Denver, Colorado metropolitan area. Pure Cycle provides water and wastewater services to customers located in the Denver metropolitan area including the design, construction, operation and maintenance of water and wastewater systems.

Additional information including our recent press releases and Annual Reports are available at www.purecyclewater.com, or you may contact our President, Mark W. Harding, at 303-292-3456 or at info@purecyclewater.com.

CONTACT:  Pure Cycle Corporation
          Mark W. Harding, President

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Source: Pure Cycle Corporation