Azure Dynamics Announces First Quarter Results for 2010
By Azure Dynamics Corporation, PRNETuesday, May 11, 2010
OAK PARK, Canada, May 12, 2010 -
- Azure Dynamics announced revenue of $2.8M, an improvement of more
than 400%, and gross margin improvement of 94% in the quarter
- The Company shipped 230 units in the first quarter
- Transit Connect Electric was successfully introduced and lauded by
industry analysts and international media at the Chicago Auto Show in
February. Subsequent to the quarter end, Azure and Ford jointly
announced Transit Connect Electric program expansion to Europe
- Azure's cash position remains strong with a cash balance of more than
$31 million at quarter end
Azure Dynamics Corporation (TSX: AZD) (
OTC: AZDDF) - ("Azure" or the "Company"), developer of environmentally
friendly and cost effective hybrid electric and electric technologies for
commercial vehicle fleets, today reported first quarter financial results
for the period ending March 31, 2010. The Company also provided an update
on corporate and product development activities.
"As each quarter is eclipsed, we talk less about expectations and more
about accomplishments. In 2009, we focused on our margin improvement plan
and maintaining sufficient cash to execute our plan. In Q1 2010, we are
pleased with results on both fronts with margins improving by 94% in the
quarter and with our quarter ending cash balance at $31.6 million," said
Scott T. Harrison, Azure Dynamics Chief Executive Officer. "We expect these
trends to continue through the fourth quarter 2010 when the Johnson
Controls-Saft lithium-ion battery pack shipments begin and our margin
improvement should be even more dramatic.
"The first quarter was also noteworthy for the highly successful
introduction of the innovative Ford Transit Connect Electric at the Chicago
Auto Show in early February. Analysts were impressed that Ford and Azure
not only introduced the vehicle on an accelerated timeline, but also took
the bold step of offering media test drives on the spot, and on one of the
coldest and snowiest days in Chicago in decades. These test drives of an
early Transit Connect Electric prototype were a testament to our technology
and a tribute to our world-class engineering team.
"As a result of the Transit Connect Electric launch, Azure received
extensive media attention in North America and around the globe. The added
visibility was especially important in the first quarter as the economic
recovery expanded. Our end-market customers have an increasingly optimistic
outlook and are on the front-end of their respective fleet rebuilding
efforts," said Harrison. "Azure has never been more top-of-mind."
Financial Results
Revenue for the first quarter of 2010 totaled $2.8 million compared to
$0.6 million in the first quarter of 2009. Net loss for the first quarter
of 2010 was $4.6 million, or $(0.01) cent per share, compared to a loss of
$7.4 million or $(0.02) cents per share in the first quarter of 2009.
Before contributions, the Company's engineering, operations and
product development expenses for the quarter totaled $5.3 million (
including $2.7 million in product development costs), compared to $3.8
million for the same period in 2009 (including $1.2 million in product
development costs).
As of March 31, 2010, the Company's net cash and cash equivalents
totaled $31.6 million, and working capital totaled $27.7 million, compared
to cash and cash equivalents of $7.9 million, and working capital of $13.1
million, as of March 31, 2009, and cash and cash equivalents of $33.6
million, and working capital of $31.7 million, as of December 31, 2009.
The Company shipped 230 units in the first quarter (33 Balance(TM)
Hybrid Electric; 176 LEEP(TM), and 21 Force Drive(TM).
Sales and Marketing Highlights
- On January 12, Azure announced that its dealer MidWest Transit
Equipment had been awarded a contract with Terre Haute Transit for
two Azure CitiBus(TM) vehicles.
- On February 10, the Transit Connect Electric made its debut at the
Chicago Auto Show. Azure collaborated with Ford Motor Company to
introduce the Transit Connect Electric, a pure electric powered
version of the 2010 North American Truck of the Year.
- On March 9, Azure announced that AT&T agreed to become a lead
customer for Transit Connect Electric by purchasing two of the
initial 2010 units. To participate in the Lead Customer program,
customers like AT&T must also agree to purchase a minimum of ten
units in 2011.
- On May 3, Azure and Ford Motor Company announced plans to expand the
Transit Connect Electric program to the European market. Transit
Connect has a successful history in Europe.
Product Development Updates
Balance(TM) Hybrid Electric
---------------------------
- Design validation testing of upgrades to inverter controllers and
DC/DC converters progressed through the first quarter with test
completion planned for Q2 in support of a mid-year production
introduction
- Within the first quarter, the Company completed the initial design
releases to its industry first belt starter generator (BSG) system on
a V8 engine. Fabrications of the new prototype BSG commenced in the
quarter. An important accelerated life durability test was complete
in support of a 2011 model year launch later this year
- The Company continued its development and testing of the lithium-ion
battery pack from Johnson Controls-Saft (JC-S) accumulating mileage
in AZD's development fleet as well as completing some industry
standard testing in support of a Q3, 2010 launch.
Transit Connect Electric (Force Drive(TM))
------------------------------------------
- In January of 2010, Azure completed and delivered to Ford a
production representative show vehicle which debuted at the Chicago
Auto Show in February
- Also in January, the Company completed an engineering prototype
vehicle which underwent performance testing in Detroit including
among other tests, cold chamber tests and driving range tests
- Of major significance in the quarter, Azure was able to demonstrate
through computer aided analysis that it could achieve federally
regulated safety tests performance
- The Company produced the first crash correlation test vehicle
LEEP Freeze(TM) & LEEP Lift(TM) (Low Emission Electric Power)
-------------------------------------------------------------
- In the first quarter, the Company completed its manufacturing ramp up
activities for the LEEP(TM) Freeze system
- Minor design improvements were made in the quarter to address lessons
learned during the increase in production
- AT&T completed its trial of the LEEP Lift trucks within the quarter
and purchased the units to have them continue in revenue service in
their fleet
Conclusion
"As the economic rebound continues, and government stimulus funds for
environmental initiatives continue to be readily available, we expect more
customers to rebuild their fleet inventories at an accelerated pace. With
our product performing well for our customers and greater corporate focus
on sustainability, we anticipate more orders coming our way," said Harrison
. "We are making real strides towards accomplishing our goal of being Part
of the Solution for customers, partners, shareholders and society at large."
The Company's fiscal 2010 first quarter financial statements and MD&A
are available at www.sedar.com or on the Company's website at
www.azuredynamics.com.
Conference Call
Please join Scott Harrison, Azure Dynamics Chief Executive Office, and
Ryan Carr, Chief Financial Officer for an earnings call today, May 12th, at
5:00 PM EST. Interested listeners can access the call toll free at
1-800-941-4658. It is recommended that you access the call at least fifteen
minutes before the scheduled start time. An accompanying presentation will
be posted to the company's website, www.azuredynamics.com, immediately
prior to the call.
For those unable to participate in the live conference, a call replay
will be posted on Azure's site on May 13th.
Annual General Meeting information
All interested parties are invited to attend the Annual General
Meeting on June 8, 2010 at 4:30 p.m. (local time) at our Corporate
Headquarters, 14925 W. 11 Mile Road, Oak Park, Michigan, 48237. In addition
to the formal business described in the Management Information Circular
there will be a management presentation on business activities and the
Company's 2009 financial results. Immediately following the meeting, guests
are encouraged to join Azure management for a reception. Guests will also
have an opportunity to experience first-hand select Azure products,
including the Ford Transit Connect Electric, on a ride and drive course.
All figures are in Canadian dollars.
Azure Dynamics
Azure Dynamics Corporation (TSX: AZD) (OTC: AZDDF) 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 Sheets
(Stated in thousands of Canadian dollars)
March 31 December 31
2010 2009
As at (unaudited) (audited)
------------------------------------------------------------------------
$ $
ASSETS
Current
Cash and cash equivalents 31,604 33,588
Accounts receivable 1,109 2,632
Inventory (Note 3) 5,002 5,215
Prepaid expenses 937 974
--------------------------
38,652 42,409
Restricted cash 1,006 1,041
Property and equipment 5,261 5,277
Intangible assets 6,463 6,755
Goodwill 2,932 2,932
--------------------------
54,314 58,414
------------------------------------------------------------------------
------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 10,592 9,837
Customer deposits & deferred revenue 159 746
Current portion of notes payable 65 66
Current portion of obligations under
capital leases 117 99
-------------------------
10,933 10,748
Long-term
Obligations under capital leases 156 117
Customer deposits & deferred revenue 627 644
Notes payable 1,970 2,055
-------------------------
13,686 13,564
-------------------------
Shareholders' equity
Share capital (Note 4) 202,239 202,250
Contributed surplus (Note 4) 7,513 7,139
Deficit (169,124) (164,539)
-------------------------
40,628 44,850
-------------------------
54,314 58,414
------------------------------------------------------------------------
------------------------------------------------------------------------
Nature of operations and going concern (Note 1)
Commitments (Note 5)
Approved on behalf of the Board:
"signed D. Campbell Deacon" Director
---------------------------
D. Campbell Deacon
"signed James C. Gouin" Director
-----------------------
James C. Gouin
The accompanying notes are an integral part of these consolidated
financial statements.
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Azure Dynamics Corporation
Consolidated Statements of Operations, Comprehensive Loss, and Deficit
(Stated in thousands of Canadian dollars, except per share amounts and
number of shares)
For the three months ended
March 31
(unaudited)
2010 2009
-------------------------------------------------------------------------
$ $
Revenues 2,847 573
Cost of sales 3,017 1,106
--------------------------
Gross margin (170) (533)
--------------------------
Expenses
Engineering, research, development and
related costs, net 1,743 3,839
Selling and marketing 514 562
General and administrative 2,334 2,083
--------------------------
Total expenses 4,591 6,484
--------------------------
Loss from operations (4,761) (7,017)
Interest and other income, net 137 147
Interest expense (26) (31)
Other expense (11) (526)
Foreign currency gains 76 6
--------------------------
Net loss and comprehensive loss for the period (4,585) (7,421)
Deficit, beginning of period (164,539) (136,731)
--------------------------
Deficit, end of period (169,124) (144,152)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Loss per share - basic and diluted (0.01) (0.02)
Weighted average number of shares - basic
and diluted 605,128,008 379,376,177
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated
financial statements.
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Azure Dynamics Corporation
Consolidated Statements of Cash Flows
(Stated in thousands of Canadian dollars)
For the three months ended
March 31
(unaudited)
2010 2009
------------------------------------------------------------------------
$ $
Cash flows from operating activities
Net loss for the period (4,585) (7,421)
Adjustments for:
Amortization of property and equipment 243 280
Amortization of intangible assets 326 349
Unrealized foreign currency (gains)/losses (188) 113
Stock option compensation expense 322 177
Deferred share units compensation expense 58 62
--------------------------
(3,824) (6,440)
Changes in non-cash working capital items 2,068 629
--------------------------
Total cash flows from operating activities (1,756) (5,811)
--------------------------
Cash flows from financing activities
Issuance of common shares (net of costs) (17) -
Principal payments on notes payable (17) (19)
Repayment of obligations under capital lease (64) (24)
--------------------------
Total cash flows from financing activities (98) (43)
--------------------------
Cash flows from investing activities
Acquisition of property and equipment (101) (7)
Acquisition of intangible assets (34) (65)
--------------------------
Total cash flows from investing activities (135) (72)
--------------------------
Decrease in cash and cash equivalents (1,989) (5,926)
Exchange impact on cash held in foreign currency 5 8
Cash and cash equivalents, beginning of period 33,588 13,803
--------------------------
Cash and cash equivalents, end of period 31,604 7,885
--------------------------
--------------------------
Supplemental cash flow information
Cash paid for interest 26 31
--------------------------
--------------------------
Non cash investing and financing activities:
Vehicles and equipment acquired under
capital lease 126 -
--------------------------
--------------------------
The accompanying notes are an integral part of these consolidated
financial statements.
For further information: Ryan Carr, Chief Financial Officer,
+1-(248)-658-7506, Email: rcarr@azuredynamics.com; Pat Liebler, Liebler
Group, +1-(313)-832-4376, Email: pat@lieblergroup.com/
For further information: Ryan Carr, Chief Financial Officer, +1-(248)-658-7506, Email: rcarr at azuredynamics.com; Pat Liebler, Liebler Group, +1-(313)-832-4376, Email: pat at lieblergroup.com
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