Axion Power International Inc (OTC Bulletin Board: AXPW - News) today announced financial results for 2008. The developer of battery technologies and advanced energy storage devices reported revenues of $679,559 for the year vs $533,911 in 2007, primarily resulting from the sale of legacy lead-acid batteries for antique and collector cars, and for race cars. Toward the end of the year, the Company began to make and ship advanced lead-acid batteries on a private-label contract for a large lead-acid battery company pursuant to a purchase contract that was announced November 5, 2008. Shipments on that contract in the final weeks of 2008 were a de minimis amount. Axion Power reported a 2008 loss of $10.6 million or $0.46 loss per share, compared to a loss of $14.3 million or $0.88 loss per share for 2007. Common shares outstanding increased from 16.2 million in 2007 to 22.8 million in 2008, primarily due to The Quercus Trust $18 million investment in Axion Power shares and warrants.
CEO Tom Granville commented, "2008 was a landmark year for Axion Power in numerous ways. We began the year with a commitment from The Quercus Trust to provide us with an investment that would fund us through prototype manufacture and early commercialization.
"Our product development continued during the year, as we began to explore how our new PbC� batteries could be used in electric or hybrid electric vehicles, for the storage of off-grid electricity from renewables, for grid buffering at utility sites, and for military vehicles in battlefield and other isolated areas. We featured our Power Cube, a portable storage system that can be used for power quality load leveling, grid storage, peak shaving, or as a solution to a combination of these issues. We also secured advantageous terms on an additional neighboring facility in New Castle that will house our PbC carbon electrode manufacturing."
Granville added that during 2008 a heavy load of legacy litigation was adjudicated in the Company's favor, and the restatement of several years of SEC filings was completed.
"We continued to manufacture our classic-car and race car batteries," Granville said, "and in the Fall we were able to secure a purchase commitment from a major lead-acid battery manufacturer to build certain types of standard lead-acid batteries on our flooded manufacturing lines for their label. There was very little revenue recorded from that contract in 2008 due to the contract being signed so late in the year, and at a time when GDP was contracting fast. While there is no assurance that the current economic downturn will not have a continuing effect on the flooded lead-acid battery market, early 2009 saw Axion manufacture an additional 15,000 batteries as partial fulfillment of that order. That product has been shipping and what remains will ship in the next few weeks. This exercise in flooded battery production has helped to point the way toward better utilization of our facilities as we continue to explore ways to reduce our factory overhead while bringing our PbC batteries toward full commercialization."
Granville pointed out that the PbC Technology(TM) is really the core of Axion Power's strategy and its business plan. "We have spent the better part of $20 million in developing our PbC battery and PbC Technology, and in working to not only develop high quality control but to also develop the most efficient methods of manufacturing so that adaptability to standard lead-acid manufacturing lines can easily be accomplished. Our first automated production line has experienced some delays due to tweaks and adjustments, but we are now accepting product, manufactured on that line, at our New Castle facility. Currently we are assembling electrodes from components fabricated on our automated line in California in conjunction with parts fabricated in New Castle. It is never easy to be the first to develop a new manufacturing technique but we are quickly eliminating the final system "bugs" and will have the complete assembly in New Castle in the very near future.
"We believe that energy storage utilizing our PbC batteries and technology will prove to be the least expensive, easiest to manufacture, and most environmentally friendly battery design for the applications we have targeted. Those markets include electric vehicles and hybrids, as well as on- and off-grid energy storage, remote power sourcing and military applications that relate directly to the safety and mobility of troops and reconnaissance personnel. The military is one of the largest consumers of batteries in the government and they are interested in the unique characteristics of our PbC batteries including their light weight, longer cycle life, deeper depth of discharge and fast re-charge capability when compared with products they currently use. PbC batteries are also likely to be considerably less expensive to own and operate than the proposed exotic battery chemistries that are based on relatively rare raw materials."
Although Axion Power does not provide guidance as to its anticipated results, the Company expects to continue toward commercialization in 2009 as the Company slowly moves out of the development phase.
At December 31, 2008, Axion Power had cash, cash equivalents and short-term investments amounting to $5.3 million, and had been awarded government and trade association research grants aggregating $2.4 million. The grants were not drawn against in 2008, nor have they been to date in 2009, so they remain intact as sources of capital. The Company had current assets of $6.9 million and current liabilities of $1.5 million, and no long-term debt.
Conference Call / Webcast
Today at 10:00am EDT (7:00am PDT), a conference call will be held to review the AXPW results; interested parties should call 888-713-4215 (domestic) or 617-213-4867 (international), with passcode 95987815 to access the call. You may also access this call via the Internet at:
For those who are unavailable to listen to the live broadcast, a replay will be available through May 1, 2009 and can be accessed by dialing 888-286-8010 (domestic), and 617-801-6888 (international). The passcode is 82957872.
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 without significant changes to production equipment and fabrication processes. It also believes it will be able to manufacture carbon electrode assemblies in volume at low cost using standard automated production methods that are commonly used in other industries. If and when its electrode manufacturing methods are fully developed, Axion believes it will be able to sell carbon electrode assemblies as virtual plug-and-play replacements for lead-based negative electrodes used by all other lead-acid battery manufacturers. Axion's goal is to become the leading supplier of carbon electrode assemblies for the lead-acid battery industry. For more information, visit www.axionpower.com.
Axion Power International
(724) 654 9300
Allen & Caron Inc
Rudy Barrio (Investors)
Brian Kennedy (Media)
-FINANCIAL TABLES FOLLOW- AXION POWER INTERNATIONAL, INC CONSOLIDATED STATEMENTS OF OPERATIONS (A Development Stage Company) Years Ended December 31, 2008 2007 Revenues $679,559 $533,911 Costs of goods sold 368,922 283,357 Gross profit 310.637 250.554 Expenses Selling, general & administrative 4,846,189 3,720,632 Research & development 3,960,909 2,155,873 Impairment of assets - - Interest expense - related party 1,137,436 276,651 Derivative revaluation (2,844) (72,236) Mega C Trust Share Augmentation (Return) - - Interest & other income, net (57,224) (47,708) Net loss before income taxes (9,573,829) (5,782,658) Income Taxes Expense (Benefit) (79,170) 83,469 Deficit accumulated during development stage (9,494,659) (5,886,127) Less preferred stock dividends and beneficial conversion feature (1,117,699) (8,417,955) Net loss applicable to common shareholders $(10,612,358) $(14,284,082) Basic and diluted net loss per share $(0.46) $(0.88) Weighted average common shares outstanding 22,826,187 16,247,299 AXION POWER INTERNATIONAL, INC CONSOLIDATED BALANCE SHEETS (A Development Stage Company) December 31, 2008 December 31, 2007 ASSETS Current Assets: Cash and cash equivalents $3,124,168 $671,244 Short-term investments 2,193,920 - Accounts receivable 128,035 133,646 Other receivables 64,456 341,801 Inventory 1,269,515 375,635 Prepaid expenses 78,989 82,102 Total current assets 6,859,083 1,604,428 Property & equipment, net 3,274,183 2,119,252 Other receivables, non-current 28,388 - TOTAL ASSETS $10,161,654 $3,723,680 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $1,324,287 $1,573,436 Other current liabilities 162,580 583,591 Notes payable to related parties - 2,259,826 Liability to issue equity instrument - 106,183 Total current liabilities 1,486,867 4,523,036 Deferred revenue 751,096 840,945 Total liabilities 2,237,963 5,363,981 Stockholders' Equity: Convertible preferred stock-12,500,000 shares authorized . Senior preferred - 1,000,000 shares designated 1,656,735 1,515,376 . 137,500 issued and outstanding (137,500 in 2007) . Series A preferred - 2,000,000 shares designated 9,440,359 9,802,894 . 718,997 shares issued and outstanding (822,997 in 2007) Common stock-100,000,000 shares authorized $0.0001 par value 26417437 issued & outstanding (16498298 in 2007) 2,641 1,625 Additional paid in capital 46,184,287 25,768,331 Deficit accumulated during development stage (49,111,062) (38,498,704) Cumulative foreign currency translation adjustment (249,269) (229,823) Total Stockholders' Equity 7,923,691 (1,640,301) TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $10,161,654 $3,723,680