VANCOUVER, BC – Westport Innovations Inc. (TSX:WPT / NASDAQ:WPRT), engineering the world's most advanced natural gas engines and vehicles, today reported financial results for the fourth quarter and year ended December 31, 2013 and provided an update on operations. All figures are in U.S. dollars unless otherwise stated.
(The reconciliation of Adjusted EBITDA is described below)
Westport remains committed to positive Adjusted EBITDA from operations by the end of 2014. To achieve this financial goal, Westport will focus on increasing product volumes and related sales, reducing costs and prioritizing investment programs. Changes and improvements over previous periods include:
"2013 was a challenging transition year as Westport moved from its market creation, demonstration project culture to a focused product business in a strong growth market," said David Demers, CEO of Westport. "This involved looking at every market opportunity and every current product in order to assess strategic priorities and to optimize our position in the emerging global market for fully integrated OEM-built natural gas vehicles."
"Our two joint ventures, Cummins Westport and Weichai Westport, each posted record volumes and strong revenue growth for the year, up 57% and 71%, respectively. I think it's worth noting that these two businesses collectively sold almost 50,000 new medium and heavy-duty natural gas engines during the year. We expect continued strong growth particularly as we see a full year of sales of the newly-launched ISX12 G engine for North American trucks through our CWI joint venture, as well as new products from Weichai Westport in China."
"In the Westport direct operating segments, we initiated first shipments in several major new products in the fourth quarter, including the new Westport iCE PACK LNG Tank System for trucks and our first LNG fuel tender for locomotives. We announced our new HPDI 2.0 system for heavy-duty vehicles, and new spark-ignition engine systems for the automotive market."
"In addition, we have substantially restructured existing businesses and shifted production and supply chain operations in order to optimize operating efficiencies and to prioritize spending in businesses showing strong growth opportunities going forward. We announced the conclusion of our first generation HPDI truck systems, and shipped our last system in December. Of course, we will continue to support our first generation of HPDI customers and have taken appropriate financial provisions to ensure this business is well-supported. As a result of these unusual adjustments and financial provisions, we recorded a charge of $67.8 million in the fourth quarter."
"Financially, we have announced that we expect to see our operating business units reach positive Adjusted EBITDA by the end of 2014, and on a consolidated basis including all of our investment programs, we expect to achieve this goal on a corporate wide basis by the end of 2015."
"We expect to achieve this significant milestone through three factors - strong sales of existing products, reduced expenses as a result of rationalizing product and operations in 2013, and completion of investment programs resulting in new product sales while reducing investment expense. 2014 is going to be a landmark year, as the market for natural gas vehicles continues to grow, and as Westport builds upon its globally recognized technology to become a profitable growth business with global market leadership."
Westport expects revenue to be between $175 million and $185 million for the year ended December 31, 2014, which represents growth of 7 to 13% over 2013. Important to note, however, is that Westport is starting the year without the $25 million in revenue contributions from the first generation Westport HPDI system.
As Westport shifts from market creation work to a full commercial operation and profitability, Westport has announced two interim financial milestones. Westport's first milestone is to have its three operating business units combined to achieve positive Adjusted EBITDA by the end of 2014. Westport's second milestone is to have its consolidated business to achieve positive Adjusted EBITDA by the end of 2015, driven by contributions from Westport's operating business units, Westport's share of net income from the joint ventures, and service revenue earned from Westport's development partners.
|($ in millions, except per share amounts)||3 months|
ended Dec 31
ended Dec 31
|Consolidated revenues||$ 52.6||$ 39.9||32%||$ 164.0||$ 155.6||5%|
|Consolidated gross margin||(17.0)||13.3||(228%)||15.3||53.2||(71%)|
|Consolidated gross margin percentage||(32.3%)||33.3%||-||9.3%||34.2%||-|
(Research and development, general and administrative, and sales and marketing)
|Income from unconsolidated joint ventures||3.5||1.8||94%||13.4||16.2||(17%)|
|Consolidated adjusted EBITDA
(The reconciliation of adjusted EBITDA is described below)
|Cash and short-term investments balance||210.6||215.9||(2%)||210.6||215.9||(2%)|
|Net loss per share||(1.42)||(0.68)||110%||(3.22)||(1.83)||76%|
Note: prior periods have been recast to conform to current segment presentation.
|($ in millions)||3 months ended (2013)|
|DEC 31||SEP 30||JUN 30||MAR 31|
|Applied Technologies||$ 1.6||$ 2.1||$ 2.8||$ 2.2|
|Total Operating Business Units Adjusted EBITDA||(8.4)||(8.6)||(8.9)||(8.7)|
|Corporate & Technology Investments||(14.8)||(10.9)||(18.9)||(17.7)|
|Consolidated Adjusted EBITDA||$ (23.2)||$ (19.5)||$ (27.8)||$ (26.4)|
|($ in millions)||3 months|
ended Dec 31
ended Dec 31
|Revenue||$ 110.5||$ 42.9||158%||$ 310.7||$ 198.0||57%|
|Gross margin percentage||12.5%||25.6%||-||20.7%||31.0%||-|
|Segment operating income||3.7||2.0||85%||23.5||35.3||(33%)|
|Net income to Westport||2.8||1.2||133%||9.4||13.2||(29%)|
Note: Comparative periods have been recast to conform to current segment presentation.
|($ in millions)||3 months|
ended Dec 31
ended Dec 31
|Revenue||$ 93.6||$ 107.4||(13%)||$ 466.6||$ 272.1||71%|
|Gross margin percentage||10.3%||4.2%||-||8.0%||9.1%||-|
|Segment operating income||2.4||1.6||50%||14.5||9.8||48%|
|Westport 35% interest||0.6||0.5||20%||4.3||2.9||48%|
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) non-cash and other unusual adjustments, (e) amortization of stock-based compensation, and (f) unrealized foreign exchange gain or loss. 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 Dec 31
ended Dec 31
|Net loss||$ (89.5)||$ (37.6)||$ (185.4)||$ (98.8)|
|Provision for income taxes||-||0.1||0.9||1.7|
|Depreciation and amortization||4.6||3.3||16.3||11.4|
|Interest expense, net||0.7||1.8||4.4||5.7|
|Non-cash and other unusual adjustments||67.8||-||67.8||-|
|Amortization of stock-based compensation||3.3||3.3||14.3||12.5|
|Unrealized foreign exchange gain (loss)||(10.1)||(1.7)||(15.2)||1.2|
|Adjusted EBITDA||$ (23.2)||$ (30.8)||$ (96.9)||$ (66.3)|
|* Excluding non-cash and other unusual adjustments related to the first generation of Westport™ HPDI systems.
** Prior periods have been recast to conform to current segment presentation.
|($ in millions)||Segment |
Share of Income
from the JVs
|For the 3 months ended Dec. 31, 2013|
|Operating Business Units*||$(9.5)||$-||$1.1||$(8.4)|
|Corporate and Technology Investments||(20.4)||3.5||2.1||(14.8)|
|For the 3 months ended Sep. 30, 2013**|
|Operating Business Units||(10.9)||-||2.3||(8.6)|
|Corporate and Technology Investments||(16.0)||3.7||1.4||(10.9)|
|For the 3 months ended Jun. 30, 2013**|
|Operating Business Units||(10.8)||-||1.9||(8.9)|
|Corporate and Technology Investments||(25.7)||4.6||2.2||(18.9)|
|For the 3 months ended Mar. 31, 2013**|
|Operating Business Units||(10.0)||-||1.3||(8.7)|
|Corporate and Technology Investments||(21.4)||1.7||2.0||(17.7)|
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 year ended December 31, 2013, please see our Financial Information page.
Westport has scheduled a conference call for today, Wednesday, February 26, 2014 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 March 5, 2014. Shortly after the conference call, the webcast will be archived on Westport website and replay will be available in streaming audio and a downloadable MP3 file.
The Westport 2014 Annual & Special Meeting of Shareholders will be held on Thursday, April 24, 2014 at 2:00 PM (Pacific Time) at the Pan Pacific Hotel, 999 Canada Place, Vancouver, British Columbia.
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 timing for Westport's operating business units and consolidated business to be Adjusted EBITDA positive, revenue expectations, the effect of the recent reorganization and restructuring of our business, timing for launch, delivery and completion of milestones related to the products referenced herein, including but not limited to the natural gas locomotive with HPDI technology, 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, 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 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.
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