SOURCE: GreenMan Technologies, Inc.

GreenMan Technologies, Inc.

January 13, 2010 09:00 ET

GreenMan Technologies Reports Fourth Quarter and Year End Results for the Fiscal Year Ended September 30, 2009

CARLISLE, IA--(Marketwire - January 13, 2010) - GreenMan Technologies, Inc. (OTCBB: GMTI), today announced results for the three months and fiscal year ended September 30, 2009.

Lyle Jensen, GreenMan's President and Chief Executive Officer, stated, "This has been a transformational year for GreenMan and we are pleased with the Company's achievements. Even more so, we believe we have a strong foundation from which to grow our business and capitalize on future prospects and we remain focused in our determination to build shareholder value. We are making great progress ramping up operations at American Power Group (APG) and as our marketing efforts have taken effect, we have increased not only our deliverable backlog but also seen significant growth in open quotes to approximately $10 million. APG offers a state-of-the-art, patented retrofit dual fuel option for diesel engines, enabling them to burn less diesel fuel, reducing emissions as well as saving money. With APG's technology, a diesel engine or generator may be upgraded to operate on a combination of compressed natural gas and diesel; on diesel fuel and biomethane; or on 100% diesel fuel as the situation may require. APG's technology is applicable domestically and internationally to stationary diesel engines, such as those that run emergency generators as well as to vehicular engines, with no loss of performance capability. We believe APG's technology offers a compelling solution and has tremendous growth potential in the alternative fuel market.

"While the struggling economy and tighter discretionary spending continued to impact our playground business during the fourth quarter, we have continued to build our existing relationships with municipalities, school board associations and state-based departments of natural resources and have made progress toward expanding our footprint to new geographic markets. In the distressed economy, playground projects and upgrades have been delayed, but we have kept in close contact with our partners and customers so that we will be able to mobilize quickly when funding returns. Additionally, our past work and experience as a provider of safe, ADA accessible and compliant playgrounds has led to increased project opportunities."

Conference Call

Please join us today, January 13, 2010 at 2:00 PM Eastern time for a conference call in which we will discuss the results for the quarter and year ended September 30, 2009. To participate, please call 1-877-545-1403 and ask for the GreenMan call using passcode 4891047. A replay of the conference call can be accessed until 11:50 PM on January 31, 2010 by calling 1-888-203-1112 and entering pass code 4891047.

Results of Operations

Our business changed substantially in November 2008, when we sold substantially all of the assets of our tire recycling operations. Because 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 September 30, 2009 Compared to the Three Months ended September 30, 2008

Net sales from continuing operations for the three months ended September 30, 2009 increased $646,000 or 47 percent to $2,017,000 as compared to net sales of $1,371,000 for the three months ended September 30, 2008. The increase is primarily attributable to stronger playground tile and equipment sales in the Midwestern U.S. and Hawaii during the three months ended September 30, 2009.

Our gross profit for the three months ended September 30, 2009 was $320,000 or 16 percent of net sales compared to a gross profit of $346,000 or 25 percent of net sales for the three months ended September 30, 2008. The decrease was attributable to the inclusion of approximately $200,000 in costs associated with our American Power Group subsidiary, without any corresponding revenues.

Selling, general and administrative expenses for the three months ended September 30, 2009 increased $373,000 to $1,449,000 as compared to $1,076,000 for the three months ended September 30, 2008. The increase was primarily attributable to the inclusion of $271,000 in costs associated with sales and marketing initiatives for our American Power Group subsidiary as well as increased professional expenses relating to business development initiatives and increased performance based incentives.

During the past two fiscal years, Green Tech Products has incurred operating losses of approximately $800,000 per year and has had negative cash flow from operations. Green Tech also had stagnant revenue growth during fiscal 2009. As a result of the losses and our annual evaluation of potential goodwill impairment, management has determined the carrying value of Green Tech Product's goodwill to be impaired and accordingly wrote-off all goodwill, recording a non-cash impairment loss of $2,290,000 during the three months ended September 30, 2009.

As a result of the foregoing, our loss from continuing operations after income taxes increased $2,595,000 to $3,472,000 for the three months ended September 30, 2009 as compared to $877,000 for the three months ended September 30, 2008.

During the three months ended September 30, 2009 we recognized an additional loss on the sale of discontinued tire recycling operations of $620,000 associated with recognition of additional income taxes as we finalized all year end results. The income from discontinued operations for the three months ended September 30, 2008 includes a net benefit for income taxes of $5,333,000, primarily due to the recognition of a $5.3 million deferred tax asset associated with the November 2008 tire recycling operations sale with the balance relating to the net results of our tire recycling operations.

Our net loss for the three months ended September 30, 2009 was $4,092,000 or $.13 per basic share as compared to net income of $5,761,000 or $.19 per basic share for the three months ended September 30, 2008.

Year ended September 30, 2009 Compared to the Year ended September 30, 2008

Net sales from continuing operations for the fiscal year ended September 30, 2009 decreased $237,000 or 7 percent to $3,228,000 as compared to net sales of $3,465,000 for the fiscal year ended September 30, 2008. The decrease is primarily attributable to decreased playground tile and equipment sales in the Midwestern and Western parts of the United States due to a general economic slowdown during fiscal 2009. There were no net sales from our American Power Group subsidiary during the fiscal year ended September 30, 2009.

Our gross profit for the fiscal year ended September 30, 2009 was $523,000 or 16 percent of net sales compared to a gross profit of $969,000 or 28 percent of net sales for the year ended September 30, 2008. The decrease was primarily attributable to the inclusion of approximately $200,000 in costs associated with our American Power Group subsidiary, without any corresponding revenues. The remaining decrease is attributed to slower tile sales during the seasonally slower first half of fiscal 2009 and management's decision to produce a minimal amount of playground tiles during that period. As a result we were unable to fully absorb all manufacturing overhead which negatively impacted our year-to-date gross profit.

Selling, general and administrative expenses for the fiscal year ended September 30, 2009 increased $875,000 to $4,254,000 as compared to $3,379,000 for the fiscal year ended September 30, 2008. The increase was primarily attributable to an increase of $300,000 in professional expenses relating to business development initiatives and the November 2008 sale of our tire recycling operations as well as an increase of approximately $250,000 in performance based incentives. Additionally, SG&A expense for the fiscal year ended September 30, 2009 includes $271,000 in costs associated with sales and marketing initiatives for our American Power Group subsidiary. These increases were partially offset by reduced travel, marketing and sales related costs at our molded products operations.

During the past two fiscal years, Green Tech Products has incurred operating losses of approximately $800,000 per year and has had negative cash flow from operations. Green Tech also had stagnant revenue growth during in fiscal 2009. As a result of the losses and our annual evaluation of potential goodwill impairment, management has determined the carrying value of Green Tech Product's goodwill to be impaired and accordingly wrote-off all goodwill, recording a non-cash impairment loss of $2,290,000 during the fiscal year ended September 30, 2009.

Interest and financing expense for the fiscal year ended September 30, 2009 decreased to $113,000, compared to $148,000 during the year ended September 30, 2008 due to reduced borrowings.

As a result of the foregoing, our loss from continuing operations after income taxes increased $3,344,000 to $6,092,000 for the fiscal year ended September 30, 2009 as compared to $2,748,000 for the fiscal year ended September 30, 2008.

During the fiscal year ended September 30, 2009, we recognized a gain on the sale of discontinued operations net of income taxes ($6.1 million), of $13,793,000 associated with the sale of our tire recycling business in November 2008. The income from discontinued operations of $290,000 for the fiscal year ended September 30, 2009 relates primarily to the net results of our tire recycling operations.

The income from discontinued operations for the fiscal year ended September 30, 2008 includes a net benefit for income taxes of $5,333,000, primarily due to the recognition of a deferred tax asset of $5,300,000 and approximately $2,361,000 is associated with the de-consolidation of our Georgia subsidiary with the balance relating to the net results of our tire recycling operations.

Our net income for the fiscal year ended September 30, 2009 was $7,990,000 or $.26 per basic share as compared to net income of $7,891,000 or $.26 per basic share for the fiscal year ended September 30, 2008.

Condensed Consolidated Statements of Operations

                           Three Months Ended            Year Ended
                              September 30,             September 30,
                            2009         2008         2009         2008

Net sales               $ 2,017,000  $ 1,371,000  $ 3,228,000  $ 3,465,000
Cost of sales             1,697,000    1,025,000    2,705,000    2,496,000
                        -----------  -----------  -----------  -----------
  Gross profit              320,000      346,000      523,000      969,000
Selling, general and
 administrative           1,449,000    1,076,000    4,254,000    3,379,000
Impairment loss -
 goodwill                 2,290,000           --    2,290,000           --
                        -----------  -----------  -----------  -----------
                         (3,739,000)  (1,076,000)   6,544,000    3,379,000
                        -----------  -----------  -----------  -----------
Operating loss from
 continuing operations   (3,419,000)    (730,000)  (6,021,000)  (2,410,000)
                        -----------  -----------  -----------  -----------
Other income (expense):
  Interest and
   financing expense        (25,000)     (34,000)    (113,000)    (148,000)
  Other, net                (28,000)    (113,000)      42,000     (190,000)
                        -----------  -----------  -----------  -----------
     Other expense, net     (53,000)    (147,000)     (71,000)    (338,000)
Loss from continuing
 operations              (3,472,000)    (877,000)  (6,092,000)  (2,748,000)
Provision for income
 taxes                           --           --           --           --
                        -----------  -----------  -----------  -----------
Loss after income taxes  (3,472,000)    (877,000)  (6,092,000)  (2,748,000)
Discontinued operations:
  (Loss) gain on sale
   of discontinued
   operations, net of
   taxes                   (620,000)          --   13,793,000           --
  Income from
   discontinued
   operations                    --    6,638,000      289,000   10,639,000
                        -----------  -----------  -----------  -----------
                           (620,000)   6,638,000   14,082,000   10,639,000
                        -----------  -----------  -----------  -----------
Net (loss) income       $(4,092,000) $ 5,761,000  $ 7,990,000  $ 7,891,000
                        ===========  ===========  ===========  ===========

Loss from continuing
 operations per share -
 basic                  $     (0.11) $     (0.03) $     (0.19) $     (0.09)
(Loss) income from
 discontinued
 operations per share -
 basic                        (0.02)        0.22         0.45         0.35
                        -----------  -----------  -----------  -----------
Net (loss) income per
 share                  $     (0.13) $      0.19  $      0.26  $     (0.26)
                        ===========  ===========  ===========  ===========

Weighted average shares
 outstanding             31,506,000   30,880,000   31,506,000   30,880,000
                        ===========  ===========  ===========  ===========


Condensed Consolidated Balance Sheet Data

                                                September 30, September 30,
                                                    2009          2008
                                                ------------- ------------
                        Assets
Current assets                                  $   9,218,000 $  2,960,000
Assets related to discontinued operations,
 current                                                   --   10,145,000
Property, plant and equipment, net                    872,000      551,000
Goodwill                                                   --    2,290,000
Other assets                                        2,552,000    1,094,000
Assets related to discontinued operations,
 non-current                                               --    6,567,000
                                                ------------- ------------
                                                $  12,642,000 $ 23,607,000
                                                ============= ============
    Liabilities and Stockholders' Equity (Deficit)
Current liabilities                             $   3,720,000 $  3,069,000
Liabilities related to discontinued operations,
 current                                                   --   16,140,000
Notes payable, non-current                            530,000      483,000
Obligations due under lease settlement                505,000      581,000
Liabilities related to discontinued operations,
 non-current                                               --    3,396,000
Stockholders' equity (deficit)                      7,887,000      (62,000)
                                                ------------- ------------
                                                $  12,642,000 $ 23,607,000
                                                ============= ============

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, the company 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
    or
    Lyle Jensen
    CEO
    GreenMan Technologies
    781-224-2411

    Investor Relations Contacts:
    Jennifer Belodeau or John Nesbett
    Institutional Marketing Services (IMS)
    203-972-9200