NEW CASTLE, Pa., May 17, 2011 /PRNewswire/ -- Axion Power International, Inc. (OTC Bulletin Board: AXPW), the developer of advanced lead-carbon PbC® batteries, today reported that during the first quarter of 2011, its net sales were $1.1 million, as compared to $0.5 million during the first quarter of 2010. The increase was due to greater product sales. Product sales increased due primarily to the production and shipment of a series of orders for flooded lead-acid batteries with the purchaser carrying the cost of inventory and providing the raw materials required for that production. The Company reported a net loss of $2.4 million, or $0.03 per share, for the first quarter of 2011, as compared to a net loss of $1.4 million, or $0.02 per share, for the first quarter of 2010. The increase in net loss of $1.0 million was the result of a $1.1 million increase in non-cash expense due to accounting for derivative revaluations.

At March 31, 2011, cash, net of debt, was $9.8 million. Total assets were $21.3 million and total stockholders' equity was $16.3 million.

Chairman and CEO Thomas Granville commented, "In the first quarter of 2011, we continued to make significant progress on the planned initiatives we began in 2010:


Granville concluded, "We've been persistent and struggled against sometimes overwhelming obstacles to get where we are today. Our shareholders, who have exhibited patience and understanding over time, are a major reason for our success. The road has been long, but the most difficult years are now clearly behind us. We are right on the verge of significant growth going forward. We're building our sales, and at the same time we've embarked on building our sales team with industry professionals. We began with small sales numbers that, percentage wise, have grown steadily practically since inception. This year will bring triple digit sales growth as we position ourselves for 2012."

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 877-485-3104 (domestic) or 201-689-8579 (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 877-660-6853 (domestic) and 201-612-7415 (international) and using passcode 371881 and account number #356.

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 (Investor Relations)
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)









March 31, 2011


December 31, 2010

ASSETS


(Unaudited)



Current Assets





Cash and cash equivalents


$ 10,463,157


$ 13,330,009

Accounts receivable


873,928


221,922

Other receivables


141,939


144,973

Prepaid expenses


61,703


82,060

Inventory, net


2,196,875


1,428,560

Total current assets


13,737,602


15,207,524






Property & equipment, net


7,499,889


6,738,575

Other receivables


62,000


65,000

TOTAL ASSETS


$ 21,299,491


$ 22,011,099






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities





Accounts payable


$ 1,997,463


$ 930,021

Other current liabilities


254,598


225,804

Notes payable


104,776


101,684

Total current liabilities


2,356,837


1,257,509






Deferred revenue


1,327,564


1,385,185

Derivative liabilities


763,130


254,461

Notes payable


518,553


547,612

Total liabilities


4,966,084


3,444,767






Stockholders' Equity





Convertible preferred stock-12,500,000 shares authorized


-


-






Common stock-125,000,000 shares authorized $0.0001 par value





85,453,302 shares issued & outstanding (85,453,302 in 2010)


8,545


8,545

Additional paid in capital


86,628,665


86,499,416

Deficit accumulated during development stage


(70,052,178)


(67,690,004)

Cumulative foreign currency translation adjustment


(251,625)


(251,625)

Total stockholders' equity


16,333,407


18,566,332






TOTAL LIABILITIES & STOCKHOLDERS' EQUITY


$ 21,299,491


$ 22,011,099









AXION POWER INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(A Development Stage Company)

UNAUDITED











Three Months Ended




March 31,




2011


2010


Product


$ 1,035,442


$ 372,417


Service


24,000


140,010


Net sales


1,059,442


512,427








Costs and expenses






Product costs


803,534


294,842


Research & development


1,074,952


1,194,388


Selling, general & administrative


1,033,538


945,761


Derivative revaluations


508,669


(568,432)


Interest & other income


923


3,478


Loss before income taxes


(2,362,174)


(1,357,610)








Income taxes


-


-


Net loss applicable to common shareholders


$ (2,362,174)


$ (1,357,610)








Basic and diluted net loss per share


$ (0.03)


$ (0.02)








Weighted average common shares outstanding


85,453,302


79,699,749










AXION POWER INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(A Development Stage Company)

UNAUDITED



Three Months Ended




March 31,




2011

2010







Cash Flows from Operating Activities




Accumulated deficit

$ (2,362,174)

$ (1,357,610)







Adjustments to reconcile deficit accumulated for noncash items



Depreciation

209,544

124,896


Derivative revaluations

508,669

(568,432)


Share based compensation expense

129,248

92,779







Changes in operating assets & liabilities




Accounts receivable

(652,006)

(114,702)


Other receivables

3,034

108,650


Prepaid expenses

20,357

(58,536)


Inventory, net

(768,315)

(253,922)


Accounts payable

1,067,442

131,881


Other current liabilities

28,794

59,839


Deferred revenue and other

(57,620)

(33,154)







Net cash used by operating activities

(1,873,027)

(1,868,311)











Cash Flows from Investing Activities




Other receivables

3,000

8,523


Purchases of property & equipment

(970,858)

(237,578)


Net cash provided (used) by investing activities

(967,858)

(229,055)











Cash Flows from Financing Activities




Repayment of notes payable

(25,967)

(25,198)


Net proceeds from exercise of warrants

-

57,000


Net cash provided by financing activities

(25,967)

31,802












Net change in cash and cash equivalents

(2,866,852)

(2,065,564)


Effect of exchange rate on cash

-

(155)


Cash and cash equivalents - beginning

13,330,009

23,279,466


Cash and cash equivalents - ending

$ 10,463,157

$ 21,213,747










SOURCE Axion Power International, Inc.