News blog
Catalytic Solutions Inc
- BY: Andrew Hore |
- POSTED: 24/01/2009 |
Catalytic Solutions Inc has received product verifications in California for two of its heavy duty diesel technology products.
There are three main parts to the company. The original light duty vehicle catalysts business, heavy duty emission control systems and gas turbines emission control systems.
The Purifilter Plus, which reduces emissions of diesel particulate matter by more than 85%, has been fully approved for on road emissions products. This hybrid diesel particulate filter has no minimum exhaust temperature requirement and is easily maintained through active regeneration.
The ECS Purifilter has been conditionally verified for off road emissions products. This also reduces nitrogen dioxide emissions.
Catalytic’s first half revenues grew 4% to $26.8m and the loss was $10m. The cash outflow in the first half of 2008 was $8.5m. Net debt was $8.4m at the end of June 2008.
A trading statement prior to Christmas admitted that 2008 turnover would be up to one-fifth below its original expectations and that 2009 turnover would fall short by a similar proportion. Canaccord had previously been forecasting turnover of $78.5m in 2008 and $101m in 2009. The poor automotive market is the main problem. The other two divisions are still in line with expectations.
In the second half of last year Catalytic cut around $5m-$6m of costs from its manufacturing operations and deferred investment in a Czech factory until 2010. It also raised C$1.8m from the sale of a building in Canada.
An even bigger transaction was the sale of the Asia Pacific rights to Catalytic’s heavy duty diesel catalyst technology to its Japanese partner TKK. That should bring in at total of $7.9m by the end of the first quarter of 2009. The two companies’ TCC joint venture will be 70% owned by TKK and the rest by Catalytic, although it has the right to buy a further 19.9% from TKK. If TKK wants to sell the patents Catalytic has the first right of refusal to buy them back and it retains the rights to the technology in the rest of the world. TKK has agreed not to compete with Catalytic outside of Asia Pacific while the TCC joint venture lasts.
Despite all of this, Catalytic still needs additional cash. It may need to issue shares but this could be difficult at the moment.
There are two sorts of shares because there are restrictions to trading in one of the classes. The DI shares are trading at 15.5p each. The regulation S shares are trading at 13.5p each.
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