Date: May 13, 2008
Source: GreenMan Technologies, Inc.
20 Percent Increase in Revenue and 27 Percent Increase in Gross Margin Compared to Prior Year
GreenMan Technologies, Inc. (
Lyle Jensen, GreenMan's President and Chief Executive Officer, stated, "We are pleased with the company's solid performance. Our tire recycling business continued to demonstrate the improved financial performance we have been seeing as a result of our turnaround, with operating losses in the seasonally slow March quarter two to three times less than pre-turnaround levels. Furthermore, our recently acquired products business was a key driver of revenue growth for the quarter and gross margins in that segment doubled compared to the prior quarter to 37 percent of revenues."
Mr. Jensen further stated, "The Company's investment in sales and marketing and finished goods inventory was heavy in the second quarter but we believe the timing was prudent, as we expect the investment will help us to maximize the historically stronger two upcoming quarters of the year. We enjoyed very strong revenue in April compared to the prior year and our order activity is increasing as our backlog of crumb rubber and playground installations kicks into a higher gear."
Please join us today, May 13, 2008 at 11:00 AM EDT for a conference call in which we will discuss the results for the quarter ended March 31, 2008. To participate, please call 1-800-769-8320 and ask for the GreenMan call. A replay of the conference call can be accessed until 11:50 PM on May 31, 2008 by calling 1-800-408-3053 and entering pass code 3261006.
"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 December 31,2007. The Company disclaims any intent or obligation to update these "forward-looking" statements.
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.greenman.biz
www.welchproducts.com
www.nssi-usa.com
www.playtribe.com
In September 2005, due to the magnitude of continued operating losses, our Board of Directors approved plans to divest the operations of our Georgia subsidiary and dispose of their respective assets. Accordingly, we have classified all remaining liabilities associated with our Georgia entity and their results of operations as discontinued operations for all periods presented in the accompanying consolidated financial statements. On October 1, 2007, we acquired Welch Products, Inc. in exchange for 8,000,000 newly issued shares of our common stock. The results described below include the operations of Welch since October 1, 2007.
Three Months ended March 31, 2008 Compared to the Three Months ended March 31, 2007
Net sales for the three months ended March 31, 2008 increased $800,000 or 23 percent to $4,265,000 as compared to net sales of $3,465,000 for the quarter ended March 31, 2007. The increase is primarily attributable to the inclusion of approximately $608,000 of revenue associated with Welch, our newly acquired subsidiary. We processed approximately 2.4 million passenger tire equivalents during the quarter ended March 31, 2008 as compared to approximately 2.2 million passenger tire equivalents during the same period last year. The results for the three months ended March 31, 2007 included approximately $198,000 of revenue and 100,000 passenger tire equivalents associated with an Iowa scrap tire cleanup project which was completed during that quarter.
Gross profit for the three months ended March 31, 2008 was $984,000 or 23 percent of net sales, compared to $776,000 or 22 percent of net sales for the three months ended March 31, 2007. The results for the three months ended March 31, 2008 included Welch which had a gross profit of $226,000 or 37 percent of its net sales.
Selling, general and administrative expenses for the three months ended March 31, 2008 increased $444,000 to $1,345,000 or 32 percent of net sales, compared to $901,000 or 26 percent of net sales for the three months ended March 31, 2007. The increase was primarily attributable to the inclusion of $443,000 associated with Welch including a significant investment in sales and marketing efforts to promote the Welch patented products and establish market presence. These increases were offset by reduced wages and performance based incentives.
Interest and financing expense for the three months ended March 31, 2008 decreased $29,000 to $494,000, compared to $523,000 during the three months ended March 31, 2007. The decrease was primarily due to reduced interest rates and outstanding principal.
Our net loss for the three months ended March 31, 2008 was $880,000 or $.03 per basic share as compared to a net loss of $648,000 or $.03 per basic share for the three months ended March 31, 2007.
Six Months ended March 31, 2008 Compared to the Six Months ended March 31, 2007
Net sales for the six months ended March 31, 2008 increased $1,802,000 or 22 percent to $10,153,000 as compared to the net sales of $8,351,000 for the six months ended March 31, 2007. The increase is primarily attributable to the inclusion of approximately $1,207,000 of revenue associated with Welch, our newly acquired subsidiary. The remaining increase in revenue was attributable to increased volume and a 14 percent increase in overall product revenues during the six months ended March 31, 2008. We processed approximately 6.0 million passenger tire equivalents during the six months ended March 31, 2008 as compared to approximately 5.9 million passenger tire equivalents during the same period last year. The results for the six months ended March 31, 2007 included approximately $350,000 of revenue and 167,000 passenger tire equivalents associated with an Iowa scrap tire cleanup project which was completed during that period.
Gross profit for the six months ended March 31, 2008 was $2,786,000 or 27 percent of net sales, compared to $2,259,000 or 27 percent of net sales for the six months ended March 31, 2007. The results for the six months ended March 31, 2008 included Welch which had a gross profit of $338,000 or 28 percent of its net sales.
Selling, general and administrative expenses for the six months ended March 31, 2008 increased $750,000 to $2,619,000 or 26 percent of net sales, compared to $1,869,000 or 22 percent of net sales for the six months ended March 31, 2007. The increase was attributable to the inclusion of $843,000 associated with Welch including a significant investment in sales and marketing efforts to promote the Welch patented products and establish market presence. These increases were offset by reduced wages and performance based incentives.
Interest and financing expense for the six months ended March 31, 2008 decreased $54,000 to $992,000 compared to $1,046,000 during the six months ended March 31, 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 six months ended March 31, 2008.
Our net loss for the six months ended March 31, 2008 was $862,000 or $.03 per basic share as compared to a net loss of $657,000 or $.03 per basic share for the three months ended March 31, 2007.
Six Months ended March 31, 2008 Compared to the Six Months ended
March 31, 2007
Condensed Consolidated Statements of Operations
Three Months Ended Six Months Ended
March 31, March 31,
2008 2007 2008 2007
------------ ------------ ------------ ------------
Net sales $ 4,265,000 $ 3,465,000 $ 10,153,000 $ 8,351,000
Cost of sales 3,281,000 2,689,000 7,367,000 6,092,000
------------ ------------ ------------ ------------
Gross profit 984,000 776,000 2,786,000 2,259,000
Selling, general
and administrative 1,345,000 901,000 2,619,000 1,869,000
------------ ------------ ------------ ------------
Operating (loss)
income from
continuing
operations (361,000) (125,000) 167,000 390,000
------------ ------------ ------------ ------------
Other income
(expense):
Interest and
financing
expense (494,000) (523,000) (992,000) (1,046,000)
Other, net (25,000) -- 15,000 (11,000)
------------ ------------ ------------ ------------
Other (expense),
net (519,000) (523,000) (977,000) (1,057,000)
Loss from
continuing
operations (880,000) (648,000) (810,000) (667,000)
Provision for
income taxes -- -- 52,000 --
------------ ------------ ------------ ------------
Loss after income
taxes (880,000) (648,000) (862,000) (667,000)
Discontinued
operations:
Gain (loss) from
discontinued
operations -- -- -- 10,000
------------ ------------ ------------ ------------
Net loss $ (880,000) $ (648,000) $ (862,000) $ (657,000)
============ ============ ============ ============
Loss from
continuing
operations per
share - basic $ (0.03) $ (0.03) $ (0.03) $ (0.03)
Loss from
discontinued
operations per
share - basic -- -- -- --
------------ ------------ ------------ ------------
Net loss per share $ (0.03) $ (0.03) $ (0.03) $ (0.03)
============ ============ ============ ============
Weighted average
shares outstanding 30,880,000 21,526,000 30,880,000 21,496,000
============ ============ ============ ============
Condensed Consolidated Balance Sheet Data
March 31, September 30,
2008 2007
------------ ------------
Assets
Current assets $ 5,611,000 $ 3,760,000
Property, plant and equipment (net) 6,397,000 5,219,000
Goodwill 2,290,000 --
Other assets 1,570,000 312,000
------------ ------------
$ 15,868,000 $ 9,291,000
============ ============
Liabilities and Stockholders' (Deficit)
Current liabilities $ 10,101,000 $ 4,262,000
Notes payable, non-current 9,500,000 10,807,000
Capital lease obligations, non-current 1,458,000 1,273,000
Deferred gain on sale leaseback 252,000 270,000
Obligations due under lease settlement 580,000 580,000
Liabilities related to discontinued operations 2,876,000 3,019,000
Stockholders' deficit (8,899,000) (10,920,000)
------------ ------------
$ 15,868,000 $ 9,291,000
============ ============
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