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Westport Fuel Systems Reports First Quarter 2020 Financial Results - Revenue and Earnings up Sharply
Friday, June 5, 2020Company Profile | Careers | Follow Company
Net Income From Continuing Operations Of $4.9 Million And Adjusted EBITDA Of $9.4 Million Due To Revenue Growth And Operating Cost Reductions
Vancouver, BC, June 5, 2020--(T-Net)--Westport Fuel Systems Inc. (TSX:WPRT / Nasdaq:WPRT) reported financial results for the third quarter ended September 30, 2019 and provided an update on our business. All figures are in U.S. dollars unless otherwise stated.
"Our Q3 results demonstrate our continued progress to transform the company into a profitable and sustainable organization," said David M. Johnson, Chief Executive Officer of Westport Fuel Systems. "Q3 marks the third consecutive quarter of positive EBITDA, and the sixth consecutive quarter of positive adjusted EBITDA. These results are evidence of the continued growth in global demand for our clean fuel systems. Our customers are deploying our products and technologies to deliver clean, cost-effective transportation solutions in markets around the world and they're helping to save money and to save the environment, all while keeping us moving. "
Highlights
Q3 2019 Financial Highlights
CONTINUING OPERATIONS
($ in millions, except per share amounts) | 3 Months Ended Sep 30 |
Change Better / (Worse) |
9 Months Ended Sep 30 |
Change Better / (Worse) |
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2019 | 2018 | 2019 | 2018 | |||
Notes:
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Consolidated Revenues | $ 75.4 | $ 65.5 | 15% | $ 231 | $ 209.8 | 10% |
Consolidated Gross Margin | 17.9 | 15.6 | 15% | 54.4 | 52.0 | 5% |
Consolidated Gross Margin % | 24% | 24% | — | 24% | 25% | — |
Consolidated Operating Expenses | 19.2 | 30.6 | 37% | 70.3 | 89.7 | 22% |
Income from Unconsolidated Joint Ventures |
5.4 | 7.7 | (30)% | 19.9 | 17.0 | 17% |
Net Loss from Continuing Operations | 4.9 | (12.1) | 140% | (0.5) | (30.4) | 98% |
Net Loss Per Share from Continuing Operations | 0.04 | (0.09) | 144% | — | (0.23) | 100% |
EBITDA[1] | 11.7 | (3.0) | 490% | 19.9 | (8.2) | 343% |
Adjusted EBITDA[1] | 9.4 | 4.3 | 119% | 24.8 | 9.4 | 164% |
Cummins Westport Inc. Highlights
CUMMINS WESTPORT HIGHLIGHTS
($ in millions, except unit amounts) | 3 Months Ended SEP 30 |
Change Better / (Worse) |
9 Months Ended SEP 30 |
Change Better / (Worse) |
||
2019 | 2018 | 2019 | 2018 | |||
Units | 1,740 | 2,090 | (17)% | 5,476 | 5,031 | 9% |
Revenue | $83.1 | $86.2 | (4)% | $259.3 | $ 225.3 | 15% |
Gross Margin | 22.7 | 27.3 | (17)% | 75.8 | 70.0 | 8% |
Gross Margin Percentage | 27% | 32% | — | 29% | 31% | — |
Operating Expenses | 9.6 | 6.8 | (41)% | 27.4 | 26.3 | (4)% |
Segment Operating Income | 13.1 | 20.5 | (37)% | 48.3 | 43.7 | 11% |
Westport Fuel Systems 50% Interest | 5.4 | 7.7 | (30)% | 19.8 | 17.0 | 17% |
Guidance
Based on strong year to date results, Westport Fuel Systems full year revenue guidance is being revised to between $295 and $305 million.
Key Priorities
Our key strategic priorities for 2019 are:
GAAP and NON-GAAP Financial Measures
Management reviews the operational progress of its business units and investment programs over successive periods through the analysis of net income, EBITDA and Adjusted EBITDA. The Company defines EBITDA as net income or loss from continuing operations before income taxes adjusted for interest expense (net), depreciation and amortization. Westport Fuel Systems defines Adjusted EBITDA as EBITDA from continuing operations excluding expenses for stock-based compensation, unrealized foreign exchange gain or loss, and non-cash and other adjustments. Management uses Adjusted EBITDA as a long-term indicator of operational performance since it ties closely to the business units' ability to generate sustained cash flow and such information may not be appropriate for other purposes. Adjusted EBITDA includes the company's share of income from joint ventures.
The term EBITDA and Adjusted EBITDA is not defined under U.S. generally accepted accounting principles ("U.S. GAAP") and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA has limitations as an analytical tool, and when assessing the company's operating performance, investors should not consider EBITDA and Adjusted EBITDA in isolation, or as a substitute for net loss or other consolidated statement of operations data prepared in accordance with U.S. GAAP. Among other things, EBITDA and Adjusted EBITDA does not reflect the company's actual cash expenditures. Other companies may calculate similar measures differently than Westport Fuel Systems, limiting their usefulness as comparative tools. The company compensates for these limitations by relying primarily on its U.S. GAAP results and using EBITDA and Adjusted EBITDA as supplemental information.
GAAP & NON-GAAP FINANCIAL MEASURES FROM CONTINUING OPERATIONS
($ in millions) 3 months ended | 30-Sep-18 | 31-Dec-18 | 31-Mar-19 | 31-Jun-19 | 30-Sep-19 |
Net Loss from Continuing Operations | $(12.1) | $(10.4) | $(3.0) | $(2.3) | $4.9 |
Interest Tax Expense | 2.6 | (1.5) | 1.1 | 0.9 | 0.8 |
Interest Expense, Net | 2.3 | 2.6 | 1.8 | 1.4 | 1.8 |
Depreciation and Amortization | 4.2 | 4.0 | 4.3 | 4.0 | 4.2 |
EBITDA | (3.0) | (5.3) | 4.2 | 4.0 | 11.7 |
Stock Based Compensation | 0.6 | 0.7 | 0.4 | 0.3 | 0.3 |
Unrealized Foreign Exchange (Gain) Loss | 2.2 | 1.6 | 0.1 | (0.7) | 0.7 |
Restructuring, Termination and other Exit Costs | — | — | 0.8 | — | — |
Asset Impairment | — | 0.6 | — | — | — |
Legal Costs Associated with SEC Investigation | 3.5 | 3.1 | 1.8 | 4.5 | — |
Other | 1.0 | (0.5) | — | — | (3.3) |
Total Adjusted EBITDA | $4.3 | $0.2 | $7.3 | $8.1 | $9.4 |
Financial Statements & Management's Discussion and Analysis
Included in this press release are an unaudited condensed consolidated interim balance sheet and statement of operations and comprehensive loss. To view Westport Fuel Systems full financials for the third quarter ended September 30, 2019, please visit wfsinc.com/investors/financials.
About Westport Fuel Systems
At Westport Fuel Systems, we are driving innovation to power a cleaner tomorrow. We are a leading supplier of advanced fuel delivery components and systems for clean, low-carbon fuels such as natural gas, renewable natural gas, propane, and hydrogen to the global automotive industry. Our technology delivers the performance and fuel efficiency required by transportation applications and the environmental benefits that address climate change and urban air quality challenges. Headquartered in Vancouver, Canada, with operations in Europe, Asia, North America and South America, we serve our customers in more than 70 countries with leading global transportation brands. At Westport Fuel Systems, we think ahead. For more information, visit www.wfsinc.com.
Cautionary Note Regarding Forward Looking Statements
This press release contains forward-looking statements, including statements regarding the future growth of, and key strategic priorities for, Westport Fuel System's business, market demand for Westport Fuel Systems' products, commercial launch of Westport HPDI 2.0TM in China, future volume growth and cost reductions and additions of new OEM customers along with statements regarding revenue, Adjusted EBITDA and cash flow expectations, continued research and development investment, the demand for our products, cash and capital requirements as well as Westport Fuel Systems 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, uncertainties and assumptions include those related to our revenue growth, operating results, industry and products, the general economy, conditions of and access to the capital and debt markets, solvency, governmental policies and regulation, technology innovations, fluctuations in foreign exchange rates, operating expenses, continued reduction in research and development expenses, CWI performance, our ability to secure new customers, the availability and price of natural gas, global government stimulus packages, the acceptance of and shift to natural gas vehicles, the inability of fleets to access capital or government funding to purchase natural gas vehicles, the development of competing technologies, our ability to adequately develop and deploy our technology, the actions and determinations of our joint venture and development partners, 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.
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