2014

Axion Power Reports Second Quarter Results For 2012

NEW CASTLE, Pa., Aug. 15, 2012 /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, 2012.

Net product sales increased to $ 2.8 million in 2012 from $1.7 million in 2011.  Net product sales increased in 2012 compared to 2011 primarily due to the sale of specialty lead-acid batteries to a single customer who will sell these batteries under their brand, as well as carry the cost of inventory and provide the raw materials for production of these batteries.

Net loss for 2012 was $ 1.9 million or $0.02 per basic and diluted share compared to $1.3 million or $0.02 per basic and diluted share in 2011.

For the first six months of 2012 compared to the same period in 2011, excluding the cash inflow of approximately $8.6 million in net proceeds from our sale of common stock in the first quarter of 2012, our net cash flow for 2012 was negative $ 4.3 million compared to a negative $6.2 million in 2011, a reduction in cash burn of $1.8 million or 30 %. The latter significant reduction in net cash burn is in alignment with our plans for 2012 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 2012 include:

  • In January, we were awarded a purchase order from Siltek, Inc. confirming their participation in a Zero Energy Building in the Washington, D.C. Naval Yard.  We shipped and installed batteries in the second quarter and began coordinating our electronics into the system. We will be providing an array of its PbC batteries, system electronics and battery management system that taken together will serve as an example of our "mini-cube" platform. This initiative, combined with our .5MW onsite PowerCube, has brought us numerous new requests for proposals encompassing cube sizes from 50 kwh up to 4MWH.
  • In March 2011, we announced that we had received a series of orders for the production and immediate delivery of flooded lead-acid batteries. The batteries will be branded by the purchaser, and will not carry an Axion Power identification label. Orders through the second quarter of 2012 have been 100% on time.  We have been advised by the purchaser that their purchase of these products is expected to continue into at least the first quarter of 2013.
  • In April, we received a $400,000 purchase order from Norfolk Southern for PbC batteries for use in their all electric "yard" switcher.  This initial order is part of a $475,000 total purchase order for this application.  Concurrent with the "yard" switcher development, we are working with Norfolk Southern on their "over the road" hybrid electric locomotive.  High performance PbC batteries are ideally suited for these applications because of their unique properties which include – high charge acceptance, fast charge and recharge capability and the battery's inherent ability to equalize voltage in large string applications.
  • In May, we were awarded a $150,000 Phase I grant from the U.S. Department of Energy to fund a commercialization plan for the use of its PbC batteries in a "low-cost, high-efficiency" dual battery architecture for micro-hybrid vehicles.  We have begun work on this important nine month Phase I grant, the completion of which will enable us to apply for a Phase II grant. We were advised that approximately ten percent of Phase I grant applicants were accepted and received awards. It has been confirmed to us that Phase II grants, of approximately $1,000,000 each, will be made to approximately fifty percent of the applying applicants who must first successfully complete their Phase I grant. Phase II grants will not exceed 24 months and those successfully completing Phase II grants will be eligible to apply for Phase III grants, which, it is our understanding, will have award sizes several times the amount of the Phase II grants. As of June 30, 2012 no invoices have been issued seeking reimbursement against our Phase I grant.
  • At our annual meeting in June, we announced that we had engaged with a marketing strategic partner, Rosewater Energy LLC, to better bring our residential energy "HUB" to market. We feel, once again, that the unique characteristics of our PbC battery (charge acceptance, fast recharge and battery string equalization) make our product ideally suited for the 'residential mini cube' market. We plan to introduce the energy "HUB" to the market at the CEDIA EXPO 2012 in Indianapolis the first week in September 2012. 

Subsequent to the end of our second quarter on June 30, the following events occurred:

  • In July 2012, we completed the Siltek project for the Washington Naval Yard.  The unit has been fully commissioned and tested and is currently functioning on a daily basis.  Solar panels charge our PbC batteries and the energy is stored for use by the Naval office building.  We are remotely monitoring the project each day and reporting results.  The electronics and system are the basic components of our PowerCube technology that we are quoting to potential customers in various sizes ranging from 50kwh to 4MWH.
  • In August 2012, we executed a distribution agreement with Rosewater Energy LLC ("Rosewater") formalizing the residential energy "HUB" sales and marketing arrangement with them that became effective immediately after signature. Rosewater will operate under an exclusive covenant as long as certain minimum sales are achieved.  The agreement is three years in duration with provisions for extension.  We will be providing Rosewater with a full standalone unit that will include batteries, battery management system, all electronics and NEMA3 housing for the unit.  We will be jointly unveiling the unit at the CEDIA EXPO 2012 in Indianapolis the first week of September 2012.

Chairman & CEO Thomas Granville commented, "While we continue to work very closely with historical strategic partners such as Norfolk Southern and the automotive vehicle manufacturers, we are also working with new strategic partners for automotive applications and new strategic partners for our cube applications such as Viridity and Rosewater Energy. The residential energy HUB will be marketed by Rosewater and we are very excited to be providing a mini cube product for the high end custom home market. Clean conditioned power is an important element for the highly sophisticated home entertainment and security systems that have become an important component of the high end home market. The Residential HUB system is about the size of a side-by-side refrigerator, and will offer a range of options to a homeowner that just isn't available elsewhere." 

Granville continued, "Put simply, the Residential HUB will condition power to provide a perfect sine wave pattern that is ideal for high end entertainment options such as sophisticated sound systems and ultra-large screen televisions. The 'HUB' can also accept and clean power from a wide variety of sources: solar panels, wind generation, the grid, and even diesel generators – and convert it to the perfectly conditioned AC power that best suits today's sophisticated home control systems."

Granville concluded, "We believe we have a winner and we are looking forward to the Indianapolis CEDIA EXPO 2012, and the first opportunity for people to see this product up-close and personal."

Conference Call / Webcast
Tomorrow, August 16 at 11:00 am ET (8 am Pacific) a conference call will be held to review the AXPW second quarter 2012 results. Interested parties should call 877-317-6789 (domestic) or 412-317-6789 (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 one week and can be accessed by dialing 877-344-7529 (domestic) and 412-317-0088 (international) and using conference number 10016934.

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, CFO
ctrego@axionpower.com
(724) 654-9300

Allen & Caron Inc
Rudy Barrio (Investors)
r.barrio@allencaron.com
(212) 691-8087

–FINANCIAL TABLES FOLLOW–

 

AXION POWER INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(A Development Stage Company)









June 30, 2012


December 31, 2011

ASSETS


(Unaudited)



Current Assets





Cash and cash equivalents


$           6,303,990


$            1,987,637

Accounts receivable


816,260


309,354

Other receivables


26,833


162,249

Prepaid expenses


254,107


145,442

Inventory, net


2,938,462


2,717,173

Total current assets


10,339,652


5,321,855

Property & equipment, net


8,181,817


8,417,163

Other receivables – long term


48,000


53,000

TOTAL ASSETS


$         18,569,469


$          13,792,018






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities





Accounts payable


$              832,734


$               520,358

Other current liabilities


495,442


429,432

Notes payable


104,777


104,777

Total current liabilities


1,432,953


1,054,567






Deferred revenue


1,432,263


1,573,962

Derivative liabilities


20,554


15,843

Notes payable


385,770


439,480

Total liabilities


3,271,540


3,083,852






Stockholders' Equity





Convertible preferred stock-12,500,000 shares authorized


-


-






Common stock-200,000,000 shares authorized $0.0001 par value





      113,233,762 shares issued & outstanding (85,503,302 in 2011)


11,323


8,552

Additional paid in capital


95,783,142


86,953,180

Deficit accumulated during development stage


(80,244,861)


(76,001,894)

Cumulative foreign currency translation adjustment


(251,675)


(251,672)

Total stockholders' equity


15,297,929


10,708,166

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY


$                18,569,469


$       13,792,018













AXION POWER INTERNATIONAL, INC.


CONSOLIDATED STATEMENTS OF OPERATIONS


(A Development Stage Company)


UNAUDITED














Three Months Ended


Six Months Ended


 Inception 



June 30,


June 30,


 9/18/2003  to



2012


2011


2012


2011


6/30/2012

Product


$   2,751,862


$      1,699,371


$   4,512,424


$     2,734,813


$  16,804,417

Service


-


387,645


-


411,645


1,279,726

Net sales


2,751,862


2,087,016


4,512,424


3,146,458


18,084,143












   Costs and expenses











   Product costs


2,433,582


1,557,435


4,000,152


2,360,969


14,597,111

   Research & development


1,139,297


1,194,810


2,540,120


2,269,762


31,411,012

   Selling, general & administrative


1,117,788


1,161,628


2,201,207


2,195,166


31,965,891

   Interest expense


4,413


4,608


9,227


9,413


2,386,398

   Impairment of assets


-


-


-


-


2,062,160

   Derivative revaluations


(33,016)


(499,648)


4,711


9,021


(1,621,925)

   Mega C Trust share augmentation


-


-


-


-


400,000

   Interest & other income


(24)


(3,844)


(26)


(7,726)


(569,312)

   Loss before income taxes


(1,910,178)


(1,327,973)


(4,242,967)


(3,690,147)


(62,547,192)












   Income taxes


-


-


-


-


4,300

   Accumulated deficit


(1,910,178)


(1,327,973)


(4,242,967)


(3,690,147)


(62,551,492)












   Less preferred stock dividends
    and beneficial conversion
    feature


-


-


-


-


(17,693,369)

   Net loss applicable to

    common shareholders


$  (1,910,178)


$  (1,327,973)


$  (4,242,967)


$  (3,690,147)


$(80,244,861)

   Foreign Currency Translation
    adjustment


(3)




(34)




(251,675)

   Comprehensive Income(Loss)

(1,910,181)

(1,327,973)

(4,243,001)

(3,690,147)

(80,496,536)

   Basic and diluted net loss per
     share


$  (0.02)


$           (0.02)


$ (0.04)


$         (0.04)


$  (2.11)












   Weighted average common
    shares outstanding


113,221,056


85,461,544


108,096,412


85,457,446


38,029,182





























AXION POWER INTERNATIONAL, INC.  

CONSOLIDATED STATEMENTS OF CASH FLOWS

(A Development Stage Company)


UNAUDITED



 

 

 Six Months Ended


 Inception 



June 30,


 9/18/2003  to



2012

2011


6/30/2012

Cash Flows from Operating Activities





Accumulated deficit

$    (4,242,967)

$              (3,690,147)


$ (62,551,492)







Adjustments to reconcile deficit accumulated for noncash items





Depreciation

687,890

444,101


3,360,012


Interest Expense

-

-


1,970,251


Impairment of assets

-

-


2,062,161


Derivative revaluations

4,711

9,021


(1,621,925)


Mega C Trust share augmentation

-

-


400,000


Share based compensation expense

197,846

240,963


6,434,083







Changes in operating assets & liabilities






Accounts receivable

(506,906)

(2,349,874)


(823,129)


Other receivables – long term

135,416

(146,892)


(4,873)


Prepaid expenses

(108,665)

(121,479)


(251,519)


Inventory, net

(221,289)

(1,611,603)


(2,938,461)


Accounts payable

312,376

2,632,215


2,487,378


Other current liabilities

66,010

124,723


516,574


Liability to issue equity instruments

-

-


178,419


Deferred revenue and other

(141,699)

95,477


1,519,781








Net cash used by operating activities

(3,817,277)

(4,373,495)


(49,262,740)












Cash Flows from Investing Activities






Other receivables

5,000

6,000


(1,265,016)


Purchases of property & equipment

(452,544)

(1,785,579)


(12,209,214)


Investment in intangible assets

-

-


(167,888)


Net cash used by investing activities

(447,544)

(1,779,579)


(13,642,118)












Cash Flows from Financing Activities

Net Proceeds from related party




5,445,458


Repayment of notes payable

(53,711)

(52,126)


490,547


Net proceeds from sale of common stock

8,634,888

-


53,806,253


Net proceeds from exercise of warrants

-

-


2,014,766


Net proceeds from sale of preferred stock

-

-


7,472,181


Net cash (used) provided by financing activities

8,581,177

(52,126)


69,229,205













Net change in cash and cash equivalents

4,316,356

(6,205,200)


6,324,347

Effect of exchange rate on cash

(3)

(18)


(20,357)

Cash and cash equivalents - beginning

1,987,637

13,330,009


-

Cash and cash equivalents - ending

$        6,303,990

$               7,124,791


$       6,303,990













 

SOURCE Axion Power International, Inc.



RELATED LINKS
http://www.axionpower.com

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