|
NEW YORK, March 30, 2007 - U.S. Energy Systems, Inc. (Nasdaq: USEY), a "clean and green" energy company, today reported that, upon its further review of relevant accounting guidelines, it intends to restate third quarter 2006 results to reduce the net carrying value, asset value less related debt, of the UK assets, it acquired in that quarter by approximately $38 million. The reduction in carrying value will reduce depreciation, depletion and amortization expense in future periods, thereby contributing to an increase in future operating income on a comparable basis. The restatement reverses a previous extraordinary non-cash gain of $38 million recorded in the period, which represented the amount by which the value of the acquired assets exceeded the price USEY paid for them.
USEY confirmed that the value of the acquired assets continues to exceed the purchase price at the time of purchase by at least $38 million, but that the more appropriate accounting treatment is for shareholders to benefit from a reduced basis for depreciation, depletion and amortization.
In addition, USEY reported that the purchase price of the UK assets has been upwardly revised by approximately $3 million to reflect the subsequent increase in value of the equity instruments used to help finance the acquisition.
The restatement has no effect on USEY's reported cash flow. USEY intends to file an amended 10-Q for the third quarter of 2006, which will contain further information on the restatement and its effects on third quarter reported results.
About U.S. Energy Systems, Inc.
U.S. Energy Systems, Inc. is an owner of green power and clean energy and resources. USEY owns and operates energy projects in the United States and United Kingdom that generate electricity, thermal energy and gas production.
Certain matters discussed in this press release are forward-looking statements, and certain important factors may affect the Company's actual results and could cause actual results to differ materially from any forward-looking statements made in this release, or which are otherwise made by or on behalf of the Company. Such factors include, but are not limited to, the effect of the USEB's Chapter 11 filing, access to needed financing or refinancing on acceptable terms, revisions in the initial estimates in the fair market value of the acquired assets, failure to realize the estimated savings or operating results of the acquisition, and other risks associated with acquisitions generally, including risks relating to managing and integrating acquired businesses, changes in market conditions, the impact of competition, changes in local or regional economic conditions, and the amount and rate of growth in expenses, dependence on management and key personnel, changes in federal or state laws and their interpretation with respect to regulation, energy policy and other business issues, the inability to commence planned projects in a timely manner, our ability to continue our growth strategy, and the ability to complete acquisitions, as well as other risks detailed from time to time in U.S. Energy's Securities and Exchange Commission filings, including its Annual Report on Form 10-K for the year ended December 31, 2005 as well as the 10-Q for the period ended September 30, 2006. We do not undertake to update any of the information set forth in this press release.
|
