Westport Reports Results for Third Fiscal Quarter Ending December 31, 2003.Business Editors VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia--(BUSINESS WIRE)--Jan. 28, 2004 Westport Westport, residential town (1990 pop. 24,407), Fairfield co., SW Conn., on Long Island Sound at the mouth of the Saugatuck River; settled 1645–50, inc. 1835. It serves as a popular residence for New York City commuters. Westport has a summer theater. Innovations Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :WPT WPT World Poker Tour WPT Waypoint WPT Wisconsin Public Television WPT Watson Poker Tour WPT Wonderlic Personnel Test WPT Wavelet Packet Transform WPT Wireless Power Transmission WPT Windfall Profit WPT Wireless Personal Terminal WPT Word Processing Technician ) today reported results for its third fiscal quarter ended December December: see month. 31, 2003 and provided an update on operations. Revenues were $7.9 million for the quarter, up from $5.6 million for the same quarter last year. Revenues for the nine-month period ending December 31, 2003 are $19.2 million, up 18% over the same period last year. Engine shipments for the quarter were up 124% compared to the same period last year, with 323 engines shipped compared to 144 last year. For the first nine months of the year, shipments are up 41% compared to last year. Engine revenue for the quarter increased by 108%, and for the first nine months by 27% over the corresponding periods last year. Since all sales are made in United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. currency, and because of the significant appreciation in currency exchange rates between the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. and US dollar over the past year, revenue expressed in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents has dropped correspondingly. Despite the negative currency impact, total revenue, including parts revenue, increased by more than 40% over the same period last year and by 14% over the second quarter this year. Westport's net loss for the quarter was $13 million ($0.20 per share) including a writedown writedown A reduction in the value of an asset carried on a firm's financial statements. For example, the firm's accountants, believing the inventory is overvalued, may decide to take a writedown by reducing inventory valuation. of assets and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $3.7 million, compared with a loss of $12.2 million ($0.24 per share) during the same period in fiscal 2003. Excluding restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs and the writedown of equipment, furniture and leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. , the basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share would have been $0.15 per share for the quarter and $0.48 per share for the three quarters ended December 31, 2003. This computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. is a non-GAAP measure included to assist readers in their financial analysis. The Company uses non-GAAP measures internally to assess performance and to assist with planning on a go-forward basis. Readers should note that because non-GAAP measures do not have standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. definitions, they may not always have the same meaning when used by different companies (see Table 1). "We are very pleased with our progress on our business plan this quarter," said David Demers Demers is a surname, and may refer to:
n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that we will be able to meet our goal of a $5 million per quarter burn rate in Q4, which is more than 50% improvement year over year. We will continue this focus through our next fiscal year as we work towards profitability and profit growth." Expenses, excluding cost of product revenue, totalled $12.2 million, down from $15.4 million in the same quarter last year. Research and development, the largest expense category, was down 34% to $7.8 million from $11.8 million in the same quarter last year, and on a year to date basis, has decreased 28% to $21.6 million from $30.0 million. This drop is primarily attributed to Westport's commitment to pace program spending with available funding and market opportunities. Both increased government and partner support, and strategic reductions in product development expenses have contributed to this financial improvement. At the end of December 31, 2003, cash, short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments and accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , net of accounts payable, totalled $23.5 million compared to $26.9 million at the beginning of the year. In addition to its commitment to its profitability goals, Westport's management team continued to make progress on its advanced technology leadership and diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. goals this quarter. Business Programs Update CWI CWI - Centrum voor Wiskunde en Informatica Joint Venture Agreement On December 16th 2003 Westport and Cummins This article is about the diesel engine manufacturer. For other uses, see Cummins (disambiguation). Cummins Inc. (NYSE: CMI) is a maker of diesel and natural gas engines whose corporate headquarters is located in Columbus, Indiana. entered into a renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. Joint Venture agreement for the joint venture company, Cummins Westport Inc (CWI). On January January: see month. 1, 2004 Cummins converted its preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. in CWI to common shares, to hold an equal number of common shares with Westport. The parents have agreed to fund CWI's business needs equally going forward, after a transition year. The two companies also signed a Technology Partnership Agreement that creates a flexible arrangement for future technology development between Cummins and Westport. CWI's new mandate is to quickly grow this global business into a profitable, high-growth enterprise. CWI's market and product opportunities have been priority ranked and resourced in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with profitability, growth and leadership potential in each market. CWI's engines have proven successful in varied customer markets and are now in service in 18 countries worldwide. In North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , CWI is now the leader in natural gas transit buses A transit bus (also known as a commuter bus) in the United States is usually operated by an urban-suburban bus line, a governmental public transit agency, or a contractor. A transit bus is normally used on public transit routes. . Transit agencies in large cities such as Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , Tacoma Tacoma (təkō`mə), city (1990 pop. 176,664), seat of Pierce co., W Wash., on Commencement Bay and Puget Sound at the mouth of the Puyallup River; inc. 1884. , Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. , San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. and Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. have selected CWI engines. In China, cities such as Beijing Beijing (bā-jĭng) or Peking (pē-kĭng, pā–), city (1994 est. urban pop. 6,093,300; 1994 est. total pop. 7,240,700), capital of the People's Republic of China. It is in central Hebei prov. and Xian have purchased multiple orders, in addition to six other cities that have received their first shipments in the past year. These eight Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. cities have a combined transit fleet of nearly 50,000 buses. Cummins is the largest foreign investor in China's engine sector and has the largest distribution and service network of any foreign manufacturer. Because of this advantage, CWI believes that its opportunity in China is its most significant growth opportunity. To better meet customer delivery and price expectations, CWI will explore opportunities to produce complete engines in China, potentially as soon as 2005. CWI has also identified India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. as a key market opportunity. Cummins has significant production and distribution resources in India and CWI's goal is to negotiate a licensed manufacturing arrangement with local partners. "We are very excited about the economic value proposition that China, India and the Middle East offer to CWI," said Hugh Hugh (pronunced hyuu) is a male given name. It is Germanic and means "Bright in Mind and Spirit" or "Thoughtful". It is related to the name Hugin( one of Odin's ravens, who represented Thought.) The following medieval rulers were named Hugh. Foden, President of Cummins Westport Inc. "While our North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. business remains a strong focus for us, we have no doubt that with the support of industry leading organizations and the Cummins distributor and dealer network, international opportunities offer us excellent growth potential over the next few years." Technology Partnership Agreement Westport and Cummins have also undertaken a new comprehensive framework agreement for collaboration Working together on a project. See collaborative software. on a range of technology development programs. This includes programs applicable to both alternative fuel engines and conventional diesel engines. The framework agreement allows either partner to initiate a project and request the technical and financial assistance of the other. The resulting technologies and products will be shared by both partners, and in some cases may be marketed to other industry partners. A new Technology Partnership Advisory Board will manage this agreement. Dr Michael Gallagher Michael Gallagher is the name of several different people:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and a member of this Board, commented, "The combined Westport and Cummins technology portfolio and capabilities will allow us to pursue a range of exciting opportunities as market conditions develop. Naturally, we will pace our product development strategy to maximize returns for our investors. Our recent successes with our ultra-low emissions programs suggest it may be reasonable to advance our own 2010 emissions solutions and accelerate the availability of these products. We will be examining the market opportunity for this in more detail with stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. and customers throughout 2004." Other Technology Program Updates Isuzu
Isuzu Motors Ltd. ( and Westport recently signed a new collaboration agreement to further advance their development partnership. The two companies will assess global market opportunity for the monofuel CNG-powered direct injection technology the two companies have developed. Isuzu will provide funding for Westport to continue development of key technologies for the project while the marketing analysis is underway. Ford's interest in Westport technology continues with the agreement announced last year for Westport to support the automaker's hydrogen engine development program. Westport provides Ford with fuel injection hardware, controls and engineering support from Westport based on a hydrogen-specific version of Westport's patented direct injection technology. One of the world's leading truck and bus manufacturers, MAN, recently completed a market study for the potential of Westport technologies in their product line. Discussions of commercialization arrangements continue. Westport Innovations Inc. is the leading developer of gaseous gas·e·ous adj. 1. Of, relating to, or existing as a gas. 2. Full of or containing gas; gassy. fuel engine technologies. It develops, manufactures and sells a wide range of engines for commercial transportation applications such as trucks and buses through Cummins Westport Inc., its joint venture with Cummins Inc. Technology development alliances are in place with a number of other leading engine manufacturers, including Ford, MAN, Isuzu, and BMW BMW in full Bayerische Motoren Werke AG German automaker. Founded as an aircraft engine manufacturer in 1916, the company assumed the name Bayerische Motoren Werke and became known for its high-speed motorcycles in the 1920s. to develop engines that operate using cleaner-burning fuels such as natural gas, propane propane, CH3CH2CH3, colorless, gaseous alkane. It is readily liquefied by compression and cooling. It melts at −189.9°C; and boils at −42.2°C;. , hydrogen, and blended fuels such as HCNG. Westport has scheduled a public conference call for Wednesday Wednesday: see week. , January 28, 2004 at 8 am (Pacific Time) to discuss the quarterly results. To access the conference call by telephone, please call 1-800-651-8979 no later than 7:55 am on January 28. Alternatively, the webcast of the conference call can be accessed through the Westport web site at www.westport.com by following the link on the Investor Information menu. Replays will be available in streaming audio A one-way audio transmission over a data network. It is widely used on the Web as well as company networks to play audio clips and Internet radio. Computers in home networks stream audio (mostly music) to digital media hubs connected to home theaters. shortly after the conclusion of the conference call. To view the financials and management's discussion and analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial , please point your browser browser Software that allows a computer user to find and view information on the Internet. The first text-based browser for the World Wide Web became available in 1991; Web use expanded rapidly after the release in 1993 of a browser called Mosaic, which used to the following link: http://www.westport.com/investor/financial.php. Note: This document contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. about Westport's business, operations, technology development or to the environment in which it operates, which are based on Westport's estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond Westport's control. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Westport disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Table 1
-------
Earnings Per Share Under GAAP And Non-GAAP Measure Reconciliation
---------------------------------------------------------------------
Three months ended Nine months ended
December 31 December 31
---------------------- ----------------------
2003 2002 2003 2002
Basic and diluted
loss per share as
reported under GAAP $ 0.20 $ 0.24 $ 0.54 $ 0.73
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Loss for the period
under GAAP 13,021,740 12,204,996 31,102,364 37,218,064
Exclude
-------
Restructuring
costs (457,400) - (457,400) -
Writedown of equipment,
furniture and
leasehold
improvements (3,219,469) - (3,219,469) -
---------- ---------- ---------- ----------
(3,676,869) - (3,676,869) -
Loss before
restructuring and
writedown of
equipment,
furniture and
leasehold
improvements ---------- ---------- ---------- ----------
(non-GAAP) 9,344,871 12,204,996 27,425,495 37,218,064
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average
common shares
outstanding 63,856,453 50,855,718 57,325,646 50,779,936
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Basic and diluted
loss per share
before restructuring
and writedown of
equipment, furniture
and leasehold
improvements
(non-GAAP) $ 0.15 $ 0.24 $ 0.48 $ 0.73
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
---------------------------------------------------------------------
WESTPORT INNOVATIONS INC.
Consolidated Balance Sheets
(Expressed in Canadian dollars)
-------------------------------------------------------------------
December 31, March 31,
2003 2003
-------------------------------------------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents (note 3) $ 2,319,967 $ 2,981,999
Short-term investments 23,123,030 25,137,389
Accounts receivable 2,849,968 7,080,281
Prepaid expenses 481,414 266,892
-------------------------------------------------------------------
28,774,379 35,466,561
Long-term investments 12,206,286 12,206,286
Equipment, furniture and leasehold
improvements 32,082,668 33,038,443
Accumulated amortization (20,396,866) (15,881,378)
-------------------------------------------------------------------
11,685,802 17,157,065
Intellectual property 3,314,160 3,314,160
Accumulated amortization (2,316,672) (1,746,635)
-------------------------------------------------------------------
997,488 1,567,525
-------------------------------------------------------------------
$ 53,663,955 $ 66,397,437
-------------------------------------------------------------------
-------------------------------------------------------------------
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities $ 4,754,684 $ 8,316,177
Demand instalment loan 1,688,597 2,500,000
Current portion of capital lease
and other obligations 225,617 369,999
Current portion of warranty
liability 3,714,205 4,186,348
-------------------------------------------------------------------
10,383,103 15,372,524
Capital lease and other long term
obligations 824,591 832,270
Warranty liability 3,249,007 2,960,881
Shareholders' equity:
Share capital:
Issued: 64,060,815 (2003 -
51,316,053)common shares (note 4) 213,577,988 189,864,603
Other equity instruments (note 6) 1,918,034 2,600,892
Additional paid in capital 87,993 40,664
Deficit (176,376,761) (145,274,397)
-------------------------------------------------------------------
39,207,254 47,231,762
-------------------------------------------------------------------
$ 53,663,955 $ 66,397,437
-------------------------------------------------------------------
-------------------------------------------------------------------
See accompanying notes to consolidated financial statements at
www.westport.com.
WESTPORT INNOVATIONS INC.
Consolidated Statements of Operations and Deficit
(Expressed in Canadian dollars)
--------------------------------------------------------------------
Three months ended Nine months ended
December 31 December 31
------------------------- ---------------------------
2003 2002 2003 2002
--------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Product
revenue $ 7,285,570 $ 3,500,309 $ 17,091,159 $ 13,475,284
Parts
revenue 611,886 2,150,673 2,079,608 2,823,159
--------------------------------------------------------------------
7,897,456 5,650,982 19,170,767 16,298,443
Cost of
revenues and
expenses:
Cost of
product
revenue 5,296,710 2,746,889 12,907,057 10,616,954
Research and
development
(notes 6
and 7) 7,815,811 11,833,047 21,579,935 30,020,179
General and
administrative
(note 6) 1,072,025 904,445 3,670,083 3,540,966
Sales and
marketing
(note 6) 1,841,268 1,316,526 4,868,255 3,473,248
Foreign
exchange
(gain)/loss (355,053) (407,591) (1,189,364) 63,185
Amortization 1,730,145 1,673,156 5,101,524 4,866,298
Bank charges
and interest
on capital
leases 71,979 75,235 246,972 269,221
--------------------------------------------------------------------
17,472,885 18,141,707 47,184,462 52,850,051
--------------------------------------------------------------------
Loss before
undernoted 9,575,429 12,490,725 28,013,695 36,551,608
Interest and
other income (230,558) (398,536) (588,200) (1,319,198)
Restructuring
costs (note 9) 457,400 - 457,400 -
Writedown of
equipment,
furniture 3,219,469 - 3,219,469 -
and leasehold
improvements
(note 10)
Writedown of
long-term
investment - - - 1,356,300
Loss from
investment
accounted for
by the equity
method - 112,807 - 629,354
--------------------------------------------------------------------
Loss for
the period 13,021,740 12,204,996 31,102,364 37,218,064
Deficit,
beginning
of period 163,355,021 121,777,649 145,274,397 96,764,581
--------------------------------------------------------------------
Deficit,
end of
period $176,376,761 $133,982,645 $176,376,761 $133,982,645
--------------------------------------------------------------------
--------------------------------------------------------------------
Basic and
diluted loss
per share $ 0.20 $ 0.24 $ 0.54 $ 0.73
Weighted
average
common shares
outstanding 63,856,453 50,855,718 57,325,646 50,779,936
--------------------------------------------------------------------
--------------------------------------------------------------------
See accompanying notes to consolidated financial statements at
www.westport.com.
WESTPORT INNOVATIONS INC.
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
--------------------------------------------------------------------
Three months ended Nine months ended
December 31 December 31
------------------------- ---------------------------
2003 2002 2003 2002
--------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash provided
by (used in):
Operations:
Loss for
the period $(13,021,740)$(12,204,996) $(31,102,364) $(37,218,064)
Items not
involving
cash:
Amortization 1,730,145 1,673,156 5,101,524 4,866,298
Stock based
compensation
expense 1,377 17,051 164,667 760,664
Deferred rent
expense 137,662 - 137,662 -
Accretion of
TPC warrants
(note 6 (b)) 285,714 - 857,143 -
Writedown of
equipment,
furniture and
leasehold
improvements 3,219,469 - 3,219,469 -
Writedown of
investment - - - 1,356,300
Loss from
investment
accounted
for by the
equity method - 112,807 - 629,354
--------------------------------------------------------------------
(7,647,373) (10,401,982) (21,621,899) (29,605,448)
Change in
non-cash
operating
working
capital:
Accounts
receivable 2,559,147 113,485 4,230,313 (564,389)
Prepaid
expenses (18,800) 107,218 (214,522) 47,101
Accounts
payable and
accrued
liabilities 503,675 2,184,693 (3,561,493) 490,353
Warranty
liability 199,517 (1,020) (184,017) 1,307,517
--------------------------------------------------------------------
(4,403,834) (7,997,606) (21,351,618) (28,324,866)
Investments:
Purchase of
equipment,
furniture, and
leasehold
improvements (632,924) (1,026,722) (2,279,694) (3,111,581)
Sale
(purchase) of
short-term
investments,
net 5,946,630 9,838,282 2,014,359 34,384,393
Acquisition
of assets - - - (223,041)
--------------------------------------------------------------------
5,313,706 8,811,560 (265,335) 31,049,771
Financing:
Issue of
common
shares, net
of issuance
costs (21,750) 100,800 22,056,047 546,803
Repayment
of demand
instalment
loan (153,507) (416,664) (811,403) (1,249,997)
Repayment
of line of
credit - - - (383,445)
Repayment
of capital
lease and
other long term
obligations (44,206) (63,908) (289,723) (237,371)
--------------------------------------------------------------------
(219,463) (379,772) 20,954,921 (1,324,010)
--------------------------------------------------------------------
Increase
(decrease)
in cash and
cash
equivalents 690,409 434,182 (662,032) 1,400,895
Cash and cash
equivalents,
beginning
of period 1,629,558 1,827,267 2,981,999 860,554
--------------------------------------------------------------------
Cash and cash
equivalents,
end of
period $ 2,319,967 $ 2,261,449 $ 2,319,967 $ 2,261,449
--------------------------------------------------------------------
--------------------------------------------------------------------
Supplementary
information
Interest
paid $ 62,410 $ 50,247 $ 219,598 $ 157,967
Non-cash
transactions:
Shares
issued on
exercise of
performance
share units 1,657,338 - 1,657,338 245,000
Shares
issued on
purchase of
assets - - - 106,497
Assumption
of debt on
purchase of
assets - - - 984,270
Assumption of
equipment,
furniture and
leasehold
improvements - - - 623,828
Acquisition of
intellectual
property by
issue of
shares - - - 106,497
Acquisition of
intellectual
property by
assumption
of debt - - - 360,442
See accompanying notes to consolidated financial statements at
www.westport.com.
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