My main concern about this last quarter is the fact that CDTI will most likely show a big decrease in their retrofits to the trucking side of the business. This is mainly caused by their not having the certs. The good news is that they are now certified and as one of the other posters on this board pointed out, one of their competitors closed shop. Also, it sounds like CARB is beginning to tighten the screws to the trucking industry. This is all good news going forward.
Earnings wise, it could be ugly because the trucking side of their business is still a significant portion of their business. However, I believe during the last conference call they mentioned that they are picking up some business from the after market side too.
IMO, after this quarter we will begin to see a new and profitable CDTI.
Grandslammer: Cleaire were not just another competitor to CDTI they were the largest supplier of retro-fit heavy duty DPFs in the California market and the only other Calfornia based company with CARB verified products being based in San Diego. They were a private company and were acquired by NewWorld Capital Partners in October 2011. Their troubles arose from the failure of their LongMile DPF system, which obviously in an attempt to save costs, used a metalic substrate which, despite originally gaining CARB verification, proved unstable in operation and emitted sparks of the catalytic coating and caused a major roadside fire in Washington state during a drought period. CARB withdrew the verification and required Cleaire to either reimburse all customers the full cost of the discredited device or alternatively replace the filters with new equipment with silicon carbide substrate which is proven to be stable at temperatures of 2800 degrees celcius, well beyond any temperature caused by the burning off of trapped particulate matter. At a cost of $12,000+ a unit to replace or reimbursement of sales money and left with a useless inventory of LongMile filters Cleaire were forced to close and clearly New World decided to write off their investment rather than provide the additional funds required.
CDTI DPFs use silicon carbide substrate anyhow.
Cleaire were only in the retro-fit market but CDTI supply over 40% of their current sales to the OEM and after markets.
Furthermore CDTI have the additional business of providing catalytic converters for gasoline engines with Honda the principal current customer, for the Accord model, with further CCs for more Honda models under development with GM and Fisker with and other potential OEMs in the pipeline.
Thanks Davidmhunter2 for the detailed information. I am a newbie here and still trying my best to gather all the pertinent facts for making a major investment in CDTI. It will be utterly fantastic if they could expand out to not only most of the Honda models but also many other OEMs. Is there another convertor on the market that can compete with CDTI? Who is their competition? What is the barrier to entry into this market?