Comverge To Record Non-Cash Impairment Charge
EAST HANOVER, N.J., October 31, 2008 Comverge, Inc. (Nasdaq: COMV) a leading provider of clean energy through demand response and energy efficiency announced today that it expects to record a non-cash impairment charge of goodwill and certain intangible assets in the range of $65 million to $79 million for the three months ended September 30, 2008. The net non-cash impairment charge is estimated to increase diluted net loss per share by $3.05 to $3.71 per share. Comverge will release third quarter operating results after market close on November 11, 2008.
During the third quarter, Comverge concluded that it is likely that the fair value of one of its reporting units has been reduced below its carrying value. Comverge is currently conducting an interim goodwill and identifiable intangible asset impairment analysis, with the assistance of an independent third party valuation specialist, to determine the required amount of the non-cash impairment charge. This non-cash impairment charge, within the Enerwise segment, is primarily a result of less revenue being generated in the PJM territory, resulting from the rule change for economic demand response programs during 2008. The non-cash impairment charge will have no effect on Comverge's cash balances, liquidity, borrowing capacity, or debt covenant compliance.
Robert M. Chiste, Chairman, President and CEO of Comverge, stated, "The impairment charge results from accounting rules primarily driven by a regulatory change. While PJM is currently considering new proposals which could provide alternative revenue streams, we have no assurance of that occurring. From a strategic standpoint, we believe that our acquisition of Enerwise in 2007 has made Comverge a strong participant in the commercial and industrial sector. Further, the Enerwise commercial and industrial expertise and technology have opened opportunities and allowed Comverge to win and execute on long-term C&I Virtual Peaking Capacity(R) contracts. In addition, we continue to expand our participation in open market programs in various geographies."
Additional financial information on Comverge can be found in the Company's Quarterly Report on Form 10-Q for the quarter-ended September 30, 2008, which is expected to be filed with the Securities and Exchange Commission by November 12, 2008.
Comverge is a leading provider of clean energy solutions that improve grid reliability and supply electric capacity on a more cost effective basis than conventional alternatives by reducing base load and peak load energy consumption. For more information, visit www.comverge.com. Virtual Peaking Capacity is a registered trademark of Comverge, Inc.
For Comverge Investors
This release contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release are not and do not constitute historical facts, do not constitute guarantees of future performance and are based on numerous assumptions which, while believed to be reasonable, may not prove to be accurate. These forward-looking statements include the impact on future cash expenditures, regulatory rule changes, success in certain industry sectors and geographies, and certain assumptions upon which such forward-looking statements are based. The forward-looking statements in this release do not constitute guarantees of future performance and involve a number of factors that could cause actual results to differ materially, including risks associated with Comverge's business involving our products, the development and distribution of our products and related services, regulatory changes, economic and competitive factors, our key strategic relationships, and other risks more fully described in our most recently filed Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Comverge assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.