OAK PARK, Michigan, March 23, 2011 /PRNewswire/ --
- Fourth quarter 2010 revenues up three-fold to $13.4 million from $4.4 million and gross margin improves $3.2M year over year
- Full year 2010 revenues increase 133% to $21.9 million from $9.4 million and gross margin improves $5.2M year over year
- Fourth quarter 2010 units sold increase 114% to 381 units from 178 units
- Full year 2010 units sold up 148% to 832 units from 335 units
- Transit Connect Electric LEAD Customer program exceeds expectations with nearly 150 units slated for marquee vehicle fleets across North America at year-end
- Azure's Balance(TM) Hybrid Electric is a leader in the Class 2c-5 medium duty hybrid commercial sector with approximately 60% market share in North America
- Provides 2011 revenue outlook
Azure Dynamics Corporation (TSX: AZD)(OTC: AZDDF), a world leader in the development and production of hybrid electric and electric components and powertrain systems for commercial vehicles, today announced its financial results for the three and twelve months ended December 31, 2010. The Company also provided an update on corporate and product development activities during the year.
Revenue for the fourth quarter of 2010 increased 205% to $13.4 million compared to $4.4 million in the fourth quarter of 2009. For the year ended December 31, 2010 revenue increased 133% to $21.9 million compared to $9.4 million in 2009. Net loss for the fourth quarter of 2010 totaled $10.8 million, or $(0.02) per share compared to a loss of $8.0 million or $(0.02) per share in the fourth quarter of 2009. For the year ended December 31, 2010, the Company's net loss was $28.1 million, or $(0.05) per share, compared to a net loss of $27.8 million, or $(0.07) per share in 2009.
"We are very pleased with our record fourth quarter and full year revenues, which met our expectations despite a sluggish, but improving commercial truck market," said Scott Harrison, CEO of Azure Dynamics. "During the fourth quarter, we shipped a record 381 vehicles, including 30 Transit Connect Electric vehicles, which were more than our entire 2009 vehicles shipments of 335 units and demonstrates the strength of our business model. We are winning with new and repeat customers and showing it with significant revenue growth - growth that we expect to be even more dramatic in 2011."
Before contributions, the Company's engineering, research and development ("R&D") expenses in the fourth quarter totaled $7.5 million (including $4.0 million in product development costs), compared to $5.2 million for the same period in 2009 (including $2.9 million in product development costs). For the year ended December 31, 2010, the Company's engineering and R&D expenses totaled $24.9 million (including $13.6 million in product development costs) compared to $15.7 million in 2009 (including $6.1 million in product development costs).
"Our most notable accomplishment in 2010 was the development and initial deliveries of the innovative Transit Connect Electric," Harrison said. "Just 13 months after the program was officially announced, 30 Transit Connect Electric vans were shipped to LEAD customers and to European constituencies. This incredibly short product development time highlights our technological know-how and product flexibility and bodes well for our future in a dynamic industry."
As of December 31, 2010, the Company's cash and cash equivalents totaled $11.8 million and working capital totaled $9.6 million. Additionally, in October, 2010, the Company obtained a $4 million credit facility to provide an additional source to help fund working capital requirements.
Subsequent to year-end, on February 8, 2011, the Company closed on the sale of 61.0 million common shares which resulted in $20.1 million of gross proceeds to fund its ongoing product development and commercialization efforts as well as general corporate purposes.
"With our stronger balance sheet and the added financial flexibility, we believe Azure is well positioned to capitalize on the increasing demand for our products and on the opportunities to integrate our technology onto additional market leading commercial vehicles," Harrison concluded. "Additionally, with the threat of continued higher fuel prices, the growing concern for the environment and continued government incentive programs, Azure's outlook is promising."
2010 and Year-To-Date Highlights
- On February 8, 2011, Azure announced agreements with 76 additional dealerships to represent Azure's innovative products including the Transit Connect Electric and the Balance(TM) Hybrid Electric in key markets across North America bringing the total number of dealerships in the Azure program to 103.
- On January 18, 2011, Azure announced that it has received an order for 50 Balance(TM) Hybrid Electric units from a world leading logistics organization. The customer also previously submitted Azure's single largest Transit Connect Electric order of 30 units.
- On January 17, 2011, Azure announced that Purolator had placed an order for 600 units - the single largest order for Azure technology. 200 units will be delivered in 2011 with an additional 200 units scheduled in both 2012 and 2013, subject to annual authorizations by Purolator. The initial 200 units will be built and delivered primarily in the third and fourth quarters of 2011.
- On December 16, Azure announced closing of the LEAD customer program after achieving its objective of identifying ten premiere vehicle fleets to place early units in 2010 with volume orders for fulfillment in 2011. Those ten LEAD customers accounted for nearly 150 Transit Connect Electric vehicles.
- On December 7, Azure, in collaboration with Ford Motor Company and AM General, announced the early production and first deliveries of the Transit Connect Electric vans just 13 months after the collaboration to develop the zero-emission vehicle was first announced.
- On October 22, Azure announced the appointment of John Formisano to its Board of Directors. Formisano recently retired from Federal Express Corporation where he served as Vice President - Global Vehicles. Formisano is also Chairman of the Board of CALSTART, the leading catalyst organization for the global clean transportation technology industry.
- On October 5th, Azure Dynamics secured a $4 million credit facility from Silicon Valley Bank to support the company's growth strategy and provide financial flexibility.
- On September 22, a wholly-owned Canadian subsidiary of Johnson Controls Inc. purchased approximately 21,080,000 common shares and Azure received gross proceeds of $6,324,000. Johnson Controls is also a Transit Connect Electric LEAD customer.
- On May 26, 2010, Cintas Corporation purchased 100 Balance(TM) Hybrid Electric Walk in Vans for deployment at its California facilities and therefore qualify for the state's Hybrid Voucher Incentive Program funding with incentives of $25,000 per unit.
- On May 18, AM General was selected to upfit the base Ford Transit Connect with the Azure Force Drive(TM) electric drive train components. The final assembly will be completed at an AM General Engineering and Product Development Center in Livonia, Michigan.
- On May 3, Azure and Ford Motor Company announced plans to expand the Transit Connect Electric program to the European market capitalizing on the Transit Connect's successful history in Europe.
- 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.
- During the fourth quarter of 2010, Azure shipped 381 units, a 114% increase over the 178 units shipped in the same period a year ago. 2010 shipments total 832 units, a 148% increase over the 335 units sold during 2009. 2010 marquis customers include Purolator, Cintas Corporation, Schwans, Illinois Department of Transportation, King County, WA Federal Transit Administration, TruGreen and the North Central Texas Council of Governments.
2011 FINANCIAL OUTLOOK
The global light and medium duty commercial truck markets are expected to continue their gradual recovery during 2011. The Transit Connect Electric has been successfully introduced in North America and in Europe with the manufacturing launch scheduled for April and June, respectively. Based on the Company's current backlog and future order expectations, 2011 revenues are expected to be in a range of $52 million to $68 million. The Company expects 2011 results to be significantly stronger in the second half of the year due to the launch of Transit Connect Electric, as well as the first and second quarters being typically the slowest due to the seasonality of order flow. Unit volume for 2011 is expected to be in the range of 1,300 to 1,500 units, consisting of approximately 700 to 800 Balance(TM) Hybrid Electric drive-trains and LEEP systems and 600 to 700 Force Drive(TM) Electric drive-trains for the Transit Connect Electric.
The Company's complete fiscal 2010 audited year-end financial statements and MD&A are available at http://www.sedar.com or on the Company's website at http://www.azuredynamics.com.
Azure will host a conference call to discuss 2010 earnings today, Wednesday, March 23 at 5:00 p.m. eastern daylight time. Interested listeners can access the call toll free at 1-888-227-6699 and should call in at least fifteen minutes before the scheduled start time. Interested participants from outside North America can participate in the call by dialing +1-303-223-4369.
About 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 a variety of 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 http://www.azuredynamics.com.
The TSX Exchange does not accept responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements Advisory
Certain information included in this press release constitutes forward-looking statements and information and future-oriented financial information under applicable securities legislation and is provided for the purpose of expressing management's current expectations and plans for the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.
More particularly, this press release contains statements concerning Azure's anticipated: business development strategy, customer orders, product deliveries, sales, revenue and revenue growth. The forward-looking statements are based on a number of key expectations and assumptions made by Azure, including expectations and assumptions concerning achievement of current timetables for development programs and sales, 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 used to develop the forward-looking statements 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 numerous risks and uncertainties that contribute to the possibility that the projections and forecasts in the forward-looking statements will not occur and that actual performance or results could differ materially from those anticipated in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks associated with Azure's stage of development, history of losses and lack of historical product revenues, uncertainty as to product development and sales milestones being met, product defect and performance risks, competition for capital and market share, uncertainty as to target markets, dependence upon third parties, changes in environmental laws or policies, uncertainty as to patent and proprietary rights, availability and retention of management and key personnel, exchange rate and currency fluctuations, uncertainties relating to potential delays or changes in plans with respect to product development or capital expenditures, the ability of Azure to access sufficient capital on acceptable terms, and environmental and safety risks. This is not an exhaustive list and additional information on these risks and other factors that could affect Azure's operations and financial results are included in reports on file with the Canadian securities regulatory authorities and can be accessed through the SEDAR website at http://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. Additionally, Azure undertakes no obligation to comment on the expectations of, or statements made by, third parties about Azure.
Azure Dynamics Corporation Consolidated Balance Sheets (Stated in thousands of Canadian dollars, except per share amounts and number of shares) December December 31 31 As at 2010 2009 $ $ ASSETS Current Cash and cash equivalents 11,838 33,588 Accounts receivable 10,043 2,632 Inventory (Note 5) 5,523 5,215 Prepaid expenses 802 974 28,206 42,409 Restricted cash (Note 4) 796 1,041 Property and equipment (Note 6) 5,740 5,277 Other assets 114 - Intangible assets (Note 7) 5,590 6,755 Goodwill 2,932 2,932 43,378 58,414 LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities 16,494 9,837 Customer deposits & deferred revenue (Note 8) 118 746 Current portion of notes payable (Note 3) 1,945 66 Current portion of obligations under capital leases (Note 9) 82 99 18,639 10,748 Long-term Obligations under capital leases (Note 9) 96 117 Customer deposits & deferred revenue (Note 8) 577 644 Notes payable (Note 3) - 2,055 19,312 13,564 Shareholders' equity Share capital (Note 11) 208,570 202,250 Contributed surplus (Note 11) 8,161 7,139 Deficit (192,665) (164,539) 24,066 44,850 43,378 58,414
Nature of operations and going concern (Note 1)
Commitments (Note 9 and 17)
Subsequent events (Note 20)
Approved on behalf of the Board:
"signed D. Campbell Deacon" Director
D. Campbell Deacon
"signed James C. Gouin" Director
James C. Gouin
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 For the twelve months ended ended December 31 December 31 2010 2009 2010 2009 $ $ $ $ Revenues 13,368 4,434 21,913 9,403 Cost of sales 13,072 7,311 21,624 14,349 Gross margin 296 (2,877) 289 (4,946) Expenses Engineering, research, development and related costs, net (Note 14) 7,508 1,343 17,028 11,852 Selling and marketing 1,143 884 2,784 2,388 General and administrative 2,744 3,129 9,329 9,134 Total expenses 11,395 5,356 29,141 23,374 Loss from operations (11,099) (8,233) (28,852) (28,320) Interest and other income, net 147 123 555 546 Interest expense (22) (25) (95) (110) Other income/(expense) - 8 - (586) Foreign currency gains 214 94 266 662 Net loss and comprehensive loss (10,760) (8,033) (28,126) (27,808) Deficit, beginning of period (181,905) (156,506) (164,539) (136,731) Deficit, end of period (192,665) (164,539) (192,665) (164,539) Loss per share - basic and diluted (0.02) (0.02) (0.05) (0.07) Weighted average number of shares - basic and 626,878,734 454,698,412 616,823,270 406,148,487 diluted Azure Dynamics Corporation Consolidated Statements of Cash Flows (Stated in thousands of Canadian dollars, except per share amounts and number of shares) For the years ended December 31 2010 2009 $ $ Cash flows from operating activities Net loss for the period (28,126) (27,808) Adjustments for: Amortization of property and equipment 1,057 1,048 Amortization of intangible assets 1,311 1,460 Amortization of other assets 16 - Unrealized foreign currency (gains)/losses (366) (448) Stock option compensation expense 799 400 Deferred share units compensation expense 242 244 (25,067) (25,104) Changes in non-cash working capital items (Note 18) (1,327) 8,032 Total cash flows from operating activities (26,394) (17,072) Cash flows from financing activities Issuance of common shares (net of costs) 6,301 37,238 Principal repayments on notes payable (65) (69) Repayment of obligations under capital lease (158) (160) Other assets (129) - Total cash flows from financing activities 5,949 37,009 Cash flows from investing activities Acquisition of property and equipment (1,394) (141) Acquisition of intangible assets (146) (203) Sale of property and equipment - 35 Changes in restricted cash 196 211 Total cash flows from investing activities (1,344) (98) Increase/(Decrease) in cash and cash equivalents (21,789) 19,839 Exchange impact on cash held in foreign currency 39 (54) Cash and cash equivalents, beginning of year 33,588 13,803 Cash and cash equivalents, end of year 11,838 33,588 Supplemental cash flow information Cash paid for interest 95 110 Cash paid for taxes 13 - Non cash investing and financing activities: Vehicles and equipment acquired under capital lease 126 24
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SOURCE Azure Dynamics Corporation