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8-K - 8-K - CDTI ADVANCED MATERIALS, INC.a18-18818_18k.htm

Exhibit 99.1

 

 

CDTi Advanced Materials, Inc. Reports Second Quarter 2018 Financial Results

 

Oxnard, California —August 14, 2018 — CDTi Advanced Materials, Inc. (Nasdaq: CDTI) (“CDTi” or “the Company”), a leader in advanced catalyst materials technology, reported its financial results for the second quarter ended June 30, 2018.

 

Matthew Beale, CDTi’s CEO, stated, “In the second quarter of 2018, we achieved a key milestone as our materials technology was selected by a global OEM for inclusion in next generation exhaust systems. We also made further progress with catalyst coaters in India and China, which we believe will lead to direct relationships with OEMs as they become confident of the adoption of our novel technology in the market.

 

“Subsequent to the second quarter, we raised net proceeds of $2.2 million from a rights offering we closed on July 25th. The completion of the rights offering is another step toward CDTi’s goal of sustainable long-term profitability and growth in its advanced materials business.”

 

In line with CDTi’s strategy to provide its catalyst technology to other catalyst manufacturers in the form of functional powders or material systems, the company is no longer selling coated catalysts and has exited its Coated Catalyst business. CDTi’s exit of the Coated Catalyst business qualifies as discontinued operations and therefore has been presented as such for all reporting periods.

 

Financial Highlights: Second Quarter 2018 compared to Second Quarter 2017

 

·                  Total revenue was $2.4 million, compared to $3.6 million.

 

·            Emissions control systems revenue was $1.9 million, compared to $3.0 million.

 

·            Technology and advanced materials revenue was $0.5 million, compared to $0.6 million.

 

·                  Gross margin was 32%, compared to 36%.

 

·                  Total operating expenses in the second quarter of 2018 were $1.9 million, compared to $2.2 million in the first quarter of 2017 as CDTi continues to align costs with its advanced materials strategy.

 

·                  Net loss from continuing operations was $1.5 million, or $0.09 per share, compared to a net loss from continuing operations of $1.0 million, or $0.05 per share in the second quarter of 2017.

 

·                  Cash at June 30, 2018, was $1.8 million, compared to $2.8 million at December 31, 2017.

 

·                  On July 25, 2018, CDTi received net proceeds of $2.2 million from the company’s rights offering.

 

Financial Highlights: Six months ended June 30, 2018 compared to 2017

 

·                  Total revenue for the first six months of 2017 was $4.6 million, compared to $7.4 million for the same prior year period.

 

·                  Gross margin was 39%, compared to 24% in the same prior year period.

 



 

·                  Total operating expenses for the first six months of 2018 were $4.1 million compared to $5.9 million in the same prior year period.

 

·                  Net loss from continuing operations for the first six months of 2018 was $2.3 million, or $0.15 per share compared to net loss of from continuing operations of $5.0 million, or $0.32 per share, in the same prior year period.

 

Company Outlook

 

The company currently expects 2018 revenue of approximately $12 million. With the implementation of local partnerships in China and India the company believes that a growing pipeline of customers will begin to generate material revenue beginning in 2018 and accelerating into 2019.

 

In addition to materials applications generating revenue in 2018, the company expects it will have established at least one partnership for deployment of its Spinel™ technology in fuel cell and advanced battery applications during the year.

 

Conference Call and Webcast Information

 

CDTi will host a conference call and live webcast beginning at 2:00 p.m. Pacific Time today, August 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 6755135. 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 6755135.

 

About CDTi Advanced Materials

 

CDTi Advanced Materials, Inc. (NASDAQ: CDTI) develops advanced materials technology for the emissions control and other catalysis markets. CDTi’s proprietary technologies provide high-value sustainable solutions to reduce hazardous emissions from on- and off-road combustion engine systems at significantly lower cost. With a continuing focus on innovation-driven commercialization and global expansion, CDTi’s breakthrough Powder-to-Coat (P2C™) approach delivers those technologies to customers in a ready to use powder form. Key technology platforms include Base Metal Activated Rhodium Support (BMARS™), Synergized PGM (SPGM™), Zero PGM (ZPGM™) and Spinel™. For more information, please visit www.cdti.com.

 

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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 Company’s business transformation into an advanced materials company, global trends in the automotive and heavy duty diesel markets, the Company’s future financial performance, and the performance of the Company’s 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 Company’s 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 Company’s estimates only as of the date of such statements and should not be relied upon as representing the Company’s 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:

 

Moriah Shilton or Kirsten Chapman

LHA Investor Relations

+1 415 433 3777

cdti@lhai.com

 

[Tables to follow]

 

3



 

CDTi ADVANCED MATERIALS, INC.

Condensed Consolidated Balance Sheet

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

June 30, 2018

 

December 31, 2017

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash

 

$

1,779

 

$

2,807

 

Accounts receivable, net

 

2,011

 

1,877

 

Inventories

 

1,126

 

1,355

 

Prepaid expenses and other current assets

 

245

 

656

 

Current assets of discontinued operations

 

599

 

1,524

 

Total current assets

 

5,760

 

8,219

 

Property and equipment, net

 

365

 

414

 

Intangible assets, net

 

970

 

1,051

 

Deferred tax assets

 

 

644

 

Other assets

 

94

 

62

 

Assets of discontinued operations

 

105

 

424

 

Total assets

 

$

7,294

 

$

10,814

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

1,520

 

$

1,684

 

Accrued expenses and other current liabilities

 

886

 

1,539

 

Income taxes payable

 

807

 

789

 

Liabilities of discontinued operations

 

1,328

 

2,421

 

Total current liabilities

 

4,541

 

6,433

 

Other liabilities

 

 

 

Liabilities of discontinued operations

 

462

 

 

Total liabilities

 

5,003

 

6,433

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Preferred stock, par value $0.01 per share: authorized 100,000; no shares issued and outstanding

 

 

 

Common stock, par value $0.01 per share: authorized 50,000,000; issued and outstanding 15,908,736 and 15,803,736 shares at June 30, 2018 and December 31, 2017, respectively

 

158

 

158

 

Additional paid-in capital

 

238,729

 

238,455

 

Accumulated other comprehensive loss

 

(6,004

)

(5,886

)

Accumulated deficit

 

(230,592

)

(228,346

)

Total stockholders’ equity

 

2,291

 

4,381

 

Total liabilities and stockholders’ equity

 

$

7,294

 

$

10,814

 

 



 

CDTi ADVANCED MATERIALS, INC.

Condensed Consolidated Statement of Operations

(in thousands, except percentage and per share amounts)

(unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2018

 

% of Revenues

 

2017

 

% of Revenues

 

2018

 

% of Revenues

 

2017

 

% of Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emission control systems

 

$

1,937

 

80

%

$

2,990

 

84

%

$

3,718

 

80

%

$

6,636

 

90

%

Technology and advanced materials

 

496

 

20

%

566

 

16

%

912

 

20

%

769

 

10

%

Revenues

 

$

2,433

 

100

%

$

3,556

 

100

%

$

4,630

 

100

%

$

7,405

 

100

%

Gross profit

 

767

 

32

%

1,265

 

36

%

1,805

 

39

%

1,752

 

24

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

621

 

 

 

917

 

 

 

1,321

 

 

 

1,911

 

 

 

Selling, general and administrative

 

1,300

 

 

 

1,899

 

 

 

2,734

 

 

 

4,607

 

 

 

Severance and other charges

 

 

 

 

(619

)

 

 

 

 

 

(619

)

 

 

Total operating expenses

 

1,921

 

 

 

2,197

 

 

 

4,055

 

 

 

5,899

 

 

 

Loss from continuing operations

 

(1,154

)

 

 

(932

)

 

 

(2,250

)

 

 

(4,147

)

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

(67

)

 

 

 

 

 

(190

)

 

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

(194

)

 

 

Gain (loss) on change in fair value of liability-classified warrants

 

170

 

 

 

4

 

 

 

534

 

 

 

(334

)

 

 

Gain on sale of DuraFit

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense, net

 

217

 

 

 

184

 

 

 

122

 

 

 

83

 

 

 

Total other income (expense)

 

387

 

 

 

121

 

 

 

656

 

 

 

(635

)

 

 

Loss from continuing operations before income taxes

 

(767

)

 

 

(811

)

 

 

(1,594

)

 

 

(4,782

)

 

 

Income tax expense (benefit) from continuing operations

 

704

 

 

 

169

 

 

 

741

 

 

 

168

 

 

 

Net loss from continuing operations

 

(1,471

)

 

 

(980

)

 

 

(2,335

)

 

 

(4,950

)

 

 

Net (loss) income from discontinued operations

 

(481

)

 

 

595

 

 

 

89

 

 

 

1,469

 

 

 

Net loss

 

$

(1,952

)

 

 

$

(385

)

 

 

$

(2,246

)

 

 

$

(3,481

)

 

 

Basic and diluted net (loss) income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations

 

$

(0.09

)

 

 

$

(0.05

)

 

 

$

(0.15

)

 

 

$

(0.32

)

 

 

Net (loss) income from discontinued operations

 

$

(0.03

)

 

 

$

0.04

 

 

 

$

0.01

 

 

 

$

0.09

 

 

 

Net loss

 

$

(0.12

)

 

 

$

(0.01

)

 

 

$

(0.14

)

 

 

$

(0.22

)

 

 

Weighted average shares outstanding — basic

 

15,876

 

 

 

15,708

 

 

 

15,840

 

 

 

15,706

 

 

 

Weighted average shares outstanding — diluted

 

15,876

 

 

 

16,408

 

 

 

15,840

 

 

 

15,936