Westport Revenue Rises

Westport Innovations said its revenue, excluding joint ventures’ revenues, for the quarter ended December 31, 2013 was $52.6 million compared with $39.9 million for the same period last year, an increase of 32%. For the year ended December 31, 2013, revenue was $164.0 million, achieving previously stated guidance of $160 million to $180 million, reflecting an increase of 5%.

Highlights include:

• Joint venture segment revenue for the quarter ended December 31, 2013 was $110.5 million for Cummins Westport Inc. (CWI), an increase of 158%; and $93.6 million for Weichai Westport Inc. (WWI), a decrease of 13%. Joint venture segment revenue for the year ended December 31, 2013 was $310.7 million for CWI, an increase of 57%; and $466.6 million for WWI, an increase of 71%.
• Westport consolidated net loss for the quarter ended December 31, 2013 increased to $89.5 million from $37.6 million in 2012. Included in the net loss are adjustments related primarily to exiting production of the first generation of Westport high pressure direct injection (Westport^™ HPDI) system, consolidating our Westport WiNG^™ Power System business into one facility in Dallas, Texas and non-cash goodwill impairments.
• Adjustments for the quarter ended December 31, 2013 were $67.8 million including goodwill and intangible impairment charges, restructuring and product obsolescence charges offset by $10.1 million net foreign exchange gains. Excluding total net adjustments of $57.7 million, Westport consolidated net loss and net loss per share was $31.8 million and $0.51, respectively, for the quarter ended December 31, 2013.
• Westport consolidated net loss for the year ended December 31, 2013 increased to $185.4 million from $98.8 million in 2012. Included in the net loss for the year ended December 31, 2013 are adjustments of $67.8 million recorded in the quarter ended December 31, 2013 outlined above, offset by $15.2 million net foreign exchange gains. Excluding total adjustments of $52.6 million, Westport consolidated net loss and net loss per share was $132.8 million and $2.30, respectively, for the year ended December 31, 2013.

“2013 was a challenging transition year as Westport moved from its market creation, demonstration project culture to a focused product business in a strong growth market,” said David Demers, CEO of Westport. “This involved looking at every market opportunity and every current product in order to assess strategic priorities and to optimize our position in the emerging global market for fully integrated OEM-built natural gas vehicles.”

“Our two joint ventures, Cummins Westport and Weichai Westport, each posted record volumes and strong revenue growth for the year, up 57% and 71%, respectively. I think it’s worth noting that these two businesses collectively sold almost 50,000 new medium and heavy-duty natural gas engines during the year. We expect continued strong growth particularly as we see a full year of sales of the newly-launched ISX12 G engine for North American trucks through our CWI joint venture, as well as new products from Weichai Westport in China.”

“In the Westport direct operating segments, we initiated first shipments in several major new products in the fourth quarter, including the new Westport iCE PACK LNG Tank System for trucks and our first LNG fuel tender for locomotives. We announced our new HPDI 2.0 system for heavy-duty vehicles, and new spark-ignition engine systems for the automotive market.”

“In addition, we have substantially restructured existing businesses and shifted production and supply chain operations in order to optimize operating efficiencies and to prioritize spending in businesses showing strong growth opportunities going forward. We announced the conclusion of our first generation HPDI truck systems, and shipped our last system in December. Of course, we will continue to support our first generation of HPDI customers and have taken appropriate financial provisions to ensure this business is well-supported. As a result of these unusual adjustments and financial provisions, we recorded a charge of $67.8 million in the fourth quarter.”

“Financially, we have announced that we expect to see our operating business units reach positive Adjusted EBITDA by the end of 2014, and on a consolidated basis including all of our investment programs, we expect to achieve this goal on a corporate wide basis by the end of 2015.”

“We expect to achieve this significant milestone through three factors – strong sales of existing products, reduced expenses as a result of rationalizing product and operations in 2013, and completion of investment programs resulting in new product sales while reducing investment expense. 2014 is going to be a landmark year, as the market for natural gas vehicles continues to grow, and as Westport builds upon its globally recognized technology to become a profitable growth business with global market leadership.”