Axion Power Reports Second Quarter Results For 2012

NEW CASTLE, Pa., Aug. 15, 2012 /PRNewswire/ -- Axion Power International, Inc. (OTC QB: AXPW), the developer of advanced lead­-carbon PbC® batteries and energy storage systems, today announced results for its second quarter and six months ended June 30, 2012.

Net product sales increased to $ 2.8 million in 2012 from $1.7 million in 2011.  Net product sales increased in 2012 compared to 2011 primarily due to the sale 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 2012 was $ 1.9 million or $0.02 per basic and diluted share compared to $1.3 million or $0.02 per basic and diluted share in 2011.

For the first six months of 2012 compared to the same period in 2011, excluding the cash inflow of approximately $8.6 million in net proceeds from our sale of common stock in the first quarter of 2012, our net cash flow for 2012 was negative $ 4.3 million compared to a negative $6.2 million in 2011, a reduction in cash burn of $1.8 million or 30 %. The latter significant reduction in net cash burn is in alignment with our plans for 2012 to improve our liquidity while continuing to focus on those activities critical to initial commercialization of our PbC technology.    

Some highlights of the second quarter of 2012 include:

• In January, we were awarded a purchase order from Siltek, Inc. confirming their participation in a Zero Energy Building in the Washington, D.C. Naval Yard.  We shipped and installed batteries in the second quarter and began coordinating our electronics into the system. We will be providing an array of its PbC batteries, system electronics and battery management system that taken together will serve as an example of our "mini-cube" platform. This initiative, combined with our .5MW onsite PowerCube, has brought us numerous new requests for proposals encompassing cube sizes from 50 kwh up to 4MWH.
• In March 2011, we announced that we had received a series of orders for the production and immediate delivery of flooded lead-acid batteries. The batteries will be branded by the purchaser, and will not carry an Axion Power identification label. Orders through the second quarter of 2012 have been 100% on time.  We have been advised by the purchaser that their purchase of these products is expected to continue into at least the first quarter of 2013.
• In April, we received a $400,000 purchase order from Norfolk Southern for PbC batteries for use in their all electric "yard" switcher.  This initial order is part of a $475,000 total purchase order for this application.  Concurrent with the "yard" switcher development, we are working with Norfolk Southern on their "over the road" hybrid electric locomotive.  High performance PbC batteries are ideally suited for these applications because of their unique properties which include – high charge acceptance, fast charge and recharge capability and the battery's inherent ability to equalize voltage in large string applications.
• In May, we were awarded a $150,000 Phase I grant from the U.S. Department of Energy to fund a commercialization plan for the use of its PbC batteries in a "low-cost, high-efficiency" dual battery architecture for micro-hybrid vehicles.  We have begun work on this important nine month Phase I grant, the completion of which will enable us to apply for a Phase II grant. We were advised that approximately ten percent of Phase I grant applicants were accepted and received awards. It has been confirmed to us that Phase II grants, of approximately $1,000,000 each, will be made to approximately fifty percent of the applying applicants who must first successfully complete their Phase I grant. Phase II grants will not exceed 24 months and those successfully completing Phase II grants will be eligible to apply for Phase III grants, which, it is our understanding, will have award sizes several times the amount of the Phase II grants. As of June 30, 2012 no invoices have been issued seeking reimbursement against our Phase I grant.
• At our annual meeting in June, we announced that we had engaged with a marketing strategic partner, Rosewater Energy LLC, to better bring our residential energy "HUB" to market. We feel, once again, that the unique characteristics of our PbC battery (charge acceptance, fast recharge and battery string equalization) make our product ideally suited for the 'residential mini cube' market. We plan to introduce the energy "HUB" to the market at the CEDIA EXPO 2012 in Indianapolis the first week in September 2012. 

Subsequent to the end of our second quarter on June 30, the following events occurred:

• In July 2012, we completed the Siltek project for the Washington Naval Yard.  The unit has been fully commissioned and tested and is currently functioning on a daily basis.  Solar panels charge our PbC batteries and the energy is stored for use by the Naval office building.  We are remotely monitoring the project each day and reporting results.  The electronics and system are the basic components of our PowerCube technology that we are quoting to potential customers in various sizes ranging from 50kwh to 4MWH.
• In August 2012, we executed a distribution agreement with Rosewater Energy LLC ("Rosewater") formalizing the residential energy "HUB" sales and marketing arrangement with them that became effective immediately after signature. Rosewater will operate under an exclusive covenant as long as certain minimum sales are achieved.  The agreement is three years in duration with provisions for extension.  We will be providing Rosewater with a full standalone unit that will include batteries, battery management system, all electronics and NEMA3 housing for the unit.  We will be jointly unveiling the unit at the CEDIA EXPO 2012 in Indianapolis the first week of September 2012.

Chairman & CEO Thomas Granville commented, "While we continue to work very closely with historical strategic partners such as Norfolk Southern and the automotive vehicle manufacturers, we are also working with new strategic partners for automotive applications and new strategic partners for our cube applications such as Viridity and Rosewater Energy. The residential energy HUB will be marketed by Rosewater and we are very excited to be providing a mini cube product for the high end custom home market. Clean conditioned power is an important element for the highly sophisticated home entertainment and security systems that have become an important component of the high end home market. The Residential HUB system is about the size of a side-by-side refrigerator, and will offer a range of options to a homeowner that just isn't available elsewhere." 

Granville continued, "Put simply, the Residential HUB will condition power to provide a perfect sine wave pattern that is ideal for high end entertainment options such as sophisticated sound systems and ultra-large screen televisions. The 'HUB' can also accept and clean power from a wide variety of sources: solar panels, wind generation, the grid, and even diesel generators – and convert it to the perfectly conditioned AC power that best suits today's sophisticated home control systems."

Granville concluded, "We believe we have a winner and we are looking forward to the Indianapolis CEDIA EXPO 2012, and the first opportunity for people to see this product up-close and personal."

Conference Call / Webcast
Tomorrow, August 16 at 11:00 am ET (8 am Pacific) a conference call will be held to review the AXPW second quarter 2012 results. Interested parties should call 877-317-6789 (domestic) or 412-317-6789 (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 one week and can be accessed by dialing 877-344-7529 (domestic) and 412-317-0088 (international) and using conference number 10016934.

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
Charles Trego, CFO
[email protected]
(724) 654-9300

Allen & Caron Inc
Rudy Barrio (Investors)
[email protected]
(212) 691-8087

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SOURCE Axion Power International, Inc.