Westport Reports First Quarter Fiscal 2013 Financial Results

         Westport Reports First Quarter Fiscal 2013 Financial Results

PR Newswire

VANCOUVER, May 2, 2013

~ Maintains Revenue Outlook for up to 30% Year over Year Growth and 2013
Product Launch Schedule ~

VANCOUVER, May 2, 2013 /PRNewswire/ - Westport Innovations Inc. (TSX:WPT /
NASDAQ:WPRT), the global leader in natural gas engines, today reported
financial results for the first quarter ended March 31, 2013 and provided an
update on operations. All figures are in U.S. dollars unless otherwise stated.

Highlights include:

  *Westport revenue for the quarter ended March 31, 2013 was $30.1 million
    compared with $36.0 million for the same period last year.
  *For the quarter ended March 31, 2013 Westport reported a net loss of $31.8
    million or $0.57 per share compared to $22.6 million or $0.44 per share
    for the same period last year.
  *Segment revenue for the quarter ended March 31, 2013 was: $23.3 million
    for Applied Technologies; $5.8 million for On-Road Systems; $1.0 million
    for Corporate and Technology Investments; $44.7 million for Cummins
    Westport Inc. (CWI) and $105.9 million for Weichai Westport Inc. (WWI).
    For comparative purposes and consistency with previous presentations,
    Westport plus CWI revenue was $74.8 million.
  *In the first quarter of 2013, CWI shipped 1,313 units, On-Road shipped
    three Westport^TM 15L units and 204 Westport WiNG^TM Power System units,
    and WWI shipped 8,529 units.
  *Westport and ENN Group signed an agreement for liquefied natural gas (LNG)
    as a fuel for on-road, off-road, rail and marine applications.
  *Westport and Clean Energy launched a co-marketing program to increase the
    use of LNG in trucking applications in North America and offer a bundled
    solution for the purchase of natural gas trucks.
  *Cummins Westport ISX12 G engine was featured at the Mid-America Trucking
    Show, with new truck products shown for 2013 delivery. Production of the
    ISX12 G began on schedule in April.
  *Announced the availability of the Ford F-Series Super Duty pickup trucks
    with the Westport WiNG Power System in Canada, and availability of the
    system in the Ford F-450 and F-550 platforms.

"As expected, our first quarter of 2013 was a transition period with remnant
effects from soft market conditions at the end of 2012, and the impact on
timing and recognition of service revenue and opportunities in our On-Road
Systems business," said David Demers, CEO of Westport. "We are expecting a
step change in growth over the course of this year and remain confident the
market for natural gas as a fuel in trucking is here and now - not five or ten
years down the road. With the launch of so many new truck models with the new
Cummins Westport ISX12 G engine, we see strong customer demand going forward
alongside our new Westport^TM LNG Tank System. At the same time, the change in
infrastructure availability year-over-year has been impressive, and more is on
the way. Our Westport WiNG^TM products have established a market leading
position for performance, quality and value. We are expanding that offering
into the larger F-450/550 models, and will be producing in Canada for the
Canadian market in June."

"Internationally, we continue to see excellent growth in China, with our
Weichai joint venture shipping more than 8,500 engines this quarter, up over
200%," continued Demers. "In Sweden, uncertainty about the availability of
government incentives slowed sales substantially in the quarter, but the
recent announcement by the Swedish government that natural gas vehicles
credits would continue for three years is expected to revive sales."

"Perhaps the most interesting news this quarter was the extent of interest in
use of LNG in the rail industry. Our programs with Caterpillar to develop
locomotives and mining applications that use Westport^TM HPDI technology for
high performance and fuel economy that matches diesel are going well and we
are seeing high commitment to building an LNG fuel distribution system
dedicated to the rail industry."

"We are reiterating strong sustainable growth for the full year in 2013, based
on a build in new products sales, particularly in our On-Road Systems
business," stated Demers. "We are in a position to capture our share of this
emerging opportunity by leveraging our first mover advantage, technologies,
and asset-light business model. Our balance sheet has enabled us to
continually invest in new products and innovative technologies that will
fundamentally change the transportation sector."

First Quarter Fiscal Year 2013 Financial Highlights

                                  Three Months Ended March 31, % Change
($ in millions, except per share         2013             2012
amounts)
Consolidated revenues                     $ 30.1     $ 36.0   (16%)
Consolidated gross margin                        8.1            8.9    (9%)
Consolidated gross margin                      26.9%          24.7%     -
percentage
Operating expenses (Research and
development, general                            39.5           32.0    23%
and administrative and sales and
marketing)
Income from unconsolidated joint                 1.7            5.5   (69%)
ventures
Consolidated adjusted EBITDA
(The reconciliation of adjusted               (26.3)         (13.9)     
EBITDA is described below)
Total employees                                1,072            852    26%
Cash and short-term investments                173.9          303.5   (43%)
balance
Net loss                                      (31.8)         (22.6)    41%
Net loss per share                            (0.57)         (0.44)    30%

  *Westport product revenue for the quarter ended March 31, 2013 was $27.3
    million, a decrease of $8.0 million, or 23%, from $35.3 million for the
    quarter ended March 31, 2012. The decrease is primarily due to timing of a
    small number of major fleet orders on the Westport 15L system and
    uncertainty around Swedish government incentives which impacted the sale
    of the Westport bi-fuel system for the Volvo V70 cars. Westport parts
    revenue for the quarter ended March 31, 2013 was $1.3 million, an increase
    of $0.6 million, or 86%, from $0.7 million for the quarter ended March 31,
    2012. Service and other revenue was $1.4 million for the quarter ended
    March 31, 2013 compared with $nil for the same period last year.

  *Research and development expenses focused primarily on new products and
    new technology were $20.4 million for the quarter ended March 31, 2013, an
    increase of $6.2 million from $14.2 million in the same period last year.

  *General and administrative expenses were $11.7 million for the quarter
    ended March 31, 2013, an increase of $0.2 million from $11.5 million in
    the same period last year

  *Sales and marketing expenses were $7.4 million for the quarter ended March
    31, 2013, an increase of $1.1 million from $6.3 million in the same period
    last year primarily due to an increase in OEM development initiatives,
    North American trucking activities, and market development initiatives for
    off-road applications and OEM activities in China.

  *For the quarter ended March 31, 2013, Westport reported a consolidated
    adjusted EBITDA loss of $26.3 million compared with a loss of $13.9
    million in the prior year period. The change in EBITDA loss is due
    primarily to approximately $4.0 million lower contribution from CWI
    compared to the same period last year and from approximately $8.5 million
    increased product development investments. The reconciliation of adjusted
    EBITDA is described below.

  *Westport consolidated net loss for the quarter ended March 31, 2013
    increased due primarily to an increase in development activities for new
    product launches in 2013 related to automotive, trucking, and off-road
    applications, and a decrease in Westport's share of equity income from
    CWI. Included in the net loss is a $3.0 million net foreign exchange gain
    attributed mainly to the movement in the Canadian dollar relative to the
    U.S. dollar, which is unrealized. Excluding this impact, Westport
    consolidated net loss and net loss per share for the quarter ended March
    31, 2013 was $34.8 million and $0.63, respectively.

Financial Outlook for 2013
Westport reiterates its guidance for 2013 consolidated revenue (excluding
joint venture revenue) to be between $180 and $200 million, up 16 to 29
percent for 2013.

Applied Technologies Business Unit 

Applied Technologies          Three Months Ended March 31, % Change
($ in millions)                    2013            2012
Revenue                            $ 23.3     $ 23.3      -
Gross margin                              6.7            6.6      2%
Gross margin percentage                 28.8%          28.3%      -
Operating expenses                        4.8            3.8     26%
Segment operatingincome             1.9            2.8    (32%)

  *Applied Technologies revenue for the quarter ended March 31, 2013 was
    $23.3 million, comparable to the same period last year.
  *Applied Technologies gross margin and gross margin percentage for the
    quarter ended March 31, 2013 increased slightly primarily due to product
    mix.
  *Applied Technologies operating expenses for the quarter ended March 31,
    2013 increased by $1.0 million primarily related to new product
    development programs and the acquisition of facilities and assets of
    Advanced Engine Components Limited in Australia. The team in Perth is
    supporting new product development initiatives for the business unit.
  *Segment operating income for the quarter ended March 31, 2013 was $1.9
    million.

In February, GAZ Group, the leader of the Russian commercial vehicles market,
announced that it will launch a light commercial vehicle featuring a bi-fuel
engine into the Russian market. Compressed natural gas (CNG) components for
this vehicle, which have been certified in accordance with European standards,
will be supplied by Westport.

On-Road Systems Business Unit

On-Road Systems              Three Months Ended March 31, % Change
($ in millions)                   2013            2012
Revenue                            $ 5.8     $ 12.7    (54%)
Gross margin                             0.4            2.3    (83%)
Gross margin percentage            6.9%          18.1%      -
Operating expenses                       9.5           12.6    (25%)
Segment operating loss                 (9.1)         (10.3)    (12%)

  *On-Road Systems revenue for the quarter was down due to sales timing and
    product mix. Westport 15L shipments were impacted by timing of a small
    number of major fleet orders and the Westport bi-fuel system for Volvo V70
    cars was affected by uncertainty around Swedish government incentives.
    Strong sales were achieved by the Westport WiNG Power System and shipments
    of the Westport 2.4L product to forklift and oilfield customers also
    increased.
  *On-Road Systems shipped three Westport 15L units and 204 Westport WiNG
    Power System units during the quarter ended March 31, 2013.
  *On-Road Systems gross margin and gross margin percentage for the quarter
    ended March 31, 2013 decreased primarily due to low unit deliveries of the
    Westport 15L systems and product mix.
  *On-Road Systems operating expenses for the quarter ended March 31, 2013
    decreased by $3.1 million or 25%.

Shell and TravelCenters of America (TA) have agreed to build at least two LNG
fueling lanes at up to 100 existing TA and Petro Stopping Centers along the
U.S. interstate highway system. Shell is also building two LNG liquefaction
facilities in the Great Lakes and Gulf Coast to support natural gas use in
long-haul trucking and marine applications. Encana opened its first LNG
facility in Canada to support its customers in Alberta, including Ferus' fleet
with Westport 15L systems.

In March, Westport and Clean Energy Fuels announced a joint marketing program
for heavy-duty trucking customers seeking optimal on-board fuel storage,
high-performance natural gas engines, and reliable fueling. To encourage the
use of natural gas vehicles and the establishment of the growing fueling
infrastructure across North America, the companies will bundle the Westport
LNG Tank System—optimized for use with the Cummins Westport ISL G or the new
Cummins Westport ISX12 G engines—and a long-term fuel contract with Clean
Energy into a package for qualified customers. Commercial quantities of the
Westport LNG Tank System are expected to be available in September.
Furthermore, Westport and ENN Group signed an agreement for LNG as a fuel for
on-road, off-road, rail and marine applications globally.

New Markets and Off-Road Systems Business Unit

New Markets and Off-Road Systems   Three Months Ended March 31, % Change

($ in millions)                          2013           2012
Revenue                                           -             -      -
Gross margin                                      -             -      -
Gross margin percentage                           -             -      -
Operating expenses                        $ 2.8     $ 1.8     56%
Segment operating loss                        (2.8)         (1.8)     56%

  *The increase in operating expenses is due primarily to the increase in
    market and product development activities

Westport expects to launch a new product in the Off-Road market in 2013 and
establish a presence in one of the fastest developing markets in North
America. The winter test for the Weichai Westport high pressure direct
injection (HPDI) 12L system has been completed. The trucks performed well even
in the lowest temperature of minus 35 degrees Celsius. The Weichai Westport
HPDI 12L system has now completed all key tests including the summer test,
plateau test, and winter test. The next step is obtaining Euro V
certification, which is expected by the second half of 2013.

Corporate and Technology Investments Business Unit

Corporate and Technology           Three Months Ended March 31, % Change
Investments
($ in millions)                          2013           2012
Service revenue                           $ 1.0       $ -     n/a
Operating expenses                             22.5          13.9     62%
Segment operating loss                       (21.4)        (13.9)     54%

  *Corporate and Technology Investments includes investments in new research
    and development programs, revenues and expenses related to development
    programs with OEMs, corporate oversight and general administrative duties.
  *Service revenue represents revenue earned under Westport's development
    agreements during the quarter.
  *Investments in research and development and new and existing development
    programs increased 136% compared to the prior year period.
  *Corporate related costs decreased by 10% primarily related to a reduction
    in professional service fees incurred in the prior year period.

Cummins Westport Inc. Highlights

                               Three Months Ended March 31, % Change
($ in millions)                      2013            2012
Units                                     1,313          1,943    (32%)
Revenue                              $ 44.7     $ 52.7    (15%)
Gross margin                               12.3           19.6    (37%)
Gross margin percentage                   27.5%          37.2%      -
Operating expenses                         10.8            4.7     130%
Segment operating income^(1)             1.4           14.9    (91%)
Net income to Westport                      0.8            4.8    (83%)

(1) Segment operating income is based on segment net operating income, which
     is
     before income taxes and does not include depreciation and amortization,
     foreign
     exchange gains and losses, bank charges, interest and other expenses,
     interest
     and other income, and gain on sale of long-term investments.
    

  *CWI engine shipments for the quarter ended March 31, 2013 were 1,313 units
    compared with 1,943 units in the prior year period. Volumes in North
    America decreased 2% with international volumes decreasing 65% compared to
    the prior year period. The prior year period international sales included
    a large transit bus shipment to Yutong.
  *The decrease in CWI gross margin percentage during the year was primarily
    due to warranty adjustments and net extended coverage claims totalling
    $3.8 million and mix of sales. Excluding the warranty impact, CWI gross
    margin percentage would have been 36%.
  *The increase in operating expenses is driven by research and development
    expenses related to the new ISX12 G, ongoing product and reliability
    improvements for the ISL G, and the commencement of development of the
    ISB6.7 G, which was announced in the fourth quarter of 2012.
  *The Cummins Westport ISX12 G engine has received certification from the
    U.S. Environmental Protection Agency (EPA) and the California Air
    Resources Board, meeting both the EPA 2013 regulations and the new
    greenhouse gas and fuel-efficiency rules that will take effect in 2014.
    Limited production of the ISX12 G began in April, with the ramp-up to full
    production scheduled to start in August.
  *CWI's net income attributable to Westport was $0.8 million for the quarter
    ended March 31, 2013, compared with $4.8 million in the prior year period.

Weichai Westport Inc. Highlights

                               Three Months Ended March 31, % Change
($ in millions)                       2013           2012
Units                                      8,529         2,728     213%
Revenue                              $ 105.9    $ 37.2     185%
Gross margin                                 7.0           6.2     13%
Gross margin percentage                     6.6%         16.7%      -
Operating expenses                           3.7           4.2    (12%)
Segment Operating income^(1)              3.3           2.0     65%
Westport's 35% interest                      1.0           0.6     67%

(1) Segment operating income is based on segment net operating income, which
     is
     before income taxes and does not include depreciation and amortization,
     foreign
     exchange gains and losses, bank charges, interest and other expenses,
     interest
     and other income, and gain on sale of long-term investments.
    

  *In the first quarter of 2013, WWI more than tripled the sales in the same
    period last year as market demand continues to increase.
  *The decrease in gross margin percentage is related primarily to product
    mix and aggressive efforts to penetrate new markets and build market share
    in China.
  *For the quarter ended March 31, 2013, shipment for trucking and bus
    applications increased by 366% and 41%, respectively, compared to the
    prior year period.

Non-GAAP Financial Measure; Adjusted EBITDA Results

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 success since it ties closely to the unit's
ability to generate sustained cash flows. Westport defines Adjusted EBITDA as
net loss attributed to the Company before (a) income taxes, (b) depreciation
and amortization, (c) interest expense, net, (d) amortization of stock-based
compensation, and (e) unrealized foreign exchange loss (gain). The term
Adjusted EBITDA is not defined under U.S. generally accepted accounting
principles, or 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.

                                            Three Months Ended March 31,
                                                2013           2012
Net loss attributed to the Company             $   (31.8)      $  (22.6)
Provision for income taxes                           0.3           0.8
Depreciation and amortization                        3.6           2.5
Interest expense, net                                1.2           1.4
                                                                  
                                                                  
EBITDA                                            (26.7)        (17.9)
Amortization of stock-based                          3.4           3.6
compensation
Unrealized foreign exchange loss (gain)            (3.0)           0.4
                                                                  
Adjusted EBITDA                                $   (26.3)      $  (13.9)

Outlook
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.

Financial Statements & Management's Discussion and Analysis
To view Westport's full financials for the quarter ended March 31, 2013,
please point your browser to the following link:
http://www.westport.com/investors/financial

Live Conference Call & Webcast
Westport has scheduled a conference call for today, Thursday, May 2, 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 Westport website at
www.westport.com/investors.

Replay Conference Call & Webcast
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 May 9, 2013. Shortly after the conference call, the webcast
will be archived on the Company's website and replay will be available in
streaming audio.

About Westport Innovations Inc.
Westport Innovations Inc. is a leading global supplier of proprietary
solutions that allow engines to operate on clean-burning fuels such as
compressed natural gas (CNG), liquefied natural gas (LNG), hydrogen, and
renewable natural gas (RNG) fuels such as landfill gas and help reduce
greenhouse gas emissions (GHG). Westport technology offers advanced LNG
fueling systems with direct injection natural gas engine technology for
heavy-duty vehicles such as highway trucks and off-road applications such as
mining and rail. Westport's joint venture with Cummins Inc., Cummins Westport
Inc., designs, engineers and markets spark-ignited natural gas engines for
medium- and heavy-duty transportation applications such as trucks and buses.
Westport is also one of the global leaders for natural gas and liquefied
petroleum gas (LPG) fuel system technology, design, and components in
passenger cars, light-duty trucks and industrial applications such as
forklifts. To learn more about our business, visit our website or subscribe to
our RSS feed at www.westport.com, or follow us on Twitter @WestportDotCom.

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 the CWI ISX12 G, the
Westport LNG Tank System and the Weichai Westport HPDI engine, timing for
development of refueling infrastructure, timing for the Euro V certification
for the Weichai Westport HPDI engine, timing and expectations for future cash
flows, the demand for our products including the Westport WiNG Power System,
the future success of our business and technology strategies, the provision of
CNG components for a light commercial vehicle of GAZ Group featuring a bi-fuel
engine, investment in new product and technology development and otherwise,
the bundling of certain of our products with a long-term fuel contract with
Clean Energy for qualified customers, 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 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.





SOURCE Westport Innovations Inc.

Contact:

Inquiries:
Darren Seed
Vice President, Investor Relations & Communications
Westport Innovations Inc.
Phone: 604-718-2046
Email:invest@westport.com

Media Inquiries:
Nicole Adams
Director, Communications
Westport Innovations Inc.
Phone: 604-718-2011
Email:media@westport.com
 
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