Axion Power International, Inc. announced results for its fourth quarter and year ended December 31, 2011.
Net product sales increased to $7.6 million in 2011 from $1.3 million in 2010. Net product sales increased in 2011 compared to 2010 primarily due to the sale of $ 6.4 million of specialty lead-acid batteries to a single customer who will sell these batteries under their brand, as well as carry the cost of inventory and provide the raw materials for production of these batteries.
Net loss for 2011 was $8.3 million or $0.10 per basic and diluted share compared to $6.8 million or $0.08 per basic and diluted share in 2010. Of the $1.5 million increase in pre-tax net loss, $0.9 million was due to a decrease in income related to accounting for non-cash derivative revaluations; the remainder was due to a $0.6 million increase in our operating loss. On an EBITDA basis, the loss was $6.8 million compared to an EBITDA loss of $6.5 million in 2010.
During 2011 there were important sales of PbC batteries, most notably to Norfolk Southern (NS), one of the nation’s largest class-A railroads. The Norfolk Southern batteries were accepted and are being used for large string platform testing for battery-powered locomotives. Axion has had a program with NS since the Fall of 2009 and believes it is one of the very few advanced battery companies in the world that has an initiative designed to provide a major rail company a "clean, green" energy storage solution for their hybrid locomotive initiative.
Also during 2011, Axion Power celebrated its first connection to the huge PJM electric power grid for saving and storing electricity. Axion provided a 0.5MW PowerCube™ ("CUBE") that was connected into the PJM network this past December. Initial use of the Cube will be for the frequency regulation market via demand response and curtailment, but the Cube has broad application beyond this use. Subsequent to year end the Company announced a contract for a Zero energy building in the United States Washington Naval Yard. Axion believes the potential for micro-storage applications on the US electric grid is very large and that the opportunity exists on both sides of the meter.
The hybrid vehicle market continues to be a major focus for Axion, and during 2011 studies and demonstrations continued with European and US automakers, primarily in the stop/start application for the micro-hybrid vehicles market. Axion feels that the PbC battery, because of its large charge acceptance and fast recharge capabilities, can offer a low cost solution for operating the ancillary load (i.e. hotel load) in the micro-hybrid platform.
Subsequent to year-end, on February 3, 2012, Axion completed a registered-direct offering of common stock that provided $8.6 million of new financing that will be used for working capital and for general corporate purposes. It is important to keep this new financing in mind when studying the financial statements for December 31, 2011.
Chairman & CEO Thomas Granville commented, "Although the road has been longer than we anticipated, we are finding the market opportunities for our PbC product applications are larger and more diverse than we had initially forecast. The industries we are working with include the U.S. military, the electrical generation industry, vehicle manufacturers and railroads – each of them well known for having long decision cycles and difficult, demanding requirements. So far we have passed all the hurdles and made excellent progress in each of these markets, even as other, more exotic and more highly publicized battery chemistries, and battery companies, have fallen by the wayside.
"We believe that our PbC batteries will be one of the ultimate winners in the contest for new energy storage technologies. Our batteries have unique properties that include a very high rate of charge acceptance and fast recharge capabilities. The PbC batteries are a fraction of the cost of more exotic chemistries. The PbC battery can be manufactured in existing factories in normal manufacturing environments (not clean rooms). They provide superior performance in all weather conditions, unlike competitive products. PbC batteries are completely recyclable and they don’t require high-cost, low-availability raw materials. We have every faith in PbC technology, and strong belief in our extraordinary and hard-working Axion team."
Granville concluded: "We’re still here; we’re still viable; we’re still servicing our customers and rapidly expanding our customer base; we’re still improving our product; we’re still improving our team. We’re here and we plan to be here for the long run."
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