GRNTF iPath Global Carbon (PK)

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