Clean Diesel Technologies, Inc. Introduction. Clean Diesel Technologies, Inc. (NASDAQ: CDTI) May the cleantech emissions control company

Transcription

1 Clean Diesel Technologies, Inc. Introduction Clean Diesel Technologies, Inc. (NASDAQ: CDTI) May

2 Legal disclaimer This document, the presentation to which it relates and the information contained herein include forward looking statements. Forward looking statements are identified by words such as expect, plan, will, should, could, anticipate, estimate, and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward looking statements. We based these forward looking statements on our current expectations and projections about future events, and they speak only as of the date they are made. Our actual results could differ materially from those discussed in, or implied by, these forward looking statements. Factors that could cause actual results to differ from those implied by the forward looking statements include a number of risks and uncertainties, such as the risk of decreased government spending on emission control projects or decreased regulation of emissions, and the risks associated with the receipt of regulatory approvals and customer acceptances of our products, as well as those described in the section entitled Risk Factors" in the Annual Report on Form 10 K filed with the SEC on March 29, 2012, all of which could have a material impact on our longterm performance and prospects. Subject to any legal or regulatory requirements, we assume no responsibility to update any of the forward looking statements contained herein. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities of Clean Diesel Technologies, Inc., nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. 2

3 Company overview Leading integrated emissions control company First quarter 2012 revenue of $17M, up over 23% compared to 2011 Over $61M in revenue for 2011, up 28% compared to 2010 Global emissions regulations driving growth Particulate Matter (PM) soot Oxides of Nitrogen (NOx) Smog Portfolio of more than 200 issued or pending patents Positive financial trends continue Global footprint 3

4 Global footprint Canada Engine Control Systems Limited HDD Systems R&D, Manufacturing and Sales Thornhill, ON Europe Clean Diesel Technologies Limited HDD Systems Assembly and Sales South Godstone, UK Catalytic Solutions, Inc. Catalyst Sales Gif sur Yvette, France Engine Control Systems Europe AB HDD Systems R&D and Sales Malmö, Sweden Asia Catalytic Solutions, Inc. Catalyst Sales Tokyo, Japan TC Catalyst, Inc. Asian Joint Venture Tokyo, Japan United States Clean Diesel Technologies, Inc. Global Headquarters Ventura, CA Catalytic Solutions, Inc. Catalyst R&D, Manufacturing and Sales Oxnard, CA Engine Control Systems Ltd. Specialty Parts Manufacturing and Sales Reno, NV Over 200 heavy duty diesel distributors globally HDD = Heavy Duty Diesel 4

5 Achieve profitable growth Heavy duty diesel products and systems drive near term growth Maximize near term opportunities in California and Europe International expansion New product introductions/verifications Identify other profitable on and off road market opportunities LDV/HDD catalyst market drives technology development Grow share with existing customers, while selectively adding new OEMs Grow internal use of low and zero PGM catalysts Partnerships and acquisitions Growth strategy 5

6 Long term emission control drivers Regulatory Increasingly restrictive engine emission standards Current key markets US: EPA rules plus individual state regulations (California a market leader in setting regulations) Europe: Low Emission Zones (LEZs) 180 currently in operation in 9 countries 1 Asia and Latin America yet to come Government support US Federal and State funding aids compliance Diesel Emissions Reduction Act, California Prop 1B US DOT Congestion Mitigation and Air Quality Improvement Program European Low Emission Zones (LEZs) 1 Source: as of December 7,

7 Key worldwide emission regulations Increasingly Stringent HEAVY DUTY ON ROAD United States EPA 1988 EPA 2004 EPA 2007 EPA 2010 United States CA CARB 1987 CARB 2004 CARB 2007 CARB 2010 European Union Euro III Euro IV Euro V Euro VI Asia China Nationwide China I China II China III China IV Brazil Euro II Proconve P5 Proconve P7 India Euro I Euro II Euro III/IV HEAVY DUTY OFF ROAD 1 United States Tier 2/Tier 3 Tier 4 European Union Stage I Stage II Stage III A & B Stage IV Asia China Nationwide Stage I Stage II Brazil MAR1 India Stage II Stage III 1 Farm tractors, excavators, bulldozers, wheel loaders, backhoe loaders, road graders, diesel lawn tractors, logging equipment, portable generators, skid steer loaders, or forklifts. Sources: 7

8 Divisions serve two primary end markets Catalyst New Light Duty Vehicle (LDV) and HDD 2011 Revenue $14M Heavy Duty Diesel (HDD) Systems Retrofit HDD Market 2011 Revenue $47M Gasoline Heavy diesel Light diesel Natural gas Biofuels On road Ports and marine Construction & mining Stationary power Distributors Focus on customers that value technology 8

9 Catalyst Division Adding value through innovative technology Mixed Phase Catalyst (MPC ) Proprietary nano structure ensures high catalytic surface area under high temperatures Low and zero Platinum Group Metal (PGM) formulations allow much lower cost $500 $2,000/troy ounce versus <$1/troy ounce High performance SULEV catalyst and low cost, palladium only catalyst announced Serve OEM LDV and HDD markets Long standing relationship with Honda and Renault Focused on growing intercompany sales of catalysts in HDD products to improve gross margin Over 10 million catalysts sold 9

10 LDV Catalyst technology overview Substrate MPC Catalytic Coating 10

11 Heavy Duty Diesel Systems Division Over 30 years of emissions compliant solutions experience Leading presence in worldwide on road retrofit market OEM supplier to off road and alternative fuel markets Broad portfolio of verified emission control systems Global distribution capability with over 200 distributors Proven world class design and manufacturing capabilities 11

12 HDD Systems product/technology overview Platinum Plus fuel borne catalyst ARIS hydrocarbon injector Catalysed Diesel Particulate Filter (CDPF) Selective Catalytic Reduction (SCR) Diesel Oxidation Catalyst (DOC) PM ARIS urea injector NOx Ammonia Slip Catalyst (ASC) Engine Exhaust 12

13 Vertical integration Pure Play Lower NOx Lower particulate matter Lower carbon monoxide On road Retrofits Off road OEM & Retrofit HDD Systems HDD OEMs LDV OEMs Catalyst Coatings Substrates 13

14 United States California On Road Heavy Duty Diesel Vehicles (in use) Regulation Mandatory vs. voluntary compliance $2.1M in sales for Q1 2012, up 58% compared to 2011 Other States New Jersey: strong wins in Q4 2011; continued opportunity in 2012 Texas and others Key 2012 opportunities European Low Emission Zones (LEZs) London LEZ completed Mandated diesel emission compliance for approximately 20,000 vehicles ($60M $70M market) by Jan Clean Diesel revenue exceeded $12M Other LEZs being evaluated Over 200 Heavy Duty Diesel distributors globally 1 Source: Management estimate based on data received from Transport for London 14

15 Estimate of California retrofit market CDT Estimate 1 of Class 7 & 8 HD Trucks in California with Mandatory Compliance Requirement from 2012 thru Truck Model Years # Class 8 (>33,000lbs) # Class 7 (26,001 33,000lbs) Total # of Trucks ,404 9,625 63, ,488 11,527 48, and older 37,470 22,317 59,787 Total 170,831 CDT management estimate of replacements/retrofits >100,000 Compliance options include new vehicles, repowering/new engines, retirement and retrofit Notes: Only includes CA based trucks. Trucks outside CA meeting certain criteria must also comply with retrofit requirements Does not include school buses, which also must comply with retrofit requirements Assumes trucks remain in use 1 Analysis based upon draft vehicle population estimate provided by Mobile Source Analysis Branch of ARB. Numbers are based upon an extrapolation of 2005 DMV registration data and reflect an approximate estimate only. 2 CARB Truck and Bus Regulation requires compliance of 90% of vehicles with diesel particulate filters by

16 revenue by segment 100% 90% Catalyst Division* HDD Systems Division 80% 70% Percent of Total 60% 50% 40% 30% 20% 10% 0% * Excludes intercompany sales to HDD Division Year Ended Note: CDT completed a business combination with CSI on October 15, 2010 when our wholly owned subsidiary, CDTI Merger Sub, Inc. merged with and into CSI. We refer to this transaction as the Merger. CDT s consolidated financial statements are those of CSI, the accounting acquirer, with the assets and liabilities and revenue and expenses of CDT being included effective from the date of the closing of the Merger (October 15, 2010). 16

17 HDD: diversified applications On Road On Highway Other School Bus Accessories Municipal/Gvt Drayage/Waste Transit Off Road Construction Mining Material Handling Marine Stationary 17

18 HDD: geographical revenue Europe U.S. Central East U.S. North East U.S. West Other 18

19 Operating results Sales by Division ($ in millions) $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $- $16.9 $31.2 $14.2 $47.4 $4.4 $9.4 $4.4 $ Q Q HDD Division Catalyst Division* * Excludes intercompany sales to HDD Division. 19

20 Operating results $20.0 Historical Gross Profit and Margin $ % $15.0 $12.0 $ % $ % 29.1% $ % 25.0% $4.0 $ % 25.0% $ Q Q Gross Profit (MM's) Gross Margin (%) 20.0% * Includes write down of excess inventory primarily related to London LEZ program of $0.5M 20

21 Income statements Summary Income Statements ($ in millions) Three Months Ended March Revenues $17.0 $13.8 HDD Systems Catalyst Gross profit Gross margin 23.2% 29.1% Operating Expenses: Selling, general and administrative Research and development Total operating expenses $6.4 $5.9 Loss from operations $(2.4) $(1.9) Other expense (0.6) (0.1) Loss from continuing operations before income tax (3.0) (2.0) Income tax (benefit) expense from continuing operations (0.3) 0.2 Net loss from continuing operations (2.7) (2.2) Discontinued operations (0.1) Net loss from continuing operations $(2.8) $(2.2) 21

22 Balance sheet Summary Balance Sheets ($ in millions) As of March 31, December 31, Total current assets $25.8 $27.1 Fixed assets Total assets $39.7 $41.1 Total current liabilities $16.6 $15.8 Total long-term liabilities Total liabilities $22.1 $21.2 Stockholders' equity $17.6 $19.9 Total liabilities and stockholders' equity $39.7 $41.1 Cash Balance $4.4 $3.5 Short-Term Debt $4.3 $4.5 Long-Term Debt $4.6 $4.5 22

23 Management team Prior Experience R. Craig Breese CEO Nikhil A. Mehta CFO Christopher J. Harris COO Stephen J. Golden, Ph.D. CTO Daniel K. Skelton, Ph.D. VP Sales and Marketing Lyndon Smith VP and General Manager With an average industry experience of 25 years, we believe our management team has the ability to identify, pursue and succeed in taking advantage of opportunities in our target markets. 23

24 Clean Diesel Technologies is positioned to outperform Global long term emissions control trends playing to Clean Diesel s technology and market leadership Continued tightening of legislation Summary Broad portfolio of one road and off road verified emission control products with proven ability to deploy in the field Low/zero PGM and fuel borne catalyst technologies provide demonstrated cost effective performance Vertically integrated global provider with an experienced management team and access to distribution channels and OEMs Fragmented nature of market and industry creates opportunities for further expansion Positive momentum entering

25 Appendix 25

26 Diesel oxidation catalysts AZ Purifier and Purimuffler Precious metal catalyst Ceramic substrate Stainless steel housing Reduces PM by 20% to 40%* DZ/EZ Purifier Precious metal catalyst Metallic substrate Standard & direct fit models Exceed original muffler noise attenuation performance Reduction of CO & HC * Reduction values dependent upon the specific engine type and application. 26

27 Passive diesel particulate filters Purifilter Family Silicon carbide substrate Precious metal catalyst Reduces PM by 90%* Purifier e4 Family Combine filter hardware with a choice of catalyst technologies Reduces PM over 90%* * Reduction values dependent upon the specific engine type and application. Cattrap Cordierite substrate Base metal catalyst Completely sulfur tolerant Reduces emissions by 85% with no NO2 increase* 27

28 Active diesel particulate filters * Reduction values dependent upon the specific engine type and application. Combifilter Active/electrically regenerated Sulfur tolerant Removes >90% of PM while reducing NO2 emissions* Purifilter Plus Passive regeneration using a catalyzed DPF Periodic active regeneration to extend use to colder duty cycles Combines 2 proven technologies for onand off road use Reduces PM by 90%* 28