AXION Reports Third Quarter 2013 Results Company to conduct conference call on Thursday, November 14 at 4:30 p.m. ET

NEW PROVIDENCE, N.J., Nov. 14, 2013 /PRNewswire/ -- AXION International Holdings, Inc. (OTCBB:AXIH), a leader in recycled plastic and plastic composite technologies used to produce ECOTRAX® rail ties and STRUXURE® building products, today announced financial results for the three and nine months ended September 30, 2013. 

(Logo: http://photos.prnewswire.com/prnh/20131107/NY13246LOGO )

Highlights include:

  • 2013 year-end revenues remain on track to exceed 2012 annual revenues of $5.3 million
  • Reported $1.3 million in revenues for the three months ended September 30, 2013, a 59% increase over the same period in 2012
  • $2.4 million backlog for the balance of 2013 plus additional significant sales opportunities anticipated to close by year-end
  • Shipped products to 12 new customers including Moscow-based TVEMA for installation of ECOTRAX® in Russia, and 8 existing customers including a major transit line in Canada during the third quarter of 2013
  • Reduced reliance on largest customer to 53% of revenues in the third quarter of 2013 as compared to 73% in the prior year period
  • Invested approximately $2 million to double manufacturing capacity and add capability to process raw materials at Company's Texas facility in anticipation of strong growth in demand

"This quarter we took a big strategic step by doubling our internal manufacturing capacity at our Waco, Texas facility which we now lease and operate. We invested approximately $2 million to change our manufacturing model from outsourced contract manufacturing to operating our own facility, owning our own equipment, and vertically integrating into processing our own raw materials. This investment allows us to move upstream, reduce overall costs, and improve quality control over our raw materials stream. This business is all about manufacturing a quality product and with this commitment to our Texas facility, we have made huge strides in these areas to push more volume through our fixed overhead model," stated AXION President and CEO Steve Silverman. "Our two extrusion lines are now working 24/7 and everything we are producing in our Waco facility is being shipped to fill current purchase orders."

"Based on our current pipeline of sales opportunities, we expect demand to increase in the fourth quarter of 2013 and into the first quarter of 2014. With continued market adoption, we continue to diversify our revenue base, reducing reliance on our Class 1 railroad that has historically been our largest customer, which should improve margins."

"Following our initial sale of ECOTRAX® to a Russian customer in the third quarter, our ties have been installed in the Moscow area and they are reportedly performing very well. We also completed lab testing and installation testing on a full ECOTRAX® solution for use in train tunnel applications. This has been a two year process and is a fantastic specialty application where we are providing the rail tie, fastening system, adhesive and pre-plating services."

"Our STRUXURE® boards and STRUXURE® Constructions Mats have been installed and used during the third quarter by customers in Canada and the Northeastern U.S.," concluded Silverman.

AXION reported $1,272,689 in revenues for the third quarter of 2013, a 59% increase over revenues of $800,007 for the third quarter of 2012. AXION's gross margin increased to $83,517, or 6.6% of revenues in the third quarter 2013 as compared to $12,929, or 1.6% of revenues in the same period of 2012. In the third quarter of 2013 and 2012, approximately 53% and 73%, respectively of sales were to one Class 1 railroad customer which received favorable pricing under a three-year supply agreement. Higher gross margins for the third quarter of 2013, as compared to the same period in 2012 reflect the Company's continuing shift to a normalized revenue mix.

Product development, quality management and excess production capacity expenses were $507,466 and $320,137 in the third quarter of 2013 and 2012, respectively. Marketing and sales expenses were $202,106 for the third quarter of 2013 compared to $362,851 for the corresponding period in 2012. General and administrative costs were $732,427 in the third quarter of 2013 compared to $581,561 in the third quarter of 2012.

Loss from operations increased 8.5% to $1,358,482 in the third quarter of 2013 from $1,251,620 in the same period of 2012. Net loss attributable to common shareholders for the third quarter of 2013 was $1,357,233, or $0.04 per basic and diluted share compared to a net loss attributable to common shareholders of $1,353,253 or $0.05 per basic and diluted share in third quarter of 2012.

For the nine months ended September 30, 2013, AXION reported revenues of $4,532,274, a 7% decline from $4,892,802 for the same period in 2012. In the first nine months of the year, AXION diversified its revenue mix with sales to new customers, which reduced its revenue concentration with its largest customer, the Class 1 railroad, to 46% as compared to 65% in the prior year period. AXION's gross margin increased to $387,266 or 8.5% of revenues in the first nine months of 2013 as compared to $64,155, or 1.3% of revenues in the same period of 2012. Higher gross margins for the nine month period in 2013, as compared to the same period in 2012 reflect the Company's continuing shift to a normalized revenue mix.

Product development, quality management and excess production capacity expenses were $1,076,881 and $883,979 in the first three quarters of 2013 and 2012, respectively. Marketing and sales expenses were $703,201for the first three quarters of 2013 compared to $749,913 for the corresponding period in 2012. General and administrative costs declined to $2,216,656 in the first nine months of 2013 from $2,788,381 in the same period of 2012.

Loss from operations narrowed 17% to $3,609,472 in the nine months ended September 30, 2013 from $4,358,118 in the first nine months of 2012. Net loss attributable to common shareholders was $5,531,305 or $0.19 per basic and diluted share for nine months ended September 30, 2013 compared to a net loss attributable to common shareholders of $5,316,380 or $0.20 per basic and diluted share for the same period in 2012.

Conference call details:

Date:  Thursday, November 14, 2013
Time:  4:30 p.m. Eastern Time (ET)
Dial in Number for U.S. & Canadian Callers: 877-407-9079
Dial in Number for International Callers (Outside of the U.S. & Canada): 201-493-6746

To join the live conference call, please dial into the above referenced telephone numbers five to ten minutes prior to the scheduled conference call time. A live webcast and archive of the call will also be available on the Investor Relations section of AXION's website at: http://axionintl.equisolvewebcast.com/q3-2013

For those unable to participate in the call at the scheduled time, a replay will be available for 7 days starting on November 14 at 8:00 p.m. ET. To access the replay, please dial 877-660-6853 in the U.S. and Canada, and 201-612-7415 for international callers. The conference ID# is 414271.

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. 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

Forward-Looking Statements 
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.

 

 AXION INTERNATIONAL HOLDINGS, INC. 

 CONDENSED CONSOLIDATED BALANCE SHEETS 















 September 30,


 December 31, 






2013


2012






 (unaudited) 











 ASSETS 






 Current assets: 







 Cash and cash equivalents 


$     599,743


$         346,905



 Accounts receivable, net of allowance for doubtful accounts 


438,950


192,015



 Inventories 


3,625,821


3,088,953



 Prepaid expenses and deposits 


168,358


165,339




 Total current assets 


4,832,872


3,793,212










 Property and equipment, net 


3,023,131


2,005,215


 Other long-term and intangible assets 


-


68,284




 Total assets 


$  7,856,003


$      5,866,711

















 LIABILITIES AND STOCKHOLDERS' DEFICIT 






 Current liabilities: 







 Accounts payable 


$  1,254,422


$         890,394



 Accrued liabilities 


653,162


446,434



 Due to investor 


400,000


-



 Derivative liabilities - 8% convertible promissory notes 


1,330,000


830,000




 Total current liabilities 


3,637,584


2,166,828










 8% convertible promissory notes, net of discounts 


7,041,112


5,671,162


 Fair value of 10% convertible preferred stock warrants 


122,357


81,716




 Total liabilities 


10,801,053


7,919,706










 Commitments and contingencies 














 10% convertible preferred stock, no par value; authorized 880,000 shares;  702,123 and 706,023 issued and outstanding at September 30, 2013 and December 31, 2012, respectively, net of discount 


6,568,316


5,922,612












 Stockholders' deficit: 







 Common stock, no par value; authorized 100,000,000 shares; 30,315,663 and 28,820,173 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively 


29,878,727


27,103,454







 Accumulated deficit 


(39,392,093)


(35,079,061)




 Total stockholders' deficit 


(9,513,366)


(7,975,607)




 Total liabilities and stockholders' deficit 


$  7,856,003


$      5,866,711

 

 

 

 AXION INTERNATIONAL HOLDINGS, INC. 

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 













2013


2012










 Revenue 


$  1,272,689


$     800,007


 Costs sales 


1,189,172


787,078



 Gross margin 


83,517


12,929










 Operating expenses: 







 Product development, quality management and excess production capacity 


507,466


320,137



 Marketing and sales 


202,106


362,851



 General and administrative 


732,427


581,561




 Total operating costs and expenses 


1,441,999


1,264,549










 Loss from operations 


(1,358,482)


(1,251,620)










 Other expenses: 







 Interest expense 


190,318


108,395



 Amortization of debt discount 


132,497


-



 Change in fair value of derivative liabilities 


(730,000)


(445,684)




 Total other expenses 


(407,185)


(337,289)










 Net loss 


(951,297)


(914,331)



 Accretion of preferred dividends and beneficial conversion feature 


(405,936)


(438,922)


 Net loss attributable to common shareholders 


$ (1,357,233)


$ (1,353,253)


















 Weighted average common shares - basic and diluted 


30,307,925


26,766,317










 Net loss per share - basic and diluted 


$          (0.04)


$          (0.05)










 

 

 AXION INTERNATIONAL HOLDINGS, INC. 

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 













2013


2012










 Revenue 


$  4,532,274


$  4,892,802


 Costs sales 


4,145,008


4,828,647



 Gross margin 


387,266


64,155










 Operating expenses: 







 Product development, quality management and excess production capacity 


1,076,881


883,979



 Marketing and sales 


703,201


749,913



 General and administrative 


2,216,656


2,788,381




 Total operating costs and expenses 


3,996,738


4,422,273










 Loss from operations 


(3,609,472)


(4,358,118)










 Other expenses: 







 Interest expense 


542,970


241,944



 Amortization of debt discount 


414,525


373,553



 Change in fair value of derivative liabilities 


(253,935)


(919,361)




 Total other expenses 


703,560


(303,864)










 Net loss 


(4,313,032)


(4,054,254)



 Accretion of preferred dividends and beneficial conversion feature 


(1,218,273)


(1,262,126)


 Net loss attributable to common shareholders 


$ (5,531,305)


$ (5,316,380)


















 Weighted average common shares - basic and diluted 


29,583,289


26,157,795










 Net loss per share - basic and diluted 


$          (0.19)


$          (0.20)










 

SOURCE AXION International Holdings, Inc.



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