SOURCE: GreenMan Technologies Inc.

GreenMan Technologies Inc.

January 14, 2011 09:00 ET

GreenMan Technologies Reports Fourth Quarter and Year End Results for the Fiscal Year Ending September 30, 2010

CARLISLE, IA--(Marketwire - January 14, 2011) - GreenMan Technologies, Inc. (OTCBB: GMTI), today announced results for the three months and fiscal year ended September 30, 2010.

Lyle Jensen, GreenMan's President and Chief Executive Officer, stated, "Fiscal 2010 was a busy and productive year for our Company, notable for the solid progress we achieved placing our American Power Group's (APG) dual fuel technology with customers in the U.S. and abroad, for use in both vehicular and stationary applications. In July, we received an order from the local distributor in Nigeria on behalf of Seven-Up Bottling Company for the conversion of 25% of their fleet. We are also working with the Nigerian Bottling Company, the authorized bottler for Coca-Cola Hellenic, for the upgrade of three generators. Domestically, we worked with Mutual Redevelopment Houses, Inc. to convert 33% of the stationary diesel engines at their Penn South cooperative housing facility in New York City.

"Subsequent to the close of our fiscal year, we signed a contract with Kleenheat Gas, a subsidiary of Wesfarmers LNG and one of Australia's leading providers of gas services, for a 90-day trial conversion of heavy duty trucks to APG's dual fuel system using diesel fuel and liquefied natural gas. The conversion trial continues to go well and we look forward to discussing a broader relationship with Wesfarmers in the coming months. Following the close of the year we launched our dual fuel products in India through our partnership with Kirloskar Integrated Technologies, a division of Kirloskar Group, India's largest manufacturer of air-cooled and liquid-cooled diesel engines.

"While I am very proud of the relationships we've built with prominent international partners for the commercialization of our technology in leading natural gas using worldwide markets, perhaps our most important work during the year was our effort toward securing domestic dual fuel vehicular test exemptions from the EPA, which we were granted in late December. The granting of these exemptions is a major achievement for our company because it allows us to demonstrate and document the positive economic and environmental impact that our dual fuel system can have on aftermarket diesel vehicles operating in North America by significantly reducing CO, NOX and Particulate Matter emissions from older and more polluting diesel engines while delivering 25%-35% net fuel savings.

"Our achievements in the past year, both internationally and domestically, have strengthened our foundation for growing our business through the strategic commercialization of our dual fuel technology. In late December we engaged Northland Capital Markets to help us achieve our 2011 commercialization initiative and international expansion and we believe their past experience and extensive knowledge of the Alternative Energy sector will provide valuable support to our Company. We continue to see tremendous growth potential in the alternative fuel market and believe our compelling technology, combined with our growing portfolio of partners and distributors will lead to increased opportunities in the worldwide marketplace."

Conference Call

Please join us Tuesday, January 18 at 11:00 AM EST for a conference call in which we will discuss the results for the quarter and fiscal year ended September 30, 2010. To participate, please call 1-888-215-6895 and ask for the GreenMan call using pass code 2406555. A replay of the conference call can be accessed until 11:50 PM on February 1, 2011 by calling 1-888-203-1112 and entering pass code 2406555.

Our business changed substantially in November 2008, when we sold substantially all of the assets of our tire recycling operations. Since 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, 2010 Compared to the Three Months ended September 30, 2009

Net sales from continuing operations for the three months ended September 30, 2010 decreased $440,000 or 22 percent to $1,577,000 as compared to net sales of $2,017,000 for the three months ended September 30, 2009. The decrease is primarily attributable to decreased playground tile and equipment sales in the Midwestern and Western regions of the United States due to a general economic slowdown during fiscal 2010. A majority of our revenue is derived from specific one-time installations with minimal follow-on revenue from the installed project, thus making annual revenue comparisons particularly difficult. In addition, our new American Power Group dual fuel subsidiary recorded $138,000 of revenue during the three months ended September 30, 2010 as compared to no revenue during the three months ended September 30, 2009.

During the three months ended September 30, 2010 we incurred gross profit of $293,000 as compared to a gross profit of $320,000 during the three months ended September 30, 2009. The improvement was due to product mix changes and slightly lower production costs during the year from our recycled rubber products operation which offset the inclusion of $90,000 of unabsorbed costs in excess of revenues associated with our dual fuel subsidiary.

Selling, general and administrative expenses for the three months ended September 30, 2010 decreased $288,000 to $1,161,000 as compared to $1,449,000 for the three months ended September 30, 2009. The decrease was primarily attributable to reduced performance based incentives which were offset by the inclusion of $335,000 in costs associated with increased sales and marketing initiatives for our American Power Group subsidiary.

Expenses for internal research and development projects relating to the introduction of new dual fuel products, enhancements made to the current family of duel fuel products, and research and development overhead were $238,000 for the three months ended September 30, 2010. There were no research and development expenses during the three months ended September 30, 2009.

During fiscal 2008 and 2009, Green Tech Products incurred significant operating losses and had negative cash flow from operations. Green Tech also had stagnant revenue growth 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 three months ended September 30, 2009.

As a result of the foregoing, our loss from continuing operations after income taxes decreased $2,331,000 to $1,141,000 for the three months ended September 30, 2010 as compared to $3,472,000 for the three months ended September 30, 2009.

During the fiscal year ended September 30, 2010, we recognized a loss from discontinued operations of $51,000 primarily associated with additional tax expense of $42,000. 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.

Our net loss for the three months ended September 30, 2010 was $1,192,000 or $0.04 per basic share as compared to a net loss of $4,092,000 or $0.13 per basic share for the three months ended September 30, 2009.

Fiscal Year ended September 30, 2010 Compared to the Fiscal Year ended September 30, 2009

Net sales from continuing operations for the fiscal year ended September 30, 2010 decreased $654,000 or 20 percent to $2,574,000 as compared to net sales of $3,228,000 for the fiscal year ended September 30, 2009. The decrease is primarily attributable to decreased playground tile and equipment sales in the Midwestern and Western regions of the United States due to a general economic slowdown during fiscal 2010. A majority of our revenue is derived from specific one-time installations with minimal follow-on revenue from the installed project, thus making annual revenue comparisons particularly difficult. In addition, our new American Power Group dual fuel subsidiary recorded $333,000 of revenue during the fiscal year ended September 30, 2010 as compared to no revenue during the fiscal year ended September 30, 2009.

During the fiscal year ended September 30, 2010 we incurred a negative gross profit of $105,000 primarily due to the inclusion of $697,000 of unabsorbed costs in excess of revenues associated with our dual fuel subsidiary. Due to product mix changes and slightly lower production costs during the year, our recycled rubber products operation had a gross profit of $593,000 or 26 percent of net sales as compared to $723,000 or 22 percent of net sales for the fiscal year ended September 30, 2009.

Selling, general and administrative expenses for the fiscal year ended September 30, 2010 increased $527,000 to $4,781,000 as compared to $4,254,000 for the fiscal year ended September 30, 2009. The increase was primarily attributable to the inclusion of $1,603,000 in costs associated with increased sales and marketing initiatives for our American Power Group subsidiary as well as increased professional expenses relating to business development initiatives, 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 duel fuel products, and research and development overhead were $699,000 for the fiscal year ended September 30, 2010. There were no research and development expenses during the fiscal year ended September 30, 2009.

During fiscal 2008 and 2009, Green Tech Products incurred operating losses of approximately $800,000 per year and had 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 at September 30, 2009.

As a result of the foregoing, our loss from continuing operations after income taxes decreased $302,000 to $5,790,000 for the fiscal year ended September 30, 2010 as compared to $6,092,000 for the fiscal year ended September 30, 2009.

During the fiscal year ended September 30, 2010, we recognized income from discontinued operations of $149,000 primarily associated with a reduction in tax expense of $134,000. During the fiscal year ended September 30, 2009, we recognized a gain on 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, including approximately $391,000 of one-time gains associated with the termination of a long-term land and building lease agreement in Minnesota.

Our net loss for the fiscal year ended September 30, 2010 was $5,642,000 or $0.17 per basic share as compared to net income $7,989,000 or $0.26 per basic share for the fiscal year ended September 30, 2009.

Condensed Consolidated Statements of Operations



                         Three Months Ended          Fiscal Year Ended
                           September 30,               September 30,
                         2010          2009          2010          2009
                     ------------  ------------  ------------  -----------

Net sales            $  1,577,000  $  2,017,000  $  2,574,000  $ 3,228,000
Cost of sales           1,284,000     1,697,000     2,679,000    2,705,000
                     ------------  ------------  ------------  -----------
  Gross profit            293,000       320,000      (105,000)     523,000
Selling, general and
 administrative         1,161,000     1,449,000     4,781,000    4,254,000
Research and
 development              238,000            --       699,000           --
Impairment loss -
 goodwill                      --     2,290,000            --    2,290,000
                     ------------  ------------  ------------  -----------
                        1,399,000     3,739,000     5,480,000    6,544,000
                     ------------  ------------  ------------  -----------
  Operating (loss)
   income from
   continuing
   operations          (1,106,000)   (3,419,000)   (5,585,000)  (6,021,000)
                     ------------  ------------  ------------  -----------
Other income
 (expense):
  Interest and
   financing income
   (expense), net          25,000       (25,000)       23,000     (113,000)
  Other, net              (60,000)      (28,000)     (229,000)      42,000
                     ------------  ------------  ------------  -----------
     Other (expense),
      net                 (35,000)      (53,000)     (206,000)     (71,000)
                     ------------  ------------  ------------  -----------
Loss from continuing
 operations            (1,141,000)   (3,472,000)   (5,791,000)  (6,092,000)
Provision for income
 taxes                         --            --            --           --
                     ------------  ------------  ------------  -----------
Loss after income
 taxes                 (1,141,000)   (3,472,000)   (5,791,000)  (6,092,000)
Discontinued
 operations:
  (Loss) gain on
   sale of
   discontinued
   operations                  --      (620,000)           --   13,793,000
  (Loss) income from
   discontinued
   operations             (51,000)           --       149,000      289,000
                     ------------  ------------  ------------  -----------
                          (51,000)     (620,000)      149,000   14,082,000
                     ------------  ------------  ------------  -----------
Net loss             $ (1,192,000) $ (4,092,000) $ (5,642,000) $ 7,990,000
                     ============  ============  ============  ===========

Loss from continuing
 operations per
 share - basic       $      (0.03) $      (0.11) $      (0.17) $     (0.19)
Loss from
 discontinued
 operations per
 share - basic              (0.01)        (0.02)           --         0.45
                     ------------  ------------  ------------  -----------
Net loss per share   $      (0.04) $      (0.13) $      (0.17) $      0.26
                     ============  ============  ============  ===========

Weighted average
 shares outstanding    33,163,000    31,506,000    33,111,000   31,506,000
                     ------------  ------------  ------------  -----------



Condensed Consolidated Balance Sheet Data



                                               September 30,  September 30,
                                                   2010           2009
                                               -------------  -------------
              Assets
Current assets                                 $   3,804,000  $   9,218,000
Property, plant and equipment, net                   975,000        872,000
Other assets                                       2,149,000      2,552,000
                                               -------------  -------------
                                               $   6,928,000  $  12,642,000
                                               =============  =============
   Liabilities and Stockholders' Equity
Current liabilities                            $   2,768,000  $   3,720,000
Notes payable, non-current                         1,136,000        530,000
Obligations due under lease settlement               506,000        505,000
Stockholders' equity                               2,518,000      7,887,000
                                               -------------  -------------
                                               $   6,928,000  $  12,642,000
                                               =============  =============

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 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, 2010. The Company disclaims any intent or obligation to update these "forward-looking" statements.

Contact Information

  • Contacts:
    Chuck Coppa
    CFO
    Lyle Jensen
    CEO
    GreenMan Technologies
    781-224-2411
    www.greenman.biz

    John Nesbett or Jennifer Belodeau
    Institutional Marketing Services
    203-972-9200