CDTi Announces Fourth Quarter and Fiscal Year 2015 Financial Results
March 30 2016 - 7:05AM
– Demonstrates momentum by securing new customers
in key growth markets –– Increased fourth quarter 2015 revenue 11%
year-over-year –– Expanded fourth quarter gross margin to 29%,
compared to 23% in the prior year period – – Provides 2016
financial outlook –
Clean Diesel Technologies, Inc. (Nasdaq:CDTI) (“CDTi” or “the
Company”), a leader in advanced emission control technology,
reported financial results for the fourth quarter and year ended
December 31, 2015.
“2015 marked a transformational year for CDTi as we refocused
and realigned operations to position the company for profitability
and long-term growth,” stated Matthew Beale, CDTi’s CEO. “We
believe our commercial agreements with Panasonic, Paccar and Hino –
Toyota’s light truck division – demonstrate the quality of our
technology and our ability to secure new customers in key growth
markets. We are capitalizing on this important commercial traction
and momentum as we pursue additional partnerships in our geographic
focus areas of North America, China and India. We have also taken
significant steps to rationalize our cost base by outsourcing lower
value production activities and streamlining our corporate
organization. While our financial results and capital structure are
not yet satisfactory, we are confident that our revenue pipeline
and expense reduction activities have placed the company on a path
to profitability that will become increasingly visible as 2016
progresses.”
Recent Operational Highlights
- Signed Panasonic Ecology Systems Co., Ltd., in November 2015
and began shipments in the first quarter of 2016. This is the first
commercial agreement using CDTi’s proprietary synergized-platinum
group metal (SPGM™) diesel oxidation catalyst (DOC) technology for
China’s heavy-duty retrofit market.
- Partnered with Hino Motors, Ltd., the fourth largest truck
dealership network in the US, adding more than 300 dealerships in
North America. Combined with the new relationship with Paccar, the
third largest truck dealership network in the US, DuraFit is now
available in more than 1,000 distribution locations, reflecting
continued traction in this key growth market.
- Completed initial vehicle testing for next generation Spinel™
SPGM technology, advancing toward commercialization.
- Reduced operating expenses by rationalizing corporate
functions, outsourcing lower value manufacturing and closing the
Markham, Ontario facility.
- Implemented additional round of cost reductions in the first
quarter of 2016, demonstrating commitment to driving profitable
growth.
Financial Highlights: Fourth Quarter 2015 compared to
Fourth Quarter 2014
- Total revenue was $9.7 million, compared to $8.7 million.
- Catalyst division revenue was $5.9 million, compared to $5.5
million, reflecting increased intercompany sales, which were
eliminated in consolidation.
- Heavy Duty Diesel Systems division revenue was $4.8 million,
compared to $3.5 million, increasing due primarily to greater
DuraFit™ DPF sales, international retrofit and licensing
royalties.
- Gross margin was 29%, compared to 23%, reflecting the increased
volume of sales and favorable revenue mix.
- Total operating expenses were $5.5 million, including severance
expense of $1.5 million. This compares to $5.1 million in the
fourth quarter of 2014.
- Net loss was $0.9 million, or $0.05 per share, compared to $2.7
million, or $0.20 per share.
- Cash at December 31, 2015 was $3.0 million, compared with $7.2
million at December 31, 2014. The company raised $3.1 million in
gross proceeds in November 2015.
- CDTi increased its financial flexibility to execute its growth
strategy by amending its loan agreements with Kanis SA and
extending the maturity dates by two years to October 1, 2018.
Financial Highlights: 2015 compared to
2014
- Total revenue was $39.7 million, compared to $41.2 million.
- Catalyst division revenue was $26.2 million, compared to $23.8
million, reflecting increased sales to our Japanese OEM customer.
Intercompany sales are eliminated in consolidation.
- Heavy Duty Diesel Systems division revenue was $16.6 million,
compared to $19.6 million due primarily to the wind down of the
legacy retrofit business. DuraFit met its annual revenue goal of $5
million.
- Gross margin was 27%, compared to 30%.
- Total operating expenses were $21.2 million, including
severance expense of $1.5 million, compared to $20.1 million,
including severance expense of $1.2 million.
- Net loss was $8.5 million, or $0.54 per share, compared to net
loss of $9.3 million, or $0.78 per share.
Financial OutlookDavid Shea, CDTi’s CFO,
stated, “For the full year 2016, we expect revenue to be between
$39 million and $43 million. We believe DuraFit will double its
revenue contribution to $10 million and partially offset the
decline in legacy retrofit revenue. In addition, we expect gross
margin to be between 27% and 29%. Based on these assumptions and
cost reductions undertaken in 2015 and 2016, we plan to be
breakeven on an income from continuing operations basis by the
fourth quarter of 2016.”
Conference Call and Webcast InformationCDTi
will host a conference call and live webcast beginning at 8:00 a.m.
Pacific Time today, March 30th, 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 international participants should
dial +1 (760) 666-3571. The conference code is 42623819. The
conference call will be webcast live on the CDTi 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.
About CDTiCDTi develops advanced materials
technology for the emissions control market. CDTi’s proprietary
technologies provide high-value sustainable solutions to reduce
hazardous emissions, increase energy efficiency and lower the
carbon intensity of on- and off-road combustion engine systems.
With a continuing focus on innovation-driven commercialization and
global expansion, CDTi’s breakthrough Powder-to-Coat (P2C™)
technology exploits the Company’s 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™. For more information, please visit
www.cdti.com.
Forward-Looking StatementsCertain 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 Company’s future financial performance, the timely
commercialization of the Company’s technology, the validation of
the quality of the Company’s technology and the availability of
future financing, are all subject to risks and uncertainties that
could cause our actual results and financial position to differ
materially. 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
MattisonLHA (IR Agency)+1 415 433 3777bherrick@lhai.com /
cmattison@lhai.com
Clean Diesel Technologies, Inc. |
|
Summary Statements of Operations
(unaudited) |
|
($ millions) |
|
|
|
|
3 Months Ended |
|
Year Ended |
|
December 31, |
December 31, |
|
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
Revenues |
$ |
|
9.7 |
|
$ |
|
8.7 |
|
$ |
|
39.7 |
|
$ |
|
41.2 |
|
|
Gross profit |
|
|
2.8 |
|
|
|
2.0 |
|
|
|
10.9 |
|
|
|
12.5 |
|
|
Gross margin |
|
|
29 |
% |
|
|
23 |
% |
|
|
27 |
% |
|
|
30 |
% |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
$ |
|
2.4 |
|
$ |
|
3.2 |
|
$ |
|
11.9 |
|
$ |
|
12.4 |
|
|
Research and development |
|
|
1.6 |
|
|
|
1.9 |
|
|
|
7.8 |
|
|
|
6.5 |
|
|
Severance and other charges |
|
|
1.5 |
|
|
|
- |
|
|
|
1.5 |
|
|
|
1.2 |
|
|
Total operating expenses |
|
|
5.5 |
|
|
|
5.1 |
|
|
|
21.2 |
|
|
|
20.1 |
|
|
Loss from continuing
operations |
|
|
(2.7 |
) |
|
|
(3.1 |
) |
|
|
(10.3 |
) |
|
|
(7.6 |
) |
|
Other income
(expense) |
|
|
1.5 |
|
|
|
0.5 |
|
|
|
1.5 |
|
|
|
(1.4 |
) |
|
Loss from continuing
operations before income tax |
|
|
(1.2 |
) |
|
|
(2.6 |
) |
|
|
(8.8 |
) |
|
|
(9.0 |
) |
|
Income tax expense
(benefit) from continuing operations |
|
|
(0.3 |
) |
|
|
- |
|
|
|
(0.4 |
) |
|
|
0.1 |
|
|
Net loss from
continuing operations |
|
|
(0.9 |
) |
|
|
(2.6 |
) |
|
|
(8.4 |
) |
|
|
(9.1 |
) |
|
Discontinued
operations |
|
|
- |
|
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.2 |
) |
|
Net loss |
$ |
|
(0.9 |
) |
$ |
|
(2.7 |
) |
$ |
|
(8.5 |
) |
$ |
|
(9.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
EPS |
$ |
|
(0.05 |
) |
$ |
|
(0.20 |
) |
$ |
|
(0.54 |
) |
$ |
|
(0.78 |
) |
|
Weighted shares
outstanding (in millions) |
|
|
17.2 |
|
|
|
13.5 |
|
|
|
15.8 |
|
|
|
12.0 |
|
|
Clean Diesel Technologies, Inc. |
Segment Information (unaudited) |
($ millions) |
|
|
|
|
3 Months Ended |
|
Year Ended |
December 31, |
December 31, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
Revenue |
|
|
|
|
|
|
|
|
Catalyst |
$ |
|
5.9 |
|
$ |
|
5.5 |
|
$ |
|
26.2 |
|
$ |
|
23.8 |
|
Heavy Duty Diesel Systems |
|
|
4.8 |
|
|
|
3.5 |
|
|
|
16.6 |
|
|
|
19.6 |
|
Eliminations |
|
|
(1.0 |
) |
|
|
(0.3 |
) |
|
|
(3.1 |
) |
|
|
(2.2 |
) |
Total |
$ |
|
9.7 |
|
$ |
|
8.7 |
|
$ |
|
39.7 |
|
$ |
|
41.2 |
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
|
|
|
|
|
|
|
|
Catalyst |
$ |
|
(0.3 |
) |
$ |
|
(1.4 |
) |
$ |
|
(1.6 |
) |
$ |
|
(0.8 |
) |
Heavy Duty Diesel Systems |
|
|
(0.2 |
) |
|
|
(0.1 |
) |
|
|
(1.7 |
) |
|
|
0.2 |
|
Corporate |
|
|
(2.2 |
) |
|
|
(1.5 |
) |
|
|
(6.8 |
) |
|
|
(6.9 |
) |
Eliminations |
|
|
- |
|
|
|
(0.1 |
) |
|
|
(0.2 |
) |
|
|
(0.1 |
) |
Total |
$ |
|
(2.7 |
) |
$ |
|
(3.1 |
) |
$ |
|
(10.3 |
) |
$ |
|
(7.6 |
) |
|
|
Clean Diesel Technologies, Inc. |
Summary Balance Sheets
(unaudited) |
($ millions) |
|
|
|
|
As of |
|
|
|
December 31, 2015 |
|
December 31, 2014 |
Total current
assets |
|
$ |
16.7 |
$ |
17.8 |
Total assets |
|
$ |
25.1 |
$ |
27.7 |
Total current
liabilities |
|
$ |
16.9 |
$ |
12.8 |
Total long-term
liabilities |
|
$ |
7.8 |
$ |
7.9 |
Stockholders’
equity |
|
$ |
0.4 |
$ |
7.0 |
|
|
|
|
|
|
Short-term debt |
|
$ |
3.5 |
$ |
2.8 |
Long-term debt |
|
$ |
7.6 |
$ |
7.5 |
|
|
|
|
|
|
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