Published: November 15, 2011
Axion Power Reports Third Quarter Results for 2011
NEW CASTLE, Pa., Nov. 15, 2011 /PRNewswire/ -- Axion Power International, Inc. (OTC Bulletin Board: AXPW), the developer of advanced leadcarbon PbC® batteries and energy storage systems, today announced results for its third quarter ended September 30, 2011.
Net sales for the third quarter of 2011 were $ 2.1 million, compared to $0.6 million during the third quarter of 2010. The 250% increase in third quarter net sales for 2011 compared to 2010 is in keeping with the 230% increase in 2011 year-to-date sales compared to the corresponding period in 2010.
The Company reported a net loss of $ 2.0 million, or $0.02 per share, for the third quarter of 2011, as compared to a net loss of $0.7 million, or $0.01 per share, for the third quarter of 2010.
The net loss for the third quarter of 2010 included a reduction in legal expenses of $0.8 million resulting from the settlement of the Mercatus matter (as disclosed in the Company's Annual Report on Form 10K and Form 10K/A for the year ended December 31, 2010) that did not recur in the third quarter of this year.
At September 30, 2011, cash, net of debt, was $3.4 million. Total assets were $16.8 million and total stockholders' equity was $13.3 million.
Chairman and CEO Thomas Granville commented, "In the third quarter we continued to execute our long- term plan to position Axion for commercial success. This plan included needed 2011 capital expenditures to make improvements to several areas connected to the full PbC battery manufacturing process. The third quarter saw final completion of a number of these key projects including the modernization of the second production line; the rebuild of five casting machines and the important 35% expansion of the battery formation room."
Granville added, "We believe, more than ever, that Axion Power's PbC technology will be the low-cost leader in advanced batteries for transportation and electric utilities both on- and off-grid. It bears repeating, that our components are inexpensive, recyclable and not sourced from politically unstable areas around the world. Our total life cycle cost is a fraction of what is required to produce other advanced battery chemistries."
Two other important highlights include:
-- Norfolk Southern ("NS") has accepted delivery of large strings of PbC
batteries to further their platform testing. These batteries are now
installed in the NS platform facility and are under test. We are
performing duplicate testing in New Castle, as well as comparison
testing with other battery technology. As part of our agreement with
NS, Penn State University is also performing string testing on our PbC
batteries. To date the data from all battery system testing confirms
PbC batteries are performing as anticipated. The success of this testing
is allowing us to expand the locomotive application to include other
locomotive end users and locomotive integrators.
-- Our onsite PowerCube(TM) ("Cube") is in the final days of testing as we
move toward tying into the grid. We are qualifying for dispatchable
power applications and will be proving out the Cube's ability to provide
power quality, back-up power, power smoothing, and load leveling. This
.5MW Cube can easily be scaled up or down from this building block size.
-- We continue to evaluate the market for smaller Cubes for residential and
community storage and larger Cubes for utilities, oil rigs and other
larger applications such as solar and wind. We anticipate establishing
additional formal marketing agreements for some of these applications in
the fourth quarter of 2011.
As we stated at the end of the second quarter, and want to repeat, "although we have made very significant progress with our PbC technology, the adoption process, and the general path to commercial viability, has been longer than we originally anticipated. In addition, we will need working capital to fund our anticipated continued growth of sales in traditional batteries and PbC products. Consequently, we initiated prudent and proactive steps in the second quarter that we have continued since that time, namely - to explore funding strategies that will ensure that we have the flexibility to access capital resources when they are needed to meet our business goals. We believe that currently available funds at September 30, 2011, along with internally generated funds, will provide sufficient financial resources for ongoing operations, working capital and capital expenditures through the second quarter of 2012. Subsequent financings will be required to fund the Company's ongoing operations, working capital, and capital expenditures beyond June 30, 2012."
Non-GAAP Measures
This release contains the non-GAAP measure EBITDA (earnings before interest, taxes, depreciation, amortization, share based compensations and derivative revaluations). Refer to the accompanying schedules for a discussion of this non-GAAP measure and reconciliation to the reported GAAP measure.
Conference Call / Webcast
Today at 11:00 am ET (8 a.m. Pacific) a conference call will be held to review the AXPW results. Interested parties should call 877-317-6789 (domestic) or 412-317-6789 (international), to access the call. You may also access this call via the Internet by visiting the company's website at www.axionpower.com and clicking on the Investors link. Access to the webcast will be available for 90 days.
For those who are unavailable to listen to the live broadcast, a replay will be available for 7 days and can be accessed by dialing 877-344-7529 (domestic) and 412-317-0088 (international) and using conference number 10005398.
About Axion Power International, Inc.
Axion has developed and patented a next generation energy storage device that won the prestigious Frost & Sullivan Technology Award for North America in the field of lead-acid batteries. According to Frost & Sullivan, Axion's new PbC batteries have "the potential to revitalize the lead-acid battery industry by breathing new life into an established technology that is not well suited to the requirements of important new applications like hybrid electric vehicles and renewable power."
Axion Power International, Inc. is the industry leader in the field of lead-acid-carbon energy storage technologies. Axion believes this new battery technology is the only class of advanced battery that can be assembled on existing lead-acid battery production lines throughout the world utilizing Axion's proprietary carbon electrodes. Axion's future goal, after filling their plant's lead-carbon battery production capacity, is to become the leading supplier of carbon electrode assemblies for the global lead-acid battery industry.
For more information, visit www.axionpower.com
Forward-looking Statements
Certain statements in this Press Release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risk factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include the risk for the Company to complete its development work, as well as the risks inherent in commercializing a new product (including technology risks, market risks, financial risks and implementation risks, and other risks and uncertainties affecting the Company), as well as other risks that have been included in filings with the Securities and Exchange Commission, all of which are available at www.sec.gov. We disclaim any intention or obligation to revise any forward-looking statements, including, without limitation, financial estimates, whether as a result of new information, future events, or otherwise.
Contacts
Axion Power International, Inc.
Charles Trego, CFO
ctrego@axionpower.com
(724) 654-9300
Allen & Caron Inc
Rudy Barrio (Investors)
r.barrio@allencaron.com
(212) 691-8087
Len Hall (Media)
len@allencaron.com
(949) 474-4300
-FINANCIAL TABLES FOLLOW-
AXION POWER INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(A Development Stage Company)
September 30,
2011 December 31, 2010
ASSETS (Unaudited)
-----------
Current Assets
Cash and cash equivalents $3,974,960 $13,330,009
Accounts receivable 469,084 221,922
Other receivables 471,552 144,973
Prepaid expenses 185,963 82,060
Inventory, net 3,088,613 1,428,560
Total current assets 8,190,172 15,207,524
Property & equipment, net 8,561,490 6,738,575
Other receivables 56,000 65,000
TOTAL ASSETS $16,807,662 $22,011,099
=========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities
Accounts payable $987,190 $930,021
Other current liabilities 234,244 225,804
Notes payable 104,776 101,684
Total current liabilities 1,326,210 1,257,509
Deferred revenue 1,625,742 1,385,185
Derivative liabilities 135,295 254,461
Notes payable 466,036 547,612
Total liabilities 3,553,283 3,444,767
Stockholders' Equity
Convertible preferred stock-
12,500,000 shares authorized - -
Common stock- 200,000,000
shares authorized $0.0001 par
value
85,516,139 shares issued &
outstanding (85,453,302 in
2010) 8,552 8,545
Additional paid in capital 86,850,918 86,499,416
Deficit accumulated during
development stage (73,353,447) (67,690,004)
Cumulative foreign currency
translation adjustment (251,644) (251,625)
Total stockholders' equity 13,254,379 18,566,332
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $16,807,662 $22,011,099
=========== ===========
AXION POWER INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(A Development Stage Company)
UNAUDITED
Three Months Ended Nine Months Ended Inception
September 30, September 30, 9/18/2003 to
------------- -------------
2011 2010 2011 2010 9/30/2011
---- ---- ---- ---- ---------
Product $2,097,413 $256,898 $4,832,226 $1,084,360 $9,492,690
Service - 337,056 411,645 494,433 1,231,726
--- ------- ------- ------- ---------
Net sales 2,097,413 593,954 5,243,871 1,578,793 10,724,416
Costs and
expenses
Product
costs 1,844,088 142,203 4,205,057 677,481 8,002,714
Research
&
development 1,329,783 1,175,945 3,599,545 3,762,054 27,410,401
Selling,
general
&
administrative 1,020,352 63,518 3,215,518 2,284,550 28,516,933
Interest
expense
-
related
party - - - - 2,337,986
Impairment
of
assets - - - - 1,753,278
Derivative
revaluations (128,187) (67,414) (119,166) (1,132,257) (1,507,184)
Mega C
Trust
share
augmentation - - - - 400,000
Interest
& other
income 4,673 2,706 6,360 11,184 (533,934)
Loss
before
income
taxes (1,973,296) (723,004) (5,663,443) (4,024,219) (55,655,778)
Income
taxes - - - - 4,300
Accumulated
deficit (1,973,296) (723,004) (5,663,443) (4,024,219) (55,660,078)
Less
preferred
stock
dividends
and
beneficial
conversion
feature - - - - (17,693,369)
Net loss
applicable
to
common
shareholders $(1,973,296) $(723,004) $(5,663,443) $(4,024,219) $(73,353,447)
=========== ========= =========== =========== ============
Basic and
diluted
net loss
per
share $(0.02) $(0.01) $(0.07) $(0.05) $(2.28)
====== ====== ====== ====== ======
Weighted
average
common
shares
outstanding 85,511,255 85,050,137 85,475,579 83,180,368 32,189,474
========== ========== ========== ========== ==========
AXION POWER INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(A Development Stage Company)
UNAUDITED
Nine Months Ended Inception
9/18/2003
September 30, to
-------------
2011 2010 9/30/2011
---- ---- ---------
Cash Flows from Operating
Activities
Accumulated deficit $(5,663,443) $(4,024,219) $(55,660,078)
Adjustments to reconcile deficit accumulated
for noncash items
Depreciation 710,850 448,690 2,368,311
Interest expense - - 1,970,251
Impairment of assets - - 1,753,278
Derivative
revaluations (119,166) (1,132,257) (1,507,184)
Mega C Trust share
augmentation - - 400,000
Share based
compensation expense 351,509 293,507 6,133,976
Changes in operating assets &
liabilities
Accounts receivable (247,162) (232,724) (475,953)
Other receivables (326,579) (158,272) (449,592)
Prepaid expenses (103,903) (3,885) (183,375)
Inventory, net (1,660,053) (617,966) (3,088,612)
Accounts payable 57,169 (126,570) 2,641,834
Other current
liabilities 8,440 121,799 255,376
Liability to issue
equity instruments - - 178,419
Deferred revenue and
other 240,557 457,928 1,713,260
Net cash used by
operating activities (6,751,781) (4,973,969) (43,950,089)
Cash Flows from Investing
Activities
Other receivables 9,000 (33,399) (1,273,016)
Purchases of property
& equipment (2,533,765) (2,158,982) (11,288,305)
Investment in
intangible assets - - (167,888)
Net cash used by
investing activities (2,524,765) (2,192,381) (12,729,209)
Cash Flows from Financing
Activities
Net proceeds from
related party debt - - 5,445,458
Net proceeds from
notes payable (78,484) (76,166) 570,813
Net proceeds from sale
of common stock - (55,894) 45,171,365
Net proceeds from
exercise of warrants - 302,266 2,014,766
Net proceeds from sale
of preferred stock - - 7,472,181
Net cash (used)
provided by financing
activities (78,484) 170,206 60,674,583
Net change in cash and
cash equivalents (9,355,030) (6,996,144) 3,995,285
Effect of exchange
rate on cash (19) 387 (20,325)
Cash and cash
equivalents -
beginning 13,330,009 23,279,466 -
Cash and cash
equivalents -ending $3,974,960 $16,283,709 $3,974,960
========== =========== ==========
Reconciliation of net loss to
EBITDA
2011 2010 Change
---- ---- ------
GAAP loss before
income taxes $(5,663,443) $(4,024,219) $(1,639,224)
Plus: Interest expense 6,360 11,184 (4,824)
Depreciation 710,850 448,690 262,160
Share based
compensation 351,509 293,507 58,002
Derivative
revaluations (119,166) (1,132,257) 1,013,091
-------- ---------- ---------
EBITDA (1) $(4,713,890) $(4,403,095) $(310,795)
=========== =========== =========
EBITDA, a non-GAAP financial measure, is defined as earnings before
interest, taxes, depreciation, amortization, share based compensation,
and derivative revaluations. EBITDA is used by management to
internally measure our operating and management performance and by
investors as a supplemental financial measure to evaluate the
performance of our business that, when viewed with our GAAP results and
the accompanying reconciliation, we believe provides additional
information that is useful to gain an understanding of the factors and
(1) trends affecting our business.
SOURCE Axion Power International, Inc.
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