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 quarter ended March 31, 2016 and provided an update on operations. All figures are in U.S. dollars unless otherwise stated.
"In the first three months of 2016, we have made solid progress towards our goals for the year,” said David Demers, CEO of Westport. “We are maintaining our focus on key products, such as the Westport high-pressure direct injection ("Westport™ HPDI") 2.0 technology, while reducing and managing our costs. This was demonstrated by the positive adjusted EBITDA in the quarter for Westport Operations, despite macro headwinds in multiple end markets. We have also strengthened our balance sheet through a strategic financing with Cartesian Capital Group and the sale of non-core assets. This solid foundation is expected to be further bolstered by Fuel Systems Solutions, Inc. (“Fuel Systems”) following completion of the merger. All Fuel Systems stockholders of record should submit their proxy promptly, even if they were stockholders of record as of the prior record date and submitted a proxy for the previously scheduled meeting.”
“We believe that 2016 will be a transformational year in the evolution of Westport,” continued Demers. “Upon completion of the Fuel Systems merger, the combined company will be a premier alternative fuel vehicle, engine and components company, possessing the scale and strategic partnerships to compete effectively, grow, and deliver strong shareholder value as markets improve. We have also continued our progress in bringing the Westport™ HPDI 2.0 to market with our first OEM customers, and we are working very closely with AVL to attract more OEM partners. The introduction of the Cummins Westport ISB6.7 G and the ISL G Near Zero NOx natural gas engine later this year will put CWI at the forefront of the natural gas truck market in North America. We will continue to rationalize operations, drive cost efficiencies, and reduce overhead expenses as our business transitions to an asset-light, profitable growth business.”
Westport will provide full year guidance after the closing of the merger with Fuel Systems.
|($ in millions, except per share amounts)||3 months|
ended MAR 31
Better / (Worse)
|Westport revenues||$ 24.0||$ 28.0||(14.3 %)|
|Westport gross margin||6.8||5.4||25.9 %|
|Westport gross margin percentage||28.3 %||19.3 %||-|
(Research and development, general and administrative, and sales and marketing)
|Income from unconsolidated joint ventures||2.0||6.2||(66.7 %)|
|Consolidated adjusted EBITDA
(The reconciliation of Adjusted EBITDA is described below)
|Cash and short-term investments balance||24.6||71.3||(65.5 %)|
|Net loss||(23.3)||(17.2)||(35.5 %)|
|Net loss per share||(0.36)||(0.30)||(33.3 %)|
|($ in millions)||3 months|
ended Mar 31
BETTER / (WORSE)
|Revenue||$ 65.0||$ 73.0||(11.0 %)|
|Gross margin||20.6||26.6||(22.6 %)|
|Gross margin percentage||31.7 %||36.4 %||-|
|Operating expenses||15.9||11.9||(33.6 %)|
|Segment operating income||4.7||14.6||(67.8 %)|
|Westport's 50% interest||1.8||5.9||(69.5 %)|
|($ in millions)||3 months|
ended mar 31
BETTER / (WORSE)
|Revenue||$ 29.9||$ 55.9||(46.5 %)|
|Gross margin||3.0||5.7||(47.4 %)|
|Gross margin percentage||10.0 %||10.2 %||-|
|Operating expenses||2.3||4.7||51.1 %|
|Segment operating income||0.7||1.0||(30.0 %)|
|Westport's 35% interest||0.2||0.3||(33.3 %)|
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) 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 as supplemental information.
|($ in millions)||3 months|
ended Mar 31
|Loss before income taxes||$ (23.4)||$ (16.7)|
|Depreciation and amortization||3.1||3.5|
|Interest expense, net||2.3||1.5|
|Non-cash and other unusual adjustments||2.1||2.0|
|Amortization of stock-based compensation||4.0||3.4|
|Unrealized foreign exchange (gain) loss||1.3||(2.9)|
|Adjusted EBITDA||$ (10.6)||$ (9.2)|
|($ in millions)||Segment |
Share of Income
from the JVs
|For the 3 months ended Mar. 31, 2016|
|Corporate and Technology Investments||(18.4)||2.0||5.8||(10.6)|
|Total Adjusted EBITDA||$(18.7)||$2.0||$6.1||$(10.6)|
|($ in millions)||Mar 31|
|Corporate and Technology Investments||(10.6)||(10.6)||(7.9)||(7.5)|
|Total Adjusted EBITDA||$(10.6)||$(12.3)||$(9.8)||$(7.7)|
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 2016 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 three months ended March 31, 2016, 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 three months ended March 31, 2016 and Westport's full financials for the year ended December 31, 2015. 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 12, 2016 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 00514. The replay will be available until May 19, 2016. Shortly after the conference call, the webcast will be archived on the Westport website and replay will be available in streaming audio and a downloadable MP3 file.
This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the United States Securities Act of 1933, as amended. Subject to certain exceptions to be approved by the relevant regulators or certain facts to be ascertained, the public offer will not be made directly or indirectly, in or into any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction, or by use of the mails or by any means or instrumentality (including without limitation, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or any facility of a national securities exchange, of any such jurisdiction.
Westport has filed with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form F-4, which includes the revised proxy statement of Fuel Systems that also constitutes a prospectus. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE REVISED PROXY STATEMENT/PROSPECTUS, AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT WESTPORT, FUEL SYSTEMS, THE PROPOSED TRANSACTIONS AND RELATED MATTERS. Investors and stockholders are able to obtain free copies of the revised proxy statement/prospectus and other documents filed with the SEC by the parties through the website maintained by the SEC at www.sec.gov. In addition, investors and stockholders are able to obtain free copies of the revised proxy statement/prospectus and other documents filed with the SEC by the parties by contacting Westport Investor Relations at 1-604-718-2046 or email@example.com (for documents filed with the SEC by Westport) or Fuel Systems Investor Relations advisors, LHA, at 1-415-433-3777 or firstname.lastname@example.org (for documents filed with the SEC by Fuel Systems).
Westport, Fuel Systems and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Fuel Systems in respect of the proposed transactions contemplated by the revised proxy statement/prospectus. Information regarding the persons who are, under the rules of the SEC, participants in the solicitation of the stockholders of Fuel Systems in connection with the proposed transactions, including a description of their direct or indirect interests, by security holdings or otherwise, are set forth in the revised proxy statement/prospectus filed with the SEC. Information regarding Westport's directors and executive officers is contained in Westport's Annual Report on Form 40-F for the year ended December 31, 2015, and its Management Information Circular, dated March 11, 2015, which is filed with, in the case of the Annual Report on Form 40-F, and furnished to, in the case of the Management Information Circular, the SEC and can be obtained free of charge from the sources indicated above. Information regarding Fuel System's directors and executive officers is contained in Fuel System's Annual Report on Form 10-K for the year ended December 31, 2015 and its Proxy Statement on Schedule 14A, dated April 14, 2015, each of which are filed with the SEC and can be obtained free of charge from the sources indicated above.
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 revenue and cash usage expectations, the effect of reorganization and restructuring of our business, the anticipated benefits of the merger with Fuel Systems, the timing and expected completion of the merger with Fuel Systems, future rationalization of operations and reduction of overhead expenses, outcome and achievability of Westport's referenced strategy for 2016, continued research and development investment, future of our development programs (including those relating to the referenced HPDI injector production facility and such injectors), timing for launch, delivery and completion of milestones related to the products referenced herein, Westport's expected actions, 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, 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.
We will participate in the alphaDIRECT Virtual Conference Series to provide a business update relating to the impact of COVID-19 on global operations on Tuesday April 14, 2020 at 1:00 pm Pacific Time.
In response to the ongoing global COVID-19 pandemic, we will host its upcoming Annual and Special Meeting of shareholders in a virtual only format, April 29, 2020 at 10:00 am Pacific Time.
$6.0 Million of Principal Payments Deferred to Improve Liquidity
Westport Fuel Systems today announced it will temporarily suspend production at its facilities in Cherasco and Albinea, Italy.
Strong 2019 Financial Performance