Noble Environmental IPO Faces Crosswinds

Factoring out the costs related to that contract, the company had $23.9 million in operating expenses, 8% more than in 2006. In 2006, that figure was nearly triple 2005 operating expenses of $7.6 million.

After ramping up in 2005, its first two full years in operations, Noble Environmental kept a lid on expense growth last year while still laying the groundwork to expand capacity.

Salary and wages rose to $10.6 million last year from $9.8 million in 2006 as the company's headcount grew to 138 from 91. (It has risen to 152 since the prospectus was filed.)

General and administrative costs, meanwhile, more than doubled to $8.3 million from $4.0 million, as fees for legal and accounting services as well as rent, utilities and recruiting increased.

Noble doesn't show signs of being reckless with spending the money it has raised through debt. It's also unlikely that the $375 million it could raise via the IPO would be spent frivolously.

But the prospectus does sketch a profile of a company that may be heading for the public markets a little too early: four years of operations, high debt and no revenue. Normally, those are the kinds of signs that cause prudent investors to think twice.

And they do mean that Noble Environmental will be bringing with it more risk than most IPO candidates have -- especially with the possibility that federal tax incentives for wind companies might not be renewed this year.

Still, other factors could offset that risk: An early entry into an energy niche that could see strong growth over the coming decade, and -- through its disclosures -- a glimpse into the financial condition of other wind-energy companies that may be headed for the public markets in the months ahead.

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