OAK PARK, Michigan,
March 23, 2011 /PRNewswire/ -- 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
For further information:
Juris Pagrabs, Vice President,
Investor Relations, +1(248)298-2403 ext 7570 Email:
jpagrabs@azuredynamics.com
Pat Liebler, Liebler Group,
+1(313)832-4376 Email: pat@lieblergroup.com