~2017 off to a strong start~
VANCOUVER, May 11, 2017
/CNW/ - Westport Fuel Systems Inc. ("Westport Fuel
Systems") (TSX:WPRT / Nasdaq:WPRT) reported financial results
for the first quarter ended March 31,
2017, and provided an update on operations. All figures are
in U.S. dollars unless otherwise stated.
"We had a strong first quarter, and we look forward to building
upon our momentum," said Nancy
Gougarty, Chief Executive Officer of Westport Fuel
Systems. "Both revenues and margins improved while our
implementation of cost efficiencies continues to yield results.
Commercial shipment of our Westport™ HPDI 2.0 technology is
on-track for later this year, a significant milestone that will
bring in a new ongoing revenue stream and allow us to ramp-down our
R&D spending. We are pleased to be making further progress
and continue to keep our focus on making Westport Fuel Systems a
sustainable and profitable company that can deliver value to
customers, employees and shareholders."
Q1 2017 CONSOLIDATED FINANCIAL HIGHLIGHTS
|
CONTINUING
OPERATIONS
|
($ in millions,
except per share amounts)
|
Three Months
Ended
March 31
|
2017
|
2016[1]
|
Consolidated
Revenues
|
$
|
60.0
|
$
|
24.0
|
Consolidated Gross
Margin
|
17.5
|
6.4
|
Consolidated Gross
Margin %
|
29.2%
|
26.7%
|
Operating
Expenses
|
27.4
|
25.4
|
Income from
Unconsolidated Joint Ventures
|
1.8
|
0.7
|
Net Loss from
Continuing Operations
|
(12.8)
|
(24.5)
|
Net Loss per Share
from Continuing Operations
|
(0.12)
|
(0.38)
|
Cash and Short-term
Investments Balance
|
47.7
|
24.6
|
[1]The quarter ended March 31,
2016 does not include Fuel Systems Solutions, Inc. ("Fuel
Systems").
|
- Consolidated revenues for the quarter ended March 31, 2017, was $60.0
million compared with $24.0
million for the same period last year mainly due to the
addition of Fuel Systems revenue as a result of the merger and
improving market outlook in key regions.
- Consolidated gross margin for the quarter ended March 31, 2017 was $17.5
million or 29.2% of revenue, compared with $6.4 million or 26.7% of revenue for the same
period last year. The change in gross margin is partly due to the
merger with Fuel Systems as well as operational improvements and
efficiencies implemented following the closure of the merger.
- Consolidated operating expenses were $27.4 million for the quarter ended March 31, 2017, an increase of $2.0 million from $25.4
million in the same period last year which did not include
any operating expenses from Fuel Systems.
- Net loss from continuing operations for the quarter ended
March 31, 2017, was $12.8 million or a loss of $0.12 per share, compared with a loss of 24.5
million or a loss of 0.38 per share in the same period last
year.
In April 2017, the Company sold
the assets of its Auxiliary Power Unit business ("APU") and
is currently negotiating the sale of additional assets of the
remainder of the Industrial segment. In light of these
developments, effective first quarter 2017, the [previously
reported] Industrial business segment has been reclassified to
Discontinued Operations.
"We continue to make progress on strengthening our balance
sheet, improving our operating efficiencies and bringing our cost
structure in line with our revenues," said Ashoka Achuthan, Chief Financial Officer of
Westport Fuel Systems. "In the first quarter we refinanced our
European credit facility at similar terms and in April we completed
the sale of our APU assets for $70
million US dollars. This transaction has added cash to our
balance sheet and allows us to concentrate on growing market share
for our unmatched proprietary alternative fuel technologies. We
remain focused on executing upon the continued transformation of
Westport Fuel Systems."
CUMMINS WESTPORT INC.
HIGHLIGHTS
|
CUMMINS WESTPORT
HIGHLIGHTS
|
($ in millions,
except unit amounts)
|
Three Months
Ended
March 31
|
Change
Better /
(Worse)
|
2017
|
2016
(Adjusted)[1]
|
Units
|
1,740
|
1,647
|
5.6%
|
Revenue
|
$
|
70.7
|
$
|
65.0
|
8.8%
|
Gross
Margin
|
21.8
|
16.6
|
31.3%
|
Gross Margin
%
|
30.8%
|
25.5%
|
n/a
|
Operating
Expenses
|
16.8
|
15.9
|
5.7%
|
Segment Operating
Income
|
5.0
|
0.7
|
614.3%
|
Westport Fuel Systems
50% Interest
|
$
|
1.8
|
$
|
0.5
|
260.0%
|
[1]
2016 adjusted for change in accounting policy at
CWI.
|
- Revenue was $70.7 million on
1,740 units for the quarter ended March 31,
2017, a increase of 8.8% in revenue over the same period
last year due to improved sales in the transit and refuse
markets.
- Gross margin during the quarter ended March 31, 2017, increased by $5.2 million on higher engine sales and a
favorable decrease in net warranty adjustments.
- CWI operating income attributable to Westport Fuel Systems for
the quarter ended March 31, 2017, was
$1.8 million, up from the prior year
due to improved shipments and higher gross margins.
- CWI recently announced its 2018 product line that will feature
the zero equivalent emissions ISX12N and L9N engines. This
demonstrates an important milestone in product development for
Cummins Westport, creating a move to zero emissions strategy for
customers and industry offering on-highway customers the benefits
of performance and reliability at an ultra-low emissions
level.
GAAP and NON-GAAP FINANCIAL MEASURES
Management reviews the operational progress of its business
units and investment programs over successive periods through the
analysis of net income, EBITDA and Adjusted EBITDA. The Company
defines EBITDA as net loss from continuing operations before income
taxes adjusted for interest expense (net), depreciation and
amortization. Westport Fuel Systems defines Adjusted EBITDA as
EBITDA from continuing operations excluding expenses for
stock-based compensation, unrealized foreign exchange gain or loss,
and non-cash and other adjustments. Management uses Adjusted EBITDA
as a long-term indicator of operational performance since it ties
closely to the business units' ability to generate sustained cash
flow. Adjusted EBITDA includes the company's share of income
from joint ventures.
The term Adjusted EBITDA is not defined under U.S. generally
accepted accounting principles ("U.S. GAAP") and is not a
measure of operating income, operating performance or liquidity
presented in accordance with U.S. GAAP. Adjusted EBITDA has
limitations as an analytical tool, and when assessing the company's
operating performance, investors should not consider Adjusted
EBITDA in isolation, or as a substitute for net loss or other
consolidated statement of operations data prepared in accordance
with U.S. GAAP. Among other things, Adjusted EBITDA does not
reflect the company's actual cash expenditures. Other companies may
calculate similar measures differently than Westport Fuel Systems,
limiting their usefulness as comparative tools. The company
compensates for these limitations by relying primarily on its GAAP
results and using Adjusted EBITDA as supplemental information.
|
|
|
|
|
|
GAAP &
NON-GAAP FINANCIAL MEASURES
|
|
|
|
|
|
($ in
millions)
|
31-Mar-16
[1] [2]
|
30-Jun-2016 [1] [2]
|
30-Sep-2016 [2]
|
31-Dec-2016
|
31-Mar-2017
|
Loss before Income
Taxes
|
$
|
(24.7)
|
$
|
3.1
|
$
|
(34.4)
|
$
|
(41.7)
|
$
|
(13.6)
|
|
|
|
|
|
|
Interest Expense,
Net
|
2.3
|
2.7
|
3.1
|
4.3
|
3.4
|
Depreciation and
Amortization
|
3.1
|
3.7
|
5.2
|
3.9
|
3.7
|
EBITDA
|
(19.3)
|
9.5
|
(26.1)
|
(33.5)
|
(6.5)
|
|
|
|
|
|
|
Stock based
compensation
|
4.0
|
2.3
|
2.9
|
1.2
|
1.1
|
Unrealized foreign
exchange (gain) loss
|
1.3
|
4.1
|
(7.1)
|
8.1
|
(1.6)
|
Asset
impairment
|
—
|
—
|
—
|
2.7
|
—
|
Inventory impairment
from product line closure
|
—
|
—
|
4.3
|
1.3
|
—
|
Bargain purchase
gain
|
—
|
(42.9)
|
—
|
7.1
|
—
|
Merger and financing
costs
|
2.1
|
4.5
|
0.4
|
—
|
—
|
Amortization of fair
value inventory adjustment recorded on acquisition
|
—
|
0.4
|
1.0
|
—
|
—
|
(Gain) loss on sale
of investments
|
—
|
6.3
|
(3.9)
|
(0.3)
|
—
|
Restructuring,
termination and other exit costs
|
—
|
—
|
17.5
|
1.5
|
1.6
|
Other
|
—
|
4.1
|
0.2
|
0.9
|
1.3
|
Total Adjusted
EBITDA
|
$
|
(11.9)
|
$
|
(11.7)
|
$
|
(10.8)
|
$
|
(11.0)
|
$
|
(4.1)
|
[1]
The merger closed on June 1, 2016. The quarter ended March 31,
2016, does not include Fuel Systems. The quarter ended June 30,
2016, includes one month of Fuel Systems.
|
[2]
Q1, Q2 and Q3 of 2016 have been adjusted for a change in
accounting policy at CWI.
|
FINANCIAL STATEMENTS & MANAGEMENT'S DISCUSSION AND
ANALYSIS
To view Westport Fuel Systems full financials for the quarter
ended March 31, 2017, please visit
wfsinc.com/investors/financial-information.
CONFERENCE CALL PRESENTATION
Westport Fuel Systems is providing this presentation of
financial information based on the most recent reporting structure
that was implemented in the first quarter of 2017. The Company is
providing this presentation as a guide to its financial information
in a quick reference format and it should be read in conjunction
with Westport Fuel Systems full financials for the quarter ended
March 31, 2017.
LIVE CONFERENCE CALL & WEBCAST
Westport Fuel Systems has scheduled a conference call for today,
May 11, 2017, at 2:00 pm Pacific Time (5:00
pm Eastern Time) to discuss these results. The public
is invited to listen to the conference call in real time by
telephone or webcast. To access the conference call by telephone,
please dial: 1-800-319-4610 (Canada & USA toll-free) or 604-638-5340. The live
webcast of the conference call can be accessed through the Westport
Fuel Systems website at wfsinc.com/investors
REPLAY CONFERENCE CALL & WEBCAST
To access the conference call replay, please dial 1-855-669-9658
(Canada & USA toll-free) or 604-674-8052 using the pass
code 1376. The replay will be available until May 18, 2017. Shortly after the conference call,
the webcast will be archived on the Westport Fuel Systems website
and replay will be available in streaming audio and a downloadable
MP3 file.
About Westport Fuel Systems
At Westport Fuel Systems,
we are driving innovation to power a cleaner tomorrow. We are
inventors, engineers, manufacturers and suppliers of advanced
clean-burning fuel systems and components that can change the way
the world moves. Our technology delivers performance, fuel
efficiency and environmental benefits to address the challenges of
global climate change and urban air quality. Headquartered in
Vancouver, Canada, we serve our
customers in more than 70 countries with leading global
transportation brands. At Westport Fuel Systems, we think ahead.
For more information, visit www.wfsinc.com.
Cautionary Note Regarding Forward Looking
Statements
This press release contains forward-looking
statements, including statements regarding revenue and cash usage
expectations, future sale of the remainder of the Industrials
Business and rationalization of operations and reduction of
overhead expenses, continued research and development investment,
future of our development programs (including those relating to the
referenced HPDI program), timing for launch, delivery and
completion of milestones related to the products referenced herein
(including HPDI components), Westport Fuel Systems expected
actions, future sales of non-core assets and the benefits
therefrom, the demand for our products, the future success of our
business and technology strategies, investment in new product and
technology development and otherwise, cash and capital
requirements, intentions of partners and potential customers, the
performance and competitiveness of Westport Fuel Systems products
and expansion of product coverage, future market opportunities,
speed of adoption of natural gas for transportation and terms and
timing of future agreements as well as Westport Fuel Systems
management's response to any of the aforementioned factors. These
statements are neither promises nor guarantees, but involve known
and unknown risks and uncertainties and are based on both the views
of management and assumptions that may cause our actual results,
levels of activity, performance or achievements to be materially
different from any future results, levels of activities,
performance or achievements expressed in or implied by these
forward looking statements. These risks and uncertainties include
risks and assumptions related to our revenue growth, operating
results, industry and products, the general economy, conditions of
and access to the capital and debt markets, solvency, governmental
policies and regulation, technology innovations, fluctuations in
foreign exchange rates, operating expenses, the availability and
price of natural gas, global government stimulus packages, the
acceptance of and shift to natural gas vehicles, the relaxation or
waiver of fuel emission standards, the inability of fleets to
access capital or government funding to purchase natural gas
vehicles, the development of competing technologies, our ability to
adequately develop and deploy our technology, the actions and
determinations of our joint venture and development partners, as
well as other risk factors and assumptions that may affect our
actual results, performance or achievements or financial position
discussed in our most recent Annual Information Form and other
filings with securities regulators. Readers should not place undue
reliance on any such forward-looking statements, which speak only
as of the date they were made. We disclaim any obligation to
publicly update or revise such statements to reflect any change in
our expectations or in events, conditions or circumstances on which
any such statements may be based, or that may affect the likelihood
that actual results will differ from those set forth in these
forward looking statements except as required by National
Instrument 51-102. The contents of any website, RSS feed or twitter
account referenced in this press release are not incorporated by
reference herein.
SOURCE Westport Fuel Systems Inc.