Clean Diesel Technologies Reports Q3, Nine-Month Results
16 November 1998
Clean Diesel Technologies Reports Third Quarter, Nine-Month Results
STAMFORD, Conn.--Nov. 13, 1998--Clean Diesel Technologies Inc. (EBB:CDTI), a development-stage company, Friday reported results for the third quarter and nine months ended Sept. 30, 1998.For the third quarter, CDT reported a net loss of $945,000, or 38 cents per share, compared with a net loss of $885,000, or 35 cents per share, for the same year-earlier period. For the nine months ended Sept. 30, CDT recorded a net loss of $2,202,000, or $0.87 per share, compared with a net loss of $3,001,000, or $1.19 per share, during the prior year's nine-month period. Both the three- and nine-month periods ended Sept. 30, 1998, include a $247,000 charge spent on professional fees for the preparation of the company's withdrawn rights offering.
CDT President and Chief Executive Officer Jeremy D. Peter-Hoblyn said that the reduced loss for the nine-month period was the result of research and development programs being largely finished in 1997 and stringent efforts to conserve cash ahead of the time when meaningful revenues can be achieved.
"The first sales of CDT's commercial prototype of the ARIS(TM) 2000 diesel NOx reduction system were recorded during the third quarter," he said. "The development of the ARIS 2000 system is a significant step in our effort to move toward commercializing our products.
"We have entered into discussions with potential partners to commercialize three diesel engine product groups: The ARIS 2000 system, platinum and cerium catalysts for particulate filters, and Platinum Plus(R) fuel catalysts for premium diesel fuel.
"Although the company's balance sheet as of Sept. 30, 1998, reported $457,000 in cash and cash equivalents, in November 1998, CDT anticipates receiving $1.85 million from the issuance of its Series A Preferred Stock to European investors.
"As a result, the $1.4 million bridge loan, which CDT received in mid-1998, will automatically convert into Series A Preferred Stock as well. Also in November 1998, Fuel Tech elected to convert its $495,000 Term Note to the company into Series A Preferred Stock upon CDT's receipt of the $1.85 million in proceeds."
Market conditions had made the company's rights offering impossible to execute in the month of September. Consequently, the company accepted offers for a total of 3,750 shares of its Series A Convertible Preferred Stock (the "Series A Preferred Stock") which, after commissions and expenses of $28,000, will produce net proceeds of approximately $1.85 million to the company. These shares have a par value of $500 per share and each is convertible into 333-1/3 shares of the company's Common Shares.
Research and development expenses for the third quarter and first nine months of 1998 decreased to $269,000 and $684,000, respectively, from $551,000 and $1,713,000 during the comparable periods in 1997. CDT significantly reduced R&D costs in 1998 as the company continued its shift in emphasis toward commercialization. Other factors included the completion of a number of fundamental programs in 1997 and the increased use of trials and demonstrations which were co-funded or entirely paid for by engine or filter systems companies.
General and administrative (G&A) expenses were $366,000 and $1,121,000, respectively, in the third quarter and first nine months of 1998, as compared with $350,000 and $1,309,000 during the respective comparable periods in 1997. G&A costs were up slightly in the third quarter as a result of the shift of some of CDT management's time (and allocated expenses) toward commercializing its products from R&D and other activities, as well as an associated increase in marketing expenses.
Clean Diesel Technologies is a development-stage company with patent-protected products that reduce emissions from diesel engines while simultaneously improving fuel economy and power. R&D efforts and products are grouped into two categories: PFCs and NOx Reduction Systems. Platinum Plus is a registered trademark of Clean Diesel Technologies Inc.
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, 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.
CLEAN DIESEL TECHNOLOGIES INC.
(A Development-Stage Company)
Statements of Operations
(Unaudited)
(in thousands except per-share data)
Period from
Three Months Nine Months Jan. 1, 1992,
Ended Sept. 30, Ended Sept. 30, through
1998 1997 1998 1997 Sept. 30, 1998
Sales $ 30 $ 80 $ 39 $ 160 $ 238
Costs and expenses:
Cost of sales 19 45 24 91 156
General and
administrative 366 350 1,121 1,309 6,163
Research and
development 269 551 684 1,713 6,001
Patent filing and
maintenance 39 43 119 158 1,057
Loss from
operations 663 909 1,909 3,111 13,139
Interest income (9) (34) (30) (144) (611)
Interest expense 44 10 76 34 280
Cost of withdrawn
Rights Offering 247 -- 247 -- 247
Net loss during
development
stage $ 945 $ 885 $2,202 $3,001 $13,055
Basic and diluted
loss per Common
Share $ 0.38 $ 0.35 $ 0.87 $ 1.19 N/A
Average number of
Common Shares
outstanding 2,517 2,517 2,517 2,515 N/A