Ecosphere Technologies, a water engineering, technology licensing, and manufacturing company that develops environmental water treatment solutions for industrial markets worldwide, reports second-quarter 2013 net income was $27.3 million, or $0.17 per share, compared to net income of $0.9 million, or $0.17 per share in the prior year period.
The increase in earnings is primarily the result of a $29.5 million gain on the deconsolidation of Ecosphere Energy Services LLC (NYSEARCA:EES) to Fidelity National Financial (NYSE:FNF) for $6 million and the transition of ESPH's activities within the energy sector to the next phase of its business model in that sector. As a result of the sale, the company no longer holds a controlling interest in EES. FNF and ESPH now own 39 percent and 31 percent of EES, respectively.
The company allocated the gross proceeds from the sale to strengthen its balance sheet, which as of June 30, 2013, reflected working capital of $2.1 million.
"For the first time in the company's history, our balance sheet reflects the value of one of our seven core verticals in which the company's patented, revolutionary Ozonix® technology can be applied. In 2009, the company granted EES the exclusive rights to Ecosphere's patented Ozonix technology for use in the global energy field of use," David Brooks, CFO of ESPH stated in the press release. "The company retains 100% of the global rights to monetize its patented Ozonix technology in all other non-energy related water treatment industries and plans to realize similar value as recently realized from the development and sale of its ownership interest in EES."
Brooks continued, " … The sale of our interests in EES confirms our belief that the value of each of these additional verticals is significant. The company is successfully implementing its long-term strategy of patenting, commercializing, and licensing our environmental technologies and that strategy continues throughout the development of the energy sector and beyond."
Dennis McGuire, chairman and CEO of ESPH, said the company plans to replicate its growth strategy across additional industries in which liquid chemicals are used to treat water, including agriculture, environmental, food and beverage, industrial, mining, metals and minerals, marine, municipal, and sewage.
"As Ecosphere Technologies commercializes each new vertical, it will also retain the exclusive manufacturing rights to supply our originally designed and manufactured Ozonix equipment for each application," McGuire stated. "The same bacteria and their food source that we eliminate in the oil and gas industry find their way into every industrial application where water is being used. Our technology treats and eliminates them just the same across all of the verticals where Ozonix can be applied."
For more information, visit EcosphereTech.com
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