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Synthesis Energy Systems, Inc. Announces Financial Results for the Third Quarter of Fiscal 2013



   Synthesis Energy Systems, Inc. Announces Financial Results for the Third
                            Quarter of Fiscal 2013

PR Newswire

HOUSTON, May 7, 2013

HOUSTON, May 7, 2013 /PRNewswire/ -- Synthesis Energy Systems, Inc. (Nasdaq:
SYMX), a global energy and gasification technology company that provides
products and solutions to the energy and chemicals industries, today announced
financial and operating results for the third quarter of fiscal 2013, ended
March 31, 2013.

"During our third fiscal quarter and to-date, good progress has been made
advancing the commissioning and start-up of the Yima Joint Venture plant in
China," stated Robert Rigdon, President and CEO. "In addition, we have made
good progress toward developing business verticals where we can deploy our
technology, equipment and services via a capital-lite approach into markets
such as power, steel and renewables.  We are pleased to have announced this
quarter our collaboration with GE to jointly market a small scale power plant
for distributed power applications. We are also excited about our new project
development opportunity in China via our collaboration with Henghe Energy
Development Co. which intends to utilize our technology for a large scale SNG
project in Jiangxi Province, China." 

Third Quarter 2013 Financial Results (Unaudited)

Total revenue for the three months ended March 31, 2013 was $303,000 versus
$100,000 for the three months ended March 31, 2012. These revenues were
comprised entirely of technology licensing and related services including
product and feasibility studies.

The operating loss for the third quarter of fiscal 2013 was $5.1 million
versus an operating loss of $4.8 million for the third quarter of fiscal 2012.
The increase in operating loss was primarily due to an increase in stock-based
compensation expenses resulting from stock and warrants issued to Crystal
Vision Energy, offset, in part, by a decrease in general and administrative
expenses.

The net loss attributable to stockholders for the third quarter of fiscal 2013
was $5.4 million, or $(0.09) per share, versus a loss of $5.4 million, or
$(0.11) per share, for the prior year's third fiscal quarter.

At March 31, 2013, the Company had cash and cash equivalents of $18.5 million
and working capital of $11.7 million.

Corporate Highlights

  o The Yima Joint Venture plant in Henan Province, China, continued to make
    progress toward full-scale operation with the start-up of the third and
    final gasification train. Commercial sales of methanol are expected to
    begin this summer.
  o SES and GE Packaged Power, Inc. agreed to jointly market SES gasification
    and GE Aeroderivative gas turbine technologies for small scale power
    generation. The application marketing agreement will focus on regions of
    the world where the conversion of low cost feedstock sources such as
    lignite and coal wastes into synthesis gas fuel via SES' technology may be
    advantaged over conventional gas turbine fuel sources such as natural gas
    and fuel oil.  
  o SES' gasification technology was selected by Hainan Dongfang Henghe Energy
    Development Company Ltd. for its large scale, 10 billion RMB coal waste to
    synthetic natural gas project in Jiangxi Province, China. SES and Henghe
    entered into a period of exclusivity for completing licensing negotiations
    while project approvals are obtained.
  o SES entered into an exclusive marketing and engineering agreement with
    Simon India Limited to exclusively market SES' gasification technology for
    projects in India.

Conference Call Information

Senior management will hold a conference call to review the Company's
financial results for the second quarter of fiscal 2013 and provide a
corporate update this morning at 8:30 a.m. Eastern Time.

To access the live webcast, please log on to the Company's website at
www.synthesisenergy.com. Alternatively, domestic callers may participate in
the live telephone conference call by dialing (800) 860-2442 and international
callers should dial (412) 858-4600.

An archived version of the webcast will be available on the Company's website
through June 7, 2013. A telephone replay of the conference call will be
available beginning approximately one hour after the completion of the call
and will be available through June 7, 2013. Domestic callers can access the
telephonic replay by dialling (877) 344-7529. International callers should
dial (412) 317-0088. The PIN access code for the live call and the replay is
10028495#.

About Synthesis Energy Systems, Inc.

SES provides technology, equipment and engineering services for the conversion
of low rank, low cost coal and biomass feedstocks into energy and chemical
products. Its strategy is to create value through providing technology and
equipment in regions where low rank coals and biomass feedstocks can be
profitably converted into high value products through its proprietary U-GAS®
fluidized bed gasification technology, which SES licenses from the Gas
Technology Institute. U-GAS® gasifies coal cost effectively, without many of
the harmful emissions normally associated with coal combustion plants. The
primary advantages of U-GAS® relative to other gasification technologies are
(a) greater fuel flexibility provided by the ability of SES to use all ranks
of coal (including low rank, high ash and high moisture coals, which are
significantly cheaper than higher grade coals), many coal waste products and
biomass feed stocks; and (b) the ability of SES to operate efficiently on a
smaller scale, which enables the construction of plants more quickly, at a
lower capital cost, and, in many cases, in closer proximity to coal sources.
SES currently has offices in Houston, Texas, and Shanghai, China. For more
information on SES and SRS, visit www.synthesisenergy.com or call (713)
579-0600.

SES Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact are forward-looking statements. Forward-looking
statements are subject to certain risks, trends and uncertainties that could
cause actual results to differ materially from those projected. Among those
risks, trends and uncertainties are the early stage of development of SES, its
estimate of the sufficiency of existing capital sources, its ability to
successfully develop its licensing business, its ability to raise additional
capital to fund cash requirements for future investments and operations
including its China platform initiative, its ability to reduce operating
costs, the limited history and viability of its technology, commodity prices
and the availability and terms of financing opportunities, its results of
operations in foreign countries, its ability to diversify, its ability to
complete the restructuring of the ZZ Joint Venture, its ability to obtain the
necessary approvals and permits for its future projects, the estimated
timetables for achieving mechanical completion and commencing commercial
operations for the Yima project as well as the ability of the Yima project to
produce revenues and earnings, the sufficiency of internal controls and
procedures, its ability to effect the proposed ZJX/China Energy transaction
based on its ongoing discussions with ZJX and China Energy, its ability to
grow its business and generate revenues and earnings as a result of its
proposed China and India platform initiatives and its relationship with
Crystal Vision Energy, as well as its joint venture with Midas Resource
Partners, and its ability to develop its marketing arrangement with GE and its
other business verticals for power, steel and renewables. Although SES
believes that in making such forward-looking statements its expectations are
based upon reasonable assumptions, such statements may be influenced by
factors that could cause actual outcomes and results to be materially
different from those projected. SES cannot assure you that the assumptions
upon which these statements are based will prove to have been correct.

Important Notice from SES

In connection with the proposed ZJX/China Energy transaction, SES has filed a
preliminary proxy statement, and intends to file a definitive proxy statement,
with the SEC and intends to mail the definitive proxy statement to the
stockholders of SES. SES and its directors and officers may be deemed to be
participants in the solicitation of proxies from the stockholders of SES in
connection with the transaction. Information about the transaction is set
forth in the preliminary proxy statement filed, and will be set forth in the
definitive proxy statement to be filed by SES with the SEC.

You may obtain the preliminary statement and, when available, the definitive
proxy statement, for free by visiting EDGAR on the SEC website at www.sec.gov.
Investors should read the definitive proxy statement carefully before making
any voting or investment decision because that document will contain important
information.

TABLES FOLLOW

SYNTHESIS ENERGY SYSTEMS, INC.
(A Development Stage Enterprise)
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
                        Three Months Ended         Nine Months Ended
                        March 31,                  March 31,
                        2013          2012         2013          2012
Revenue:
Product sales and       $             $          
other — related         —              —           $          —  $      2,121
parties
Technology licensing    303           100          387           571
and related services
Other                   —             —            —             86
Total revenue           303           100          387           2,778
Costs and Expenses:
Costs of sales and
plant operating         275           246          538           4,330
expenses
General and
administrative          3,331         3,702        9,552         9,901
expenses
Stock-based             1,195         348          1,467         707
compensation expense
Depreciation and        576           622          1,722         1,903
amortization
Total costs and         5,377         4,918        13,279        16,841
expenses
Operating loss          (5,074)       (4,818)      (12,892)      (14,063)
Non-operating (income)
expense:
Equity in losses of     242           410          1,159         1,244
joint ventures
Foreign currency        22            (2)          (26)          (617)
(gains) losses
Interest income         (12)          (15)         (41)          (78)
Interest expense        74            140          249           466
Net loss                (5,400)       (5,351)      (14,233)      (15,078)
Less: net  (income)
loss attributable to    20            (9)          (32)          132
noncontrolling
interests
Net loss attributable   $    (5,380)  $            $  (14,265)   $  (14,946)
to stockholders                        (5,360)
Net loss per share:
Basic and diluted       $             $            $             $    
                         (0.09)        (0.11)       (0.24)        (0.29)
Weighted average
common shares
outstanding:
Basic and diluted       63,007        50,864       59,080        50,861

 

 

SYNTHESIS ENERGY SYSTEMS, INC.
(A Development Stage Enterprise)
Consolidated Balance Sheets
(In thousands)
(Unaudited)
                                                    March 31,     June 30,

                                                    2013          2012
ASSETS
Current assets:
Cash and cash equivalents                           $     18,462  $     18,035
Accounts receivable                                 72            316
Prepaid expenses and other currents assets          2,457         2,015
Inventory                                           23            23
Total current assets                                21,014        20,389
Property, plant and equipment, net                  32,683        33,942
Intangible assets, net                              1,068         1,126
Investment in Yima joint ventures                   33,043        33,340
Other long-term assets                              3,823         4,050
Total assets                                        $     91,631  $     92,847
LIABILITIES AND EQUITY
Current liabilities:
Accrued expenses and accounts payable               $ 6,935       $ 8,080
Current portion of long-term bank loan              2,393         2,435
Total current liabilities                           9,328         10,515
Long-term bank loan                                 —             2,372
Total liabilities                                   9,328         12,887
Equity:
Stockholders' Common stock, $0.01 par value:
200,000 shares authorized: 63,420 and 52,022 shares 634           520
issued and outstanding, respectively
Additional paid-in capital                          223,479       207,345
Deficit accumulated during development stage        (146,073)     (131,808)
Accumulated other comprehensive income              5,128         4,802
Total stockholders' equity                          83,168        80,859
Noncontrolling interests in subsidiaries            (865)         (899)
Total equity                                        82,303        79,960
Total liabilities and equity                        $     91,631  $     92,847

 

 

SOURCE Synthesis Energy Systems, Inc.

Website: http://www.synthesisenergy.com
Contact: Synthesis Energy Systems, Inc., Kevin Kelly, Chief Accounting
Officer, +1-713-579-0600, Kevin.Kelly@synthesisenergy.com, or Matthew D.
Haines, Managing Director, MBS Value Partners, +1-212-710-9686,
Matt.haines@mbsvalue.com
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