CDTi Announces First Quarter Fiscal Year 2016 Financial Results
May 13 2016 - 8:00AM
Clean Diesel Technologies, Inc. (Nasdaq:CDTI) (“CDTi” or “the
Company”), a leader in advanced emission control technology,
reported its financial results for the first quarter ended March
31, 2016.
“In the first quarter, we took steps to accelerate the execution
of our advanced materials and high-value catalyst business
strategy, while also strengthening our capital structure to support
our growth,” stated Matthew Beale, CDTi’s CEO. “Our agreement with
Panasonic exemplifies our strategy to cost effectively deliver our
technology through high-volume coaters through our powder-to-coat
capability. In addition, this relationship provides important
validation of our advanced materials technology among industry
leaders. The progress in our commercialization efforts and success
growing the DuraFit™ distribution network support our expectation
to be breakeven on an income from continuing operations basis by
2016 year-end.
“Key to our long-term success is strengthening our financial
foundation. Subsequent to the end of the first quarter, we amended
our loan agreements with our long-time lender, Kanis S.A.,
providing us with a mechanism to convert debt into common stock of
the company in the event of a stock offering or strategic
investment. We believe these agreements provide us with an
important opportunity to significantly reduce the debt on our
balance sheet and thereby reduce our cost of capital, accelerating
our path to profitability.”
Recent Highlights
- Began supplying Panasonic Ecology Systems Co., Ltd., with
CDTi’s proprietary synergized-platinum group metal (SPGM™) diesel
oxidation catalyst (DOC) with an initial focus on China’s
heavy-duty retrofit market. CDTi continues to expect a meaningful
ramp in activity during the second half of 2016.
- Added more than 300 dealerships in North America through a
partnership with Hino Motors, Ltd., a Toyota Group company and the
fourth largest truck dealership network in the US. This brings the
total DuraFit™ distribution locations to more than 1,000, as
traction in this key growth market continues to grow.
- Advanced Spinel™ SPGM technology toward commercialization by
completing initial vehicle testing.
- Closed a new $2 million loan with Kanis S.A. and amended
existing agreements providing CDTi the ability to convert the $7.5
million aggregate principal balance of the debt into equity in the
event of a public stock offering or strategic investment in
CDTi.
- Executed a Convertible Promissory Note for $500,000 on
April 11, 2016 with Lon E. Bell, Ph.D., one of the Company’s
Directors, with a maturity date of September 30, 2017.
Financial Highlights: First Quarter 2016 compared to
First Quarter 2015
- Total revenue was $9.7 million, compared to $10.3 million.
- Catalyst division revenue was $6.5 million, compared to $6.8
million.
- Heavy Duty Diesel Systems division revenue was $4.1 million for
both quarters.
- Gross margin was 28%, compared to 27%.
- Total operating expenses in the first quarter 2016 were $5.9
million, compared to $5.5 million in the first quarter of 2015. The
increase in operating expenses reflects $0.8 million in severance
expense related to the closing of the Markham facility, increased
stock compensation resulting from awards made in 2015, and
increased administrative fees for audit and statutory work. The
company expects the savings from restructuring actions taken in
late 2015 and early 2016 will begin to take effect in the second
quarter of 2016.
- Net loss was $2.8 million, or $0.15 per share, compared to $3.0
million, or $0.21 per share.
- Cash at March 31, 2016 was $1.6 million, compared with $3.0
million at December 31, 2015.
Financial OutlookDavid Shea, CDTi’s CFO,
stated, “We are reaffirming our full year 2016 outlook for 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 continue to
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, May 13th 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 95591142. 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.
[Tables to follow]
Clean Diesel Technologies, Inc. |
Summary Statements of Operations
(unaudited) |
($ millions) |
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended |
|
March 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
Revenues |
$ |
|
9.7 |
|
$ |
|
10.3 |
|
|
Gross profit |
|
|
2.7 |
|
|
|
2.8 |
|
|
Gross margin |
|
|
28 |
% |
|
|
27 |
% |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Selling, general and
administrative |
$ |
|
3.4 |
|
$ |
|
3.4 |
|
|
Research and development |
|
|
1.7 |
|
|
|
2.1 |
|
|
Severance and other charges |
|
|
0.8 |
|
|
|
- |
|
|
Total operating expenses |
|
|
5.9 |
|
|
|
5.5 |
|
|
Loss from
operations |
|
|
(3.2 |
) |
|
|
(2.7 |
) |
|
Other income
(expense) |
|
|
- |
|
|
|
(0.1 |
) |
|
Loss before income
tax |
|
|
(3.2 |
) |
|
|
(2.8 |
) |
|
Income tax expense
(benefit) |
|
|
(0.4 |
) |
|
|
0.2 |
|
|
Net loss |
$ |
|
(2.8 |
) |
$ |
|
(3.0 |
) |
|
|
|
|
|
|
|
Basic and diluted
EPS |
$ |
|
(0.15 |
) |
$ |
|
(0.21 |
) |
|
Weighted shares
outstanding (in millions) |
|
|
18.2 |
|
|
|
14.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Clean Diesel Technologies, Inc. |
Segment Information (unaudited) |
($ millions) |
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended |
|
March 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
Revenue |
|
|
|
|
|
Catalyst |
$ |
|
6.5 |
|
$ |
|
6.8 |
|
|
Heavy Duty Diesel Systems |
|
|
4.1 |
|
|
|
4.1 |
|
|
Eliminations |
|
|
(0.9 |
) |
|
|
(0.6 |
) |
|
Total |
$ |
|
9.7 |
|
$ |
|
10.3 |
|
|
|
|
|
|
|
|
Income (loss) from
operations |
|
|
|
|
|
Catalyst |
$ |
|
(0.3 |
) |
$ |
|
(0.5 |
) |
|
Heavy Duty Diesel Systems |
|
|
(0.8 |
) |
|
|
(0.4 |
) |
|
Corporate |
|
|
(2.1 |
) |
|
|
(1.7 |
) |
|
Eliminations |
|
|
- |
|
|
|
(0.1 |
) |
|
Total |
$ |
|
(3.2 |
) |
$ |
|
(2.7 |
) |
|
|
|
|
|
|
|
|
|
|
Clean Diesel Technologies, Inc. |
Summary Balance Sheets
(unaudited) |
($ millions) |
|
|
|
|
As of |
|
|
|
March 31, 2016 |
|
December 31, 2015 |
|
Total current
assets |
$ |
|
16.2 |
|
$ |
16.7 |
|
Total assets |
$ |
|
24.8 |
|
$ |
25.1 |
|
Total current
liabilities |
$ |
|
17.9 |
|
$ |
16.9 |
|
Total long-term
liabilities |
$ |
|
7.8 |
|
$ |
7.8 |
|
Stockholders’
equity |
$ |
|
(0.9 |
) |
$ |
0.4 |
|
|
|
|
|
|
|
Short-term debt |
$ |
|
4.1 |
|
$ |
3.5 |
|
Long-term debt |
$ |
|
7.6 |
|
$ |
7.6 |
|
Contact Information:
Becky Herrick or Cathy Mattison
LHA (IR Agency)
+1 415 433 3777
bherrick@lhai.com / cmattison@lhai.com
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