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Westport Reports Third Quarter Fiscal 2012 Results
By: PR Newswire
Nov. 8, 2012 03:35 PM
~ Strong Balance Sheet Provides Solid Foundation for a Range of Product Launches on Deck ~
VANCOUVER, Nov. 8, 2012 /PRNewswire/ - Westport Innovations Inc. (TSX:WPT / NASDAQ:WPRT), the global leader in natural gas engines, today reported financial results for the third quarter ended September 30, 2012 and provided an update on operations. All figures are in U.S. dollars unless otherwise stated.
"The overall market for natural gas transportation is developing with more infrastructure in place by the end of this year and key product launches for the industry, such as the Cummins Westport ISX12 G, edging closer," said David Demers, CEO of Westport Innovations Inc. "We expect to launch a portfolio of new products ranging from automotive and trucking to off-road applications over the next few quarters from a broad variety of OEMs. Our Ford F-250/350 program and Westport™ WiNG Power System is in full production now which positions us with a new product line with strong prospects for growth."
"We may have changed our near-term and annual revenue expectations, however, recent announcements to bring a new Cummins Westport 6.7 litre engine to market, targeting school buses, and an innovative new engine with Tata, also prove the thesis that virtually all segments of the transportation market will see significant opportunity for natural gas this decade," continued Demers. "While new markets evolve, our North American heavy-duty business is seeing repeat orders from customers such as UPS who've ordered 21 additional liquefied natural gas (LNG) tractors with Westport high pressure direct injection (HPDI). Finally, our programs with Caterpillar to jointly develop LNG as a fuel in mining truck and locomotive operations are off to a strong start. We are seeing high levels of interest from customers in these high fuel use industries."
"We have a strong balance sheet and our asset-light business model allows us to remain competitively positioned. We will continue to invest in key products and markets that will help provide new revenue streams and distribution channels to maintain our dominant market share."
Third Quarter and Year to Date (YTD) Highlights
* Included in the Company's net loss for the three months ended September 30, 2012 and September 30, 2011 is a $7.4 million net foreign exchange loss and a $2.0 million net foreign exchange gain, respectively. Included in the Company's net loss for the nine months ended September 30, 2012 and September 30, 2011 is a $2.9 million and a $1.3 million net foreign exchange loss, respectively. These foreign exchange gains/losses are attributed to the movement in the Canadian dollar relative to the U.S. dollar, which are unrealized.
Financial Outlook for 2012
Cummins Westport Inc. (CWI) Business Unit Highlights
Year to date shipments in North America have increased by 38% compared to the previous year, with growth in each of the transit, refuse and conventional truck segments. Year to date international shipments increased 131% over 2011 due to large transit bus engine orders for China, Peru and Venezuela. During the quarter there were several new CWI ISL G-powered fleets put into service, including new refuse truck fleets in Pomona, CA, and Winnipeg, MB, and new transit bus fleets in Long Beach, CA, and Guadalajara, Mexico.
CWI is continuing the development of the ISX12 G, a 12 litre heavy-duty natural gas engine for regional haul, vocational and refuse applications. Limited production of this engine will commence in early 2013 at Cummins' Jamestown, New York engine plant. CWI is working with OEM launch partners including Freightliner, Peterbilt, Kenworth, Volvo and Autocar, all of whom are participating in the field trials.
Westport Light-Duty (Westport LD) Business Unit Highlights
During the quarter, Pioneer Natural Resources announced that it was adding 225 bi-fuel Westport WiNG natural gas powered Ford F-250 Super Duty trucks to its fleet. Pioneer has begun transitioning a number of its fleet vehicles from gasoline and diesel powered to those able to run on more cost-effective natural gas for light-duty and heavy-duty applications. Westport LD delivered 184 WiNG Power Systems to Pioneer during the quarter. Westport LD remains on track to deliver more than 500 units by the end of the year.
Westport LD in Sweden, the sole supplier of natural gas fuel systems to Volvo Car Corporation for the bi-fuel version of the popular V70 wagon, launched the 2013 model year V70. The 2.0-litre turbocharged V70 has improved fuel efficiency and extended range compared with the previous model. The manual transmission option is particularly popular for company cars in Sweden.
Westport Heavy-Duty (Westport HD) Business Unit Highlights
During the quarter, Westport HD shipped 58 HD Systems to Kenworth and Peterbilt for LNG truck production for customers such as City of Los Angeles, Basic Energy, Kenan Advantage and TransGas.
UPS has continued its commitment to building its natural gas powered fleet with an order for 21 Kenworth T800 LNG heavy-duty trucks. The T800s, powered by Westport HD, make UPS one of the largest fleet owners of LNG trucks in North America.
FortisBC, the gas distribution utility in British Columbia, Canada designed an incentive funding program to assist qualified medium and heavy-duty fleet owners to purchase natural gas vehicles in British Columbia and recently has notified successful applicants of their preliminary awards. The conditionally awarded recipients consist of 16 on-road-transportation fleets for 236 compressed natural gas (CNG) and 165 LNG vehicles. The final award details will be made public by FortisBC, which is expected to take place by the end of 2012 with vehicles being delivered in 2013.
According to Clean Energy Fuels' America's Natural Gas Highway deployment plan, 48 LNG stations have been built to date and Clean Energy expects to be on track to complete its goal of approximately 70 stations by year end. As announced during its quarterly conference call, Clean Energy has 21 LNG stations under construction, 12 in various stages in entitlement, design, and permitting process, and 64 stations in process for next year. By the end of 2014, Westport is confident that infrastructure will likely not be a material barrier to any fleet in the U.S. that wants to move to natural gas.
As announced at the Atlantic Provinces Trucking Association Transportation Summit in October, Irving Oil plans to open five LNG stations in Eastern Canada commencing in late 2013. Irving Oil is planning to make LNG available at five of its existing fuelling stations in Nova Scotia, New Brunswick and Quebec.
In August, a Shaanxi truck powered by the Weichai Westport 12L HPDI engine conquered 4,767 meter (or 15,640 feet) altitude testing for the first time on China's Kunlun Mountain. This marked a significant milestone as it was the highest altitude that natural gas trucks had ever reached, proving HPDI's comparable performance to diesel. The Weichai Westport HPDI engine will be undergoing cold testing through the winter months to prepare for commercial launch in 2013.
Weichai Westport Inc. (WWI) Highlights
High-Horsepower (HHP) Highlights
The off-road development program with Caterpillar was launched in June 2012. In September, Westport attended the first-ever HHP Summit in Houston, which brought together delegates from key industries (e.g. rail, mining, marine, drilling, agriculture, construction, and on-site power generation) to discuss the use of natural gas for HHP applications. At the Summit, Joel Feucht, Caterpillar's newly appointed Director of Gas Engine Strategy, underlined the economic advantages of moving to natural gas and confirmed Caterpillar's intentions to go "all-in on natural gas" as quickly as possible. Feucht confirmed that Caterpillar, who is working closely with Westport, is committed to a long-term investment to provide natural gas fueled equipment and engines across its product lines. Furthermore, Caterpillar announced at September's MinExpo that its first expected LNG-powered products will likely include Cat® 793, 795 and 797 mining trucks.
CN is presently running two of its diesel-fired locomotives on natural gas as part of an evaluation program. This test also involves a longer term demonstration project with Westport, Electro-Motive Diesel (a Caterpillar subsidiary), and Quebec gas distributor Gaz Metro, with funding from Sustainable Development Technology Canada to develop a natural gas locomotive engine and LNG tender car to carry the fuel. Westport anticipates the first results from the test engine in mid-2013.
Non-GAAP Financial Measure; Adjusted EBITDA Results
Adjusted EBITDA is used by management to review operational progress of
its business units and investment programs over successive periods and
as a long-term indicator of operational success since it ties closely
to the unit's ability to generate sustained cash flows. Westport
defines Adjusted EBITDA as net loss attributed to the Company before
(a) income taxes, (b) depreciation and amortization, (c) interest
expense, net, (d) amortization of stock-based compensation, (e)
unrealized foreign exchange loss (gain), (f) income (loss) from
unconsolidated joint ventures and (g) gains and other. The term
Adjusted EBITDA is not defined under U.S. generally accepted accounting
principles, or U.S. GAAP, and is not a measure of operating income,
operating performance or liquidity presented in accordance with U.S.
GAAP. Adjusted EBITDA has limitations as an analytical tool, and when
assessing Westport's operating performance, investors should not
consider Adjusted EBITDA in isolation, or as a substitute for net loss
or other consolidated statement of operations data prepared in
accordance with U.S. GAAP. Among other things, Adjusted EBITDA does not
reflect Westport's actual cash expenditures. Other companies may
calculate similar measures differently than Westport, limiting their
usefulness as comparative tools. Westport compensates for these
limitations by relying primarily on its GAAP results and using Adjusted
EBITDA only supplementally.
Non-GAAP Financial Measure; Segment Adjusted EBITDA Results
Financial Statements & Management's Discussion and Analysis
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About Westport Innovations Inc.
This press release contains forward-looking statements, including statements regarding the consolidated revenue and revenue growth of Westport for calendar year 2012, timing for launch and completion of milestones related to the engine products referenced herein, including the CWI ISX12 G, Weichai Westport HPDI engine and EMD locomotive engines, projected Westport engine unit sales in the fourth quarter of 2012, timing for opening of LNG retail plazas and development of refueling infrastructure, results of FortisBC incentive program, timing and expectations for future cash flows, the demand for our products, the future success of our business and technology strategies, investment in new product and technology development and otherwise, cash and capital requirements, intentions of partners and potential customers, the performance and competitiveness of Westport's products and expansion of product coverage, future market opportunities, speed of adoption of natural gas for transportation and terms of future agreements as well as Westport management's response to any of the aforementioned factors. These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties and are based on both the views of management and assumptions that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activities, performance or achievements expressed in or implied by these forward looking statements. These risks and uncertainties include risks and assumptions related to our revenue growth, operating results, industry and products, the general economy, conditions of and access to the capital and debt markets, governmental policies and regulation, technology innovations, fluctuations in foreign exchange rates, the availability and price of natural gas, global government stimulus packages, the acceptance of and shift to natural gas vehicles, the relaxation or waiver of fuel emission standards, the inability of fleets to access capital or government funding to purchase natural gas vehicles, the sufficiency of bio methane for use in our vehicles, the development of competing technologies, our ability to adequately develop and deploy our technology as well as other risk factors and assumptions that may affect our actual results, performance or achievements or financial position discussed in our most recent Annual Information Form and other filings with securities regulators. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they were made. We disclaim any obligation to publicly update or revise such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in these forward looking statements except as required by National Instrument 51-102. The contents of any website, RSS feed or twitter account referenced in this press release are not incorporated by reference herein.
SOURCE Westport Innovations Inc.
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