Final Results

RNS Number:3310Q
Clean Diesel Technologies, Inc
18 March 2008

                        NEWS RELEASE for March 18, 2008



                        Clean Diesel Technologies, Inc.
               Reports Full Year and Fourth Quarter 2007 Results


Stamford, CT - March 18, 2008 - Clean Diesel Technologies, Inc. (NASDAQ:CDTI;
XETRA:CDIA; AIM:CDT), the cleantech emissions reduction company, today announces
financial results for the year and fourth quarter ended December 31, 2007.



Financial highlights for the full year 2007 include:

*    Total revenue of $4.9 million, up 339% compared to $1.1 million in 2006.

*    Revenue mix was 30% in product sales and 70% in technology licensing
     fees and royalties compared to the 2006 revenue mix of 77% in product sales, 
     6% in technology licensing fees and royalties and 17% in consulting fees 
     and other.

*    Total gross profit as a percentage of revenue was 77% and 41% for
     the years ended December 31, 2007 and 2006, respectively, due to the change 
     in revenue mix.

*    Net loss lowered to $4.5 million compared to 2006 net loss of $5.4
     million. 2007 includes $2.2 million in non-cash stock option and warrant 
     fair value charges compared to $304,000 of such charges in 2006.

*    Clean Diesel netted $15.2 million upon warrant exercises, and
     received $4.3 million for subscribed shares, resulting in a cash and 
     investment position of about $20.3 million at December 31, 2007.



Significant developments

*   Granted a worldwide nonexclusive license for Clean Diesel's patented
    ARIS(R) technologies for control of oxides of nitrogen (NOx) using selective
    catalytic reduction to Robert Bosch GmbH.

*   Granted a similar worldwide nonexclusive license for the ARIS
    technologies to Tenneco Automotive.

*   In October, received the London Low Emission Zone (LEZ)
    certification for PurifierTM, Clean Diesel's particulate matter emission 
    control technology. LEZ sales to date have exceeded initial expectations.

*   In October, CDTI common shares began trading on the NASDAQ Capital Market.



"The past year has been our most successful, with worldwide licensing
agreements, a NASDAQ listing and significant revenue growth," said Dr. Bernhard
Steiner, President and CEO of Clean Diesel Technologies. "The licensing
agreements with Bosch and Tenneco for our ARIS selective catalytic reduction
technologies indicate industry acceptance of our NOx reducing technologies as
effective solutions to the worldwide regulatory standards for air quality.
Combined with this, our certification for the London Low Emission Zone program
has resulted in substantial orders. We are now in a good position to sign
further licensing deals and obtain business in low emission zones planned
throughout Europe."



"We are broadening our sales by building our marketing and distribution
channels. We will continue to focus on supplying market needs in various
industries to bring environmental benefits, fuel economy improvements, and
practical, lower-cost emission control solutions," said Dr. Steiner.



Full Year Financial Results

Total revenue was $4.9 million in 2007 compared to $1.1 million in 2006, an
increase of $3.8 million, or 339%, reflecting increases in product sales and
technology licensing fees and royalties.

In 2007, the Company made progress in the execution of technology license
agreements with manufacturers and component suppliers, including new and amended
licensing agreements for the use of ARIS technologies for control of oxides of
nitrogen (NOx) using our selective catalytic reduction (SCR) emission control;
the combination of exhaust gas recirculation (EGR) with SCR technologies; and
hydrocarbon injection for lean NOx traps, NOx catalysts and diesel particulate
filter regeneration. Technology license fees and royalties were $3,459,000 in
2007, compared to $74,000 in 2006, and were primarily attributable to the
license fees and royalties from new and amended licenses.

Product sales were $1,466,000 in 2007 compared to $860,000 in 2006, an increase
of $606,000, or 70.5%. The Company's 2007 product sales exceeded 2006 total
revenue of $1.1 million. The increase in product sales is attributable primarily
to higher demand for Purifier filter systems. The Purifier line is a range of
products comprising an emission control device, such as ceramic diesel
particulate filter or wire mesh particulate filter, together with the Company's
Platinum Plus fuel-borne catalyst dosed into the fuel to enable filter
regeneration.



Selling, general and administrative expenses were $8,041,000 for the year ended
December 31, 2007, an increase of 52.3% compared to $5,278,000 in 2006. The
increase is mainly due to higher non-cash charges for the fair value of stock
options and warrants (in accordance with SFAS No. 123R which the Company adopted
in January 2006). Aggregate non-cash charges for the fair value of stock options
and warrants in 2007 operating expenses were approximately $2.2 million, or
$0.32 per share, compared to $304,000 ($0.06 per share) in 2006.



Fourth Quarter 2007 Results

Total revenue for the fourth quarter was $1.0 million, an increase of 326%
compared to $236,000 in the fourth quarter of 2006. The increase in fourth
quarter revenue is primarily due to higher product sales for the London LEZ. Net
loss for the fourth quarter of 2007 was approximately $2.9 million ($0.38 per
share) compared to $1.5 million ($0.30 per share) in the same 2006 quarter. 2007
fourth quarter operating expenses include non-cash stock option and warrant fair
value charges of approximately $1.5 million.




For further information:



Clean Diesel Technologies, Inc.
Dr. Bernhard Steiner, President & CEO
[e-mail]
Ann Ruple, Vice President, Treasurer & CFO
[e-mail]
[phone]



Innovator Capital Limited
(Financial press inquiries)
Shaun Brown
Jade Summer
[phone]
[e-mail].



Charles Stanley Securities
Nominated Advisors
Philip Davies
Tel: [phone]
[e-mail]



Matter Communications
(Technical press inquiries)
Jacqueline Volovich
[phone] x236
[e-mail]



About Clean Diesel Technologies, Inc.

Clean Diesel Technologies, Inc. is a cleantech company that provides innovative
solutions to reduce harmful engine emissions and conserve energy. Clean Diesel's
patented technologies, products and solutions enable cost-effective reduction of
harmful emissions from internal combustion engines while also improving fuel
economy and power. Products include Platinum Plus(R) fuel-borne catalysts,
PurifierTM particulate filter systems, the ARIS(R) urea injection systems for
selective catalytic reduction of NOx, diesel particulate filter and biofuel
formulation technologies. Our products are in commercial use around the world.
Platinum Plus and ARIS are registered trademarks of Clean Diesel Technologies,
Inc. You may visit Clean Diesel at www.cdti.com or contact the Company directly.
For additional information, you may review our Annual Report on Form 10-K as
filed with the Securities and Exchange Commission at www.sec.gov.


Certain statements in this news release constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known or unknown risks, including those
detailed in the Company's filings with the U.S. Securities and Exchange
Commission, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof.





                               - TABLES FOLLOW -






CLEAN DIESEL TECHNOLOGIES, INC.
Consolidated Statements of Operations
(in thousands, except per share amounts)



                      Three Months Ended          Years Ended
                         December 31,             December 31,
                       2007        2006        2007        2006
Revenue:

Product sales         $ 899      $  212    $  1,466       $ 860
Technology licensing    107          24       3,459          74
fees and royalties
Consulting and other      -           -           -         189

  Total revenue       1,006         236       4,925       1,123

Costs and expenses:

Cost of revenue -       738         180       1,126         612
product sales
Cost of revenue -         -           -           -           -
licensing fees and
royalties
Cost of revenue -         -           -           -          46
consulting and other
Selling, general and  3,084 a     1,405       8,041 a     5,278
administrative

Research and            136          63         428         510
development

Patent amortization     102          89         364         235
and other expense
  Operating costs     4,060       1,737       9,959       6,681
and expenses

Loss from operations(3,054)     (1,501)     (5,034)     (5,558)

Other income
(expense):
Foreign currency       (10)           3        (11)         104
exchange gain (loss)
Interest income         211           2         509          58
Other                     1           -           1          12

Net loss           $(2,852)    $(1,496)    $(4,535)    $(5,384)


Basic and diluted         
loss per common    $ (0.38)    $ (0.30)    $ (0.66)    $ (1.03)
share
Basic and diluted
weighted-average
number of             7,421       5,255       6,886       5,212
common shares
outstanding


Notes:
a  Includes non-cash stock option and warrant fair value charges of
$1.5 million and $2.2 million, respectively.




CLEAN DIESEL TECHNOLOGIES, INC.
Consolidated Balance Sheets
(in thousands, except share data)

                                                                               December 31,
                                                                            2007           2006
Assets
Current assets:
Cash and cash equivalents                                                $ 1,517       $  5,314
Accounts receivable, net of allowance of $49 and $34, respectively         1,927            100
Investments                                                                7,100              - 
Inventories, net                                                           1,093            365
Other current assets                                                         234             96
Subscriptions receivable, net                                                  -          2,412

Total current assets                                                      11,871          8,287
Investments                                                               11,725              -
Patents, net                                                                 817            603
Fixed assets, net of accumulated depreciation of $421 and $350,
respectively                                                                 175             91

Other assets                                                                  75             37


Total assets                                                            $ 24,663       $  9,018



Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable                                                        $    757      $     330
Accrued expenses                                                             850            740
Customer deposits                                                             56              -
Total current liabilities                                                  1,663          1,070

Commitments

Stockholders' equity:
Preferred stock, par value $0.01 per share;
authorized 100,000; no shares issued and outstanding                           -              -
Common stock, par value $0.01 per share:
   authorized 12,000,000 and 9,000,000 shares, respectively;
   issued and outstanding 8,124,056 and 5,964,493
       shares, respectively                                                   81             60
   subscribed and to be issued 667,998 shares at
       December 31, 2006                                                       -              7
Additional paid-in capital, net of subscriptions receivable of
$1,901 at December 31, 2006                                               72,447         52,854
Accumulated other comprehensive income (loss)                               (16)              4
Accumulated deficit                                                     (49,512)       (44,977)
Total stockholders' equity                                                23,000          7,948
Total liabilities and stockholders' equity                             $  24,663      $   9,018



CLEAN DIESEL TECHNOLOGIES, INC.
Consolidated Statements of Cash Flow
(in thousands)


                                                                    For the years ended December 31, 
                                                                         2007               2006
Operating activities
Net loss                                                            $ (4,535)        $   (5,384)
Adjustments to reconcile net loss to cash used in operating
activities:
    Depreciation and amortization                                         112                138
    Provision for inventory                                                22                 27
    Provision for doubtful accounts, net                                   28                 23
    Compensation expense for stock options and warrants                  2,208               304
    Loss on disposition/abandonment of fixed assets/patents                 58                23
Changes in operating assets and liabilities:
    Accounts receivable                                                (1,855)                 2
    Inventories                                                          (750)             (107)
    Other current assets and other assets                                (177)              (12)
    Accounts payable and accrued expense                                   677               678


    Other liabilities                                                       56                (9)
     Net cash used for operating activities                            (4,156)            (4,317)


Investing activities                                 
Purchase of investments                                               (18,825)                  -
Patent costs                                                             (313)               (94)
Purchase of fixed assets                                                 (154)               (20)
     Net cash used for investing activities                           (19,292)              (114)

Financing activities


Proceeds from issuance of common stock, net                              4,313              5,214


Proceeds from exercise of warrants                                      15,173                  -
Proceeds from exercise of stock options                                    353                 14


Stockholder-related charges                                              (168)                  -
     Net cash provided by financing activities                          19,671              5,228
Effect of exchange rate changes on cash                                   (20)                  4

Net (decrease) increase in cash and cash equivalents               $   (3,797)          $     801
Cash and cash equivalents at beginning of the year                       5,314              4,513

Cash and cash equivalents at end of the year                       $     1,517          $   5,314


Supplemental non-cash activities:
  Common stock subscribed, net                                     $         -          $   4,313
                                                                         
  Payment of accrued directors' fees in common stock                       140                 94








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