WorldWater & Power Corp. (OTC BB: WWAT) has reported financial results for the second quarter and six months ended June 30, 2006.
“This quarter, WorldWater took a number of decisive steps, strategically and operationally, to improve our performance for the remainder of 2006,” stated Quentin T. Kelly, Chairman of WorldWater & Power Corp. “Most importantly, we started construction of the Farm ACW solar irrigation project in California, which is now on track and expected to be nearly complete by the end of 2006. This $7.8 million system, the largest of its kind, solidifies WorldWater’s position as a leading player in the solar field, paving the way for similar deals that can leverage our capabilities in solar technology, energy conversion, and high-horsepower pumps.
“In addition, we signed a letter of intent to acquire ENTECH, a developer and manufacturer of advanced concentrating solar photovoltaic and thermal technologies, on July 10, 2006. We are very excited about the prospects offered by ENTECH’s technology, and the due diligence is proceeding as scheduled. With the combination of WorldWater and ENTECH, solar installations will be capable of generating and delivering electrical and thermal energy on site at costs competitive to current retail prices, without the need for rebates. WorldWater and ENTECH are already working together on a number of joint bids for large solar farms, with strong demand anticipated going forward.
“Also just after the end of the quarter, WorldWater hired a new CFO, Larry Crawford, to focus on the increased financial reporting requirements of the company while providing direction on a number of growth initiatives. This has enabled our prior CFO, Jim Brown, to concentrate on streamlining and accelerating the financing process for numerous projects in our backlog.
“We are very confident of the projects now underway and forecast third quarter revenue of between $5-$6 million, the largest in the company’s history, with even greater revenue anticipated in the fourth quarter. Given current geopolitical events and the continued high price of oil, we see increasing demand for solar applications that can provide long-term energy independence, and we are focused on meeting these demands while improving returns for our shareholders. With an active pipeline of proposals and our pending acquisition of ENTECH, we view the remainder of 2006 very positively, positioning us for even greater growth – and improved performance – in 2007.”
Financial Results
Revenue for the second quarter was $1.8 million, compared with $0.2 million reported in the second quarter of 2005. Gross profit for the quarter was $0.3 million or 15.5% gross margin, versus a loss of $(0.1) million in the prior-year period. The company posted an operating loss of $(1.5) million compared with an operating loss of $(1.2) million in the second quarter of 2005, representing increased marketing costs and stock compensation expense. Including the impact of warrant fees, WorldWater’s net loss for the second quarter was $(2.0) million, or $(0.01) per share, compared to $(1.5) million, or $(0.02) per share, in the prior-year period.
For the first six months of fiscal 2006, WorldWater reported revenue of $3.7 million, versus $0.2 million in the same period last year. Gross profit was $0.4 million for the first two quarters of 2006, as compared with a loss of $(0.2) million in 2005. WorldWater’s net loss for the period was $(5.5) million, or $(0.04) per share, versus a net loss of $(2.8) million, or $(0.03) per share, last year.