DENVER, July 9, 2010 (GLOBE NEWSWIRE) -- Pure Cycle Corporation (Nasdaq:PCYO) announced the following summary results of operations:
    Nine Months Ended May 31,
    2010 2009 $ Change  
Total revenues    $ 168,700  $ 180,400  $ (11,700)  
Total cost of revenues    (115,600)  (120,400)  4,800  
Gross margin    53,100  60,000  (6,900)  
 Gross margin %   31% 33%    
Operating expenses:          
 General and administrative expenses    (1,327,500)  (1,547,900)  220,400  
 Other operating expenses    (223,900)  (218,800)  (5,100)  
Loss from operations    (1,498,300)  (1,706,700)  208,400  
Other (expense) income:          
 Interest imputed on the Tap          
 Participation Fee liability    (2,694,000)  (2,862,000)  168,000  
 Other    65,900  130,200  (64,300)  
Net loss    $ (4,126,400)  $ (4,438,500)  $ 312,100  
Weighted average shares outstanding (basic and diluted)    20,206,566  20,206,566    
Loss per share    $ (0.20)  $ (0.22)  $ 0.02  

Revenues for the nine months ended May 31, 2010 decreased 6% over the comparable period in 2009. This was mainly attributable to decreased water usage at our largest customer due to a reduction in funding experienced by the customer as a result of the economy, which resulted in the closing of student housing facilities and reduced water usage. Due to our ability to actively manage our expenditures including some of our energy costs, the gross margin percentage decreased 2%, period over period despite a 6% decrease in revenues.

Our general and administrative expenses ("G&A expenses") decreased approximately 14% as a result of cost reduction efforts undertaken by management in light of the weakened economy and particularly the housing market and delays in development within our service areas. Specifically, we reduced the level of outside professional services we were utilizing by more closely managing the level of involvement by legal counsel and other professional service firms. More specific details of the decreases in our G&A expenses are included in our Form 10-Q which was filed with the Securities and Exchange Commission on July 9, 2010.

Our summarized financial position as of May 31, 2010 and August 31, 2009 is as follows:
    May 31, 2010 August 31, 2009 $ Change
 Cash, cash equivalents and marketable securities    $ 2,549,900  $ 3,707,300  $ (1,157,400)
 Other current assets    340,600  283,100  57,500
 Total current assets    2,890,500  3,990,400  (1,099,900)
 Investments in water and water systems, net    102,894,400  103,159,600  (265,200)
 Other long-term assets    912,100  941,100  (29,000)
 Total assets    $ 106,697,000  $ 108,091,100  $ (1,394,100)
Liabilities and Shareholders' Equity        
 Current liabilities    $ 167,100  $ 138,100  $ 29,000
 Tap participation fee payable to HP A&M    60,215,300  57,521,300  2,694,000
 Other long-term liabilities    2,619,700  2,662,500  (42,800)
 Total liabilities     63,002,100  60,321,900  2,680,200
 Total shareholders' equity     43,694,900  47,769,200  (4,074,300)
 Total liabilities and shareholders' equity    $ 106,697,000  $ 108,091,100  $ (1,394,100)

Cash, cash equivalents and marketable securities have declined due to use of cash in operations. Reference is made to the Management's, Discussion and Analysis section of our May 31, 2010 Form 10-Q for further information on cash used by operations. 

The Tap Participation Fee is due and payable once we have sold a water tap and received the consideration due for such water tap. The Tap Participation Fee liability represents the fair value of the estimated amounts payable to HP A&M as a result of the assets we acquired from HP A&M in 2006. The increase is due to the imputing of approximately $912,000 and $2.7 million of interest during the three and nine months ended May 31, 2010, respectively. This liability is described in further detail in our May 31, 2010 Form 10-Q.

As we announced in 2009, management will host earnings calls reviewing mid-year and year end results. Therefore, our next earnings call will be hosted after the release of our fiscal year end results. We have posted a detailed slide presentation which overviews the Company and presents summary financial results on our website which can be accessed at .

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 .
CONTACT:  Pure Cycle Corporation          Mark W. Harding, President          303-292-3456

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