Demand Response Energy Management Technology

EnergyConnect Group, Inc. (OTCBB: ECNG - News) and its subsidiary, EnergyConnect, announced financial results today for the first quarter ended April 4, 2009. The Company generated revenues from continuing operations of $1,210,000 for the first quarter 2009 compared to revenues of $7,379,000 for the first quarter 2008. This decrease is due primarily to reduced production activity in the current economy, which has resulted in a surplus of electricity generation in the energy markets, and therefore lower electricity prices.   

The company revised its revenue recognition procedure at the beginning of 2008. The change necessitated the inclusion of a fourth month of revenue, or an extra $1.7 million to the first quarter 2008 revenues. On a pro forma basis, comparing the three months of 2009 versus the same three months of 2008, revenue in the 2009 three month period was $1.2 million versus $5.7 million in the first three months of 2008.

“Moderate temperatures in PJM and lower overall economic activity have resulted in low electricity prices in the last few months, providing a limited number of opportunities for our customers to shift or reduce load in response to prices,” Randy Reed, EnergyConnect’s Chief Financial Officer noted. 

The loss from continuing operations for the first quarter of 2009 was $2,082,000 compared to a loss from continuing operations of $1,904,000 for the three months ended March 29, 2008. The Company recorded a net loss of $2,082,000 or $0.02 per share for the three months ended April 4, 2009, compared to a net loss of $2,079,000 or $0.02 per share for the three months ended March 29, 2008. Included in the loss for the three months ended March 29, 2008, is an operating loss of $175,000 from our discontinued subsidiary, Christenson Electric.

Operating expenses for the three months ended April 4, 2009 were $2,571,000, compared to $3,102,000 in the three months ended March 29, 2008. The decrease of $531,000 between quarters was primarily due to a reduction in headcount taken over the last two quarters. Also included in the current quarter are charges for non-recurring financing, restructuring and consulting fees. These charges totaled approximately $259,000 during the quarter.

With respect to the balance sheet, quarter ending unrestricted cash was $724,000 compared to $410,000 at January 3, 2009. This increase of $314,000 is the result of draws under the Company’s new debt facility opened in the first quarter. Accounts receivable and accounts payable decreased by $2,107,000 and $2,560,000, respectively, due to receipts under the PJM ILR capacity program, and payment of those related obligations. Long term debt increased by $2,168,000, net of a debt discount of $332,000. The debt discount was generated by a beneficial conversion feature contained in the $5 million debt agreement the Company signed during the quarter.

Commenting on the first quarter results, Kevin Evans, EnergyConnect’s Chief Executive Officer, said, “I’m encouraged that in spite of this difficult market, we’ve met the following objectives I set for the Company in the first quarter. We increased our callable MWs by 40% to 250 MW, secured $5 million of financing and restructured the business with a new management team. Most importantly, we are on track to reach our financial objective of an operating profit excluding non-cash items, and the timely introduction of new technologies that will enable the market development of price responsive load management.”

About EnergyConnect Group, Inc.
EnergyConnect delivers industry leading Demand Response technologies and services to commercial, educational and industrial consumers enabling them to manage their use of electricity in response to market prices or regional power shortages. The EnergyConnect technology platform provides a scalable, cost-effective, clean technology to enhance the grid’s efficiency and reliability.  For more information about this leading edge technology or about investor relations, visit:  /.

Forward Looking Statements
This press release includes statements that may constitute “forward-looking” statements.  These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause or contribute to such differences that include, but are not limited to, competitive factors, the success of new products in the marketplace, dependence upon third-party vendors, and the ability to obtain financing. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
 

For further information, please contact:

Randy Reed, CFO
503.419.3580  

ENERGYCONNECT GROUP, INC.
CONSOLIDATED BALANCE SHEET
		April 4,			January 3,
		2009			2009
		(Unaudited)
Cash	$	724,271		$	410,101
Restricted cash		66,800			300,000
Accounts receivable		2,267,195			4,373,818
Other current assets		416,258			269,144
Total current assets		3,474,524			5,353,063
Goodwill and intangibles		1,573,856			1,633,622
Other long term assets		359,553			370,139
Total assets	$	5,407,933		$	7,356,824
Accounts payable	$	2,556,038		$	5,116,296
Bank line of credit		117,263			117,257
Other current liabilities		128,539			127,016
Total current liabilities		2,801,840			5,360,569
Note payable, net of debt discount		2,167,832			-
Total liabilities		4,969,672			5,360,569
Shareholders’ equity		438,261			1,996,255
Total liabilities and shareholders’ equity	$	5,407,933		$	7,356,824

 

 

ENERGYCONNECT GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
			Three months ended
			April 4,			March 29,
			2009			2008
Revenue		$	1,210,211		$	7,379,013
Cost of goods sold			641,988			6,186,955
Gross profit			568,223			1,192,058
Sales, general and administrative			2,401,758			2,904,711
Stock-based compensation			169,245			197,424
Total operating expenses			2,571,003			3,102,135
Loss from operations			(2,002,780)			(1,910,077)
Other income (expense)			(78,794)			5,850
Loss from continuing operations			(2,081,574)			(1,904,227)
Loss on discontinued operations			-			(174,622)
Net loss		$	(2,081,574)		$	(2,078,849)
Net loss per share:
Basic and diluted		$	(0.02)		$	(0.02)
Shares used in per share calculations:
Basic and diluted			95,179,961			84,746,784

 

Posted on Tuesday, May 12th, 2009 - Press Releases