Pure Cycle Corporation Announces Third Quarter Fiscal 2009 Results

• Press Release
• Source: Pure Cycle Corporation
• On 12:00 pm EDT, Friday July 10, 2009

THORNTON, Colo., July 10, 2009 (GLOBE NEWSWIRE) -- Pure Cycle Corporation (Nasdaq:PCYO - News) announced the following unaudited summary results of operations:

Related Quotes

Symbol	Price	Change
PCYO	2.27	-0.02

{"s" : "pcyo","k" : "c10,l10,p20,t10","o" : "","j" : ""}

                                Nine Months Ended May 31,
                        2009           2008       $ Change    $ Change
                    ------------- ------------- ----------------------
 Total revenues     $    180,400  $    194,100  $    (13,700)      -7%
 Total cost of
  revenues              (120,400)     (118,500)       (1,900)       2%
                    ------------- ------------- ----------------------
 Gross margin             60,000        75,600       (15,600)     -21%
 Operating expenses:
   General and
    administrative
    expenses          (1,547,900)   (1,810,400)      262,500      -14%
   Other operating
    expenses            (218,800)     (220,000)        1,200       -1%
                    ------------- ------------- ----------------------
 Loss from
  operations          (1,706,700)   (1,954,800)      248,100      -13%
 Other (expense)
  income:
   Interest imputed
    on the Tap
    Participation
    Fee liability     (2,862,000)   (3,255,000)      393,000      -12%
   Other                 130,200       (63,200)      193,400     -306%
                    ------------- ------------- ----------------------
 Net loss           $ (4,438,500) $ (5,273,000) $    834,500      -16%
                    ============= ============= ======================
 Weighted average
  shares outstanding
  (basic and
  diluted)            20,206,566    20,182,668
                    ============= =============
 Loss per share     $      (0.22) $      (0.26) $       0.04
                    ============= ============= =============

Revenues and gross margin were negatively impacted by reduced water usage by our customers. This is due to above average precipitation levels thus far in 2009 along the Colorado Front Range. Increased levels of precipitation result in decreased outside irrigation.

Our general and administrative expenses ("G&A expenses") decreased as a result of cost reduction efforts undertaken by management since 2008 in light of the weakened housing market and delay in development at the Lowry Range. Specifically, we reduced the number of consultants we were utilizing to assist with negotiations at the Lowry Range (described further in our May 31, 2009, Form 10-Q filed with the SEC today) due to the developer of the Lowry Range terminating its agreement with the State of Colorado Board of Land Commissioners. In addition we eliminated franchise fees payable to the State of Delaware as a result of our reincorporation into Colorado in 2008. More specific details of the decreases in our G&A expenses are included in our May 31, 2009 Form 10-Q.

Our summarized financial position as of May 31, 2009 is as follows:

                       May 31,     August 31,
                        2009         2008         $ Change    % Change
                    ------------- ------------- ----------------------
 Assets              (unaudited)
 ------------------
  Cash, cash
   equivalents and
   marketable
   securities       $  3,947,500  $  5,239,000  $ (1,291,500)     -25%
  Other current
   assets                322,700       263,200        59,500       23%
                    ------------- ------------- ----------------------
    Total current
     assets            4,270,200     5,502,200    (1,232,000)     -22%

  Investments in
   water and water
   systems, net      103,176,500   103,346,600      (170,100)       0%
  Other long-term
   assets              1,029,700     1,050,600       (20,900)      -2%
                    ------------- ------------- ----------------------
    Total assets    $108,476,400  $109,899,400  $ (1,423,000)      -1%
                    ============= ============= ======================

 Liabilities and
  Stockholders'
  Equity
 ------------------
  Current
   liabilities      $    197,700  $    163,900  $     33,800       21%
  Tap participation
   fee payable to HP
   A&M                56,650,300    53,848,000     2,802,300        5%
  Other long-term
   liabilities         2,677,000     2,719,700       (42,700)      -2%
                    ------------- ------------- ----------------------
    Total liabili-
     ties             59,525,000    56,731,600     2,793,400        5%

  Total stock-
   holders' equity    48,951,400    53,167,800    (4,216,400)      -8%
                    ------------- ------------- ----------------------
    Total liabili-
     ties and
     stockholders'
     equity         $108,476,400  $109,899,400  $ (1,423,000)      -1%
                    ============= ============= ======================

Cash, cash equivalents and marketable securities have declined due to operations. Reference is made to the Management, Discussion and Analysis section of our May 31, 2009 Form 10-Q for further information on cash used by operations. Our other current assets increased mainly as a result of additional prepaid expenditures due to the timing of payments for various annual contracts.

Our current liabilities increased mainly as a result of timing of payments made on accounts payable. The Tap Participation Fee liability represents the fair value of the estimated amounts payable to HP A&M, the company we acquired our Arkansas River water from in 2006. The increase is due to the imputing of approximately $2.9 million of interest during the nine months ended May 31, 2009. This liability is described in further detail in our May 31, 2009 Form 10-Q.

Other information

During the three months ended May 31, 2009, the Colorado Supreme Court upheld the Colorado Water Court's ruling against the City of Aurora relating to a water court application concerning certain reservoirs sites which were subject to an agreement with the State Land Board. Additionally the State Land Board reached an agreement with the former developer of the Lowry Range Development Parcel to purchase certain studies conducted by the developer.

Effective this quarter, we are reducing the number of earnings conference calls we will be hosting. We anticipate hosting calls to announce our year end results and our annual shareholders meeting. We also plan to host calls as needed whenever material events affecting the Company's financial statements and operations occur. Therefore, we will not be hosting a conference call this quarter. However, in an effort to continue to provide timely and useful information to our shareholders, we plan to maintain a comprehensive power point presentation on our website with an overview of our operations, service area updates and current financial information presenting each quarter's results of operations. Additionally, management remains available to answer specific questions and can be reached at the number below. Our next conference call will be held in November 2009 when we announce our fiscal 2009 financial results.

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.

Pure Cycle Corporation
303-292-3456