SAVAGE, MN--(Marketwire - August 12, 2008) - GreenMan Technologies, Inc. (OTCBB: GMTI), a
leading regional tire recycler and emerging leader in patented cold-cure
recycled rubber molded products, announced today results for the three and
nine months ended June 30, 2008.
Lyle Jensen, GreenMan's President and Chief Executive Officer, stated, "We
are very pleased with the June quarterly results of both business segments
and the resulting 42% increase in overall revenue and almost tripling of
income from continuing operations after taxes to $632,000. We believe the
tripling of income from continuing operations over 2007's third quarter
reaffirms the success of our turnaround. Tire recycling revenue was up
over 25% compared to a year ago due to a 25% increase in overall tire
derived end product revenues and a 15% increase in scrap tire volumes. Our
recently acquired molded recycled rubber products business segment enjoyed
a 46% increase in revenue for the June quarter compared to the March
quarter and as of the nine months ended June 30, 2008, have surpassed their
total revenue for the pro-forma previous fiscal year. We are well
positioned to take advantage of continued strong demand for our end
products as we enter the seasonally strong fourth quarter."
Mr. Jensen further stated, "Our focus during the past two years on quality
of revenue, earnings and cash flow has created significant internal value
that is not easily recognized due to the historical debt on our balance
sheet. The good news is that this phenomenal turnaround of the income
statement will allow GreenMan to be in a better position to address our
remaining balance sheet issues in the upcoming quarters."
Conference Call Scheduled for 10:00 a.m. Today
Please join us today, August 12, 2008 at 10:00 AM EDT for a conference call
in which we will discuss the results for the quarter ended June 30, 2008.
To participate, please call 1-877-874-1586 and ask for the GreenMan call. A
replay of the conference call can be accessed until 11:50 PM on August 29,
2008 by calling 1-888-203-1112 and entering pass code 5794885.
Financial Overview
In September 2005, due to the magnitude of continued operating losses, our
Board of Directors approved plans to divest the operations of our GreenMan
Technologies of Georgia, Inc. subsidiary and dispose of its respective
assets. Accordingly, we have classified all remaining liabilities
associated with our Georgia entity and its results of operations as
discontinued operations for all periods presented in the accompanying
consolidated financial statements. On June 27, 2008, our Georgia subsidiary
filed for liquidation under Chapter 7 of the federal bankruptcy laws in the
Bankruptcy Court of the Middle District of Georgia. As a result of the
bankruptcy proceedings we have relinquished control of our Georgia
subsidiary to the Bankruptcy Court and therefore have de-consolidated
substantially all remaining obligations from our financial statements as of
June 30, 2008. On October 1, 2007, we acquired Welch Products, Inc. in
exchange for 8,000,000 newly issued shares of our commons stock. The
results described below include the operations of Welch since October 1,
2007.
Three Months ended June 30, 2008 Compared to the Three Months ended June
30, 2007
Net sales for the three months ended June 30, 2008 increased $2,238,000 or
42 percent to $7,558,000 as compared to net sales of $5,320,000 for the
quarter ended June 30, 2007. The increase is primarily attributable to a 25
percent increase in overall tire derived end product revenues during the
three months ended June 30, 2008 and a 15 percent increase in scrap tire
volume (we processed approximately 3.5 million passenger tire equivalents
during the quarter ended June 30, 2008 as compared to approximately 3.0
million passenger tire equivalents during the same period last year). The
remaining increase in revenue was attributable to the inclusion of
approximately $886,000 of revenue associated with Welch, our newly acquired
subsidiary. The results for the three months ended June 30, 2007 included
approximately $54,000 of revenue and 39,000 passenger tire equivalents
associated with an Iowa scrap tire cleanup project which was completed
during that quarter.
Gross profit for the three months ended June 30, 2008 was $2,515,000 or 33
percent of net sales, compared to $1,742,000 or 33 percent of net sales for
the three months ended June 30, 2007. The results for the three months
ended June 30, 2008 included Welch, which had a gross profit of $285,000 or
32 percent of its net sales.
Selling, general and administrative expenses for the three months ended
June 30, 2008 increased $433,000 to $1,378,000 or 18 percent of net sales,
compared to $945,000 or 18 percent of net sales for the three months ended
June 30, 2007. The increase was primarily attributable to the inclusion of
$394,000 associated with Welch, including an ongoing significant investment
in sales and marketing efforts to promote the Welch patented products and
establish market presence.
Interest and financing expense for the three months ended June 30, 2008
decreased $63,000 to $497,000, compared to $560,000 during the three months
ended June 30, 2007. The decrease was primarily due to reduced interest
rates and outstanding principal.
As a result of the foregoing, our income from continuing operations after
income taxes increased $420,000 or 198 percent to $632,000 for the three
months ended June 30, 2008 as compared to $212,000 for the three months
ended June 30, 2007.
During the three months ended June 30, 2008 we recognized income from
discontinued operations of $2,361,000 associated with a one time, non-cash
gain resulting from the de-consolidation of our inactive Georgia subsidiary
which filed Chapter 7 bankruptcy during the quarter. During the quarter
ended June 30, 2007 we reached agreements with several Georgia vendors
regarding remaining past due amounts resulting in approximately $102,000 of
income from discontinued operations.
Our net income for the three months ended June 30, 2008 was $2,993,000 or
$.10 per basic share as compared to net income of $314,000 or $.01 per
basic share for the three months ended June 30, 2007.
Nine Months ended June 30, 2008 Compared to the Nine Months ended June 30,
2007
Net sales for the nine months ended June 30, 2008 increased $4,038,000 or
30 percent to $17,710,000 as compared to the net sales of $13,672,000 for
the nine months ended June 30, 2007. The increase is primarily attributable
to a 26 percent increase in overall tire derived end product revenues
during the nine months ended June 30, 2008 and a 7 percent increase in
scrap tire volume (we processed approximately 9.5 million passenger tire
equivalents during the nine months ended June 30, 2008 as compared to
approximately 9.0 million passenger tire equivalents during the same period
last year). The remaining increase in revenue was attributable to the
inclusion of approximately $2,094,000 of revenue associated with Welch, our
newly acquired subsidiary. The results for the nine months ended June 30,
2007 included approximately $404,000 of revenue and 205,000 passenger tire
equivalents associated with an Iowa scrap tire cleanup project which was
completed during that period.
Gross profit for the nine months ended June 30, 2008, was $5,300,000 or 30
percent of net sales, compared to $4,001,000 or 29 percent of net sales
for the nine months ended June 30, 2007. The results for the nine months
ended June 30, 2008 included Welch, which had a gross profit of $623,000 or
30 percent of its net sales.
Selling, general and administrative expenses for the nine months ended June
30, 2008, increased $1,182,000 to $3,996,000 or 23 percent of net sales,
compared to $2,814,000 or 21 percent of net sales for the nine months ended
June 30, 2007. The increase was attributable to the inclusion of $1,237,000
associated with Welch, including a significant investment in sales and
marketing efforts to promote the Welch patented products and establish
market presence.
As a result of the foregoing, we had operating income from continuing
operations of $1,304,000 during the nine months ended June 30, 2008 as
compared to operating income of $1,188,000 for the nine months ended June
30, 2007.
Interest and financing expense for the nine months ended June 30, 2008,
decreased $117,000 to $1,489,000 compared to $1,606,000 during the nine
months ended June 30, 2007. The decrease was primarily due to reduced
interest rates and outstanding principal.
We recorded a provision for state income tax expense of approximately
$52,000 during the nine months ended June 30, 2008 as compared to
approximately $32,000 for the same period last year.
As a result of the foregoing, our loss from continuing operations after
income taxes decreased $225,000 or 49 percent to $230,000 for the nine
months ended June 30, 2008 as compared to a loss of $455,000 for the nine
months ended June 30, 2007.
During the nine months ended June 30, 2008, we recognized income from
discontinued operations of $2,361,000 associated with a one time, non-cash
gain resulting from the de-consolidation of our inactive Georgia subsidiary
which filed Chapter 7 bankruptcy in June 2008. During the nine months ended
June 30, 2007 we reached agreements with several Georgia vendors regarding
remaining past due amounts resulting in approximately $112,000 of income
from discontinued operations.
Our net income for the nine months ended June 30, 2008, was $2,131,000 or
$.07 per basic share as compared to a net loss of $344,000 or $.02 per
basic share for the nine months ended June 30, 2007.
About GreenMan Technologies
GreenMan Technologies pursues technological processes and unique marketing
programs to transform recycled materials into renewable fuel, alternative
energy, recycled feedstock, and innovative recycled products. Over twelve
million tires are collected and recycled annually into tire-derived fuel,
tire-derived aggregate, and crumb rubber feedstock for playground, athletic
track and field, and road surfacing. Through GreenMan's subsidiary, Welch
Products, the company develops and markets branded products and services
that provide schools and other political subdivisions viable solutions for
safety, compliance, and accessibility. To learn more about all of the
companies, please visit the following websites: www.welchproducts.com;
www.nssi-usa.com; www.playtribe.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 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 sustained profitability, our ability to successfully integrate
the recent Welch Products acquisition and realize the anticipated benefits,
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 Quarterly
Report on Form 10-QSB for the fiscal period ended March 31, 2008. The
Company disclaims any intent or obligation to update these
"forward-looking" statements.
Condensed Consolidated Statements of Operations
Three Months Ended Nine Months Ended
June 30, June 30,
2008 2007 2008 2007
----------- ----------- ------------ ------------
Net sales $ 7,558,000 $ 5,320,000 $ 17,710,000 $ 13,672,000
Cost of sales 5,043,000 3,578,000 12,410,000 9,670,000
----------- ----------- ------------ ------------
Gross profit 2,515,000 1,742,000 5,300,000 4,002,000
Selling, general and
administrative 1,378,000 945,000 3,996,000 2,814,000
----------- ----------- ------------ ------------
Operating income
from continuing
operations 1,137,000 797,000 1,304,000 1,188,000
----------- ----------- ------------ ------------
Other income
(expense):
Interest and
financing expense (497,000) (560,000) (1,489,000) (1,606,000)
Other, net (8,000) 7,000 8,000 (5,000)
----------- ----------- ------------ ------------
Other expense,
net (505,000) (553,000) (1,481,000) (1,611,000)
Income (loss) from
continuing
operations 632,000 244,000 (178,000) (423,000)
Provision for income
taxes -- 32,000 52,000 32,000
----------- ----------- ------------ ------------
Income (loss) from
continuing
operations after
income taxes 632,000 212,000 (230,000) (455,000)
Discontinued
operations:
Gain from
discontinued
operations 2,361,000 102,000 2,361,000 112,000
----------- ----------- ------------ ------------
Net loss $ 2,993,000 $ 314,000 $ 2,131,000 $ (343,000)
=========== =========== ============ ============
Income (loss) from
continuing
operations per
share - basic $ 0.02 $ 0.01 $ (0.01) $ (0.02)
Gain from
discontinued
operations per
share - basic 0.08 -- 0.08 --
----------- ----------- ------------ ------------
Net income per
share - basic $ 0.10 $ 0.01 $ 0.07 $ (0.02)
=========== =========== ============ ============
Net income per
share - diluted $ 0.08 $ 0.01 $ 0.06 $ (0.02)
=========== =========== ============ ============
Weighted average
shares outstanding
- basic 30,880,000 21,588,000 30,880,000 21,527,000
=========== =========== ============ ============
Weighted average
shares outstanding
- diluted 35,497,000 27,340,000 35,558,000 21,527,000
=========== =========== ============ ============
Condensed Consolidated Balance Sheet Data
June 30, September 30,
2008 2007
------------ ------------
Assets
Current assets $ 7,500,000 $ 3,760,000
Property, plant and equipment (net) 6,624,000 5,219,000
Goodwill 2,290,000 --
Other assets 1,510,000 312,000
------------ ------------
$ 17,924,000 $ 9,291,000
============ ============
Liabilities and Stockholders' (Deficit)
Current liabilities $ 18,426,000 $ 4,262,000
Notes payable, non-current 2,622,000 10,807,000
Capital lease obligations, non-current 1,530,000 1,273,000
Deferred gain on sale leaseback 243,000 270,000
Obligations due under lease settlement 580,000 580,000
Liabilities related to discontinued operations 398,000 3,019,000
Stockholders' deficit (5,875,000) (10,920,000)
------------ ------------
$ 17,924,000 $ 9,291,000
============ ============
Contact Information: Contacts:
Chuck Coppa
CFO
or
Lyle Jensen
CEO
GreenMan Technologies
800-526-0860