NEW CASTLE, Pa., Nov. 16 /PRNewswire-FirstCall/ -- Axion Power International Inc (OTC Bulletin Board: AXPW), the developer of advanced lead-carbon PbC� batteries, today reported results for its third quarter and nine months ended September 30, 2009. Sales for the third quarter were $962,833 compared to $149,441 during last year's third quarter, an increase of 544%. The loss for the third quarter was $17.2 million compared to $2.2 million in the third quarter of 2008. The current loss includes a non-cash loss of $12,048,203 due to SEC mandated changes that went into effect in 2009 that require down rounding for certain derivative securities. It also includes a non-cash loss of $3,302,428 for beneficial conversion features of the company's preferred stock. On a cash expense basis, operating expense declined in the third quarter of 2009 compared with the same period in 2008.
For the first nine months of 2009, sales were $1.6 million, compared to $541,298 for the prior year's first nine months, an increase of 190%. Net loss for the first nine months of 2009 was $23.5 million compared to a net loss of $8.3 million for the first nine months of 2008. The nine month totals include a non-cash loss of $13,592,717 for down rounding of certain derivative securities and $3,871,570 in non-cash expense for beneficial conversion features of the company's preferred stock. On a cash expense basis, operating expense for the first nine months of 2009 declined 19% when compared to the same nine month period for 2008.
During the third quarter, the Company completed an initial phase in its four-year global supply agreement with Alpharetta, GA-based Exide Technologies. Axion will supply PbC� batteries and other Axion Technology(TM) to Exide under the supply agreement. The two companies have jointly established specifications and test protocols for Axion's lead-carbon product that will be manufactured for multiple markets including hybrid vehicles, defense applications, utility and industrial energy storage as well as renewable power such as wind and solar. Monthly shipments of PbC� batteries began in September and will continue in accordance with the Exide contract.
In August, the U.S. Department of Energy (DOE) announced a $34.3 million stimulus award to "Exide Technologies with Axion Power International" for the development of lead carbon technology for micro-hybrid and mild-hybrid vehicle applications and for other potential storage applications.
The micro-hybrid and mild-hybrid vehicle market will dominate the early growth in the HEV market, particularly in Europe. Axion began to jointly test their product to European OEM's specifications and that testing continued successfully in the third quarter.
The Company closed on a 3% loan from the Machinery and Equipment Loan Fund under Pennsylvania's Department of Community Development in the maximum amount of $791,055.
The Company continues to market the Power Cube(TM) for various storage and power applications and has several open proposals. Subsequent to the end of the third quarter, Axion received its first purchase order in the oil rig market. An initial Power Cube will be provided that will reduce the oil rigs fuel consumption by up to 20%, provide backup power protection and be capable of powering the rig in certain applications. Delivery will be made in the fourth quarter of 2009.
"We are making important progress on a number of fronts, especially in the emerging hybrid vehicle market; in our relationships with our strategic partners; and in ramping up our production capacities at our New Castle facility," said Axion Power CEO Thomas Granville. "Our advanced lead-carbon electrode design, the cornerstone of our proprietary PbC battery product, is receiving increased recognition for its many advantages over other advanced battery technologies, including its substantially lower cost, ability to deliver power and be quickly recharged, its ease of manufacture and its already established recycling infrastructure. We believe the DOE grant recognition is yet another substantial validation of our PbC technology."
The Company has maintained production of its collector-car batteries and race-car batteries and is also producing a line of flooded batteries at its New Castle plant. In Q-1, the Company introduced a line of AGM lead-acid batteries -- the Sure Energy product that will eventually fill some of the flooded line production area. This "superior margin" AGM product line blends well with Axion's PbC product which will use an identical case, cover and separator material and will be manufactured on the same existing battery line.
At September 30, the Company had cash of $784,756 and a current ratio of 1.1:1. Stockholders' equity stood at $7.1 million.
Conference Call / Webcast
The Company will hold a conference call on Monday, November 16, at 11:00 am ET to review its results; interested parties should call 800-299-9086 (domestic) or 617-786-2903 (international), with passcode 57321346 to access the call. You may also access this call via the Internet at:
http://phx.corporate-ir.net/playerlink.zhtml?c=155732&s=wm&e=2540190
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 40358231.
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 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
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 statements include, without limitation, statements concerning the Company's ability to expand its manufacturing capabilities and bring its new PbC� 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 Inc
Thomas Granville, CEO
(724) 654 9300
Allen & Caron Inc
Rudy Barrio (Investors)
r.barrio@allencaron.com
(212) 691-8087
Brian Kennedy (Media)
brian@allencaron.com
(212) 691-8087
- FINANCIAL TABLES FOLLOW -
AXION POWER INTERNATIONAL, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(A Development Stage Company)
UNAUDITED
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Revenues $962,833 $149,441 $1,567,816 $541,248
Cost of goods sold 981,273 81,019 1,380,923 266,344
Gross profit (loss) (18,440) 68,422 186,893 274,904
Expenses
Research & development 869,892 1,033,961 3,327,676 2,438,345
Selling, general
& administrative 873,213 993,479 2,887,597 4,172,675
Interest expense -
related party 44,881 (2,500) 44,881 1,175,370
Impairment of assets - - - -
Derivative
revaluation 12,048,203 - 13,592,717 (2,844)
Mega C Trust Share
Augmentation
(Return) - - - -
Interest & other
income, net (1,341) (42,961) (14,039) (34,524)
Net loss before
income taxes (13,853,288) (1,913,557) (19,651,939) (7,474,118)
Income Taxes - - - -
Deficit accumulated
during development
stage (13,853,288) (1,913,557) (19,651,939) (7,474,118)
Less preferred
stock dividends
and beneficial
conversion feature (3,302,428) (270,944) (3,871,570) (843,230)
Net loss applicable
to common
shareholders $(17,155,716) $(2,184,501) $(23,523,509) $(8,317,348)
Basic and diluted
net loss per share $(0.64) $(0.08) $(0.89) $(0.39)
Weighted average
common shares
outstanding 26,676,678 26,045,156 26,508,643 21,263,533
AXION POWER INTERNATIONAL, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(A Development Stage Company)
September 30, December 31,
2009 2008
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $784,756 $3,124,168
Escrow deposits for foreign
patent applications 20,375 -
Short-term investments - 2,193,920
Accounts receivable 763,863 128,035
Other receivables 13,037 64,456
Prepaid expenses 341,642 78,989
Inventory 1,206,406 1,269,515
Total current assets 3,130,079 6,859,083
Property & equipment, net 3,964,068 3,274,183
Other receivables, non-current 41,899 28,388
TOTAL ASSETS $7,136,046 $10,161,654
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $1,910,550 $1,324,287
Other current liabilities 97,561 162,580
Notes payable, current 92,630 -
Notes payable to related parties 746,228 -
Total current liabilities 2,846,969 1,486,867
Deferred revenue 688,054 751,096
Derivative liabilities 16,043,259 -
Notes payable 683,614 -
Total liabilities 20,261,896 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) 1,770,387 1,656,735
Series A preferred - 2,000,000
shares designated 693,997 shares
issued and outstanding
(718,997 in 2008) 9,829,340 9,440,359
Common stock-100,000,000 shares
authorized $0.0001 par value
26,743,172 issued & outstanding
(26,417,437 in 2008) 2,674 2,641
Additional paid in capital 41,281,221 46,184,287
Deficit accumulated during
development stage (65,757,396) (49,111,062)
Cumulative foreign currency
translation adjustment (252,076) (249,269)
Total Stockholders' Equity (13,125,850) 7,923,691
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $7,136,046 $10,161,654
SOURCE Axion Power International Inc