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Azure Dynamics Announces First Quarter Results
OAK PARK, Michigan, May 12 /PRNewswire/ -- Azure Dynamics Corporation (TSX: AZD, LSE: ADC & OTCQX: AZDDF) - ("Azure"
or the "Company"), a leading developer of hybrid electric and electric
powertrains for commercial vehicles today reported its first quarter
financial results for the period ending March 31, 2008. The Company also
provided an update on corporate and product development
activities.
First Quarter 2008 Highlights
- Finalized supply agreement with Utilimaster for commercial
production of its Balance Hybrid Electric (P1) commercial vehicles
- Completed a production build of 25 hybrid chassis on the production
line at the Company's manufacturing assembly partner, Utilimaster.
The build included 20 hybrid chassis which will be delivered to
FedEx in the second quarter of this year
- Signed an MOU with the leading manufacturer of aerial boom trucks,
for its "LEEP Lift" (Low Emission Electric Power) product.
- During the first quarter Azure received five lead orders for the
Balance Hybrid Electric (P1) Ford E450 cab-chassis from major
shuttle bus manufacturers and body builders.
"The first quarter set the foundation for us to capitalize on a number
of market opportunities," Azure Dynamics' Chief Executive Officer, Scott T.
Harrison said. "We added to those production opportunities early this quarter
by completing critical pilot testing for two key customers and also
increasing our exposure to many new investors by becoming listed on the
International OTCQX, our first ever listing on a U.S. based trading platform.
There's a huge potential U.S. market for Azure and the OTCQX puts us in
position to take advantage of it."
Financial Results
Revenue for the first quarter of 2008 totaled CAD$0.4 million compared to
CAD$0.2 million in the first quarter of 2007. The increase in revenue in the
quarter was due to a shipment of a Series Hybrid "CitiBus". Net loss for the
first quarter of 2008 was CAD$7.9 million, or CAD$(0.03) cents per share,
compared to a loss of CAD$6.5 million or CAD$(0.03) cents per share in the
first quarter of 2007. The higher loss in the quarter is primarily
attributable to reorganization costs, higher levels of engineering expenses
and negative gross margin during the current quarter. Reorganization costs
incurred by the Company relate primarily to changes in management as the
Company completes its transition from development stage to a commercial
enterprise. Engineering expenses were higher as a result of the Company's
ongoing technology development. Negative gross margin in the quarter was
primarily the result of negative production variances typically associated
with lower volume early stage production.
Before contributions, the Company's engineering, operations and product
development expenses for the quarter totaled CAD$4.8 million (including
CAD$2.4 million in product development costs), compared to CAD$4.2 million
for the same period in 2007 (including CAD$2.4 million in product development
costs). During the first quarter, the Company continued to focus on the
development of its Balance 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, 2008, the Company's net cash and cash equivalents
totaledCAD$13.7 million, and working capital totaled CAD$25.1 million,
compared to cash andcash equivalents of CAD$20.6 million, and working
capital of CAD$26.1 million, as at March 31, 2007, and cash and cash
equivalents of CAD$24.1 million, and working capital of CAD$32.3 million,
as at December 31, 2007. The reduction in net cash and cash equivalents from
December 31, 2007 is mainly due to cash used in support of product
development and the Company's ongoing efforts to commercialize its products.
Product Developments
Series Hybrid Electric (G1):
----------------------------
- Purolator's fleet of 49 series hybrid vehicles has accumulated over
600,000 miles as of March 31, 2008. The vehicles are deployed in
Montreal, Ottawa, Toronto and Vancouver. Of the 49 vehicles, 19
series diesel hybrids are approaching 3 years in service, while 30
series gas hybrids have just surpassed a year in-service this
quarter.
- As of March 31, 2008 Azure had completed the assembly of 54 of a 59
unit Series hybrid cab chassis production run at Production Concepts,
Inc. The hybrid cab chassis' will be completed into shuttle buses in
the coming quarters to meet customer sales demand.
- Series hybrid shuttle buses ("CitiBus") entered service with Bronx
Overall Economic Development Commission (BOEDC) in New York.
Balance Hybrid Electric (P1):
-----------------------------
- Three demonstration vans were placed in service with previously
announced lead customers including FedEx (November 2007), Purolator
and a leading North American courier fleet.
- Azure completed the initial design and prototypes for the shuttle bus
variant of the Ford Balance Hybrid Electric E450 in the quarter.
Furthermore, a test bus was sent to Altoona in April 2008, where it
will begin its 7 year accelerated durability test. Once the testing
is complete, the Balance Hybrid Electric shuttle bus will be eligible
for funding programs administered by the Federal Transit
Administration (FTA) in the United States.
- As mentioned earlier, the management changes completed during the
quarter allows Azure to support the production of 105 Balance Hybrid
Electric E-450's to be delivered to Purolator in the second half of
2008.
LEEP Freeze & LEEP Lift (Low Emission Electric Power):
------------------------------------------------------
- Within the quarter, Azure completed further testing on the LEEP
Freeze refrigeration units including the monitoring of a unit in
service at Citi Harvest in New York City. The LEEP Freeze
refrigeration design is now completed and released and the company is
supporting Kidron in sales development activities for the product.
- On March 19, 2008, Azure signed a memorandum of understanding (MOU)
with a leading manufacturer of aerial boom trucks for the electric
utility, telecommunications and contractor markets for its LEEP Lift
product. The development of a demonstration vehicle with the
manufacturer also commenced within the quarter.
Force Drive (Electric Solutions):
---------------------------------
- During the quarter, Azure continued the production of its Force Drive
systems planned for delivery against a 200 unit release within the
supply agreement with Electro Autos of Mexico. Azure's scope of
supply for the 1,000 Force Drive systems includes the motor,
controller, gearbox and DC/DC converters.
The Company's fiscal 2008 first quarter financial statements and MD&A
are available at http://www.sedar.com or on the Company's website at
http://www.azuredynamics.com.
Annual General Meeting
All interested parties are invited to attend the Annual Shareholder
Meeting on June 10, 2008 at 4:30 p.m. (local time) at The National Club, 303
Bay Street, Toronto, Ontario. 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 2007 financial results.
About Azure Dynamics
Azure Dynamics Corporation (TSX: AZD) (LSE: ADC) (OTCQX: 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 http://www.azuredynamics.com.
The TSX and LSE Exchanges do 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 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.
-------------------------------------------------------------------------
Azure Dynamics Corporation
Consolidated Balance Sheet
Stated in Thousands)
March 31 December 31
2008 2007
As at (unaudited) (audited)
-------------------------------------------------------------------------
CAD$ CAD$
ASSETS
Current
Cash and cash equivalents 13,728 24,133
Accounts receivable 908 590
Contributions receivable 1,184 1,128
Inventory and related prepayments (Note 3) 12,095 10,201
Prepaid expenses 776 702
--------------------------
28,691 36,754
Restricted cash 1,214 1,172
Property and equipment 5,820 5,746
Intangible assets, net of amortization 9,003 9,283
Goodwill 2,932 2,932
--------------------------
47,660 55,887
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 3,410 4,275
Customer deposits & deferred revenue 96 166
Current portion of notes payable (Note 4) 39 35
Current portion of obligations under capital
leases (Note 5) 14 -
--------------------------
3,559 4,476
Long-term
Obligations under capital leases (Note 5) 92 -
Customer deposits & deferred revenue 999 941
Notes payable (Note 4) 2,126 2,064
--------------------------
3,217 3,005
--------------------------
Shareholders' equity
Share capital (Note 6) 140,664 140,665
Contributed surplus (Note 6) 5,991 5,605
Deficit (105,771) (97,864)
--------------------------
40,884 48,406
--------------------------
47,660 55,887
-------------------------------------------------------------------------
Approved on behalf of the Board:
"signed D. Campbell Deacon" Director
---------------------------
D. Campbell Deacon
"signed Dennis A. Sharp" Director
------------------------
Dennis A. Sharp
-------------------------------------------------------------------------
Azure Dynamics Corporation
Consolidated Statements of Operations, Comprehensive Loss, and Deficit
(Stated in Thousands)
For the three months ended
March 31
(unaudited)
2008 2007
-------------------------------------------------------------------------
CAD$ CAD$
Revenues 370 156
Cost of sales 517 67
--------------------------
Gross Margin (147) 89
--------------------------
Expenses
Engineering, research, development and
related costs, net 4,737 3,947
Selling and marketing 921 831
General and administrative 1,887 1,964
--------------------------
Total expenses 7,545 6,742
--------------------------
Loss from operations (7,692) (6,653)
--------------------------
Interest and other income, net 145 197
Interest expense (1) -
Other expense (452) -
Foreign currency gains/(losses) 93 (51)
--------------------------
Net loss and comprehensive loss for the
period (7,907) (6,507)
Deficit, beginning of period (97,864) (67,629)
--------------------------
Deficit, end of period (105,771) (74,136)
-------------------------------------------------------------------------
Loss per share - basic (0.03) (0.03)
Weighted average number of shares - basic(x) 279,376 198,275
(x) No fully diluted earnings per share have been disclosed, as these
would be anti dilutive.
-------------------------------------------------------------------------
Azure Dynamics Corporation
Consolidated Statements of Cash Flows
(Stated in Thousands)
For the three months ended
March 31
(unaudited)
2008 2007
-------------------------------------------------------------------------
CAD$ CAD$
Cash flows from operating activities
Net loss for the period (7,907) (6,507)
Adjustments for:
Amortization of property and equipment and
other assets 223 214
Amortization of intangible assets 343 337
Unrealized foreign currency gains 21 8
Stock option compensation expense 354 236
Deferred share units compensation expense 32 -
--------------------------
(6,934) (5,712)
Changes in non-cash working capital items (3,185) (319)
Movement due to exchange impact (34) 17
--------------------------
Total Cash flows from operating activities (10,153) (5,551)
--------------------------
Cash flows from financing activities
Issuance of common shares (net of costs) (1) 15
Principle payments on notes payable (9) (10)
Proceeds from obligations under capital lease (2) -
--------------------------
Total Cash flows from financing activities (12) (18)
--------------------------
Cash flows from investing activities
Acquisition of property and equipment (189) (334)
Acquisition of other assets (63) (12)
Changes in restricted cash - (225)
--------------------------
Total Cash flows from investing activities (252) (571)
--------------------------
Increase (decrease) in cash and cash
equivalents (10,417) (6,603)
Exchange impact on cash held in foreign
currency 12 3
Cash and cash equivalents, beginning of
period 24,133 27,192
--------------------------
Cash and cash equivalents, end of period 13,728 20,592
--------------------------
--------------------------
Non cash investing and financing activities:
Vehicles and equipment acquired under capital
lease 108 -
--------------------------
--------------------------
For further information:
Ryan Carr
Chief Financial Officer
+1-248-298-2403 ext 1206
Email: rcarr@azuredynamics.com
Bruce G. MacDonald
Liebler!MacDonald
+1-248-840-6990
Email: bmacd@liemac.com
David Poutney
Stuart Skinner
Richard Kenny
Tel: +44-207-260-1000
Numis Securities Limited,
Nominated Adviser to the Company
