LYNNFIELD, Mass.-Still reeling from continuing losses, tire recycler GreenMan Technologies Inc. is taking steps to improve profitability and reduce costs, including the transfer of its corporate headquarters to its profitable Midwestern operations.
GreenMan moved its main offices to Savage, Minn., from Lynnfield in April, said GreenMan CEO Lyle Jensen during a May 24 teleconference regarding the company´s second-quarter and six-month financial results.
At this point, only GreenMan Chief Financial Officer Chuck Coppa and one other employee are still working out of Lynnfield, according to Jensen, and they will move by the end of the year. The company will have its annual meeting on the East Coast this year, he said, but it will move to the Minneapolis area in 2007.
Meanwhile, the company is busy implementing a strategic plan to get back into the black, according to Jensen. These points include stabilizing continuing operations; reaching a new agreement with its primary lender, Laurus Master Fund Ltd.; maximizing continuing operations; and establishing some new joint-venture strategic partnerships with product manufacturers who use GreenMan´s crumb rubber and tire-derived fuel.
The company recently divested its money-losing Georgia and Tennessee operations in an effort to stanch the flow of losses, Coppa noted. The Midwestern operations exceeded expectations, he said, but the California subsidiary continues to lag behind.
GreenMan also continues to labor under certain handicaps, such as the effects of downsizing and the continuing debt, Jensen said.
"Fifty percent of our debt is finance charges," he said. "There´s nothing we can do about that until we amortize it off."
GreenMan had net losses of $1.9 million on sales of $9 million for the six months ending March 31. This compared with losses of $1.7 million on sales of $9.9 million for the prior-year´s six-month period.
For the second quarter, losses were $1.3 million on sales of $3.9 million, compared with losses of $1 million on sales of $4.7 million for the same period a year before. The company blamed the dire financial figures on generally lower inbound tire volumes and the completion of a scrap tire cleanup contract in Iowa.