UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): November 14, 2017
CLEAN DIESEL TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware |
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001-33710 |
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06-1393453 |
(State or Other Jurisdiction |
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(Commission |
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(IRS Employer |
of Incorporation) |
|
File Number) |
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Identification No.) |
1621 Fiske Place |
|
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Oxnard, California |
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93033 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(805) 639-9458
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c)) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations and Financial Condition.
On November 14, 2017, Clean Diesel Technologies, Inc. announced its financial results for the quarter ended September 30, 2017. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit |
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Number |
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Description |
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99.1 |
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Press Release issued by Clean Diesel Technologies, Inc. dated November 14, 2017. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 14, 2017 |
CLEAN DIESEL TECHNOLOGIES, INC. | |
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| |
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By: |
/s/ Tracy Kern |
|
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Tracy Kern |
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Chief Financial Officer |
CDTi Announces Third Quarter 2017 Financial Results
Achieves key milestones in advanced materials commercialization
Oxnard, California Nov. 14, 2017 Clean Diesel Technologies, Inc. (Nasdaq: CDTI) (CDTi or the Company), a leader in advanced emission control technology, reported its financial results for the third quarter ended Sept. 30, 2017.
Matthew Beale, CDTis CEO, stated, The third quarter marked several critical milestones in CDTis development as a provider of enabling technology to the automotive catalyst industry. We completed our business realignment with the sale of our downstream distribution activities in the North American aftermarket, secured our first Chinese OEM vehicle platform for our advanced materials and signed a joint development agreement with a major global OEM focused on material systems for catalyst applications.
Importantly, the global regulatory environment, automotive industry trends and commodity price dynamics further strengthen our unique value proposition. With our streamlined operations, lower cost base and clean balance sheet, CDTi is ideally positioned to capitalize on its growing commercial pipeline.
Financial Highlights: Third Quarter 2017 compared to Third Quarter 2016
· Total revenue was $6.9 million, compared to $10.1 million.
§ Coated catalyst revenue was $3.5 million, compared to $7.1 million.
§ Emissions control systems revenue was $2.9 million, compared to $2.8 million.
§ Technology and advanced materials revenue was $0.5 million, compared to $0.2 million.
· Gross margin was 22%, compared to 27%. The decrease primarily reflects the impact of overhead on lower sales.
· Total operating expenses in the third quarter of 2017 were $3.3 million, compared to $3.7 million in the third quarter of 2016 including severance costs and a significant investment in outside testing as we partner with OEMs in China on our powder-to-coat implementations. As we realize the full benefit of headcount reductions executed in the third and fourth quarter resulting from the sale of Durafit and the exit of our high-volume coating activities, along with other cost cutting measures, our operating expenses will decrease to $2 million per quarter in 2018.
· Net loss was $360,000, or $0.02 per share, compared to a net loss of $12.6 million, or $2.14 per share in the third quarter of 2016.
· Cash at September 30, 2017 was $3.3 million, compared to $7.8 million at December 31, 2016.
Financial Highlights: Nine months ended September 30, 2017 compared to 2016
· Total revenue for the first nine months of 2017 was $23.5 million, compared to $28.3 million for the same prior year period.
· Gross margin was 21%, compared to 25% in the same prior year period.
· Total operating expenses for the first nine months of 2017 were $9.3 million compared to $14.4 million in the same prior year period.
· Net loss for the first nine months of 2017 was $3.8 million, or $0.24 per share, compared to net loss of $15.6 million, or $3.49 per share, in the same prior year period.
Financial Outlook
Based on CDTis current business configuration as well as its third quarter results, the company now expects full-year revenue to be approximately $28 million and gross margin to be approximately 22%.
Conference Call and Webcast Information
CDTi will host a conference call and live webcast beginning at 2:00 p.m. Pacific Time today, November 14th to discuss its financial results and its business outlook. This conference call will contain forward-looking information. To participate in the conference call, please dial +1 (877) 303-9240 and international participants should dial +1 (760) 666-3571. The conference code is 9998218. The conference call will be webcast live on the CDTi website at www.cdti.com under the Investor Relations section. To listen to the live webcast, participants should visit the site at least 15 minutes prior to the conference to download any required streaming media software. An archived recording of the conference call will be available on the CDTi website for 30 days. You may also access a telephone replay for two business days following the conclusion of the call by dialing +1 (855) 859-2056 or +1 (404) 537-3406 if dialing in internationally. The passcode is 9998218.
About CDTi
CDTi develops advanced materials technology for the emissions control market. CDTis proprietary technologies provide high-value sustainable solutions to reduce hazardous emissions, increase energy efficiency and lower the carbon intensity of on- and off-road combustion engine systems. With a continuing focus on innovation-driven commercialization and global expansion, CDTis breakthrough Powder-to-Coat (P2C) technology exploits the Companys high-performance, advanced low-platinum group metal (PGM) emission reduction catalysts. Key technology platforms include Mixed Phase Catalyst (MPC®), Base Metal Activated Rhodium Support (BMARS), Synergized PGM (SPGM), Zero PGM (ZPGM) and Spinel. For more information, please visit www.cdti.com.
Forward-Looking Statements
Certain information contained in this press release constitutes forward-looking statements, including any statements that are not statements of historical fact. You can identify these forward-looking statements by the use of the words believes, expects, anticipates, plans, may, will, would, intends, estimates, and other similar expressions, whether in the negative or affirmative. Forward-looking statements are based on a series of expectations, assumptions, estimates and projections, which involve substantial uncertainty and risk. In this document, the Company includes forward-looking statements regarding the acceleration of the Companys business transformation into an advanced materials company, global trends in the automotive and heavy duty diesel markets, the Companys future financial performance, and the performance of the Companys technology, are all subject to risks and uncertainties that could cause our actual results and financial position to differ materially. In general, actual results may differ materially from those indicated by such forward-looking statements as a result of risks and uncertainties, including, but not limited, to (i) that the Company may not be able to (a) successfully implement, or implement at all, its strategic priorities; (b) streamline its operations or
align its organization and infrastructure with the anticipated business; (c) meet expectations or projections; (d) decrease costs; (e) increase sales; (f) obtain adequate funding; (g) retain or secure customers; (h) increase its customer base; (i) protect its intellectual property; (j) successfully evolve into an advanced materials supplier or, even if successful, increase profitability; (k) successfully market new products; (l) obtain product verifications or approvals; (m) attract or retain key personnel; (n) validate, optimize and scale our powder-to-coat capability; or (o) realize benefits from investments; (ii) funding for and enforcement and tightening of emissions controls, standards and regulations; (iii) prices of PGM and rare earth metals; (iv) royalty and other restrictions on sales in certain Asian countries; (v) supply disruptions or failures; (vi) regulatory, marketing and competitive factors; (vii) environmental harm or damages; and (viii) other risks and uncertainties discussed or referenced in the Companys filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and any subsequent periodic reports on Form 10-Q and Form 8-K. In addition, any forward-looking statements represent the Companys estimates only as of the date of such statements and should not be relied upon as representing the Companys estimates as of any subsequent date. The Company specifically disclaims any obligation to update forward-looking statements. All forward-looking statements in this press release are qualified in their entirety by this cautionary statement.
Contact Information:
Becky Herrick or Cathy Mattison
LHA (IR Agency)
+1 415 433 3777
bherrick@lhai.com / cmattison@lhai.com
[Tables to follow]
CLEAN DIESEL TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheet
(in thousands, except per share amounts)
(unaudited)
|
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September 30, 2017 |
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December 31, 2016 | ||
ASSETS |
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|
|
| ||
Current assets: |
|
|
|
| ||
Cash |
|
$ |
3,341 |
|
$ |
7,839 |
Accounts receivable, net |
|
3,669 |
|
5,398 | ||
Inventories |
|
3,534 |
|
7,125 | ||
Prepaid expenses and other current assets |
|
961 |
|
968 | ||
Total current assets |
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11,505 |
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21,330 | ||
Property and equipment, net |
|
935 |
|
1,158 | ||
Intangible assets, net |
|
1,158 |
|
1,483 | ||
Deferred tax assets |
|
670 |
|
554 | ||
Other assets |
|
326 |
|
305 | ||
Total assets |
|
$ |
14,594 |
|
$ |
24,830 |
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
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Current liabilities: |
|
|
|
| ||
Line of credit |
|
$ |
|
|
$ |
1,458 |
Shareholder notes payable |
|
|
|
1,803 | ||
Accounts payable |
|
4,243 |
|
5,979 | ||
Accrued expenses and other current liabilities |
|
3,972 |
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6,345 | ||
Income taxes payable |
|
765 |
|
642 | ||
Total current liabilities |
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8,980 |
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16,227 | ||
Commitments and contingencies |
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|
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| ||
Stockholders equity: |
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|
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Preferred stock, par value $0.01 per share: authorized 100,000; no shares issued and outstanding |
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Common stock, par value $0.01 per share: authorized 50,000,000; issued and outstanding 15,802,936 and 15,703,301 shares at September 30, 2017 and December 31, 2016, respectively |
|
158 |
|
157 | ||
Additional paid-in capital |
|
238,340 |
|
237,838 | ||
Accumulated other comprehensive loss |
|
(5,979) |
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(6,329) | ||
Accumulated deficit |
|
(226,905) |
|
(223,063) | ||
Total stockholders equity |
|
5,614 |
|
8,603 | ||
Total liabilities and stockholders equity |
|
$ |
14,594 |
|
$ |
24,830 |
CLEAN DIESEL TECHNOLOGIES, INC.
Condensed Consolidated Statement of Operations
(in thousands, except percentage and per share amounts)
(unaudited)
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Three Months Ended |
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Nine Months Ended | ||||||||||||||||||||
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2017 |
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% of Revenues |
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2016 |
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% of Revenues |
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2017 |
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% of Revenues |
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2016 |
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% of Revenues | ||||||||
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As Restated |
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As Restated |
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Coated catalysts |
|
$ |
3,456 |
|
50 |
% |
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$ |
7,110 |
|
70 |
% |
|
$ |
12,747 |
|
55 |
% |
|
$ |
17,626 |
|
62 |
% |
Emission control systems |
|
2,948 |
|
43 |
% |
|
2,778 |
|
27 |
% |
|
9,500 |
|
40 |
% |
|
9,565 |
|
34 |
% | ||||
Technology and advanced materials |
|
453 |
|
7 |
% |
|
244 |
|
3 |
% |
|
1,223 |
|
5 |
% |
|
1,093 |
|
4 |
% | ||||
Revenues |
|
$ |
6,857 |
|
100 |
% |
|
$ |
10,132 |
|
100 |
% |
|
$ |
23,470 |
|
100 |
% |
|
$ |
28,284 |
|
100 |
% |
Cost of revenues |
|
5,370 |
|
|
|
7,425 |
|
|
|
18,605 |
|
|
|
21,153 |
|
| ||||||||
Gross profit |
|
1,487 |
|
|
|
2,707 |
|
|
|
4,865 |
|
|
|
7,131 |
|
| ||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Research and development |
|
1,155 |
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|
|
762 |
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|
|
3,211 |
|
|
|
3,955 |
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| ||||||||
Selling, general and administrative |
|
1,877 |
|
|
|
2,322 |
|
|
|
6,519 |
|
|
|
8,549 |
|
| ||||||||
Severance and other charges |
|
235 |
|
|
|
571 |
|
|
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(384) |
|
|
|
1,945 |
|
| ||||||||
Total operating expenses |
|
3,267 |
|
|
|
3,655 |
|
|
|
9,346 |
|
|
|
14,449 |
|
| ||||||||
Loss from operations |
|
(1,780) |
|
|
|
(948) |
|
|
|
(4,481) |
|
|
|
(7,318) |
|
| ||||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Interest expense |
|
(93) |
|
|
|
(458) |
|
|
|
(260) |
|
|
|
(1,541) |
|
| ||||||||
Gain on bifurcated derivative liability |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,754 |
|
| ||||||||
Loss on extinguishment of debt |
|
|
|
|
|
(10,780) |
|
|
|
(194) |
|
|
|
(12,410) |
|
| ||||||||
Gain (loss) on change in fair value of liability-classified warrants |
|
738 |
|
|
|
(705) |
|
|
|
404 |
|
|
|
883 |
|
| ||||||||
Gain on sale of DuraFit |
|
805 |
|
|
|
|
|
|
|
805 |
|
|
|
|
|
| ||||||||
Other (expense) income, net |
|
(149) |
|
|
|
196 |
|
|
|
(67) |
|
|
|
824 |
|
| ||||||||
Total other income (expense) |
|
1,301 |
|
|
|
(11,747) |
|
|
|
688 |
|
|
|
(9,490) |
|
| ||||||||
Loss from operations before income taxes |
|
(479) |
|
|
|
(12,695) |
|
|
|
(3,793) |
|
|
|
(16,808) |
|
| ||||||||
Income tax (benefit) expense |
|
(119) |
|
|
|
(113) |
|
|
|
49 |
|
|
|
(1,232) |
|
| ||||||||
Net loss |
|
$ |
(360) |
|
|
|
$ |
(12,582) |
|
|
|
$ |
(3,842) |
|
|
|
$ |
(15,576) |
|
| ||||
Basic and diluted net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net loss |
|
$ |
(0.02) |
|
|
|
$ |
(2.14) |
|
|
|
$ |
(0.24) |
|
|
|
$ |
(3.49) |
|
| ||||
Weighted average shares outstanding basic and diluted |
|
15,760 |
|
|
|
5,876 |
|
|
|
15,724 |
|
|
|
4,462 |
|
|