Westport Innovations Inc. (NASDAQ:WPRT) Q3 2018 Earnings Conference Call Transcript
Nov 08, 2018 • 04:30 pm ET
Thank you for standing by. This is the conference operator. Welcome to the Westport Fuel Systems Third Quarter 2018 Financial Results Conference Call. As a reminder all participants are in listen-only mode, and the conference is being recorded. After the presentation there will be an opportunity to ask questions. (Operator Instructions) I would now like to turn the conference over to Ms. Caroline Sawamoto, Senior Manager of IR and Communications for Westport Fuel Systems. Please go ahead.
Thank you, and good afternoon. Welcome to Westport Fuel Systems third quarter 2018 conference call, which is being held to coincide with the press release containing Westport Fuel Systems financial results that went out this afternoon. On today's call, speaking on behalf of Westport Fuel Systems is CEO, Nancy Gougarty; and CFO, Mike Willis. Attendance at this call is open to the public and to media, but questions will be restricted to the investment community.
(Forward-Looking Cautionary Statements)
I will now turn the call over to Nancy.
Good afternoon, and thank you for joining us for Westport Fuel Systems third quarter results conference call. In the past several years, we have been very active in taking the necessary steps to move Westport Fuel Systems into a profitable sustainable organization. Our transformative efforts include optimizing our product portfolio, aligning our cost with revenue, positioning for future growth, delivering financial performance and utilizing our people and their talents.
I am pleased with quarter three 2018, it was a solid quarter. Year-over-year revenue was up 16% plus quarter three is our second consecutive quarter of positive adjusted EBITDA. By achieving positive adjusted EBITDA for the second time, this positions Westport Fuel Systems to adjust our secured interest thus reducing our borrowing cost as well as freeing up restricted cash. I will let Mike go into more detail on this in a minute.
We continue to see rapid adoption in the transportation industries towards environmentally friendly fuels and technology. It is becoming apparent that this adoption trend is propelled by anti-diesel sentiment in concert with stringent emissions regulations around the world, but especially in Europe.
A few proof points I want to highlight. Firstly, the European Union new car registration is the first. In fact, the first half of 2018 in the EU, diesel vehicles registrations fell 16% compared to the same period last year, while alternative powered vehicles were up 36% with CNG showing a 90% increase year-over-year. Consumers are seeking environmentally friendly vehicles and freedom to enter into city centers. All of this is driving a greater urgency for market ready solutions.
Secondly, the European Commission proposal on CO2 emission targets for heavy-duty trucks is moving forward. European Commission's proposal has a 20% CO2 reduction by 2025. Moving to 35% in 2030, with 2019 as the baseline year. These CO2 reductions provide a path for Westport's HPDI solution. The CO2 proposal is being discussed in Parliament with a vote expected in quarter one, 2019. It is our understanding that if this proposed legislation is enacted that