iPath Global Carbon (PK) (USOTC:GRNTF)
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GreenMan Technologies, Inc. (AMEX: GRN), a leading
recycler of approximately 20 million scrap tires per year in the
United States, today announced results for the three and six months
ended March 31, 2006.
Lyle Jensen, GreenMan's President and Chief Executive Officer
stated, " While the March quarterly results are not acceptable, I am
pleased with the performance of our mid-west operations which exceeded
expectations and budget during our seasonally slowest second fiscal
quarter. Strong end-product demand and an ongoing effort to reduce
operating costs resulted in higher gross profit and improved EBITDA
(Earnings Before Interest, Taxes, Depreciation and Amortization) for
the region despite reduced inbound scrap tire volume. Unfortunately,
our California facility's performance during the quarter did not meet
expectations and we have taken steps to reduce our operating costs at
that location in an effort to improve their near term performance as
we evaluate alternatives available to us. As previously noted, we will
continue to evaluate each operation on its merits and contribution to
the corporation and make the necessary decisions to ensure the
continued viability of GreenMan."
Mr. Jensen added, "The mid-west region is our core base of
business on which we are implementing the five-point turnaround plan
discussed during our April 20th conference call. The steps are: (1)
stabilize, then work to (2) maximize continuing operations; (3)
successfully renegotiate our existing $9 million corporate credit
facility in order to obtain additional near term capital and gain time
to implement our turnaround plan; (4) finalize our Southeast
divestiture efforts and (5) aggressively pursue strategic business
development opportunities intended to leverage our existing operations
and maximize shareholder value. Given the fact we have made
significant strides implementing this plan during the last thirty
days, I am optimistic as we head into the seasonally strongest half of
our fiscal year."
Please join us on Wednesday, May 24, 2006 at 11:30 AM EST for a
conference call in which we will discuss the results for the quarter
ended March 31, 2006 and provide more details about actions which have
been taken and are in the process of being taken to accelerate
GreenMan's financial turnaround. We intend to file our Form 10-QSB for
the quarter ended March 31, 2006 prior to the May 24th conference
call. To participate, please call 1-800-967-7188 and ask for the
GreenMan call.
"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 profitability, the possibility that
the American Stock Exchange may delist our common stock, 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 December 31, 2005. The Company disclaims any intent or
obligation to update these "forward-looking" statements.
Three Months ended March 31, 2006 Compared to the Three Months
ended March 31, 2005
Net sales from continuing operations for the three months ended
March 31, 2006 decreased $781,000 or 17 percent to $3,911,000 as
compared to last year's net sales from continuing operations of
$4,692,000. Our continuing operations processed approximately 3.1
million passenger tire equivalents during the three months ended March
31, 2006, compared to approximately 3.8 million passenger tire
equivalents during the same period last year. The decrease was
primarily attributable to the completion of an Iowa scrap tire cleanup
project during fiscal 2005 which accounted for approximately $745,000
of revenue and 800,000 passenger tire equivalents during the three
months ended March 31, 2005. In addition, the overall fee we are paid
to collect and dispose of a scrap tire (tipping fee") decreased 9
percent (4 percent decrease when the prior year Iowa scrap tire
cleanup revenue is removed) during the three months ended March 31,
2006 which was partially offset by an 8 percent increase in
end-product revenue during this period. During fiscal 2005, we
completed an evaluation of our corporate-wide inbound collection
infrastructure and determined that we would no longer provide certain
levels of service and products at existing rates in certain markets
and therefore implemented price increases where warranted and
terminated service in situations where price increases were not an
alternative. While these initiatives reduced our overall inbound tire
volume and may negatively impact our overall gross tipping fee
revenue, we believe these efforts will continue to improve our
performance through lower labor, parts and maintenance costs.
Gross profit for the three months ended March 31, 2006 was
$508,000 or 13 percent of net sales, compared to $471,000 or 10
percent of net sales for three months ended March 31, 2005. Our cost
of sales decreased $818,000 or 19 percent primarily due to decreased
collection and processing costs associated with lower inbound volume
and our ongoing efforts to reduce operating costs where available.
Selling, general and administrative expenses for the three months
ended March 31, 2006 increased $144,000 to $1,030,000 or 26 percent of
net sales, compared to $886,000 or 19 percent of net sales for the
three months ended March 31, 2005. The increase was primarily
attributable to increased outside professional expenses and insurance.
During the quarter ended March 31, 2006, management determined as
part of our ongoing performance evaluation of each operating entity
that the carrying value of certain California equipment exceeded its
estimated fair value based on replacement cost of similar equipment
and recorded a non-cash impairment loss amounting to $109,000.
As a result of the foregoing, we had an operating loss of $631,000
for the three months ended March 31, 2006 as compared to an operating
loss of $415,000 for the three months ended March 31, 2005.
Interest and financing costs for the three months ended March 31,
2006 increased $138,000 to $627,000 (including $307,000 of non-cash
deferred financing costs), compared to $489,000 (including $250,000 of
non-cash deferred financing costs) during the three months ended March
31, 2005. The increase is primarily attributable to increased non-cash
deferred financing associated with the Laurus credit facility and an
increase in borrowing rates. Included in other expenses for the
quarter ended March 31, 2005 is $101,000 relating to a portion of an
acquisition deposit which was written off.
As a result of the foregoing, our net loss from continuing
operations for the three months ended March 31, 2006 increased
$265,000 to $1,269,000 or $.07 per basic share, compared to a net loss
of $1,004,000 or $.05 per basic share for the three months ended March
31, 2005. The $12,000 loss from discontinued operations for the three
months ended March 31, 2006 relates primarily to the costs of exit
activities associated with our Georgia operations. The $884,000 loss
($.05 per basic share) from discontinued operations for the three
months ended March 31, 2005 includes approximately $443,000 associated
with our Georgia operations and approximately $441,000 associated with
our Tennessee operations.
Our net loss for the three months ended March 31, 2006 decreased
$607,000 or 32 percent to $1,281,000 as compared to a net loss of
$1,888,000 for the three months ended March 31, 2005.
Six Months ended March 31, 2006 Compared to the Six Months ended
March 31, 2005
Net sales from continuing operations for the six months ended
March 31, 2006 decreased $860,000 or 9 percent to $9,023,000 as
compared to last year's net sales from continuing operations of
$9,883,000. Our continuing operations processed approximately 7
million passenger tire equivalents during the six months ended March
31, 2006, a 17 percent decrease as compared to approximately 8.4
million passenger tire equivalents during the same period last year.
The decrease was primarily attributable to the completion of an Iowa
scrap tire cleanup project during fiscal 2005 which accounted for
approximately $827,000 of revenue and 875,000 passenger tire
equivalents during the six months ended March 31, 2005. The negative
impact on overall revenue resulting from lower inbound tire volumes
was partially offset by a 3 percent increase (5 percent decrease when
the prior year Iowa scrap tire cleanup revenue is removed) in the
overall fee we are paid to collect and dispose of a scrap tire and a 2
percent increase in end product revenue during the six months ended
March 31, 2006. During fiscal 2005, we completed an evaluation of our
corporate-wide inbound collection infrastructure and determined that
we would no longer provide certain levels of service and products at
existing rates in certain markets and therefore implemented price
increases where warranted and terminated service in situations where
price increases were not an alternative. While these initiatives
reduced our overall inbound tire volume growth rate and may negatively
impact our overall gross tipping fee revenue, we believe these efforts
will continue to improve our performance through lower labor, parts
and maintenance costs.
Gross profit for the six months ended March 31, 2006 was
$1,826,000 or 20 percent of net sales, compared to $1,197,000 or 12
percent of net sales for six months ended March 31, 2005. Our cost of
sales decreased $1,489,000 or 17 percent primarily due to decreased
collection and processing costs associated with lower inbound volume
and our ongoing efforts to reduce operating costs where available.
Selling, general and administrative expenses for the six months
ended March 31, 2006 increased $294,000 to $2,035,0000 or 23 percent
of net sales, compared to $1,741,000 or 18 percent of net sales for
the six months ended March 31, 2005. The increase was primarily
attributable to increased outside professional expenses and insurance.
During the quarter ended March 31, 2006, management determined as
part of our ongoing performance evaluation of each operating entity
that the carrying value of certain California equipment exceeded its
estimated fair value based on replacement cost of similar equipment
and recorded a non-cash impairment loss amounting to $109,000.
As a result of the foregoing, our operating loss decreased
$226,000 to $318,000 for the six months ended March 31, 2006 as
compared to an operating loss of $544,000 for the six months ended
March 31, 2005.
Interest and financing costs for the six months ended March 31,
2006 increased $765,000 to $1,578,000 (including $962,000 of non-cash
deferred financing costs), compared to $813,000 (including $350,000 of
non-cash deferred financing costs) during the six months ended March
31, 2005. The increase is primarily attributable to increased non-cash
deferred financing associated with the Laurus credit facility and an
increase in borrowing rates. Included in other expenses for the six
months ended March 31, 2005 is $101,000 relating to a portion of an
acquisition deposit which was written off.
Based on the magnitude of our fiscal 2005 losses, we determined
the near-term realizability of a $270,000 non-cash deferred tax asset
to be uncertain and therefore have provided a valuation allowance on
the entire amount during the six months ended March 31, 2005.
As a result of the foregoing, our net loss from continuing
operations for the six months ended March 31, 2006 increased $199,000
to $1,928,000 or $.10 per basic share, compared to a net loss of
$1,729,000 or $.09 per basic share for the six months ended March 31,
2005. The $759,000 loss ($.04 per basic share) from discontinued
operations for the six months ended March 31, 2006 relates primarily
to the costs of exit activities associated with our Georgia
operations. The loss from discontinued operations for the six months
ended March 31, 2005 includes approximately $1,202,000 associated with
our Georgia operations and approximately $762,000 associated with our
Tennessee operations, totaling $.10 per basic share.
Our net loss for the six months ended March 31, 2006 decreased
$1,006,000 or 27 percent to $2,687,000 as compared to a net loss of
$3,693,000 for the six months ended March 31, 2005.
-0-
*T
Condensed Consolidated Statements of Operations
Three Months Ended Six Months Ended
March 31, March 31, March 31, March 31,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Net sales $3,911,000 $4,692,000 $9,023,000 $9,883,000
Cost of sales 3,403,000 4,221,000 7,197,000 8,686,000
------------ ------------ ------------ ------------
Gross profit 508,000 471,000 1,826,000 1,197,000
Selling, general
and
administrative 1,030,000 886,000 2,035,000 1,741,000
Impairment loss 109,000 -- 109,000 --
------------ ------------ ------------ ------------
1,139,000 886,000 2,144,000 1,741,000
------------ ------------ ------------ ------------
Operating income
(loss) from
continuing
operations (631,000) (415,000) (318,000) (544,000)
------------ ------------ ------------ ------------
Other (expenses)
income, net (638,000) (589,000) (1,610,000) (915,000)
------------ ------------ ------------ ------------
Loss from
continuing
operations before
income taxes (1,269,000) (1,004,000) (1,928,000) (1,459,000)
Provision for
income taxes -- -- -- 270,000
------------ ------------ ------------ ------------
Loss from
continuing
operations (1,269,000) (1,004,000) (1,928,000) (1,729,000)
Discontinued
operations
Gain on disposal
of discontinued
operations 17,000 -- 8,000 --
Loss from
discontinued
operations (29,000) (884,000) (767,000) (1,964,000)
------------ ------------ ------------ ------------
(12,000) (884,000) (759,000) (1,964,000)
------------ ------------ ------------ ------------
Net loss $(1,281,000) $(1,888,000) $(2,687,000) $(3,693,000)
============ ============ ============ ============
Loss from
continuing
operations per
share - basic $(0.07) $(0.05) $(0.10) $(0.09)
Loss from
discontinued
operations per
share - basic -- (0.05) (0.04) (0.10)
------------ ------------ ------------ ------------
Net loss per share $(0.07) $(0.10) $(0.14) $(0.19)
============ ============ ============ ============
Weighted average
shares
outstanding 19,225,000 19,200,000 19,225,000 19,153,000
============ ============ ============ ============
Condensed Consolidated Balance Sheet Data
March September
31, 30,
2006 2005
------------ ------------
Assets
Current assets $3,145,000 $4,041,000
Property, plant and equipment (net) 5,814,000 6,342,000
Other assets 555,000 699,000
Assets related to discontinued operations 69,000 2,038,000
------------ ------------
$9,583,000 $13,120,000
============ ============
Liabilities and
Stockholders' (Deficit)
Current liabilities $10,697,000 $10,065,000
Notes payable, non-current 3,922,000 4,739,000
Capital lease obligations, non-current 1,319,000 1,369,000
Deferred gain on sale leaseback 361,000 380,000
Liabilities related to discontinued
operations 4,657,000 5,253,000
Stockholders' equity (11,373,000) (8,686,000)
------------ ------------
$9,583,000 $13,120,000
============ ============
*T