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Axion Power Reports Year-End Results for 2011

NEW CASTLE, Pa., April 2, 2012 /PRNewswire/ -- Axion Power International, Inc. (OTC Bulletin Board: AXPW),the developer of advanced lead-carbon PbC® batteries and energy storage systems, today announced results for its fourth quarter and year ended December 31, 2011.

Net product  sales increased to $7.6 million in 2011 from $1.3 million in 2010.  Net product  sales increased in 2011 compared to 2010 primarily due to the sale of $ 6.4 million of specialty lead-acid batteries to a single customer who will sell these batteries under their brand, as well as carry the cost of inventory and provide the raw materials for production of these batteries.

Net loss for 2011 was $8.3 million or $0.10 per basic and diluted share compared to $6.8 million or $0.08 per basic and diluted share in 2010. Of the  $1.5 million increase in pre-tax net loss, $0.9 million was due to a decrease in income related to accounting for non-cash derivative revaluations; the remainder was due to a $0.6 million increase in our operating loss. On an EBITDA basis, the loss was $6.8 million compared to  an EBITDA loss of $6.5 million in 2010.  

During 2011 there were important sales of PbC batteries, most notably to Norfolk Southern (NS), one of the nation's largest class-A railroads. The Norfolk Southern batteries were accepted and are being used for large string platform testing for battery-powered locomotives.  Axion has had a program with NS since the Fall of 2009 and believes it is one of the very few advanced battery companies in the world that has an initiative designed to provide a major rail company a "clean, green" energy storage solution for their hybrid locomotive initiative.  

Also during 2011, Axion Power celebrated its first connection to the huge PJM electric power grid for saving and storing electricity.  Axion provided a 0.5MW PowerCube™ ("CUBE") that was connected into the PJM network this past December. Initial use of  our  Cube will be for the frequency regulation market via demand response and curtailment, but the Cube has broad application beyond this use. Subsequent to year end the Company announced a contract for a Zero energy building in the United States Washington Naval Yard.  Axion believes the potential for micro-storage applications on the US electric grid is very large and that the opportunity exists on both sides of the meter.

The hybrid vehicle market continues to be a major focus for Axion, and during 2011 studies and demonstrations continued with European and US automakers, primarily in the stop/start application for the micro-hybrid vehicles market. Axion feels that the PbC battery, because of its large charge acceptance and fast recharge capabilities, can offer a low cost solution for operating the ancillary load (i.e. hotel load) in the micro-hybrid platform.

Subsequent to year-end, on February 3, 2012, Axion completed a registered-direct offering of common stock that provided $8.6 million of new financing that will be used for working capital and for general corporate purposes.  It is important to keep this new financing in mind when studying the financial statements for December 31, 2011.

Chairman & CEO Thomas Granville commented, "Although the road has been longer than we anticipated, we are finding the market opportunities for our PbC product applications are larger and more diverse than we had initially forecast. The industries we are working with include the U.S. military, the electrical generation industry, vehicle manufacturers and railroads – each of them well known for having long decision cycles and difficult, demanding requirements.  So far we have passed all the hurdles and made excellent progress in each of these markets, even as other, more exotic and more highly publicized battery chemistries, and battery companies, have fallen by the wayside.

"We believe that our PbC batteries will be one of the ultimate winners in the contest for new energy storage technologies.   Our batteries have unique properties that include a very high rate of charge acceptance and fast recharge capabilities. The PbC batteries are a fraction of the cost of more exotic chemistries. The PbC battery can be manufactured in existing factories in normal manufacturing environments (not clean rooms). They provide superior performance in all weather conditions, unlike competitive products. PbC batteries are completely recyclable and they don't require high-cost, low-availability raw materials.  We have every faith in PbC technology, and strong belief in our extraordinary and hard-working Axion team."

Granville concluded: "We're still here; we're still viable; we're still servicing our customers and rapidly expanding our customer base; we're still improving our product; we're still improving our team. We're here and we plan to be here for the long run."  

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 10011676.

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 & CaronInc
Rudy Barrio (Investors)
r.barrio@allencaron.com
(212) 691-8087

–FINANCIAL TABLES FOLLOW–


AXION POWER INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(A Development Stage Company)




December 31, 2011


December 31, 2010






ASSETS





Current Assets





Cash and cash equivalents


$            1,987,637


$            13,330,009

Accounts receivable


309,354


221,922

Other receivables


162,249


144,973

Prepaid expenses


145,442


82,060

Inventory, net


2,717,173


1,428,560

Total current assets


5,321,855


15,207,524






Property & equipment, net


8,417,163


6,738,575

Other receivables


53,000


65,000

TOTAL ASSETS


$            13,792,018


$            22,011,099






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities





Accounts payable


$                520,358


$             930,021

Other liabilities


429,432


225,804

Notes payable


104,777


101,684

Total current liabilities


1,054,567


1,257,509






Deferred revenue


1,573,962


1,385,185

Derivative liabilities


15,843


254,461

Notes payable


439,480


547,612

Total liabilities


3,083,852


3,444,767






Stockholders' Equity





Convertible preferred stock-12,500,000 shares authorized





    Series-A preferred – 2,000,000 shares designated
    0 shares issued and outstanding


-


-

Common stock-200,000,000 shares authorized $0.0001 par value





     85,531,114 issued & outstanding (85,453,302 in 2010)


8,552


8,545

Additional paid in capital


86,953,180


86,499,416

Deficit accumulated during development stage


(76,001,894)


(67,690,004)

Cumulative foreign currency translation adjustment


(251,672)


(251,625)

Total stockholders' equity


10,708,166


18,566, 332






TOTAL LIABILITIES AND  STOCKHOLDERS' EQUITY


$            13,792,018


$            22,011,099











AXION POWER INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(A Development Stage Company)




Years Ended  


Inception



December 31  


9/18/2003  to



2011


2010


12/31/2011

Product


$           7,631,529


$           1,328,025


$                  12,291,993

Service


459,645


820,081


1,279,726

Net  sales


8,091,174


2,148,106


13,571,719








Costs and expenses







Product costs


6,799,302


893,681


10,596,959

Research & development


5,060,036


5,432,230


28,870,892

Selling, general & administrative


4,463,269


3,448,508


29,764,684

Interest expense


18,042


21,143


2,377,171

Impairment of assets


308,882


361,793


2,062,160

Derivative revaluations (income)


(238,618)


(1,165,751)


(1,626,636)

Mega C Trust share augmentation


-


-


400,000

Interest & other income


(7,849)


(12,644)


(569,286 )

Loss before income taxes


(8,311,890)


(6,830,854)


(58,305,225)








Income taxes


-


-


4,300

Accumulated deficit


(8,311,890)


(6,830,854)


(58,308,525)








Less preferred stock dividends and beneficial conversion feature


-


-


(17,693,369)

Net loss applicable to common shareholders


$          (8,311,890)


$        (6,830,854)


$          (76,001,894)








Basic and diluted net loss per share


$                 (0.10)


$                 (0.08)


$                    (2.25)








Weighted average common shares outstanding


85,488,150


83,711,708


33,812,173













AXION POWER INTERNATIONAL, INC.  

CONSOLIDATED STATEMENTS OF CASH FLOWS

(A Development Stage Company)




Years Ended

Inception  



December 31

9/18/2003  to



2011

2010

12/31/2011

Cash Flows from Operating Activities




Accumulated deficit

$           (8,311,890)

$               (6,830,854)

$         (58,308,525)






Adjustments to reconcile deficit accumulated for noncash items





Depreciation

1,014,661

673,170

2,672,122


Interest expense

-

-

1,970,251


Impairment of assets

308,882

361,793

2,062,161


Derivative revaluations (income)

(238,618)

(1,165,751)

(1,626,636)


Mega C Trust share augmentation

-

-

400,000


Share based compensation expense

453,770

444,986

6,236,237






Changes in operating assets & liabilities





Accounts receivable

(87,432)

(27,607)

(316,223)


Other receivables

(17,276)

63,206

(140,289)


Prepaid expenses

(63,382)

(2,073)

(142,854)


Inventory, net

(1,288,613)

(420,468)

(2,717,172)


Accounts payable

(409,663)

(445,271)

2,175,002


Other liabilities

203,628

143,478

450,564


Liability to issue equity instruments

-

-

178,419


Deferred revenue and other

188,777

528,977

1,661,480







Net cash used by operating activities

(8,247,156)

(6,676,414)

(45,445,463)






Cash Flows from Investing Activities





Other receivables

12,000

(30,399)

(1,270,016)


Purchases of property & equipment

(3,002,130)

(3,557,458)

(11,756,670)


Investment in intangible assets

-

-

(167,888)


Net cash used by investing activities

(2,990,130)

(3,587,857)

(13,194,574)






Cash Flows from Financing Activities






Net proceeds from related party debt

-

-

5,445,458


Repayment of notes payable

(105,039)

(101,937)

544,258


Net proceeds from sale of common stock


-


                  57,137


            45,171,365



Net proceeds from exercise of warrants

-

359,266

2,014,766


Net proceeds from sale of preferred stock

-

-

7,472,181


Net cash (used) provided by financing activities

(105,039)

314,466

60,648,028






Net change in cash and cash equivalents

(11,342,325)

(9,949,805)

2,007,991

Effect of exchange rate on cash

(47)

348

(20,354)

Cash and cash equivalents - beginning

13,330,009

23,279,466

-

Cash and cash equivalents - ending

$              1,987,637

$                13,330,009

$            1,987,637












SOURCE Axion Power International, Inc.

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