Clean Diesel Technologies, Inc. Reports First Quarter 2012 Financial Results
VENTURA, Calif., May 10, 2012 /PRNewswire/ — Clean Diesel Technologies, Inc. (NASDAQ:CDTI) (“Clean Diesel”), a cleantech emissions reduction company, announced today its financial results for the first quarter ended March 31, 2012. The highlights are as follows:
- First quarter revenue of $17.0 million, up 23.3% year over year
- First quarter net loss of $0.39 per share (diluted)
- First quarter net loss includes $0.6 million pre-tax inventory write-down; $0.5 million after-tax
“We began 2012 with a strong top-line performance as we reported revenue growth in excess of 23 percent year over year,” said Craig Breese, Chief Executive Officer of Clean Diesel. “Sales in our Heavy Duty Diesel (“HDD”) Systems division led our growth with an increase of more than 33 percent as we benefitted from additional sales of over $4 million to the London Low Emission Zone (“LEZ”) as a result of the extension announced by the regulator at the end of 2011. At the same time, as anticipated, we experienced some margin compression due to product mix in the London LEZ market. The shift in product mix in London also resulted in our decision to write-down excess inventories of certain components. As a result, gross margin and results from operations were negatively impacted in the first quarter.
“In spite of this challenge in our first quarter, we believe our HDD division is well-positioned to participate in the expected growth over the next several years in the markets we serve as operators retrofit their fleets in order to meet the mandatory compliance regulations. We have begun initial sales under the mandatory California Truck and Bus Regulation program which went into effect this year. We recorded sales in excess of $2 million in California. We expect to see a gradual acceleration of sales under this program, with the majority of sales occurring in the second half of 2012. While the California program clearly represents perhaps the largest opportunity for us, we are winning orders in New Jersey, New York, Texas and other states. Excluding intercompany sales, our Catalyst division sales for the quarter were essentially unchanged from the prior year first quarter. In addition, we are continuing to benefit from increasing intercompany sales of our catalysts to our Heavy Duty Diesel Systems division which this quarter totaled approximately $1.7 million. Lastly, we are excited that our Catalyst division has developed two breakthrough catalysts. The first is a high-performance catalyst which is designed to meet stringent California Air Resources Board (“CARB”) Super Ultra Low Emissions Vehicle (“SULEV”) emission standards, and the second is a palladium-only (“Pd-only”) catalyst that significantly reduces precious metal content when compared to competitive products, which typically include more expensive and price volatile metals such as Platinum and Rhodium. We expect to introduce both products for vehicles to be launched by an OEM later in 2012.
“As expected, we experienced some headwinds in gross margin performance in the first quarter which at 23.2 percent was below our expectation. As we scale back our operational footprint in London, improve our product mix, and sales under the California program pick-up, particularly in the second half of the year, we would expect gross margin to improve. We are also keenly focused on controlling our costs in order to continue to leverage our fixed cost base as our sales grow. While we are making progress, we have more work to do to improve the efficiency of our operations and achieve profitable growth.”
First Quarter 2012 Financial Results
Total revenue for the first quarter of 2012 was $17.0 million, an increase of $3.2 million, or 23.3%, from $13.8 million for the prior year first quarter. Revenue for Clean Diesel’s Heavy Duty Diesel Systems division for the quarter ended March 31, 2012 increased $3.2 million, or 33.2%, to $12.6 million from $9.4 million for the same prior year quarter. Revenue, excluding intercompany sales, for Clean Diesel’s Catalyst division for the quarter ended March 31, 2012 was $4.4 million, unchanged from the same prior year quarter. Intercompany sales to its Heavy Duty Diesel Systems division increased by $1.3 million for the quarter ended March 31, 2012 compared to the same prior year quarter.
Total operating expenses for the first quarter of 2012 were $6.4 million, compared to $5.9 million in the prior year first quarter.
Net loss for the first quarter of 2012 was $2.8 million, or $0.39 per share, compared to net loss of $2.2 million, or $0.54 per share, in the prior year first quarter. Net loss includes a write-down of inventory relating to the London LEZ program of $0.5 million ($0.6 million, pre-tax). In addition, net loss included non-cash expense of approximately $0.1 million related to stock based compensation expense, $0.4 million related to depreciation and amortization of intangible assets, for a total of approximately $0.5 million compared to $0.3 million and $0.4 million, respectively, for a total of approximately $0.7 million in the net loss for the same period in 2011. Results for the quarter also include a non-cash charge of $0.1 million due to the change in fair value of liability classified stock warrants compared to a gain of $0.4 million for the same period in 2011. Weighted average common shares outstanding were 7,219,000 in the current quarter compared to 3,984,000 in the same quarter a year ago, with the increase in the number of shares due principally to the public offering completed on July 5, 2011.
At March 31, 2012 and December 31, 2011, Clean Diesel had cash and cash equivalents of $4.4 million and $3.5 million, respectively.
Conference Call and Webcast Information
Clean Diesel will host a conference call and simultaneous webcast over the Internet beginning at 8:00 a.m. Pacific Time today to discuss its financial results and its business outlook. This conference call will contain forward-looking information. To participate in the conference call, dial +1 (877) 303-9240 and use confirmation code 76628376. International participants should dial +1 (760) 666-3571 and use the same confirmation code. The conference call will be webcast live on the Clean Diesel 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 Clean Diesel website for 30 days.
About Clean Diesel Technologies, Inc.
Clean Diesel is a vertically integrated global manufacturer and distributor of emissions control systems and products, focused on the heavy duty diesel and light duty vehicle markets. Clean Diesel utilizes its proprietary patented Mixed Phase Catalyst (MPC®) technology, as well as its ARIS® selective catalytic reduction, Platinum Plus® fuel-borne catalyst, and other technologies to provide high-value sustainable solutions to reduce emissions, increase energy efficiency and lower the carbon intensity of on- and off-road engine applications. Clean Diesel is headquartered in Ventura, California and currently has operations in the U.S., Canada, U.K., France, Japan and Sweden. For more information, please visit www.cdti.com.
Forward-Looking Statements Safe Harbor
Certain statements in this news release, such as statements regarding Clean Diesel’s expected growth and timing of sales under the California mandated Truck and Bus regulation, introduction and timing of new products, and expected improvement in gross margin constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known or unknown risks, including those detailed in Clean Diesel’s filings with the U.S. Securities and Exchange Commission, uncertainties and other factors that may cause the actual results, performance or achievements of Clean Diesel to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Clean Diesel assumes no obligation to update the forward-looking information contained in this release.
Clean Diesel Technologies, Inc.
Summary Income Statements (unaudited)
3 Months Ended March 31, --------- 2012 2011 ---- ---- Revenues $17.0 $13.8 Gross profit 4.0 4.0 Gross margin 23.2% 29.1% Operating expenses: Selling, general and administrative 4.5 4.4 Research and development $1.9 $1.5 ---- ---- Total operating expenses 6.4 5.9 Loss from operations $(2.4) $(1.9) Other expense (0.6) (0.1) ---- ---- Loss from continuing operations before income tax (3.0) (2.0) Income tax (benefit) expense from continuing operations (0.3) 0.2 ---- --- Net loss from continuing operations (2.7) (2.2) Discontinued operations (0.1) - ---- --- Net loss $(2.8) $(2.2) ----- ----- Basic and diluted EPS $(0.39) $(0.54) Weighted shares outstanding (in thousands) 7,219 3,984
Clean Diesel Technologies, Inc.
Segment Information (unaudited)
3 Months Ended March 31, --------- 2012 2011 ---- ---- Revenue Heavy Duty Diesel Systems $12.6 $9.4 Catalyst 6.1 4.8 Eliminations (1.7) (0.4) ---- ---- Total $17.0 $13.8 ===== ===== (Loss) income from operations Heavy Duty Diesel Systems $(0.4) $0.3 Catalyst (0.3) (0.4) Corporate (1.7) (1.8) ---- ---- Total $(2.4) $(1.9) ===== =====
Clean Diesel Technologies, Inc.
Summary Balance Sheets (unaudited)
As of ----- March 31, December 31, 2012 2011 ---- ---- Total current assets $25.8 $27.1 Total assets $39.7 $41.1 Total current liabilities $16.6 $15.8 Total long-term liabilities $5.5 $5.4 Stockholders' equity $17.6 $19.9 Short-term debt $4.3 $4.5 Long-term debt $4.6 $4.5
SOURCE Clean Diesel Technologies, Inc.