AZURE DYNAMICS CORPORATION - 1st Quarter Results
May 13, 2009 (PR Newswire Europe via COMTEX) --
Company: Azure Dynamics Corp. (AZDDF)
Azure Dynamics Announces First Quarter Results for 2009
OAK PARK, MI, May 12 /CNW/ - Azure Dynamics Corporation (TSX: AZD) -
("Azure" or the "Company"), a leading innovator in the development of
environmentally friendly and cost effective hybrid electric and electric
technologies for commercial vehicles, today reported its first quarter
financial results for the period ending March 31, 2009. The Company also
provided an update on corporate and product development activities.
First Quarter 2009 Highlights
- On January 13, 2009, 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. This agreement with one of the world's leading developers
of hybrid electric technology will enable Azure to provide a cost-
effective, consistent and timely product flow to all of its
customers.
- On January 15, 2009, the Company announced a plan designed to address
cost issues while meeting growing demand for our 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.
- The Balance(TM) Hybrid Electric shuttle bus passed the U.S. federal
government's rigorous "Altoona" durability test enabling purchasers
of the vehicle to apply for significant financial assistance from the
government.
- Azure staff has completed significant due diligence on the federal
stimulus program as it relates to the transportation sector. Azure
executives, in turn, have met with numerous politicians and have led
webinar discussions with well over 100 Ford Truck Dealers and shuttle
bus dealers and manufacturers. The webinars highlighted relevant
stimulus program elements that will support customer decisions to
purchase Azure's green technology vehicles.
- On April 9, 2009, Azure announced a supply agreement with Collins Bus
of Kansas that will allow Collins' customers to specify the Azure
Balance(TM) Hybrid Electric drive train on select Type A school
buses.
"Many companies have put the brakes on new spending until the economy
shows some signs of recovery," said Scott T. Harrison, Azure Dynamics Chief
Executive Officer. "But that hasn't dimmed their level of interest in our
products. We continue to work with existing customers to fulfill orders and
we're talking to new prospects virtually every day to educate them on what our
technology can do for their operations.
"We're seeing genuine enthusiasm for our value proposition and we're
confident that once the government stimulus funds kick in and the economy
shows some positive momentum, these companies will be ready to place orders
with us," Harrison said. "As a result we believe our sales will be up again
this year as they were last."
Financial Results
Revenue for the first quarter of 2009 totaled $0.6 million compared to
$0.4 million in the first quarter of 2008. The higher revenue in the current
quarter is attributable to the sale of one Azure Citibus(TM) shuttle bus
recorded in 2008 compared to six Balance(TM) Hybrid Electric systems and one
LEEP Freeze system recorded in 2009. Net loss for the first quarter of 2009
was $7.4 million, or $(0.02) cents per share, compared to a loss of $7.9
million or $(0.03) cents per share in the first quarter of 2008.
The Company's engineering, operations and product development expenses
for the quarter totaled $3.8 million (including $1.2 million in product
development costs), compared to $4.7 million for the same period in 2008
(including $2.4 million in product development costs). During the first
quarter, the Company continued to focus on the development of its Balance(TM)
Hybrid Electric program and component development, as well as ongoing
production activities associated with the Series Hybrid shuttle buses and
electric components.
As of March 31, 2009, the Company's net cash and cash equivalents totaled
$7.9 million, and working capital totaled $13.1 million, compared to cash and
cash equivalents of $13.7 million, and working capital of $25.1 million, as at
March 31, 2008, and cash and cash equivalents of $13.8 million, and working
capital of $19.8 million, as at December 31, 2008.
Product Development Updates
G1 Series (7,500 to 16,000 lbs. gross vehicle weight, "GVW")
------------------------------------------------------------
- The 49 G1 Purolator fleet crossed a major milestone in operating
over 1,000,000 miles in service
Balance(TM) Hybrid Electric (P1) Parallel (10,000 - 19,000 lbs. GVW)
--------------------------------------------------------------------
- The Company completed the design release and pilot production
start of the 2009 model year Balance(TM) Hybrid Electric shuttle
bus chassis
- The 105 balance hybrid vans delivered to Purolator in Q4 last year
have all entered service in the quarter
- The Company began testing of the first level prototype advanced
Lithium-Ion battery pack from Johnson Controls-Saft (JCS) in
accordance with the agreement announced in January
- The Company's announced agreement with Collins Bus in April brings
the total number of shuttle bus body builders on the product to
six which accounts for the majority of the North American market
in sales
LEEP Freeze & LEEP Lift (Low Emission Electric Power)
-----------------------------------------------------
- The Company successfully completed testing of a new variant of the
LEEP(TM) Freeze product in conjunction with Eaton Corporation. The
system, which is integrated with an Eaton Ultrashift transmission,
entered a field trial at Schwan Food Company in Minnesota in March
- A field trial of LEEP(TM) Lift commenced with AT&T in Kansas
Other Product Developments
--------------------------
- The Company received a second generation prototype advanced soft-
switched inverter which is being developed with support of the DOE
Freedom Car program
"Our most important product activity during the first quarter was
finalizing the Johnson Controls-Saft battery supply agreement," said Curt
Huston, Azure's Chief Operating Officer. "With increased public pressure and
government attention on more efficient, environmentally-friendly vehicles, all
indicators point to continued growth in the hybrid electric vehicle commercial
sector. Batteries have been a constraint industry-wide. This five year
agreement with a world-class partner protects our supply chain and offers an
attractive pricing model and proven battery performance characteristics."
"We have been aggressively marketing our products and technology to new
prospects and new markets since we moved into a full commercialization mode
over a year ago," Harrison said. "We aren't any happier about the slowdown in
the economy than any other business is, but it did allow us to fill existing
orders, refine our technology and complete our future battery supply agreement
with Johnson Controls-Saft so that we're ready to meet market demand when it
comes back. We're confident it will come back and that's why we feel positive
about our 2009 sales outlook."
The Company's fiscal 2009 first quarter financial statements and MD&A are
available at www.sedar.com or on the Company's website at
www.azuredynamics.com.
Annual General Meeting
All interested parties are invited to attend the Annual Shareholder
Meeting on June 9, 2009 at 4:30 p.m. (local time) at our Corporate
Headquarters, 14925 W. 11 Mile Road, Oak Park, Michigan. 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 2008
financial results.
About Azure Dynamics
Azure Dynamics Corporation (TSX: AZD) 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.
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Azure Dynamics Corporation
Consolidated Balance Sheet
(Stated in Thousands)
March 31 December 31
2009 2008
As at (unaudited) (audited)
-------------------------------------------------------------------------
$ $
ASSETS
Current
Cash and cash equivalents (note 5) 7,885 13,803
Accounts receivable 648 2,317
Inventory (Note 4) 9,515 8,318
Prepaid expenses 715 675
-----------------------
18,763 25,113
Restricted cash 1,491 1,440
Property and equipment 5,921 6,194
Intangible assets 7,727 8,012
Goodwill 2,932 2,932
-----------------------
36,834 43,691
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 5,157 4,806
Customer deposits & deferred revenue (Note 5) 348 360
Current portion of notes payable (Note 3) 78 74
Current portion of obligations under capital
leases (Note 6) 123 114
-----------------------
5,706 5,354
-----------------------
Long-term
Obligations under capital leases (Note 6) 238 263
Customer deposits & deferred revenue (Note 5) 770 839
Notes payable (Note 3) 2,526 2,459
-----------------------
3,534 3,561
-----------------------
Shareholders' equity
Share capital (Note 7) 165,007 165,007
Contributed surplus (Note 7) 6,739 6,500
Deficit (144,152) (136,731)
-----------------------
27,594 34,776
-----------------------
36,834 43,691
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Approved on behalf of the Board:
"signed D. Campbell Deacon" Director
---------------------------
D. Campbell Deacon
"signed Dennis A. Sharp" Director
---------------------------
Dennis A. Sharp
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Azure Dynamics Corporation
Consolidated Statements of Operations, Comprehensive Loss, and Deficit
(Stated in Thousands)
For the three months ended
March 31
(unaudited)
2009 2008
-------------------------------------------------------------------------
$ $
Revenues 573 370
Cost of sales 1,112 517
-----------------------
Gross Margin (539) (147)
-----------------------
Expenses
Engineering, research, development and
related costs, net 3,833 4,737
Selling and marketing 562 921
General and administrative 2,083 1,887
-----------------------
Total expenses 6,478 7,545
-----------------------
Loss from operations (7,017) (7,692)
Interest and other income, net 147 145
Interest expense (31) (1)
Other expense (526) (452)
Foreign currency losses 6 93
-----------------------
Net loss and comprehensive loss for the period (7,421) (7,907)
Deficit, beginning of period (136,731) (97,864)
-----------------------
Deficit, end of period (144,152) (105,771)
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Loss per share - basic (0.02) (0.03)
Weighted average number of shares -
basic and diluted 379,376 279,376
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Azure Dynamics Corporation
Consolidated Statements of Cash Flows
(Stated in Thousands)
For the three months ended
March 31
(unaudited)
2009 2008
-------------------------------------------------- ----------------------
$ $
Cash flows from operating activities
Net loss for the period (7,421) (7,907)
Adjustments for:
Amortization of property and equipment 280 223
Amortization of intangible assets 349 343
Unrealized foreign currency (gains)/losses 113 (13)
Stock option compensation expense 177 354
Deferred share units compensation expense 62 32
-----------------------
(6,440) (6,968)
Changes in non-cash working capital items 629 (3,185)
-----------------------
Total cash flows from operating activities (5,811) (10,153)
-----------------------
Cash flows from financing activities
Issuance of common shares (net of costs) - (1)
Principle payments on notes payable (19) (9)
Repayment of obligations under capital lease (24) (2)
-----------------------
Total cash flows from financing activities (43) (12)
-----------------------
Cash flows from investing activities
Acquisition of property and equipment (7) (189)
Acquisition of intangible assets (65) (63)
-----------------------
Total cash flows from investing activities (72) (252)
-----------------------
Decrease in cash and cash equivalents (5,926) (10,417)
Exchange impact on cash held in foreign currency 8 12
Cash and cash equivalents, beginning of period 13,803 24,133
-----------------------
Cash and cash equivalents, end of period 7,885 13,728
-----------------------
-----------------------
Cash paid for interest 31 37
-----------------------
-----------------------
Non cash investing and financing activities:
Vehicles and equipment acquired under
capital lease - 108
-----------------------
-----------------------
For further information: Ryan Carr, Chief Financial Officer, (248) 298-2403
ext 1206, Email: rcarr(at)azuredynamics.com; Pat Liebler, Liebler Group, (313)
832-4376, Email: pat(at)lieblergroup.com
(AZD)
END
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Company: Azure Dynamics Corp. (AZDDF)
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