GreenMan Technologies, Inc. (GreenMan), a US-based collector, processor and marketer of scrap tires, has reported net sales of $98,000 for the second quarter of fiscal 2009, down 84%, compared with the net sales of $608,000 in the year-ago quarter. It has also reported a net loss of $0.92 million, or $0.03 loss per share, for the second quarter of fiscal 2009, compared with the net loss of $0.88 million, or $0.03 loss per share, in the year-ago quarter.

Lyle Jensen, GreenMan’s president and chief executive officer, said, “School board budgets have been dramatically tightened across the country and impacted our results for the March quarter. While sales at our Green Tech Products (formerly Welch Products, Inc.) subsidiary tend to be uneven from quarter to quarter given revenues are derived from one time installations, these results are not acceptable. We are now through our seasonally slowest second fiscal quarter and heading into our seasonally and historically stronger second half of the fiscal year. Even with the reduced school board budgets, we continue to see a very attractive market opportunity for our products given their ADA compliance and attractive total cost of ownership.”

Jensen added, “We have devoted a significant amount of time and resources during the first half of fiscal 2009 evaluating several potentially near term green-based technologies opportunities particularly in the areas of recycled material and waste feedstock into bio-fuels, alternative energy, and recycled products. We remain confident in our due diligence efforts and our goal is to bring at least one and possibility several of these opportunities to conclusion by the end of the fiscal year.

Jensen concluded, “During the quarter we continued to strengthen our capital structure. In March, we purchased and retired warrants to purchase 4.8 million shares of common stock at an exercise price of $.01 per share representing all of the remaining warrants held by our former secured lender, Laurus Master Fund, Ltd. We have successfully evolved our capital structure over the past year and currently have a strong balance sheet with over $5 million in cash, limited debt, and $0.40 per share in shareholders’ equity.”

Results of Operations:

Three Months ended March 31, 2009 Compared to the Three Months ended March 31, 2008:

The decrease is primarily attributable to decreased playground tile and equipment sales in the Midwestern and Western regions of the US. A majority of the company’s revenue is derived from specific one time installations with minimal follow on revenue from the installed project, thus making quarterly revenue comparison particularly difficult. In addition, the company’s quarter ended March 31 is its seasonally slowest quarter due to weather related factors which preclude the installation of playground tiles and equipment during the colder winter months, especially in the Midwestern region.

Due to lower revenue and playground tile production during the three months ended March 31, 2009 the company incurred a negative gross profit of $111,000 compared to a positive gross profit of $226,000 or 37% of net sales for the three months ended March 31, 2008. Due to anticipated seasonally slower tile sales and adequate existing product inventory levels, management decided to produce a minimal amount of playground tiles during the quarter ended March 31, 2009. As a result, the company was unable to fully absorb all manufacturing overhead costs resulting in a negative gross profit during the three months ended March 31, 2009.

Selling, general and administrative expenses for the three months ended March 31, 2009 decreased $106,000 to $725,000 as compared to $831,000 for the three months ended March 31, 2008. The decrease was primarily attributable to reduced travel, marketing and sales related costs.

Interest and financing expense for the three months ended March 31, 2009 decreased $13,000 to $13,000, compared to $26,000 during the three months ended March 31, 2008 due to decreased borrowings.

As a result of the foregoing, the company’s loss from continuing operations after income taxes increased $156,000 to $817,000 for the three months ended March 31, 2009 as compared to $661,000 for the three months ended March 31, 2008.

During the quarter ended March 31, 2009, the company recognized a loss from Georgia discontinued operations of $100,000 associated with settlement agreement with a former Georgia vendor. The loss from discontinued operations for the three months ended March 31, 2008 relates to the net results of the company’s tire recycling.

Six Months ended March 31, 2009 Compared to the Six Months ended March 31, 2008:

Net sales from continuing operations for the six months ended March 31, 2009 decreased $448,000 or 37% to $759,000 as compared to net sales of $1,207,000 for the six months ended March 31, 2008. The decrease is primarily attributable to decreased playground tile and equipment sales in the Midwestern and Western parts of the US of during the company’s seasonally slower second quarter. A majority of the company’s revenue is derived from specific one time installations with minimal follow on revenue from the installed project, thus making quarterly revenue comparison particularly difficult. In addition, the company’s quarter ended March 31, 2009 is its seasonally slowest quarter due to weather related factors which preclude the installation of playground tiles and equipment during the colder winter months, especially in the Midwestern region.

Due to lower revenue and playground tile production during the three months ended March 31, 2009 the company’s gross profit for the six months ended March 31, 2009 was $57,000 or 8% of net sales compared to a gross profit of $338,000 or 28% of net sales for the six months ended March 31, 2008. Due to anticipated seasonally slower tile sales during the quarter ended March 31, 2009 and adequate existing product inventory levels, management decided to produce a minimal amount of playground tiles during the quarter ended March 31, 2009. As a result, the company was unable to fully absorb all manufacturing overhead costs which negatively impacted the company’s gross profit for the six months ended March 31, 2009.

Selling, general and administrative expenses for the six months ended March 31, 2009 increased $333,000 to $1,902,000 as compared to $1,569,000 for the six months ended March 31, 2008. The increase was primarily attributable to an increase of $247,000 in professional expenses relating to business development initiatives and the November 2008 sale of the company’s tire recycling operations and an increase of about $164,000 in wage and performance based incentives. These increases were partially offset by reduced travel, marketing and sales related costs.

Interest and financing expense for the six months ended March 31, 2009 increased slightly to $72,000, compared to $71,000 during the six months ended March 31, 2008.

As a result of the foregoing, the company’s loss from continuing operations after income taxes increased $543,000 to $1,894,00 for the six months ended March 31, 2009 as compared to $1,351,000 for the six months ended March 31, 2008.

During the six months ended March 31, 2009 the company recognized a gain on sale of discontinued operations net of income taxes ($5.5 million), of $14,347,000 associated with the sale of the company’s tire recycling business in November 2008. The income from discontinued operations for the six months ended March 31, 2009 relates primarily to the net results of the company’s tire recycling operations including about $391,000 of one-time gains associated with the termination of a long-term land and building lease agreement in Minnesota. In addition, during the six months ended March 31, 2009, the company recognized income from Georgia discontinued operations of about $44,000 relating to the net effects of two settlement agreements with two former Georgia vendors. The income from discontinued operations for the six months ended March 31, 2008 relates to the net results of the company’s tire recycling operations.

The company’s net income for the six months ended March 31, 2009 was $12,771,000 or $.41 per basic share as compared to a net loss of $861,000 or $.03 per basic share for the six months ended March 31, 2008.