NEW CASTLE, Pa., Aug. 14 /PRNewswire-FirstCall/ -- Axion Power International, Inc. (OTC Bulletin Board: AXPW), a leading developer of advanced lead-carbon PbC(R) batteries, today reported results for its second quarter and first six months ended June 30, 2009. The development-stage Company filed its 10-Q for the second quarter on August 14, 2009.
Sales during the 2009 second quarter were $277,890, up 58 percent compared to $176,080 during last year's second quarter. Operating expenses for the second quarter of 2009 declined 26 percent to $2.1 million, from $2.8 million in the prior year second quarter. The Company reported a net loss for the second quarter of 2009 of $2.5 million, or $0.10 per share, compared to a net loss of $3.2 million, or $0.16 per share for the second quarter of 2008.
For the first six months of 2009, sales were $604,983, compared to $391,807 for the prior year's first six months, an increase of 54 percent. Operating expenses for the first six months of 2009 declined 26 percent to $4 million, compared to $5.4 million in the prior year's first six months. Net loss for the first six months of 2009 was $4.8 million, or $0.18 per share, compared to a net loss of $6.1 million, or $0.32 per share, for the first six months of 2008.
The highlights of the second quarter included the start of a four-year global supply agreement with Exide Technologies (NASDAQ: XIDE) for the purchase of Axion's PbC batteries and other Axion Technology(TM). Exide is a global leader in stored electrical energy solutions and one of the world's largest producers and recyclers of lead-acid batteries with operations in more than 80 countries. The two companies are jointly marketing a lead-carbon product that can compete with other advanced battery chemistries, including lithium-ion, in multiple markets that include hybrid vehicles, defense applications, utility and industrial energy storage as well as renewable power such as wind and solar. The PbC battery is significantly less expensive and can be manufactured on existing lead-acid battery lines.
Subsequent to the end of the quarter, "Exide Technologies with Axion Power International" was named in a $34.3M stimulus package award from the U.S. Department of Energy. One of the benefits the award provides is capacity additions for Exide for the production of advanced lead-acid batteries using lead-carbon electrodes particularly for micro- and mild-hybrid applications. In addition to providing further validation of Axion's lead-carbon technology, the award provides further opportunities for the sale of Axion's PbC electrodes. The final details of the award still require further negotiation with all parties. East Penn, another Axion strategic partner, received a $33.1M award which was also for the development of a lead-carbon product. The existence of these DoE awards will open up a wide variety of other funding options to Axion as they look to add capacity to meet the demands created by this award and by the April 2009 Axion/Exide 4-year supply agreement.
Axion feels that the "micro- and mild-hybrid vehicle applications" are where the most growth is expected in the hybrid electric vehicle industry and the areas where the major car companies, especially in Europe, are immediately focused. On April 23rd of this year, European Union legislation was passed requiring a 25 percent reduction in CO2 emissions beginning in 2012. As a result, the European OEM's are adopting fleet wide hybridization, the vast majority of which will be micro-hybrid. It is estimated that European market sales by 2012, will include 13M micro-hybrid stop start vehicles. This is a "made to order" market for Axion's PbC battery.
"We accomplished one of our major initiatives in the second quarter by teaming up with Exide, one of the largest and most respected battery manufacturers in the world," Axion CEO Tom Granville said. "That was a significant achievement for us and it validated the potential of our PbC battery and PbC Technology(TM). We believe this is the beginning of what promises to be a very prosperous relationship. Obviously, the Department of Energy also believes there is considerable promise in our proprietary lead-carbon technology. Our two companies have already made important progress working together and we look forward to announcing updates on the testing results and battery shipments in the near future."
Axion and Exide recently announced the completion of the first phase of the 4-year supply agreement, including the development of test protocols and the selection of product formats for hybrid electric vehicle and renewable energy applications. As part of the second phase of the contractual relationship, next month, Axion will begin shipping PbC lead-carbon batteries to Exide.
Other highlights of the second quarter 2009 included the unveiling of the nation's first CleanCharge(TM) solar charging station created through a partnership of Envision Solar International, Coulomb Technologies and Axion Power. The plan is to install the solar-powered stations nationwide as a means to power a fleet of plug-in hybrid electric vehicles designed by Bright Automotive.
Research and development expenses for the first six months of 2009 increased to $2.5 million from $1.4 million for the prior year. The increase was due to additional costs associated with efforts to design, develop and test advanced batteries and an energy storage product based on the patented PbC Technology. Those efforts included the preparation of the Company's manufacturing facilities for future PbC production, pilot product production and demonstration product production.
Subsequent to the end of the second quarter, on July 22, 2009, the Pennsylvania Department of Community and Economic Development approved Axion's application for a loan from the Machinery and Equipment Loan Fund in the maximum amount of $791,055. "The proceeds of the loan will be used to defray part of the cost of equipment purchased for use at the Company's electrode production facility on Green Ridge Road," Don Hillier, Axion CFO, reported.
In addition to this new Pennsylvania machinery loan, the Company has been awarded several grants, including $1.2 million from the Department of Defense Office of Naval Research, $380,000 from the ALABC for further testing of PbC batteries, and $800,000 from the Commonwealth of Pennsylvania Alternative Fuels Incentive Grants Program.
"In August, the Company closed on the first half of a $1M bridge loan designed to carry it through the conclusion of the current capital raise, while maintaining the schedule for ramp up in electrode manufacturing. The need for increased capacity has been created by the Exide agreement, the DoE awards and the emerging micro- and mild-hybrid markets in Europe," Granville added. "We have one production line currently going through the final steps to full commission. We need to get to 5x to achieve sustainable profitability and to double that number to even begin to fully service the market opportunities."
The Company has maintained production of its collector-car batteries and race-car batteries and is producing a line of flooded batteries to fill some of the capacity created from a slowdown in the markets served by its major customer, a large lead-acid battery company. Toll processing has always been viewed as a "filler" strategy for Axion, which in Q-1 introduced a line of AGM lead-acid batteries - the Sure Energy product, which will eventually fill some of the flooded line production area. This "superior margin" AGM product line will eventually evolve into Axion's PbC product which will use an identical case, cover and separator material.
At June 30, the Company had cash of $950,000, a current ratio of 1.62:1 and no long-term debt. Stockholders' equity stood at $4.1 million.
Conference Call / Webcast
The Company will hold a conference call on Friday, August 14 at 11:00 am ET to review its results; interested parties should call 800-299-0148 (domestic) or 617-801-9711 (international), with passcode 42461212 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 for 30 days and can be accessed by dialing 888 286 8010 (domestic) and 617 801 6888 (international) and using passcode 43094456.
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(R) 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 future goal, after filling their plant's lead-carbon battery production, is to become the leading supplier of carbon electrode assemblies for the lead-acid battery industry.
For more information, visit www.axionpower.com
Certain statements in this Press Release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. These statements include, without limitation, statements concerning the Company's ability to expand its manufacturing capabilities and bring its new PbC(R) based battery products to market, the Company's belief that its completed products will be the only class of advance battery of its kind and that it will be a viable replacement for older generation lead-acid batteries. 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 Kelly Gubish firstname.lastname@example.org (724) 654 9300 Allen & Caron Inc Rudy Barrio (Investors) email@example.com (212) 691-8087 Brian Kennedy (Media) firstname.lastname@example.org (212) 691-8087
- FINANCIAL TABLES FOLLOW -
AXION POWER INTERNATIONAL, INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (A Development Stage Company) UNAUDITED Three Months Ended Six Months Ended June 30, June 30, ======== ======== 2009 2008 2009 2008 ---- ---- ---- ---- Revenues $277,890 $176,080 $604,983 $391,807 Cost of goods sold 163,963 80,235 399,650 185,325 ------- ------ ------- ------- Gross profit 113,927 95,845 205,333 206,482 Expenses Research & development 1,223,817 733,221 2,457,784 1,404,384 Selling, general & administrative 1,132,841 1,466,031 2,014,384 3,179,196 Interest expense - related party - 758,197 - 1,177,870 Impairment of assets - - - - Derivative revaluation - - - (2,844) Mega C Trust Share Augmentation (Return) - - - - Interest & other income, net (4,098) 19,765 (12,698) 8,437 ------ ------ ------- ----- Net loss before income taxes (2,238,633) (2,881,369) (4,254,137) (5,560,561) Income Taxes - - - - --- --- --- --- Deficit accumulated during development stage (2,238,633) (2,881,369) (4,254,137) (5,560,561) Less preferred stock dividends and beneficial conversion feature (287,992) (284,917) (569,142) (572,332) -------- -------- -------- -------- Net loss applicable to common shareholders $(2,526,625) $(3,166,286) $(4,823,279) $(6,132,893) =========== =========== =========== =========== Basic and diluted net loss per share $(0.10) $(0.16) $(0.18) $(0.32) ====== ====== ====== ====== Weighted average common shares outstanding 26,427,019 20,290,404 26,423,233 18,990,487 ========== ========== ========== ==========
AXION POWER INTERNATIONAL, INC CONDENSED CONSOLIDATED BALANCE SHEETS (A Development Stage Company) June 30, December 31, 2009 2008 (Unaudited) ----------------------- ASSETS Current Assets: Cash and cash equivalents $950,013 $3,124,168 Escrow deposits for foreign patent applications 68,160 - Short-term investments - 2,193,920 Accounts receivable 253,906 128,035 Other receivables 13,037 64,456 Prepaid expenses 35,133 78,989 Inventory 1,725,542 1,269,515 --------- --------- Total current assets 3,045,791 6,859,083 Property & equipment, net 3,625,654 3,274,183 Other receivables, non-current 50,404 28,388 ------ ------ TOTAL ASSETS $6,721,849 $10,161,654 ========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $1,700,592 $1,324,287 Other current liabilities 174,646 162,580 ------- ------- Total current liabilities 1,875,238 1,486,867 Deferred revenue 709,068 751,096 ------- ------- Total liabilities 2,584,306 2,237,963 Stockholders' Equity: Convertible preferred stock-12,500,000 shares authorized Senior preferred - 1,000,000 shares designated 137,500 issued and outstanding (137,500 in 2008) 1,731,710 1,656,735 Series A preferred - 2,000,000 shares designated 718,997 shares issued and Outstanding (718,997 in 2008) 9,934,525 9,440,359 Common stock-100,000,000 shares authorized $0.0001 par value 26,453,437 issued & outstanding (26,417,437 in 2008) 2,645 2,641 Additional paid in capital 46,655,209 46,184,287 Deficit accumulated during development stage (53,934,342) (49,111,062) Cumulative foreign currency translation adjustment (252,204) (249,269) -------- -------- Total Stockholders' Equity 4,137,543 7,923,691 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $6,721,849 $10,161,654 ========== ===========
SOURCE Axion Power International, Inc.