Azure Dynamics Reports Fiscal 2009 Year End Results
By Azure Dynamics Corporation, PRNETuesday, March 23, 2010
OAK PARK, Michigan, March 24, 2010 -
- Azure Dynamics reports record fourth quarter revenue of $4.4 million
and record year end revenue of $9.4 million representing increases of
72% and 23%, respectively versus the same periods in the prior year.
- Balance(TM) Hybrid Electric delivery vans and shuttle buses continue
to gain market acceptance with new and repeat customers in 2009.
- Azure and Ford Motor Company announced collaboration on Transit
Connect Electric project.
- Company says that with the success of its recent public offering, and
current and anticipated product demands, it anticipates having
sufficient liquidity to execute its business plan in 2010.
Azure Dynamics Corporation (TSX: AZD) (
OTC: AZDDF) ("Azure" or the "Company") a leading developer of hybrid
electric and electric powertrains for commercial vehicles, today announced
its financial results for the three and twelve-month periods ended December
31, 2009. The Company also provided an update on corporate and product
development activities during the year.
"2009 was just the start of what we expect will be a long-term trend
of positive results for Azure," said Scott T. Harrison, CEO of Azure
Dynamics. "Despite the economy, it was our best sales year ever with 566
total products sold which are now powering vehicles for 80 new and repeat
customers. Plus we completed major agreements with our key partners and
continued to build our already strong relationships with our major fleet
customers.
"As businesses start to ramp up their purchasing and implement their
green initiatives, Azure is in a good place," Harrison said. "Most of our
products qualify for federal and state stimulus funds which will help to
lower the purchase price and reduce the payback period making them even
more attractive to customers. That will help us build on the momentum we're
already enjoying in the marketplace."
Financial Results
Revenue for the fourth quarter of 2009 totaled $4.4 million compared
to $2.6 million in the fourth quarter of 2008. For the year ended December
31, 2009 revenue increased to $9.4 million compared to $7.7 million in 2008
. Net loss for the fourth quarter of 2009 totaled $8.0 million, or $(0.02)
per share compared to a loss of $14.5 million or $(0.04) per share in the
fourth quarter of 2008. For the year ended December 31, 2009, the Company's
net loss was $27.8 million, or $(0.07) per share, compared to a net loss of
$38.9 million, or $(0.12) per share in 2008.
Before contributions, the Company's engineering, research and
development ("R&D") expenses in the quarter totaled $5.2 million (including
$2.9 million in product development costs), compared to $6.0 million for
the same period in 2008 (including $3.1 million in product development
costs). For the year ended December 31, 2009, the Company's engineering and
R&D expenses totaled $15.6 million (including $6.1 million in product
development costs) compared to $21.5 million in 2008 (including $11.6
million in product development costs).
As of December 31, 2009, the Company's cash and cash equivalents
totaled $33.6 million and working capital totaled $31.7 million, compared
to cash and cash equivalents of $13.8 million and working capital of $19.8
million as at December 31, 2008. During the year, the Company completed two
equity financings, raising net proceeds of $37.2 million to fund ongoing
product development, operations and working capital.
Key 2009 Milestones
- On December 22, Azure closed its offering of common shares for total
gross proceeds to the Company of approximately $30,000,000.
- On December 14, Azure announced that Purolator Courier Ltd.
("Purolator") placed an order for an additional 200 Balance(TM)
Hybrid Electric delivery trucks. The 200 unit purchase is Azure's
largest revenue order ever. Purolator had already ordered 50 units
earlier in the year.
- On November 9, Azure announced that FedEx Express purchased fifty-one
(51) additional Azure Balance(TM) Hybrid Electric vans.
- On October 30, Azure announced its collaborative effort to deliver
the Ford Transit Connect Electric van. Azure will upfit the Transit
Connect with its proprietary Force Drive(TM) pure electric
drivetrain.
- On October 14, Azure and Kidron announced a record 248 unit Low
Emission Electric Power (LEEP(TM)) sale to Idealease on behalf of its
client, Schwan Food Company.
- On August 13, Azure Dynamics closed a private placement offering for
gross proceeds of approximately $10,000,000.
- On April 9, Azure announced an exclusive supply agreement with
Collins Bus of Kansas to create NEXBUS, the only hybrid electric
Type A (short) school bus available in North America.
- On January 15, the Company announced a plan designed to address cost
issues while meeting growing demand for its green technology
solutions. The plan included a 25% workforce reduction, cuts in
discretionary spending, actions to offset component cost increases
and a focus on new programs that involve a sharing of development
costs.
- On January 13, Azure announced a five year supply agreement with
Johnson Controls-Saft under which Johnson Controls-Saft will supply
the Company with its state-of-the-art lithium-ion hybrid batteries.
Corporate
- Azure's Balance(TM) Hybrid Electric drivetrain integrated on the Ford
E-450 chassis continues to enjoy little competition in the medium
duty commercial truck segment where it resides and where Ford is the
clear market leader. Azure customers report up to 40% fuel economy
improvement, 30% reduction in maintenance costs, and a 30% reduction
in greenhouse gas emissions. Current government incentives are
encouraging adoption of this environmentally-friendly technology.
- During 2009 Azure deepened both its relationship with Ford and its
offering to commercial customers with the October announcement that
the Company will provide its Force Drive(TM) electric powertrain
technology for the Ford Transit Connect Electric. The award winning
Transit Connect began selling in North America in 2009 and the
electric variant is the first electric offspring in Ford's Blueprint
for Sustainability. Johnson Controls-Saft was chosen as the battery
supplier for Azure's Force Drive(TM) integration on the Ford Transit
Connect Electric.
- Azure established a new strategic relationship with Johnson
Controls-Saft (JC-S) in 2009 by signing a five year supply agreement
for lithium-ion battery packs. The relationship gives Azure a
predictable supply of JC-S advanced lithium-ion batteries at market
competitive prices. Led by this battery, Azure expects to
significantly reduce the Balance(TM) Hybrid Electric product costs by
up to 40% by year end 2010. Azure expects significant margin
improvement on the product as a result, and where appropriate a
portion of the savings will be passed along to customers to drive
additional volume.
- Azure's sales strategy includes a combination of direct sales,
distributor sales and Ford dealerships. Azure has partnerships with
seven of the top shuttle bus body manufacturers that represent
approximately 90% of this target market. The Company's relationship
with Ford commercial truck dealerships in major metro markets in
North America for both sales and service provides distribution
bandwidth while keeping internal sales costs comparatively low.
- Azure has avoided significant investment in manufacturing facilities
by leveraging existing capacity. The Company has announced that
Transit Connect Electric upfitting will occur in the State of
Michigan, however, the location and partner have not been named
pending final agreement.
"Adding new customers is the name of the game but it's especially
gratifying to add repeat business to the portfolio, and we did a lot of
both in 2009," said Harrison. "Our biggest customers who already have
experience with our products placed significant repeat orders during the
year and we signed on a number of new customers who are just starting to
convert to more
energy efficient fleets. This bodes well for our future opportunities since
we traditionally have a high re-order rate.
"We have the technology, the partners and the products to make Azure
the choice for commercial fleets looking to reduce costs and green their
fleets," Harrison said. "Our development work over the past twenty years is
paying off and we expect that sales and revenue records will be short lived
around here."
Product Development
G1 Series (7,500 to 16,000 lbs. gross vehicle weight, "GVW")
------------------------------------------------------------
- Purolator's fleet of 49 series hybrid vehicles have approximately
1.3 million miles as of December 31, 2009
- During the year all 19 G1 diesel hybrids have surpassed their
warranty period of 3 years
- The 30 gas series hybrids have surpassed two years in service and the
earlier units will hit the 3 yr in-service milestone in Q1 of 2010
- 2009 was the final model year for production of G1 Hybrid vans and
CitiBuses. The program will now move into a service engineering mode.
The high mileage and time in-service data will provide Azure with
valuable durability data for future developments
Balance(TM) Hybrid Electric (P1) Parallel (10,000 - 19,000 lbs. GVW)
--------------------------------------------------------------------
- The Balance(TM) Hybrid Electric shuttle bus was released into
production in the first quarter of 2009
- The 2009 model Balance(TM) Hybrid Electric was certified as a new
qualified heavy-duty hybrid motor vehicle by the IRS, which qualifies
it for a $3,000 US 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 serve to qualify the product for the
California Hybrid Truck and Bus Voucher Incentive Project (HVIP)
which 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 in the state
- The Company worked with JC-S throughout the year on development and
testing of the a new Lithium-Ion battery pack and by year-end a
second generation of prototype battery packs were received and are
running in the Azure development fleet
Transit Connect Electric (Force Drive(TM))
------------------------------------------
- Development for the Transit Connect Electric was begun in the fourth
quarter of 2009
- By December 1st, the Company completed a development and supply
agreement with Johnson Controls-Saft to collaborate on the Lithium
Ion battery pack for the Transit Connect Electric
- By year-end the Company had completed a concept design release for
the vehicle and also built an initial show vehicle
- Testing on the completed vehicle was in progress through the end of
the year, and the delivery to Ford occurred in January, 2010. The
build of a second engineering vehicle began within the first quarter,
2010
LEEP Freeze(TM) & LEEP Lift(TM) (Low Emission Electric Power)
-------------------------------------------------------------
- With support of Eaton, the company released a new variant of the LEEP
Freeze(TM) system that is compatible with Eaton Ultrashift
transmissions
- The company executed validation and durability testing on the LEEP
Freeze(TM) system throughout the year
- In support of the 248 unit order for LEEP Freeze(TM) systems in
October, the Company undertook final design upgrades and
manufacturing ramp-up activities to support volume production. Forty
systems were produced and delivered by year end
- A product field trial of LEEP Lift(TM) commenced with AT&T in the
first quarter and continued throughout the year demonstrating up to
30% fuel savings and idle-off performance attributes
Other Product Developments
--------------------------
- Development of a next generation of the Force Drive(TM) inverter
commenced in the first half of 2009; the product will go into
production mid 2010 and be used across the Company's product lines
- A second generation prototype advanced soft-switched inverter was
received and preliminary testing completed with the support of the US
DOE Freedom Car program
Conclusion
"We believe that our products and our internal practices, set against
a backdrop of external factors including the threat of higher oil prices,
access to government stimulus programs, greater recognition and
appreciation for environmental issues, and better understanding of hybrid
electric and electric technology in general, set the stage for Azure's
accelerated growth in 2010 and beyond," said Harrison. "Our goal is very
clear - to be a profitable company delivering state-of-the-art products and
a solid return to our customers, investors, partners and employees. The
road to profitability requires us to pass through the breakeven plateau. We
believe that this plateau is within reach and hope to have a clear picture
in time for our 2010 Annual General Meeting in June," Harrison said.
The Company's complete fiscal 2009 audited year-end financial
statements and MD&A are available at www.sedar.com or on the Company's
website at www.azuredynamics.com.
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 labor 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)
December 31 December 31
As at 2009 2008
-------------------------------------------------------------------------
$ $
ASSETS
Current
Cash and cash equivalents 33,588 13,803
Accounts receivable 2,632 2,317
Inventory (Note 5) 5,215 8,318
Prepaid expenses 974 675
--------------------------
42,409 25,113
Restricted cash (Note 4) 1,041 1,440
Property and equipment (Note 6) 5,277 6,194
Intangible assets (Note 7) 6,755 8,012
Goodwill 2,932 2,932
--------------------------
58,414 43,691
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 9,837 4,806
Customer deposits & deferred revenue (Note 
746 360
Current portion of notes payable (Note 3) 66 74
Current portion of obligations under
capital leases (Note 9) 99 114
--------------------------
10,748 5,354
Long-term
Obligations under capital leases (Note 9) 117 263
Customer deposits & deferred revenue (Note 644 839
Notes payable (Note 3) 2,055 2,459
--------------------------
2,816 3,561
--------------------------
Shareholders' equity
Share capital (Note 11) 202,250 165,007
Contributed surplus (Note 11) 7,139 6,500
Deficit (164,539) (136,731)
--------------------------
44,850 34,776
--------------------------
58,414 43,691
-------------------------------------------------------------------------
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 years ended December 31
2009 2008
-------------------------------------------------------------------------
$ $
Revenues 9,403 7,651
Cost of sales 14,520 12,866
--------------------------
Gross Margin (5,117) (5,215)
--------------------------
Expenses
Engineering, research, development and
related costs, net (Note 13) 11,681 22,286
Selling and marketing 2,388 2,833
General and administrative 9,134 7,899
--------------------------
Total expenses 23,203 33,018
--------------------------
Loss from operations (28,320) (38,233)
--------------------------
Interest and other income, net 546 347
Interest expense (110) (10)
Other expense (586) (568)
Foreign currency gains/(losses) 662 (403)
--------------------------
Net loss and comprehensive loss (27,808) (38,867)
Deficit, beginning of year (136,731) (97,864)
--------------------------
Deficit, end of year (164,539) (136,731)
-------------------------------------------------------------------------
Loss per share - basic and diluted (0.07) (0.12)
Weighted average number of shares
- basic and diluted 406,148,487 313,802,407
-------------------------------------------------------------------------
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 years ended December 31
2009 2008
-------------------------------------------------------------------------
$ $
Cash flows from operating activities
Net loss for the period (27,808) (38,867)
Adjustments for:
Amortization of property and equipment 1,048 1,005
Amortization of intangible assets 1,460 1,414
Unrealized foreign currency (gains)/losses (448) 525
Stock option compensation expense 400 711
Deferred share units compensation expense 244 184
--------------------------
(25,104) (35,028)
Changes in non-cash working capital items
(Note 17) 8,032 1,625
--------------------------
Total cash flows from operating activities (17,072) (33,403)
--------------------------
Cash flows from financing activities
Issuance of common shares (net of costs) 37,238 24,342
Principal repayments on notes payable (69) (40)
Repayment of obligations under capital lease (160) (26)
--------------------------
Total cash flows from financing activities 37,009 24,276
--------------------------
Cash flows from investing activities
Acquisition of property and equipment (141) (1,089)
Acquisition of intangible assets (203) (143)
Sale of property and equipment 35 -
Changes in restricted cash 211 -
--------------------------
Total cash flows from investing activities (98) (1,232)
--------------------------
Increase/(Decrease) in cash and cash equivalents 19,839 (10,359)
Exchange impact on cash held in foreign currency (54) 29
Cash and cash equivalents, beginning of year 13,803 24,133
--------------------------
Cash and cash equivalents, end of year 33,588 13,803
--------------------------
--------------------------
Supplemental cash flow information
Cash paid for interest 110 159
Cash paid for taxes - -
--------------------------
--------------------------
Non cash investing and financing activities:
Vehicles and equipment acquired under
capital lease 24 364
--------------------------
--------------------------
The accompanying notes are an integral part of these consolidated
financial statements.
For further information: Ryan Carr, Chief Financial Officer,
+1-(248)-298-2403 ext 1206, Email: rcarr@azuredynamics.com; Pat Liebler,
Liebler Group, +1-(313)-832-4376, Email: pat@lieblergroup.com (AZD.)
For further information: Ryan Carr, Chief Financial Officer, +1-(248)-298-2403 ext 1206, Email: rcarr at azuredynamics.com; Pat Liebler, Liebler Group, +1-(313)-832-4376, Email: pat at lieblergroup.com (AZD.)
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