American Power Group Corporation Reports Second Quarter Fiscal 2014
Results
LYNNFIELD, MA--(Marketwired - May 15, 2014) - American Power
Group Corporation (OTCQB: APGI), today announced results for the
three and six months ending March 31, 2014. Several areas of
notable progress are as follows:
Quarterly
Highlights:
- Domestic vehicular revenues for the three months ended March
31, 2014 increased $272,000 or 312 percent to $359,000 as the
early-adopter customer phase continues to grow. Over 200
vehicular dual fuel conversion systems have been shipped in North
America since 2012.
- APG's Dual Fuel Glider™ was named a 2014 Top 20 Product by
Heavy Duty Trucking Magazine in February 2014.
- North American oil and gas drilling revenues for the three
months ended March 31, 2014 were approximately $835,000 or 142
percent higher than drilling revenue for the same period a year
ago. Regarding North American oil & gas fracturing
revenue, we did not have a frac rig available during the quarter
for conversion as compared to the $1.3 million full turnkey
conversion completed in the same quarter a year ago. Over 335
stationary oil and gas dual fuel conversion systems have been
installed since 2011.
- Entering Q3 with a backlog of more than $600,000 with nearly
80% relating to vehicular dual fuel conversions.
Lyle Jensen, American Power Group Corporation's Chief Executive
Officer, stated, "Despite the cold weather start and lack of a
comparable fracturing conversion order during the second quarter,
there was much to be proud of. Notably, the adoption of
vehicular dual fuel systems by Class 8 heavy-duty 'early-adopter'
customers is accelerating. During the quarter we shipped 34
conversion systems and added another 46 conversion systems to
backlog for delivery during the balance of the year as compared to
6 conversion systems the same period last year. As of today, we
have shipped more vehicular conversion systems in fiscal 2014 than
all of fiscal 2013 and 6 times more than fiscal 2012. Through our
WheelTime Network and related associations, we are adding three to
four new 'early-adopter' customers per month which provides the
foundation for the next phase we call the 'early-growers' which are
planning to add ten, fifteen, and twenty additional dual fuel
trucks to their fleet."
Mr. Jensen added, "Despite several industry challenges,
including the recent dedicated 15L engine cancelation and its
impact on infrastructure build-out, APG's vehicular and stationary
natural gas business model marches on undeterred due to its
attractive economics, better up-time performance, and the
flexibility our system provides to the end user. More and more
natural gas industry leaders are concluding that APG's Dual Fuel
Turbocharged® technology "simply makes more sense" which we believe
APG can capitalize on for years to come."
Conference Call
Please join us today at 10:30 AM Eastern when we will discuss the
results for the three months ended March 31, 2014. To participate,
please call 1-888-481-2844 and
ask for the American Power Group call using pass code
2156307. A replay of the conference call can be accessed until
11:50 PM on May 31, 2014 by calling 1-888-203-1112 and
entering pass code 2156307.
Three Months ended March 31, 2014 Compared to the Three Months
ended March 31, 2013
Net sales for the three months ended March 31, 2014 decreased
$594,000 or 32 percent to $1,258,000 as compared to net sales of
$1,852,000 for the three months ended March 31, 2013. We
believe the unusually colder than normal weather conditions in
North America during the quarter negatively impacted the results
for the three months ended March 31, 2014 as customers delayed
conversions due harsh installation conditions or vehicle
availability. The results for the three months ended March 31, 2013
included approximately $1.3 million or 70 percent of the quarterly
revenue associated with an oil and gas conversion order relating to
the full turnkey conversion of multiple engines in the high
pressure fracturing market. North American stationary revenues
for the three months ended March 31, 2014 were approximately
$835,000 which was approximately $490,000 or 142 percent higher
when compared to North American stationary revenues of
approximately $345,000 for the same period of the prior year,
adjusted for the large turnkey conversion order discussed above.
Domestic vehicular revenues for the three months ended March 31,
2014 increased $272,000 or 312 percent to $359,000 due to increased
market exposure and sales through our WheelTime member
distributor/installer network and the ability to actively solicit
customer orders due to the increased number of EPA approvals
received to date.
During the three months ended March 31, 2014 our gross profit
was $347,000 or 28 percent of net sales as compared to a gross
profit of $716,000 or 39 percent of net sales for the three months
ended March 31, 2013. Selling, general and administrative expenses
for the three months ended March 31, 2014 decreased $334,000 or 26
percent to $932,000 as compared to $1,266,000 for the three months
ended March 31, 2013. The results for the three months ended March
31, 2013 included approximately $361,000 of one-time, non-cash
amortization expense associated with the WheelTime member incentive
warrants which vested in 2013.
Our net loss for the three months ended March 31, 2014 increased
$44,000 or 7 percent to $655,000 or ($0.01) per basic share as
compared to a net loss of $611,000 or ($0.01) per basic share for
the three months ended March 31, 2013. The calculation of net loss
per share available for Common shareholders for the three months
ended March 31, 2014 and 2013 reflects the inclusion of 10%
Convertible Preferred Stock quarterly dividends of $235,000 and
$187,000, respectively associated with the issuance of the 10%
Convertible Preferred Stock.
Six Months ended March 31, 2014 Compared to the Six Months ended
March 31, 2013
Net sales for the six months ended March 31, 2014 increased
$374,000 or 14 percent to $3,101,000 as compared to net sales of
$2,727,000 for the six months ended March 31, 2013. We believe
the unusually colder than normal weather conditions in North
America during the quarter negatively impacted the results for the
three months ended March 31, 2014 as customers delayed conversions
due harsh installation conditions or vehicle availability. The
results for the six months ended March 31, 2013 included
approximately $1.3 million or 48 percent of the year to date
revenue associated with an oil and gas conversion order relating to
the full turnkey conversion of multiple engines in the high
pressure fracturing market. North American stationary revenues
for the six months ended March 31, 2014 were approximately $2.2
million which was approximately $1.4 million or 201 percent higher
when compared to North American stationary revenues of
approximately $171,000 for the same period of the prior year,
adjusted for the large turnkey conversion order discussed
above. Domestic vehicular revenues for the six months ended
March 31, 2014 increased approximately $317,000 or 56 percent
compared to last year. The increase was attributable to increased
market exposure and sales through our WheelTime member
distributor/installer network and the ability to actively solicit
customer orders due to the increased number of EPA approvals
received to date.
During the six months ended March 31, 2014, our gross profit was
$1,249,000 or 40 percent of net sales as compared to $1,017,000 or
37 percent of net sales for the six months ended March 31, 2013.
Selling, general and administrative expenses for the six months
ended March 31, 2014 decreased $225,000 or 10 percent to $1,924,000
as compared to $2,149,000 for the six months ended March 31, 2013.
The decrease was primarily attributable to the inclusion of
approximately $393,000 of one-time, non-cash amortization expense
associated with the WheelTime member incentive warrants which
vested during the six months ended March 31, 2013.
Our net loss for the six months ended March 31, 2014 decreased
$431,000 or 34 percent to $819,000 or ($0.02) per basic share as
compared to a net loss of $1,250,000 or ($0.03) per basic share for
the six months ended March 31, 2013. The calculation of net loss
per share available for Common shareholders for the six months
ended March 31, 2014 and 2013, reflects the inclusion of quarterly
dividends of $480,000 and $400,000, respectively, paid on our 10%
Convertible Preferred Stock.
Condensed Consolidated Statements of Operations
| |
|
|
|
|
|
| |
Three Months Ended March 31, |
|
|
Six Months Ended March 31, |
|
| |
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net sales |
$ |
1,258,000 |
|
|
$ |
1,852,000 |
|
|
$ |
3,101,000 |
|
|
$ |
2,727,000 |
|
| Cost of sales |
|
911,000 |
|
|
|
1,136,000 |
|
|
|
1,852,000 |
|
|
|
1,710,000 |
|
| |
Gross profit |
|
347,000 |
|
|
|
716,000 |
|
|
|
1,249,000 |
|
|
|
1,017,000 |
|
| Selling, general and administrative |
|
932,000 |
|
|
|
1,266,000 |
|
|
|
1,924,000 |
|
|
|
2,149,000 |
|
| |
Operating loss from continuing operations |
|
(585,000 |
) |
|
|
(550,000 |
) |
|
|
(675,000 |
) |
|
|
(1,132,000 |
) |
| Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Interest and financing expense |
|
(45,000 |
) |
|
|
(47,000 |
) |
|
|
(91,000 |
) |
|
|
(87,000 |
) |
| |
Other, net |
|
(25,000 |
) |
|
|
(14,000 |
) |
|
|
(53,000 |
) |
|
|
(31,000 |
) |
| |
|
Other
expense, net |
|
(70,000 |
) |
|
|
(61,000 |
) |
|
|
(144,000 |
) |
|
|
(118,000 |
) |
| Net loss |
|
(655,000 |
) |
|
|
(611,000 |
) |
|
|
(819,000 |
) |
|
|
(1,250,000 |
) |
| |
10% Convertible Preferred dividends |
|
(235,000 |
) |
|
|
(187,000 |
) |
|
|
(480,000 |
) |
|
|
(400,000 |
) |
| Net loss available to Common shareholders |
$ |
(890,000 |
) |
|
$ |
(798,000 |
) |
|
$ |
(1,299,000 |
) |
|
$ |
(1,650,000 |
) |
| Loss from continuing operations per share - basic and
diluted |
|
$ (0.01 |
) |
|
|
$ (0.01 |
) |
|
|
$ (0.02 |
) |
|
|
$ (0.03 |
) |
| Net loss per Common share - 10% Convertible Preferred
dividend |
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
| Net loss attributable to Common shareholders per share
- basic and diluted |
|
$ (0.02 |
) |
|
$ |
(0.02 |
) |
|
|
$ (0.03 |
) |
|
|
$ (0.04 |
) |
| Weighted average shares outstanding - basic and
diluted |
|
49,062,000 |
|
|
|
46,354,000 |
|
|
|
48,723,000 |
|
|
|
45,972,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheet Data
|
|
|
|
|
|
|
March 31, 2014 |
|
September 30, 2013 |
|
Assets |
|
|
|
|
|
|
Current assets |
$ |
3,864,000 |
|
$ |
4,771,000 |
|
Property, plant and equipment, net |
|
875,000 |
|
|
930,000 |
| Other
assets |
|
4,683,000 |
|
|
4,696,000 |
|
|
$ |
9,422,000 |
|
$ |
10,397,000 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
Current liabilities |
$ |
2,204,000 |
|
$ |
2,657,000 |
| Notes
payable, net of current portion |
|
1,995,000 |
|
|
1,490,000 |
|
Obligations due under lease settlement, net of current portion |
|
506,000 |
|
|
506,000 |
|
Stockholders' equity |
|
4,717,000 |
|
|
5,744,000 |
|
|
$ |
9,422,000 |
|
$ |
10,397,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
About American Power
Group Corporation American Power Group's alternative energy
subsidiary, American Power Group, Inc., provides a cost-effective
patented Turbocharged Natural Gas® conversion technology for
vehicular, stationary and off-road mobile diesel engines. American
Power Group's dual fuel technology is a unique non-invasive energy
enhancement system that converts existing diesel engines into more
efficient and environmentally friendly engines that have the
flexibility to run on: (1) diesel fuel and liquefied natural gas;
(2) diesel fuel and compressed natural gas; (3) diesel fuel and
pipeline or well-head gas; and (4) diesel fuel and bio-methane,
with the flexibility to return to 100% diesel fuel operation at any
time. The proprietary technology seamlessly displaces up to 75% of
the normal diesel fuel consumption with the average displacement
ranging from 40% to 65%. The energized fuel balance is maintained
with a proprietary read-only electronic controller system ensuring
the engines operate at original equipment manufacturers' specified
temperatures and pressures. Installation on a wide variety of
engine models and end-market applications require no engine
modifications unlike the more expensive invasive fuel-injected
systems in the market. See additional information at:
www.americanpowergroupinc.com.
Caution Regarding
Forward-Looking Statements and Opinions With the exception
of the historical information contained in this release, the
matters described herein contain forward-looking statements and
opinions, including, but not limited to, statements relating to new
markets, development and introduction of new products, and
financial and operating projections. These forward-looking
statements and opinions are neither promises nor guarantees, but
involve risk and uncertainties that may individually or mutually
impact the matters herein, and cause actual results, events and
performance to differ materially from such forward-looking
statements and opinions. These risk factors include, but are not
limited to, the fact that our dual fuel conversion business has
lost money in the last five consecutive fiscal years, the risk that
we may require additional financing to grow our business, the fact
that we rely on third parties to manufacture, distribute and
install our products, we may encounter difficulties or delays in
developing or introducing new products and keeping them on the
market, we may encounter lack of product demand and market
acceptance for current and future products, we may encounter
adverse events economic conditions, we operate in a competitive
market and may experience pricing and other competitive pressures,
we are dependent on governmental regulations with respect to
emissions, including whether EPA approval will be obtained for
future products and additional applications, the risk that we may
not be able to protect our intellectual property rights, factors
affecting the Company's future income and resulting ability to
utilize its NOLs, the fact that our stock is thinly traded and our
stock price may be volatile, the fact that we have preferred stock
outstanding with substantial preferences over our common stock, the
fact that the conversion of the preferred stock and the exercise of
stock options and warrants will cause dilution to our shareholders,
the fact that we incur substantial costs to operate as a public
reporting company and other factors that are detailed from time to
time in the Company's SEC reports, including the report on Form
10-K for the year ended September 30, 2013 and the Company's
quarterly reports on Form 10-Q. Readers are cautioned not to place
undue reliance on these forward-looking statements and opinions,
which speak only as of the date hereof. The Company undertakes no
obligation to release publicly the result of any revisions to these
forward-looking statements and opinions that may be made to reflect
events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
Media Information Contact: Kim Doran Quixote Group 336-413-1872 Email
Contact Investor Relations Contacts: Chuck Coppa CFO American Power
Group Corporation 781-224-2411 Email
Contact Mike Porter Porter, LeVay, & Rose, Inc. 212-564-4700 Email
Contact
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