GreenMan Issues Second Quarter Financials

The increase is attributable to the inclusion of the operations of two new subsidiaries formed in connection with fiscal 2002 acquisitions, the formation of a majority owned joint venture and the increase in end product sales, which accounted for 23 percent of consolidated revenues for the quarter.

GreenMan processed 6 million passenger tire equivalents (PTE) during the quarter. The revenue per PTE improved somewhat because of improved end product sales, which offset a 12 percent reduction in tipping fees and lower tire volumes in some markets.

Gross profit for the period was $595,000, or 10 percent of net sales, as compared to $1,343,000, or 24 percent of net sales for the same period in 2002. GreenMan attributes the decrease in part to the completion of several tire pile cleanups in 2002; increases in insurance, fuel and transportation costs; a $125,000 increase in raw material costs for the company’s Iowa operation; more than $120,000 in excess transportation costs because tires sourced in Tennessee had to be shipped to its Georgia facility for processing; approximately $75,000 in lost profitability because of boiler problems at two tire derived fuel customers; and $45,000 in operating inefficiencies associated with the conversion of its Wisconsin operations into a whole-tire transfer station.

Chuck Coppa, CFO, says, “As we head into the historically strongest portion of our fiscal year, we are confident that inbound tire volumes and out-going product shipments will increase.”

GreenMan’s net loss for its second quarter was $1,184,000, or $.08 per share, as compared to a net income of $214,000, or $.02 per share for the same quarter in 2002.

Bob Davis, president and CEO, says, “Despite the negative first half performance, I am a firm believer that building strength during a down market will position us to maximize performance as market conditions approve. Over $2.5 million has been committed to upgrade out Iowa processing capacity, to increase our ability to produce higher value added products in Minnesota and to establish a new collection and processing operation in Tennessee, and we are beginning to realize the benefits from these investments.”