GreenMan Technologies, Inc. (AMEX: GRN), a leading recycler of
approximately 20 million scrap tires per year in the United States,
today announced results for its first quarter ended December 31,
2005. Chuck Coppa, GreenMan's Chief Financial Officer stated, "The
net loss for the quarter ended December 31, 2005 decreased
approximately $400,000 to $1.4 million (including approximately
$746,000 associated with our discontinued Georgia operations and
approximately $656,000 of non-cash deferred financing charges) as
compared to a net loss of approximately $1.8 million for the
quarter ended December 2004 (including approximately $1.1 million
associated with our discontinued operations in Georgia and
Tennessee and approximately $360,000 associated with non-cash
deferred financing charges and the write-off of a deferred tax
asset)". Please see below for a more detailed explanation of the
quarterly results. Three Months ended December 31, 2005 Compared to
the Three Months ended December 31, 2004 In September 2005, due to
the magnitude of continued operating losses, our Board of Directors
approved separate plans to divest the operations of our Georgia and
Tennessee subsidiaries and dispose of their respective assets.
Accordingly, we have classified their respective results of
operations as discontinued operations for all periods presented in
the accompanying consolidated financial statements. Net sales from
continuing operations for the three months ended December 31, 2005
were $5,112,000, a 1 percent decrease, compared to last year's net
sales from continuing operations of $5,168,000. Our continuing
operations processed approximately 4.0 million passenger tire
equivalents during the three months ended December 31, 2005,
compared to approximately 4.6 million passenger tire equivalents
during the three months ended December 31, 2004. The slight
decrease in revenue was attributable to a 13 percent decrease in
inbound scrap tires volume and a 1 percent decrease in overall
product revenue which was offset by a 13 percent increase in
overall tipping fees per passenger tire. During fiscal 2005, we
completed an evaluation of our corporate-wide inbound collection
infrastructure and determined 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 have reduced our overall
inbound tire volume growth rate, they have positively impacted our
overall tipping fee revenue and will continue to improve our
performance through lower labor, parts and maintenance costs. Gross
profit for the three months ended December 31, 2005 was $1,319,000
or 26 percent of net sales, compared to $736,000 or 14 percent of
net sales for three months ended December 31, 2004. Our cost of
sales decreased $639,000 or 14 percent primarily due to decreased
collection and processing costs associated with lower inbound
volume and our ongoing efforts to reduce operating costs were
available. Three Months ended December 31, 2005 Compared to the
Three Months ended December 31, 2004 Selling, general and
administrative expenses for the three months ended December 31,
2005 increased $149,000 to $1,005,000 or 20 percent of net sales,
compared to $855,000 or 17 percent of net sales for the three
months ended December 31, 2004. The increase was primarily
attributable to increased outside professional expenses and
insurance. As a result of the foregoing, we had operating income of
$314,000 for the three months ended December 31, 2005 as compared
to an operating loss of $119,000 for the three months ended
December 31, 2004. Interest and financing costs for the three
months ended December 31, 2005 increased $608,000 to $951,000
(including $656,000 of non-cash deferred financing costs), compared
to $344,000 (including $92,000 of non-cash deferred financing
costs) during the three months ended December 31, 2004. The
increase is primarily attributable to increased non-cash deferred
financing associated with the Laurus credit facility and an
increase in borrowing rates. 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
three months ended December 31, 2004. As a result of the foregoing,
our net loss from continuing operations for the three months ended
December 31, 2005 decreased $55,000 to $660,000 or $.03 per basic
share, compared to a net loss of $715,000 or $.04 per basic share
for the three months ended December 31, 2004. The $746,000 loss
from discontinued operations for the three months ended December
31, 2005 relates primarily to the costs of exit activities
associated with our Georgia operations. The loss from discontinued
operations for the three months ended December 31, 2004 includes
$736,000 associated with our Georgia operations and $353,000
associated with our Tennessee operations. Our net loss for the
three months ended December 31, 2005 decreased $399,000 to
$1,406,000 as compared to a net loss of $1,805,000 for the three
months ended December 31, 2004. "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-KSB for the fiscal period ended September 30, 2005. The Company
disclaims any intent or obligation to update these
"forward-looking" statements. -0- *T Condensed Consolidated
Statements of Operations Three Months Ended December 31, December
31, 2005 2004 ----------- ------------ Net sales $5,112,000
$5,168,000 Cost of sales 3,793,000 4,432,000
------------------------ Gross profit 1,319,000 736,000 Selling,
general and administrative 1,005,000 855,000
------------------------ Operating income (loss) from continuing
operations 314,000 (119,000) Other (expenses) income, net (974,000)
(326,000) ------------------------ Loss from continuing operations
before income taxes (660,000) (445,000) Provision for income taxes
-- (270,000) ------------------------ Loss from continuing
operations (660,000) (715,000) Discontinued operations Loss on
disposal of discontinued operations (9,000) -- Loss from
discontinued operations (737,000) (1,090,000)
------------------------ (746,000) (1,090,000)
------------------------ Net loss $(1,406,000)$(1,805,000)
======================== Loss from continuing operations per share
- basic $(0.03) $(0.04) Loss on disposal of discontinued operations
per share - basic -- -- Loss from discontinued operations per share
- basic (0.04) (0.05) ------------------------ Net loss per share
$(0.07) $(0.09) ======================== Weighted average shares
outstanding 19,225,000 19,106,000 ========================
Condensed Consolidated Balance Sheet Data December 31, September
30, 2005 2005 ------------ ------------- Assets Current assets
$3,226,000 $4,041,000 Property, plant and equipment (net) 5,883,000
6,342,000 Other assets 621,000 699,000 Assets related to
discontinued operations 1,097,000 2,038,000
--------------------------- $10,827,000 $13,120,000
=========================== Liabilities and Stockholders' (Deficit)
Current liabilities $9,625,000 $10,065,000 Notes payable,
non-current 4,325,000 4,739,000 Capital lease obligations,
non-current 1,354,000 1,369,000 Deferred gain on sale leaseback
370,000 380,000 Liabilities related to discontinued operations
5,243,000 5,253,000 Stockholders' equity (10,092,000) (8,686,000)
--------------------------- $10,827,000 $13,120,000
=========================== *T
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