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CDTi Reports Second Quarter Fiscal Year 2013 Financial Results

CDTi Reports Second Quarter Fiscal Year 2013 Financial Results

VENTURA, Calif., Aug. 8, 2013 (GLOBE NEWSWIRE) -- Clean Diesel Technologies,
Inc. (Nasdaq:CDTI) ("CDTi" or the "Company"), a leader in advanced emissions
control solutions, announced today its financial results for the second
quarter and six months ended June 30, 2013. The highlights are as follows:

  oSecond quarter revenue of $12.6 million, down 24.9% year-over-year
  oSecond quarter net loss of $0.19 per share, versus a net loss of $0.31 for
    the prior year
  oCash and cash equivalents of $3.2 million as of June 30, 2013

"While our revenue result for the quarter was below our expectation, we are
pleased with the continued progress we made in a number of areas. During the
quarter, we improved our gross profit margin, made meaningful progress in
lowering our operating expenses, and significantly reduced our net loss
compared to the second quarter a year ago. The results are encouraging and we
are continuing to implement actions to improve operating performance. Our
strategy is to complement these advances with a marketing and technology
strategy designed to grow sales and further leverage the improvements we've
made on the cost side of the business," said Craig Breese, President and Chief
Executive Officer of CDTi.

"In our Catalyst division, sales to our major OEM customer, Honda, were solid.
In addition to supplying catalysts for the successful new 2013 Honda Accord
and the 2008 Acura TSX, our catalysts are now also featured on the new Accord
Hybrid and Plug-in Hybrid models. Our Heavy Duty Diesel Systems division saw a
decline in sales across a number of market segments compared to last year. We
are, however, beginning to see some positive signs in the California retrofit
market and when coupled with the strengthening of our sales and marketing
team, additions to our distribution system and a full portfolio of verified
retrofit solutions in place, we expect to see stronger growth in this division
for the remainder of 2013. Our joint venture with Pirelli commenced in April
and we are actively working with them to expand business opportunities across
Europe.

"We set out to review our business in order to identify ways to accelerate the
development of our unique materials science platform, and enhance growth and
improve shareholder value over the long-term. To this end, we completed a
number of important strategic actions during the second quarter, including the
filing of 26 new patents —35 year to date — and a comprehensive review of our
business. Our top priorities are to explore strategic options to maximize the
value of our existing manufacturing business, focus on patent protection and
commercialization of advanced low-platinum group metal ("PGM") and
zero-platinum group metal ("ZPGM") technologies, and seek customers for our
core emissions control technology through licensing arrangements, joint
development agreements and partnerships. Thus, we remain focused on managing
costs to maximize profitability while further investing in advancing our
technological leadership and adding to our customer relationships around the
world," concluded Mr. Breese.

Second Quarter 2013 Financial Results

Total revenue for the second quarter of 2013 was $12.6 million, a decrease of
$4.1 million, or 24.9%, from $16.7 million for the prior year quarter.
Revenue, excluding intercompany sales, for CDTi's Catalyst division for the
quarter ended June 30, 2013 decreased $0.2 million, or 4.8%, to $5.5 million
from $5.7 million for the same prior year quarter. Excluding the impact of
reimbursement for rare earth price increases, underlying Catalyst division
external revenue grew over 13% compared to the same year ago quarter. Revenue
for CDTi's Heavy Duty Diesel Systems division for the quarter ended June 30,
2013 decreased $3.9 million, or 35.4%, to $7.1 million from $11.0 million for
the same prior year quarter.

Gross margin increased to 25.9% compared to 25.0% in the prior year period.

Total operating expenses for the second quarter of 2013 were $4.5 million,
down 27%, compared to $6.1 million in the prior year quarter.

Net loss for the second quarter of 2013 was $1.4 million, or $0.19 per diluted
share, compared to net loss of $2.3 million, or $0. 31 per share, in the prior
year quarter. Diluted common shares outstanding were 7,306,000 in the current
quarter compared to 7,221,000 in the same quarter a year ago.

At June 30, 2013 and December 31, 2012, CDTi had cash and cash equivalents of
$3.2 million and $6.9 million, respectively. Not included in such amounts are
the net proceeds from the July 2013 public offering in which CDTi sold
1,730,000 units, with each unit consisting of one share of common stock and
one half of a warrant to purchase one share of common stock, for a price of
$1.25 per unit and the July 2013 private placement made in reliance upon
Regulation S under the Securities Act of 1933, as amended. Under the private
placement, CDTi sold 54,347 shares of common stock at a price of $1.84 per
share to one of its directors and issued 188,000 shares of common stock and
warrants to purchase up to 94,000 shares of common stock to one of its
principal lenders and largest shareholders, reflecting the conversion into
shares and warrants of $235,000 of premium and interest due on June 30, 2013
pursuant to loans made to the Company. The net proceeds of the public offering
and private placement to CDTi after deducting underwriting discounts and
commissions and expenses were approximately $1.8 million, and are expected to
be used for general corporate purposes.

First Six Months 2013 Financial Results

Total revenue for the first six months of 2013 was $25.9 million, a decrease
of $7.8 million, or 23.3%, from $33.7 million for the same prior year period.
Revenue, excluding intercompany sales, for CDTi's Catalyst division for the
first six months of 2013 increased $1.4 million, or 13.3%, to $11.5 million
from $10.1 million for the same prior year period. Excluding the impact of
reimbursement for rare earth price increases, underlying Catalyst division
external revenue grew over 34% compared to the same year ago period. Revenue
for CDTi's Heavy Duty Diesel Systems division for the first six months of 2013
decreased $9.2 million, or 39.0%, to $14.4 million from $23.6 million for the
same prior year period.

Total operating expenses for the first six months of 2013 were $9.6 million,
down 23.3%, compared to $12.4 million in the same prior year period.

Net loss for the first six months of 2013 was $3.5 million, or $0.48 per
share, compared to net loss of $5.1 million, or $0.70 per share, in the same
prior year period. Weighted average common shares outstanding were 7,284,000
for the first six months of 2013 compared to 7,220,000 in the same period a
year ago.

Conference Call and Webcast Information

CDTi will host a conference call and simultaneous webcast over the Internet
beginning at 8:00 a.m. Pacific Time today to discuss its financial results and
its business outlook. This conference call will contain forward-looking
information. To participate in the conference call, dial +1 (877) 303-9240 and
use confirmation code 26490510. International participants should dial +1
(760) 666-3571 and use the same confirmation code. The conference call will be
webcast live on CDTi's website at www.cdti.com under the "Investor Relations"
section. To listen to the live webcast, participants should visit the site at
least 15 minutes prior to the conference to download any required streaming
media software. An archived recording of the conference call will be available
on the CDTi website for 30 days.

About CDTi

CDTi is a vertically integrated global manufacturer and distributor of
emissions control systems and products, focused on the heavy duty diesel and
light duty vehicle markets. CDTi utilizes its proprietary patented Mixed Phase
Catalyst (MPC®) technology, as well as its ARIS® selective catalytic
reduction, Platinum Plus® fuel-borne catalyst, and other technologies to
provide high-value sustainable solutions to reduce emissions, increase energy
efficiency and lower the carbon intensity of on- and off-road engine
applications. CDTi is headquartered in Ventura, California and currently has
operations in the U.S., Canada, France, Japan and Sweden. For more
information, please visit www.cdti.com.

Forward-Looking Statements Safe Harbor

Certain information contained in this press release constitutes
forward-looking statements for purposes of the safe harbor provisions of The
Private Securities Litigation Reform Act of 1995. Any statements contained
herein that are not statements of historical fact should be considered
forward-looking statements. You can identify these forward-looking statements
by the use of words such as "believe(s)", "expect(s)", "anticipate(s)",
"plan(s)", "may", "will", "would", "intend(s)", "estimate(s)" or similar
expressions, as well as other words or expressions referencing future events,
conditions or circumstances, whether in the negative or affirmative. Examples
of forward-looking statements contained in this press release include, among
others, statements regarding growth expectations, business strategies and
priorities, actions to improve operating performance, and the application of
net proceeds from the Company's July 2013 public offering and private
placement. Forward-looking statements are based on a series of expectations,
assumptions, estimates and projections which involve substantial uncertainty
and risk. In general, actual results may differ materially from those
indicated by such forward-looking statements as a result of risks and
uncertainties, including but not limited to the risks and uncertainties
discussed or referenced in the Company's filings with the Securities and
Exchange Commission. In addition, any forward-looking statements represent the
Company's estimates only as of the date such statements and should not be
relied upon as representing the Company's estimates as of any subsequent date.
The Company specifically disclaims any obligation to update forward-looking
statements. All forward-looking statements in this press release are qualified
in their entirety by this cautionary statement.



Clean Diesel Technologies, Inc.
Summary Statements of Operations (unaudited)
($ millions)

                                          3 Months Ended    6 Months Ended
                                           June 30,          June 30,
                                          2013     2012     2013     2012
Revenues                                   $ 12.6   $ 16.7   $ 25.9   $ 33.7
Gross profit                               3.3      4.2      6.4      8.1
Gross margin                               25.9%    25.0%    24.6%    24.1%
                                                                  
Operating expenses:                                                
Selling, general and administrative        3.5      3.8      7.3      8.2
Research and development                   $ 0.9    $ 2.0    $ 2.2    $ 3.9
Severance expense                          0.1      0.3      0.1      0.3
Total operating expenses                   4.5      6.1      9.6      12.4
                                                                  
Loss from operations                       $ (1.2)  $ (1.9)  $(3.2)  $ (4.3)
Other expense, net                         (0.5)    (0.2)    (0.5)    (0.9)
Loss from continuing operations before     (1.7)    (2.1)    (3.7)    (5.2)
income tax
Income tax expense (benefit) from          (0.3)    0.1      (0.2)    (0.2)
continuing operations
Net loss from continuing operations        (1.4)    (2.2)    (3.5)    (5.0)
Discontinued operations                    ─        (0.1)    ─        (0.1)
Net loss                                   $ (1.4)  $ (2.3)  $ (3.5)  $(5.1)
                                                                  
Basic and diluted EPS                      $ (0.19) $ (0.31) $ (0.48) $ (0.70)
Weighted shares outstanding (in thousands) 7,306    7,221    7,284    7,220



Clean Diesel Technologies, Inc.
Segment Information (unaudited)
($ millions)

                             3 Months Ended  6 Months Ended
                              June 30,        June 30,
                             2013    2012    2013    2012
Revenue                                            
Heavy Duty Diesel Systems     $ 7.1   $ 11.0  $ 14.4  $ 23.6
Catalyst                      6.3     6.4     12.8    12.5
Eliminations                  (0.8)   (0.7)   (1.3)   (2.4)
Total                         $ 12.6  $ 16.7  $ 25.9  $ 33.7
                                                  
(Loss) income from operations                      
Heavy Duty Diesel Systems     $ (0.1) $ 0.1   $ (0.4) $ (0.3)
Catalyst                      0.2     (0.7)   0.3     (1.0)
Corporate                     (1.4)   (1.4)   (3.2)   (3.0)
Eliminations                  0.1     0.1     0.1     ─
Total                         $ (1.2) $ (1.9) $ (3.2) $ (4.3)



Clean Diesel Technologies, Inc.
Summary Balance Sheets (unaudited)
($ millions)

                           As of
                           June 30, December 31,
                            2013     2012
Total current assets        $ 17.5   $ 22.8
Total assets                $ 29.4   $ 35.4
Total current liabilities   $ 16.8   $ 15.7
Total long-term liabilities $ 5.4    $ 8.3
Stockholders' equity        $ 7.2    $ 11.4
                                   
Short-term debt             $ 7.8    $ 5.6
Long-term debt              $ 4.5    $ 7.5

CONTACT: Kevin M. McGrath
         Cameron Associates, Inc.
         Tel: +1 (212) 245-4577

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