GreenMan Technologies, Inc. Reports First Quarter; Revenue Increases 26 Percent; $1.5M Iowa Upgrade Concluded; New Tennessee Initiative Commenced
LYNNFIELD, Mass.--Feb. 13, 2003--GreenMan Technologies, Inc. (AMEX: GRN) today announced results for its first quarter ended December 31, 2002.Bob Davis, GreenMan's President and Chief Executive Officer said, "We are preparing ourselves for GreenMan's next major growth phase by upgrading and enhancing our existing operations, expanding into new geographic locations to maximize existing transportation and marketing infrastructures, and identifying better and more profitable uses for existing and new products." Mr. Davis added, "Our string of eight consecutive profitable quarters has come to a temporary end with this reporting period. While it is never enjoyable to break-the-string, we believe the long term decisions impacting this quarter's results position GreenMan for strong performance during the last half of our fiscal year and beyond."
Three Months ended December 31, 2002 Compared to the Three Months ended December 31, 2001
Net sales for the first quarter ended December 31, 2002 were $7,963,000, an increase of 26 percent as compared to net sales of $6,308,000 for the first quarter ended December 31, 2001. GreenMan processed 7.8 million passenger tire equivalents during the quarter ended December 31, 2002 as compared to 5.8 million passenger tire equivalents during the quarter ended December 31, 2001. The increases are attributable to (1) the inclusion of the operations of three new subsidiaries formed in connection with fiscal 2002 acquisitions and the new majority owned joint venture formed in fiscal 2002 and (2) increased end product revenue which accounted for 19 percent of consolidated revenues for the quarter ended December 31, 2002 as compared to 9 percent for the same period last year. The increases in end product revenues are attributable to implementation of GreenMan's waste wire processing equipment and the expanded crumb rubber capacity acquired in fiscal year 2002.
Gross profit for the three months ended December 31, 2002 was $1,383,000 or 17 percent of net sales as compared to $1,443,000 or 23 percent of net sales for the three months ended December 31, 2001. The results for the quarter ended December 31, 2002 benefited from a 34 percent increase in overall volume and the inclusion of GreenMan's fiscal year 2002 acquisitions and the majority owned joint venture. These benefits were offset by approximately $150,000 relating to costs specifically associated with operational disruptions and increased transportation costs due to a complete shredding equipment upgrade at GreenMan of Iowa; approximately $150,000 of excessive transportation costs associated with processing Tennessee based tires in Georgia (See February 5, 2003 Press Release); approximately $45,000 relating to operating losses associated with a terminated kiln relationship; $60,000 associated with the commercialization of our California based roofing shingle project; and previously noted corporate-wide insurance cost increases of over $100,000 per quarter as a result of higher insurance limits due to recent acquisitions and increased renewal premiums reflecting the impact that September 11, 2001 has had on the industry.
GreenMan reported a net loss after taxes of $356,000, or $.02 per share, for the quarter ended December 31, 2002 as compared to net income after taxes of $247,000 or $.02 per share for the quarter ended December 31, 2001. (Note: Total charges associated with the Iowa upgrade, excessive Tennessee related transportation, kiln operating losses, initial start up costs associated with the recently announced Tennessee operation (February 5, 2003) and costs associated with roofing shingle commercialization and curtailed specialty waste initiative equaled approximately $510,000 for the quarter ended December 31, 2002.)
Chuck Coppa, GreenMan's Chief Financial Officer said "Historically, the first half of our fiscal year is the slowest because of seasonality issues as people tend to change tires less during the winter months. This fact coupled with the short term impact of our current growth initiatives will result in a soft first half of fiscal 2003 but provide the foundation for a stronger second half of the year and beyond." Mr. Coppa added, "Although, we anticipate our second quarter results to be similar to our first quarter, we are confident that our performance during the second half of the fiscal 2003 will enable us to surpass last years record results.
"I would also like to remind everyone to join us on Thursday, February 20, 2003 at our Annual Shareholders Meeting (9:30 AM, Sheraton Colonial Hotel, One Audubon Road, Wakefield, Massachusetts) in order to meet our senior management team and hear more about GreenMan."
GreenMan will hold a conference call on Tuesday, February 18, 2002 at 12 PM (Eastern Time) to discuss the results for its first quarter ended December 31, 2002. To participate in the call please call 1-800-937-6563.
"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 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 fiscal year ended September 30, 2002. The Company disclaims any intent or obligation to update these "forward-looking" statements
Consolidated Statements of Operations
Three Months Ended
December 31, December 31,
2002 2001
(Unaudited) (Unaudited)
Net sales $7,963,457 $6,308,300
Cost of sales 6,580,184 4,865,745
Gross profit 1,383,273 1,442,555
Selling, general and administrative expenses 1,379,315 930,944
Operating profit 3,958 511,611
Other (expenses) income, net (358,979) (259,068)
Income taxes (550) (5,700)
Net income (loss) $355,571 $246,843
Net income (loss) per share - basic $(.02) $0.02
Weighted average shares outstanding - basic 15,676,479 13,648,550
Condensed Consolidated Balance Sheet Data
December 31, September 30,
2002 2002
(Unaudited)
Assets
Current assets $6,294,577 $6,351,818
Property, plant and equipment (net) 11,120,167 10,845,337
Goodwill (net) 3,413,894 3,413,894
Other assets 1,310,022 1,342,195
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$22,138,660 $21,953,244
Liabilities and Stockholders' Equity
Current liabilities $7,755,366 $6,849,185
Notes payable, non-current 6,991,667 7,364,932
Capital lease obligations, non-current 2,123,871 2,176,000
Stockholders' equity 5,267,756 5,563,127
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$22,138,660 $21,953,244