AXION Reports First Quarter 2014 Financial Results Company Reports Strong Performance with First Quarter Revenues Up 176% Year-Over-Year
ZANESVILLE, Ohio, May 16, 2014 /PRNewswire/ -- AXION International Holdings, Inc. (OTCQB: AXIH), a leader in recycled plastic and plastic composite technologies used to produce ECOTRAX® rail ties/sleepers and STRUXURE® building products, and a vertically integrated re-processor and supplier of recycled plastic, today announced financial results for the first quarter ended March 31, 2014.
First Quarter Highlights:
- $4.9 million of revenue for first quarter 2014, representing a 176% increase over first quarter 2013
- $2.8 million of revenue were attributed to the Engineered Products division for the first quarter 2014, compared to $1.8 million for the first quarter 2013
- $2.1 million of revenue were attributed to the Reprocessed Plastics division for the period ended March 31, 2014
- Current pipeline likely to close during 2014 for Engineered Products division consists of 57 active opportunities across 51 customers
- Shipped ECOTRAX® rail ties to a second European passenger railway as part of their annual refurbishment and renewal program
- Multiple purchase orders through North American distributor SPARTAN Mat, LLC for its STRUXURE® Heavy Construction Mats
- Entered into Asian markets and received approval to start in-track testing with ECOTRAX® rail ties to one of the busiest transit lines in the world
- Additional purchase orders for ECOTRAX® rail ties in Russia through its in-country distributor and business partner, TVEMA
- Appointment of Claude Brown as the Company's COO and CTO, who has over 22 years of experience in engineering, development, commercialization and production of unique polymer technologies and differentiated building products
"The first quarter of 2014 was an excellent start for the Company, both financially and operationally," said Steve Silverman, President and CEO of AXION. "Our $4.9 million in revenue alone represented a triple digit revenue growth when compared to the same period of last year and is nearly 75% of revenues for all of 2013. This is driven by the high demand for products from our Engineered Products division from both new and repeat orders with a very diversified customer base. Our Reprocessed Plastics division generated solid growth as well and was a result of our efforts to adopt a vertically integrated production operation. ECOTRAX® and STRUXURE® products continue to receive very positive receptions and have garnered purchase orders from around the world. In addition, we have built strong and strategic international relationships that have positioned us to penetrate those markets further. We expect 2014 to be a record breaking year for the Company and look forward to updating our shareholders on our progress."
During the first quarter of 2014, the Company incurred expenses in connection with the relocation of its corporate headquarters to the Ohio facility and integrating the new Reprocessed Plastics division into AXION. Additional expenses may continue into the second quarter of 2014, as further integration is necessary.
AXION reported $4,850,943 in revenue for the first quarter of 2014, a 176% increase over revenues of $1,759,635 for the first quarter of 2013. In the first quarter of 2014 and 2013, approximately 29% and 24%, respectively, of total sales were to one Class 1 railroad customer, which received favorable pricing under a three-year supply agreement. This three-year supply agreement should be concluded during the first half of this year.
The Company has made the necessary investments in tooling, molds and other production equipment that has capacity to produce $30 to $40 million in revenues annually. The Company is working diligently to maximize efficiency and throughput on all of its equipment as it is a primary focus in becoming a value added supplier to its customers across both business units.
As the Company continues to enhance its manufacturing processes, procedures and capabilities, it incurred excess capacity costs of $465,700 in the first quarter of 2014. The Company utilized third-party manufacturers during the same period in 2013, and no excess capacity costs were incurred. AXION is continuing to focus on improving margins by selling premium products, diversifying its customer and revenue base, reducing its raw materials costs and improving economies of scale in manufacturing.
Product development and quality management expenses were $79,500 and $218,200 in the first quarter of 2014 and 2013, respectively. Marketing and sales expenses were $300,700 for the first quarter of 2014 compared to $244,900 for the corresponding period in 2013. General and administrative costs were $980,400 in the first quarter of 2014 compared to $718,100 in the first quarter of 2013.
Net income for the first quarter ended March 31, 2014 were $3.6 million compared to a net loss of $6.9 million in the same period of 2013. This was a result of the impact of several non-cash charges including a positive effect of the change in fair value of the derivative liabilities associated with the Company's 8% convertible promissory notes.
About AXION International Holdings, Inc.
AXION (OTCQB: AXIH) is a green technology company, transforming waste plastics into structural building materials. Using 100%-recycled consumer and industrial plastics, AXION develops, markets and sells its recycled structural composite products through its ECOTRAX® composite rail tie and STRUXURE® building material lines. AXION's wholly owned subsidiary, AXION Recycled Plastics (ARPI) recycles post-consumer and post-industrial plastics. As a complete plastics recovery operation, ARPI sorts, grinds, washes, blends, and pelletizes plastic for future use, offering economic benefits to its customers, while keeping waste out of landfills. In addition, it offers toll recycling services. ARPI will continue to serve regional customers from its Zanesville, Ohio facility, and establish and grow the recycling capabilities at the Company's Waco, Texas facility to serve new customers in Texas and surrounding states, as well as provide raw materials internally for the Company to produce ECOTRAX® and STRUXURE®. From the railroading industry to the military to global engineering firms, AXION delivers tested, proven and superior green solutions to infrastructure needs around the world. www.AXIH.com
This release contains "forward-looking statements" for purposes of the Securities and Exchange Commission's "safe harbor" provisions under the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under the Securities Exchange Act of 1934. These forward-looking statements are subject to various risks and uncertainties that could cause AXION's actual results to differ materially from those currently anticipated, including the availability of materials at favorable pricing, sufficient manufacturing capability and the risk factors identified in AXION's filings with the Securities and Exchange Commission.
SOURCE AXION International Holdings, Inc.