GreenMan Reports Increase in Revenue for Q1

Tire recycling company GreenMan Technologies Inc., Savage, Minn., has announced results for the three months ended Dec. 31, 2006, the first quarter of its fiscal year.

The company’s revenue was up a reported 14 percent compared to the same quarter in 2005 and inbound tire volume also increased by more than half a million tires thanks to several tire pile cleanups in Iowa. 

Lyle Jensen, GreenMan president and CEO, says, "I am very pleased with the continued positive trend in operating results across the board.” He adds, “Included in this increase, crumb rubber revenue was up 43 percent during the December 2006 quarter primarily due to strong demand for product produced by our new Des Moines powderizer equipment. Gross margins for the quarter remained above 30 percent despite higher repairs and maintenance costs during the December 2006 quarter. Earnings before interest, tax, depreciation and amortization ('EBITDA') exceeded $900,000 for the quarter and, at 18.5 percent of revenue, reflects another positive milestone in our progress towards sustained profitability."

Net sales from continuing operations for the three months ended Dec. 31, 2006, increased $611,000, or 14 percent, to $4.89 million as compared to the first quarter of last year's net sales from continuing operations of $4.28 million. In addition to the 18 percent increase in overall inbound tire volume, the tipping fee GreenMan charges to collect and dispose of a scrap tire increased 2 percent compared to last year.

Gross profit for the three months ended Dec. 31, 2006, was $1.48 million, or 30.4 percent of net sales, compared to $1.3 million, or 30.5 percent of net sales, for the three months ended Dec. 31, 2005. GreenMan’s cost of sales increased $433,000, or 15 percent, primarily because of increased collection and processing costs associated with higher inbound volume and higher repair and maintenance expenses. The company’s processing residual waste costs also increased approximately $58,000 during the three months ended Dec. 31, 2006 as compared to the prior year.

Interest and financing expenses for the quarter increased $244,000 to $523,000, compared to the first quarter of fiscal year 2006. The increase is attributable to the inclusion of approximately $138,000 of deferred interest associated with the June 2006 Laurus credit facility restructuring, increased rates and the allocation of all Laurus related interest to continuing operations during the fiscal year ended Sept. 30, 2006.

As a result, GreenMan’s net loss from continuing operations for the three months ended Dec. 31, 2006, decreased $409,000, or 96 percent, to $19,000, or $.00 per basic share, compared to a net loss of $428,000 or $.02 per basic share, for the three months ended Dec. 31, 2005.

The company’s net loss for the three months ended Dec. 31, 2006, decreased $1.44 million, or 99 percent, to $9,000, or $.00 per basic share, as compared to a net loss of $1.4 million, or $.07 per basic share, for the three months ended Dec. 31, 2005.