CARLISLE, IA--(Marketwire - August 17, 2010) - GreenMan Technologies, Inc. (
Lyle Jensen, GreenMan's President and Chief Executive Officer, stated, "During the third quarter, through vigorous sales and marketing activity, we continued to build our order pipeline and capitalized on several meaningful dual fuel opportunities in both the stationary and vehicular sectors. Our American Power Group's ('APG') focus on introducing our dual fuel solution to the international marketplace is gaining traction with the receipt of several key orders subsequent to the close of the third quarter.
"Following the quarter, APG received an order valued at $440,000 from its local distributor in Nigeria, on behalf of Seven-Up Bottling Company, for the conversion of approximately 25% of their local delivery fleet. The initial order is expected to be completed over a six to nine month period and with the successful delivery of this initial order, APG has received verbal indication for a potential follow on order valued at approximately $1.22 million.
"Likewise, in early August, APG signed a distributor agreement with Engineering Kinetics Limited (EKL) to sell and install its diesel dual fuel technology in the number one natural gas vehicular country in the world as per The European Natural Gas Vehicle Association. Pakistan has over two million natural gas vehicles in operation and the country is considered the world leader in natural gas infrastructure. APG has also upgraded three diverse test vehicles in the country and intends to upgrade a transit bus to demonstrate the fuel savings and emissions reduction that can be achieved. We believe APG's ability to provide a reliable and economical CNG technology that addresses the demands of medium and heavy-duty diesel trucks will fill an underserved niche in Pakistan.
"In addition to contract wins on the vehicular front, APG also recently received an order valued at approximately $264,000 from Mutual Redevelopment Houses (MRH) for the conversion of 33% of the stationary diesel engines used by their Penn South housing facility in New York City. APG's technology will enable the displacement of up to 50% of the facility's diesel requirements with lower cost natural gas, enhancing PennSouth's ongoing environmental initiatives while also significantly reducing the cooperative's operating costs. MRH has verbally indicated their intention to place a follow on order valued at $300,000, to convert Penn South's remaining stationary diesel engines over a six to nine month period. We believe this order is a validation of our conversion technology and we anticipate that it will provide more opportunities for our involvement in stationary diesel engine projects and applications in other major metropolitan areas.
"While our progress has not yet been reflected in terms of revenue and earnings growth, we have great confidence in our technology and remain enthusiastic about our ability to convert opportunities in our pipeline, as demonstrated by our three recent contract wins. The economic and environmental benefits of our technology are proven and we will continue our aggressive sales and marketing efforts to bring our technology to the attention of the worldwide marketplace."
Please join us today, August 17, 2010 at 11:00 AM EST for a conference call in which we will discuss the results for the quarter ended June 30, 2010. To participate, please call 1-888-599-8685 and ask for the GreenMan call using pass code 8210647. A replay of the conference call can be accessed until 11:50 PM on September 15, 2010 by calling 1-888-203-1112 and entering pass code 8210647.
Our business changed substantially in November 2008, when we sold substantially all of the assets of our tire recycling operations. Since we operated our tire recycling assets during only a portion of the fiscal year ended September 30, 2009 we have included relevant information on this business segment but have classified its assets, liabilities and results of operations as discontinued operations for all periods presented in the accompanying consolidated financial statements. On July 27, 2009 we purchased substantially all the dual fuel conversion operating assets of American Power Group (excluding its dual fuel patent). The results described below include the operations of American Power Group since July 27, 2009.
Results of Operations
Three Months ended June 30, 2010 Compared to the Three Months ended June 30, 2009
Net sales from continuing operations for the three months ended June 30, 2010 decreased $141,000 or 31 percent to $310,000 as compared to net sales of $451,000 for the three months ended June 30, 2009. The decrease is primarily attributable to lower playground tile and equipment sales in the Midwestern region of the United States as well as the deferral of several orders into the fourth quarter. A majority of our Green Tech Products revenue is derived from specific one-time installations with minimal follow-on revenue from the installed project, thus making quarterly revenue comparison particularly difficult. We anticipate increased revenue during our seasonally stronger second half of the fiscal year due to warmer weather conditions and school vacation closures, which allow for easier installation conditions. In addition, our new American Power Group dual fuel subsidiary recorded revenue of $33,000 during the three months ended June 30, 2010.
During the three months ended June 30, 2010 we incurred a negative gross profit of $60,000, primarily due to the inclusion of $160,000 of unabsorbed costs in excess of revenues associated with our dual fuel subsidiary. Due to product mix changes and slightly lower production costs during the quarter, our recycled rubber products operation had a gross profit of $101,000 or 36 percent of net sales as compared to 145,000 or 32 percent of net sales for the three months ended June 30, 2009.
Selling, general and administrative expenses for the three months ended June 30, 2010 increased $189,000 to $1,092,000 as compared to $903,000 for the three months ended June 30, 2009. The increase was primarily attributable to the inclusion of $359,000 in costs associated with increased sales and marketing initiatives for our American Power Group subsidiary as well as increased professional expenses relating to business development initiatives which offset decreased performance based incentives.
Expenses for internal research and development projects relating to the introduction of new dual fuel products, enhancements made to the current family of dual fuel products, and research and development overhead was $169,000 for the three months ended June 30, 2010.
As a result of the foregoing, our loss from continuing operations after income taxes increased $608,000 to $1,334,000 for the three months ended June 30, 2010 as compared to $726,000 for the three months ended June 30, 2009.
During the three months ended June 30, 2010, we recognized income from discontinued operations of $200,000 associated with a reduction of income tax expense by $176,000 and a $24,000 credit from a former vendor. During the three months ended June 30, 2009, we recognized net income from our discontinued tire recycling operations of $37,000 associated with the final purchase price reconciliation with the purchaser of the assets.
Our net loss for the three months ended June 30, 2010 was $1,134,000 or $.03 per basic share as compared to a net loss of $689,000 or $.02 per basic share for the three months ended June 30, 2009.
Nine Months ended June 30, 2010 Compared to the Nine Months ended June 30, 2009
Net sales from continuing operations for the nine months ended June 30, 2010 decreased $213,000 or 18 percent to $998,000 as compared to net sales of $1,211,000 for the nine months ended June 30, 2009. The decrease is attributable to lower playground tile and equipment sales in the Midwestern region of the United States. A majority of our Green Tech Products revenue is derived from specific one-time installations with minimal follow on revenue from the installed project, thus making quarterly revenue comparison particularly difficult. We anticipate increased revenue during our seasonally stronger second half of the fiscal year due to warmer weather conditions and school vacation closures which allow for easier installation conditions. In addition, our new American Power Group dual fuel subsidiary recorded $194,000 of revenue during the nine months ended June 30, 2010.
During the nine months ended June 30, 2010 we incurred a negative gross profit of $397,000 primarily due to the inclusion of $610,000 of unabsorbed costs in excess of revenues associated with our dual fuel subsidiary. Due to product mix changes and slightly lower production costs during the quarter, our recycled rubber products operation had a gross profit of $210,000 or 26 percent of net sales as compared to $203,000 or 17 percent of net sales for the nine months ended June 30, 2009.
Selling, general and administrative expenses for the nine months ended June 30, 2010 increased $814,000 to $3,620,000 as compared to $2,805,000 for the nine months ended June 30, 2009. The increase was primarily attributable to the inclusion of $1,268,000 in costs associated with increased sales and marketing initiatives for our American Power Group subsidiary as well as increased professional expenses relating to business development initiatives, which offset decreased performance based incentives.
Expenses for internal research and development projects relating to the introduction of new dual fuel products, enhancements made to the current family of dual fuel products, and research and development overhead were $461,000 for the nine months ended June 30, 2010.
As a result of the foregoing, our loss from continuing operations after income taxes increased $2,029,000 to $4,649,000 for the nine months ended June 30, 2010 as compared to $2,620,000 for the nine months ended June 30, 2009.
During the nine months ended June 30, 2010, we recognized income from discontinued operations of $200,000 associated with a reduction of income tax expense by $176,000 and a $24,000 credit from a former vendor. During the nine months ended June 30, 2009 we recognized a gain on sale of discontinued operations net of income taxes ($5.5 million), of $14,413,000 associated with the sale of our tire recycling business in November 2008. The income from discontinued operations for the nine months ended June 30, 2009 relates primarily to the net results of our tire recycling operations including approximately $391,000 of one-time gains associated with the termination of a long-term land and building lease agreement in Minnesota. In addition, during the nine months ended June 30, 2009, we recognized income from Georgia discontinued operations of approximately $44,000 relating to the net effects of two settlement agreements with two former Georgia vendors.
Our net loss for the nine months ended June 30, 2010 was $4,449,000 or $.13 per basic share as compared to net income of $12,083,000 or $.39 per basic share for the nine months ended June 30, 2009.
| Condensed Consolidated Statements of Operations | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
| Net sales | $ | 310,000 | $ | 451,000 | $ | 998,000 | $ | 1,211,000 | |||||||||||
| Cost of sales | 370,000 | 306,000 | 1,395,000 | 1,008,000 | |||||||||||||||
| Gross profit | (60,000 | ) | 145,000 | (397,000 | ) | 203,000 | |||||||||||||
| Selling, general and administrative | 1,092,000 | 903,000 | 3,620,000 | 2,805,000 | |||||||||||||||
| Research and development | 169,000 | -- | 461,000 | -- | |||||||||||||||
| 1,261,000 | 903,000 | 4,081,000 | 2,805,000 | ||||||||||||||||
| Operating (loss) income from continuing operations | (1,321,000 | ) | (758,000 | ) | (4,478,000 | ) | (2,602,000 | ) | |||||||||||
| Other income (expense): | |||||||||||||||||||
| Interest and financing expense, net | 3,000 | (15,000 | ) | (2,000 | ) | (88,000 | ) | ||||||||||||
| Other, net | (16,000 | ) | 47,000 | (169,000 | ) | 70,000 | |||||||||||||
| Other (expense), net | (13,000 | ) | 32,000 | (171,000 | ) | (18,000 | ) | ||||||||||||
| Loss from continuing operations | (1,334,000 | ) | (726,000 | ) | (4,649,000 | ) | (2,620,000 | ) | |||||||||||
| Provision for income taxes | -- | -- | -- | -- | |||||||||||||||
| Loss after income taxes | (1,334,000 | ) | (726,000 | ) | (4,649,000 | ) | (2,620,000 | ) | |||||||||||
| Discontinued operations: | |||||||||||||||||||
| Gain on sale of discontinued operations | 176,000 | 65,000 | 176,000 | 14,413,000 | |||||||||||||||
| (Loss) income from discontinued operations | 24,000 | (28,000 | ) | 24,000 | 290,000 | ||||||||||||||
| 200,000 | 37,000 | 200,000 | 14,703,000 | ||||||||||||||||
| Net loss | $ | (1,134,000 | ) | $ | (689,000 | ) | $ | (4,449,000 | ) | $ | 12,083,000 | ||||||||
| Loss from continuing operations per share - basic | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.14 | ) | $ | (0.08 | ) | |||||||
| Loss from discontinued operations per share - basic | 0.01 | -- | 0.01 | 0.47 | |||||||||||||||
| Net loss per share | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.13 | ) | $ | 0.39 | ||||||||
| Weighted average shares outstanding | 33,113,000 | 31,171,000 | 33,093,000 | 30,977,000 | |||||||||||||||
| Condensed Consolidated Balance Sheet Data | ||||||
| June 30, | September 30, | |||||
| 2010 | 2009 | |||||
| Assets | ||||||
| Current assets | $ | 4,054,000 | $ | 9,218,000 | ||
| Property, plant and equipment, net | 990,000 | 872,000 | ||||
| Other assets | 2,352,000 | 2,552,000 | ||||
| $ | 7,396,000 | $ | 12,642,000 | |||
| Liabilities and Stockholders' Equity | ||||||
| Current liabilities | $ | 2,798,000 | $ | 3,720,000 | ||
| Notes payable, non-current | 508,000 | 530,000 | ||||
| Obligations due under lease settlement | 505,000 | 505,000 | ||||
| Stockholders' equity | 3,585,000 | 7,887,000 | ||||
| $ | 7,396,000 | $ | 12,642,000 | |||
About GreenMan Technologies
GreenMan Technologies, through its subsidiaries, provides technological processes and unique marketing programs for alternative energy, renewable fuels and innovative recycled products. The Company's alternative energy subsidiary, American Power Group, Inc. (APG) provides a cost-effective patented dual fuel technology for diesel engines. APG's dual fuel alternative energy system is a unique external fuel delivery enhancement system that converts existing diesel engines into more efficient and environmentally friendly engines that have the flexibility to run on: 1) diesel fuel and compressed natural gas ("CNG"); 2) diesel fuel and bio-methane, or 3) 100% diesel fuel depending on the circumstances. The proprietary technology seamlessly displaces up to 70% of the normal diesel fuel consumption with CNG or bio-methane and the energized fuel balance between the two fuels is maintained with a patented control system ensuring the engines operate to Original Equipment Manufacturers' ("OEM") specified temperatures and pressures with no loss of horsepower. Installation requires no engine modification unlike the more expensive high-pressure alternative fuel systems in the market. Our Green Tech Products, Inc. subsidiary develops and markets branded products and services that provide schools and other political subdivisions viable solutions for safety, compliance, and accessibility including recycled surfacing. See additional information at: www.americanpowergroupinc.com and www.playgroundcompliance.com
"Safe Harbor" Statement: Under the Private Securities Litigation Reform Act
With the exception of the historical information contained in this news release, the matters described herein contain "forward-looking" statements that involve risks and uncertainties that may individually or collectively impact the matters herein described, including but not limited to the fact that we have sold the tire recycling operations which have historically generated substantially all our revenue and that we will be prohibited from competing in that business on a regional basis until 2013; the risk that we may not be able to increase the revenue or improve the operating results of our Green Tech Products or American Power Group divisions; the risk that we may not be able to return to sustained profitability; the risk that we may not be able to secure additional funding necessary to grow our business, on acceptable terms or at all; the risk that if we have to sell securities in order to obtain financing, the rights of our current stockholders may be adversely affected; the risk that we may not be able to increase the demand for our products and services; the risk that we may not be able to adequately protect our intellectual property; and risks of possible adverse effects of economic, governmental, seasonal and/or other factors outside the control of the Company, which are detailed from time to time in the Company's SEC reports, including the Annual Report on Form 10-K for the fiscal year ended September 30, 2009. The Company disclaims any intent or obligation to update these "forward-looking" statements.
Contact Information:
Contacts:
Chuck Coppa, CFO
Lyle Jensen, CEO
GreenMan Technologies
781-224-2411
John Nesbett or Jennifer Belodeau
Institutional Marketing Services
203-972-9200