Azure Dynamics Announces Third Quarter 2009 Results
Revenue Up as Sales Trend Improves
OAK PARK, MI,
"While the automotive and commercial vehicle industries struggled along with the rest of the economy to recover during the quarter, we saw definite signs of improvement and opportunity," said
Harrison said that interest in fuel efficient green products continues to mushroom in the commercial vehicle industry and that as federal stimulus funds are released he expects more companies and municipalities to take advantage of them to order vehicles equipped with Azure technology.
"It's clear that we have the right products for today's market and as we continue to amass on-the-road experience and customer understanding of our unique product benefits, the market is responding," said Harrison. "Our more than two decades of development work in alternative vehicle transportation systems is finally starting to pay off."
Subsequent to the quarter end, Azure announced significant advancements for each of its core technologies. On
"We're delighted at the amount of financial support that is being made available to the Company to assist us in our development efforts for the Transit Connect battery electric vehicle. For the first time in the Company's history, we will share the development costs of a major product program with several project collaborators. Additionally, we're evaluating several commitment letters received from government for a significant economic package to further reduce our overall development costs," said Harrison. "With the added financial benefits of sharing development costs, and support from government, we are now more confident than ever in our ability to continue delivering our innovative products to meet the growing customer demand."
Third Quarter 2009 Highlights
- On July 9, Azure was awarded a 16 vehicle contract from the Hybrid
Truck Users Forum's (HTUF) Small Hybrid Bus Working Group. HTUF's
Small Hybrid Bus Working group is a joint program between CALSTART
and the U.S. Army TARDEC's National Automotive Center (NAC) and is
supported by the Federal Transit Administration. Azure won the
competitive bid process because its technology provided the
flexibility to service the needs of a broad range of HTUF
constituents.
- On August 5, the Company announced a successful bid for up to
50 Balance(TM) Hybrid Electric shuttle buses for the State of
Kentucky. Ten buses were ordered immediately by three separate
Kentucky municipalities with an option for up to 40 additional buses.
- On August 13, Azure Dynamics closed a private placement offering for
gross proceeds of approximately CDN$10,000,000. The offering was
conducted through a syndicate of agents co-led by Raymond James Ltd.
and TD Securities Inc. and including Paradigm Capital Inc. and
Stonegate Securities, Incorporated as co-managers.
- On August 18, the NAPA Valley Unified School District (NAPA) in
California purchased the nation's first NEXBUS, the only hybrid
electric Type A school bus available in North America. NEXBUS is
produced by Collins Bus Corporation and features Azure Dynamics'
Balance(TM) Hybrid Electric drive train. Collins is the largest
builder of Type A (short) school buses and Azure's exclusive partner
in producing certified hybrid school buses.
- On August 25, Azure announced the sale of five Balance(TM) Hybrid
Electric buses to Votran, the transit entity for Volusia County,
Florida. Votran, which used FTA stimulus funds to cover 100 percent
of the cost of the vehicles, will integrate the buses into its
county-wide paratransit service.
- On August 26, Azure announced that the United States Postal Service
(USPS) had added a Balance(TM) Hybrid Electric vehicle to its fleet.
The Azure product, a Balance(TM) Hybrid Electric two-ton walk-in van,
will actively participate in the USPS fleet in Long Island, New York,
for a twelve month pilot program. Azure has an additional 30 vehicles
already in service with USPS.
- On September 24, Azure's Balance(TM) Hybrid Electric technology was
approved by the Michigan Department of Transportation (MDOT) for use
by state transportation agencies. The MDOT contract creates a fixed
price for up to 50 buses and will remain in effect for up to three
years with a total maximum value of $5.6 million.
- On September 30, Azure's dealer, Colonial Equipment Co., was awarded
a bid with Howard County, Maryland, for up to 25 of the
Azure CitiBus(TM) units with 17 units immediately ordered.
- As the fourth quarter began in October, Azure received two separate
orders from Kidron Body Company for a total of 257 Low Emission
Electric Power (LEEP(TM) Freeze) systems.
Financial Results
Revenue for the third quarter of 2009 totaled
Before contributions, the Company's engineering, operations and product development expenses for the quarter totaled
As of
The Company is progressing in its discussions with Technology Partnerships
Third Quarter Product Development Updates
CitiBus(TM) (G1) Series (7,500 to 16,000 lbs. gross vehicle weight,
-------------------------------------------------------------------
"GVW")
------
- The 49 G1 Purolator fleet crossed over 1.2 million miles in service
- 28 G1 CitiBuses have been delivered and are in service
Balance(TM) Hybrid Electric (P1) Parallel (10,000 - 19,000 lbs. GVW)
--------------------------------------------------------------------
- In addition to notification from the IRS that the 2009 model
Balance(TM) Hybrid Electric qualifies for a $3,000 U.S. Federal tax
credit to eligible buyers, Azure received notification of
certification from California Air Resources Board (CARB) for the 2009
Azure Balance Hybrid E-450
- The EPA and CARB certifications are requirements for the Balance(TM)
Hybrid Electric to qualify for the California Hybrid Truck and Bus
Voucher Incentive Project (HVIP). The HVIP will provide vouchers of
$10,000 to $45,000 on a first-come, first-served basis for purchase
of each eligible new hybrid truck or bus. The program is anticipated
to be in effect January 2010
- Second generation prototype Lithium battery packs were received from
Johnson Controls-Saft and are running in the Azure development fleet
LEEP(TM) Freeze & LEEP(TM) Lift (Low Emission Electric Power)
-------------------------------------------------------------
- The field trial of LEEP(TM) Lift by AT&T in Kansas continued in the
quarter
- Customer demonstration trial of LEEP(TM) Freeze with Dreyer's Grand
Ice Cream, Inc. in Florida was completed within the quarter
- Engineering and production prepared for increased manufacturing rates
for LEEP(TM) Freeze in Q4 as a result of recent orders announced
Sales and Marketing Highlights:
- On July 17, Azure announced two new patents for innovations to its
proprietary hybrid electric drive trains. Azure Dynamics broad patent
portfolio includes 21 total patents issued or pending. The newest
additions address key value-adding components applicable to electric,
hybrid and PHEV vehicle drive trains.
- On July 22, Azure announced a partnership with Turtle Top, a leading
body manufacturer specializing in small to mid-sized buses and
specialty vehicles. The agreement provides Turtle Top customers and
dealers the opportunity to select Azure's Balance(TM) Hybrid Electric
drivetrain system on the Ford E-450 chassis.
- On August 20, Azure Dynamics announced that its shuttle buses will
service student and faculty needs at both the College of Staten
Island and the University of Fairfield. The College of Staten Island
is working to set a green example for its community. J & R Tours will
manage the second bus on behalf of the University of Fairfield in
Fairfield, Connecticut.
- On September 22, Azure announced the sale of two hybrid electric
NEXBUS school buses to Durham School Services, a subsidiary of
National Express Corporation (NEC). NEC manages more than
16,000 school buses in North America. NEXBUS utilizes Azure's
Balance(TM) Hybrid Electric drivetrain with a Collins school bus
body.
The Company's fiscal 2009 third quarter financial statements and MD&A are available at www.sedar.com or on the Company's website at www.azuredynamics.com.
About Azure Dynamics
Azure Dynamics Corporation (TSX: AZD) is a world leader in the development and production of hybrid electric and electric components and powertrain systems for commercial vehicles. Azure is strategically targeting the commercial delivery vehicle and shuttle bus markets and is currently working internationally with various partners and customers. The Company is committed to providing customers and partners with innovative, cost-efficient, and environmentally friendly energy management solutions.
For more information, please visit www.azuredynamics.com.
The TSX Exchange does not accept responsibility for the adequacy or
accuracy of this release.
Forward-looking Statements
This press release contains forward-looking statements. More particularly, this press release contains statements concerning Azure's business development strategy, projected commercial revenues and product deliveries.
The forward-looking statements are based on certain key expectations and assumptions made by Azure, including expectations and assumptions concerning achievement of current timetables for development programs, target market acceptance of Azure's products, current and new product performance, availability and cost of labour and expertise, and evolving markets for power for transportation vehicles. Although Azure believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Azure can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with Azure's early stage of development, lack of product revenues and history of losses, requirements for additional financing, uncertainty as to commercial viability, uncertainty as to product development and commercialization milestones being met, uncertainty as to the market for Azure's products and unproven acceptance of Azure's technology, competition for capital, product market and personnel, uncertainty as to target markets, dependence upon third parties, changes in environmental laws or policies, uncertainty as to patent and proprietary rights, availability of management and key personnel, and acquisition integration risk. These risks are set out in more detail in Azure's annual information form which can be accessed at www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and Azure undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
-------------------------------------------------------------------------
Azure Dynamics Corporation
Consolidated Balance Sheet
(Stated in Thousands)
September 30 December 31
As at 2009 2008
-------------------------------------------------------------------------
$ $
ASSETS
Current
Cash and cash equivalents 5,297 13,803
Accounts receivable 2,621 2,317
Inventory (Note 4) 8,313 8,318
Prepaid expenses 1,366 675
-------------------------
17,597 25,113
Restricted cash 1,173 1,440
Property and equipment 5,497 6,194
Intangible assets 7,116 8,012
Goodwill 2,932 2,932
-------------------------
34,315 43,691
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 6,029 4,806
Customer deposits & deferred revenue (Note 5) 285 360
Current portion of notes payable (Note 3) 67 74
Current portion of obligations under capital
lease (Note 6) 111 114
-------------------------
6,492 5,354
-------------------------
Long-term
Obligations under capital lease (Note 6) 138 263
Customer deposits & deferred revenue (Note 5) 659 839
Notes payable (Note 3) 2,111 2,459
-------------------------
2,908 3,561
-------------------------
Shareholders' equity
Share capital (Note 7) 174,407 165,007
Contributed surplus (Note 7) 7,014 6,500
Deficit (156,506) (136,731)
-------------------------
24,915 34,776
-------------------------
34,315 43,691
-------------------------------------------------------------------------
Azure Dynamics Corporation
Consolidated Statements of Operations, Comprehensive Loss, and Deficit
(Stated in Thousands)
For the three months ended For the nine months ended
September 30 September 30
(unaudited) (unaudited)
2009 2008 2009 2008
-------------------------------------------------------------------------
$ $ $ $
Revenues 3,168 1,325 4,969 5,078
Cost of sales 3,594 2,132 7,126 6,214
------------------------- -------------------------
Gross Margin (426) (807) (2,157) (1,136)
------------------------- -------------------------
Expenses
Engineering,
research,
development and
related costs, net 3,330 4,832 10,422 15,074
Selling and
marketing 519 679 1,504 1,945
General and
administrative 1,859 1,937 6,005 5,834
------------------------- -------------------------
Total expenses 5,708 7,448 17,931 22,853
------------------------- -------------------------
Loss from operations (6,134) (8,255) (20,088) (23,989)
Interest and other
income, net 136 40 423 285
Interest expense (26) (3) (85) (6)
Other expense 24 - (594) (561)
Foreign currency
gains/(losses) 308 (91) 569 (64)
------------------------- -------------------------
Net loss and
comprehensive loss
for the period (5,692) (8,309) (19,775) (24,335)
Deficit, beginning
of period (150,814) (113,890) (136,731) (97,864)
------------------------- -------------------------
Deficit, end of period (156,506) (122,199) (156,506) (122,199)
-------------------------------------------------------------------------
Loss per share -
basic and diluted (0.01) (0.03) (0.05) (0.08)
Weighted average
number of shares -
basic and
diluted* 410,241,505 316,332,699 389,787,339 291,784,936
-------------------------------------------------------------------------
* No diluted earnings per share have been disclosed, as these would be
anti dilutive.
Azure Dynamics Corporation
Consolidated Statements of Cash Flows
(Stated in Thousands)
For the three months ended For the nine months ended
September 30 September 30
(unaudited) (unaudited)
2009 2008 2009 2008
-------------------------------------------------------------------------
$ $ $ $
Cash flows from operating
activities
Net loss for the
period (5,692) (8,309) (19,775) (24,335)
Adjustments for:
Amortization of
property and
equipment 254 252 789 699
Amortization of
intangible assets 354 347 1,056 1,063
Unrealized foreign
currency (gains)/
losses (279) 129 (362) 180
Stock option
compensation
expense 69 181 332 633
Deferred share
units
compensation
expense 64 93 186 146
------------------------- -------------------------
(5,230) (7,307) (17,774) (21,614)
Changes in non-cash
working capital
items (1,193) (680) 248 (4,563)
------------------------- -------------------------
Total cash flows from
operating activities (6,423) (7,987) (17,526) (26,177)
------------------------- -------------------------
Cash flows from
financing activities
Issuance of common
shares (net of
costs) 9,395 24,394 9,395 24,392
Principal payments
on notes payable (17) (9) (53) (27)
Repayment of
obligations under
capital lease (36) (10) (131) (20)
------------------------- -------------------------
Total cash flows from
financing activities 9,342 24,375 9,211 24,345
------------------------- -------------------------
Cash flows from
investing activities
Acquisition of
property and
equipment (67) (577) (103) (961)
Acquisition of
intangible assets (35) (17) (160) (125)
Sale of property
and equipment - - 35 -
Changes in
restricted cash 35 - 97 -
------------------------- -------------------------
Total cash flows from
investing activities (67) (594) (131) (1,086)
------------------------- -------------------------
Increase (decrease)
in cash and cash
equivalents 2,852 15,794 (8,446) (2,918)
Exchange impact on
cash held in foreign
currency 2 (15) (60) (8)
Cash and cash
equivalents,
beginning of period 2,443 5,428 13,803 24,133
------------------------- -------------------------
Cash and cash
equivalents, end of
period 5,297 21,207 5,297 21,207
------------------------- -------------------------
------------------------- -------------------------
Supplemental cash
flow information
Cash paid for
interest 26 21 85 57
Cash paid for taxes - - - -
------------------------- -------------------------
------------------------- -------------------------
Non cash investing
and financing
activities:
Vehicles and
equipment acquired
under capital
lease - 151 - 336
------------------------- -------------------------
------------------------- -------------------------
For further information: Ryan Carr, Chief Financial Officer, (248) 298-2403 ext 1206, Email: [email protected]; Mike Elwood, Vice President-Marketing, (905) 607-3486 x203, Email: [email protected]; Pat Liebler, Liebler Group, (313) 832-4376, Email: [email protected]
Share this article