SOURCE: GreenMan Technologies, Inc.

GreenMan Technologies, Inc.

February 17, 2009 09:00 ET

GreenMan Technologies Reports First Quarter December 31, 2008 Results

CARLISLE, IA--(Marketwire - February 17, 2009) - GreenMan Technologies, Inc. (OTCBB: GMTI), today announced results for the three months ended December 31, 2008.

Lyle Jensen, GreenMan's President and Chief Executive Officer stated, "Having successfully divested our tire recycling business for approximately $27.7 million in November, we enter fiscal 2009 with a strong balance sheet, significantly increased cash position and revitalized growth platform. We are focused on evaluating opportunities for our newly created GreenMan Renewable Fuels and Alternative Energy subsidiary. Our strategy is to focus on opportunities that offer shareholders long-term growth coupled with near term positive cash flow. A silver lining of this difficult economy is that attractive opportunities have availed themselves, particularly green-based technologies that convert recycled material and waste feedstock into bio-fuels, alternative energy, and recycled products."

Mr. Jensen continued, "The Welch Products group saw double digit revenue growth for the quarter resulting in enhanced gross margins. While the economy has tightened school board budgets, we continue to see demand for our products given their ADA compliance and attractive total cost of ownership. We remain focused on creating alternative funding solutions and building relationships with state school boards as we head into 2009."

Please join us today, February 17, 2009 at 11:00 AM EST for a conference call in which we will discuss the results for the quarter ended December 31, 2008. To participate, please call 1-877-879-6201 and ask for the GreenMan call using passcode 6834038. A replay of the conference call can be accessed until 11:50 PM on March 3, 2009 by calling 1-888-203-1112 and entering pass code 6834038.

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 this press release. 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 September 30, 2008.

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 quarter covered by this release and the report on Form 10Q we have included all relevant information on this business segment but have classified their respective assets, liabilities and results of operations as discontinued operations for all periods presented in the accompanying consolidated financial statements.

The following information should be read in conjunction with the unaudited consolidated financial statements and the notes thereto included in Item 1 of this Quarterly Report, and the audited consolidated financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Form 10-KSB filed for the fiscal year ended September 30, 2008.

Results of Operations

Three Months ended December 31, 2008 Compared to the Three Months ended December 31, 2007

Net sales from continuing operations for the three months ended December 31, 2008 increased $62,000 or 10 percent to $662,000 as compared to net sales of $600,000 for the quarter ended December 31, 2008. The increase is primarily attributable to increased playground tile and equipment sales of our Welch subsidiary.

Gross profit for the three months ended December 31, 2008 was $169,000 or 26 percent of net sales, compared to $112,000 or 19 percent of net sales for the three months ended December 31, 2007. The increase was primarily attributable to higher revenues and reduced overhead costs and headcount.

Selling, general and administrative expenses for the three months ended December 31, 2008 increased $439,000 to $1,177,000 as compared to $738,000 for the three months ended December 31, 2007. The increase was primarily attributable to an increase of $247,000 in professional expenses relating to business development initiatives and the November 2008 sale of our tire recycling operations, an increase of approximately $164,000 in wage and performance-based incentives.

Interest and financing expense for the three months ended December 31, 2008 increased $14,000 to $59,000, compared to $45,000 during the three months ended December 31,2007 due to increased borrowings.

As a result of the foregoing, our loss from continuing operations after income taxes increased $387,000 to $1,077,000 for the three months ended December 31, 2008 as compared to $690,000 for the three months ended December 31, 2007.

During the three months ended December 31, 2008 we recognized a gain on sale of discontinued operations net of income taxes ($5.5 million), of $14,347,000 associated with the sale of our tire recycling business in November 2008. The income from discontinued operations for the three months ended December 31, 2008 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 quarter ended December 31, 2008, we recognized income from Georgia discontinued operations of approximately $144,000 including approximately $161,000 associated with the completion of a March 2008 settlement agreement with a former Georgia vendor. The income from discontinued operations for the three months ended December 31, 2007 relates to the net results of our tire recycling operations.

Our net income for the three months ended December 31, 2008 was $13,688,000 or $.39 per basic share as compared to net income of $18,000 or $.00 per basic share for the three months ended December 31, 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. Through the company's Welch Products subsidiary, the company develops and markets branded products and services that provide schools and other political subdivisions viable solutions for safety, compliance, and accessibility. Our Renewable Fuels and Alternative Energy subsidiary supports our strategic objective to pursue opportunities to commercialize green-based technologies that convert waste feedstock into bio-fuels and other waste-to-energy solutions. To learn more about all of the companies, please visit the following websites: www.greenman.biz, www.welchproducts.com, www.nssi-usa.com

Condensed Consolidated Statements of Operations



                                                    Three Months Ended
                                                       December 31,
                                                    2008          2007
                                                ------------  ------------
Net sales                                       $    662,000  $    600,000
Cost of sales                                        493,000       488,000
                                                ------------  ------------
Gross profit                                         169,000       112,000
Selling, general and administrative                1,177,000       738,000
                                                ------------  ------------
Operating (loss) from continuing operations       (1,008,000)     (626,000)
                                                ------------  ------------
Other income (expense)
Interest and financing expense                       (59,000)      (45,000)
Other (expenses) income, net                         (10,000)      (19,000)
                                                ------------  ------------
                                                     (69,000)      (64,000)
(Loss) from continuing operations                 (1,077,000)     (690,000)
                                                ------------  ------------
Discontinued operations
 Gain from sale of discontinued operations        14,347,000            --
 Income from discontinued operations                 418,000       708,000
                                                ------------  ------------
                                                  14,765,000       708,000
                                                ------------  ------------
Net income                                      $ 13,688,000  $     18,000
                                                ============  ============

(Loss) from continuing operations per share -
 basic                                          $      (0.03) $      (0.02)
Income from discontinued operations per share -
 basic                                                  0.47          0.02
                                                ------------  ------------
Net income per share - basic                    $       0.44  $         --
                                                ============  ============
Net income per share - diluted                  $       0.39  $         --
                                                ============  ============
Weighted average shares outstanding - basic       30,880,000    30,880,000
                                                ============  ============
Weighted average shares outstanding - diluted     35,500,000    35,788,000
                                                ============  ============



Condensed Consolidated Balance Sheet Data


                                                December 31,  September 30,
                                                    2008          2008
                                                ------------- ------------
               Assets
Current assets                                  $  12,818,000 $  2,960,000
Assets related to discontinued operations,
 current                                                   --   10,145,000
Property, plant and equipment (net)                   538,000      551,000
Goodwill                                            2,290,000    2,290,000
Other assets                                        1,042,000    1,094,000
Assets related to discontinued operations,
 non-current                                               --    6,567,000
                                                ------------- ------------
                                                $  16,688,000 $ 23,607,000
                                                ============= ============
     Liabilities and Stockholders’ Deficit
Current liabilities                             $   1,970,000 $  3,069,000
Liabilities related to discontinued operations,
 current                                                   --   16,140,000
Notes payable, non-current                            479,000      483,000
Obligations due under lease settlement                581,000      581,000
Assets related to discontinued operations,
 non-current                                               --    3,396,000
Stockholders’ equity (deficit)                     13,658,000      (62,000)
                                                ------------- ------------
                                                $  16,688,000 $ 23,607,000
                                                ============= ============

"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 risks and uncertainties that may individually or collectively impact the matters herein described, including but not limited to the facts 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 of our Welch division, the risks that we may not be able to identify and acquire complementary businesses and that we may not be able successfully to integrate any such acquisitions with our current businesses, 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, and the 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-KSB for the fiscal period ended September 30, 2008. 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