Axion International Reports Second Quarter 2012 Financial Results

Revenue for the first six months of 2012 tops $4.0 Million while Axion meets its targeted strategic and manufacturing goals including financing, expansion and supply chain improvements and market penetration

NEW PROVIDENCE, N.J.--()--Axion International Holdings, Inc. (OTCBB: AXIH), a leading producer of industrial building products and railroad ties made from 100% recycled plastic, today announced its second quarter 2012 financial results for the period ending June 30, 2012.

Axion International reported second quarter 2012 revenue of $1.8 million, a 38% increase compared to $1.3 million for the second quarter of 2011. Axion’s gross margin continues to prove challenging and was approximately $40,100 for the second quarter of 2012. Net loss for the second quarter of 2012 was $1.7 million compared to a net loss of $2.7 million for the second quarter of 2011, as restated.

During the second quarter of 2012, Axion secured $5.0 million in financing to provide the necessary liquidity to continue to improve on its production processes and meet its strategic objectives for the remainder of the year.

“The first half of 2012 has been a huge success on many fronts. We had a very ambitious plan for all areas of the business and I am happy to report we have executed exceedingly well against this plan,” stated Steve Silverman, Axion’s President and Chief Executive Officer. "Although Gross Margin remains a concern we are confident that as we continue to make improvements in our sourcing of raw materials and manufacturing processes and expand our sales to lessen the impact of favorable pricing which was employed to initially gain product traction and validation, we will begin to realize our plan to improve upon our gross margins in the latter half of 2012.

“Bringing a new revolutionary infrastructure technology such as ours to the market is a time consuming and at times, difficult process. When you consider that we are scaling our raw material supply, from both sourcing and pricing perspective, continuing to focus on our manufacturing processes and quality programs, and add in our ambitious business development activities, we get very excited but we can never take our eyes off the ball. We’ve established a solid manufacturing baseline that allows us to scrutinize and accurately forecast the scalability of our technology from a costing perspective based on current financial data to drive our decision-making. Our multi-pronged marketing efforts have paid off, in just 18 months of sales efforts, ECOTRAX™ is currently in lab testing or in-track trials for both freight and transit lines in every continent around the world that provides rail service. This truly shows the value and demand for a quality composite rail tie. In certain countries we’re partnering with local businesses and organizations to establish new specifications for composite rail ties. Our focus is to make ECOTRAX™ the worldwide standard for composite rail ties. These opportunities are critical in growing to profitability and it’s imperative we continue this focus to realize our future strategic and financial goals. For our structural building products segment, we are making progress in laying a foundation that will help mainstream our STRUXURE™ products into their respective markets. We are developing products and creating market and competitive analysis to determine how this technology can be applied profitably to various markets. We successfully launched our short span bridge design guide and delivered various structural building product samples for extensive mechanical property testing. As our new sources of raw materials begin to enter our production processes, we anticipate a positive impact on our production costs. These new material sources are significant steps in moving the Company to profitability. The second quarter and first half of 2012 have been tremendously successful in the evolution of Axion.”

Highlights for the First Half of 2012

Manufacturing/Quality

  • Third set of molds and tooling have been completed and are ready for deployment
  • Second X-ray machine has been installed and is operational
  • New embossing technology for the application of the dimples to ECOTRAX™ has been implemented, and the second embosser completed and being deployed
  • Developed testing standards for STRUXURE™ products with focus on commercial deck boards
  • Successfully deployed full quality data capture and reporting system

Material Sourcing

  • Identified new raw material sources identified for which purchasing is underway
  • Awarded four-month municipal contract for raw materials allowing us to purchase closer to the collection source

ECOTRAX™

  • Completed testing of 10 year old ties with major transit line that confirms our ECOTRAX™ rail ties do not breakdown over time
  • Shipped opening order for large freight line in Brazil
  • Received initial order from rail line in New Zealand
  • Shipped repeat orders to Australia and several transit systems in US
  • Shipped orders to nine new customers
  • Shipped opening test order to Singapore rail system
  • Shipped opening order for trial to Mexico Metro System
  • Lab or in-track testing underway with major transit and freight lines on every continent

STRUXURE™

  • Initiated business development strategy for market identification and validation
  • Developed multi-blend commercial decking products with tests for mechanical properties and competitive analysis
  • Shipped first container of STRUXURE™ boards to distributor in South America
  • Engineering underway for publication of complete design guides for commercial deck boards, marinas and boardwalks.
  • Received approval for test of our STRUXURE™ commercial deck boards on a large section of boardwalk for a major New Jersey city to be shipped in Q3 2012.
  • Continuing to expand the customers for the industrial storage application of our STRUXURE™ building products
  • Started the evaluation of potential distributors and fabricators of our products that will stock and distribute Axion products for end user use.
  • Through close collaboration with international bridge construction and engineering firm, Parsons Brinckerhoff, Axion produced a Design Guide for heavy-load short span bridges that is available on Axion’s website for engineers and designers to use when initiating their design specifications for bridges ranging from 10’ – 25’

About Axion International

Axion International is a leading structural solution provider of cost-effective alternative infrastructure and building products. The Company’s "green" proprietary technologies allow for the development and manufacture of innovative structural products made from 100% recycled consumer and industrial plastics. Axion's up-cycled products are an economic and sustainable alternative to traditional building materials such as wood, steel or concrete. Developed in collaboration with scientists at Rutgers University, Axion's patented technologies allow for products that are extremely strong, durable, flexible in design, and low maintenance.

For additional information, please visit Axion’s corporate website: www.axionintl.com

Forward-Looking Statements

This release contains "forward-looking statements" for purposes of the Securities and Exchange Commission's "safe harbor" provisions under the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under the Securities Exchange Act of 1934. These forward-looking statements are subject to various risks and uncertainties that could cause Axion’s actual results to differ materially from those currently anticipated, including the risk factors identified in Axion’s filings with the Securities and Exchange Commission.

Contacts

PR Financial Marketing LLC
Jim Blackman, 713-256-0369
jim@prfmonline.com

Contacts

PR Financial Marketing LLC
Jim Blackman, 713-256-0369
jim@prfmonline.com