$2.58 Million Revenue Reported for Three Month Period
Second Quarter Results to Date
$4.5 Million Orders Booked - $8.9 Million Contracts in Progress
LAVERNIA, Texas, May 17 /PRNewswire-FirstCall/ -- PowerCold Corporation
(OTC Bulletin Board: PWCL) reported financial results for Q1 2005. Revenue
totaled $2,583,967 for the three months ended March 31, 2005, exceeded first
quarter revenue of $2,241,103 for 2004 and $1,112,334 for 2003. Order backlog
exceeded $1.8 million for the first quarter. $4.5 million in new orders were
booked during the first six weeks of the second quarter, and $8.9 million
contracts are in progress for scheduled order booking.
Operating losses were higher than expected due to the disproportionate
increase in the number of lower margin bid spec contracts for retail and
restaurant chain accounts during the first quarter. Margins in future periods
should improve as the Company reduces dependence on bid spec contracts and
increases the number of hospitality contracts using the Company's proprietary
technology. And gross margin improvement is anticipated from recently
introduced products, including the new plastic fluid coolers.
Management anticipates continued growth with over $39 million in
outstanding engineering design proposals submitted to numerous national
account customers. The majority of PowerCold ComfortAir Solutions engineering
design proposals are for large commercial building projects that generate
higher margins than reported in the first quarter of 2005.
Operating expenses increased for the quarter primarily from substantial
increases in sales & marketing expense and research & development expense.
Sales and marketing expense increased $300,127 over the prior year quarter due
to expanding the sales program for 2005. Research and development increased
$88,179 over the prior year quarter with spending focused on the development
of the new plastic fluid cooler products. Interest and finance expense
increased to $290,414 due to the $5 million convertible debt placed with
Laurus Funds in July of 2004.
PowerCold's CEO Frank Simola said, "We continue to foresee significant
growth in revenue with improving operating margins during the year. The
second quarter contracts support the anticipated growth in our business. We
recently introduced new proprietary plastic fluid cooler products that have a
lower manufactured cost and correspondingly higher gross margins than copper
coil products. We recently attended two large hotel conventions where our
patented central HVAC system was introduced generating nineteen new prospects.
New and retrofit hospitality industry contracts for HVAC central systems and
our new plastic fluid cooler products are expected to drive our growth in the
coming years.
Collection of outstanding receivables should start to improve during the
next quarter, as two unique large hotels complete installation valued over $2
million each. We anticipate positive cash flow as the monthly installation
cycle for the large hotels start to increase the second half of the year."
PowerCold(R) develops, produces and markets unique HVAC products and
systems for commercial use. PowerCold's proprietary energy efficient products
provide a clean comfort air environment and significantly reduce power costs
by up to 50% for air conditioning, refrigeration and on-site building power.
Company Information:
Contact: Diane Braun at 800-782-1225
Email: pwcl@powercold.com
Website: http://www.powercold.com
Forward-Looking Information: The statements in this news release contain
forward-looking information within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve certain
risks, assumptions and uncertainties, including the inability to generate and
secure the necessary product sale, or the lack of acceptance of the company's
products by its customers. In each case actual results may differ materially
from such forward-looking statements. The company does not undertake to
publicly update or revise its forward-looking statements even if experience or
future changes make it clear that any projected results (expressed or
modified) will not be realized.
POWERCOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Three Months Ended March 31,
2005 2004 2003
REVENUES
Contracts including
equipment $ 2,430,439 $ 2,113,228 $ --
Equipment 153,528 127,875 1,112,334
Total Revenues 2,583,967 2,241,103 1,112,334
COST OF REVENUES
Direct labor and
equipment-contracts 2,050,688 1,479,497 --
Direct labor and material-
equipment 101,116 52,141 919,478
Warranty expense -- 52,413 --
Manufacturing supplies 9,942 4,486 --
Shipping and handling 11,093 24,337 --
Total Cost of Revenues 2,172,839 1,612,873 919,478
GROSS PROFIT (LOSS) 411,128 628,230 192,856
OPERATING EXPENSES
Sales, marketing and
advertising 484,224 181,097 95,934
General and administrative 623,562 607,627 454,127
Research and development 93,453 5,274 --
Legal and accounting 39,577 34,755 --
Depreciation and
amortization 43,014 19,575 25,068
Total Operating Expenses 1,283,829 848,327 575,129
LOSS FROM OPERATIONS (872,701) (220,097) (382,273)
OTHER INCOME (EXPENSES)
Interest income 53,520 -- 60
Interest and financing
expense (290,414) (154,250) (242)
Other income (expense) -- 659 68
Total Other Income
(Expenses) (236,894) (153,591) (114)
LOSS BEFORE INCOME TAX (1,109,595) (373,688) (382,387)
INCOME TAX EXPENSE -- -- --
LOSS FROM CONTINUING
OPERATIONS (1,109,595) (373,688) (382,387)
NET LOSS (1,109,595) (373,688) (382,387)
OTHER COMPREHENSIVE INCOME
(LOSS)
Unrealized gain (loss) on
investments -- -- (19,483)
COMPREHENSIVE LOSS $ (1,109,595) $ (373,688) $ (401,870)
NET LOSS PER COMMON SHARE:
BASIC AND DILUTED $ (0.05) $ (0.02) $ (0.02)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING,
BASIC AND DILUTED 23,585,817 21,703,416 19,002,066
SOURCE PowerCold Corporation
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Related links:
http://www.powercold.com
CONTACT:
Diane Braun, +800-782-1225,
pwcl@powercold.com, for PowerCold
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