Westport Reports First Quarter Fiscal 2014 Financial Results
4:05 PM ET 5/1/14 | Dow Jones
Westport Reports First Quarter Fiscal 2014 Financial Results
PR Newswire
VANCOUVER, May 1, 2014
First Quarter Revenue Up 39% Year over Year; Step Change Improvement in Westport Operating Business Units' Adjusted EBITDA
VANCOUVER, May 1, 2014 /PRNewswire/ - Westport Innovations Inc. (TSX:WPT / NASDAQ:WPRT), engineering the world's most advanced natural gas engines and systems, today reported financial results for the first quarter ended March 31, 2014 and provided an update on operations. All figures are in U.S. dollars unless otherwise stated.
Highlights include:
Revenue & Net Results
-- Westport revenue, excluding joint ventures' revenues, for the quarter
ended March 31, 2014 was $41.9 million compared with $30.1 million for
the same period last year, an increase of 39%.
-- Joint venture segment revenue for the quarter ended March 31, 2014 was
$80.1 million for Cummins Westport Inc. (CWI), an increase of 79% over
the same period last year; and $113.4 million for Weichai Westport Inc.
(WWI), an increase of 7% over the same period last year.
-- Westport consolidated net loss and net loss per share for the quarter
ended March 31, 2014 decreased to $23.9 million and $0.38, respectively,
from $31.8 million, and $0.57, respectively in 2013.
Adjusted EBITDA (The reconciliation of Adjusted EBITDA is described below)
-- For the quarter ended March 31, 2014, Westport reported an Adjusted
EBITDA loss from operations of $1.6 million compared with an Adjusted
EBITDA loss from operations of $8.7 million for the quarter ended March
31, 2013, an improvement of approximately 81% year-over-year.
-- For the quarter ended March 31, 2014, Westport reported a consolidated
Adjusted EBITDA loss of $22.1 million for the Company, compared with a
loss of $26.3 million in the prior year period.
As previously announced, Westport re-organized its business in 2013 to take advantage of the shift by original equipment manufacturers (OEMs) to develop natural gas vehicle products in-house. Westport's operating business units have the goal of achieving positive Adjusted EBITDA from operations by the end of 2014. The $1.6 million loss is a step change in Adjusted EBITDA, which has averaged about a $9.4 million loss per quarter for the past eight quarters. This has been achieved through significant organizational efficiencies, product portfolio optimization and cost reductions.
Increased Product Volumes / Revenue:
-- For the quarter ended March 31, 2014, On-Road Systems revenue increased
by 277% to $17.7 million compared with $4.7 million in the same period
last year due primarily to the addition to revenue from acquired
organizations, BAF Technologies (BAF) and its subsidiary, ServoTech
Engineering, Inc. (ServoTech), shipment of Westport iCE PACK(TM)
liquefied natural gas (LNG) Tank Systems, and increased sales of Volvo
cars with Westport bi-fuel systems.
-- For the quarter ended March 31, 2014, CWI revenue increased by 79% to
$80.1 million on 2,480 units, compared with $44.7 million on 1,313 units
in the same period last year.
-- For the quarter ended March 31, 2014, WWI revenue increased by 7% to
$113.4 million on 9,172 units, compared with $105.9 million on 8,529
units in the same period last year.
Reducing Costs and Prioritizing Investments
-- Cash used in the quarter ended March 31, 2014 was $26.7 million,
including a one-time payment to Clean Energy Fuels Corp. of $5.0 million
for a previously announced joint marketing and sales program related to
the acquisition of BAF and its subsidiary, ServoTech, in June 2013. This
is compared with $26.9 million for the quarter ended December 31, 2013.
Westport is continuing to focus on cost reduction initiatives and
management of Westport's investment programs.
-- Westport is co-investing with OEMs to develop a portfolio of new natural
gas vehicle technologies and related systems and components. Since 2012,
Westport has invested $214.9 million into various programs, including
trucking, automotive, and off-road applications, as well as advanced
engineering and capital expenditures. These are investments with 3 to 5
year development cycles from the start of development to product sales.
Westport is carefully managing the programs and allocating capital to
products and technologies designed to deliver high margin returns in the
future.
Business Highlights
-- Westport and Delphi Automotive are combining their intellectual property
and engineering strengths to co-develop and manufacture high-pressure
natural gas fuel injectors designed for multiple engine OEMs,
establishing Westport high pressure direct injection (Westport(TM) HPDI)
as the leading natural gas technology platform for heavy-duty engine
applications. The family of injectors to be developed will be one of the
core components of Westport(TM) HPDI 2.0 fuel system. Delphi and Westport
plan to ramp production capacity to 100,000 HPDI injectors per year by
2018.
-- Westport and Weichai launched final customer validation units of the next
generation Westport(TM) HPDI 2.0 on the Weichai Westport WP12 engine
platform; and initiated development of the 10 litre Weichai Westport WD10
engine with Westport HPDI 2.0. The current generation Weichai Westport
WD10 and WP12 natural gas engines, using lean burn spark ignited
technology, account for about 75 percent of WWI's engine unit sales. With
the strong demand for natural gas engines in China, WWI is expanding its
manufacturing capacity to 100,000 engines per year by the end of 2014.
-- Westport received California Air Resources Board (CARB) certification for
its 2014 model year Westport WiNG(TM) Ford F-150 3.7L pickup truck with
the dedicated compressed natural gas (CNG) system.
-- Westport received Environmental Protection Agency (EPA) certification for
its 2015 model year Ford F-250 and F-350 super duty trucks with the
Westport WiNG(TM) bi-fuel CNG system.
-- Westport and Tata Motors Limited launched a new spark-ignited (SI)
natural gas 3.8L turbocharged engine featuring the Westport WP580 Engine
Management System (EMS). Westport also unveiled its newest proprietary
technology, Westport gas enhanced methane diesel (Westport GEMDi(TM))
targeted for medium-duty trucks and buses in India.
-- Westport and Universal LNG has signed an agreement to develop a range of
LNG portable power units for a diverse range of applications. Westport
will initially develop two water pump units powered by the Westport(TM)
2.4L industrial power unit or a low cost natural gas 7L engine platform,
fitted with the Westport WP580 EMS for larger applications, and
integrated with the Westport iCE PACK LNG Tank System to supply the fuel.
The power unit is design protected to meet future requirements of
Universal LNG's customers in marine transit, utility, power generation
and tractor applications. Upon successful completion of the development
phase, Westport expects to build and supply units for a large scale trial
in the U.S. and Asia Pacific markets.
-- Westport is developing an advanced, durable, and fuel efficient 3.8L
industrial engine, designed to operate on either natural gas or liquefied
petroleum gas (LPG). This new industrial product is based on Hyundai
Motor Company's 3.8L automotive engine and is targeted for use in
industrial applications such as forklift, oil & gas, power generation,
and construction equipment. The engine will feature a multi-point fuel
injection system designed and manufactured by Westport, and the Westport
WP580 EMS. With the new 3.8L engine, Westport expects to broaden its
market opportunity and engage new OEMs in the mobile and stationary
industrial markets. The engine is expected to meet EPA and CARB emissions
standards.
"We have made a step change this quarter with Westport revenue growth of 39% year-over-year and significant improvement on Adjusted EBITDA from operations, from an average loss of approximately $9.4 million to a $1.6 million loss," said David Demers, CEO of Westport. "We are on track to achieve positive Adjusted EBITDA from operations by the end of 2014 by continuing to increase sales, shipping committed products, and applying cost and margin discipline. At the same time, we are confident that our investment projects will deliver shareholder value as these products come to market."
"In China, Weichai Westport sold more than 9,100 units in the quarter and recorded $113 million in revenue, 8% and 7% higher than the same period last year. As announced earlier this week, we are excited that Weichai will be the first OEM delivering HPDI 2.0 technology to the market. The WP12 engine is China's first engine featuring Westport HPDI technology, delivering the power and performance of the base diesel engine, while replacing up to 95% of diesel fuel with cleaner burning, less expensive natural gas. Furthermore, we have agreed to develop the 10 litre Weichai Westport WD10 engine with Westport HPDI 2.0, with product availability planned for 2016. We are very pleased to continue to work with Weichai to lead this energy transition in China."
"We have a comprehensive product investment program, collaborating with key global OEMs to launch major new products, resulting in increased sales while reducing investment expenses over the next several years. At the same time, we are continuing to reduce our operating costs and prudently manage our cash flow. The income from our joint ventures and service revenue are expected to cover our corporate costs and investment programs."
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