Tire Recycler Reports Numbers for Quarter, Year

Recycling company GreenMan Technologies, Inc. announced results for its fourth quarter and fiscal year.

Bob Davis, GreenMan's president and CEO stated, " During the past 15 months, we have invested over $3 million in new equipment to increase processing capacity at our Iowa, Minnesota, Georgia and Tennessee locations. During the year ended September 30, 2004, our scrap tire volume was up over 2 million tires; our gross revenue was up 8 percent when adjusted for our Oklahoma joint venture divestiture; end product revenues increased 13 percent or almost $1 million and our selling, general and administrative costs decreased 14 percent. "We experienced a 7 percent increase in revenue during the quarter as a result of ongoing efforts to increase inbound tire volumes. This benefit, however was more than offset by severe weather experienced during the quarter which hampered product sales nationally. Additionally, high costs of operation continued in the Southeast due to the fact Tennessee continues to operate under limited conditions and our Georgia waste wire processing system did not come on-line until November.

Davis added, "As we enter fiscal 2005, two of the three main obstacles inhibiting our past performance have been overcome; in June 2004 we executed a new $9 million credit facility with Laurus Master Fund and in November we re-established our Georgia waste wire processing capacity which unfortunately did not benefit our fiscal 2004 results, but will be a solid contributor to future performance. We now are focused on implementing the necessary processing equipment in Tennessee in order bring that facility on line at 100 percent capacity and eliminate the significant transportation penalties being incurred today."

GreenMan includes six locations that collect, process and market over 30 million scrap tires in whole, shredded or granular form. The company operates tire processing operations in California, Georgia, Iowa, Minnesota, Tennessee and Wisconsin and operates under exclusive agreements to supply whole tires to cement kilns in Alabama, Florida, Georgia, Illinois, Missouri, Tennessee and Texas.

Net sales for the most recent quarter were $9 million, a 7 percent increase from the same time last year. The increase was primarily attributable to an 8 percent increase in inbound tire volumes during the quarter. The company processed about 8.2 million passenger tire equivalents during the previous year, compared to about 7.6 million passenger tire equivalents during the most recent quarter. Overall end product sales decreased slightly to $2.689 million for the quarter, compared to $2.715 million the same time last year.

Gross profit for the quarter was $855,000, compared to $1.053 million the same time last year. The decrease is due to increased disposal costs in Georgia resulting from the delayed implementation of its Georgia waste wire equipment as well as increased transportation and operating costs associated with GreenMan’s Tennessee operation. In addition, the Georgia operation was negatively impacted by weather related events which occurred during the quarter, resulting in lower in bound tire volumes and plant operating efficiencies.

During the quarter, in addition to the disruption of operations and lost revenues caused by a fire in March 2003, the Georgia plant incurred additional direct costs relating to damaged equipment and excess disposal costs totaling about $139,000.

Net sales for the year were $30.777 million, a 4 percent increase, compared to last year's net sales of $29.68 million, which included about $1.357 million of net sales associated with the company’s majority owned joint venture which was divested on April 1, 2003 and two kiln relationships terminated during fiscal 2003.

Overall end product sales increased about $963,000 to $8,540,000 for the year, compared to $7,577,000 for the same period last year, despite the company’s Georgia facility being off-line since April 2003.