Axion Power Reports Year-End Results for 2010

Mar 31, 2011, 07:30 ET from Axion Power International Inc

NEW CASTLE, Pa., March 31, 2011 /PRNewswire/ -- Axion Power International Inc. (OTC Bulletin Board: AXPW), the developer of advanced lead-carbon PbC® batteries, today announced financial results for the year ended December 31, 2010.

(Logo: https://photos.prnewswire.com/prnh/20100119/AXIONLOGO)

Net sales increased to $2.1 million from $1.8 million in 2009.  Although the Company experienced a decline in product sales resulting from fewer batteries shipped in 2010 compared to 2009, net sales increased as a result of higher service sales.  In 2010, the Company's net loss before income taxes was $6.8 million compared to $14.6 million in 2009. The reduction in net loss before income taxes of $7.8 million was primarily due to accounting for non-cash derivative revaluations. Net loss for 2010 was $6.8 million or $0.08 per basic and diluted share compared to $18.6 million or $0.67 per basic and diluted share in 2009. The change in net loss was attributable to the non-recurring impact of the beneficial conversion features of preferred stock that impacted 2009.

At December 31, 2010, cash, net of debt, was $12.7 million. Total assets were $22.0 million and total stockholders' equity was $18.6 million.

Chairman and CEO Thomas Granville commented, "2010 was a year of important accomplishments for Axion Power.  Of the significant progress achieved through the execution of our planned initiatives last year, I would say that three stand out as major achievements and position us well as we move forward in 2011.  First, as a result of our having invested in the reconfiguration of our manufacturing space and in the training of our workforce, we have been able to seize an evolving opportunity to generate incremental revenue and cash flow through an opportunity to manufacture legacy lead-acid batteries. This initiative is not a deviation from our long-term strategy, which is focused on PbC battery and component production, but rather, it provides us with an opportunity to enhance that strategy by enabling us to further train our factory personnel and improve our processes and quality control. We are currently building hundreds of made-to-spec batteries on a daily basis and we anticipate that in 2011, this production will generate a minimum of $3.5 million in new revenue. This business will help improve our cash flow and reduce our burn rate as we move forward with the commercialization of our PbC products.

"Second, we now have a robotic carbon electrode manufacturing line at our Greenridge, PA facility. This line will produce a high level of quality-controlled product and will be responsible for the production of our patented activated carbon construct. We will continue to tweak the line for some time going forward, but this Spring we will be turning out negative electrodes of consistent quality sufficient to begin the production of PbC batteries in quantities that will satisfy our customers."

The Company's vision for 2011 is to launch commercial quantities of PbC batteries through its growing network of strategic development partnerships.  That includes the Company's work with Norfolk Southern (NS), a Tier One US railroad with a leadership position in clean operations. Granville continued, "The third major achievement of 2010 was solidifying our relationship with NS.  We have been working with them for more than a year but have made real progress in the last several months. We have been told that we will receive an order from NS, in early April, for the purchase of PbC batteries for large 'string testing' which will result in profitable revenue when the anticipated transaction occurs in the second quarter of 2011. The string testing will be used by NS to duplicate the results that we have achieved here at Axion and the specific testing regimen will focus on how the PbC battery's longer cycle life and high rate of charge acceptance can best be utilized in the NS locomotive's use profile."

Additionally, the Company has continued to pursue and build relationships with numerous worldwide vehicle manufacturing leaders such as BMW.  The Company believes that micro and mild hybrid vehicles will help auto makers around the world meet their carbon emissions requirements, and will also enable the automakers to provide increased miles per gallon to the consumer. The Company believes the low-cost, high-charge acceptance PbC battery will be a contending preferred battery choice for this emerging "vehicle hybridization" market.  

Granville continued, "The recent events in Japan have brought home in a forceful way the need to integrate renewable and sustainable energy into our lives. If we want to increase the share of solar, wind, tidal and other forms of renewable energy, we will need a distributed power grid that can supply and accept power from a wide variety of sources.  One of the enabling technologies for such a grid will be affordable energy storage that allows one to hold energy generated when grid demand is low and utilize it in times of need or when demand is high. We believe PbC batteries will be an important part of the solution for bringing renewables to their proper place in our energy mix. We feel our proprietary PowerCube™ product, complete with batteries, with a battery management system, with remote monitoring and balancing capabilities, with all necessary integrated electronics, etc., is well suited to respond to on grid, and off grid, power demands such as UPS-back up; power smoothing; and power quality – to name a few. Our new onsite PowerCube project, which will be commissioned in early summer, will demonstrate some of these capabilities."

Axion Power has continued its work with various governmental groups and agencies in developing its PowerCube line of products for distributed energy storage under a grant from the Commonwealth of Pennsylvania; and a grant from the DOD through the Office of Naval Research for the development of standby power for the Navy and Marine Corps Silent Watch Program and their Assault Vehicle Program. It is the Company's objective to complete these projects in 2011.

In closing Granville said, "we have strengthened our team considerably with numerous important appointments in 2010.  We believe we now have a team that can take us where we need to go, and take us there effectively. We have spent considerable investment in updating our battery manufacturing plant at the Clover Lane facility to mesh with our new robotic electrode manufacturing equipment being installed at our Greenridge Road facility. There's still work to be done, there's always work to be done, but most of the important pieces are in place. We're ready, we're so ready."  

Conference Call / Webcast

Today at 11:00 am ET (8 a.m. Pacific) a conference call will be held to review the AXPW results. Interested parties should call 877-485-3104 (domestic) or 201-689-8579 (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 7 days and can be accessed by dialing 877-660-6853 (domestic) and 201-612-7415 (international) and using passcode 369267 and account number #356.

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. Lisa Herrington (Investor Relations) (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 BALANCE SHEETS

(A Development Stage Company)

December 31, 2010

December 31, 2009

ASSETS

Current Assets

Cash and cash equivalents

$            13,330,009

$            23,279,466

Accounts receivable

221,922

194,315

Other receivables

144,973

208,179

Prepaid expenses

82,060

79,987

Inventory, net

1,428,560

1,008,092

Total current assets

15,207,524

24,770,039

Property & equipment, net

6,738,575

4,216,080

Other receivables

65,000

34,601

TOTAL ASSETS

$            22,011,099

$            29,020,720

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable

$                930,021

$             1,375,292

Other liabilities

225,804

82,326

Notes payable

101,684

101,684

Total current liabilities

1,257,509

1,559,302

Deferred revenue

1,385,185

856,237

Derivative liabilities

254,461

1,616,788

Notes payable

547,612

649,549

Total liabilities

3,444,767

4,681,876

Stockholders' Equity

Convertible preferred stock-12,500,000 shares authorized

    Series-A preferred - 2,000,000 shares designated

-

9,069,871

     0 shares issued and outstanding (630,897 in 2009)

Common stock-125,000,000 shares authorized $ 0.0001 par value

     85,453,302 issued & outstanding (75,767,818 in 2009)

8,545

7,576

Additional paid in capital

86,499,416

76,372,520

Deficit accumulated during development stage

(67,690,004)

(60,859,150)

Cumulative foreign currency translation adjustment

(251,625)

(251,973)

Total Stockholders' Equity

18,566,332

24,338,844

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$            22,011,099

$            29,020,720

AXION POWER INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(A Development Stage Company)

Years Ended

December 31

2010

2009

Product

$           1,328,025

$           1,843,592

Service

               820,081

                       -  

Net  sales

             2,148,106

             1,843,592

Costs and expenses

Product costs

               893,681

             1,693,714

Research & development

             5,432,230

             4,426,956

Selling, general & administrative

             3,448,508

             3,837,526

Interest expense - related party

                 21,143

               186,063

Impairment of assets

               361,793

                       -  

Derivative revaluations (income)

           (1,165,751)

             6,292,401

Mega C Trust share augmentation

                       -  

                       -  

Interest & other income

                (12,644)

                (14,641)

Loss before income taxes

           (6,830,854)

          (14,578,427)

Income taxes

                       -  

                       -  

Accumulated deficit

           (6,830,854)

          (14,578,427)

Less preferred stock dividends and beneficial conversion feature

                       -  

           (4,046,836)

Net loss applicable to common shareholders

$          (6,830,854)

$        (18,625,263)

Basic and diluted net loss per share

$                   (0.08)

$                  (0.67)

Weighted average common shares outstanding

           83,711,708

           27,619,839

AXION POWER INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(A Development Stage Company)

Years Ended

31-Dec

2010

2009

Cash Flows from Operating Activities

Accumulated deficit

($6,830,854)

($14,578,427)

Adjustments to reconcile deficit accumulated for noncash items

Depreciation

673,170

441,005

Interest expense

-

139,668

Impairment of assets

361,793

-

Derivative revaluations (income)

(1,165,751)

6,292,401

Share based compensation expense

444,986

986,982

Changes in operating assets & liabilities

Accounts receivable

(27,607)

(66,280)

Other receivables

63,206

(143,723)

Prepaid expenses

(2,073)

(998)

Inventory, net

(420,468)

261,423

Accounts payable

(445,271)

51,005

Other liabilities

143,478

(80,254)

Deferred revenue and other

528,977

105,151

Net cash used by operating activities

(6,676,414)

(6,592,047)

Cash Flows from Investing Activities

Short term investments

-

2,193,920

Other receivables

(30,399)

(6,213)

Purchases of property & equipment

(3,557,458)

(1,382,902)

Net cash provided (used) by investing activities

(3,587,857)

804,805

Cash Flow from Financing Activities

Net proceeds from related party debt

-

265,687

Repayment of notes payable

(101,937)

751,234

Net proceeds from sale of common stock

57,137

24,928,323

Net proceeds from exercise of warrants

359,266

-

Net cash provided by financing activities

314,466

25,945,244

Net change in cash and cash equivalents

(9,949,805)

20,158,002

Effect of exchange rate on cash

348

(2,704)

Cash and cash equivalents - beginning

23,279,466

3,124,168

Cash and cash equivalents - ending

$13,330,009

$23,279,466

SOURCE Axion Power International Inc



RELATED LINKS

http://www.axionpower.com