Westport Reports Third Quarter Fiscal 2013 Financial Results

         Westport Reports Third Quarter Fiscal 2013 Financial Results

PR Newswire

VANCOUVER, Oct. 30, 2013

~ Quarterly Revenues Up 51% Year over Year; Westport Maintains Annual Revenue
Outlook ~

VANCOUVER, Oct. 30, 2013 /PRNewswire/ - Westport Innovations Inc. (TSX:WPT /
NASDAQ:WPRT), the global leader in natural gas engines, today reported
financial results for the third quarter ended September 30, 2013 and provided
an update on operations. All figures are in U.S. dollars unless otherwise
stated.

Highlights include:

  *Westport revenue, excluding joint ventures' revenues, for the quarter
    ended September 30, 2013 was $46.5 million compared with $30.7 million for
    the same period last year, an increase of 51%.
  *Westport revenue, excluding joint ventures' revenues, for the nine months
    ended September 30, 2013 was $111.4 million compared with $115.7 million
    for the same period last year.
  *Segment revenue for the quarter ended September 30, 2013 was: $20.3
    million for Applied Technologies; $17.8 million for On-Road Systems; $8.4
    million for Corporate and Technology Investments; $77.5 million for
    Cummins Westport Inc. (CWI); and $114.6 million for Weichai Westport Inc.
    (WWI).
  *Westport revenue plus CWI revenue for the quarter ended and nine months
    ended September 30, 2013 was $124.0 million and $311.6 million,
    respectively, compared with $76.2 million and $270.8 million,
    respectively, for the same period last year.
  *In the third quarter of 2013, CWI shipped 2,409 units and WWI shipped
    9,080 units.
  *For the quarter ended September 30, 2013 Westport reported a net loss of
    $30.2 million, or $0.53 loss per share, compared with $32.5 million, or
    $0.59 loss per share, for the same period last year.
  *Subsequent to the quarter ended September 30, 2013, Westport increased
    cash balance by $148.2 million through a financing transaction, which
    closed on October 1, 2013.

"2013 is an exciting transition year for us as we see the continued rapid
development of markets for natural gas vehicles," said David Demers, CEO of
Westport. "As natural gas truly begins to penetrate our economy, the benefits
of a step change cost in transportation energy will be profound and
far-reaching. Westport is moving quickly as we transition from a market
creation culture into a full commercial operation. Over the next few years we
will be rebalancing our product portfolio and our business model as our OEM
partnerships mature and develop."

"First, in terms of developments in our current portfolio, Cummins Westport's
new ISX12 G is off to a good start this year and we expect very strong growth
next year. I think we have the right product at the right time to see a real
breakthrough that will establish natural gas as a major fuel for trucks around
the world which will be a catalyst for further investment in refueling
infrastructure. Furthermore, it is great to see interest building for the
Westport iCE PACK^TM liquefied natural gas (LNG) Tank system as illustrated in
our purchase order announcement earlier today for 900 iCE PACKs over the next
two years."

"We see many of the engine and vehicle OEMs transitioning to natural gas on a
vertically-integrated basis and our recently completed equity financing gives
us the balance sheet strength to expand our reach into fast developing
opportunities where we can create value for our OEM partners and Westport
shareholders," stated Demers.

Third Quarter Fiscal Year 2013 Financial Highlights

                     Three Months Ended            Nine Months Ended
                         September 30,                  September 30,
($ in millions,          2013      2012   % Change    2013     2012   % Change
except per share
amounts)
Consolidated revenues $ 46.5    $      51%      $   $     (4%)
                                     30.7               111.4   115.7
Consolidated gross          16.0      7.8     105%       32.4    39.7    (18%)
margin
Consolidated gross         34.4%    25.4%        -      29.1%   34.3%        -
margin percentage
Operating expenses          42.9     32.7      31%      127.2    98.8      29%
(Research and
development, general
and administrative
and sales and
marketing)
Income from                  3.7      4.3    (14%)       10.0    14.4    (31%)
unconsolidated joint
ventures
Consolidated Adjusted     (19.5)   (17.6)      11%     (73.7)  (35.5)     108%
EBITDA (The
reconciliation of
Adjusted EBITDA is
described below)
Cash and short-term        89.3*    255.5    (65%)       89.3   255.5    (65%)
investments balance
Net loss                  (30.2)   (32.5)     (7%)     (96.0)  (61.2)      57%
Net loss per share     $ (0.53)      $    (10%)  $ (1.72)      $      51%
                                   (0.59)                      (1.14)

*As of October  1, 2013, cash  and short-term investments  balance was  $237.5 
million.

Path to Profitability

2013 is a transition year. As Westport shifts from market creation work to a
full commercial operation and profitability, Westport has two interim
milestones. Westport's first milestone is to have its three operating business
units to be Adjusted EBITDA positive by the end of 2014. Westport's second
milestone is to have its consolidated business to be Adjusted EBITDA positive
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.

Business Units Adjusted EBITDA*

                                            Three Months Ended
($ in millions)                September 30, 2013 June 30, 2013 March 31, 2013
Applied Technologies               $  2.1 $    2.9 $   2.3
On-Road Systems                             (7.2)         (8.6)          (8.6)
New Markets and Off-Road                    (3.6)         (3.1)          (2.4)
Systems
Total Operating Business Units              (8.7)         (8.8)          (8.7)
Adjusted EBITDA
                                                             
Corporate & Technology                     (10.8)        (19.0)         (17.7)
Investments
Consolidated Adjusted EBITDA          $ (19.5)   $ (27.8)    $ (26.4)

*Adjusted EBITDA reconciliation is described below.

Third Quarter Fiscal Year 2013 Financial Highlights

  *Westport product revenue, excluding joint ventures' revenues, for the
    quarter ended September 30, 2013 was $32.9 million, an increase of $4.6
    million, or 16.3%, from $28.3 million for the quarter ended September 30,
    2012. The increase is primarily due to revenue generated through the BAF
    acquisition and increased sales of high pressure direct injection
    (Westport^TM HPDI) systems. Westport parts revenue for the quarter ended
    September 30, 2013 was $3.7 million, an increase of $2.7 million, or 270%,
    from $1.0 million for the quarter ended September 30, 2012. Service and
    other revenue was $9.9 million for the quarter ended September 30, 2013
    compared with $1.4 million for the same period last year. The $8.5
    million increase is due to the timing of revenue recognized under Westport
    development agreements.

  *Research and development expenses were $23.5 million for the quarter ended
    September 30, 2013, an increase of $7.1 million from $16.4 million in the
    same period last year. These expenses were driven by increases in
    investments under new and existing on-road and off-road development
    programs.

  *Selling, general and administrative expenses were $19.4 million for the
    quarter ended September 30, 2013, an increase of $3.1 million from $16.3
    million in the same period last year primarily due global market
    development efforts.

  *Westport consolidated net loss for the quarter ended September 30, 2013
    decreased from $32.5 million in 2012 to $30.2 million. Included in the net
    loss for the three months ended September 30, 2013 and September 30, 2012
    is a $1.3 million and a $7.4 million net foreign exchange loss,
    respectively, 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 was $28.9 million
    and $0.51, respectively, for the quarter ended September 30, 2013, and
    $25.1 million and $0.46, respectively, for the quarter ended September 30,
    2012.

  *For the quarter ended September 30, 2013, Westport reported a consolidated
    Adjusted EBITDA loss of $19.5 million compared with a loss of $17.6
    million in the prior year period. The reconciliation of Adjusted EBITDA is
    described below.

  *Cash used in the quarter ended September 30, 2013 was $46.0 million
    including $12.4 million in debt-related repayments. Excluding the
    debt-related repayments, cash used in the quarter was $33.6 million.

Operating Business Unit Highlights

Applied Technologies

  *Applied Technologies gross margin and gross margin percentage for the
    quarter ended September 30, 2013 increased to $6.5 million and 32%,
    respectively, compared to $5.2 million and 25%, respectively, in the prior
    year period primarily due to service revenue and product mix.
  *Applied Technologies operating expenses for the quarter ended September
    30, 2013 increased by $1.5 million compared to the prior year period
    primarily related to higher research and development costs for new
    products.
  *During the quarter, Westport launched a new high pressure natural gas
    system, consisting of tank valve and filling valve, for the automotive
    market in China and Europe. The new system is lighter, smaller, and
    designed and validated to the OEMs' standards. Supplying to two of the
    leading European automotive OEMs, Westport's high pressure natural gas
    system will be integrated into their existing and new natural gas vehicle
    platforms.

On-Road Systems

  *On-Road Systems revenue for the quarter ended September 30, 2013 increased
    by 109% to $17.8 million compared to $8.5 million in the same period last
    year as a result of revenue generated from BAF and increased sales of HPDI
    systems.
  *The production of Volvo V60 Bi-Fuel car has started and the first delivery
    is expected to be in the beginning of December.
  *Westport On-Road business strategy is to provide HPDI as a vertically
    integrated solution for engine and truck OEMs. The current generation of
    HPDI on the Westport 15L engine is still assembled in Vancouver using an
    upfit process. Westport's production focus is shifting from an upfit model
    to vertical integration of Westport's next generation of HPDI for targeted
    OEMs. The last day for orders for the 15L engine with Westport HPDI with
    2013 Environmental Protection Agency 2010 certification will be November
    15, 2013. However, Westport plans to continue to offer an HPDI solution
    for Australia in concert with Westport's fuelling partners for the
    foreseeable future.
  *Westport strives to deliver the best customer experience and is committed
    to the continuation of its class-leading support for all existing
    customers. In 2014, Westport will leverage service and support activities
    in the Westport U.S. operations to take advantage of logistics and to
    better assist its U.S. customer base. While Westport OEM partners
    implement vertically integrated natural gas engine strategies, they will
    have a strong product offering in the vocational and regional haul segment
    in the Cummins Westport ISX12 G natural gas engine and the Westport iCE
    PACK™ LNG Tank System.

New Markets and Off-Road Systems

  *Westport continues its strong collaboration with Caterpillar and EMD to
    develop HPDI-based fuel systems and LNG tank systems for large mine trucks
    and locomotives. To date, the collaborative HPDI system has been
    demonstrated on multi-cylinder versions of the Caterpillar C175 and EMD
    710 engines used in large mine trucks and locomotives, respectively. Test
    data is confirming full diesel power, torque, and efficiency with high
    natural gas substitution rates.
  *Westport has entered into the final phase of the previously-announced HPDI
    locomotive demonstration project, with the consortium members Canadian
    National Railways (CN), EMD, and Gaz Metro, partially funded by
    Sustainable Technology Development Canada. This demonstration project will
    also include a prototype LNG Tender for HPDI locomotives.
  *The first revenue is expected to be recorded in the fourth quarter of 2013
    for delivery of LNG Tenders to CN as previously announced.

Cummins Westport Inc. Highlights

                     Three Months Ended           Nine Months Ended
                        September 30,     % Change   September 30,    % Change
($ in millions)         2013      2012               2013      2012
Units                     2,409     1,588      52%     6,438    5,503      17%
Revenue              $ 77.5 $ 45.5      70%     $    $      29%
                                                       200.2    155.1
Gross margin               17.7      13.4      32%      50.5     50.5        -
Gross margin              22.8%     29.5%        -     25.2%    32.6%        -
percentage
Operating expenses          9.8       6.4      53%      30.6     17.1      79%
Segment operating          7.9       7.0      13%      19.9     33.4    (40%)
income
Net income to               2.5       3.6    (31%)       6.6     12.0    (45%)
Westport

  *CWI engine shipments for the quarter ended September 30, 2013 increased by
    52% to 2,409 units compared with 1,588 units in the prior year period. The
    quarterly volumes in North America increased by 103% driven by higher
    sales in all segments particularly truck applications. Growth in the
    trucking segment increased as a result of the launch of the 400HP version
    of the ISX12 G engine in August.
  *The decrease in CWI gross margin percentage during the quarter is
    primarily due to mix of sales, mainly from the sale of the ISX12 G
    engines, which have a low gross margin on product launch. In addition,
    warranty adjustments and net extended coverage claims of $6.6 million were
    recorded in the three months ended September 30, 2013, an increase of $3.1
    million compared to the prior year period. Excluding the warranty impact
    on the ISL G, CWI gross margin percentage would have been 31.4%.
  *The increase in operating expenses is driven by research and development
    expenses related to the ISX12 G, the development of the ISB6.7 G, and
    ongoing investments to improve product reliability and customer
    satisfaction.
  *CWI's net income attributable to Westport was $2.5 million for the quarter
    ended September 30, 2013, compared with $3.6 million in the prior year
    period. The decrease is related to research and development tax credits
    claimed by CWI in the prior year period of $2.6 million and income tax
    expense of $2.5 million, which resulted in income tax recovery of $0.1
    million, compared to income tax expense of $2.8 million in the current
    year period. Excluding the impact of the tax credit claims, CWI's net
    income to Westport was $2.3 million in the prior year period.

Weichai Westport Inc. Highlights

                     Three Months Ended  % Change Nine Months Ended  % Change
                         September 30,               September 30,
($ in millions)         2013      2012               2013      2012
Units                     9,080     4,825      88%    30,019   12,884     133%
Revenue                   $     $      95%     $    $     126%
                          114.6      58.7              373.0    164.7
Gross margin                8.8       4.6      91%      27.8     20.3      37%
Gross margin               7.7%      7.8%        -      7.5%    12.3%        -
percentage
Operating expenses          4.6       2.3     100%      15.6     12.1      29%
Segment operating          4.2       2.3      83%      12.2      8.2      49%
income
Westport's 35%              1.3       0.7      86%       3.6      2.3      57%
interest

  *In the third quarter of 2013, WWI increased sales by 95% compared to the
    same period last year as market demand for natural gas trucks and buses
    continues to increase.
  *Based on NGV Communications and Westport analysis, China had 1,730 LNG
    stations as of June 30, 2013 compared with 635 LNG stations in the prior
    year period.
  *For the quarter ended September 30, 2013, shipment for trucking and bus
    applications increased by 158% and 23%, 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 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) amortization of stock-based compensation, and
(e) unrealized foreign exchange loss or gain. 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.

                                Three Months Ended       Nine Months Ended
                                  September 30,            September 30,
                                   2013          2012        2013       2012
Net loss                      $ (30.2)    $ (32.5)  $ (96.0) $ (61.2)
Provision for income taxes           0.3           0.1         0.9        1.6
Depreciation and amortization        4.3           2.9        11.7        8.1
Interest expense, net                1.2           1.6         3.7        3.9
                                                                        
EBITDA                            (24.4)        (27.9)      (79.7)     (47.6)
Amortization of stock-based          3.6           2.9        11.1        9.2
compensation
Unrealized foreign exchange          1.3           7.4       (5.1)        2.9
gain (loss)
                                                                        
Adjusted EBITDA               $ (19.5)  $ (17.6)  $ (73.7) $ (35.5)


For the three months ended September 30, 2013
                                                               Adjustments                                 
($ in                                                Westport's
millions)                                             Share of
                    Segment operating                Income from             Stock-based          Adjusted
                      income (loss)                    the JVs               compensation           EBITDA
Applied                           $  1.6          $ -     $ 0.5        
Technologies                                                                                      $ 2.1
On-Road         
Systems                                 (7.9)                       -                     0.7          (7.2)
New Markets     
and Off-Road                            (4.7)                       -                     1.1          (3.6)
Systems
Corporate             
and                                    (15.9)                       3.7                     1.4         (10.8)
Technology
Investments
                                                                                                         
For the                                                                                                   
three months
ended June
30, 2013
                                                               Adjustments                                 
($ in                                                Westport's
millions)                                             Share of
                    Segment operating                Income from             Stock-based             Adjusted
                      income (loss)                    the JVs               compensation               EBITDA
Applied         $       $   -  $  0.7    $ 2.9
Technologies                              2.2
On-Road         
Systems                                 (9.4)                       -                     0.8          (8.6)
New Markets     
and Off-Road                            (3.5)                       -                     0.4          (3.1)
Systems
Corporate             
and                                    (25.8)                       4.6                     2.2         (19.0)
Technology
Investments
                                                                                                         
For the                                                                                                   
three months
ended March
31, 2013
                                                               Adjustments                                 
($ in                                                Westport's
millions)                                             Share of
                    Segment operating                Income from             Stock-based          Adjusted
                      income (loss)                    the JVs               compensation           EBITDA
Applied               $ 1.9    $   -    $ 0.4  $  
Technologies                                                                                               2.3
On-Road         
Systems                                 (9.1)                       -                     0.5          (8.6)
New Markets     
and Off-Road                            (2.8)                       -                     0.4          (2.4)
Systems
Corporate             
and                                    (21.4)                       1.7                     2.0         (17.7)
Technology
Investments

Financial Outlook for 2013
Westport reiterates its revenue outlook to between $160 million and $180
million for the calendar year ended December 31, 2013.

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 September 30, 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, Wednesday, October 30,
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 November 6, 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 engineers the world's most advanced natural gas engines and vehicles.
More than that, we are fundamentally changing the way the world travels the
roads, rails and seas. We work with original equipment manufacturers (OEMs)
worldwide from design through to production, creating products to meet the
growing demand for vehicle technology that will reduce both emissions and fuel
costs. To learn more about our business, visit westport.com, subscribe to our
RSS feed, or follow us on Twitter @WestportDotCom.

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, timing for first revenue
for LNG tenders, timing for launch, delivery and completion of milestones
related to the engine and tank system products referenced herein, including
but not limited to the Westport iCE PACK^TM LNG Tank System, next generation
Volvo HPDI trucks and Volvo V60 Bi-Fuel car, the integration of Westport's
high pressure natural gas system into natural gas vehicle platforms by
European automotive OEMs, timing for, and implementation of, movement of
service and support activities to Westport U.S. operations, 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.











SOURCE Westport Innovations Inc.

Contact:

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