Tire Recycler Posts Loss for Quarter

GreenMan Technologies, Inc. announced results for its first quarter ended December 31. Net sales for the quarter were $7.963 million, an increase of 26 percent as compared to net sales of $6.308 million the first quarter the previous year.

During the quarter GreenMan processed 7.8 million passenger tire equivalents, compared to 5.8 million passenger tire equivalents during the quarter the previous year. The increases are attributable to the inclusion of the operations of three new subsidiaries formed in connection with fiscal 2002 acquisitions and the new majority owned joint venture formed in fiscal 2002; and increased end product revenue which accounted for 19 percent of consolidated revenues for the quarter, compared to 9 percent for the same period last year. The increases in end product revenues are attributable to implementation of GreenMan's waste wire processing equipment and the expanded crumb rubber capacity acquired last year.

Gross profit for the quarter was $1.383 million or 17 percent of net sales, compared to $1.443 million or 23 percent of net sales for the same time the previous year.

The results for the quarter benefited from a 34 percent increase in overall volume and the inclusion of GreenMan's fiscal year 2002 acquisitions and the majority owned joint venture. These benefits were offset by approximately $150,000 relating to costs specifically associated with operational disruptions and increased transportation costs due to a complete shredding equipment upgrade at GreenMan of Iowa; about $150,000 of excessive transportation costs associated with processing Tennessee based tires in Georgia; approximately $45,000 relating to operating losses associated with a terminated kiln relationship; $60,000 associated with the commercialization of our California based roofing shingle project; and previously noted corporate-wide insurance cost increases of over $100,000 per quarter.

GreenMan reported a net loss after taxes of $356,000 for the quarter, compared to net income after taxes of $247,000 for the same time last year.

Chuck Coppa, GreenMan's CFO, said "Historically, the first half of our fiscal year is the slowest because of seasonality issues as people tend to change tires less during the winter months. This fact coupled with the short term impact of our current growth initiatives will result in a soft first half of fiscal 2003 but provide the foundation for a stronger second half of the year and beyond." Coppa added, "Although, we anticipate our second quarter results to be similar to our first quarter, we are confident that our performance during the second half of the fiscal 2003 will enable us to surpass last years record results.

Bob Davis, GreenMan's president and CEO, said, "We are preparing ourselves for GreenMan's next major growth phase by upgrading and enhancing our existing operations, expanding into new geographic locations to maximize existing transportation and marketing infrastructures, and identifying better and more profitable uses for existing and new products."