Thursday January 14, 7:41 am Eastern Time
Company Press Release
GreenMan Technologies Inc. Reports 'Transition Period' Financial Results: Revenue Rises 63 Percent
Company Realizes First-Ever Operating Profit
''I believe we have turned this company around, and I am very much looking forward to reporting our first-quarter fiscal 1999 results early next month.'' Robert H. Davis, President/CEO
LYNNFIELD, Mass.--(BUSINESS WIRE)--Jan. 14, 1999--GreenMan Technologies Inc. (NASDAQ:GMTI - news, GMTW - news; BSE:GMY, GMYW) today reported financial results for the four-month ''transition period'' ended Sept. 30, 1998.
For the four months ended Sept. 30, 1998, GreenMan reported net sales of $5,034,809, compared with net sales of $3,081,945 for the same period in 1997. The increase of $1,952,864, or 63 percent, was primarily attributable to increased revenues from the Company's tire-recycling operations, which were acquired in June 1997 and realized more than 30 percent internal growth in tires processed during the four-month period in 1998 compared with the same period in 1997.
Operating expenses for the four months ended Sept. 30, 1998, were $1,544,913, or 31 percent of consolidated revenues, compared with $1,154,835, or 37 percent of consolidated revenues, for the comparable period in 1997. As a result of revenue growth and improved operating expense management, the Company experienced its first-ever operating profit of $96,842 for the four-month period ended Sept. 30, 1998, compared with an operating loss of $142,517 for the four-month period ended Sept. 30, 1997.
''We changed our year-end from May 31st to September 30th in order to better synchronize the timing of GreenMan's financial reporting with calendar quarters. We now look forward to reporting our first-quarter fiscal 1999 financial results -- for the period October through December 1998 -- early next month,'' said Robert H. Davis, president and chief executive officer of GreenMan.
''Regarding our results for the four months ended Sept. 30, 1998, we are extremely gratified by the performance of all GreenMan's tire-recycling operations, particularly the internal growth of more than 30 percent, and the backlog of business now in place,'' Davis added. ''Our attention is now fixed on building the leading scrap tire-recycler in the industry, with a special focus on enhanced and sustainable profitability.''
The Company reported a net loss of $2,326,086, or a net loss of $0.37 per share, for the four months ended September 30, 1998, compared with a net loss of $1,184,900, or a net loss of $0.67 per share, for the comparable period in 1997. The net loss in 1998 included $735,000 relating to the Company's write-off of its investment in two joint ventures and uncollectible equipment deposits, and a net $950,000 casualty loss associated with the August 21, 1998, fire at the Company's Louisiana crumb rubber facility. Under the terms of the Company's $3,000,000 property insurance policy, the Company anticipates initially receiving approximately $2,050,000. The remaining $950,000 may be paid if the Company can demonstrate, to the insurance company's satisfaction, that the Company's expenditure of $3,000,000 (replacement policy limit) on alternative equipment satisfies the replacement requirements of the insurance policy. The Company will recognize the remaining $950,000 of insurance proceeds when it has received approval from the insurance company and has reported the damaged property. Interest and financing costs for the four-month period ended Sept. 30, 1998, decreased by $392,892, to $651,316, due to decreased amortization of financing costs associated with the issuance of convertible debentures.
Chuck Coppa, GreenMan's chief financial officer, added, ''The September 30, 1998, transition period results reflect our commitment to eliminate underperforming assets and to focus GreenMan on near-term profitable operations and acquisitions. Our efforts at September 30, 1998, have positioned GreenMan to enter fiscal 1999 focused on our future, and not on our past. We will aggressively pursue realization of the remaining $950,000 of insurance proceeds in fiscal 1999.''
Already the second-largest U.S. scrap tire-recycler, GreenMan Technologies intends to become the leading company in this industry.
The Company's ''Consolidated Statements of Loss'' and ''Consolidated Balance Sheet'' follow.
''Safe Harbor'' Statement Under the Private Security Litigation Reform Act
With the exception of the historical information contained in this 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 product acceptance, economic, competitive, governmental, results of litigation, 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 report on Form 10-KSB for the transition period ended September 30, 1998. The Company disclaims any intent or obligation to update these forward-looking statements.
Consolidated Statements of Loss
Year Ended Four Months Ended
May 31 September 30
1997 1998 1997 1998
(unaudited)
Net sales $2,084,220 $11,011,519 $3,081,945 $5,034,809
Cost of sales 1,439,249 7,494,762 2,069,627 3,393,054
Gross profit 644,971 3,516,757 1,012,318 1,641,756
Operating expenses:
Research and
development 319,726 675,252 97,176 150,132
Selling, general and
administrative 3,721,223 4,524,488 1,057,659 1,394,781
Impairment loss 1,000,000 -- -- --
Total operating
expenses 5,040,949 5,199,740 1,154,835 1,544,913
Operating (loss) profit (4,395,978) (1,682,983) (142,517) 96,842
Other income (expense):
Interest and
financing costs (2,015,971) (2,886,366) (1,044,208) (651,316)
Other, net (5,436) 5,317 1,825 (821,613)
Casualty loss -- -- -- (1,450,000)
Forgiveness of
indebtedness -- -- -- 500,000
Other (expense),
net (2,021,407) (2,881,049) (1,042,383)(2,422,929)
Loss from continuing
operations (6,417,385) (4,564,032) (1,184,900)(2,326,086)
Discontinued operations:
Loss from discontinued
operations (589,094) (660,954) (244,115) --
Loss on disposal of
discontinued
operations -- (1,100,000) -- --
(589,094) (1,760,954) (244,115) --
Net loss $(7,006,479)$(6,324,986)$(1,429,015)$(2,326,086)
Loss from continuing
operations per share
- basic $(5.72) $(1.76) $(0.67) $(0.37)
Loss from discontinued
operations per share
- basic (0.52) (0.26) (0.14) --
Loss on disposal of
discontinued operations
- basic -- (0.42) -- --
Net loss per share
- basic $(6.24) $(2.44) $(0.81) $(0.37)
Weighted average
shares outstanding 1,122,788 2,596,776 1,774,631 6,247,793
(a) All share and per share data presented have been adjusted to give
retroactive effect to a reverse split of the Company's Common Stock
pursuant to which each five shares of Common Stock then outstanding
were converted into one share. The reverse split became effective on
March 23, 1998.
Consolidated Balance Sheet Data
Assets May 31, 1998 Sept. 30, 1998
Total Current Assets $ 2,376,724 $ 4,937,280
Property, Plant and Equipment (net) 9,874,079 9,126,573
Deferred Financing Costs 441,465 306,304
Other Assets 1,815,274 3,036,602
Total Assets $14,507,542 $17,406,759
Liabilities and Stockholders' (Deficit) Equity
Total Current Liabilities $ 4,524,639 $ 6,172,731
Convertible Notes payable 1,359,567 839,740
Non-Current Portion of Notes Payable 3,062,283 3,546,207
Non-Current Portion of Capital Lease
Obligations 2,424,825 1,568,364
Stockholders' Equity 3,136,228 5,279,717
Total Liabilities and Stockholders'
Equity $14,507,542 $17,406,759
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Contact:
GreenMan Technologies Inc.
Robert Davis
Chuck Coppa
781/224-2411
or
Ronald Trahan Associates Inc.
Ronald Trahan
Constance Adolph
617/332-0101 |
