SAVAGE, MN -- (MARKET WIRE) -- February 7, 2007 -- GreenMan Technologies, Inc. (
OTCBB:
GMTI), a
leading recycler of over 12 million scrap tires per year in the United
States, today announced results for the three months ended December 31,
2006.
Lyle Jensen, GreenMan's President and Chief Executive Officer, stated: "I
am very pleased with the continued positive trend in operating results
across the board. Overall revenue was up 14 percent from the same period
last year with inbound tire volume up over half a million tires during the
December 2006 quarter as a result of ongoing efforts to increase market
share and the commencement of several Iowa based tire cleanup projects
(November 1, 2006 press release). Included in this increase, crumb rubber
revenue was up 43 percent during the December 2006 quarter primarily due to
strong demand for product produced by our new Des Moines powderizer
equipment (September 26, 2006 press release). Gross margins for the quarter
remained above 30 percent despite higher repairs and maintenance costs
during the December 2006 quarter. Earnings before interest, tax,
depreciation and amortization ('EBITDA') exceeded $900,000 for the quarter
and, at 18.5 percent of revenue, reflects another positive milestone in our
progress towards sustained profitability."
Mr. Jensen added, "I am very proud that our team accomplished these goals
without drawing down on our line of credit through the December quarter
marking six consecutive months of internal cash flow subsistence. For the
first time in many years, we enter our seasonally and historically slower
March quarter, focused on increasing market share, cost control and
building our crumb rubber inventory to meet the strong demand we've created
for our products during the seasonally stronger second half of our fiscal
year."
Please join us tomorrow, Thursday, February 8, 2007 at 12:00 PM EST for a
conference call in which we will discuss the results for the quarter ended
December 31, 2006. To participate, please call 1-800-946-0719 and ask for
the GreenMan call. A replay of the conference call can be accessed until
11:50 PM on February 10, 2007 by calling 1-888-203-1112 and entering pass
code 8672419.
GreenMan collects and recycles over 12 million tires annually into
alternative fuel, alternative energy and innovative products. Today, our
products are used as an efficient alternative fuel in large industrial
boilers, as a substitute for crushed stone in civil engineering
applications and as crumb rubber in playground and sport surfaces,
rubberized asphalt and landscaping applications. We pursue technological
processes and unique marketing programs intended to maximize the value of
each tire we manage. To learn more, please visit our website at
www.greenman.biz
In September 2005, due to the magnitude of continued operating losses, our
Board of Directors approved separate plans to divest the operations of our
Georgia and Tennessee subsidiaries and dispose of their respective assets.
In addition, due to continuing operating losses, in July 2006 we sold our
California subsidiary. Accordingly, we have classified all three respective
entity's results of operations as discontinued operations for all periods
presented in the consolidated financial statements.
Three Months Ended December 31, 2006 Compared To The Three Months Ended
December 31, 2005
Net sales from continuing operations for the three months ended December
31, 2006 increased $611,000 or 14 percent to $4,887,000 as compared to the
first quarter of last year's net sales from continuing operations of
$4,276,000. Our continuing operations processed approximately 3.65 million
passenger tire equivalents during the quarter ended December 31, 2006,
compared to approximately 3.10 million passenger tire equivalents during
the same period last year. In addition to the 18 percent increase in
overall inbound tire volume, the overall fee we are paid to collect and
dispose of a scrap tire ("tipping fee") increased 2 percent compared to
last year.
Gross profit for the three months ended December 31, 2006 was $1,483,000 or
30.4 percent of net sales, compared to $1,305,000 or 30.5 percent of net
sales for the three months ended December 31, 2005. Our cost of sales
increased $433,000 or 15 percent primarily due to increased collection and
processing costs associated with higher inbound volume and higher repair
and maintenance expense. In addition, due to the completion of several
large civil engineering projects (which use more of the scrap tire
including waste wire) during fiscal 2006, our processing residual waste
costs increased approximately $58,000 during the three months ended
December 31, 2006 as compared to the prior year.
Selling, general and administrative expenses for the three months ended
December 31, 2006 increased $192,000 to $968,000 or 20 percent of net
sales, compared to $776,000 or 18 percent of net sales for the three months
ended December 31, 2005. The increase was primarily attributable to an
increase of approximately $116,000 in salaries and wage related expenses,
sales commissions and the re-allocation of approximately $52,000 of net
corporate operating expenses which were absorbed by discontinued operations
during the three months ended December 31, 2005.
As a result of the foregoing, we had operating income from continuing
operations of $515,000 during the three months ended December 31, 2006 as
compared to an operating income of $529,000 for the three months ended
December 31, 2005.
Interest and financing expense for the three months ended December 31, 2006
increased $244,000 to $523,000, compared to $279,000 during the three
months ended December 31, 2005. The increase is attributable to the
inclusion of approximately $138,000 of deferred interest associated with
the June 2006 Laurus credit facility restructuring, increased rates and the
allocation of all Laurus related interest to continuing operations during
the fiscal year ended September 30, 2006 (approximately $25,000 was
allocated to discontinued operations during the three months ended December
31, 2005). Non-cash financing fees and interest were zero during the three
months ended December 31, 2006 and as compared to $656,000 for the same
period last year from the amortization of deferred financing fees in
conjunction with the June 2006 Laurus refinancing.
As a result of the foregoing, our net loss from continuing operations for
the three months ended December 31, 2006 decreased $409,000 or 96 percent
to $19,000 or $.00 per basic share, compared to a net loss of $428,000 or
$.02 per basic share for the three months ended December 31, 2005.
During the three months ended December 31, 2006, several vendors issued
credits relating to past due amounts, we recovered some bad debts and
reduced certain accrued expenses which offset a $19,000 increase in our
Georgia lease settlement reserve resulting in $10,000 ($.00 per basic
share) of income from discontinued operations. The $978,000 net loss ($.05
per basic share) from discontinued operations for the three months ended
December 31, 2005 includes approximately $746,000 associated with our
Georgia operations and approximately $232,000 associated with our
California operations.
Our net loss for the three months ended December 31, 2006 decreased
$1,397,000 or 99 percent to $9,000 or $.00 per basic share as compared to a
net loss of $1,406,000 or $.07 per basic share for the three months ended
December 31, 2005.
Condensed Consolidated Statements of Operations
Three Months Ended
December 31,
2006 2005
------------ ------------
Net sales $ 4,887,000 $ 4,276,000
Cost of sales 3,404,000 2,971,000
------------ ------------
Gross profit 1,483,000 1,305,000
Selling, general and administrative 968,000 776,000
------------ ------------
Operating income from continuing operations 515,000 529,000
------------ ------------
Other income (expense):
Interest and financing expense (523,000) (279,000)
Non-cash interest and financing fees -- (656,000)
Other, net (11,000) (22,000)
------------ ------------
Other (expense), net (534,000) (957,000)
Loss from continuing operations (19,000) (428,000)
Discontinued operations:
Gain (loss) from discontinued operations 10,000 (978,000)
------------ ------------
Net loss $ (9,000) $ (1,406,000)
============ ============
Loss from continuing operations per share -
basic $ -- $ (0.02)
Loss from discontinued operations per share -
basic -- (0.05)
------------ ------------
Net loss per share $ -- $ (0.07)
============ ============
Weighted average shares outstanding 21,467,000 19,225,000
============ ============
Condensed Consolidated Balance Sheet Data
December 31, September 30,
2006 2006
-------------- ---------------
Assets
Current assets $ 3,324,000 $ 3,463,000
Property, plant and equipment,net 5,701,000 5,807,000
Other assets 277,000 232,000
Assets related to discontinued operations -- 7,000
-------------- ---------------
$ 9,302,000 $ 9,509,000
============== ===============
Liabilities and Stockholders' (Deficit)
Current liabilities $ 3,994,000 $ 4,045,000
Liabilities related to discontinued
operations 3,350,000 3,415,000
Notes payable, non-current 10,798,000 10,874,000
Capital lease obligations, non-current 1,630,000 1,615,000
Deferred gain on sale leaseback 334,000 343,000
Obligations due under lease settlement,
non-current 562,000 630,000
Stockholders' deficit (11,366,000) (11,413,000)
-------------- ---------------
$ 9,302,000 $ 9,509,000
============== ===============
"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 risk and uncertainties that may individually or collectively
impact the matters herein described, including but not limited to the
possibility that we may not be able to secure the financing necessary to
return to profitability, the possibility that the delisting of our stock by
the American Stock Exchange could substantially limit our stock's future
liquidity and our ability to raise capital, the possibility that we may
not realize the benefits of product acceptance, economic, competitive,
governmental, seasonal, management, technological 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-KSB for
the fiscal period ended September 30,2006. The Company disclaims any
intent or obligation to update these "forward-looking" statements.
Contact Information: Contacts:
Chuck Coppa
CFO
Lyle Jensen
CEO
GreenMan Technologies
800-957-9575