VANCOUVER, BC – Westport Innovations Inc. (TSX:WPT / NASDAQ:WPRT), engineering the world's most advanced natural gas engines and systems, today reported financial results for the first quarter ended March 31, 2015 and provided an update on operations. All figures are in U.S. dollars unless otherwise stated.
The global market for natural gas vehicles demonstrated resilience with continued expansion in several markets in the first quarter of 2015 despite headwinds from volatile oil prices and economic turbulence in many of Westport's key markets.
"The swift change in global energy pricing caused some short term disruption to our business plan at the end of 2014, but this quarter demonstrates that we have successfully reset our plans and we are back on track," said David Demers, Westport's CEO. "Our strong and diversified product portfolio and position in key global markets has meant we can deliver improvements to the bottom line at the same time as we improve our market position and advance our technology leadership with aggressive product development initiatives."
"Our consolidated business demonstrated a dramatic improvement in cash used in operations compared to the average in 2014. We achieved this result through our focus on key products and key markets, and improved operational efficiencies across the business, while continuing investment in key strategic programs including HPDI 2.0 products. We believe this steady focus is extending our competitive lead while building long term value for our customers and investors. We will continue to focus on profitable growth in our current markets, launching new products that establish new benchmarks for price and performance, and continuing to build towards positive consolidated adjusted EBITDA targeted by mid-2016."
Revenue for Westport Operations and Corporate & Technology Investments ("Westport Operations") was $28.0 million for the first quarter ended March 31, 2015 in line with 2015 expectations and up 2% sequentially from Q4 2014. Westport is reiterating its revenue outlook and expects consolidated revenue from these two segments to be between $110 million and $125 million for the year ended December 31, 2015. As in the past, we do not provide financial forecasts for our individual joint ventures.
|($ in millions, except per share amounts)||3 months|
ended MAR 31
Better / (Worse)
|Consolidated revenues||$ 28.0||$ 39.9||(30 %)|
|Consolidated gross margin||5.4||12.3||(56 %)|
|Consolidated gross margin percentage||19.3 %||30.8 %||-|
(Research and development, general and administrative, and sales and marketing)
|Income from unconsolidated joint ventures||6.3||(0.4)||1,675 %|
|Consolidated adjusted EBITDA
(The reconciliation of Adjusted EBITDA is described below)
|Cash and short-term investments balance||71.3||183.9||(61 %)|
|Net loss per share||(0.27)||(0.38)||29%|
|($ in millions)||3 months|
ended Mar 31
BETTER / (WORSE)
|Revenue||$ 73.0||$ 80.1||(9 %)|
|Gross margin||26.6||7.6||250 %|
|Gross margin percentage||36.4 %||9.5 %||-|
|Operating expenses||11.7||9.7||(21 %)|
|Segment operating income||14.9||(2.1)||810 %|
|Net income to Westport (50% interest)||5.9||(0.8)||838 %|
|($ in millions)||3 months|
ended mar 31
BETTER / (WORSE)
|Revenue||$ 55.9||$ 113.4||(51 %)|
|Gross margin||5.7||6.3||(10 %)|
|Gross margin percentage||10.2 %||5.6 %||-|
|Operating expenses||4.7||4.6||(2 %)|
|Segment operating income||1.0||1.7||(41 %)|
|Net income to Westport (35% interest)||0.3||0.5||(40 %)|
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 Mar 31
|Net loss||$ (17.2)||$ (23.9)|
|Provision for income taxes||0.5||-|
|Depreciation and amortization||3.5||4.3|
|Interest expense, net||1.5||0.8|
|Non-cash and other unusual adjustments||2.0||0.9|
|Amortization of stock-based compensation||3.4||4.7|
|Unrealized foreign exchange (gain) loss||(2.9)||(8.9)|
|Adjusted EBITDA||$ (9.2)||$ (22.1)|
|($ in millions)||Segment |
Share of Income
from the JVs
|For the 3 months ended Mar. 31, 2015|
|Operating Business Units||$(3.9)||$-||$2.5||$(1.4)|
|Corporate and Technology Investments||(16.9)||6.3||2.8||(7.8)|
|($ in millions)||Mar 31|
|Operating Business Units||$(1.4)||$(11.6)||$(5.4)||$1.0|
|Corporate and Technology Investments||(7.8)||(11.4)||(16.6)||(17.9)|
|Total Adjusted EBITDA||$(9.2)||$(23.0)||$(22.0)||$(16.9)|
This press release includes financial outlook information for Westport and such information is being provided for the purpose of forecasting Westport's total revenues and Adjusted EBITDA for 2015 and updating prior revenue and Adjusted EBITDA 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 ended March 31, 2015, please see our Financial Information page.
To view unaudited historical financial information, please visit our Financial Information page. Westport is providing this supplement as a guide to Westport’s financial information in a quick reference format and it should be read in conjunction with Westport’s full financials for the quarter ended March 31, 2015 and Westport’s full financials for the year ended December 31, 2014. The Supplementary Financial Information contains previously undisclosed quarterly unaudited historical financial information based on the most recent reporting structure that was implemented in the fourth quarter of 2013 and is being provided in order to allow readers to better reconcile such information with the prior reporting structure.
Westport has scheduled a conference call for today, Thursday, May 7, 2015 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 1-855-669-9658 (Canada & USA toll-free) or 604-674-8052 using the pass code 1847. The replay will be available until May 14, 2015. 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.
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 and cash usage expectations, the effect of the recent reorganization and restructuring of our business, continued research and development investment, future of our development programs, timing for launch, delivery and completion of milestones related to the products referenced herein, including but not limited to Volvo cars with Westport's natural gas systems, Westport's HPDI 2.0 products and the Westport GEMDi program, Westport's expected actions and results relating to the key components of its strategy in 2015, future sales of non-core assets and the benefits therefrom, 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, 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.
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