GreenMan Technologies announced results for its fourth quarter and fiscal year. Bob Davis, president and CEO, said, "Fiscal 2003 represented a year in GreenMan's history characterized by several significant challenges."
Davis added, "In order to position GreenMan to be stronger, more profitable and enhance shareholder value in the future, we began initiatives during the first quarter of fiscal 2003 to upgrade existing operations, expand into new geographic locations to maximize existing transportation and marketing infrastructures, and continue to identify better and more profitable uses for existing and new products. We anticipated that a majority of the funding to implement these initiatives would come from our principal lender, which unfortunately was closed by the Commissioner of Financial Institutions of the State of California in February 2003, shortly after we received verbal approval to move forward."
"On March 31, 2003, a portion of our Georgia facility and several pieces of waste wire processing equipment were damaged by a fire resulting in increased disposal costs and reduced product revenue in Georgia that will continue until the equipment is re-installed and operational. We currently estimate the equipment to be operational in March 2004.
"Despite these events, we pursued critical projects with the cooperation of our vendors and, regional bankers, and through the use of a significant amount of internally generated resources. We were able to complete four major performance enhancing projects totaling over $3 million during fiscal 2003; a complete rebuild of the shredding and waste wire processing infrastructure in Iowa; installation of additional size reduction equipment in Georgia and Minnesota to meet customer demands for smaller sized fuel chips; installation of our third waste wire processing equipment line in Minnesota and opening of a scaled-down size reduction plant in Tennessee. The estimated cost savings realized by processing Tennessee-sourced tires locally instead of transporting them to Georgia will exceed $70,000 per month."
"As a result of these challenges and inherent delays, we were unable to complete all planned growth initiatives during fiscal 2003. Nonetheless, we enter fiscal 2004 with a solid operating infrastructure in the Midwest; improved and enhanced capabilities in the West and Southeast; and more than double our fiscal 2003 corporate-wide crumb rubber production capacity.
Net sales for the quarter ended September 30 were $8.409 million, compared to last year's net sales of $8,407 million7
Gross profit for the quarter was $1.053 million, compared to $1.574 million the same time the previous year. The decrease was attributable to: the completion of several large tire pile cleanups completed during the summer 2002; decreased product revenue in Georgia as a result of the March 31, 2003 waste wire processing equipment fire and which management estimates to exceed $300,000; more than $250,000 of excess transportation costs necessitated by processing Tennessee-sourced tires at our Georgia facility until our Nashville facility commences full operation; approximately $200,000 of operating inefficiencies including increased parts, repair and maintenance costs due to excessive equipment downtime in Georgia during the quarter and previously reported corporate-wide insurance cost increases of more than $135,000 per quarter.
Net sales for the year increased 8 percent or $2.228 million, compared to $27,452,000 for the previous year
The increase was primarily attributable to the inclusion of operations of three new subsidiaries formed in connection with fiscal 2002 acquisitions as well as increased end product sales which accounted for 25 percent of consolidated revenues for the year ended September 30, 2003 as compared to 17 percent for the same period last year.
Gross profit for the year was $3,978,000 compared to $6,255,000 the previous year.