Clean Diesel Technologies, Inc. Reports 2007 Half Year and Second Quarter Results
STAMFORD, Conn.--Clean Diesel Technologies, Inc. (“Clean Diesel Technologies” or the “Company”) (OTC-BB: CLDS, AIM: CDT/CDTS & XETRA: CDI), an innovative leader for clean energy and environmental technologies to reduce harmful engine emissions, today announces its results for the three and six months ended June 30, 2007.
Highlights
- First half year revenue increased by 166% to $1,459,000 (2006: $548,000)
- Further improvement in bottom line compared to prior year periods (2007: $0.37 loss per share; 2006: $0.54 loss per share)
- Cash and cash equivalents at June 30, 2007 were $10.8 million
- Substantial new technology licensing agreements executed with global industry leaders such as Robert Bosch GmbH
- Continued investment in technologies and favorable external market drivers
- Application for listing on NASDAQ Capital Market filed in June
Dr. Bernhard Steiner, President and CEO, commented, ”We are pleased to report a step change in the Company’s prospects during the first half of 2007. Not only has revenue increased by 166% compared to the first half of 2006 but many years of investment in our IP portfolio is now paying off through significant licensing agreements with leaders in the global automotive equipment supply chain. Indeed, we are already experiencing increased order enquiries due to the reassurance and visibility of these agreements. Furthermore, the license revenue has helped us to further enhance Clean Diesel’s market position and enables us to exploit ever-increasing emissions regulation at an even faster pace. In 2007, we will continue to focus on securing additional license agreements and the rollout of our Low Emission Zone initiative.”
Clean Diesel reported total revenue for the first half of 2007 increased $911,000, or 166.2%, to $1,459,000 from $548,000 in the first half of 2006. Total revenue in the three months ended June 30, 2007 was $1,243,000 compared to $279,000 in the three months ended June 30, 2006, an increase of $964,000, or 345.5%; both increases are due to higher technology licensing fees and royalties. Net loss for the six months ended June 30, 2007 was $2,334,000 compared to a net loss of $2,774,000.
During the six months ended June 30, 2007, the Company made substantial progress with its ongoing initiative to consummate technology license agreements with significant manufacturers and component suppliers. In the second quarter, Clean Diesel entered into a worldwide non-exclusive licensing agreement with Stuttgart, Germany-based Robert Bosch GmbH (a leading global supplier in the areas of automotive and industrial technology, customer goods and building technology) as well as a non-exclusive license agreement with privately held, Monroe, CT-based Combustion Components Associates (a provider of air pollution control technologies for the power generation and transportation industries).
Product sales in the six months ended June 30, 2007 were $344,000 compared to $413,000 in the same prior year period, a decrease of $69,000, or 16.7% and product sales in the three months ended June 30, 2007 was $139,000 compared to $218,000 in the three months ended June 30, 2006, a decrease of $79,000, or 36.2%. The declines are attributable to timing of projects, order pattern shifts in customer and distributor product sales and the Company’s focus during the period on developing other revenue sources. The 2007 product sales comprise $261,000 in fuel-borne catalysts and $83,000 in hardware sales compared to $296,000 in fuel-borne catalysts and $117,000 in hardware sales in 2006.
Operating costs and expenses were $3,887,000 in the six months ended June 30, 2007 compared to $3,475,000 in the same 2006 period, an increase of $412,000, or 11.9%, reflecting higher selling, general and administrative expenses and higher patent-related costs. Selling, general and administrative expenses in 2007 included $642,000 of non-cash charges for the fair value of stock options compared to $106,000 in 2006 in non-cash stock option compensation charges in accordance with SFAS No. 123R, which the Company adopted in January 2006. The 2006 period also included approximately $357,000 of severance charges for the former president and chief operating officer who had been released from employment in January 2006.
At June 30, 2007 and December 31, 2006, Clean Diesel had cash and cash equivalents of $10,778,000 and $5,314,000, respectively, an increase of $5,464,000 primarily due to the collection of subscription receivables from its December 2006 private placement and the cash infusion upon exercise of warrants. Clean Diesel’s working capital was $11,890,000 at June 30, 2007 compared to $7,217,000 at December 31, 2006, an increase of $4,673,000.
On June 29, 2007, Clean Diesel submitted an application for listing of its common stock on the NASDAQ Capital Market. In connection with submission of that application, the Company paid an initial fee of $5,000 which was charged to additional paid-in capital. If Clean Diesel is approved for listing on the NASDAQ Capital Market, additional listing fees will be required. In addition, the Company filed a Registration Statement on Form S-1 with the US Securities and Exchange Commission in June covering securities sold in the December 2006 private placement.
Full financial information is included in the Company’s Quarterly Report on Form 10-Q filed with the US Securities and Exchange Commission (http://www.sec.gov/).
About Clean Diesel Technologies, Inc.
Clean Diesel Technologies, Inc., together with its wholly-owned subsidiary, Clean Diesel International, LLC, is a clean energy and environmental technology company that provides innovative solutions to reduce harmful engine emissions and conserve energy. Clean Diesel Technologies’ patented technologies, products and solutions enable cost-effective reduction of harmful emissions from internal combustion engines while improving fuel economy and power. Products include Platinum Plus® fuel-borne catalysts, the Platinum Plus Purifier Systems, the ARIS® urea injection system for selective catalytic reduction of NOx, diesel particulate filter and biofuels technologies. The products are in commercial use around the world. For more information, visit Clean Diesel at www.cdti.com or contact the Company directly.
Certain statements in this news release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known or unknown risks, including those detailed in the Company’s filings with the US Securities and Exchange Commission, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
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Condensed Consolidated Statements of Operations (Unaudited; in thousands, except per share amounts) |
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Three Months Ended June 30,
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Six Months Ended June 30,
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| 2007 | 2006 | 2007 | 2006 | ||||||||
| Revenue: | |||||||||||
| Product sales | $ | 139 | $ | 218 | $ | 344 | $ | 413 | |||
| Technology licensing fees and royalties | 1,104 | 1 | 1,115 | 2 | |||||||
| Consulting and other |
-- |
60 |
-- |
133 | |||||||
| Total revenue | 1,243 | 279 | 1,459 | 548 | |||||||
| Costs and expenses: | |||||||||||
| Cost of revenue | 105 | 156 | 221 | 272 | |||||||
| Selling, general and administrative | 1,495 | 1,186 | 3,298 | 2,715 | |||||||
| Research and development | 150 | 177 | 192 | 395 | |||||||
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Patent amortization and other expense |
79 | 50 | 176 | 93 | |||||||
| Operating costs and expenses | 1,829 | 1,569 | 3,887 | 3,475 | |||||||
| Loss from operations | (586) | (1,290) | (2,428) | (2,927) | |||||||
| Other income (expense): | |||||||||||
| Interest income | 67 | 21 | 94 | 48 | |||||||
| Other income (expense) |
-- |
79 |
-- |
105 | |||||||
| Net loss | $ | (519) | $ | (1,190) | $ | (2,334) | $ | (2,774) | |||
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Basic and diluted loss per common share |
$ | (0.08) | $ | (0.23) | $ | (0.37) | $ | (0.54) | |||
| Basic and diluted weighted-average number of common shares outstanding | 6,550 | 5,222 | 6,333 | 5,179 | |||||||
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*On June 15, 2007, the Company effected a five-for-one reverse split of its common stock. All historical share numbers and per share amounts in these financial statements have been adjusted to give effect to this reverse split. |
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CLEAN DIESEL TECHNOLOGIES, INC. Condensed Consolidated Balance Sheets (in thousands, except share data) |
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June 30, 2007 |
December 31, 2006
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| (Unaudited) | ||||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 10,778 | $ | 5,314 | ||
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Accounts receivable, net of allowance of $63 and $34, respectively
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1,031 |
100 |
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| Inventories, net | 609 | 365 | ||||
| Other current assets | 103 | 96 | ||||
| Subscription receivable, net |
-- |
2,412 | ||||
| Total current assets | 12,521 | 8,287 | ||||
| Patents, net | 638 | 603 | ||||
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Fixed assets, net of accumulated depreciation of $385 and $350, respectively
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74 |
91 |
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| Other assets | 37 | 37 | ||||
| Total assets | $ | 13,270 | $ | 9,018 | ||
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| Liabilities and stockholders’ equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 174 | $ | 330 | ||
| Accrued expenses | 457 | 740 | ||||
| Total current liabilities | 631 | 1,070 | ||||
| Stockholders’ equity: | ||||||
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Preferred Stock, par value $0.01 per share; authorized 100,000 shares; no shares issued and outstanding
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-- |
-- |
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Common Stock, par value $0.01 per share: authorized 12,000,000 shares; |
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issued 7,115,232 and 5,964,493 shares, respectively |
71 | 60 | ||||
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subscribed and to be issued 0 and 667,998 shares, respectively |
-- |
7 |
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Additional paid-in capital, net of subscriptions receivable of $0 and $1,901, respectively
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59,875 | 52,854 | ||||
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Treasury stock, 86 and 0 shares, respectively, of common stock, at cost
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(1) |
-- |
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| Accumulated other comprehensive income | 5 | 4 | ||||
| Accumulated deficit | (47,311) | (44,977) | ||||
| Total stockholders’ equity | 12,639 | 7,948 | ||||
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Total liabilities and stockholders’ equity |
$ | 13,270 | $ | 9,018 | ||
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CLEAN DIESEL TECHNOLOGIES, INC. Condensed Consolidated Statements of Cash Flows (Unaudited; in thousands) |
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Six Months Ended
June 30, |
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| 2007 | 2006 | |||||
| Operating activities | ||||||
| Net loss | $ | (2,334) | $ | (2,774) | ||
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Adjustments to reconcile net loss to cash used in operating activities: |
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| Depreciation and amortization | 68 | 79 | ||||
| Provision for doubtful accounts, net | 30 | 18 | ||||
| Compensation expense for stock options | 642 | 106 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (961) | (57) | ||||
| Inventories | (244) | (161) | ||||
| Other current assets and other assets | (7) | (44) | ||||
| Accounts payable and accrued expenses | (298) | 381 | ||||
| Net cash used for operating activities | (3,104) | (2,452) | ||||
| Investing activities | ||||||
| Patent costs | (68) | (62) | ||||
| Purchase of fixed assets | (18) |
-- |
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| Net cash used for investing activities | (86) | (62) | ||||
| Financing activities | ||||||
| Proceeds from issuance of common stock, net | 4,313 | 488 | ||||
| Proceeds from exercise of warrants, net | 4,346 |
-- |
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| Proceeds from exercise of stock options | 40 | 14 | ||||
| Stockholder-related charges | (45) |
-- |
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| Net cash provided by financing activities | 8,654 | 502 | ||||
| Net increase (decrease) in cash and cash equivalents | $ | 5,464 | $ | (2,012) | ||
| Cash and cash equivalents at beginning of the period | 5,314 | 4,513 | ||||
| Cash and cash equivalents at end of the period | $ | 10,778 | $ | 2,501 | ||
| Supplemental non-cash activities: | ||||||
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Payment of accrued directors’ fees in common stock |
$ | 140 | $ | 94 | ||