5 Important Things Westport Innovations Inc. Management

Wants You to Know

Source: Westport Innovations

What’s fueling Westport’s growth#1

What management said

“We saw continued strength in certain natural-gas engine markets and reported record results in Cummins-Westport joint venture.”

Nancy Gougarty, President and Chief Operating Officer

Cummins-Westport (CWI): Going strong

Source: Westport Innovations’ Corporate Overview Presentation, May 2016

Things you need to knowCWI’s revenue fell only 2% in 2015 despite a slowdown in global

trucking markets. Westport’s income from CWI jumped more than twofold to

$17.1 million in 2015. CWI is banking on two major launches in 2016:

ISB6.7 G natural-gas engine for school buses.ISL G Near Zero nat-gas engine, with 95% lower Nox exhaust

emissions than existing EPA limit.

What’s hurting Westport?#2

What management said

“The China economy and soft truck market continues to impact Weichai Westport.”

Jim McCallum, VP Finance and Corporate Controller

Weichai-Westport slowing down

Source: Westport Innovations’ Corporate Overview Presentation, May 2016

Why China matters Slowdown in China has been a huge blow to

Westport’s joint venture with Weichai (WWI).Revenue from WWI slumped 70% in 2015.Westport’s operating income from the venture

tumbled to $1 million in 2015 from $6 million in 2014.

Recovery in China is critical to Westport’s turnaround.

How is Westport fighting back?#3

What management said

“[…] In 2016, we will continue to press down on expenses while looking for market growth opportunities, and there are many, as we continue to target mid-2016 for crossing into sustainable operating cash flow from our operations.”

David Demers, CEO

Cutting costs while…

Restructuring helped Westport lower its operating expenses by 26% in 2015.

WPRT’s consolidated adjusted EBITDA* losses shrank to $39 million in 2015 from $83.9 million in 2014.

WPRT aims to turn consolidated adjusted EBITDA positive this year.

*earnings before interest, taxes, amortization, depreciation, unrealized foreign exchange gain or loss .

…focusing on key program

Westport expects early production trials of its second-generation high pressure direct injection, or HPDI 2.0, components to begin next year. HPDI 2.0 injector. Source: Westport’s Corporate

Overview Presentation.

Focus on cash#4

What management said

“On our Westport operations and the corporate investment side, we’ve managed to cut our cash burn rate by more than half over 2014, while still continuing to advance our core strategic programs, including HPDI 2.0 developments with a number of OEM partners.”

David Demers

Reducing cash burn Though negative, Westport’s cash flows have improved

significantly in recent quarters.

Tapping new sources of cashWestport used $46.8 million cash in operations in 2015

compared to $97.6 million in 2014. However, its cash, cash equivalents, and short-term

investments as of Dec. 31, 2015 was only $27.8 million, down 70% from Dec. 31, 2014.

Going forward, WPRT is banking on:Potential financing worth $71.3 million from Cartesian Capital

Group.Impending merger with Fuel Systems, a cash-flow positive

company.

Impending merger nearing

completion#5

What management said

“Our merger with Fuel Systems will dramatically improve our competitive positioning across the spectrum going forward.”

David Demers

Westport expects to close its merger with Fuel Systems Solutions once the latter receives its shareholders’ approval on May 31, 2015.

A global leader in the making

What WPRT expects from the merger Stronger footprint across 70 countries.Addition of light and medium duty, industrial,

and automotive applications to its portfolio.Stronger balance sheet as Fuel Systems is

debt-free, and held $60 million in cash and cash equivalents as of December 31, 2015.

Annual savings of $30 million by 2018.

The next billion-dollar iSecret The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-

new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early-in-

the-know investors! To be one of them, just click here.