CDTi Announces Third Quarter 2015 Financial Results
November 13 2015 - 8:00AM
Announces Business Transformation Initiative to
Drive Profitability
Reaffirms Full Year 2015 Financial Guidance
Clean Diesel Technologies, Inc. (Nasdaq:CDTI) ("CDTi" or "the
Company"), a leader in advanced emission control technology,
reported financial results for the third quarter ended September
30, 2015.
Matthew Beale, CDTi's CEO, stated: "During the third quarter of
2015, we made significant progress on our near-term goals to grow
DuraFit sales and reposition CDTi as an advanced materials provider
for the global emissions control market. We are gaining real
traction in our powder-to-coat ("P2C") business model as our
commercial pipeline expands visibly in North America and in key
international growth markets. Building upon this commercial
progress, we intend to accelerate our business transformation and
its goal of delivering sustainable profitability.
"First and foremost, our advanced materials strategy provides an
immediate opportunity to streamline operations and better align
CDTi's organization and infrastructure with the anticipated
evolution of its business mix. To achieve this end, we are
currently finalizing plans to restructure and reposition our
operating footprint in support of our strategy, including
initiatives that could result in exiting non-core businesses and
externalizing operating activities that are not integral to
delivering value for our customers. We believe the opportunities
for CDTi are significant, and I look forward to providing you with
updates as we make progress toward achieving our goals," Beale
concluded.
David Shea, CDTi's CFO, stated: "Our third quarter revenue of
$9.8 million was driven by increased sales of DuraFit™ and
catalysts, while retrofit sales were lower year-over-year due to
the wind-down of the California diesel retrofit mandate. Gross
margin of 25% was at the low end of our guidance reflecting the
costs associated with the new DuraFit™ product line launch. We
continue to grow our DuraFit regional and national distribution
footprint as we execute our plan to become the market leader in the
medium and heavy duty diesel aftermarket."
Recent Highlights
- Announced the launch of DuraFit™ Diesel Oxidation Catalyst
(DOC) for the heavy duty aftermarket, which leverages CDTi's
synergized-platinum group metal (SPGM™) technology
- Strengthened leadership team with the hiring of industrial
technology leader Matthew Beale as CEO in October
- Opened four new distribution centers in the U.S., further
enhancing CDTi's best-in-class service model and enabling the
company to more efficiently meet the technical support and service
needs of its end customers
- Signed a multi-year contract with PACCAR Parts to distribute
CDTi's DuraFit™ diesel particulate filters (DPFs) to its North
American network of more than 670 Peterbilt and Kenworth
dealerships
- CDTi's Chief Technology Officer, Dr. Steve Golden, delivered a
keynote speech titled "Development of Spinel™ Mixed Metal Oxides
for Zero-Precious Metal and Ultra-Low Precious Metal
Next-Generation TWC" at the 6th Annual Global Congress of Catalysis
2015 (GCC-2015) on September 24th in Xi'an, China
- Amended its loan agreements with Kanis SA to extend the
maturity dates from October 1, 2016 to October 1, 2018, providing
greater financial flexibility as CDTi executes its growth
strategy
Financial Highlights – Third Quarter 2015 compared to
Third Quarter 2014
- Total revenue was $9.8 million compared to $9.3 million in the
third quarter of 2014.
- Catalyst division revenue was $6.7 million compared to $6.2
million due to increased sales to our Japanese OEM customer and a
favorable product mix. Intercompany sales are eliminated in
consolidation.
- Heavy Duty Diesel Systems division revenue was $3.8 million
compared to $3.7 million due primarily to a $1.6 million increase
in DuraFit DPF sales, partially offset by a decrease in retrofit
sales.
- Gross margin was 25% compared to 31% for the year-ago quarter,
reflecting lower volumes of retrofits and continued launch costs
associated with the DuraFit rollout and ramp.
- Total operating expenses were $5.3 million for both
periods.
- Net loss was $2.2 million, or $0.13 per share. This compares to
a net loss of $1.6 million, or $0.13 per share, in the same period
last year.
- The weighted average common shares outstanding were 16.8
million in the current quarter, compared to 12.4 million in the
third quarter of 2014. The increase in the number of shares was due
principally to the equity offerings completed in November 2014 and
June 2015.
- Cash at September 30, 2015 was $3.0 million, compared with $7.2
million at December 31, 2014.
Financial Highlights - Nine months ended September 30,
2015 compared to 2014
- Total revenue for the first nine months of 2015 was $30.0
million, compared to $32.6 million for the same prior year period.
- Catalyst division revenue for the first nine months of 2015 was
$20.3 million compared to $18.3 million for the same prior year
period. Intercompany sales are eliminated in consolidation.
- Heavy Duty Diesel Systems division revenue for the first nine
months of 2015 was $11.8 million compared to $16.0 million for the
same prior year period.
- Gross margin was 27%, compared to 32% in the prior year
period.
- Total operating expenses for the first nine months of 2015 were
$15.7 million compared to $15.0 million in the same prior year
period.
- Net loss for the first nine months of 2015 was $7.7 million, or
$0.50 per share, compared to net loss of $6.6 million, or $0.57 per
share, in the same prior year period.
- Weighted average common shares outstanding were 15.3 million
for the first nine months of 2015 compared to 11.5 million in the
same period a year ago. The increase in the number of shares was
due principally to the equity offerings completed in November 2014
and June 2015.
Financial Outlook
The Company is reaffirming its outlook for 2015 and expects
revenue of between $40 million and $45 million, as compared to $41
million in 2014, and of that, DuraFit to contribute $5 million.
Gross margin is expected to be at the mid- to high-end of its
guidance range, which is between 25% and 28%.
Conference Call and Webcast Information
CDTi will host a conference call and live webcast beginning at
8:00 a.m. Pacific Time today, November 12th, to discuss its
financial results and its business outlook. This conference call
will contain forward-looking information. To participate in the
conference call, please dial +1 (877) 303-9240 and use conference
code 62521700. International participants should dial +1 (760)
666-3571 and use the same conference code. The conference call will
be webcast live on CDTi's website at www.cdti.com under the
"Investor Relations" section. To listen to the live webcast,
participants should visit the site at least 15 minutes prior to the
conference to download any required streaming media software. An
archived recording of the conference call will be available on the
CDTi website for 30 days and a full transcript for one year.
About CDTi
CDTi manufactures and distributes vehicle emissions control
products that leverage its advanced materials technology. CDTi
utilizes its proprietary technology to provide high-value
sustainable solutions to reduce emissions, increase energy
efficiency and lower the carbon intensity of on- and off-road
combustion engine systems. Continuing its focus on innovation and a
strategy to scale its business globally, CDTi is pursuing a
Powder-to-Coat (P2C™) business model that exploits
high-performance, advanced low-platinum group metal (PGM) emission
reduction catalysts. Key technology platforms include Mixed Phase
Catalyst (MPC®), Base Metal Activated Rhodium Support (BMARS™),
Synergized PGM (SPGM™), Zero PGM (ZPGM™) and Spinel™. CDTi is
headquartered in Oxnard, California and has operations in Canada,
Japan, the United Kingdom and Sweden. For more information, please
visit www.cdti.com.
Forward-Looking Statements
Certain information contained in this press release constitutes
forward-looking statements, including any statements that are not
statements of historical fact. You can identify these
forward-looking statements by the use of the words "believes",
"expects", "anticipates", "plans", "may", "will", "would",
"intends", "estimates", and other similar expressions, whether in
the negative or affirmative. Forward-looking statements are based
on a series of expectations, assumptions, estimates and
projections, which involve substantial uncertainty and risk. In
this document, the Company includes forward-looking statements
regarding the acceleration of the Company's business transformation
into an advanced materials company, the potential value enhancement
from strategic priorities, streamlining Company operations and
aligning its organization and infrastructure, the potential exit of
non-core businesses and externalization of operating activities,
DuraFit sales projections, our ability to validate, optimize and
scale our powder-to-coat capability, outlook for 2015, and
anticipated benefits of products and technologies. In general,
actual results may differ materially from those indicated by such
forward-looking statements as a result of risks and uncertainties,
including, but not limited, to (i) that the Company may not be able
to (a) successfully implement, or implement at all, its strategic
priorities; (b) streamline its operations or align its organization
and infrastructure with the anticipated business; (c) meet
expectations or projections; (d) decrease costs; (e) increase
sales; (f) obtain adequate funding; (g) retain or secure customers;
(h) increase its customer base; (i) protect its intellectual
property; (j) successfully evolve into an advanced materials
supplier or, even if successful, increase profitability; (k)
successfully market new products; (l) obtain product verifications
or approvals; (m) attract or retain key personnel; (n) validate,
optimize and scale our powder-to-coat capability; or (o) realize
benefits from investments; (ii) funding for and enforcement and
tightening of emissions controls, standards and regulations; (iii)
prices of PGM and rare earth metals; (iv) royalty and other
restrictions on sales in certain Asian countries; (v) supply
disruptions or failures; (vi) regulatory, marketing and competitive
factors; (vii) environmental harm or damages; and (viii) other
risks and uncertainties discussed or referenced in the Company's
filings with the Securities and Exchange Commission, including its
most recent Annual Report on Form 10-K. In addition, any
forward-looking statements represent the Company's estimates only
as of the date of such statements and should not be relied upon as
representing the Company's estimates as of any subsequent date. The
Company specifically disclaims any obligation to update
forward-looking statements. All forward-looking statements in this
press release are qualified in their entirety by this cautionary
statement.
Contact Information: |
Becky Herrick or Cathy Mattison |
LHA (IR Agency) |
+1 415 433 3777 |
bherrick@lhai.com / cmattison@lhai.com |
|
Clean Diesel
Technologies, Inc. |
Summary Statements of
Operations (unaudited) |
($
millions) |
|
|
3 Months Ended
September 30, |
9 Months
Ended September 30, |
|
2015 |
2014 |
2015 |
2014 |
Revenues |
$ 9.8 |
$ 9.3 |
$ 30.0 |
$ 32.6 |
Gross profit |
2.5 |
2.9 |
8.0 |
10.5 |
Gross margin |
25% |
31% |
27% |
32% |
|
|
|
|
|
Operating expenses: |
|
|
|
|
Selling, general and administrative |
$ 3.0 |
$ 2.7 |
$ 9.4 |
$ 9.2 |
Research and development |
2.3 |
1.8 |
6.3 |
4.6 |
Severance and other charges |
─ |
0.8 |
─ |
1.2 |
Total operating expenses |
5.3 |
5.3 |
15.7 |
15.0 |
Loss from continuing operations |
(2.8) |
(2.4) |
(7.7) |
(4.5) |
Other income (expense) |
0.7 |
0.9 |
─ |
(1.8) |
Loss from continuing operations before income
tax |
(2.1) |
(1.5) |
(7.7) |
(6.3) |
Income tax expense (benefit) from continuing
operations |
─ |
(0.1) |
(0.1) |
0.2 |
Net loss from continuing operations |
(2.1) |
(1.4) |
(7.6) |
(6.5) |
Discontinued operations |
(0.1) |
(0.2) |
(0.1) |
(0.1) |
Net loss |
$ (2.2) |
$ (1.6) |
$ (7.7) |
$ (6.6) |
|
|
|
|
|
Basic and diluted EPS |
$ (0.13) |
$ (0.13) |
$ (0.50) |
$ (0.57) |
Weighted shares outstanding (in
millions) |
16.8 |
12.4 |
15.3 |
11.5 |
|
|
Clean Diesel
Technologies, Inc. |
Segment Information
(unaudited) |
($
millions) |
|
|
3 Months
Ended September 30, |
9 Months
Ended September 30, |
|
2015 |
2014 |
2015 |
2014 |
Revenue |
|
|
|
|
Catalyst |
$ 6.7 |
$ 6.2 |
$ 20.3 |
$ 18.3 |
Heavy Duty Diesel Systems |
3.8 |
3.7 |
11.8 |
16.0 |
Eliminations |
(0.7) |
(0.6) |
(2.1) |
(1.7) |
Total |
$ 9.8 |
$ 9.3 |
$ 30.0 |
$ 32.6 |
|
|
|
|
|
Income (loss) from operations |
|
|
|
|
Catalyst |
$ (0.6) |
$ 0.1 |
$ (1.3) |
$ 0.7 |
Heavy Duty Diesel Systems |
(0.7) |
(0.6) |
(1.5) |
0.2 |
Corporate |
(1.5) |
(1.9) |
(4.7) |
(5.4) |
Eliminations |
─ |
─ |
(0.2) |
─ |
Total |
$ (2.8) |
$ (2.4) |
$ (7.7) |
$ (4.5) |
|
|
Clean Diesel
Technologies, Inc. |
Summary Balance Sheets
(unaudited) |
($
millions) |
|
|
As
of |
|
September 30,
2015 |
December 31,
2014 |
Total current assets |
$ 15.2 |
$ 17.8 |
Total assets |
$ 24.0 |
$ 27.7 |
Total current liabilities |
$ 14.6 |
$ 12.8 |
Total long-term liabilities |
$ 7.9 |
$ 7.9 |
Stockholders' equity |
$ 1.5 |
$ 7.0 |
|
|
|
Short-term debt |
$ 3.6 |
$ 2.8 |
Long-term debt |
$ 7.6 |
$ 7.5 |
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