|($ in millions, except per share amounts)||Three months ended June 30,||Six months ended June 30,|
|2017||2016 [1, 2]||2017||2016 [1, 2]|
|Consolidated Gross Margin||15.8||8.2||33.3||14.5|
|Consolidated Gross Margin %||25.4||%||21.9||%||27.3||%||23.7||%|
|Consolidated Operating Expenses||32.1||46.2||61.6||75.7|
|Income from Unconsolidated Joint Ventures||5.3||1.4||7.0||2.2|
|Net income (loss) from Continuing Operations||$||(13.3||)||$||3.4||$||(26.2||)||$||(21.1||)|
|Net income (loss) per Share from Continuing Operations||$||(0.12||)||$||0.04||$||(0.24||)||$||(0.29||)|
|Cash and Short-term Investments Balance||$||87.7||$||71.2||$||87.7||$||71.2|
- Consolidated revenues for the quarter ended June 30, 2017, was $62.1 million compared with $37.2 million for the same period last year mainly due to the addition of Fuel Systems' revenue as a result of the merger. The 2017 quarter has a full three months of Fuel Systems' revenue versus only one month for the comparative 2016 quarter.
- Consolidated gross margin for the quarter ended June 30, 2017 was $15.8 million or 25.4% of revenue, compared with $8.2 million or 21.9% of revenue for the same period last year. The increase in gross margin and gross margin percentage is due to the addition of Fuel Systems' gross margin as a result of the merger and a $1.1 million favourable warranty adjustment related to Westport's automotive business.
- Consolidated operating expenses were $32.1 million for the quarter ended June 30, 2017, a decrease of 30.5% from $46.2 million in the same period last year. The current quarter included a full quarter of Fuel Systems' operating expenses versus only one month for the 2016 period. Despite this, research & development (" R&D") and selling, general and administrative (" SG&A") expenses decreased 9% in the three months ended June 30, 2017 compared to the three months ended June 30, 2016. This decrease was primarily the result of expense rationalization, headcount reductions, facility closures and one time merger related costs in the 2016 period.
- Net loss from continuing operations for the quarter ended June 30, 2017, was $13.3 million or a loss of $0.12 per share, compared with net income of $3.4 million or $0.04 per share in the same period last year. Net income for the quarter ended June 30, 2016 included a one-time non-cash gain of $42.9 million related to the merger. Excluding the gain, Westport Fuel Systems net loss for the quarter ended June 30, 2016 would have been $39.5 million. As a result, net loss from continuing operations for the quarter ended June 30, 2017 improved by 66% compared to the same period last year.
"We have made substantial progress in strengthening our balance sheet in the second quarter of 2017 and ended the quarter with $87.7 million in cash," said Ashoka Achuthan, Chief Financial Officer of Westport Fuel Systems. "The successful completion of the sale of the industrial business assets, which generated $87.5 million, combined with the recent equity issuance with gross proceeds of $28.7 million, has further improved our liquidity. Given our improved financial situation and outlook, on August 8 we sent an offer to the holders of our outstanding debentures to either sell their debentures or consent to the extension of the maturity date for an additional three years. We will continue to take the necessary steps to put the company on a sustainable path to achieve positive adjusted EBITDA."CUMMINS WESTPORT INC. HIGHLIGHTS
|CUMMINS WESTPORT HIGHLIGHTS|
|($ in millions, except unit amounts)||Three monthsended June 30,||Increase / Decrease||Six monthsended June 30,||Increase / Decrease|
|2017||2016(Adjusted) ||2017||2016(Adjusted) |
|Gross Margin %||36.0||%||28.5||%||26.3||%||33.5||%||29.1||%||15.1||%|
|Segment Operating Income||16.3||3.7||340.5||%||21.3||7.1||200.0||%|
|Westport Fuel Systems 50% Interest||$||5.3||$||1.4||278.6||%||$||7.1||$||2.6||173.1||%|
- Revenue was $79.5 million on 2,037 units for the quarter ended June 30, 2017, an increase of 8.0% in revenue over the same period last year due to an increase in parts revenue attributed to the increase in the natural gas engine population in service. The demand from refuse remained strong in the second quarter.
- Gross margin for the quarter ended June 30, 2017 increased by $7.6 million compared to the same period last year driven by higher revenues, a favorable parts revenue mix, and a positive warranty adjustment.
- CWI operating income for the quarter ended June 30, 2017 was $16.3 million, a significant increase from the prior year primarily due to improvement in gross margin and lower operating expenses as a result of reduction in the R&D expenses. This is primarily due to the timing of the on-board diagnostics compliance spending that is nearing completion.
The term Adjusted EBITDA is not defined under U.S. generally accepted accounting principles (" U.S. GAAP") and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing the company's operating performance, investors should not consider Adjusted EBITDA in isolation, or as a substitute for net loss or other consolidated statement of operations data prepared in accordance with U.S. GAAP. Among other things, Adjusted EBITDA does not reflect the company's actual cash expenditures. Other companies may calculate similar measures differently than Westport Fuel Systems, limiting their usefulness as comparative tools. The company compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA as supplemental information.
|GAAP & NON-GAAP FINANCIAL MEASURES|
|($ in millions)||30-Jun-2016 ||30-Sep-2016||31-Dec-2016||31-Mar-2017||30-Jun-2017|
|Loss before Income Taxes||$||3.4||$||(34.4||)||$||(41.7||)||$||(13.6||)||$||(17.3||)|
|Interest Expense, Net||2.7||3.1||4.3||3.4||6.3|
|Depreciation and Amortization||3.6||5.2||3.9||3.7||3.5|
|Stock based compensation||2.3||2.9||1.2||1.1||3.1|
|Unrealized foreign exchange (gain) loss||4.1||(7.1||)||8.1||(1.6||)||1.0|
|Inventory impairment from product line closure||—||4.3||1.3||—||—|
|Bargain purchase gain||(42.9||)||—||7.1||—||—|
|Merger and financing costs||4.5||0.4||—||—||—|
|Amortization of fair value inventory adjustment recorded on acquisition||0.4||1.0||—||—||—|
|(Gain) loss on sale of investments||6.3||(3.9||)||(0.3||)||—||—|
|Restructuring, termination and other exit costs||—||17.5||1.5||1.6||(1.6||)|
|Total Adjusted EBITDA||$||(11.5||)||$||(10.8||)||$||(11.0||)||$||(4.1||)||$||(5.3||)|
CONFERENCE CALL PRESENTATIONWestport Fuel Systems is providing this presentation of financial information based on the most recent reporting structure that was implemented in the first quarter of 2017. The Company is providing this presentation as a guide to its financial information in a quick reference format and it should be read in conjunction with Westport Fuel Systems full financials for the quarter ended June 30, 2017, and full financials for the year ended December 31, 2016. LIVE CONFERENCE CALL & WEBCAST Westport Fuel Systems has scheduled a conference call for today, August 14, 2017, at 2:00 pm Pacific Time (5:00 pm Eastern Time) to discuss these results. The public is invited to listen to the conference call in real time by telephone or webcast. To access the conference call by telephone, please dial: 1-800-319-4610 (Canada & USA toll-free) or 604-638-5340. The live webcast of the conference call can be accessed through the Westport Fuel Systems website at wfsinc.com/investors REPLAY CONFERENCE CALL & WEBCAST To access the conference call replay, please dial 1-855-669-9658 (Canada & USA toll-free) or 604-674-8052 using the pass code 1581. The replay will be available until August 21, 2017. Shortly after the conference call, the webcast will be archived on the Westport Fuel Systems website and replay will be available in streaming audio and a downloadable MP3 file. About Westport Fuel SystemsAt Westport Fuel Systems, we are driving innovation to power a cleaner tomorrow. We are inventors, engineers, manufacturers and suppliers of advanced clean-burning fuel systems and components that can change the way the world moves. Our technology delivers performance, fuel efficiency and environmental benefits to address the challenges of global climate change and urban air quality. Headquartered in Vancouver, Canada, we serve our customers in more than 70 countries with leading global transportation brands. At Westport Fuel Systems, we think ahead. For more information, visit www.wfsinc.com. Cautionary Note Regarding Forward Looking Statements This press release contains forward-looking statements, including statements regarding revenue and cash usage expectations, time for achievement of positive adjusted EBITDA and rationalization of operations and reduction of overhead expenses, future of our development programs (including those relating to the referenced HPDI program), timing for launch, delivery and completion of milestones related to the products referenced herein (including HPDI components).These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties and are based on both the views of management and assumptions that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activities, performance or achievements expressed in or implied by these forward looking statements. These risks and uncertainties include risks and assumptions related to our revenue growth, operating results, industry and products, the general economy, conditions of and access to the capital and debt markets, solvency, governmental policies and regulation, technology innovations, fluctuations in foreign exchange rates, operating expenses, the availability and price of natural gas, global government stimulus packages, the acceptance of and shift to natural gas vehicles, the relaxation or waiver of fuel emission standards, the inability of fleets to access capital or government funding to purchase natural gas vehicles, the development of competing technologies, our ability to adequately develop and deploy our technology, the actions and determinations of our joint venture and development partners, as well as other risk factors and assumptions that may affect our actual results, performance or achievements or financial position discussed in our most recent Annual Information Form and other filings with securities regulators. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they were made. We disclaim any obligation to publicly update or revise such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in these forward looking statements except as required by National Instrument 51-102. The contents of any website, RSS feed or twitter account referenced in this press release are not incorporated by reference herein.
More InformationCaroline SawamotoManager, Investor Relations & CommunicationsWestport Fuel SystemsT: +1 firstname.lastname@example.org