CDTi Advanced Materials, Inc. Reports Fourth Quarter and Year-End 2017 Financial Results
April 02 2018 - 4:05PM
CDTi Advanced Materials, Inc., (Nasdaq:CDTI) (“CDTi” or “the
Company”), a leader in advanced emission control technology,
reported its financial results for the fourth quarter and year
ended December 31, 2017.
Matthew Beale, CDTi Advanced Materials’ CEO, stated, “Our
ability to deliver technology in powder form has redefined CDTi as
a technology partner to catalyst manufacturers and automotive OEMs
globally, creating new, highly scalable market opportunities in
high growth markets such as India and China. Having completed
our business realignment in 2017, we have significantly reduced our
cash burn while creating a path to profitability as our powder
business gains traction. In the first quarter of 2018 we
announced our name change to CDTi Advanced Materials, which
reflects our larger role as provider of enabling technology to the
emissions catalyst market and our excellence in the material
science of catalyst formulation.
“Our primary focus in 2018 will be to pursue commercialization
opportunities for our Powder-to-Coat (P2C™) technology in current
vehicle programs, be they 2-wheel, passenger cars or commercial,
that are the most immediate revenue opportunities for our advanced
emission control technology. As we lay the foundation for
cost-effective, global product delivery, a key part of our strategy
is securing local production capability in India or China. In
parallel, and in partnership with leading automotive industry and
institutional partners, we are engaged in fundamental catalyst
design projects with world-wide applications that have the
potential to alter catalyst architecture to significantly reduce
cost,” concluded Beale.
Financial Highlights: Fourth Quarter 2017 compared to
Fourth Quarter 2016
- Total revenue was $4.9 million, compared to $8.6 million.
- Coated catalyst revenue was $2.9 million, compared to $4.9
million.
- Emissions control systems revenue was $1.6 million, compared to
$3.4 million.
- Technology and advanced materials revenue was $0.4 million,
compared to $0.3 million.
- Gross margin was 21%, compared to 11%. 2016 included $1.1
million of inventory write-offs related to the implementation of
CDTI’s strategy to outsource the company’s
manufacturing.
- Total operating expenses in the fourth quarter of 2017 were
$2.4 million, compared to $9.3 million in the fourth quarter of
2016, which included a $4.7 million write-off of goodwill and $0.7
million of costs related to the closure of the company’s
manufacturing facility in Canada.
- Net loss was $1.4 million, or $0.09 per share, compared to a
net loss of $7.6 million, or $0.69 per share in the fourth quarter
of 2016.
- Cash at December 31, 2017, was $2.8 million, compared to $3.3
million at September 30, 2017, and $7.8 million at December 31,
2016.
Financial Highlights: 2017 compared to 2016
- Total revenue for the full year 2017 was $28.4 million,
compared to $36.8 million for 2016.
- Gross margin was 21%, compared to 22% for 2016.
- Total operating expenses for 2017 were $11.8 million compared
to $23.7 million, in 2016, which included $2.6 million in severance
and other charges relating to CDTi’s corporate restructuring as
well as a goodwill impairment of $4.7 million.
- Net loss for 2017 was $5.3 million, or $0.34 per share,
compared to net loss of $23.5 million, or $3.84 per share, in
2016.
2018 Financial OutlookBased on CDTi’s current
business configuration, the company expects 2018 full-year revenue
from its baseline, specialty emissions business for retrofit, oil
and gas, mining and materials handling applications to be
approximately $10 million. Based on the roll-out of current
customer programs in China and India, sales of CDTi’s materials is
expected to increase during the later part of 2018 and management
will provide additional information regarding its contribution to
2018 and beyond in the coming months.
Gross margin is expected to range between 20% to 30% as the
company continues to exit its manufacturing operations in its
pursuit of its long-term 40% gross margin target. As CDTi realizes
the full benefit of headcount reductions resulting from the sale of
DurafitTM and the exit of the company’s high-volume coating
activities in the third and fourth quarter of 2017, along with the
significant cost-cutting measures completed as part of CDTi’s
business realignment, the company expects its operating expenses
will be approximately $8 million for 2018.
Conference Call and Webcast InformationCDTi
will host a conference call and live webcast beginning at 2:00 p.m.
Pacific Time today, April 2nd 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 7693657. 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 7693657.
About CDTi Advanced Materials CDTi Advanced
Materials (NASDAQ:CDTI) 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, 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 ADVANCE MATERIALS, INC. |
Consolidated Statement of
Operations |
(in thousands, except percentage and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
Years Ended December 31, |
|
2017 |
% of Rev |
|
2016 |
% of Rev |
|
2017 |
% of Rev |
|
2016 |
% of Rev |
Coated catalysts |
$ |
2,880 |
59
% |
|
$ |
4,894 |
57
% |
|
$ |
15,627 |
55
% |
|
$ |
22,520 |
61
% |
Emission control
systems |
1,616 |
33
% |
|
3,405 |
40
% |
|
11,116 |
39
% |
|
12,970 |
35
% |
Technology and advanced
materials |
387 |
8 % |
|
256 |
3 % |
|
1,610 |
6 % |
|
1,349 |
4 % |
Revenues |
$ |
4,883 |
100
% |
|
$ |
8,555 |
100
% |
|
$ |
28,353 |
100
% |
|
$ |
36,839 |
100
% |
Gross profit |
1,033 |
|
|
935 |
|
|
5,898 |
|
|
8,066 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
759 |
|
|
702 |
|
|
3,970 |
|
|
4,657 |
|
Selling,
general and administrative |
1,773 |
|
|
3,213 |
|
|
8,292 |
|
|
11,837 |
|
Goodwill
impairment |
— |
|
|
4,675 |
|
|
— |
|
|
4,675 |
|
Severance
and other charges |
(96) |
|
|
686 |
|
|
(480) |
|
|
2,555 |
|
Total
operating expenses |
2,436 |
|
|
9,276 |
|
|
11,782 |
|
|
23,724 |
|
Loss from
continuing operations |
(1,403) |
|
|
(8,341) |
|
|
(5,884) |
|
|
(15,658) |
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net |
— |
|
|
101 |
|
|
(260) |
|
|
(1,535) |
|
Gain on
change in fair value of bifurcated derivative liability |
— |
|
|
— |
|
|
— |
|
|
2,754 |
|
Gain
(Loss) on extinguishment of debt |
— |
|
|
162 |
|
|
(194) |
|
|
(12,410) |
|
Gain on
change in fair value of liability - classified warrants |
119 |
|
|
671 |
|
|
523 |
|
|
1,554 |
|
Gain on
sale of DuraFit business |
— |
|
|
— |
|
|
805 |
|
|
— |
|
Other
(expense) income, net |
(121) |
|
|
41 |
|
|
(188) |
|
|
863 |
|
Total
other income (expense) |
(2) |
|
|
975 |
|
|
686 |
|
|
(8,774) |
|
Loss from
operations before income taxes |
(1,405) |
|
|
(7,366) |
|
|
(5,198) |
|
|
(24,432) |
|
Income
tax expense (benefit) from operations |
36 |
|
|
274 |
|
|
85 |
|
|
(958) |
|
Net
loss |
(1,441) |
|
|
(7,640) |
|
|
(5,283) |
|
|
(23,474) |
|
Basic and diluted net
loss per share: |
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(0.09) |
|
|
$ |
(0.69) |
|
|
$ |
(0.34) |
|
|
$ |
(3.84) |
|
Weighted shares
outstanding |
15,803 |
|
|
11,011 |
|
|
15,744 |
|
|
6,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDTI ADVANCE MATERIALS, INC. |
Consolidated Balance Sheets |
(in thousands, except per share
amounts) |
|
|
|
December 31, |
|
2017 |
|
2016 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash |
$ |
2,807 |
|
$ |
7,839 |
Accounts
receivable, net |
2,097 |
|
5,398 |
Inventories |
2,647 |
|
7,125 |
Prepaid
expenses and other current assets |
667 |
|
968 |
Total
current assets |
8,218 |
|
21,330 |
Property and equipment,
net |
714 |
|
1,158 |
Intangible assets,
net |
1,051 |
|
1,483 |
Deferred tax asset |
644 |
|
554 |
Other assets |
187 |
|
305 |
Total
assets |
$ |
10,814 |
|
$ |
24,830 |
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Line of
credit |
$ |
— |
|
$ |
1,458 |
Shareholder notes payable |
— |
|
1,803 |
Accounts
payable |
2,059 |
|
5,979 |
Accrued
expenses and other current liabilities |
3,585 |
|
6,345 |
Income
taxes payable |
789 |
|
642 |
Total
current liabilities |
6,433 |
|
16,227 |
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 and 15,703,301 shares at December 31, 2017 and
2016, respectively |
158 |
|
157 |
Additional paid-in
capital |
238,455 |
|
237,838 |
Accumulated other
comprehensive loss |
(5,886) |
|
(6,329) |
Accumulated
deficit |
(228,346) |
|
(223,063) |
Total stockholders'
equity |
4,381 |
|
8,603 |
Total liabilities and
stockholders' equity |
$ |
10,814 |
|
$ |
24,830 |
|
|
|
|
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