SOURCE: GreenMan Technologies, Inc.

February 19, 2008 16:29 ET

GreenMan Technologies Reports First Quarter Results; 20 Percent Increase in Revenue; Third Consecutive Profitable Quarter

SAVAGE, MN--(Marketwire - February 19, 2008) - GreenMan Technologies, Inc. (OTCBB: GMTI), a leading recycler of over 12 million scrap tires per year in the United States, today announced results for the three months ended December 31, 2007.

Lyle Jensen, GreenMan's President and Chief Executive Officer, stated: "The fiscal 2008 first quarter results marked another performance milestone which supports our belief that we are taking the company in the right direction, one step at a time. Revenue from the Tire Recycling business segment was up 8 percent over the same quarter a year ago, primarily as a result of increasing demand for our higher priced crumb product, which drove positive incremental results through operating income. Some of those profits were re-invested into additional sales and marketing capabilities for our recently acquired Welch Products, Inc. subsidiary. While we saw several playground installations opportunities move out of the quarter due to the poor weather and delays in school board funding, we are encouraged by the prospective customer interest we are experiencing."

Mr. Jensen further stated: "During the quarter we successfully launched the National Playground Compliance Group™ which is presenting our patented crumb rubber safety surfacing, equipment design, play/fitness equipment, and turnkey installation capabilities as the 'Overall Solution' for schools and other political subdivisions. Along with our school board endorsements, this marketing approach is creating more bid opportunities than originally planned. We remain optimistic that our efforts will be rewarded with stronger order flow in advance of the approaching seasonally stronger installation season. The long-term public interest in an overall solution for viable recycled products that address safety and accessibility continues to be confirmed."

Please join us tomorrow, February 20, 2008 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 1-877-461-2814 and ask for the GreenMan call. A replay of the conference call can be accessed until 11:50 PM on March 14, 2008 by calling 1-800-408-3053 and entering pass code 3252816.

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 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. 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 commons stock. The results described below include the operations of Welch since October 1, 2007.

Three Months ended December 31, 2007 Compared to the Three Months ended December 31, 2006

Net sales from continuing operations for the three months ended December 31, 2007 increased $1,001,000 or 20 percent to $5,888,000 as compared to the first quarter of last year's net sales from continuing operations of $4,887,000. The increase in primarily attributable to the inclusion of approximately $600,000 of revenue associated with Welch, our newly acquired subsidiary. The remaining increase was attributable to a 17 percent increase in overall product revenue associated with the tire recycling operations. We processed approximately 3.6 million passenger tire equivalents during the quarter ended December 31, 2007 which was consistent with the same period last year.

Gross profit for the three months ended December 31, 2007 was $1,802,000 or 31 percent of net sales, compared to $1,483,000 or 30 percent of net sales for the three months ended December 31, 2006. The results for the three months ended December 31, 2007 included Welch which had a gross profit of $112,000 or 19 percent of its net sales.

Selling, general and administrative expenses for the three months ended December 31, 2007 increased $305,000 to $1,273,000 or 22 percent of net sales, compared to $968,000 or 20 percent of net sales for the three months ended December 31, 2006. The increase was primarily attributable to the inclusion of $401,000 associated with Welch which was offset by reduced wages and performance based incentives and professional expenses.

As a result of the foregoing, we had operating income from continuing operations of $529,000 during the three months ended December 31, 2007 as compared to operating income of $515,000 for the three months ended December 31, 2006.

Interest and financing expense for the three months ended December 31, 2007 decreased $25,000 to $498,000, compared to $523,000 during the three months ended December 31, 2006. The decrease was primarily due to reduced interest rates and borrowings.

We recorded a provision for state income tax expense of approximately $52,000 during the three months ended December 31, 2007.

As a result of the foregoing, we had net income after income taxes from continuing operations for the three months ended December 31, 2007 of $18,000 or $.00 per basic share, compared to a net loss of $19,000 or $.00 per basic share for the three months ended December 31, 2006.

Our net income for the three months ended December 31, 2007 was $18,000 or $.00 per basic share as compared to a net loss of $9,000 or $.00 per basic share for the three months ended December 31, 2006.

"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 Annual report on Form 10-KSB for the fiscal period ended September 30, 2007. The Company disclaims any intent or obligation to update these "forward-looking" statements.


Condensed Consolidated Statements of Operations

                                                     Three Months Ended
                                                        December 31,
                                                      2007         2006
                                                  -----------  -----------

Net sales                                         $ 5,888,000  $ 4,887,000
Cost of sales                                       4,086,000    3,404,000
                                                  -----------  -----------
Gross profit                                        1,802,000    1,483,000
Selling, general and administrative                 1,273,000      968,000
                                                  -----------  -----------
Operating income (loss) from continuing
 operations                                           529,000      515,000
                                                  -----------  -----------
Other income (expense)
Interest and financing expense                       (498,000)    (523,000)
Other (expenses) income, net                           39,000      (11,000)
                                                  -----------  -----------
                                                     (459,000)    (534,000)
Income (loss) from continuing operations before
 income taxes                                          70,000      (19,000)
Provision for income taxes                             52,000           --
                                                  -----------  -----------
Income (loss) from continuing operations               18,000      (19,000)
Discontinued operations
  Gain (loss) from discontinued operations                 --       10,000
                                                  -----------  -----------
                                                           --           --
                                                  -----------  -----------
Net income (loss)                                 $    18,000  $    (9,000)
                                                  ===========  ===========

Income (loss) from continuing operations per
 share - basic                                    $        --  $        --
Income (loss) from discontinued operations per
 share - basic                                             --           --
                                                  -----------  -----------
Net income (loss) per share - basic               $        --  $        --
                                                  ===========  ===========
Net income per share - diluted                    $        --  $        --
                                                  ===========  ===========

Weighted average shares outstanding - basic        30,880,000   21,467,000
                                                  ===========  ===========
Weighted average shares outstanding - diluted      35,788,000   21,467,000
                                                  ===========  ===========



Condensed Consolidated Balance Sheet Data

                                              December 31,   September 30,
                                                  2007           2007
                                              -------------  -------------
               Assets
Current assets                                $   5,016,000  $   3,760,000
Property, plant and equipment (net)               6,296,000      5,219,000
Goodwill                                          2,290,000             --
Other assets                                      1,621,000        312,000
                                              -------------  -------------
                                              $  15,223,000  $   9,291,000
                                              =============  =============

    Liabilities and Stockholders' (Deficit)

Current liabilities                           $   7,409,000  $   4,262,000
Notes payable, non-current                       10,677,000     10,807,000
Capital lease obligations, non-current            1,391,000      1,273,000
Deferred gain on sale leaseback                     261,000        270,000
Obligations due under lease settlement              580,000        580,000
Liabilities related to discontinued
 operations                                       2,975,000      3,019,000
Stockholders' equity                             (8,070,000)   (10,920,000)
                                              -------------  -------------
                                              $  15,223,000  $   9,291,000
                                              =============  =============

Contact Information

  • Contacts:
    Chuck Coppa, CFO
    Lyle Jensen, CEO
    GreenMan Technologies
    800-957-9575