ZANESVILLE, Ohio, Nov. 14, 2014 /PRNewswire/ -- AXION International Holdings, Inc. ( OTCQB:AXIH), a leader in structural polymer solutions, including ECOTRAX® rail ties and STRUXURE® construction mats, today announced its financial results for the third quarter ended September 30, 2014.
Third Quarter Highlights:
- $3.1 million in revenue for third quarter 2014, of which $1.7 million of revenue was attributed to our engineered products, representing a 31% increase over third quarter 2013
- Saw continued growth in international business and market penetration with multiple purchase orders for ECOTRAX® rail ties
- Expanded interest in STRUXURE® heavy construction and temporary road mats with signing of distribution agreement with a major Canada-based corporation in the oil and gas industry
- Acceleration of vertical integration strategy with conversion of Zanesville facility to increase capacity for engineered products
AXION's Chief Executive Officer Claude Brown Jr. said, "During the quarter, we adopted several corporate initiatives to bolster our operational performance and financial results. The conversion of our Zanesville, Ohio, facility has been progressing well and moving forward this will enable the growth of our STRUXURE® construction mat line and help us focus on strengthening margins through increased production capacity."
Mr. Brown continued, "Our ECOTRAX® products continue to penetrate the global markets with orders in Europe and Australia. Regarding our STRUXURE® products, we have seen increasing market demand for both our heavy construction mat and temporary road mats. Our distribution agreement with Hydra Energy Solutions Ltd., a Canadian company in the oil and gas industry, is significant as Canada presents one of the largest energy industries in the world."
"We remain confident in our plans on moving forward with the objective of growing our engineered products and manufacturing and production capacity, creating efficiencies in our production, improving our margins and continuing the penetration of our product lines in global markets. We continue to grow our sales, diversify and expand our customer base, and believe we are aligning our corporate decisions with the interest of our shareholders to ensure that our fundamental goal is increasing long-term total shareholder returns."
Third Quarter 2014 Financial Summary
AXION reported $3,122,912 in revenue for the third quarter of 2014, a 145% increase over revenues of $1,272,689 for the third quarter of 2013. Revenue from the sale of its engineered products was $1.7 million and $1.3 million for the third quarter of 2014 and 2013, respectively. As the Company transitions its Zanesville facility to provide increased production capacity for its engineered products, revenue from the sale of reprocessed plastics is expected to decrease.
The Company continued to operate at a negative gross margin, as sustained profitability will be achieved with planned increases in production volume and higher sales revenue.
Total operating expenses were $1.2 million and $1.1 million for the third quarter ended September 30, 2014, and 2013, respectively.
Other income and expenses, consisting of interest expense, amortization of discounts associated with debt securities and the change in the fair values of the various derivative liabilities primarily associated with the Company's convertible debt, resulted in other income of $5.1 million for the third quarter ended September 30, 2014 compared to other income of $407,185 for the same period in 2013.
Primarily as a result of the gain recognized from the change in fair value of our derivative liabilities, net income for the third quarter ended June 30, 2014 was $2.7 million, as compared to net loss of $951,297 for the corresponding period of 2013.
Nine Months Ended September 30, 2014 Financial Summary
AXION reported $12 million in revenues for the nine months ended September 30, 2014, an increase from $4.5 million for the same period in 2013, of which $6.6 million was attributable to the engineered products division. The remainder was attributable to reprocessed plastics sales.
The negative gross margin for the nine months ended September 30, 2014 of $4.5 million compares to a negative gross margin of $7,474 for the nine months ended September 30, 2013. The Company continued to operate at a negative gross margin due to the nature of both its reprocessed plastics segment and its engineered products segment which require higher volume of production than the Company has been able to achieve to date.
Total operating expenses were $23.2 million and $3.6 million for the nine months ended September 30, 2014 and 2013, respectively. The increase was a result of higher general and administrative expenses during the quarter.
Other income and expense for the nine months ended September 30, 2014 and 2013, was other income of $13.6 million and other expense of $703,560, respectively.
For the nine months ended September 30, 2014 and 2013, net loss was $14.1 million and $4.3 million, respectively.
As of September 30, 2014, the Company had 69,167,050 common shares outstanding.
About AXION International Holdings, Inc.
AXION ( OTCQB: AXIH) creates innovative structural polymer solutions, engineering sustainable products and systems for applications that provide improved long-term value, consistent performance, and reduced maintenance costs in comparison to conventional products. Through its ECOTRAX® rail applications and STRUXURE® building products lines, AXION delivers tested, proven, and superior structural polymer solutions for the infrastructure, transportation, and energy industries.
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.