SOURCE: GreenMan Technologies, Inc.

GreenMan Technologies, Inc.

August 12, 2009 09:00 ET

GreenMan Technologies Reports Third Quarter Results

CARLISLE, IA--(Marketwire - August 12, 2009) - GreenMan Technologies, Inc. (OTCBB: GMTI) today announced results for the three and nine months ended June 30, 2009.

Lyle Jensen, GreenMan's President and Chief Executive Officer stated, "Third quarter financial results were disappointing as we continued to see the impact of the economy and a slow start to the playground install season for our Green Tech Products subsidiary. That being said, we saw much stronger revenue in the month of July that exceeded the revenue for the whole quarter ending June. The firm backlog for August through October is at $ 1.7 million which we believe will give us the opportunity for a strong fourth quarter and year-end finish. While the general economic slowdown has impacted our Green Tech Product year-to-date results, particularly in states like California, we expect flat to moderate growth in the Midwest and have momentum builders in place to capture additional new state endorsements which could bode well for calendar year 2010."

Jensen further stated, "Subsequent to the quarter, we purchased the assets of American Power Group, Inc., a provider of patented dual fuel alternative energy technology. This is a bourgeoning industry around the world, and American Power Group provides a unique patented solution that reduces a customer's operating cost while also being environmentally friendly. We are working very closely with the their management team on multiple opportunities both in the U.S. and abroad and expect this business to be a primary growth driver for GreenMan's business in 2010 and beyond."

Conference Call

Please join us today, August 12, 2009 at 11:00 AM EDT for a conference call in which we will discuss the results for the quarter ended June 30, 2009. To participate, please call 1-888-576-4390 and ask for the GreenMan call using passcode 5256004. A replay of the conference call can be accessed until 11:50 PM on September 11, 2009 by calling 1-888-203-1112 and entering pass code 5256004.

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 duel 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 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.

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 June 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 June 30, 2009 Compared to the Three Months ended June 30, 2008

Net sales from continuing operations for the three months ended June 30, 2009 decreased $435,000 or 49 percent to $451,000 as compared to net sales of $886,000 for the three months ended June 30, 2008. 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 2009 in the United States. A majority of our revenue is derived from specific one time installations with minimal follow on revenue from the installed project, thus making quarterly revenue comparisons particularly difficult. We anticipate increased revenue during our seasonally strongest fourth quarter due to warmer weather conditions and school vacation closures which allow for easier installation conditions.

Our gross profit for the three months ended June 30, 2009 was $145,000 or 32 percent of net sales as compared to a gross profit of $285,000 or 32 percent of net sales for the three months ended June 30, 2008.

Selling, general and administrative expenses for the three months ended June 30, 2009 increased $169,000 to $903,000 as compared to $734,000 for the three months ended June 30, 2008. The increase was primarily attributable to an increase of $115,000 in professional expenses relating to business development initiatives and the November 2008 sale of our tire recycling operations and an increase of approximately $125,000 in performance based incentives. These increases were partially offset by reduced travel, marketing and sales related costs.

Interest and financing expense for the three months ended June 30, 2009 decreased $28,000 to $15,000, compared to $43,000 during the three months ended June 30, 2008 due to decreased borrowings.

As a result of the foregoing, our loss from continuing operations after income taxes increased $207,000 to $726,000 for the three months ended June 30, 2009 as compared to $519,000 for the three months ended June 30, 2008.

During the three months ended June 30, 2009, we recognized net income from our discontinued tire recycling operations of $37,000 associated with the final purchase price reconciliation with the purchaser of the assets. The income from discontinued operations for the three months ended June 30, 2008 includes approximately $2,631,000 associated with the de-consolidation of our Georgia subsidiary due to its bankruptcy with the balance associated with the net results of our tire recycling.

Our net loss for the three months ended June 30, 2009 was $689,000 or $.02 per basic share as compared to net income of $2,992,000 or $.10 per basic share for the three months ended June 30, 2008.

Nine Months ended June 30, 2009 Compared to the Nine Months ended June 30, 2008

Net sales from continuing operations for the nine months ended June 30, 2009 decreased $883,000 or 42 percent to $1,211,000 as compared to net sales of $2,094,000 for the nine months ended June 30, 2008. The decrease is primarily attributable to decreased playground tile and equipment sales in the Midwestern and Western parts of the United States due to a general economic slowdown during fiscal 2009 in the United States . A majority of our revenue is derived from specific one time installations with minimal follow on revenue from the installed project, thus making quarterly revenue comparisons particularly difficult. We anticipate increased revenue during our seasonally strongest fourth quarter due to warmer weather conditions and school vacation closures which allow for easier installation conditions.

Due to lower revenue and playground tile production during the nine months ended June 30, 2009 our gross profit was $203,000 or 17 percent of net sales compared to a gross profit of $623,000 or 30 percent of net sales for the nine months ended June 30, 2008. Due to slower tile sales during the seasonally slower first half of fiscal 2009 and adequate existing product inventory levels, management decided to produce a minimal amount of playground tiles during the first half of fiscal 2009 and as a result we were unable to fully absorb all manufacturing overhead which negatively impacted our year-to-date gross profit.

Selling, general and administrative expenses for the nine months ended June 30, 2009 increased $502,000 to $2,805,000 as compared to $2,303,000 for the nine months ended June 30, 2008. 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 and an increase of approximately $164,000 in performance based incentives. These increases were partially offset by reduced travel, marketing and sales related costs.

Interest and financing expense for the nine months ended June 30, 2009 decreased to $88,000, compared to $114,000 during the nine months ended June 30, 2008 due to reduced borrowings.

As a result of the foregoing, our loss from continuing operations after income taxes increased $749,000 to $2,620,000 for the nine months ended June 30, 2009 as compared to $1,871,000 for the nine months ended June 30, 2008.

During the nine months ended June 30, 2009 we recognized a gain on sale of discontinued operations net of income taxes ($5.5 million), of $14,413,000 associated with the sale of our tire recycling business in November 2008. The income from discontinued operations for the nine months ended June 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. In addition, during the six months ended June 30, 2009, we recognized income from Georgia discontinued operations of approximately $44,000 relating to the net effects of two settlement agreements with two former Georgia vendors. The income from discontinued operations for the nine months ended June 30, 2008 includes approximately $2,361,000 associated with the de-consolidation of our Georgia subsidiary with the balance relating to the net results of our tire recycling operations.

Our net income for the nine months ended June 30, 2009 was $12,083,000 or $.39 per basic share as compared to net income of $2,130,000 or $.07 per basic share for the nine months ended June 30, 2008.

Condensed Consolidated Statements of Operations

                         Three Months Ended         Nine Months Ended
                             June 30,                     June 30,
                        2009          2008          2009          2008
                    ------------  ------------  ------------  ------------

Net sales           $    451,000  $    886,000  $  1,211,000  $  2,094,000
Cost of sales            306,000       601,000     1,008,000     1,471,000
                    ------------  ------------  ------------  ------------
  Gross profit           145,000       285,000       203,000       623,000
Selling, general
 and administrative      903,000       734,000     2,805,000     2,303,000
                    ------------  ------------  ------------  ------------
  Operating (loss)
   income from
   continuing
   operations           (758,000)     (449,000)   (2,602,000)   (1,680,000)
                    ------------  ------------  ------------  ------------
Other income
 (expense):
  Interest and
   financing
   expense               (15,000)      (43,000)      (88,000)     (114,000)
  Other, net              47,000       (27,000)       70,000       (77,000)
                    ------------  ------------  ------------  ------------
      Other
       (expense),
       net                32,000       (70,000)      (18,000)     (191,000)
Loss from
 continuing
 operations             (726,000)     (519,000)   (2,620,000)   (1,871,000)
Provision for
 income taxes                 --            --            --            --
                    ------------  ------------  ------------  ------------
Loss after income
 taxes                  (726,000)     (519,000)   (2,620,000)   (1,871,000)
Discontinued
 operations:
  Gain on sale of
   discontinued
   operations             65,000            --    14,413,000            --
  Income from
   discontinued
   operations            (28,000)    3,511,000       290,000     4,001,000
                    ------------  ------------  ------------  ------------
                          37,000     3,511,000    14,703,000     4,001,000
                    ------------  ------------  ------------  ------------
Net loss            $   (689,000) $  2,992,000  $ 12,083,000  $  2,130,000
                    ============  ============  ============  ============

Loss from
 continuing
 operations per
 share - basic      $      (0.02) $      (0.02) $      (0.08) $      (0.06)
Income from
 discontinued
 operations per
 share - basic                --          0.12          0.47          0.13
                    ------------  ------------  ------------  ------------
Net loss per share  $      (0.02) $       0.10  $       0.39  $      (0.07)
                    ============  ============  ============  ============

Weighted average
 shares outstanding   31,170,000    30,880,000    30,977,000    30,880,000
                    ============  ============  ============  ============

Condensed Consolidated Balance Sheet Data


                                                  June 30,    September 30,
                                                    2009          2008
                                                ------------- ------------
               Assets
Current assets                                  $  10,117,000 $  2,960,000
Assets related to discontinued operations,
 current                                                   --   10,145,000
Property, plant and equipment, net                    540,000      551,000
Goodwill                                            2,290,000    2,290,000
Other assets                                        1,684,000    1,094,000
Assets related to discontinued operations,
 non-current                                               --    6,567,000
                                                ------------- ------------
                                                $  14,631,000 $ 23,607,000
                                                ============= ============
 Liabilities and Stockholders’ Equity (Deficit)
Current liabilities                             $   1,503,000 $  3,069,000
Liabilities related to discontinued operations,
 current                                                   --   16,140,000
Notes payable, non-current                            673,000      483,000
Obligations due under lease settlement                505,000      581,000
Liabilities related to discontinued operations,
 non-current                                               --    3,396,000
Stockholders’ equity (deficit)                     11,950,000      (62,000)
                                                ------------- ------------
                                                $  14,631,000 $ 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 Green Tech Products 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
    Lyle Jensen, CEO
    GreenMan Technologies
    781-224-2411
    www.greenman.biz

    Investor Relations:
    Jennifer Belodeau
    John Nesbett
    Institutional Marketing Services (IMS)
    203-972-9200