SOURCE: GreenMan Technologies Inc.

GreenMan Technologies Inc.

February 10, 2010 09:00 ET

GreenMan Technologies Reports First Quarter December 31, 2009 Results

American Power Group to Debut Dual Fuel Vehicular Upgrade System

CARLISLE, IA--(Marketwire - February 10, 2010) - GreenMan Technologies, Inc. (OTCBB: GMTI) today announced results for the three months ended December 31, 2009. Concurrently, the Company has announced that it will debut its upgraded APG V-3000 Vehicular Dual Fuel Upgrade System at the Mid-America Trucking Show in March 2010.

Lyle Jensen, GreenMan's President and Chief Executive Officer, stated, "During the December quarter we reported our first ever dual fuel revenue and expect to see increased dual fuel related revenue in the March quarter. During the past 180 days, our dual fuel subsidiary, American Power Group, has been on both an evolutionary and revolutionary path of upgrading and enhancing both our dual fuel and related emission reduction solutions and has achieved several product and marketing milestones. With an open bid pipeline in excess of $10 million, we are diligently working to close several important near-term domestic and international orders.

"Our first quarter results reflected seasonality and the continuing effects of the economy on our Green Tech subsidiary, which nonetheless remained cash flow self-sufficient during the first quarter. We anticipate increased playground installations during the seasonally stronger second half of the year as the warmer spring and summer months and vacation closures create more favorable installation conditions. Additionally, we are currently evaluating new products and marketing opportunities for Green Tech's patented cold-cure process beyond traditional recreational applications in order to expand our target markets."

Jensen further stated, "We are especially pleased to announce that our American Power Group subsidiary will debut its APG V-3000 Vehicular Diesel Dual Fuel Upgrade System at the Mid-America Trucking Show ("MATS") in Louisville, Kentucky, March 25th - 27th. American Power Group through its technical advisory board has accessed the best automotive minds in Detroit for assistance in upgrading our existing analog dual fuel system to a state-of-the-art digital engine controller. This improved, proprietary technology for blending diesel and CNG results in dramatic net fuel savings and reduced emissions. American Power Group's primary initial focus for the upgraded system will be the retrofit market, i.e. fleet owners with vehicles currently on the road. MATS is a premier trade show for trucking professionals with participants from all 50 states and 51 foreign countries, providing an optimal venue for our product launch. We will have an outfitted Sprinter van and heavy-duty truck on display, as well as a "Ride and Drive" demonstration utilizing our dual fuel Ford truck."

Conference Call

Please join us today, February 10, 2010 at 11:00 AM Eastern Time for a conference call in which we will discuss the results for the quarter ended December 31, 2009. To participate, please call 1-877-874-1588 and ask for the GreenMan call using passcode 3400240. A replay of the conference call can be accessed until 11:50 PM on February 28, 2010 by calling 1-888-203-1112 and entering pass code 3400240.

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 December 31, 2009 Compared to the Three Months ended December 31, 2008

Net sales from continuing operations for the three months ended December 31, 2009 decreased $222,000 or 34 percent to $440,000 as compared to net sales of $662,000 for the three months ended December 31, 2009 and 2008, respectively. The decrease is primarily attributable to decreased playground tile and equipment sales in the Midwestern region of the U.S. during the three months ended December 31, 2009. The decrease was offset by $65,000 of revenue from our American Power Group dual fuel subsidiary during the three months ended December 31, 2009.

The company incurred a negative gross profit of $254,000 compared to a positive gross profit of $169,000 or 26% of net sales in the three months ended December 31, 2008. The decrease was due to lower revenue and playground tile production during the three months ended December 31, 2009 and the inclusion of $388,000 of costs associated with our dual fuel subsidiary which had minimal offsetting revenue. In addition, due to anticipated seasonally slower tile sales and adequate existing product inventory levels, management decoded to produce a minimal amount of playground tiles during the quarter ended December 31, 2009. As a result, we were unable to fully absorb all manufacturing overhead costs which contributed to the negative gross profit during the quarter.

Selling, general and administrative expenses for the three months ended December 31, 2009 increased slightly to $1,192,000 as compared to $1,178,000 for the three months ended December 31, 2008. The increase was primarily attributable to the inclusion of $361,000 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 which offset decreased performance based incentives.

Expenses for internal research and development projects relating to the introduction of new dual fuel products, enhancements made to the current family of dual fuel products, and research and development overhead was $78,000 for the three months ended December 31, 2009.

As a result of the foregoing, our loss from continuing operations after income taxes increased $517,000 to $1,594,000 for the three months ended December 31, 2009 as compared to $1,077,000 for the three months ended December 31, 2008.

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 Georgia vendor.

Our net loss for the three months ended December 31, 2009 was $1,594,000 or $.05 per basic share as compared to net income of $13,688,000 or $.44 per basic share for the three months ended December 31, 2008.

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.

Consolidated Statements of Operations (Unaudited)
                                                    Three Months Ended
                                                       December 31,
                                                    2009          2008
                                                ------------  ------------
Net sales                                       $    440,000  $    662,000
Cost of sales                                        694,000       493,000
                                                ------------  ------------
  Gross profit                                      (254,000)      169,000
Selling, general and administrative                1,192,000     1,178,000
Research and development                              78,000            --
                                                ------------  ------------
                                                   1,270,000     1,179,000
                                                ------------  ------------
Operating loss from continuing operations         (1,524,000)   (1,009,000)
                                                ------------  ------------
Other income (expense):
  Interest income (expense), net                      13,000       (59,000)
  Other, net                                         (83,000)       (9,000)
                                                ------------  ------------
    Other expense, net                               (70,000)      (68,000)
Loss from continuing operations                   (1,594,000)   (1,077,000)
Provision for income taxes                                --            --
                                                ------------  ------------
Loss after income taxes                           (1,594,000)   (1,077,000)
Discontinued operations:
  (Loss) gain on sale of discontinued
   operations, net of taxes                               --    14,347,000
  Income from discontinued operations                     --       418,000
                                                ------------  ------------
                                                          --    14,765,000
                                                ------------  ------------
Net (loss) income                               $ (1,594,000) $ 13,688,000
                                                ============  ============

Loss from continuing operations per share -
 basic                                          $      (0.05) $      (0.03)
(Loss) income from discontinued operations per
 share - basic                                            --          0.47
                                                ------------  ------------
Net (loss) income per share                     $      (0.05) $       0.44
                                                ============  ============

Weighted average shares outstanding               33,077,000    30,880,000
                                                ============  ============




Condensed Consolidated Balance Sheet Data

                                                December 31,  September 30,
                                                    2009          2009
                                                ------------  ------------
                 Assets
Current assets                                  $  6,793,000  $  9,218,000
Property, plant and equipment, net                   936,000       872,000
Other assets                                       2,490,000     2,552,000
                                                ------------  ------------
                                                $ 10,219,000  $ 12,642,000
                                                ============  ============
     Liabilities and Stockholders' Equity
Current liabilities                             $  2,869,000  $  3,720,000
Notes payable, non-current                           527,000       530,000
Obligations due under lease settlement               505,000       505,000
Stockholders' equity (deficit)                     6,318,000     7,887,000
                                                ------------  ------------
                                                $ 10,219,000  $ 12,642,000
                                                ============  ============

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