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GreenMan Technologies, Inc.: GreenMan Technologies Reports Fourth Quarter and Year Ending September 30, 2008 Results
CARLISLE, IA--(Marketwire - January 20, 2009) - GreenMan Technologies, Inc. (
Lyle Jensen, GreenMan's President and Chief Executive Officer, stated, "We are very pleased with the results of the fiscal year ended September 30, 2008 which marked our second consecutive year of improved performance and the final stage of our three year turnaround of GreenMan. As previously announced, on November 17, 2008 we completed the divestiture of our tire recycling operations for approximately $27.5 million in cash. The sale of that business enabled us to retire the majority of our outstanding obligations, resulting in a virtually debt free balance sheet in what has become a very tight credit market. As we report to you today, we present a cash strong balance sheet and a renewed freedom to actively build shareholder value as opposed to focusing on simply keeping our company viable. We have established a new, stronger foundation for growth and we believe GreenMan is well positioned to capitalize on new opportunities in the development of recycled products and green-based technologies as we move into 2009."
Mr. Jensen added, "Our Welch Products subsidiary, particularly the National Playground Compliance Group ("NPCG"), made excellent progress during fiscal 2008 building relationships with state school board associations in Iowa, Missouri, Minnesota and California and we anticipate that we will add new state school board associations in 2009. Additionally, Welch was awarded a Master Agreement from the state of Iowa to provide ADA and safety compliant surfacing at 22 state parks and was selected to facilitate Iowa's Safe School Surfacing Initiative in partnership with the Iowa Department of Natural Resources and the Iowa Association of School Boards.
"The recently announced establishment of our new subsidiary, GreenMan Renewable Fuels and Alternative Energy supports our strategic objective to pursue opportunities to commercialize green-based technologies that convert waste feedstock into bio-fuels and other waste-to-energy solutions. There are many opportunities in the renewable fuel and alternative energy space and we remain committed to following our guiding principles in pursuit of appropriate partnerships towards our goal in increasing shareholder value."
Please join us today, January 20, 2009 at 10:00 AM EST for a conference call in which we will discuss the results for the quarter and fiscal year ended September 30, 2008. To participate, please call 1-877-718-5099 and ask for the GreenMan call using passcode 5743380. A replay of the conference call can be accessed until 11:50 PM on February 20, 2009 by calling 1-888-203-1112 and entering pass code 5743380.
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. 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. Our Renewable Fuels and Alternative Energy subsidiary supports our strategic objective to pursue opportunities to commercialize green-based technologies that convert waste feedstock into bio-fuels and other waste-to-energy solutions. 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 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 the accompanying consolidated financial statements. 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 September 30, 2008. On October 1, 2007, we acquired Welch Products, Inc. in exchange for 8,000,000 newly issued shares of our common stock. The results described below include the operations of Welch since October 1, 2007.
As previously disclosed, our business changed significantly in November 2008, when we sold substantially all of the assets of our tire recycling operations. We operated these assets throughout the fiscal year covered by this release and our Annual Report on Form 10-KSB so the following discussion reflects the results of operations of this business segment through September 30, 2008. Investors should understand, however, that our current business excludes such operations.
Three Months Ended September 30, 2008 Compared To The Three Months Ended September 30, 2007
Net sales for the three months ended September 30, 2008 increased $2,532,000 or 39 percent to $9,039,000 as compared to the net sales of $6,507,000 for the three months ended September 30, 2007. The increase is primarily attributable to the inclusion of approximately $1,372,000 of revenue associated with Welch, our newly acquired subsidiary. The remaining increase in revenue was attributable to an 18 percent increase in overall tire derived end product revenues during the three months ended September 30, 2008 and a 2 percent increase in scrap tire volume (we processed approximately 3.73 million passenger tire equivalents during the three months ended September 30, 2008 as compared to approximately 3.66 million passenger tire equivalents during the same period last year).
Gross profit for the three months ended September 30, 2008 was $2,644,000 or 29 percent of net sales compared to $1,955,000 or 30 percent of net sales for the three months ended September 30, 2007. The results for the three months ended September 30, 2008 included Welch, which had a gross profit of $347,000 or 25 percent of its net sales.
Selling, general and administrative expenses for the three months ended September 30, 2008 increased $584,000 to $1,611,000 or 18 percent of net sales, compared to $1,027,000 or 16 percent of net sales for the three months ended September 30, 2007. The increase was attributable to the inclusion of $417,000 associated with Welch, including a significant investment in sales and marketing efforts to promote the Welch patented products and establish market presence.
As a result of the foregoing, we had operating income from continuing operations of $1,033,000 during the three months ended September 30, 2008 as compared to operating income of $928,000 for three months ended September 30, 2007.
Interest and financing expense for the three months ended September 30, 2008, increased $114,000 to $510,000 compared to $396,000 during the three months ended September 30, 2007. The increase was primarily due to the inclusion of approximately $50,000 associated with Welch and increased borrowings during the quarter.
We recorded a net benefit for income taxes of $5,385,000 during the three months ended September 30, 2008 primarily due to the recognition of a deferred tax asset of $5,300,000. As a result of the gain to be realized in fiscal 2009 from the sale of the tire recycling operations, we expect to realize the benefit of a portion of our federal net operating loss carry-forwards and therefore have reduced our deferred tax valuation reserve resulting in the recognition of the net deferred tax asset. During the three months ended September 30, 2007 we recorded income tax expense of approximately $84,000.
As a result of the foregoing, income from continuing operations after income taxes increased to $5,761,000 for the three months ended September 30, 2008 as compared to income from continuing operations of $451,000 for three months ended September 30, 2007.
During the three months ended September 30, 2007 we reached agreements with several Georgia vendors regarding remaining past due amounts resulting in approximately $186,000 of income from discontinued operations.
Our net income for the three months ended September 30, 2008, was $5,761,000 or $.19 per basic share as compared to a net income of $637,000 or $.03 per basic share for the three months ended September 30, 2007.
Fiscal Year Ended September 30, 2008 Compared To The Fiscal Year Ended September 30, 2007
Net sales for the fiscal year ended September 30, 2008 increased $6,570,000 or 33 percent to $26,749,000 as compared to the net sales of $20,179,000 for the fiscal year ended September 30, 2007. The increase is primarily attributable to the inclusion of approximately $3,465,000 of revenue associated with Welch, our newly acquired subsidiary. The remaining increase in revenue was attributable to a 18 percent increase in overall tire derived end product revenues during the fiscal year ended September 30, 2008 and a 3 percent increase in scrap tire volume (we processed approximately 13.2 million passenger tire equivalents during the fiscal year ended September 30, 2008 as compared to approximately 12.8 million passenger tire equivalents during the same period last year). The results for the fiscal year ended September 30, 2007 included approximately $404,000 of revenue and 205,000 passenger tire equivalents associated with an Iowa scrap tire cleanup project which was completed during that period.
Gross profit for the fiscal year ended September 30, 2008 was $7,944,000 or 30 percent of net sales, compared to $5,957,000 or 30 percent of net sales for the fiscal year ended September 30, 2007. The results for the fiscal year ended September 30, 2008 included Welch, which had a gross profit of $970,000 or 28 percent of its net sales.
Selling, general and administrative expenses for the fiscal year ended September 30, 2008 increased $1,759,000 to $5,607,000 or 21 percent of net sales, compared to $3,848,000 or 19 percent of net sales for the fiscal year ended September 30, 2007. The increase was attributable to the inclusion of $1,654,000 associated with Welch, including a significant investment in sales and marketing efforts to promote the Welch patented products and establish market presence. These increases were offset by reduced wages and performance based incentives.
As a result of the foregoing, we had operating income from continuing operations of $2,337,000 during the fiscal year ended September 30, 2008 as compared to operating income of $2,109,000 for fiscal year ended September 30, 2007.
Interest and financing expense for the fiscal year ended September 30, 2008, decreased $7,000 to $1,999,000 compared to $2,006,000 during the fiscal year ended September 30, 2007. The decrease was primarily due to reduced interest rates.
We recorded a net benefit for income taxes of $5,333,000 primarily due to the recognition of a deferred tax asset of $5,300,000. As a result of the gain to be realized in fiscal 2009 from the sale of the tire recycling operations, we expect to realize the benefit of a portion of our federal net operating loss carry-forwards and therefore have reduced our deferred tax valuation reserve resulting in the recognition of the net deferred tax asset. During the fiscal year ended September 30, 2007 we recorded income tax expense of approximately $116,000.
As a result of the foregoing, income from continuing operations after income taxes increased to $5,531,000 for the fiscal year ended September 30, 2008 as compared to a loss of $3,000 for fiscal year ended September 30, 2007.
During the fiscal year ended September 30, 2008, we recognized income from discontinued operations of $2,361,000 associated with a one time, non-cash gain resulting from writing off liabilities and the de-consolidation of our inactive Georgia subsidiary which filed Chapter 7 bankruptcy in June 2008. During the fiscal year ended September 30, 2007 we reached agreements with several Georgia vendors regarding remaining past due amounts resulting in approximately $297,000 of income from discontinued operations.
Our net income for the fiscal year ended September 30, 2008, was $7,892,000 or $.26 per basic share as compared to a net income of $294,000 or $.01 per basic share for the fiscal year ended September 30, 2007.
"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 Welch division, 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.
Condensed Consolidated Statements of Operations Three Months Ended Year Ended September 30, September 30, 2008 2007 2008 2007 ------------ ------------ ------------ ------------ Net sales $ 9,039,000 $ 6,507,000 $ 26,749,000 $ 20,179,000 Cost of sales 6,395,000 4,552,000 18,805,000 14,222,000 ------------ ------------ ------------ ------------ Gross profit 2,644,000 1,955,000 7,944,000 5,957,000 Selling, general and administrative 1,611,000 1,027,000 5,607,000 3,848,000 ------------ ------------ ------------ ------------ Operating income from continuing operations 1,033,000 928,000 2,337,000 2,109,000 ------------ ------------ ------------ ------------ Other income (expense) Interest and financing expense (510,000) (396,000) (1,999,000) (2,006,000) Other (expenses) income, net (147,000) 3,000 (140,000) 10,000 ------------ ------------ ------------ ------------ (657,000) (393,000) (2,139,000) (1,996,000) Income from continuing operations before income taxes 376,000 535,000 198,000 113,000 Benefit (provision) for income taxes 5,385,000 (84,000) 5,333,000 (116,000) ------------ ------------ ------------ ------------ Income (loss) from continuing operations 5,761,000 451,000 5,531,000 (3,000) Discontinued operations Gain from discontinued operations -- 186,000 2,361,000 297,000 ------------ ------------ ------------ ------------ Net income $ 5,761,000 $ 637,000 $ 7,892,000 $ 294,000 ============ ============ ============ ============ Income (loss) from continuing operations per share - basic $ 0.19 $ 0.02 $ 0.18 $ -- Income from discontinued operations per share - basic -- 0.01 0.08 0.01 ------------ ------------ ------------ ------------ Net income per share - basic $ 0.19 $ 0.03 $ 0.26 $ 0.01 ============ ============ ============ ============ Net income per share - diluted $ 0.16 $ 0.02 $ 0.22 $ 0.01 ============ ============ ============ ============ Weighted average shares outstanding - basic 30,880,000 22,476,000 30,880,000 21,766,000 ============ ============ ============ ============ Weighted average shares outstanding - diluted 35,496,000 27,073,000 35,547,000 26,457,000 ============ ============ ============ ============ Condensed Consolidated Balance Sheet Data September September 30,2008 30,2007 ------------ ------------ Assets Current assets $ 13,105,000 $ 3,760,000 Property, plant and equipment (net) 6,951,000 5,219,000 Goodwill 2,290,000 -- Other assets 1,261,000 312,000 ------------ ------------ $ 23,607,000 $ 9,291,000 ============ ============ Liabilities and Stockholders’ Deficit Current liabilities $ 19,209,000 $ 7,281,000 Notes payable, non-current 2,023,000 10,807,000 Capital lease obligations, non-current 1,623,000 1,273,000 Deferred gain on sale leaseback 234,000 270,000 Obligations due under lease settlement 580,000 580,000 Stockholders’ deficit (62,000) (10,920,000) ------------ ------------ $ 23,607,000 $ 9,291,000 ============ ============