OAK PARK — The Oak Park hybrid and electric truck powertrain developer Azure Dynamics Corp. (OTC: AZDDF) reported a nearly sixfold increase in revenue in the third quarter.
Revenue hit $12.4 million, up 579 percent from $1.8 million in the third quarter of 2010.
For the nine months, revenue rose 171 percent to $23.1 million from $8.5 million in the first nine months of 2011.
Unit sales for the 2011 third quarter increased 196 percent to 272 compared to 92 for the same period last year. The 2011 third quarter included shipments of 143 Transit Connect Electric vans, which launched in April and June, 2011 in North America and Europe, respectively.
“We made significant progress in the third quarter on a number of fronts, and are particularly pleased to report initial revenue from our European operations,” said Scott Harrison, CEO of Azure Dynamics. “Although European shipments began in late June, about one-third of our revenues were generated from outside North America in the third quarter. As we continue to establish distribution relationships in additional countries, and subsequently increase our visibility with commercial fleet buyers, we expect the European contribution to continue to rise. Meanwhile, despite sluggish municipal spending, revenue from the Balance Hybrid Electric powertrain was up 196 percent in the quarter to $3.7 million. Although we expect Balance sales to continue to be negatively impacted by tight municipal budgets, these customers have substantial product needs and we remain hopeful that they will seek our energy and environmentally efficient products when they inevitably return to market.”
Net loss for the 2011 third quarter totaled $9.8 million, or 1 cent a share, compared to a loss of $6.7 million, or 1 cent a share, in the third quarter of 2010. Net loss for the 2011 nine month period totaled $26.1 million, or 4 cents a share, compared to a loss of $17.7 million, or 3 cents a share, in the comparable period a year ago. Unit sales for the 2011 nine month period totaled 525, including 249 Balance Hybrid Electric vehicles, 241 Transit Connect Electric vans, 34 Force Drive components and one LEEP unit. This compares to unit sales for the 2010 nine month period of 451, including 136 BalanceHybrid Electric vehicles, 67 Force Drive and other components and 248 LEEP units.
Gross profit for the 2011 third quarter improved 221 percent, to $167,000 and for the 2011 nine-month period rose to $470,000, or 2 percent of sales. Gross profit for the 2010 third quarter was a loss of $138,000 and for the 2010 nine-month period was a loss of $6,000.
New orders received during the third quarter of 2011 relating to current year deliveries were $10.6 million, representing 178 vehicles, compared with second quarter 2011 orders of $5.6 million and first quarter 2011 orders of $16.8 million. For the 2011 nine-month period, new order intake for 2011 deliveries total $33 million, representing 719 vehicle orders.
Engineering, research and development expenses in the 2011 third quarter totaled $5.7 million (including $2.7 million in product development costs), compared to $4 million (including $3.8 million in product development costs, offset by $1.4 million in customer contributions and $1.3 million in government grants) for the same period in 2010. R&D expenses for the 2011 nine-month period totaled $15.1 million (including $8.6 million in product development costs, offset by $3.4 million in customer contributions), compared to $9.5 million (including $9.6 million in product development costs, offset by $2.2 million in customer contributions and $5.6 million in government grants) for the same period in 2010.
As of Sept. 30, the company’s net cash and cash equivalents totaled $1.3 million, and working capital totaled $6 million, compared to cash and cash equivalents of $11.7 million, and working capital of $14.7 million, as of June 30. On Nov. 4, Johnson Controls’ Canadian subsidiary acquired, on a private placement basis, 30,796,969 common shares of Azure, at a price of 16,5 cents Canadian per share, for gross proceeds to Azure of $5.1 million Canadian. As a result of this investment, Johnson Controls, through its Canadian subsidiary, now holds approximately 7.2 percent of the issued and outstanding common shares of Azure.
“Our focus in 2011 for Transit Connect Electric was to successfully introduce the program worldwide, establish and optimize our manufacturing facilities, begin building the distribution network and realize initial sales,” Harrison said. “We believe we have accomplished those goals and are encouraged by the interest shown for the product.”
Based on current market conditions, orders to date and future order expectations, the Company reaffirms its previous issued 2011 revenue range of $38 to $45 million and expects 2011 revenues to be at the lower-end of this range.
The company’s 2011 third quarter financial statements and management’s discussion and analysis are at www.azuredynamics.com.
Management will host a webcast and conference call on Wednesday, Nov. 16 at 10 a.m. Eastern time to discuss the results. Interested listeners can access the call toll free at (877) 317-6789 from the United States and at (866) 605- 3852from Canada. Participants from outside North America can participate in the call by dialing (412) 317-6789. It is recommended that you access the call at least 15 minutes before the scheduled start time. An accompanying presentation will be posted to the company’s website, www.azuredynamics.com, immediately prior to the call.
For those unable to participate in the live conference, a call replay will be posted on Azure’s Web site no later than Nov. 17.