CDTi Announces Second Quarter Fiscal Year 2016 Financial Results
August 15 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 second quarter ended June
30, 2016.
Matthew Beale, CDTi’s CEO, stated, “In the second quarter, we
achieved important milestones in establishing improved capital and
cost structures for the Company. In June, we reached an agreement
to convert $8.5 million in debt into the Company’s common stock,
demonstrating our debtholders’ confidence in CDTi’s future. The
debt conversion is subject to stockholder approval. In a related
transaction, we received a $1.25 million investment from Haldor
Topsoe A/S as well as began an important commercial relationship
where CDTi’s technology will complement Haldor Topsoe’s product
capabilities and global reach within the heavy duty diesel
market.
“Our advanced materials strategy aligns with highly favorable
global trends in the automotive and heavy duty diesel markets and
with the needs of market participants. This has accelerated our
commercial momentum as a technology partner as recent agreements
with leading global players including Panasonic and Haldor Topsoe
provide the foundation for a diversified and growing revenue base.
The market opportunities in China and India are particularly
significant as our international partners and domestic suppliers
require technology to cost-effectively address increasingly
stringent emissions standards. With our leading PGM reduction
technology and pedigree as a tier one catalyst manufacturer, CDTi
is uniquely qualified to supply enabling technology to this growing
global market.
“While the impact of our new strategic customers and partners
will begin taking hold in the second half of 2016 and into 2017, we
believe the actions taken to date to build our revenue pipeline and
optimize our cost structure have placed the company on a path to
profitability that will become increasingly visible in the second
half of 2016,” Beale concluded.
Financial Highlights: Second Quarter 2016 compared to
Second Quarter 2015
- Total revenue was $8.4 million, compared to $9.9 million.
- Coated catalyst revenue was $4.8 million, compared to $6.1
million.
- Emissions control systems revenue was $2.9 million, compared to
$3.6 million.
- Technology and advanced materials revenue was $0.7 million,
compared to $0.2 million.
- Gross margin was 20%, compared to 28%. The variance reflects
approximately $0.5 million in costs related to the shutdown of the
Markham facility and the startup of new vendor relationships as
CDTi transitioned to outsourcing. The company expects gross margins
to return to more normalized levels in the second half of the
year.
- Total operating expenses in the second quarter of 2016 were
$4.8 million, compared to $4.9 million in the second quarter of
2015. The decrease in operating expenses reflects the restructuring
actions taken in late 2015 and early 2016, which began to take
effect in the second quarter of 2016. This was offset by
approximately $0.6 million in severance and costs related to the
company’s shutdown of the Markham facility and transition to
outsourcing.
- Net income was $1.3 million, or $0.35 per share, and included
an accounting gain of $2.8 million related to the conversion
feature of the Kanis S.A. debt. This compares to a net loss of $2.4
million, or $0.81 per share in the second quarter of 2015.
- Cash at June 30, 2016 was $0.9 million, compared with $3.0
million at December 31, 2015.
Financial Highlights: Six months ended June 30, 2016
compared to 2015
- Total revenue for the first six months of 2016 was $18.2
million, compared to $20.3 million for the same prior year
period.
- Gross margin was 24%, compared to 28% in the prior year
period.
- Total operating expenses for the first six months of 2016 were
$10.8 million compared to $10.4 million in the same prior year
period.
- Net loss for the first six months of 2016 was $1.4 million, or
$0.38 per share, compared to net loss of $5.4 million, or $1.88 per
share, in the same prior year period.
Revised Financial OutlookTracy Kern, CDTi’s
CFO, stated, “We now expect full year 2016 revenue to be at the
lower end of our guided range of between $39 million and $43
million. We believe DuraFit™ will continue to partially offset the
decline in legacy retrofit revenue; however, we now expect its full
year revenue contribution will approximate $7 million due in part
to supply chain issues related to the closure of our Markham
facility in December 2015. We expect this to be positively offset
by a greater than anticipated revenue ramp from Panasonic related
to shipments of our synergized-platinum group metal (SPGM™) diesel
oxidation catalysts (DOCs). In addition, based on the transition
costs related to the closure of our Markham facility, we expect
gross margin to be between 25% and 27%. Based on these assumptions
and cost reductions undertaken in 2015 and 2016, we now expect to
be breakeven on an income from continuing operations basis by the
first quarter of 2017.”
Conference Call and Webcast InformationCDTi
will host a conference call and live webcast beginning at 8:00 a.m.
Pacific Time today, August 15th 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 54121388. 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 conversion of outstanding indebtedness into common
stock, 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:Becky Herrick or Cathy
MattisonLHA (IR Agency)+1 415 433 3777bherrick@lhai.com /
cmattison@lhai.com
[Tables to follow]
|
|
Clean Diesel Technologies, Inc. |
|
|
Summary Statements of Operations
(unaudited) |
|
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
Revenues |
|
$ |
8.4 |
|
|
$ |
9.9 |
|
|
|
18.2 |
|
|
$ |
20.3 |
|
|
|
Gross profit |
|
|
1.7 |
|
|
|
2.8 |
|
|
|
4.4 |
|
|
|
5.6 |
|
|
|
Gross margin |
|
|
20 |
% |
|
|
28 |
% |
|
|
24 |
% |
|
|
28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
1.4 |
|
|
|
1.9 |
|
|
|
3.2 |
|
|
|
4.0 |
|
|
|
Selling, general and
administrative |
|
|
2.8 |
|
|
|
3.0 |
|
|
|
6.2 |
|
|
|
6.4 |
|
|
|
Severance and other charges |
|
|
0.6 |
|
|
|
- |
|
|
|
1.4 |
|
|
|
- |
|
|
|
Total operating expenses |
|
|
4.8 |
|
|
|
4.9 |
|
|
|
10.8 |
|
|
|
10.4 |
|
|
|
Loss from operations |
|
|
(3.1 |
) |
|
|
(2.1 |
) |
|
|
(6.4 |
) |
|
|
(4.8 |
) |
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(0.8 |
) |
|
|
(0.3 |
) |
|
|
(1.1 |
) |
|
|
(0.6 |
) |
|
|
Gain on bifurcated derivative
liability |
|
|
2.8 |
|
|
|
- |
|
|
|
2.8 |
|
|
|
- |
|
|
|
Gain on warrant liability |
|
|
0.8 |
|
|
|
(0.5 |
) |
|
|
1.6 |
|
|
|
(0.3 |
) |
|
|
Other income (expense), net |
|
|
1.0 |
|
|
|
0.3 |
|
|
|
0.6 |
|
|
|
0.2 |
|
|
|
Total other income (expense) |
|
|
3.8 |
|
|
|
(0.5 |
) |
|
|
3.9 |
|
|
|
(0.7 |
) |
|
|
Income (loss) before income tax
benefit |
|
|
0.7 |
|
|
|
(2.6 |
) |
|
|
(2.5 |
) |
|
|
(5.5 |
) |
|
|
Income tax benefit |
|
|
(0.6 |
) |
|
|
(0.2 |
) |
|
|
(1.1 |
) |
|
|
(0.1 |
) |
|
|
Net loss |
|
$ |
1.3 |
|
|
$ |
(2.4 |
) |
|
$ |
(1.4 |
) |
|
$ |
(5.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share |
|
$ |
0.35 |
|
|
$ |
(0.81 |
) |
|
$ |
(0.38 |
) |
|
$ |
(1.88 |
) |
|
|
Diluted earnings (loss)
per common share |
|
$ |
0.13 |
|
|
$ |
(0.81 |
) |
|
$ |
(0.38 |
) |
|
$ |
(1.88 |
) |
|
|
Weighted average shares
of common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
3.8 |
|
|
|
3.0 |
|
|
|
3.7 |
|
|
|
2.9 |
|
|
|
Diluted |
|
|
10.6 |
|
|
|
3.0 |
|
|
|
3.7 |
|
|
|
2.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Clean Diesel Technologies, Inc. |
|
Revenues by Product Category |
|
(in millions, except
percentages) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
$ |
|
% of
Revenues |
|
$ |
|
% of
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Coated
catalysts |
|
$ |
4.8 |
|
|
|
57 |
% |
|
$ |
6.1 |
|
|
|
62 |
% |
|
Emission
control systems |
|
|
2.9 |
|
|
|
35 |
% |
|
|
3.6 |
|
|
|
36 |
% |
|
Technology
and advanced materials |
|
|
0.7 |
|
|
|
8 |
% |
|
|
0.2 |
|
|
|
2 |
% |
|
|
Total revenues |
|
$ |
8.4 |
|
|
|
100 |
% |
|
$ |
9.9 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
$ |
|
% of
Revenues |
|
$ |
|
% of
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Coated
catalysts |
|
$ |
10.4 |
|
|
|
57 |
% |
|
$ |
12.3 |
|
|
|
61 |
% |
|
Emission
control systems |
|
|
6.9 |
|
|
|
38 |
% |
|
|
7.7 |
|
|
|
38 |
% |
|
Technology
and advanced materials |
|
|
0.9 |
|
|
|
5 |
% |
|
|
0.3 |
|
|
|
1 |
% |
|
|
Total revenues |
|
$ |
18.2 |
|
|
|
100 |
% |
|
$ |
20.3 |
|
|
|
100 |
% |
|
Clean Diesel Technologies, Inc. |
Condensed Consolidated Balance Sheets
(unaudited) |
(in millions) |
|
|
|
|
|
|
|
|
As of |
|
|
|
June 30, 2016 |
|
December 31, 2015 |
|
Total current
assets |
|
$ |
18.3 |
|
|
$ |
16.7 |
|
|
Total assets |
|
$ |
26.5 |
|
|
$ |
25.1 |
|
|
Total current
liabilities |
|
$ |
18.2 |
|
|
$ |
16.9 |
|
|
Total long-term
liabilities |
|
$ |
7.8 |
|
|
$ |
7.8 |
|
|
Stockholders’
equity |
|
$ |
0.5 |
|
|
$ |
0.4 |
|
|
|
|
|
|
|
|
Short-term debt |
|
$ |
1.3 |
|
|
$ |
- |
|
|
Long-term debt |
|
$ |
6.4 |
|
|
$ |
7.6 |
|
|
|
|
|
|
|
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