NEW CASTLE, Pa., Aug. 15, 2013 /PRNewswire/ -- Axion Power International, Inc. (OTC QB: AXPW), the developer of advanced lead-carbon PbC® batteries and energy storage systems, today announced results for its second quarter and six months ended June 30, 2013.
(Logo: http://photos.prnewswire.com/prnh/20100119/AXIONLOGO)
Net sales were $2.7 million in 2013 compared to $2.8 million in 2012. The decrease in net sales in 2013 compared to 2012 is principally due to the timing of shipments.
Net income for 2013 was $0.1 million or $0.00 per basic and diluted share compared to a net loss of $1.9 million or $0.02 per basic and diluted share in 2012. The change to a net income in 2013 from a net loss in 2013 of $2.0 million resulted from a decrease in our operating loss of $0.3 million and an increase in non - operating income of $1.7 million. The decrease in operating loss was due to an increase in other income resulting from the sale of R&D tax credits to generate cash. The increase in non–operating income related primarily to the accounting for the issuance on May 8, 2013 of private placement senior notes and warrants and had an almost entirely non cash impact on our operating results and cash flow for the second quarter of 2013.
Net sales for the first half of 2013 were $4.9 million compared to $4.5 million for the first half of 2012, an increase of $0.4 million or 9%. The increase in net sales resulted from the sale of specialty lead-acid batteries to a single customer which will sell these batteries under its brand, as well as carry the cost of inventory and provide the raw materials for production of these batteries.
Net loss for the first half of 2013 was $2.0 million or $0.02 per basic and diluted share compared to a net loss of $4.2 million or $0.04 per basic and diluted share in the first half of 2012. The decrease in net loss of $2.2 million resulted from a decrease in our operating loss of $0.6 million and an increase in non- operating income of $1.6 million. The decrease in the operating loss resulted from equal increases in gross profit and other income. The increase in non - operating income relates primarily to the accounting for the issuance on May 8, 2013 of private placement senior notes and warrants and had an almost entirely non cash impact on our operating results and cash flow for the first half of 2013.
For the first six months of 2013 compared to the same period in 2012, excluding the cash provided by financing activities of $3.5 million in 2013 and $8.6 million in 2012, our cash flow used by operating and investing activities was $2.7 million in 2013 compared to $4.3 million in 2012, a reduction in net cash burn of $1.6 million or 37 %. The latter significant reduction in net cash burn is in alignment with the plans we initiated beginning in 2012 and continuing in 2013 to improve our liquidity while continuing to focus on those activities critical to initial commercialization of our PbC technology.
Some highlights of the second quarter of 2013 include:
- Received an order from ePower for enough of our PbC® batteries to convert ten Class 8 trucks to a series hybrid design.
- In their 2013 Sustainability report, Norfolk Southern (NS) confirmed their commitment to a reduction in NoX and Co2 emissions through a series of initiatives including an all electric locomotive and a hybrid locomotive with "industry partner – Axion Power". Joint testing with Penn State now includes 'road hybrid locomotive', as well as all electric 'yard locomotive'. All PbC batteries for the first yard locomotive have been shipped to NS.
- We have increased the participation of our PowerCube™ in the PJM network so that it is now responding to the PJM signal at least 8 hours per day/5 days per week. This in addition to performing different testing functions for us. We have applied the test and real world results from our onsite PowerCube to other Cube application opportunities. We have utilized the PowerCube scalability in responding to these opportunities both in North America and outside North America.
- We completed final 'tweaking' of our continuous roll carbon sheeting line and have formally transferred this equipment from our engineering group to our manufacturing division.
Thomas Granville, Chairman and CEO of Axion, commented, "naturally, we are very pleased that our cost reduction measures, together with improved sales, have resulted in continued significant reductions in cash burn through the second quarter. Net cash used for operating and investment activities was reduced by 37% ($1.6 million) in the first six months of 2013, when compared to that same time period in 2012. Phil Baker, our COO, and Chuck Trego, our former CFO, worked together to implement prudent cost reduction measures at the beginning of 2013, and we will continue to implement them going forward. And speaking of Chuck, we were saddened by his July resignation from our CFO position. He left for personal reasons but will remain as a short term consultant for us, and will assist in the transition to a new CFO. Fortunately for us, Chuck has agreed to join our Board of Directors if the shareholders elect him at our annual meeting on September 26th. If he is elected as expected, we look forward to his continued advice and guidance as we continue building the company in the years to come."
Granville continued, "New orders for our PbC batteries came from several sources in the second quarter and subsequent to the end of the second quarter. Some of these orders we have spoken about, such as ePower's $200,000 plus purchase order, and some we have not, and still cannot make public at this time. Small initial batch orders from industry leaders in motive applications would be one example. The Class 8-A, 8-B, and even the Class 7 trucks, present a huge potential market opportunity for Axion and our unique proprietary PbC product. For a hybrid conversion system, like ePower's, to work efficiently and substantially increase 'miles per gallon of diesel fuel', a robust battery with the right product attributes is needed. In the hybrid system, the battery is designed to provide adjunct power when the truck requires it and to level out the fuel consumption peaks that traditional trucks create in normal operation. The robust battery must be capable of high charge acceptance, fast re-chargeability, voltage stability in large series string applications and operating at full function in temperature extremes. We believe our PbC battery is the perfect fit for these requirements. In the US alone, on an annual basis, there are statistics that report that Class 8-A and 8-B trucks consume 19 billion gallons of diesel fuel. The opportunity to save literally hundreds of millions of gallons of this diesel fuel is what drives the hybrid conversion market initiative. Each year in the US, it is estimated that approximately 120,000 Class 8 trucks are rebuilt. Since the engines, drive trains, motors and motor generators are changed out during this rebuild anyway, it is an ideal time to incorporate a series hybrid conversion – a conversion that provides us with a potential sale of 56 of our PbC batteries per converted truck."
Granville concluded, "We have spoken on various prior occasions about the numerous markets that our PbC products can service. I won't go into all of them here, but I will highlight the PowerCube and 'scaled' PowerCube markets. We are devoting significant time and resources to pursue these opportunities, and I expect to report a combination of confirmed orders and initial sales in these markets before our next quarterly earnings call in mid November. These opportunities include PbC applications for: back up for wind and solar; frequency regulation; electric vehicle charging stations; single family and multi-family residential back up, both grid tied and standalone; off grid lighting tied to renewables - and more. We look forward to reporting on the progress we make in these exciting areas."
Conference Call and Webcast details:
The Company's management team will host a conference call to discuss its second quarter and six months ended June 30, 2013 results today, August 15 at 11:00 am Eastern Time.
Participants should dial into the call ten minutes before the scheduled time using the following numbers: 1-877-300-8521 (USA) or +1-412-317-6026 (international) to access the call.
Audio Webcast:
There will also be a simultaneous live webcast through the Company's website, www.axionpower.com and selecting the investor tab. Participants should register on the website approximately ten minutes prior to the start of the webcast.
Replay:
An audio replay of the conference call will be available for seven days and can be accessed by dialing 1-877-870-5176 (USA) or +1-858-384-5517 (international) and using passcode 10032710. For those unable to attend to the live webcast, it will be archived shortly following the event for 30 days in the Investors section of the Company's website.
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 has not been 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-carbon energy storage technologies. Axion believes its new PbC 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 activated 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.
Tom Granville, Chairman & CEO
(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 CONDENSED BALANCE SHEETS
|
|
(Unaudited)
|
|
|
June 30, 2013
|
|
December 31, 2012
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
2,817,859
|
|
$
|
2,004,391
|
|
Restricted cash
|
5,997,265
|
|
-
|
|
Accounts receivable
|
361,868
|
|
771,410
|
|
Other current assets
|
828,802
|
|
194,975
|
|
Inventory, net
|
2,833,407
|
|
2,838,791
|
|
Total current assets
|
12,839,201
|
|
5,809,567
|
|
|
|
|
|
Property & equipment, net
|
7,336,190
|
|
7,963,041
|
|
Other receivables
|
35,000
|
|
41,000
|
|
|
|
|
|
Total Assets
|
$
|
20,210,391
|
|
$
|
13,813,608
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
577,885
|
|
$
|
581,503
|
|
Other liabilities
|
456,316
|
|
305,510
|
|
Note payable
|
104,777
|
|
113,921
|
|
Accrued interest convertible notes
|
176,438
|
|
-
|
|
Derivative conversion feature senior notes
|
120,153
|
|
-
|
|
Junior convertible notes, net of discount
|
368,709
|
|
-
|
|
Senior convertible notes, net of discount
|
4,267,728
|
|
-
|
|
Total current liabilities
|
6,072,006
|
|
1,000,934
|
|
|
|
|
|
Deferred revenue
|
1,097,799
|
|
1,262,295
|
|
Note payable
|
275,902
|
|
331,247
|
|
Junior convertible notes
|
385,233
|
|
-
|
|
Derivative liability senior warrants
|
1,382,700
|
|
-
|
|
Derivative liabilities
|
-
|
|
1,217
|
|
Total liabilities
|
9,213,640
|
|
2,595,693
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
Convertible preferred stock – 12,500,000 shares designated no shares
issued and outstanding
|
-
|
|
-
|
|
Common stock-200,000,000 shares authorized $0.0001 par value per share
|
|
|
|
|
118,198,330 shares issued & outstanding (113,233,762 in 2012)
|
11,819
|
|
11,326
|
|
Additional paid in capital
|
97,772,946
|
|
96,013,439
|
|
Retained earnings (deficit)
|
(86,536,402)
|
|
(84,555,174)
|
|
Cumulative foreign currency translation adjustment
|
(251,612)
|
|
(251,676)
|
|
Total Stockholders' equity
|
10,996,751
|
|
11,217,915
|
|
|
|
|
|
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
|
$
|
20,210,391
|
|
$
|
13,813,608
|
|
|
|
|
|
AXION POWER INTERNATIONAL, INC.
|
|
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Net sales
|
|
2,688,466
|
|
2,751,862
|
|
4,926,113
|
|
4,512,425
|
|
|
Cost of sales
|
|
2,290,737
|
|
2,433,582
|
|
4,281,210
|
|
4,000,152
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
397,729
|
|
318,280
|
|
644,903
|
|
512,273
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
2,324,665
|
|
2,257,684
|
|
4,635,596
|
|
4,742,721
|
|
Other income
|
|
(324,994)
|
|
(24)
|
|
(324,995)
|
|
(26)
|
|
Operating loss
|
|
(1,601,942)
|
|
(1,939,380)
|
|
(3,665,698)
|
|
(4,230,422)
|
|
|
|
|
|
|
|
|
|
|
Change in value of senior warrants, gain
|
|
(1,555,300)
|
|
-
|
|
(1,555,300)
|
|
-
|
|
Change in value conversion feature senior notes, gain
|
|
(1,391,847)
|
|
-
|
|
(1,391,847)
|
|
-
|
|
Debt discount amortization expense
|
|
717,728
|
|
-
|
|
717,728
|
|
-
|
|
Interest expense, note payable
|
|
6,907
|
|
3,814
|
|
11,487
|
|
7,834
|
|
Extinguishment loss on senior notes conversion
|
|
195,500
|
|
-
|
|
195,500
|
|
-
|
|
Derivative revaluations (gain)loss
|
|
(154)
|
|
(33,016)
|
|
(1,217)
|
|
4,711
|
|
Interest on convertible notes
|
|
209,224
|
|
-
|
|
209,224
|
|
-
|
|
Financing costs on convertible notes
|
|
129,955
|
|
-
|
|
129,955
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net income(loss)
|
|
86,045
|
|
(1,910,178)
|
|
(1,981,228)
|
|
(4,242,967)
|
|
Foreign Currency Translation adjustment
|
|
-
|
|
(3)
|
|
(64)
|
|
(34)
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income(Loss)
|
|
86,045
|
|
(1,910,181)
|
|
(1,981,292)
|
|
(4,243,001)
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share
|
|
$ 0.00
|
|
$ (0.02)
|
|
$ (0.02)
|
|
$ (0.04)
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
114,730,614
|
|
113,221,056
|
|
114,012,287
|
|
108,096,412
|
|
|
|
|
|
AXION POWER INTERNATIONAL, INC.
|
|
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
|
Six Months Ended
|
|
June 30,
|
|
2013
|
|
2012
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(1,981,228)
|
|
$
|
(4,242,967)
|
|
|
|
|
|
Adjustments to reconcile deficit accumulated for noncash items
|
|
|
|
|
Depreciation expense
|
747,015
|
|
687,890
|
|
Derivative revaluations (gain)loss
|
(1,217)
|
|
4,711
|
|
Change in value of senior warrants, gain
|
(1,555,300)
|
|
-
|
|
Change in value conversion feature senior notes, gain
|
(1,391,847)
|
|
-
|
|
Debt discount amortization expense
|
717,728
|
|
-
|
|
Interest accrued , convertible notes
|
197,224
|
|
-
|
|
Extinguishment loss on senior notes conversion
|
195,500
|
|
-
|
|
Amortization deferred finance costs
|
129,955
|
|
|
|
Stock based compensation expense
|
132,969
|
|
197,846
|
|
|
|
|
|
Changes in operating assets & liabilities
|
|
|
|
|
Accounts receivable
|
409,543
|
|
(506,906)
|
|
Other receivables
|
-
|
|
135,416
|
|
Other current assets
|
(125,506)
|
|
(108,665)
|
|
Inventory, net
|
5,384
|
|
(221,289)
|
|
Accounts payable
|
(55,008)
|
|
312,376
|
|
Other current liabilities
|
167,922
|
|
66,010
|
|
Accrued interest
|
12,000
|
|
-
|
|
Deferred revenue
|
(169,967)
|
|
(141,699)
|
|
Cash (used) by operating activities
|
(2,564,833)
|
|
(3,817,277)
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
Other receivables
|
6,000
|
|
5,000
|
|
Capital expenditures
|
(120,164)
|
|
(452,544)
|
|
Cash (used) by investing activities
|
(114,164)
|
|
(447,544)
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
Repayment of note payable
|
(64,489)
|
|
(53,711)
|
|
Proceeds from senior and junior convertible notes
|
10,000,000
|
|
8,634,888
|
|
Payment of debt issuance costs
|
(443,110)
|
|
|
|
Amount deposited into restricted cash account
|
(6,000,000)
|
|
|
|
Cash provided by financing activities
|
3,492,401
|
|
8,581,177
|
|
Net increase in cash and cash equivalents
|
813,404
|
|
4,316,356
|
|
Effect of exchange rate on cash
|
64
|
|
(3)
|
|
Cash and cash equivalents – beginning
|
2,004,391
|
|
1,987,637
|
|
Cash and cash equivalents – ending
|
$
|
2,817,859
|
|
$
|
6,303,990
|
|
|
|
|
Supplemental Schedule of Non-Cash Investing and Financing Activities:
|
|
|
First installment payment of Senior notes through
|
|
|
|
common stock issuance
|
$
|
1,195,500
|
|
|
Warrants issued for placement agent fees
|
$
|
143,777
|
|
SOURCE Axion Power International, Inc.