GreenMan Technologies, Inc. (AMEX: GRN), a leading recycler of over
20 million scrap tires per year in the United States, today
announced results for its fiscal year ended September 30, 2005.
Chuck Coppa, GreenMan's Chief Financial Officer stated, "As
previously released on January 4, 2006, due to the magnitude of the
operating losses incurred by our Georgia and Tennessee subsidiaries
during fiscal 2005, the anticipated financial impact of the pending
divestiture of our Georgia operations and the write-off of
corporate-wide goodwill, we estimated the aggregate net loss for
the fiscal year ended September 30, 2005 to be between $14 and $15
million as compared to approximately $2.6 million for the year
ended September 30, 2004. Today we announce a net loss of
$15,173,000 for the fiscal year ended September 30, 2005 (including
a loss relating to discontinued operations of $11,119,000; the
non-cash write-off of $1,362,000 of goodwill and approximately
$1,548,000 of non-cash deferred financing charges, in aggregate
$14,029,000) as compared to a net loss of $2,645,000 for the fiscal
year ended September 30, 2004 (including a loss relating to
discontinued operations of $2,067,000 and approximately $407,000 of
non-cash deferred financing charges, in aggregate $2,474,000)". Mr.
Coppa, added, "We are in the process of finalizing remaining open
items and intend to file our Form 10-KSB for the fiscal year ended
September 30, 2005 within the next five days and our Form 10-QSB
for the quarter ended December 31, 2005 within the next ten days.
Please join us on Thursday, April 20, 2006 at 11:30 AM EST for a
conference call in which we will discuss the results for fiscal
2005 and the quarter ended December 31, 2005 and provide more
details about actions which have been taken and are in the process
of being taken to accelerate GreenMan's financial turnaround
including our initiatives to address the going-concern opinion
issued by the our auditors on the September 30, 2005, audited
financial statements. To participate, please call 1-800-946-0782
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 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 June 30, 2005. The Company
disclaims any intent or obligation to update these
"forward-looking" statements. 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. Fiscal Year
ended September 30, 2005 Compared to Fiscal Year ended September
30, 2004 Net sales from continuing operations for the fiscal year
ended September 30, 2005 were $22,075,000, a 16 percent increase,
compared to last year's net sales from continuing operations of
$19,115,000. Our continuing operations processed approximately 18.3
million passenger tire equivalents during the fiscal year ended
September 30, 2005, compared to approximately 17.5 million
passenger tire equivalents during the fiscal year ended September
30, 2004. The increase in revenue was attributable to an 18 percent
increase in overall product revenues, a 5 percent increase in
inbound scrap tires volume and a 4 percent increase in overall
tipping fees per passenger tire. Included in the fiscal 2005
results were approximately $827,000 of revenue and 875,000
passenger tire equivalents associated with an Iowa scrap tire
cleanup project which was completed during fiscal 2005. Overall end
product sales increased 18 percent or $1,222,000 to $7,857,000
during the fiscal year ended September 30, 2005, compared to
$6,635,000 for the same period last year. The increase in end
product sales is attributable to stronger crumb rubber and
tire-derived fuel sales during the fiscal year ended September 30,
2005. Gross profit for the fiscal year ended September 30, 2005 was
$3,603,000 or 16 percent of net sales, compared to $3,908,000 or 20
percent of net sales for year ended September 30, 2004. Our cost of
sales increased $3,265,000 or 21 percent primarily due to increased
collection costs, reduced processing capacity and equipment
reliability issues at our California facility as well as unforeseen
decreases in inbound tire volumes in California due to severe
weather conditions during the first half of fiscal 2005. Selling,
general and administrative expenses for the fiscal year ended
September 30, 2005 increased $286,000 to $3,459,000 or 16 percent
of net sales, compared to $3,173,000 or 17 percent of net sales for
the fiscal year ended September 30, 2004. The increase was
primarily attributable to increased outside professional expenses
and travel. During June 2005 our Wisconsin subsidiary reached an
agreement with the lessor of certain transportation equipment to
buy-out the remaining term of the lease and recorded a $57,000
impairment loss associated with writing down the assets to their
estimated fair market value. In addition, due to the magnitude of
the fiscal 2005 losses, management determined that the carrying
value of corporate-wide goodwill to be impaired and accordingly
wrote-off all remaining goodwill recording an additional non-cash
impairment loss of $1,362,000. As a result of the foregoing, we had
and operating loss of $1,275,000 for the fiscal year ended
September 30, 2005 as compared to an operating profit of $735,000
for the fiscal year ended September 30, 2004. Interest and
financing costs for the fiscal year ended September 30, 2005
increased $1,000,000 to $2,409,000 (including $1,548,000 of
non-cash deferred financing costs), compared to $1,409,000
(including $407,000 of non-cash deferred financing costs) during
the fiscal year ended September 30, 2004. The increase is primarily
attributable to increased non-cash deferred financing associated
with the Laurus credit facility and an increase in borrowing rates.
During the fiscal year ended September 30, 2004 we also recorded
other income of approximately $90,000 relating to a settlement for
damaged product. 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 fiscal year
ended September 30, 2005. As a result of the foregoing, our net
loss from continuing operations for the fiscal year ended September
30, 2005 increased $3,477,000 to $4,054,000 or $.21 per basic
share, compared to a net loss of $578,000 or $.03 per basic share
for the fiscal year ended September 30, 2004. The estimated loss on
disposal of discontinued operations of $5,966,000 includes
approximately $1,335,000 relating to our Tennessee operations and
approximately $4,631,000 in connection with our Georgia facility.
Losses primarily relate to the write-off of property, equipment,
goodwill, an acquisition deposit and costs of exit activities. Our
loss from discontinued operations increased $3,086,000 to
$5,153,000 for fiscal year ended September 30, 2005 as compared to
a net loss from discontinued operations of $2,067,000 for last
year. Our net loss for the fiscal year ended September 30, 2005
increased $12,528,000 to $15,173,000 as compared to a net loss of
$2,645,000 for the fiscal year ended September 30, 2004. -0- *T
Condensed Consolidated Statements of Operations Year Ended
September September 30, 2005 30, 2004 ------------ ------------ Net
sales $22,075,000 $19,115,000 Cost of sales 18,472,000 15,207,000
------------- ------------ Gross profit 3,603,000 3,908,000
------------- ------------ Operating expenses: Selling, general and
administrative 3,459,000 3,173,000 Impairment loss - goodwill
1,362,000 -- Impairment loss - long lived assets 57,000 --
------------- ------------ 4,878,000 3,173,000 -------------
------------ Operating income (loss) from continuing operations
(1,275,000) 735,000 Other (expenses) income, net (2,504,000)
(1,313,000) ------------- ------------ Loss from continuing
operations before income taxes (3,779,000) (578,000) Provision for
income taxes (275,000) -- ------------- ------------ Loss from
continuing operations (4,054,000) (578,000) Discontinued operations
Loss on disposal of discontinued operations (5,966,000) -- Loss
from discontinued operations (5,153,000) (2,067,000) -------------
------------ (11,119,000) (2,067,000) ------------- ------------
Net loss $(15,173,000) $(2,645,000) ============= ============ Loss
from continuing operations per share - basic $(0.21) $(0.03) Loss
on disposal of discontinued operations per share - basic (0.31) --
Loss from discontinued operations per share - basic (0.27) (0.12)
------------- ------------ Net loss per share $(0.79) $(0.15)
============= ============ Weighted average shares outstanding
19,189,000 17,173,000 ============= ============ Condensed
Consolidated Balance Sheet Data September 30, September 30, 2005
2004 --------------- --------------- Assets Current assets
$4,041,000 $4,853,000 Property, plant and equipment (net) 6,342,000
7,542,000 Goodwill (net) -- 1,362,000 Other assets 699,000
1,618,000 Assets related to discontinued operations 2,038,000
8,246,000 --------------- --------------- $13,120,000 $23,621,000
=============== =============== Liabilities and Stockholders'
Equity Current liabilities $10,065,000 $7,712,000 Notes payable,
non-current 4,739,000 6,267,000 Capital lease obligations,
non-current 1,369,000 1,577,000 Deferred gain on sale leaseback
380,000 419,000 Liabilities related to discontinued operations
5,253,000 4,259,000 Stockholders' equity (deficit) (8,686,000)
3,387,000 --------------- --------------- $13,120,000 $23,621,000
=============== =============== *T
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