CDTi Advanced Materials, Inc. Reports First Quarter 2018 Financial Results
May 14 2018 - 4:05PM
CDTi Advanced Materials, Inc. (Nasdaq:CDTI) (“CDTi” or “the
Company”), a leader in advanced catalyst materials technology,
reported its financial results for the first quarter ended March
31, 2018.
Matthew Beale, CDTi’s CEO, stated, “In the first quarter of
2018, we achieved 35% gross margin, more than double that obtained
in the first quarter of 2017. In addition, we reduced our operating
expenses by 45% and created the path to profitability as our
advanced materials business gains traction. These achievements were
enabled by the successful execution of our 2017 business
realignment strategy.
“We expect to make tangible progress in both vehicle
applications and fundamental catalyst design projects with OEMs and
other partners during the balance of 2018. In addition, this year
we expect to complete partnerships that will provide for local
production of our materials in China and India. We believe that
continued progress with catalyst coaters in India and China will
lead to direct relationships with OEMs as they become confident of
the adoption of our novel technology in the market.
“We also realigned our Board of Directors with the nomination of
two seasoned executives who will bring significant business acumen
in international markets, including China and India, to support the
execution of our long-term growth strategy.”
Financial Highlights: First Quarter 2018 compared to
First Quarter 2017
- Total revenue was $4.9 million, compared to $8.2 million.
- Coated catalyst revenue was $2.7 million, compared to $4.7
million. The first quarter 2018 is the last quarter in which CDTi
will generate revenue from shipments to Honda.
- Emissions control systems revenue was $1.8 million, compared to
$3.3 million.
- Technology and advanced materials revenue was $0.4 million,
compared to $0.2 million.
- Gross margin was 35%, compared to 17%, primarily due to product
mix which reflected the sale of the company’s 2017 DuraFit product
line and final shipments to Honda.
- Total operating expenses in the first quarter of 2018 were $2.2
million, compared to $3.8 million in the first quarter of 2017 due
to decreases in sales and support staff resulting from the sale of
the company’s DuraFit product line and the completion of its Honda
production.
- Net loss was $0.3 million, or $0.02 per share, compared to a
net loss of $3.1 million, or $0.20 per share in the first quarter
of 2017.
- Cash at March 31, 2018, was $2.1 million, compared to $2.8
million at December 31, 2017.
Company Outlook The company currently expects
2018 revenue of approximately $12 million. With the implementation
of local production capabilities in China and India the company
believes that a growing pipeline of customers will begin to
generate material revenue beginning in 2018 and accelerating into
2019.
In addition to materials applications generating revenue in
2018, the company expects that its materials technology will be
selected by at least one global OEM for inclusion in next
generation exhaust systems and that CDTi will have established at
least one partnership for deployment of its Spinel™ technology in
fuel cell and advanced battery applications during the
year.
Conference Call and Webcast InformationCDTi
will host a conference call and live webcast beginning at 2:00 p.m.
Pacific Time today, May 14th, 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 7419489. 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. You may also access a
telephone replay for two business days following the conclusion of
the call by dialing +1 (855) 859-2056 or +1 (404) 537-3406 if
dialing in internationally. The passcode is 7419489.
About CDTi Advanced Materials CDTi Advanced
Materials, Inc. (NASDAQ:CDTI) develops advanced materials
technology for the emissions control and other catalysis markets.
CDTi’s proprietary technologies provide high-value sustainable
solutions to reduce hazardous emissions from on- and off-road
combustion engine systems at significantly lower cost. With a
continuing focus on innovation-driven commercialization and global
expansion, CDTi’s breakthrough Powder-to-Coat (P2C™) approach
delivers those technologies to customers in a ready to use powder
form. Key technology platforms include 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, global trends in the automotive and heavy duty diesel
markets, the Company’s future financial performance, and the
performance of the Company’s technology, 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 and any
subsequent periodic reports on Form 10-Q and Form 8-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: Moriah
Shilton or Kirsten ChapmanLHA Investor Relations +1 415 433
3777cdti@lhai.com
[Tables to follow]
| CDTi ADVANCED MATERIALS, INC. |
| Condensed Consolidated Statement of Operations |
| (in thousands, except percentage and per share
amounts) |
| (unaudited) |
| |
Three Months Ended March 31, |
|
|
|
2018 |
% of Revenues |
|
2017 |
% of Revenues |
|
| |
|
|
|
|
|
|
| Coated catalysts |
$ |
2,716 |
|
55 |
% |
|
$ |
4,669 |
|
57 |
% |
|
| Emission control
systems |
|
1,786 |
|
37 |
% |
|
|
3,342 |
|
41 |
% |
|
| Technology and advanced
materials |
|
410 |
|
8 |
% |
|
|
203 |
|
2 |
% |
|
| Revenues |
$ |
4,912 |
|
100 |
% |
|
$ |
8,214 |
|
100 |
% |
|
| Gross profit |
|
1,718 |
|
|
|
|
1,434 |
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
| Research
and development |
|
757 |
|
|
|
|
1,069 |
|
|
|
| Selling,
general and administrative |
|
1,453 |
|
|
|
|
2,726 |
|
|
|
| Total
operating expenses |
|
2,210 |
|
|
|
|
3,795 |
|
|
|
| Loss from
operations |
|
(492 |
) |
|
|
|
(2,361 |
) |
|
|
| Other income
(expense): |
|
|
|
|
|
|
| Interest
expense, net |
|
— |
|
|
|
|
(103 |
) |
|
|
| Loss on
extinguishment of debt |
|
— |
|
|
|
|
(194 |
) |
|
|
| Gain
(loss) on change in fair value of liability-classified
warrants |
|
364 |
|
|
|
|
(338 |
) |
|
|
| Other
expense, net |
|
(130 |
) |
|
|
|
(101 |
) |
|
|
| Total
other income (expense) |
|
234 |
|
|
|
|
(736 |
) |
|
|
| Loss
before income taxes |
|
(258 |
) |
|
|
|
(3,097 |
) |
|
|
| Income
tax expense (benefit) |
|
37 |
|
|
|
|
(1 |
) |
|
|
| Net
loss |
$ |
(295 |
) |
|
|
$ |
(3,096 |
) |
|
|
| Basic and diluted net
loss per common share: |
|
|
|
|
|
|
| Net loss |
$ |
(0.02 |
) |
|
|
$ |
(0.20 |
) |
|
|
| Weighted average shares
outstanding – basic and diluted |
|
15,804 |
|
|
|
|
15,703 |
|
|
|
| |
|
|
|
|
|
|
| CDTi ADVANCED MATERIALS, INC. |
| Condensed Consolidated Balance Sheet |
| (in thousands, except share and per share amounts) |
| (unaudited) |
| |
|
|
|
| |
March 31, 2018 |
|
December 31, 2017 |
|
ASSETS |
|
|
|
| Current assets: |
|
|
|
| Cash |
$ |
2,128 |
|
|
$ |
2,807 |
|
| Accounts
receivable, net |
|
2,992 |
|
|
|
2,097 |
|
|
Inventories |
|
1,840 |
|
|
|
2,647 |
|
| Prepaid
expenses and other current assets |
|
1,108 |
|
|
|
667 |
|
| Total
current assets |
|
8,068 |
|
|
|
8,218 |
|
| Property and equipment,
net |
|
676 |
|
|
|
714 |
|
| Intangible assets,
net |
|
1,010 |
|
|
|
1,051 |
|
| Deferred tax
assets |
|
644 |
|
|
|
644 |
|
| Other assets |
|
188 |
|
|
|
187 |
|
| Total
assets |
$ |
10,586 |
|
|
$ |
10,814 |
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
| Current
liabilities: |
|
|
|
| Accounts
payable |
$ |
2,465 |
|
|
$ |
2,059 |
|
| Accrued
expenses and other current liabilities |
|
2,958 |
|
|
|
3,585 |
|
| Income
taxes payable |
|
796 |
|
|
|
789 |
|
| Total
current liabilities |
|
6,219 |
|
|
|
6,433 |
|
| Commitments and
contingencies |
|
|
|
| Stockholders’
equity: |
|
|
|
| Preferred stock, par
value $0.01 per share: authorized 100,000; no shares issued and
outstanding |
|
— |
|
|
|
— |
|
| Common stock, par value
$0.01 per share: authorized 50,000,000; issued and outstanding
15,803,736 shares at March 31, 2018 and December 31,
2017, respectively |
|
158 |
|
|
|
158 |
|
| Additional paid-in
capital |
|
238,556 |
|
|
|
238,455 |
|
| Accumulated other
comprehensive loss |
|
(5,706 |
) |
|
|
(5,886 |
) |
| Accumulated
deficit |
|
(228,641 |
) |
|
|
(228,346 |
) |
| Total stockholders’
equity |
|
4,367 |
|
|
|
4,381 |
|
| Total liabilities and
stockholders’ equity |
$ |
10,586 |
|
|
$ |
10,814 |
|
| |
|
|
|
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