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VANCOUVER, BC – Westport Innovations Inc. (TSX:WPT / NASDAQ:WPRT), the global leader in natural gas engines, today reported financial results for the third quarter ended September 30, 2013 and provided an update on operations. All figures are in U.S. dollars unless otherwise stated.
Highlights include:
"2013 is an exciting transition year for us as we see the continued rapid development of markets for natural gas vehicles," said David Demers, CEO of Westport. "As natural gas truly begins to penetrate our economy, the benefits of a step change cost in transportation energy will be profound and far-reaching. Westport is moving quickly as we transition from a market creation culture into a full commercial operation. Over the next few years we will be rebalancing our product portfolio and our business model as our OEM partnerships mature and develop."
"First, in terms of developments in our current portfolio, Cummins Westport's new ISX12 G is off to a good start this year and we expect very strong growth next year. I think we have the right product at the right time to see a real breakthrough that will establish natural gas as a major fuel for trucks around the world which will be a catalyst for further investment in refueling infrastructure. Furthermore, it is great to see interest building for the Westport iCE PACK™ liquefied natural gas (LNG) Tank system as illustrated in our purchase order announcement earlier today for 900 iCE PACKs over the next two years."
"We see many of the engine and vehicle OEMs transitioning to natural gas on a vertically-integrated basis and our recently completed equity financing gives us the balance sheet strength to expand our reach into fast developing opportunities where we can create value for our OEM partners and Westport shareholders," stated Demers.
| *As of October 1, 2013, cash and short-term investments balance was $237.5 million. | ||||||
| ($ in millions, except per share amounts) | 3 months ended SEP 30 | change | 9 months ended SEP 30 | change | ||
|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |||
| Consolidated revenues | $ 46.5 | $ 30.7 | 51% | $ 111.4 | $ 115.7 | (4%) |
| Consolidated gross margin | 16.0 | 7.8 | 105% | 32.4 | 39.7 | (18%) |
| Consolidated gross margin percentage | 34.4% | 25.4% | - | 29.1% | 34.3% | - |
| Operating expenses (Research and development, general and administrative, and sales and marketing) |
42.9 | 32.7 | 31% | 127.2 | 98.8 | 29% |
| Income from unconsolidated joint ventures | 3.7 | 4.3 | (14%) | 10.0 | 14.4 | (31%) |
| Consolidated adjusted EBITDA (The reconciliation of adjusted EBITDA is described below) |
(19.5) | (17.6) | 11% | (73.7) | (35.5) | 108% |
| Cash and short-term investments balance | 89.3* | 255.5 | (65%) | 89.3 | 255.5 | (65%) |
| Net loss | (30.2) | (32.5) | (7%) | (96.0) | (61.2) | 57% |
| Net loss per share | (0.53) | (0.59) | (10%) | (1.72) | (1.14) | 51% |
2013 is a transition year. As Westport shifts from market creation work to a full commercial operation, Westport plans to begin generating positive cash flows from its operating business units. Westport's plan is to have its three operating business units to be Adjusted EBITDA positive by the end of 2014.
Building upon contributions from Westport's operating business units, Westport's share of net income from the joint ventures and funding from Westport's development partners are planned to fund the Corporate & Technology Investments business unit. As a result, Westport's plan is to have its consolidated business to be Adjusted EBITDA positive by the end of 2015.
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* Adjusted EBITDA reconciliation is described below. |
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| ($ in millions) | 3 months ended (2013) | ||
|---|---|---|---|
| SEP 30 | JUN 30 | MAR 31 | |
| Applied Technologies | $ 2.1 | $ 2.9 | $ 2.3 |
| On-Road Systems | (7.2) | (8.6) | (8.6) |
| New Markets and Off-Road Systems | (3.6) | (3.1) | (2.4) |
| Total Operating Business Units Adjusted EBITDA | (8.7) | (8.8) | (8.7) |
| Corporate & Technology Investments | (10.8) | (19.0) | (17.7) |
| Consolidated Adjusted EBITDA | (19.5) | (27.8) | (26.4) |
| ($ in millions) | 3 months ended SEP 30 | change | 9 months ended SEP 30 | change | ||
|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |||
| Units | 2,409 | 1,588 | 52% | 6,438 | 5,503 | 17% |
| Revenue | $ 77.5 | $ 45.5 | 70% | $ 200.2 | $ 155.1 | 29% |
| Gross margin | 17.7 | 13.4 | 32% | 50.5 | 50.5 | - |
| Gross margin percentage | 22.8% | 29.5% | - | 25.2% | 32.6% | - |
| Operating expenses | 9.8 | 6.4 | 53% | 30.6 | 17.1 | 79% |
| Segment operating income | 7.9 | 7.0 | 13% | 19.9 | 33.4 | (40%) |
| Net income to Westport | 2.5 | 3.6 | (31%) | 6.6 | 12.0 | (45%) |
| ($ in millions) | 3 months ended SEP 30 | change | 9 months ended SEP 30 | change | ||
|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |||
| Units | 9,080 | 4,825 | 88% | 30,019 | 12,884 | 133% |
| Revenue | $ 114.6 | $ 58.7 | 95% | $ 373.0 | $ 164.7 | 126% |
| Gross margin | 8.8 | 4.6 | 91% | 27.8 | 20.3 | 37% |
| Gross margin percentage | 7.7% | 7.8% | - | 7.5% | 12.3% | - |
| Operating expenses | 4.6 | 2.3 | 100% | 15.6 | 12.1 | 29% |
| Segment operating income | 4.2 | 2.3 | 83% | 12.2 | 8.2 | 49% |
| Westport 35% interest | 1.3 | 0.7 | 86% | 3.6 | 2.3 | 57% |
Adjusted EBITDA is used by management to review operational progress of its business units and investment programs over successive periods and as a long-term indicator of operational performance since it ties closely to the unit's ability to generate sustained cash flows. Westport defines Adjusted EBITDA as net loss attributed to the business unit or the consolidated company excluding expenses for (a) income taxes, (b) depreciation and amortization, (c) interest expense, net, (d) amortization of stock-based compensation, and (e) unrealized foreign exchange loss or gain. Adjusted EBITDA includes Westport's share of income from the joint ventures (JVs). 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 Westport'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 Westport's actual cash expenditures. Other companies may calculate similar measures differently than Westport, limiting their usefulness as comparative tools. Westport compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only supplementally.
| ($ in millions) | 3 months ended SEP 30 | 9 months ended SEP 30 | |||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Net loss | $ (30.2) | $ (32.5) | $ (96.0) | $ (61.2) | |
| Provision for income taxes | 0.3 | 0.1 | 0.9 | 1.6 | |
| Depreciation and amortization | 4.3 | 2.9 | 11.7 | 8.1 | |
| Interest expense, net | 1.2 | 1.6 | 3.7 | 3.9 | |
| EBITDA | (24.4) | (27.9) | (79.7) | (47.6) | |
| Amortization of stock-based compensation | 3.6 | 2.9 | 11.1 | 9.2 | |
| Unrealized foreign exchange gain (loss) | 1.3 | 7.4 | (5.1) | 2.9 | |
| Adjusted EBITDA | $ (19.5) | $ (17.6) | $ (73.7) | $ (35.5) | |
| ($ in millions) | Applied Technologies | On-Road Systems | New Markets & Off-Road Systems | Corporate & Technology Investments | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 3 months endED (2013): | SEP 30 | JUN 30 | MAR 31 | SEP 30 | JUN 30 | MAR 31 | SEP 30 | JUN 30 | MAR 31 | SEP 30 | JUN 30 | MAR 31 |
| Segment operating income (loss) | 1.6 | 2.2 | 1.9 | (7.9) | (9.4) | (9.1) | (4.7) | (3.5) | (2.8) | (15.9) | (25.8) | (21.4) |
| Westport's share of income from the JVs | - | - | - | - | - | - | - | - | - | 3.7 | 4.6 | 1.7 |
| Stock-based compensation | 0.5 | 0.7 | 0.4 | 0.7 | 0.8 | 0.5 | 1.1 | 0.4 | 0.4 | 1.4 | 2.2 | 2.0 |
| Adjusted EBITDA | 2.1 | 2.9 | 2.3 | (7.2) | (8.6) | (8.6) | (3.6) | (3.1) | (2.4) | (10.8) | (19.0) | (17.7) |
Westport reiterates its revenue outlook to between $160 million and $180 million for the calendar year ended December 31, 2013.
This press release includes financial outlook information for Westport and such information is being provided for the purpose of updating prior revenue disclosure and may not be appropriate for, and should not be relied upon for, other purposes.
To view Westport’s full financials for the quarter, please see our Financial Information page.
Westport has scheduled a conference call for today, Wednesday, October 30, 2013 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 Investors page.
To access the conference call replay, please dial 1-800-319-6413 (Canada & USA toll-free) or 604-638-9010 using the pass code 1847. The replay will be available until November 6, 2013. Shortly after the conference call, the webcast will be archived on the Company’s website and replay will be available in streaming audio.
At Westport Fuel Systems, we are driving innovation to power a cleaner tomorrow. We are a leading supplier of advanced fuel delivery components and systems for clean, low-carbon fuels such as natural gas, renewable natural gas, propane, and hydrogen to the global automotive industry. Our technology delivers the performance and fuel efficiency required by transportation applications and the environmental benefits that address climate change and urban air quality challenges. Headquartered in Vancouver, Canada, with operations in Europe, Asia, North America and South America, 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.
This press release contains forward-looking statements, including statements regarding the anticipated consolidated revenue and revenue growth of Westport for calendar year 2013, timing for launch and completion of milestones related to the engine products referenced herein, including but not limited to the 400HP Cummins Westport ISX12 G, the Westport iCE PACK™ LNG Tank System, the GAZ Group natural gas system, natural gas tender product, timing and expectations for future cash flows, the demand for our products, the future success of our business and technology strategies, investment in new product and technology development and otherwise, cash and capital requirements, intentions of partners and potential customers, the performance and competitiveness of Westport's products and expansion of product coverage, future market opportunities, speed of adoption of natural gas for transportation and terms and timing of future agreements as well as Westport management's response to any of the aforementioned factors. 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, governmental policies and regulation, technology innovations, fluctuations in foreign exchange rates, 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 sufficiency of bio methane for use in our vehicles, the development of competing technologies, our ability to adequately develop and deploy our technology 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.
