Clean Diesel Technologies, Inc. Reports Fourth Quarter and Year End 2006 Results
STAMFORD, Conn.--Clean Diesel Technologies, Inc. (“Clean Diesel Technologies” or the “Company”) (OTC-BB: CDTI, AIM: CDT/CDTS & XETRA: CDI), a developer of technological solutions to reduce harmful engine emissions, today announced its results for the fourth quarter and year ended December 31, 2006.
Clean Diesel Technologies reported total revenue increased 38.3% ($311,000) in 2006 to $1,123,000 compared to $812,000 in 2005. The 2006 increase in revenue was due to additive revenue, license and royalty revenue and consulting projects completed in 2006. Revenue for the fourth quarter of 2006 increased 26.9% to $236,000 compared to $186,000 in the fourth quarter of 2005. The increase in revenue in the fourth quarter of 2006 was primarily attributable to additive and hardware revenue. Net loss for the year ended December 31, 2006 was $5,384,000, or $0.21 loss per share, compared to the 2005 net loss of $5,426,000, or $0.30 loss per share. Net loss for the fourth quarter of 2006 was $1,496,000, or $0.06 loss per share, as compared to the fourth quarter of 2005 net loss of $1,460,000, or $0.07 loss per share.
The Company’s total operating costs and expenses for the year ended December 31, 2006 were $6,681,000 compared to $6,043,000 in 2005, an increase of $638,000, or 10.6%, and included $304,000 of non-cash charges for the fair value of stock options granted (in accordance with SFAS No. 123R which the Company adopted in January 2006). Excluding the stock option charge, the total operating costs and expenses increased 5.5% in relation to the prior year. Also included in 2006 operating costs and expenses are severance charges of $357,475 (due to the departure of the Company’s former president and chief operating officer who had been released from employment in January 2006) and the full year effect of the Company’s executive vice president, North American operations and chief technology officer who was hired in August 2005.
Commenting on the results, Dr. Bernhard Steiner, President and CEO, said: ”2006 was a significant year for Clean Diesel Technologies’ development with a strong focus on moving the sales and marketing activities forward, a key component of which was expanding our distribution partners in North and South America, Europe and Asia. The net loss from operations reflects this increased investment in sales and marketing. Clean Diesel Technologies finished the year with $5.3 million in cash and the expectation of collecting another $4.3 million (net of expenses) from subscriptions. I am pleased that we successfully completed a private placement in December 2006. For that, we are grateful to our supportive stockholders.”
Dr. Steiner continued, “The combination of increasingly stringent legislation and expanding financial incentives in the global emissions market, underpinned by strengthening demand for environmental best practice and dramatic cuts in greenhouse gas emissions, is expected to drive the market in 2007 and throughout the rest of the decade. The escalating need for clean air and energy efficiency provides significant opportunities for Clean Diesel Technologies’ existing range of products and solutions also for its future innovations.”
“Our expanded distribution network, additional patents, technology developments and investment in sales and marketing should all provide the Company with enhanced revenue opportunities in 2007 and beyond. We are now well positioned for the next stage of growth and look forward to 2007 with confidence.”
Clean Diesel Technologies, Inc. is a clean energy and environmental technology company supplying proprietary pollution control systems technologies to reduce harmful emissions from internal combustion engines while improving fuel economy, resulting in “cleaner air” and reduced “greenhouse gas” emissions. The Company has four main technology areas: Platinum Plus® fuel-borne catalysts for emission control and fuel economy improvement in diesel engines; ARIS® selective catalytic reduction (SCR) technology for control of nitrogen oxide (NOx) emissions from diesel engines; catalyzed wire mesh diesel particulate filters to reduce particulate matter and other regulated engine emissions; and biofuels technology, which includes the low emission Biodiesel Plus™ formula. For additional information, you may review our Annual Report on Form 10-K as filed with the Securities and Exchange Commission.
About Clean Diesel Technologies, Inc.
Clean Diesel Technologies, Inc. and its UK Branch office, Clean Diesel International LLC, is a developer of technological solutions to reduce harmful engine emissions. Clean Diesel Technologies has patented products that reduce emissions from combustion engines while simultaneously improving fuel economy and power. Products include Platinum Plus® fuel-borne catalysts (FBC), the Platinum Plus Purifier System, catalyzed wire mesh diesel particulate filter technologies and the ARIS® injection systems for selective catalytic reduction of NOx. Platinum Plus and ARIS are registered trademarks of Clean Diesel Technologies, Inc. For more information, visit CDT at www.cdti.com or contact the Company directly.
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CLEAN DIESEL TECHNOLOGIES, INC. Statement of Operations
(in thousands, except per share data) |
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| Three Months Ended | Years Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||
| Revenue: | ||||||||||||
| Additive revenue | $ | 134 | $ | 128 | $ | 591 | $ | 411 | ||||
| Hardware revenue | 78 | 35 | 269 | 349 | ||||||||
| License and royalty revenue | 24 | 23 | 74 | 47 | ||||||||
| Consulting and other |
- |
- |
189 | 5 | ||||||||
| Total revenue | 236 | 186 | 1,123 | 812 | ||||||||
| Costs and expenses: | ||||||||||||
| Cost of revenue | 180 | 99 | 658 | 471 | ||||||||
| General and administrative | 1,405 | 1,328 | 5,278 | 4,963 | ||||||||
| Research and development | 63 | 69 | 510 | 439 | ||||||||
| Patent amortization and other expense | 89 | 45 | 235 | 170 | ||||||||
| Loss from operations | (1,501) | (1,355) | (5,558) | (5,231) | ||||||||
| Foreign currency exchange gain (loss) | 3 | (115) | 104 | (221) | ||||||||
| Interest income | 2 | 10 | 58 | 26 | ||||||||
| Other |
- |
- |
12 |
- |
||||||||
| Net income (loss) | $ | (1,496) | $ | (1,460) | $ | (5,384) | $ | (5,426) | ||||
| Basic and diluted loss per common share | $ | (0.06) | $ | (0.07) | $ | (0.21) |
$ |
(0.30) |
||||
| Basic and diluted weighted-average number of common shares outstanding | 26,276 | 22,027 | 26,059 | 18,389 | ||||||||
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CLEAN DIESEL TECHNOLOGIES, INC. Consolidated Balance Sheets
(in thousands, except share data) |
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| December 31, | ||||||
| 2006 | 2005 | |||||
| ASSETS | ||||||
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | $ | 5,314 | $ | 4,513 | ||
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Accounts receivable, net of allowance of $34 and $11, respectively |
100 |
125 |
||||
| Inventories, net | 365 | 285 | ||||
| Other current assets | 96 | 94 | ||||
| Subscription receivable, net | 2,412 | 488 | ||||
| Total current assets | 8,287 | 5,505 | ||||
| Patents, net | 603 | 567 | ||||
| Fixed assets, net of accumulated depreciation of | ||||||
| $350 and $259, respectively | 91 | 175 | ||||
| Other assets | 37 | 27 | ||||
| Total assets | $ | 9,018 | $ | 6,274 | ||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| CURRENT LIABILITIES: | ||||||
| Accounts payable | $ | 30 | $ | 170 | ||
| Accrued expenses | 740 | 317 | ||||
| Deferred revenue |
- |
9 | ||||
|
Total current liabilities |
1,070 | 496 | ||||
| Commitments | ||||||
| STOCKHOLDERS’ EQUITY: | ||||||
| Preferred stock, par value $0.05 per share, | ||||||
| authorized 100,000; no shares issued and outstanding |
- |
- |
||||
| Common stock, par value $0.05 per share: | ||||||
| authorized 45,000,000 and 30,000,000 shares, respectively; issued and outstanding 29,822,468 and 25,369,358 shares, respectively | 1,491 | 1,269 | ||||
| subscribed and to be issued 3,339,994 and 705,113 shares, respectively |
167 |
35 | ||||
|
Additional paid-in capital, net of subscriptions receivable of $1,901 at December 31, 2006 |
51,263 |
44,067 |
||||
| Accumulated other comprehensive income | 4 |
- |
||||
| Accumulated deficit | (44,977) | (39,593) | ||||
| Total stockholders’ equity | 7,948 | 5,778 | ||||
| Total liabilities and stockholders’ equity | $ | 9,018 | $ | 6,274 | ||
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CLEAN DIESEL TECHNOLOGIES, INC. Consolidated Statements of Cash Flow
(in thousands) |
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| For the years ended December 31, | |||||||||
| 2006 | 2005 | 2004 | |||||||
| Operating activities | |||||||||
| Net loss | $ | (5,384) | $ | (5,426) | $ | (4,143) | |||
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Adjustments to reconcile net loss to cash used in operating |
|||||||||
| Depreciation and amortization | 138 | 163 | 132 | ||||||
| Provision for inventory | 27 | 43 |
- |
||||||
| Provision for doubtful accounts, net | 23 | 12 |
- |
||||||
| Compensation expense for stock options | 304 |
- |
88 | ||||||
| Loss on disposition/abandonment of fixed assets/patents | 23 | 33 | 19 | ||||||
| Changes in operating assets and liabilities: | |||||||||
| Accounts receivable | 2 | 7 | (40) | ||||||
| Inventories | (107) | 59 | (76) | ||||||
| Other current assets and other assets | (12) | (23) | (7) | ||||||
| Deferred compensation and pension benefits |
- |
- |
(306) | ||||||
| Accounts payable and accrued expense | 678 | 167 | 21 | ||||||
| Deferred revenue | (9) | 9 |
- |
||||||
| Net cash used for operating activities | (4,317) | (4,956) | (4,312) | ||||||
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|
|
|
|
||||||
| Investing activities | |||||||||
| Patent costs | (94) | (235) | (186) | ||||||
| Purchase of fixed assets | (20) | (85) | (164) | ||||||
| Net cash used for investing activities | (114) | (320) | (350) | ||||||
| Financing activities | |||||||||
| Proceeds from issuance of common stock, net | 5,214 | 5,522 | 2,408 | ||||||
| Proceeds from exercise of stock options | 14 | 2 | 1 | ||||||
| Proceeds from broker fee credit |
- |
- |
3 | ||||||
| Net cash provided by financing activities | 5,228 | 5,524 | 2,412 | ||||||
| Effect of exchange rate changes on cash | 4 |
- |
- |
||||||
|
Net increase (decrease) in cash and cash equivalents |
$ | 801 | $ | 248 | $ | (2,250) | |||
| Cash and cash equivalents at beginning of the year | 4,513 | 4,265 | 6,515 | ||||||
| Cash and cash equivalents at end of the year | $ | 5,314 | $ | 4,513 | $ | 4,265 | |||
|
|
|||||||||
| Supplemental non-cash activities: | |||||||||
| Common stock subscribed, net | $ | 4,313 | $ | 488 |
$ |
- |
|||
| Payment of accrued directors’ fees in common stock | 94 | 70 | 57 | ||||||
| Stock issued as payment for deferred compensation |
- |
- |
135 | ||||||