CDTi Announces Third Quarter Fiscal Year 2016 Financial Results
15 November 2016 - 12:00AM
– Reports revenue of $10.1 million ––
Improves operating expenses by $1.7 million year-over-year ––
Revises full year 2016 financial guidance –
Clean Diesel Technologies, Inc. (Nasdaq:CDTI) (“CDTi” or “the
Company”), a leader in advanced emission control technology,
reported its financial results for the third quarter ended
September 30, 2016.
Matthew Beale, CDTi’s CEO, stated, “Since late last year we have
completed several significant initiatives to enhance our financial
foundation, support our growth and accelerate our path to
profitability. We streamlined operations, reduced our fixed cost
base and in August, we successfully eliminated $8.9 million in
debt. With the recently announced $10.3 million equity raise, we
have established a strong financial foundation on which to execute
on our advanced materials and high-value catalyst business
strategy.
“We are pursuing opportunities in fast growing markets in China,
India and North America that we believe we can serve profitably
with our advanced materials business model. By focusing on
technology development and strategic relationships, we have entered
initial partnerships that are core to our P2C revenue ramp and
positioning CDTi as a leading technology provider to the
industry.
“Looking ahead, we will experience a shift in revenue mix as
partner volumes ramp during the next 12 to 24 months. In
particular, as Technology and Advanced Materials revenue grows,
which consists mainly of high-margin P2C business, it will be
accretive to gross profit margins. Together with our lower
operating expense run rate, we believe we will achieve operating
profit breakeven during the first half of 2017.”
Financial Highlights: Third Quarter 2016 compared to
Third Quarter 2015
- Total revenue was $10.1 million, compared to $9.8 million.
- Coated catalyst revenue was $7.1 million, compared to $5.9
million.
- Emissions control systems revenue was $2.8 million, compared to
$3.6 million.
- Technology and advanced materials revenue was $0.2 million for
both periods.
- Gross margin was 27%, compared to 25%. The increase reflects
fluctuations in product mix.
- Total operating expenses in the third quarter of 2016 were $3.7
million, compared to $5.3 million in the third quarter of 2015. The
decrease in operating expenses reflects the benefits of
restructuring efforts completed during the first half of the year.
Operating expenses for the quarter include severance and other
charges totaling $0.6 million.
- Third quarter 2016 results include a non-cash charge of $12.6
million related to the extinguishment of $8.9 million in debt
during the quarter.
- Net loss was $14.4 million, or $2.45 per share, reflecting the
aforementioned non-cash charge. This compares to a net loss of $2.2
million, or $0.64 per share in the third quarter of 2015.
- Cash at September 30, 2016 was $2.7 million, compared to $3.0
million at December 31, 2015. Subsequent to the end of the third
quarter, on November 3rd CDTi entered into a definitive agreement
to raise approximately $10.3 million in gross proceeds through a
private placement of common stock, closing on $1.9 million in gross
proceeds at the initial closing on November 4th.
Financial Highlights: Nine months ended September 30,
2016 compared to 2015
- Total revenue for the first nine months of 2016 was $28.3
million, compared to $30.0 million for the same prior year
period.
- Gross margin was 25% for the first nine months of 2016,
compared to 27% for the same prior year period.
- Total operating expenses for the first nine months of 2016 were
$14.4 million, which includes $1.9 million in severance and other
charges relating to CDTi’s corporate restructuring, compared to
$15.7 million in the same prior year period.
- Net loss for the first nine months of 2016 was $15.8 million,
or $3.55 per share, reflecting the aforementioned $12.6 million
non-cash charge. This compares to net loss of $7.7 million, or
$2.48 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 and to be between $37 million and $39
million. We expect DuraFit™ full year revenue contribution will
approach $6 million. We also 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 half of 2017.”
Conference Call and Webcast InformationCDTi
will host a conference call and live webcast beginning at 8:00 a.m.
Pacific Time today, November 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 6558038. 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.Condensed Consolidated
Balance Sheets(in thousands, except share and per
share amounts)(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
December 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
|
$ |
2,698 |
|
|
|
$ |
2,958 |
|
Accounts
receivable, net |
|
|
|
5,539 |
|
|
|
4,255 |
|
Inventories |
|
|
|
8,866 |
|
|
|
7,918 |
|
Prepaid
expenses and other current assets |
|
|
|
2,508 |
|
|
|
1,568 |
|
Total
current assets |
|
|
|
19,611 |
|
|
|
16,699 |
|
Property and equipment,
net |
|
|
|
1,264 |
|
|
|
1,538 |
|
Intangible assets,
net |
|
|
|
1,609 |
|
|
|
1,901 |
|
Goodwill |
|
|
|
4,760 |
|
|
|
4,659 |
|
Other assets |
|
|
|
311 |
|
|
|
305 |
|
Total
assets |
|
|
$ |
27,555 |
|
|
|
$ |
25,102 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Line of
credit |
|
|
$ |
3,313 |
|
|
|
$ |
3,513 |
|
Accounts
payable |
|
|
|
8,552 |
|
|
|
5,012 |
|
Accrued
expenses and other current liabilities |
|
|
|
6,443 |
|
|
|
7,854 |
|
Current
portion of notes payable |
|
|
|
2,750 |
|
|
|
- |
|
Income taxes
payable |
|
|
|
647 |
|
|
|
534 |
|
Total
current liabilities |
|
|
|
21,705 |
|
|
|
16,913 |
|
Notes payable, net of
current portion |
|
|
|
- |
|
|
|
7,559 |
|
Deferred tax
liability |
|
|
|
203 |
|
|
|
193 |
|
Total
liabilities |
|
|
|
21,908 |
|
|
|
24,665 |
|
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 99,900,000 and 24,000,000 shares at
September 30, 2016 and December 30, 2015; respectively; issued
and outstanding 9,487,432 and 3,559,530 shares at
September 30, 2016 and December 31, 2015,
respectively |
|
|
|
95 |
|
|
|
36 |
|
Additional paid-in
capital |
|
|
|
226,822 |
|
|
|
205,377 |
|
Accumulated other
comprehensive loss |
|
|
|
(5,847 |
) |
|
|
(5,387 |
) |
Accumulated deficit |
|
|
|
|
(215,423 |
) |
|
|
(199,589 |
) |
Total stockholders’
equity |
|
|
|
|
5,647 |
|
|
|
437 |
|
Total liabilities and
stockholders’ equity |
|
|
$ |
27,555 |
|
|
|
$ |
25,102 |
|
CLEAN DIESEL
TECHNOLOGIES, INC.Condensed Consolidated
Statements of Comprehensive Loss(in thousands,
except per share amounts)(unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Revenues |
|
$ |
|
10,132 |
|
|
$ |
|
9,759 |
|
|
$ |
|
28,284 |
|
|
$ |
|
30,038 |
|
Cost of revenues |
|
|
7,425 |
|
|
|
7,300 |
|
|
|
21,153 |
|
|
|
21,994 |
|
Gross profit |
|
|
2,707 |
|
|
|
2,459 |
|
|
|
7,131 |
|
|
|
8,044 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and
development |
|
|
762 |
|
|
|
2,303 |
|
|
|
3,955 |
|
|
|
6,276 |
|
Selling,
general and administrative |
|
|
2,322 |
|
|
|
3,028 |
|
|
|
8,549 |
|
|
|
9,461 |
|
Severance
and other charges |
|
|
571 |
|
|
|
3 |
|
|
|
1,945 |
|
|
|
4 |
|
Total
operating expenses |
|
|
3,655 |
|
|
|
5,334 |
|
|
|
14,449 |
|
|
|
15,741 |
|
Loss from
continuing operations |
|
|
(948 |
) |
|
|
(2,875 |
) |
|
|
(7,318 |
) |
|
|
(7,697 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
Interest
expense |
|
|
(489 |
) |
|
|
(309 |
) |
|
|
(1,637 |
) |
|
|
(886 |
) |
Gain on
bifurcated derivative liability |
|
|
- |
|
|
|
- |
|
|
|
2,754 |
|
|
|
- |
|
Loss on
extinguishment of convertible debt |
|
|
(12,572 |
) |
|
|
- |
|
|
|
(12,572 |
) |
|
|
- |
|
Gain (loss)
on warrant liability |
|
|
(705 |
) |
|
|
541 |
|
|
|
883 |
|
|
|
269 |
|
Other
income, net |
|
|
196 |
|
|
|
474 |
|
|
|
824 |
|
|
|
640 |
|
Total other
income (expense) |
|
|
(13,570 |
) |
|
|
706 |
|
|
|
(9,748 |
) |
|
|
23 |
|
Loss from
continuing operations before income taxes |
|
|
(14,518 |
) |
|
|
(2,169 |
) |
|
|
(17,066 |
) |
|
|
(7,674 |
) |
Income tax
benefit from continuing operations |
|
|
(113 |
) |
|
|
(28 |
) |
|
|
(1,232 |
) |
|
|
(88 |
) |
Net loss
from continuing operations |
|
|
(14,405 |
) |
|
|
(2,141 |
) |
|
|
(15,834 |
) |
|
|
(7,586 |
) |
Net loss
from discontinued operations |
|
|
- |
|
|
|
(67 |
) |
|
|
- |
|
|
|
(67 |
) |
Net
loss |
|
|
(14,405 |
) |
|
|
(2,208 |
) |
|
|
(15,834 |
) |
|
|
(7,653 |
) |
Foreign
currency translation adjustments |
|
|
(190 |
) |
|
|
(1,155 |
) |
|
|
(460 |
) |
|
|
(2,026 |
) |
Comprehensive loss |
|
$ |
|
(14,595 |
) |
|
$ |
|
(3,363 |
) |
|
$ |
|
(16,294 |
) |
|
$ |
|
(9,679 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss
per common share: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
|
(2.45 |
) |
|
$ |
|
(0.64 |
) |
|
$ |
|
(3.55 |
) |
|
$ |
|
(2.48 |
) |
Weighted average shares
outstanding – basic and diluted |
|
|
5,876 |
|
|
|
3,358 |
|
|
|
4,462 |
|
|
|
3,055 |
|
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