Though still posting losses, GreenMan Technologies Inc. hopes the improvements in its first-quarter financial picture will make potential lenders more sympathetic to the financially strapped tire recycling firm.
``We have the right assets in place,'' said GreenMan CFO Chuck Coppa during a Feb. 18 teleconference to discuss the financial results for the quarter ended Dec. 31, 2003. ``All we need is the capitalization.''
Losses for the Lynnhaven-based firm totaled $178,000, or 1 cent per share, for the quarter, exactly half the losses it posted for the same period a year before. Total sales for the quarter were $7.8 million, 2 percent less than the $8 million for the period ended Dec. 31, 2002. But overall product sales comprised 25 percent of consolidated revenues during the just-completed quarter, the company said, compared with 19 percent during the year-ago quarter.
Increased tire-derived fuel sales and crumb rubber sales aided the company's product strength, as did new waste wire processing equipment at its Minnesota and Iowa facilities, the company said.
Last year's collapse of Coast Business Credit, GreenMan's primary lender, ``literally paralyzed everything,'' said Mr. Coppa during the teleconference, at which he and company CEO Robert Davis fielded contentious questioning from shareholders.
``Going to another lender while the FDIC was still looking at Coast Business Credit was close to impossible,'' Mr. Coppa said.
The lack of funds stymied a number of important company projects, according to Messrs. Coppa and Davis-especially efforts to create a full-fledged crumb rubber processing operation at its Tennessee facility and restart waste wire processing operations at the Georgia facility. The latter operations have been closed since a March 31, 2003, fire at the Georgia plant, although tire grinding operations there were closed only 24 hours.
``We installed a used shredder in Tennessee that allows us to process 25 percent of our Tennessee tires locally,'' Mr. Davis said. ``But the rest are still going to Georgia, at a transportation deficit of $100,000 per month. On the other hand, all that material is pre-sold.''
GreenMan managed more than $4 million in capital investments during fiscal 2003 to upgrade existing operations and expand its Tennessee market position, according to Mr. Davis. The company also has downsized in certain areas, he added, such as cutting employment by 10 percent and changing its Wisconsin facility into a transfer station only.
The benefits of those upgrades are beginning to show, according to Messrs. Davis and Coppa.
``A bank isn't going to look at you until you make a positive movement, and we think our first quarter has shown that we have,'' Mr. Coppa said.
Reopening of the Georgia waste wire operations, moved back several times, is now anticipated for April or May of this year, according to Messrs. Davis and Coppa.