CDTi Reports Third Quarter Fiscal Year 2013 Financial Results

CDTi Reports Third Quarter Fiscal Year 2013 Financial Results

VENTURA, Calif., Nov. 12, 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 third quarter
and nine months ended September 30, 2013. Highlights of the 2013 third quarter
(all comparisons versus prior year quarter, unless otherwise noted) include:

  oRevenue of $14.2 million, down 1.4%
  oGross margin improved 320 basis points to 30.1%
  oTotal operating expenses declined 17.4%
  oOperating income of $0.1 million versus operating loss of $1.2 million
  oNet loss of $0.12 per share, versus a net loss of $0.24
  oCash used in operations of approximately $80,000 for Q3 2013
  oCash and cash equivalents of $4.6 million as of September 30, 2013

"Our stable top line performance combined with continued operational progress,
strong gross margin expansion and cost control drove a significant improvement
in our bottom line for a third consecutive quarter," said Craig Breese,
President and Chief Executive Officer of CDTi. "Solid revenue growth from our
Catalyst division reflected continued strength in our sales to our major OEM
customer, Honda. Our Heavy Duty Diesel Systems division benefited from a
substantial increase in sales in the California retrofit market which helped
offset slower retrofit activity in the other 49 States and expected softness
in this division from reduced sales to our mining and material handling
customers in Europe. The positive signs we began to see in the second quarter
of 2013 in the California retrofit market are continuing and we expect to see
stronger growth from this market in the fourth quarter of 2013. Also
encouraging in the third quarter was the significant expansion in our gross
margin due to continued improvements in our product mix and other operational
improvements across our facilities.

"We continued to execute on our growth strategies and technology initiatives
during the quarter. Patent filings now total 39 year to date. Our priorities
will continue to involve the strengthening of our patent position and
commercialization of advanced low-platinum group metal ("PGM") and
zero-platinum group metal ("ZPGM") technologies. We remain intently focused on
these technology initiatives to help support our innovation and enhance our
future growth opportunities.

"In summary, CDTi executed well in the quarter. However, there are areas of
our business where we can do a better job, and I'm confident in our team's
abilities to deliver for our customers and for shareholders. We're encouraged
by the financial and operating results for the first nine months of 2013, and
believe that the Company is well positioned to achieve profitable growth and
continued operational improvement," concluded Mr. Breese.

Third Quarter 2013 Financial Results

Total revenue for the third quarter of 2013 was $14.2 million, a decrease of
$0.2 million, or 1.4%, from $14.4 million for the prior year quarter. Revenue,
excluding intercompany sales, for CDTi's Catalyst division for the quarter
ended September 30, 2013 increased $0.5 million, or 9.0%, to $6.2 million from
$5.7 million for the same prior year quarter. Catalyst division external
revenue grew nearly 39% after excluding the impact of reimbursements for rare
earth price increases, which were greater in the prior year quarter, and $1.0
million of revenue recognized in the prior year quarter related to the
completion of a contract to provide support services to CDTi's partner, TKK,
for the establishment of its operations in China. Revenue for CDTi's Heavy
Duty Diesel Systems division for the quarter ended September 30, 2013
decreased $0.7 million, or 8.2%, to $8.0 million from $8.7 million for the
same prior year quarter.

Gross margin increased to 30.1% compared to 26.9% in the prior year period.

Total operating expenses for the third quarter of 2013 were $4.2 million, down
17.4%, compared to $5.1 million in the prior year quarter.

Net loss for the third quarter of 2013 was $1.1 million, or $0.12 per diluted
share, compared to net loss of $1.8 million, or $0. 24 per diluted share, in
the prior year quarter. Diluted common shares outstanding were 9,247,000 in
the current quarter compared to 7,229,000 in the same quarter a year ago.

At September 30, 2013 and December 31, 2012, CDTi had cash and cash
equivalents of $4.6 million and $6.9 million, respectively. Included in the
September 30, 2013 amount 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 Nine Months 2013 Financial Results

Total revenue for the first nine months of 2013 was $40.1 million, a decrease
of $8.0 million, or 16.7%, from $48.1 million for the same prior year period.
Revenue, excluding intercompany sales, for CDTi's Catalyst division for the
first nine months of 2013 increased $1.9 million, or 11.8%, to $17.7 million
from $15.8 million for the same prior year period. Catalyst division external
revenue grew nearly 36% excluding the impact of reimbursements for rare earth
price increases, which were greater in the prior year period, and $1.0 million
of revenue recognized in the prior year period related to the completion of a
contract to provide support services to CDTi's partner, TKK, for the
establishment of its operations in China. Revenue for CDTi's Heavy Duty Diesel
Systems division for the first nine months of 2013 decreased $9.9 million, or
30.7%, to $22.4 million from $32.3 million for the same prior year period.

Total operating expenses for the first nine months of 2013 were $13.7 million,
down 21.6%, compared to $17.5 million in the same prior year period.

Net loss for the first nine months of 2013 was $4.6 million, or $0.58 per
share, compared to net loss of $6.9 million, or $0.95 per share, in the same
prior year period. Weighted average common shares outstanding were 7,945,000
for the first nine months of 2013 compared to 7,223,000 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 95879169. 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 and a full transcript for one year.

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, continued improvements,
business strategies and priorities, delivery of results and shareholder value,
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      9 Months Ended
                                      September 30,       September 30,
                                      2013      2012      2013      2012
Revenues                               $14.2   $14.4   $40.1   $48.1
Gross profit                           4.3       3.9       10.7      12.0
Gross margin                           30.1%     26.9%     26.6%     24.9%
                                                                 
Operating expenses:                                               
Selling, general and administrative    3.0       3.5       10.2      11.6
Research and development               $1.2    $1.6    $3.4    $5.5
Severance expense                      --        --        0.1       0.4
Total operating expenses               4.2       5.1       13.7      17.5
                                                                 
Income (loss) from operations          $0.1    $(1.2)  $(3.0)  $(5.5)
Other expense, net                     (1.1)     (0.9)     (1.6)     (1.8)
Loss from continuing operations before (1.0)     (2.1)     (4.6)     (7.3)
income tax
Income tax expense (benefit) from      0.1       (0.1)     --        (0.3)
continuing operations
Net loss from continuing operations    (1.1)     (2.0)     (4.6)     (7.0)
Discontinued operations                --        0.2       --        0.1
Net loss                               $(1.1)  $(1.8)  $(4.6)  $(6.9)
                                                                 
Basic and diluted EPS                  $(0.12) $(0.24) $(0.58) $(0.95)
Weighted shares outstanding (in        9,247     7,229     7,945     7,223
thousands)


Clean Diesel Technologies, Inc.
Segment Information (unaudited)
($ millions)
                                                    
                             3 Months Ended   9 Months Ended
                             September 30,    September 30,
                             2013    2012     2013     2012
Revenue                                              
Heavy Duty Diesel Systems     $8.0  $8.7   $22.4  $32.3
Catalyst                      7.1     6.7      19.9     19.2
Eliminations                  (0.9)   (1.0)    (2.2)    (3.4)
Total                         $14.2 $14.4  $40.1  $48.1
                                                    
Income (loss) from operations                        
Heavy Duty Diesel Systems     $0.7  $(0.3) $0.3   $(0.5)
Catalyst                      0.6     0.3      0.9      (0.8)
Corporate                     (1.2)   (1.2)    (4.3)    (4.3)
Eliminations                  --      --       0.1      0.1
Total                         $0.1  $(1.2) $(3.0) $(5.5)


Clean Diesel Technologies, Inc.
Summary Balance Sheets (unaudited)
($ millions)
                                        
                           As of
                           September 30, September 30,
                           2013          2012
Total current assets        $20.0       $22.8
Total assets                $31.7       $35.4
Total current liabilities   $18.2       $15.7
Total long-term liabilities $5.4        $8.3
Stockholders' equity        $8.1        $11.4
                                        
Short-term debt             $7.4        $5.6
Long-term debt              $4.5        $7.5

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

CDTi Logo