EX-99.1 6 v122587_ex99-1.htm Unassociated Document
EXHIBIT 99.1 
PRESS RELEASE ISSUED BY APPLIED ENERGETICS, INC. ON AUGUST 11, 2008

APPLIED ENERGETICS REPORTS SECOND QUARTER 2008 FINANCIAL RESULTS 

TUCSON, Ariz. — August 11, 2008--Applied Energetics, Inc., (Nasdaq: AERG) the Guided Energy™ Company, today reported financial results for the second quarter ended June 30, 2008. The Company will host a conference call today, August 11, 2008, at 11:00 a.m. (Eastern Daylight Time).

Applied Energetics highlighted the following activities and accomplishments during the quarter:
 
 
·
Awarded a Cost-Plus-Fixed-Fee (CPFF) contract issued by the U.S. Army (Aberdeen Proving Ground, MD) with a ceiling value of approximately $9.3 million for a U.S. Marine Corps program. Due to the sensitivity of the effort the customer has asked that program details not be publicly disclosed. 
 
 
·
Received a $4.5 million Sole Source Contract from the U.S. Army's Research, Development and Engineering Command (ARDEC - Picatinny, NJ) for the development and advancement of the company's Laser Guided Energy™ technology.
 
 
·
Development of the Company’s proprietary Laser Guided Energy™ technology continued largely according to plan under contracts from both the U.S. Navy and the U.S. Army.
 
 
·
Brigadier General, U.S. Marine Corp. (USMC) (Ret.) James M. Feigley was elected to the Company’s board of directors. James M. Feigley has served as President of Rock River Consulting, Inc. a defense consulting firm he founded in early May 2003 after retiring from the USMC. General Feigley served as Commander of the Marine Corps Systems Command from 1998 through 2002, where he was the executive authority on research, development, procurement, fielding and life cycle support for all Marine Corps ground combat, combat support and combat service support equipment, ordinance and systems.
 
Dana Marshall, Applied Energetics’ Chairman, President and Chief Executive Officer, commented, “This was an important quarter for our company, as we have secured milestone contracts for our core defense programs, and made notable progress in our efforts to move our technologies into real-world use.” Mr. Marshall continued: “We are also truly pleased with the operational and financial progress we made during this quarter. Revenues have increased, operating results are improved, and our contracted backlog has increased significantly. We continue to work with our customers to advance our technologies, and with our Board to advance our business. We welcome General Feigley to our team and thank him for the contributions he has already made in helping us move our company towards increased customer acceptance and financial performance.”

Second Quarter 2008 and Year-to-Date 2008 Financial Results

Revenue for the second quarter of 2008 was approximately $5.7 million, compared to approximately $3.1 million for the same period last year, an increase of 80%. This increase in revenue was primarily attributable to performance on new Counter-IED contracts.

Net loss attributable to common shareholders for the second quarter of 2008 was ($1.1) million, or ($0.01) per diluted common share as compared to a net loss of ($2.5) million or ($0.03) per diluted common share for the same period last year. This improvement was driven by higher revenues accompanied with lower operating expenses.

 
 
 
 
Revenue for the six months ended June 30, 2008 was approximately $7.6 million, compared to approximately $5.2 million for the same period last year, an increase of 46%. The increase in revenue was primarily attributable to performance on the Counter-IED contract received during the second quarter.

Net loss attributable to common shareholders for the six months ended June 30, 2008 was ($4.7) million, or ($0.06) per diluted common share as compared to a net loss of ($5.2) million or ($0.07) per diluted common share for the same period last year. This loss decreased primarily due to higher revenues accompanied with lower operating expenses.

During the second quarter and first half of 2008 the company made significant operational and business performance improvements. These improvements resulted in positive EBITDA for the second-quarter of 2008. EBITDA increased by $1.9 million during the second-quarter and $1.3 million during the first-half compared to the same periods in 2007. EBITDA is defined as Net Loss less depreciation, amortization, interest, taxes, and non-cash stock-based compensation.

At June 30, 2008, the Company had approximately $8.0 million of cash and cash equivalents and $7.1 million securities available-for-sale as compared to $15.0 million of cash and cash equivalents and $7.5 million securities available-for-sale at December 31, 2007.

As of June 30, 2008 the Company had a backlog of $13.1 million, which is expected to be completed within the next twelve-months. This compares to a backlog of $4.9 million at the end of our first quarter 2008.

Conference Call

As previously announced, Applied Energetics will host a conference call on August 11, 2008, at 11:00 a.m. (EDT). Shareholders and other interested parties may participate in the conference call by dialing +1 888 713 4213 (domestic) or +1 617 213 4865 (international) and entering access code 73842344, a few minutes before 11:00 a.m. EDT on August 11, 2008. The call will also be broadcast live on the Internet at www.streetevents.com,
 www.fulldisclosure.com and www.appliedenergetics.com.

A replay of the conference call will be accessible two hours after its completion through August 18, 2008 by dialing +1 888 286 8010 (domestic) or +1 617 801 6888 (international) and entering access code 89184645. The call will also be archived for 30 days at www.streetevents.com, www.fulldisclosure.com and www.appliedenergetics.com.

About Applied Energetics Inc.

Applied Energetics, Inc., based in Tucson Ariz., specializes in development and manufacture of high performance lasers, high voltage electronics, advanced optical systems, and integrated guided energy systems for defense, aerospace, industrial, and scientific customers worldwide. Applied Energetics pioneered the development of Laser Guided Energy® (LGE®) technology, and related solutions for defense and security applications. For more information about Applied Energetics, please visit www.appliedenergetics.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

Certain statements contained in this News Release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

 
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Such factors include, but are not limited to: the dependence on sales of a limited number of products and the uncertainty of the timing and magnitude of government funding and orders, dependence on sales to government customers; the uncertainty of patent protection; the uncertainty of strategic alliances; the uncertainty of management tenure; the impact of third-party suppliers' manufacturing constraints or difficulties; management's ability to achieve business performance objectives, market acceptance of, and demand for, the Company's products, and resulting revenues; development and testing of technology and products; manufacturing capabilities; impact of competitive products and pricing; litigation and other risks detailed in the Company's filings with the Securities and Exchange Commission. The words "looking forward," "believe," "demonstrate," "intend," "expect," "contemplate," "estimate," "anticipate," "likely" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Applied Energetics undertakes no obligation to update any forward-looking statements contained in this news release.
 
 
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APPLIED ENERGETICS, INC.
CONSOLIDATED BALANCE SHEETS 
 
 
    
June 30, 2008
    
December 31, 2007
  
 
    
(Unaudited)
        
ASSETS
              
Current assets
              
Cash and cash equivalents
  
$
8,021,845
  
$
14,981,192
  
Accounts receivable
    
5,330,634
   
3,264,968
 
Inventory
    
1,991,403
   
1,468,391
 
Prepaid expenses and deposits
    
231,142
   
445,832
 
Other receivables
    
126,931
   
59,983
 
Total current assets
    
15,701,955
   
20,220,366
 
Securities available for sale
    
7,125,000
   
7,500,000
 
Property and equipment - net
    
3,528,310
   
1,600,887
 
Intangible assets - net
    
61,500
   
86,100
 
Other assets
    
50,153
   
59,517
 
TOTAL ASSETS
  
$
26,466,918
  
$
29,466,870
  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
             
Current liabilities
              
Accounts payable
  
$
589,233
  
$
1,148,266
  
Accrued expenses
    
661,145
   
516,589
 
Accrued compensation
    
706,814
   
1,060,603
 
Customer deposits
    
824,850
   
936,373
 
Billings in excess of costs
    
197,455
   
-
 
Current portion of capital lease obligations
    
6,916
   
13,937
 
Total current liabilities
    
2,986,413
   
3,675,768
 
Capital lease obligations
    
-
   
2,028
 
Deferred rent
    
5,787
   
125,814
 
Total liabilities
    
2,992,200
   
3,803,610
 
               
Commitments and contingencies
              
               
Stockholders’ equity
              
Series A Convertible Preferred stock, $.001 par value, 2,000,000 shares
authorized; 678,000 shares issued and outstanding at June 30, 2008
and 690,000 shares issued and outstanding at December 31, 2007
    
678
   
690
 
Common stock, $.001 par value, 125,000,000 shares authorized;
80,622,710 shares issued and outstanding at June 30, 2008 and
80,244,617 shares issued and outstanding at December 31, 2007
    
80,623
   
80,245
 
Additional paid-in capital
    
68,941,062
   
66,344,066
 
Accumulated deficit
    
(45,172,645
)
  
(40,761,741
)
Accumulated other comprehensive loss
    
(375,000
)
  
-
 
Total stockholders’ equity
    
23,474,718
   
25,663,260
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
26,466,918
  
$
29,466,870
  

 
4
 

APPLIED ENERGETICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 
  
For the three months ended
June 30,
  
     
2008
    
2007
  
               
Revenue
  
$
5,677,998
  
$
3,149,173
  
               
Cost of revenue
    
5,189,454
   
3,135,603
 
               
Gross profit
    
488,544
   
13,570
 
               
Operating expenses:
              
General and administrative
    
1,157,277
   
2,317,578
 
Selling and marketing
    
72,854
   
125,015
 
Research and development
    
243,272
   
183,804
 
Total operating expenses
   
1,473,403
   
2,626,397
 
               
Operating loss
    
(984,859
)
  
(2,612,827
)
               
Other (expense) income
              
Interest expense
    
(239
)
  
(489
)
Interest income
    
165,780
   
354,143
 
Other
   
-
   
7,835
 
Total other
    
165,541
   
361,489
 
               
Net loss
    
(819,318
)
  
(2,251,338
)
               
Preferred stock dividends
    
(282,220
)
  
(295,105
)
               
Net loss attributable to common stockholders
  
$
(1,101,538
)
$
(2,546,443
)
               
Net loss per common share – basic and diluted
  
$
(0.01
)
$
(0.03
)
               
Weighted average number of shares outstanding, basic
and diluted
   
80,594,626
   
78,741,988
  
 
 
5
 
 
APPLIED ENERGETICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
  
For the six months ended
June 30,
  
     
2008
    
2007
  
               
Revenue
  
$
7,639,088
  
$
5,219,783
  
               
Cost of revenue
    
6,929,562
   
5,347,512
 
               
Gross profit (loss)
    
709,526
   
(127,729
)
               
Operating expenses:
              
General and administrative
    
4,522,741
   
4,663,285
 
Selling and marketing
    
111,438
   
254,815
 
Research and development
    
605,210
   
307,827
 
Total operating expenses
   
5,239,389
   
5,225,927
 
               
Operating loss
    
(4,529,863
)
  
(5,353,656
)
               
Other (expense) income
              
Interest expense
    
(1,552
)
  
(1,488
)
Interest income
    
415,608
   
737,969
 
Other
   
10
   
7,847
 
Total other
    
414,066
   
744,328
 
               
Net loss
    
(4,115,797
)
  
(4,609,328
)
               
Preferred stock dividends
    
(577,311
)
  
(590,221
)
               
Net loss attributable to common stockholders
  
$
(4,693,108
)
$
(5,199,549
)
               
Net loss per common share – basic and diluted
  
$
(0.06
)
$
(0.07
)
               
Weighted average number of shares outstanding, basic
and diluted
   
80,499,620
   
78,458,508
  
 
 
6
 

APPLIED ENERGETICS, INC.
RECONCILIATION OF NET LOSS TO EBITDA
(Unaudited)
 
 
  
For the three months ended
June 30,
  
For the six months ended
June 30,
  
     
2008
    
2007
    
2008
    
2007
  
                           
Net loss
  
$
(819,318
)
$
(2,251,338
)
$
(4,115,797
)
$
(4,609,328
)
                           
Interest income
    
(165,780
)
  
(354,143
)
  
(415,608
)
  
(737,969
)
Interest expense
    
239
   
489
   
1,552
   
1,488
 
Non-cash stock-based compensation expense
    
952,894
   
682,312
   
2,302,255
   
1,785,297
 
Depreciation and amortization expense
    
242,318
   
270,471
   
480,206
   
541,706
 
                           
EBITDA
  
$
210,353
  
$
(1,652,209
)
$
(1,747,392
)
$
(3,018,806
)
 
Contact:
Kevin McGrath
Cameron Associates
(212) 245-8800 Ext. 203
Kevin@cameronassoc.com

 
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