Chronicle Journal: Finance

CDTi Announces Second Quarter 2017 Financial Results

OXNARD, Calif., Aug. 14, 2017 (GLOBE NEWSWIRE) -- Clean Diesel Technologies, Inc. (Nasdaq:CDTI) (“CDTi” or “the Company”), a leader in advanced emission control technology, reported its financial results for the second quarter ended June 30, 2017.

Matthew Beale, CDTi’s CEO, stated, “We are nearing our goal to complete CDTi’s transition to an advanced materials and specialty coating business model by the end of 2017. Shipments of our advanced materials to commercial partners in China and India are set to begin during the fourth quarter and forward revenue visibility continues to increase for both cost-down and new vehicles programs.  We have successfully adapted our technology for deployment in two-wheel and selective catalytic reduction (SCR) applications that offer additional near-term revenue opportunities.  Our restructuring and repositioning initiatives have begun to translate into improved financial results with both operating loss and cash burn decreasing significantly during the second quarter.  CDTi is nearing the end stages of transitioning to a scalable technology company, providing us with a solid platform to support the ramp of our new powder business in 2018 and 2019.”

Financial Highlights: Second Quarter 2017 compared to Second Quarter 2016

  • Total revenue was $8.4 million for both periods.
    - Coated catalyst revenue was $4.8 million in both periods.
    - Emissions control systems revenue was $3.0 million, compared to $2.9 million.
    - Technology and advanced materials revenue was $0.6 million in both periods.
  • Gross margin was 23%, compared to 20%. The increase primarily reflects a more favorable revenue mix.
  • Total operating expenses in the second quarter of 2017 were $2.3 million, compared to $4.8 million in the second quarter of 2016. The decrease reflects the positive effects of the company’s cost reduction initiatives undertaken in 2016 as well as a reduction in the liability related to the exit of our Canadian manufacturing facility.  The Company achieved its goal to reduce ongoing operating expenses to $3.0 million in the second quarter and anticipates that operating expense will continue at this level or lower for the remainder of the year.
  • Net loss was $385,000, or $0.02 per share, compared to a net loss of $222,000, or $0.06 per share in the second quarter of 2016.
  • Cash at June 30, 2017 was $1.6 million, compared to $7.8 million at December 31, 2016 including a $600,000 decrease in our line of credit since the first quarter.

Financial Highlights: Six months ended June 30, 2017 compared to 2016

  • Total revenue for the first six months of 2017 was $16.6 million, compared to $18.2 million for the same prior year period.
  • Gross margin was 20%, compared to 24% in the same prior year period.
  • Total operating expenses for the first six months of 2017 were $6.1 million compared to $10.8 million in the same prior year period.
  • Net loss for the first six months of 2017 was $3.5 million, or $0.22 per share, compared to net loss of $3.0 million, or $0.80 per share, in the same prior year period.

Financial Outlook
Based on CDTi’s current business configuration as well as its second quarter results, the company continues to expect revenue to be between $32.0 million and $35.0 million and gross margin to be between 23% and 25%. 

Conference Call and Webcast Information
CDTi will host a conference call and live webcast beginning at 2:00 p.m. Pacific Time today, August 14th to discuss its financial results and its business outlook. This conference call will contain forward-looking information. To participate in the conference call, please dial +1 (877) 303-9240 and international participants should dial +1 (760) 666-3571. The conference code is 59723228. The conference call will be webcast live on the CDTi website at 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. You may also access a telephone replay for two business days following the conclusion of the call by dialing +1 (855) 859-2056 or +1 (404) 537-3406 if dialing in internationally. The passcode is 59723228.

About CDTi
CDTi develops advanced materials technology for the emissions control market. CDTi’s proprietary technologies provide high-value sustainable solutions to reduce hazardous emissions, increase energy efficiency and lower the carbon intensity of on- and off-road combustion engine systems. With a continuing focus on innovation-driven commercialization and global expansion, CDTi’s breakthrough Powder-to-Coat (P2C™) technology exploits the Company’s high-performance, advanced low-platinum group metal (PGM) emission reduction catalysts. Key technology platforms include Mixed Phase Catalyst (MPC®), Base Metal Activated Rhodium Support (BMARS™), Synergized PGM (SPGM™), Zero PGM (ZPGM™) and Spinel™. For more information, please visit

Forward-Looking Statements
Certain information contained in this press release constitutes forward-looking statements, including any statements that are not statements of historical fact. You can identify these forward-looking statements by the use of the words “believes”, “expects”, “anticipates”, “plans”, “may”, “will”, “would”, “intends”, “estimates”, and other similar expressions, whether in the negative or affirmative. Forward-looking statements are based on a series of expectations, assumptions, estimates and projections, which involve substantial uncertainty and risk. In this document, the Company includes forward-looking statements regarding the acceleration of the Company’s business transformation into an advanced materials company, global trends in the automotive and heavy duty diesel markets, the Company’s future financial performance, and the performance of the Company’s technology, are all subject to risks and uncertainties that could cause our actual results and financial position to differ materially.  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 (i) that the Company may not be able to (a) successfully implement, or implement at all, its strategic priorities; (b) streamline its operations or align its organization and infrastructure with the anticipated business; (c) meet expectations or projections; (d) decrease costs; (e) increase sales; (f) obtain adequate funding; (g) retain or secure customers; (h) increase its customer base; (i) protect its intellectual property; (j) successfully evolve into an advanced materials supplier or, even if successful, increase profitability; (k) successfully market new products; (l)  obtain product verifications or approvals; (m) attract or retain key personnel; (n) validate, optimize and scale our powder-to-coat capability; or (o) realize benefits from investments; (ii) funding for and enforcement and tightening of emissions controls, standards and regulations; (iii) prices of PGM and rare earth metals;  (iv) royalty and other restrictions on sales in certain Asian countries; (v) supply disruptions or failures; (vi) regulatory, marketing and competitive factors; (vii) environmental harm or damages; and (viii) other risks and uncertainties discussed or referenced in the Company’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and any subsequent periodic reports on Form 10-Q and Form 8-K. In addition, any forward-looking statements represent the Company’s estimates only as of the date of 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.

Contact Information:
Becky Herrick or Cathy Mattison
LHA (IR Agency)
+1 415 433 3777 /

[Tables to follow]

Condensed Consolidated Balance Sheet
(in thousands)
 June 30, 2017 December 31, 2016
Current assets:   
Cash$  1,611  $  7,839 
Accounts receivable, net  4,623    5,398 
Inventories  5,833    7,125 
Prepaid expenses and other current assets  978    968 
Total current assets  13,045    21,330 
Property and equipment, net  1,031    1,158 
Intangible assets, net  1,267    1,483 
Deferred tax assets  561    554 
Other assets  347    305 
Total assets$  16,251  $  24,830 
Current liabilities:   
Line of credit$  672  $  1,458 
Shareholder notes payable  —    1,803 
Accounts payable  4,145    5,979 
Accrued expenses and other current liabilities  5,143    6,345 
Income taxes payable  693    642 
Total current liabilities  10,653    16,227 
Commitments and contingencies   
Stockholders’ equity:   
Preferred stock, par value $0.01 per share: authorized 100,000; no shares issued and outstanding  —    — 
Common stock, par value $0.01 per share: authorized 50,000,000; issued and outstanding 15,722,537
and 15,703,301 shares at June 30, 2017 and December 31, 2016, respectively
  157    157 
Additional paid-in capital  238,093    237,838 
Accumulated other comprehensive loss  (6,108)   (6,329)
Accumulated deficit  (226,544)   (223,063)
Total stockholders’ equity  5,598    8,603 
Total liabilities and stockholders’ equity$  16,251  $  24,830 


Condensed Consolidated Statement of Operations
(in thousands, except percentage and per share amounts)
 Three Months Ended
June 30,
   Six Months Ended
June 30,
  2017 % of Revenues  2016 % of Revenues   2017 % of Revenues  2016 % of Revenues
    As Restated      As Restated 
Coated catalysts$  4,821 57% $  4,830 58%  $  9,291 56% $  10,441 58%
Emission control systems  3,011 36%   2,946 35%    6,553 39%   6,862 37%
Technology and advanced materials  567 7%   630 7%    769 5%   849 5%
Revenues$  8,399 100% $  8,406 100%  $  16,613 100% $  18,152 100%
Gross profit  1,944     1,687      3,378     4,424  
Operating expenses:            
Research and development  987     1,431      2,056     3,193  
Selling, general and administrative  1,916     2,827      4,642     6,227  
Severance and other charges  (619)    581      (619)    1,373  
Total operating expenses  2,284     4,839      6,079     10,793  
Loss from operations  (340)    (3,152)     (2,701)    (6,369) 
Other income (expense):            
Interest expense  (64)    (691)     (167)    (1,083) 
Gain on bifurcated derivative liability  —     2,754      —     2,754  
Loss on extinguishment of debt  —     (1,630)     (194)    (1,630) 
Gain (loss) on change in fair value of liability-classified warrants  4     792      (334)    1,588  
Other income, net  184     1,008      83     628  
Total other income (expense)  124     2,233      (612)    2,257  
Loss from operations before income taxes  (216)    (919)     (3,313)    (4,112) 
Income tax expense (benefit)  169     (697)     168     (1,119) 
Net loss$  (385)  $  (222)   $  (3,481)  $  (2,993) 
Basic and diluted net loss per common share:            
Net loss$  (0.02)  $  (0.06)   $  (0.22)  $  (0.80) 
Weighted average shares outstanding – basic and diluted  15,708     3,848      15,706     3,747  


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