Distributed Energy Systems Corp. (Nasdaq: DESCs reported that revenues for the third quarter of 2006 were a record $14.8 million, up 20% from 2005’s third quarter revenues of $12.3 million. For the third quarter ended September 30, 2006, the company posted a net loss of $6.3 million, or $0.16 per share, including approximately $0.03 per share attributable to required compliance with Statement of Financial Accounting Standard 123®, which took effect in 2006. One year ago, Distributed Energy reported a third-quarter net loss of $3.6 million, or $0.10 per share.
“Results for the third quarter represented another step forward this year,” said Ambrose L. Schwallie, Distributed Energy’s chief executive officer. “As the year progressed, business improved throughout the company, and we expect the fourth quarter to be stronger than the third quarter, and to continue building our backlog as we enter 2007.” Distributed Energy’s current backlog is approximately $40 million, about 20% higher than the $33 million the company reported in early August.
He noted that the company’s two businesses — Northern Power’s energy systems, products and services and Proton’s commercial hydrogen products and its Hydrogen Technology Group — posted increases in revenues and quarter-over-prior-quarter improvements during 2006.
“There has been a steadily improving pace of customer inquiries, paid engineering studies and signed contracts for major engineering, procurement and construction assignments, as well for our product and service offerings. September was an exceptionally strong month, and that trend continues into the fourth quarter,” Mr. Schwallie noted.
He cited a $2.1 million contract, announced in October, from Consolidated Edison Company of New York, to supply advanced power converters that will enable the utility, for the first time, to rapidly deploy and connect megawatt-scale generators to its distribution grid and provide power during emergencies. In addition, the company benefited from Pathmark Stores Inc. qualifying for and receiving State of New Jersey renewable energy funding for an engineering services contract that had been pending with Northern Power since March.
Discussing Distributed Energy’s commercial hydrogen business, he noted that booking and revenue trends made incremental progress during the year. “Proton’s on-site HOGEN® hydrogen and StableFlow(TM) control systems continue to live up to reliability expectations in the field, and they also enable customers to produce more electricity from less fuel. That enables us to market these advanced products and systems more aggressively, including via lease financing, because they are proven to be highly cost-effective, self-liquidating investments for power generating companies in the U.S. and around the world.”
“At the same time, our advanced intellectual property and know-how in state-of-the-art hydrogen technology for back-up power, aerospace and fuel- cell-related transportation applications are at the core of a steady stream of recently awarded research and development projects for large, well-known energy companies and Federal government agencies.”
Conference Call
The Company will host a conference call tomorrow, Wednesday, November 8, 2006 at 10:00 a.m. (Eastern time) to discuss third quarter results. Individuals wishing to participate in the conference call should dial (866) 700-6067 or for international calls (617) 213-8834. For interested individuals unable to join the call, a replay will be available through Wednesday, November 22, 2006, by dialing (888) 286-8010 or for international calls (617) 801-6888, pass code 49603649, or on the company’s web site. The call will also be broadcast live over the Internet, and can be accessed by all interested parties at www.investorcalendar.com or through the investors’ section of the Distributed Energy Systems website.
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