EXHIBIT 99.1
Pure Cycle Corporation Announces Fiscal 2008 Financial Results
Thornton, Colorado — November 7, 2008 — Pure Cycle Corporation (NASDAQ Capital Market: PCYO) announced the following summary results of operations for the years ended August 31, 2008, 2007 and 2006, respectively:
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| | | Years Ended August 31, | |
| | | 2008 | | | 2007 | | | 2006 | |
| Total revenues | | $ | 282,400 | | | $ | 265,700 | | | $ | 271,700 | |
| Total cost of revenues | | | (166,000 | ) | | | (165,200 | ) | | | (73,900 | ) |
| | | | | | | | | | |
| Gross margin | | | 116,400 | | | | 100,500 | | | | 197,800 | |
| Total operating expenses | | | (2,609,600 | ) | | | (2,754,800 | ) | | | (1,556,500 | ) |
| Other (expense) income | | | | | | | | | | | | |
Including imputed interest of $4.4 million, $4.7 million and $0, respectively | | | (4,433,500 | ) | | | (4,260,400 | ) | | | 565,800 | |
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| Net loss | | $ | (6,926,700 | ) | | $ | (6,914,700 | ) | | $ | (792,900 | ) |
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| Weighted average shares outstanding (basic and diluted) | | | 20,188,675 | | | | 18,589,737 | | | | 14,693,585 | |
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| Loss per share | | $ | (0.34 | ) | | $ | (0.37 | ) | | $ | (0.05 | ) |
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Fiscal 2008 revenues increased over fiscal 2007 revenues mainly as a result of higher water usage fees and higher wastewater service fees.
Operating expenses decreased from 2007 to 2008 as a result of (i) management and employee wages remaining unchanged and no incentive compensation being paid in 2008, (ii) an $84,300 reduction in certain professional fees due to an SEC consultation in 2007 not incurred in 2008, and (iii) a reduction in public entity costs of approximately $92,900 mainly due to the elimination of franchise fees to the State of Delaware as a result of our reincorporation in Colorado.
However, these decreases were offset by us incurring approximately $223,600 in consulting fees in 2008 related to ongoing discussions with the Land Board and Lend Lease over water and wastewater services for the proposed development at the Lowry Range as opposed to $39,200 in 2007.
As will be further explained in our Form 10-K to be filed with the SEC on November 14, 2008, the results reported above were impacted by the following items that do not require the use of current assets:
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| | | Years ended August 31, | |
| | | 2008 | | | 2007 | |
| Imputed expenses or non-cash expenses: | | | | | | | | |
| Imputed Interest on the Tap Participation Fee | | $ | 4,393,000 | | | $ | 4,669,700 | |
| Loss (gain) on extinguishment of contingent obligations | | | 273,700 | | | | (271,100 | ) |
| Depreciation and depletion | | | 381,300 | | | | 366,100 | |
| Stock based compensation expense | | | 351,500 | | | | 287,300 | |
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| Total imputed and non-cash expenses | | $ | 5,399,500 | | | $ | 5,052,000 | |
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Because these items do not require the use of current assets, management does not include these items in its analysis of the financial results or how we allocate our resources. Because of this, we deemed it meaningful to provide a non-GAAP disclosure of the impact of these significant items on our financial results. Adjusting our US GAAP net loss to exclude the expenses described above, our net loss for the years ended August 31, 2008 and 2007, respectively, would have been:
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| | | Years ended August 31, | | | | |
| | | 2008 | | | 2007 | | | Change | |
| Net losses as reported | | $ | (6,926,700 | ) | | $ | (6,914,700 | ) | | $ | (12,000 | ) |
| Imputed and non-cash items described above | | | 5,399,500 | | | | 5,052,000 | | | $ | 347,500 | |
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| As adjusted net losses | | $ | (1,527,200 | ) | | $ | (1,862,700 | ) | | $ | 335,500 | |
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Financial Position Data
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| | | August 31, 2008 | | | August 31, 2007 | |
| | | | | | | | | |
| Current assets | | $ | 5,502,200 | | | $ | 7,288,400 | |
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| Total assets | | $ | 109,899,400 | | | $ | 111,891,900 | |
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| | | | | | | | | |
| Current liabilities | | $ | 163,900 | | | $ | 183,300 | |
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| Total liabilities | | $ | 56,731,600 | | | $ | 54,047,100 | |
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| | | | | | | | | |
| Total stockholders’ equity | | $ | 53,167,800 | | | $ | 57,844,800 | |
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We will host a conference call to discuss the results on November 17, 2008 at 2 pm Mountain. The call will be hosted by our President, Mark W. Harding. Call details are presented below.
CALL INFORMATION
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| What: | | Fiscal year end August 31, 2008 Financial Release |
| When: | | November 17, 2008 at 2:00 pm Mountain |
| To listen: | | Click on the link posted on the Company’s website: |
| | | www.purecyclewater.com |
| | | Log-on 5 minutes early in case downloads are required. |
| Call in Number: | | Toll free:(866) 314-4483 |
| Passcode: | | 93536889 |
REPLAY INFORMATION
The call will be available for replay until 9:59 p.m. on November 24, 2008:
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| Toll free: | | (888) 286-8010 |
| Passcode: | | 54264249 |
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.
