SOURCE: GreenMan Technologies, Inc.

December 17, 2007 08:30 ET

GreenMan Technologies Reports Fourth Quarter and Year Ending September 30, 2007 Results

Second Consecutive Profitable Quarter; First Profitable Year in Five Years

SAVAGE, MN--(Marketwire - December 17, 2007) - 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 and twelve months ended September 30, 2007.

Lyle Jensen, GreenMan's President and Chief Executive Officer, stated: "Fiscal 2007 was a year of transformation for GreenMan, and we're very pleased to close our first profitable year since 2002 with solid fourth quarter performance and our second consecutive profitable quarter. Notably, net revenues for the quarter and fiscal year increased 19 percent and 15 percent, respectively, and gross margin grew to 30 percent both for the quarter and the year. Our strategic focus on meeting the increasing demand for higher margin crumb rubber products contributed to a 40 percent and 27 percent increase in overall end product revenue for the quarter and fiscal quarter ended September 30, 2007."

Mr. Jensen added, "This has been a year of many milestones for GreenMan, including, subsequent to the close of our fiscal year, the acquisition of Welch Products, which we expect to give us the opportunity to leverage our existing operations in the crumb rubber business while establishing a vertically integrated playground safety division within the Company. We look forward to continuing this positive momentum as we enter fiscal 2008."

Please join us today, December 17, 2007 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, 2007. To participate, please call 1-866-542-4265 and ask for the GreenMan call. A replay of the conference call can be accessed until 11:50 PM on January 17, 2008 by calling 1-800-408-3053 and entering pass code 3245581.

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 separate plans to divest the operations of our Georgia and Tennessee subsidiaries and dispose of their respective assets. In addition, due to continuing operation losses, in July 2006 we sold our California subsidiary. Accordingly, we have classified all three respective entities' 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. Because the acquisition was completed after the end of our fiscal year, the results described below do not include any contribution from Welch Products, Inc.

Three Months Ended September 30, 2007 Compared To The Three Months Ended September 30, 2006

Net sales from continuing operations for the three months ended September 30, 2007 increased $1,045,000 or 19 percent to $6,507,000 as compared to $5,462,000 for the three months ended September 30, 2006. Our continuing operations processed 12 percent more or approximately 3.7 million passenger tire equivalents during the three months ended September 30, 2007 compared to approximately 3.3 million passenger tire equivalents during the same period last year. The increase in revenue was primarily attributable to a 40 percent increase in overall product revenue which offset a 3 percent decrease in overall tipping fees (fees we are paid to collect and dispose of scrap tires) during the three months ended September 30, 2007.

Gross profit for the three months ended September 30, 2007 was $1,955,000 or 30 percent of net sales, compared to $1,321,000 or 24 percent of net sales for the three months ended September 30, 2006. Our cost of sales increased $411,000 or 10 percent primarily due to increased collection and processing costs associated with higher inbound volume.

Selling, general and administrative expenses for the three months ended September 30, 2007 increased $239,000 to $1,027,000 or 16 percent of net sales, compared to $788,000 or 15 percent of net sales for the three months ended September 30, 2006. This decrease was offset by an increase of approximately $287,000 in wages and performance-based incentives.

As a result of the foregoing, we had operating income from continuing operations of $928,000 during the three months ended September 30, 2007 as compared to operating income of $533,000 for the same period last year.

Interest and financing expense for the three months ended September 30, 2007 decreased $122,000 to $396,000 compared to $518,000 during the three months ended September 30, 2006. The reduction was attributable to lower interest rates and the reallocation of certain costs to operations.

We recorded a provision for state income tax expense of approximately $64,000 and $65,000 during the three months ended September 30, 2007 and 2006, respectively, based on certain subsidiary state income tax obligations.

As a result of the foregoing, our income after income taxes from continuing operations for the three months ended September 30, 2007 was $471,000 or $.02 per basic share, compared to a net loss of $102,000 or $.00 per basic share for the three months ended September 30, 2006.

During the three months ended September 30, 2007, we received credits from vendors resulting in $186,000 ($.01 per basic share) of income from discontinued operations. The $64,000 of income ($.00 per basic share) from discontinued operations for the three months ended September 30, 2006 includes approximately $118,000 of income associated with our Georgia and Tennessee operations which offset approximately $54,000 of losses associated with our former California operations.

Our net income for the three months ended September 30, 2007 was $657,000 or $.03 per basic share as compared to a net loss of $38,000 or $.00 per basic share for the three months ended September 30, 2006.

Fiscal Year Ended September 30, 2007 Compared To The Fiscal Year Ended September 30, 2006

Net sales from continuing operations for the fiscal year ended September 30, 2007 increased $2,571,000 or 15 percent to $20,179,000 as compared to $17,608,000 for the fiscal year ended September 30, 2006. Our continuing operations processed 6 percent more or approximately 12.8 million passenger tire equivalents during the fiscal year ended September 30, 2007 compared to approximately 12.1 million passenger tire equivalents during the same period last year. The increase in revenue was primarily attributable to a 27 percent increase in overall product revenue in addition to increased volume on which we realized a 2 percent increase in overall tipping fees (fees we are paid to collect and dispose of scrap tires) during the fiscal year ended September 30, 2007. The increase also included approximately $484,000 of revenue and 174,000 passenger tire equivalents associated with an Iowa scrap tire cleanup project which was completed during fiscal 2007.

Gross profit for the fiscal year ended September 30, 2007 was $5,957,000 or 30 percent of net sales, compared to $4,654,000 or 26 percent of net sales for the fiscal year ended September 30, 2006. Our cost of sales increased $1,268,000 or 10 percent primarily due to increased collection and processing costs associated with higher inbound volume including $85,000 of increased processing residual waste costs due to the completion of several large civil engineering projects (which use more of the scrap tire including waste wire) during the fiscal year ended September 30, 2006.

Fiscal Year Ended September 30, 2007 Compared To The Fiscal Year Ended September 30, 2006

Selling, general and administrative expenses for the fiscal year ended September 30, 2007 increased $291,000 to $3,841,000 or 19 percent of net sales, compared to $3,550,000 or 20 percent of net sales for the fiscal year ended September 30, 2006. The results for the fiscal year ended September 30, 2006 included approximately $397,000 of one-time severance costs related to our former President and Chief Executive Officer and the sale of our California subsidiary in July 2006. This decrease was offset by an increase of approximately $580,000 in wages and performance-based incentives in addition to the re-allocation of approximately $132,000 of net corporate operating expenses which were absorbed by discontinued operations during the fiscal year ended September 30, 2006.

As a result of the foregoing, we had operating income from continuing operations of $2,116,000 during the fiscal year ended September 30, 2007 as compared to operating income of $1,104,000 for the same period last year.

Interest and financing expense for the fiscal year ended September 30, 2007 decreased $1,579,000 to $2,006,000 compared to $3,585,000 during the fiscal year ended September 30, 2006. The decrease is attributable to the elimination of $1,273,000 of non-cash financing fees and interest and $888,000 of one-time fees and expenses incurred during the fiscal year ended September 30, 2006 associated with Laurus credit facility which was restructured in June 2006. This reduction was offset by the inclusion of approximately $566,000 of deferred interest associated with the June 2006 Laurus credit facility restructuring. During the fiscal year ended September 30, 2006, we recognized approximately $353,000 of gain on restructuring associated with the June 30, 2006 restructuring of a promissory note.

We recorded a provision for state income tax expense of approximately $97,000 and $65,000 during the fiscal years ended September 30, 2007 and 2006, respectively, based on certain subsidiary state income tax obligations.

As a result of the foregoing, our income after income taxes from continuing operations for the fiscal year ended September 30, 2007 was $16,000 or $.00 per basic share, compared to a net loss of $2,245,000 or $.11 per basic share for the fiscal year ended September 30, 2006.

During the fiscal year ended September 30, 2007, we received credits from vendors, recovered certain bad debts and reduced certain accrued expenses resulting in $297,000 ($.01 per basic share) of income from discontinued operations. The $1,461,000 net loss ($.08 per basic share) from discontinued operations for the fiscal year ended September 30, 2006 includes approximately $1 million associated with our former California operations and approximately $461,000 associated with the costs of exiting associated with our Georgia operation.

Our net income for the fiscal year ended September 30, 2007 was $313,000 or $.01 per basic share as compared to a net loss of $3,706,000 or $.19 per basic share for the fiscal year ended September 30, 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 quarterly report on Form 10-QSB for the fiscal period ended June 30, 2007. The Company disclaims any intent or obligation to update these "forward-looking" statements.

Condensed Consolidated Statements of Operations

                         Three Months Ended              Year Ended
                            September 30,               September 30,
                         2007          2006          2007          2006
                    ------------  ------------  ------------  ------------

Net sales           $  6,507,000  $  5,462,000  $ 20,179,000  $ 17,608,000
Cost of sales          4,552,000     4,141,000    14,222,000    12,954,000
                    ------------  ------------  ------------  ------------
Gross profit           1,955,000     1,321,000     5,957,000     4,654,000
Selling, general
 and administrative    1,027,000       788,000     3,841,000     3,550,000
                    ------------  ------------  ------------  ------------
                       1,027,000       788,000     3,841,000     3,550,000
                    ------------  ------------  ------------  ------------
Operating income
 (loss) from
 continuing
 operations              928,000       533,000     2,116,000     1,104,000
                    ------------  ------------  ------------  ------------
Other income
 (expense)
Interest and
 financing expense      (396,000)     (518,000)   (2,006,000)   (2,312,000)
Non-cash interest
 and financing fees           --            --            --    (1,273,000)
Other (expenses)
 income, net               3,000       (52,000)        3,000       301,000
                    ------------  ------------  ------------  ------------
                        (393,000)     (570,000)   (2,003,000)   (3,284,000)
Income (loss) from
 continuing
 operations before
 income taxes            535,000       (37,000)      113,000    (2,180,000)
Provision for
 income taxes             64,000        65,000        97,000        65,000
                    ------------  ------------  ------------  ------------
Income (loss) from
 continuing
 operations              471,000      (102,000)       16,000    (2,245,000)
Discontinued
 operations
 Gain (loss) from
  discontinued
  operations             186,000        64,000       297,000    (1,461,000)
                    ------------  ------------  ------------  ------------
                         186,000        64,000       297,000    (1,461,000)
                    ------------  ------------  ------------  ------------
Net income (loss)   $    657,000  $    (38,000) $    313,000  $ (3,706,000)
                    ============  ============  ============  ============

Income (loss) from
 continuing
 operations per
 share - basic      $       0.02  $         --  $         --  $      (0.11)
Income (loss) from
 discontinued
 operations per
 share - basic              0.01            --          0.01         (0.08)
                    ------------  ------------  ------------  ------------
Net income (loss)
 per share - basic  $       0.03  $         --  $       0.01  $      (0.19)
                    ============  ============  ============  ============
Net income per
 share - diluted    $       0.02  $         --  $       0.01  $      (0.19)
                    ============  ============  ============  ============

Weighted average
 shares outstanding
 - basic              22,476,000    20,788,000    21,766,000    19,810,000
                    ============  ============  ============  ============
Weighted average
 shares outstanding
 - diluted            27,073,000    20,788,000    26,438,000    19,810,000
                    ============  ============  ============  ============



Condensed Consolidated Balance Sheet Data

                                               September 30,  September 30,
                                                    2007           2006
                    Assets
Current assets                                 $  3,760,000   $  3,463,000
Property, plant and equipment (net)               5,219,000      5,807,000
Other assets                                        312,000        232,000
Assets related to discontinued operations                --          7,000
                                               ------------   ------------
                                               $  9,291,000   $  9,509,000
                                               ============   ============

    Liabilities and Stockholders' (Deficit)

Current liabilities                            $  4,243,000   $  4,081,000
Notes payable, non-current                       10,807,000     10,874,000
Capital lease obligations, non-current            1,273,000      1,615,000
Deferred gain on sale leaseback                     270,000        307,000
Obligations due under lease settlement              580,000        630,000
Liabilities related to discontinued operations    3,019,000      3,415,000
Stockholders' equity                            (10,901,000)   (11,413,000)
                                               ------------   ------------
                                               $  9,291,000   $  9,509,000
                                               ============   ============

Contact Information

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