PORTSMOUTH, N.H., Nov. 14 /PRNewswire-FirstCall/ -- Environmental Power Corporation (Amex: EPG or the "Company") today announced results for the three months and nine months ended September 30, 2007. Financial Results Nine months ended September 30, 2007 compared to nine months ended September 30, 2006 Revenues from continuing operations decreased by $882,000, or 50%, to $886,000 for the nine months ended September 30, 2007, as compared to $1.8 million for the same period in 2006. The decrease in revenue is due mainly to the change from a business model where anaerobic digester equipment was sold to the farmer, to the current model whereby the Company will own and operate anaerobic digester facilities that will generate long term gas or electric revenue streams for the benefit of the Company. We recognized $1.2 million from the sale of digester equipment in 2006 whereas there were no such sales in 2007 due to the change in models. The Company reported a loss from continuing and discontinued operations available to common shareholders for the nine months ended September 30, 2007 of $15.0 million, or $1.51 per share, compared to net loss available to common shareholders of $7.8 million, or loss per common share of $0.81, for the same period in 2006. The Company's discontinued operations experienced a loss of $0.50 per share for the nine months ended September 30, 2007. The remaining $1.01 per share loss from continuing operations is associated with a decrease in revenues and an increase in expenses associated with the Company's ownership business model as explained above. Three months ended September 30, 2007 compared to three months ended September 30, 2006 The Company reported a loss from continuing and discontinued operations available to common shareholders for the three months ended September 30, 2007 of $6.2 million, or $0.61 per common share, compared to a loss of $3.4 million, or $0.35 per common share, for the three months ended September 30, 2006. Continuing operations reported a loss available to common shareholders of $4.2 million, or $0.41 per share, while discontinued operations reported a loss of $2.0 million, or $0.20 per share for the three months ended September 30, 2007. For the same period in 2006, continuing operations reported a loss available to common shareholders of $2.7 million, or $0.27 per share, and discontinued operations reported a loss of $738,000, or $0.08 per share. The increase in loss is due to a $1.0 million increase in general and administrative expenses, primarily due to increased payroll expense, and a $335,024 increase in preferred dividend requirements. Discontinued Operations In accordance with previous announcements, the Company continues to expect that its subsidiary, Buzzard Power Corporation, will complete an agreement with Scrubgrass Generating Company, L.P., to terminate Buzzard's leasehold interest in the Scrubgrass waste coal facility by the end of 2007. The Company expects to recognize approximately $5.8 million to income to reflect cancellation of debt and recognition of deferred gain associated with the facility once the closing occurs. Business Update Huckabay Ridge Ribbon-Cutting On November 5th, the Company celebrated the completion of construction at the Huckabay Ridge facility with a ribbon cutting event attended by over a hundred investors, suppliers, dairy owners, press and officials from the State of Texas. The event produced a sustained level of interest in the facility, the technology, and the Company as a whole. All systems at Huckabay are operational following the completion of modifications to the gas conditioning system and front-end manure processing systems and we are ramping up the digesters, at an expected rate, to targeted production levels of 635,000 MMBtus on an annual basis. Management currently anticipates that the facility will reach full capacity within the next few weeks. In addition, we announced that we will begin deliveries of RNG(R) from the Huckabay Ridge facility beginning in October 2008 under the existing 10- year agreement with Pacific Gas and Electric. The facility currently exports RNG(R) to Lower Colorado River Authority pursuant to an agreement ending in September 2008. Other Development Projects The Company continues to advance the development of its previously announced project pipeline of 4.9 million MMBtus/year. We have identified qualified contractors who are capable of implementing our plans to build multiple projects in parallel on a fast-track basis and have finalized our design configuration reflecting experience gained at Huckabay. We are also working closely with permitting agencies to ensure we obtain our permits in the time frames necessary to support our construction schedule and continue to work with various utilities to establish long term off-take agreements. In addition we are preparing for financing of the California projects using tax exempt bonds. For the JBS Swift project in Grand Island, Nebraska, we are in the process of completing a final agreement with The Benham Companies, LLC who will act as our detailed engineering and construction contractor. Groundbreaking and the start of site-work is currently expected to occur in the fourth quarter of 2007. Management Conference Call Mr. Richard Kessel, Chief Executive Officer, and Mr. Michael Thomas, Chief Financial Officer, will comment on these and related items and will also answer questions from interested investors in a conference call scheduled for Wednesday, November 14, 2007, at 10 a.m. EDT. Conference call details: Dial-in: U.S. Toll Free: 800-391-2548 Canadian Toll Free: 866-627-1646 International Toll: 302-709-8328 Access Code: Verbal Passcode VK21236 Replay Access#: 800-355-2355 Replay Passcode: 21236# The call will be available for 3 days by accessing the number above after which it will be available on our website http://www.environmentalpower.com/ ABOUT ENVIRONMENTAL POWER CORPORATION Environmental Power Corporation is a developer, owner and operator of renewable energy production facilities. Its principal operating subsidiary, Microgy, Inc., holds an exclusive license in North America for the development and deployment of a proprietary anaerobic digestion technology for the extraction of methane gas from livestock wastes and other organic waste for its use to generate energy. For more information visit the Company's web site at http://www.environmentalpower.com/. CAUTIONARY STATEMENT The Private Securities Litigation Reform Act of 1995, referred to as the PSLRA, provides a "safe harbor" for forward-looking statements. Certain statements contained in this press release, such as statements concerning planned manure-to-energy systems, our sales pipeline, our backlog, our projected sales and financial performance, statements containing the words "may," "assumes," "forecasts," "positions," "predicts," "strategy," "will," "expects," "estimates," "anticipates," "believes," "projects," "intends," "plans," "budgets," "potential," "continue," "targets" "proposed," and variations thereof, and other statements contained in this press release regarding matters that are not historical facts are forward-looking statements as such term is defined in the PSLRA. Because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to: uncertainties involving development-stage companies; uncertainties regarding project financing, the lack of binding commitments and/or the need to negotiate and execute definitive agreements for the construction and financing of projects, the sale of project output, the supply of substrate and other requirements and for other matters; financing and cash flow requirements and uncertainties; inexperience with the development of multi-digester projects; risks relating to fluctuations in the price of commodity fuels like natural gas, and our inexperience with managing such risks; difficulties involved in developing and executing a business plan; difficulties and uncertainties regarding acquisitions; technological uncertainties; including those relating to competing products and technologies; risks relating to managing and integrating acquired businesses; unpredictable developments; including plant outages and repair requirements; the difficulty of estimating construction, development, repair and maintenance costs and timeframes; the uncertainties involved in estimating insurance and implied warranty recoveries, if any; the inability to predict the course or outcome of any negotiations with parties involved with our projects; uncertainties relating to general economic and industry conditions, and the amount and rate of growth in expenses; uncertainties relating to government and regulatory policies and the legal environment; uncertainties relating to the availability of tax credits, deductions, rebates and similar incentives; intellectual property issues; the competitive environment in which Environmental Power Corporation and its subsidiaries operate and other factors, including those described in our most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, well as in other filings we make with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date that they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For More Information Company Contact Mark Hall, Senior Vice President Environmental Power Corporation (630) 573-2926 Public Relations Contact John Abrashkin, Ricochet Public Relations (212) 679-3300 x121 Investor Relations Contact John Baldissera BPC Financial Marketing 1-800-368-1217 DATASOURCE: Environmental Power Corporation CONTACT: Mark Hall, Senior Vice President of Environmental Power Corporation, +1-630-573-2926, , or Public Relations Contact, John Abrashkin of Ricochet Public Relations, +1-212-679-3300 x121, , or Investor Relations Contact, John Baldissera of BPC Financial Marketing, +1-800-368-1217, Web site: http://www.environmentalpower.com/

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