Axion Power year-end results for 2011 show hybrid focus still strong
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.
While Axion Power International, Inc. (OTCBB: AXPW) 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, it is clear that 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."
Unfortunately, the latest news release about year-end results for 2011 indicates that results have yet to create a profitable situation. Axion Power, the developer of advanced lead-carbon PbC® batteries and energy storage systems, today 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 our 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.
Hybrid Vehicle Market