Clean Diesel Technologies Reports 2004 Second Quarter Results
STAMFORD, Conn.--Aug. 1, 20041, 2004--Clean Diesel Technologies Inc. (CDT) (OTCBB:CDTI)(AIM:CDT)(AIM:CDTS) today reported results for the second quarter and first half of 2004. Total revenue for this year's second quarter was $93,000 with a net loss of $885,000, or $0.06 loss per share, versus revenue of $283,000 and a net loss of $585,000, or $0.05 loss per share for the second quarter of 2003. For the first six months ended June 30, 2004, total revenue was $287,000 and a net loss of $1,693,000, or $0.11 loss per share. In the comparable 2003 period, revenue was $379,000 and a net loss of $1,492,000, or $0.12 loss per share. CDT's base Platinum Plus fuel-borne catalyst (FBC) and Purifier System revenue continues to grow, however, the 2003 second quarter and year-to-date 2003 revenue included a one-time $150,000 ARIS license fee.Reporting on operations, President and Chief Operating Officer James M. Valentine commented: "Revenues reported do not include any sales from the first significant commercial awards that we announced in the second quarter. These included awards by the state of Pennsylvania of more than $300,000 to Coca-Cola Enterprises Inc. (CCE) and Waste Management to purchase CDT's Platinum Plus Purifier diesel oxidation catalyst (DOC) and Platinum Plus FBC for over 140 refuse- and beverage-delivery trucks. First shipments have commenced in the third quarter."
"Additionally," Valentine said, "CDT signed a contract with the state of Maine to retrofit over 75 school buses with the Platinum Plus Purifier System and has been notified by two municipalities in Connecticut of awards for FBC/DOC retrofits to school buses. All these significant awards follow the extension of our Environmental Protection Agency (EPA) verification to cover newer engine model years, which increases the applications in school bus, municipal and private fleets. Furthermore, the EPA announced $5 million of incremental funding for 20 school districts to purchase verified technologies and CDT intends to pursue several of the grants."
The company is expanding its operations with CCE and is now supplying the Platinum Plus FBC to over 10 percent of CCE's U.S. diesel fleet. CCE fleet operations in Texas and Louisiana are enjoying fuel-economy gains and reduced emissions from the use of treated fuel. Platinum Plus Purifier DOCs will also be added to certain vehicles in the CCE fleet following the successful demonstration of emissions reductions of 40-50 percent in EPA verification testing.
Following additional testing completed in the second quarter, CDT was able to extend its EPA verification of the Platinum Plus Purifier System to cover all medium and heavy duty on-road engines from 1988-2003 model years. Reductions in particulate emissions of 40-50 percent for the Purifier System are twice those of other verified DOCs.
In June the company announced a second verification from the EPA for the higher efficiency FBC and catalyzed wire-mesh filter (CWMF) system. This system, developed in conjunction with PUREarth Inc., a wholly owned subsidiary of Mitsui & Co. Inc., provides particulate (PM) reductions of 65-75 percent on ultra low sulfur diesel (ULSD) and 55-60 percent on normal diesel (No. 2D). It is the only filter system verified for use on No. 2D fuel. This system is targeted at the California mandatory retrofit market. Formal application for verification was submitted to California Air Resources Board (CARB) in April 2004. California represents another large market with over 1 million engines required to retrofit with verified technology.
EPA's recently announced challenge to the industry to retrofit, re-power or retire over 11 million diesel engines in the next 10 years gives an indication of the magnitude of the potential U.S. market. International retrofit markets are developing; many of them are heavily influenced by EPA's lead. CDT's suite of lower cost emission reduction systems is firmly positioned to share in the developing retrofit market.
Mitsui continues to develop the market for stationary diesel NOx control using the ARIS injection system in Japan and is working with several heavy duty truck companies on a mobile ARIS system.
CDT's licensee for the mobile ARIS NOx reduction, Combustion Components Associates Inc. (CCA), has recently received orders for over 18 urea SCR systems to be fitted to off-road construction equipment and refuse trucks. These represent the first commercial orders in the United States for the mobile ARIS system. The system is capable of over 75 percent NOx reduction and uses CDT's patented return flow injector design to control the injection of urea into the engine exhaust.
Derek R. Gray, non-executive chairman announced that Jeremy Peter-Hoblyn, chief executive officer, had recently informed the board of directors of his intention to retire before the end of the year. Peter-Hoblyn, who will turn 65 in September and has been CEO of CDT since its formation in 1995, will remain on the board of directors. The company's Compensation and Nominating Committee has identified a candidate and is in the advanced stage of discussions with a formal announcement expected shortly.
To assist with commercialization of the company's technologies in both retrofit and OEM business, the company has retained the technical advisory services of David Merrion, formerly executive vice president of engineering at Detroit Diesel Corp. Merrion brings extensive experience in the field of diesel-engine design, aftertreatment systems and impacts of fuels on diesel-engine emissions as well as insight into the regulations and market factors affecting fleet owners.
Full financial information is included in the company's Form 10-Q filed with the Securities and Exchange Commission (www.SEC.gov).
About Clean Diesel Technologies Inc.
Clean Diesel Technologies Inc. is a specialty chemical company with patented products that reduce emissions from diesel engines while simultaneously improving fuel economy. Products include Platinum Plus(R) fuel-borne catalysts (FBC) which reduce engine out emissions of particulate (PM), carbon monoxide (CO) and hydrocarbons (HC), while improving fuel economy and also increasing the regeneration of diesel particulate filters, and the ARIS(R) 2000 urea injection systems for selective catalytic reduction of NOx. Platinum Plus and ARIS are registered trademarks of Clean Diesel Technologies Inc.
CLEAN DIESEL TECHNOLOGIES INC.
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Revenue:
Product revenue $ 81 $ 123 $ 257 $ 210
License and royalty revenue 12 160 30 169
Total revenue 93 283 287 379
Costs and expenses:
Cost of sales 53 64 185 120
General and administrative 821 636 1,611 1,338
Research and development 90 170 170 419
Patent filing and maintenance 27 -- 39 --
Loss from operations (898) (587) (1,718) (1,498)
Interest income 13 2 25 6
Net loss $ (885) $ (585) $(1,693) $(1,492)
Basic and diluted loss per common
share $ (0.06) $ (0.05) $ (0.11) $ (0.12)
Weighted average number of common
shares outstanding - basic and
diluted 15,679 11,976 15,679 11,972
CLEAN DIESEL TECHNOLOGIES INC.
BALANCE SHEET
(in thousands except share data)
June 30, Dec. 31,
2004 2003
(Unaudited)
Assets:
Current assets:
Cash and cash equivalents $ 4,629 $ 6,515
Accounts receivable, Net 80 115
Inventories 375 320
Other current assets 93 73
Total current assets 5,177 7,023
Patents, Net 298 274
Fixed asset, Net 194 126
Other assets 20 18
Total assets $ 5,689 $ 7,441
Liabilities and Stockholders' Equity:
Current liabilities:
Deferred compensation and pension benefits $ 441 $ 441
Accounts payable and accrued expenses 365 427
Total current liabilities 806 868
Stockholders' Equity:
Preferred stock, par value $0.05 per share,
authorized 100,000 and 80,000 shares
respectively, no shares issued and
outstanding -- --
Series A convertible preferred stock, par
value $0.05 per share, $500 per share
liquidation preference, authorized 0 and
20,000 shares respectively, no shares issued
and outstanding -- --
Common stock, par value $0.05 per share,
authorized 30,000,000, issued and
outstanding 15,679,337 shares 784 784
Additional paid-in capital 35,816 35,813
Accumulated deficit (31,717) (30,024)
Total stockholders' equity 4,883 6,573
Total liabilities and stockholders' equity $ 5,689 $ 7,441