“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
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.
- Coated catalyst revenue was
- Gross margin was 21%, compared to 11%. 2016 included
$1.1 millionof 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 millionin the fourth quarter of 2016, which included a $4.7 millionwrite-off of goodwill and $0.7 millionof costs related to the closure of the company’s manufacturing facility in Canada.
- Net loss was
$1.4 million, or $0.09per share, compared to a net loss of $7.6 million, or $0.69per share in the fourth quarter of 2016.
- Cash at
December 31, 2017, was $2.8 million, compared to $3.3 millionat September 30, 2017, and $7.8 millionat December 31, 2016.
Financial Highlights: 2017 compared to 2016
- Total revenue for the full year 2017 was
$28.4 million, compared to $36.8 millionfor 2016.
- Gross margin was 21%, compared to 22% for 2016.
- Total operating expenses for 2017 were
$11.8 millioncompared to $23.7 million, in 2016, which included $2.6 millionin 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 $0.34per share, compared to net loss of $23.5 million, or $3.84per share, in 2016.
2018 Financial Outlook
Based 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
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
Conference Call and Webcast Information
CDTi will host a conference call and live webcast beginning at
Certain 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.
[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 %||$||36,839||100 %|
|Research and development||759||702||3,970||4,657|
|Selling, general and administrative||1,773||3,213||8,292||11,837|
|Severance and other charges||(96)||686||(480)||2,555|
|Total operating expenses||2,436||9,276||11,782||23,724|
|Loss from continuing operations||(1,403)||(8,341)||(5,884)||(15,658)|
|Other income (expense):|
|Interest expense, net||—||101||(260)||(1,535)|
|Gain on change in fair value of bifurcated derivative liability||—||—||—||2,754|
|Gain (Loss) on extinguishment of debt||—||162||(194)||(12,410)|
|Gain on change in fair value of liability - classified warrants||119||671||523||1,554|
|Gain on sale of DuraFit business||—||—||805||—|
|Other (expense) income, net||(121)||41||(188)||863|
|Total other income (expense)||(2)||975||686||(8,774)|
|Loss from operations before income taxes||(1,405)||(7,366)||(5,198)||(24,432)|
|Income tax expense (benefit) from operations||36||274||85||(958)|
|Basic and diluted net loss per share:|
|Weighted shares outstanding||15,803||11,011||15,744||6,107|
|CDTI ADVANCE MATERIALS, INC.|
|Consolidated Balance Sheets|
|(in thousands, except per share amounts)|
|Accounts receivable, net||2,097||5,398|
|Prepaid expenses and other current assets||667||968|
|Total current assets||8,218||21,330|
|Property and equipment, net||714||1,158|
|Intangible assets, net||1,051||1,483|
|Deferred tax asset||644||554|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Line of credit||$||—||$||1,458|
|Shareholder notes payable||—||1,803|
|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|
|Preferred stock, par value $0.01 per share: authorized 100,000; no shares issued and outstanding||—||—|
|Common stock, par value $0.01 per share: authorized 50,000,000; issued and outstanding 15,803,736 and 15,703,301 shares at December 31, 2017 and 2016, respectively||158||157|
|Additional paid-in capital||238,455||237,838|
|Accumulated other comprehensive loss||(5,886)||(6,329)|
|Total stockholders' equity||4,381||8,603|
|Total liabilities and stockholders' equity||$||10,814||$||24,830|
Source: CDTi Advanced Materials, Inc.