Provaris Power: Enabling Clear Power Provide Chains through Progressive Hydrogen, CO2 Storage and Transport Options

We stay assured within the position that different fuels will play in driving sustainability in the way forward for the transportation and industrial software area. Concerning hydrogen, we acknowledge the slowdown in infrastructure growth within the international market, which has tapered the adoption of automotive and industrial purposes powered by hydrogen. The success of this market will depend on the set up of infrastructure and the manufacturing of unpolluted hydrogen, each of which have been gradual to materialize.  Nonetheless, we’re steadfast in our perception that hydrogen as a gasoline will prevail – though gradual versus instant – and turn out to be a clear gasoline supply that’s adopted worldwide. Within the meantime, Westport presently delivers a set of confirmed and modern parts and programs for a variety of inexpensive different low-carbon fuels resembling pure fuel, renewable pure fuel, propane, and hydrogen. We’re driving cleaner efficiency by addressing decrease emissions laws with sensible purposes utilizing innovation accessible right this moment.

As we navigate the subsequent quarter, and the subsequent yr, Westport is strongly dedicated to driving operational excellence, nurturing innovation, and supporting Cespira, all to place the Firm for sustainable development in an evolving panorama. We’re centered and devoted to the current and our future.”

Dan Sceli, Chief Government Officer, Westport Fuel Systems

Q3 2024 Highlights

• Revenues decreased by 14% to $66.2 million in comparison with $77.4 million in the identical quarter final yr, primarily pushed by the transition of the Heavy-Responsibility OEM revenues now being mirrored within the outcomes of Cespira, of which Westport accounts for as an fairness funding.
• Internet lack of $3.9 million for the quarter, an enchancment over the online lack of $11.9 million for a similar quarter final yr. This was primarily the results of an enchancment in gross margin by $1.3 million in comparison with the prior yr quarter, a major lower in working expenditures and depreciation and amortization as prices beforehand related to our HPDI enterprise are actually accrued by Cespira, value reductions in Westport and a internet overseas alternate acquire of $1.1 million.
• Continued enchancment in Adjusted EBITDA ^[2] attaining destructive $0.8 million in comparison with destructive $3.0 million for a similar interval in 2023.
• Money and money equivalents had been $33.3 million on the finish of the third quarter of 2024. Money utilized in working actions was $9.9 million primarily from a rise in working capital of $11.4 million. Money supplied by investing actions included the sale of investments for $9.6 million associated to the gathering of $8.4 million from the formation of the HPDI JV and sale of our possession curiosity in Westport Weichai Inc. (“Weichai”), partially offset by the acquisition of capital belongings of $2.1 million. Money utilized in financing actions represented debt repayments of $7.0 million within the quarter.
• In September 2024, HPDI Know-how, the three way partnership between Volvo Group and Westport, launched as Cespira.

⁽¹⁾ This contains revenue (loss) from Minda Westport Applied sciences Restricted and Cespira.

⁽²⁾ Gross margin, EBITDA and Adjusted EBITDA are non-GAAP measures. Please check with GAAP and NON-GAAP FINANCIAL MEASURES for the reconciliation to equal GAAP measures and limitations on using such measures.

Section Info

Gentle-Responsibility Section

Income for the three and 9 months ended September 30, 2024 was $61.5 million and $194.2 million, respectively, in contrast with $60.2 million and $200.4 million for the three and 9 months ended September 30, 2023.

Gentle-Responsibility income elevated by $1.3 million for the three months ended September 30, 2024 in comparison with the prior yr quarter, primarily a results of a rise in gross sales in our light-duty OEM and IAM companies and partially offset by decreased gross sales in our gasoline storage, DOEM, and electronics companies. For the 9 months ended September 30, 2024, Gentle-Responsibility income decreased by $6.2 million in comparison with the prior yr interval, primarily pushed by a lower in gross sales in our DOEM, and gasoline storage companies and partially offset by a rise in gross sales in our light-duty OEM, electronics, and IAM companies.

Gross margin elevated by $1.9 million to $13.9 million, or 23% of income, for the three months ended September 30, 2024 in comparison with $12.0 million, or 20% of income, for the three months ended September 30, 2023. This was primarily pushed by a slight enhance in gross sales volumes, a change in gross sales combine with will increase in gross sales to European clients and discount in gross sales to creating areas.

Gross margin elevated by $4.3 million to $41.4 million, or 21% of income, for the 9 months ended September 30, 2024 in comparison with $37.1 million, or 19% of income, for the 9 months ended September 30, 2023. This was primarily pushed by a change in gross sales combine with a rise in gross sales to European clients and a discount in gross sales to creating areas.

Westport started supplying its Euro 6 LPG gasoline system to its international OEM buyer in early 2024. Regardless of a slower begin to manufacturing than anticipated, Westport expects to exceed deliberate Euro 6 LPG gasoline system deliveries in 2024. This manufacturing provide settlement has been instrumental in bettering income and delivering increased margins, which greater than offset the decline in income because of a key delayed OEM buyer persevering with to work via their stock. Manufacturing for the Euro 7 LPG gasoline system for a similar international OEM buyer is anticipated to start mid-to-late 2025.

The Gentle-Responsibility section continues to evolve our LPG gasoline system answer, offering extra clients with a cost-competitive different gasoline answer. Lately, two new product platforms had been introduced using our programs. Westport was excited to be a part of the first-ever OEM hybrid automobile powered by HEV and LPG applied sciences – the Kia Niro Tri-Gas in Italy. This revolutionary product, born from Westport’s historic partnership with Kia Italia, affords three gasoline sources—petrol, electrical, and LPG—delivering over 1,600 km on full tanks with decreased emissions and uncompromised efficiency. Westport additionally introduced the worldwide availability of a LPG gasoline system for the RAM 1500 Hurricane 3.0 DI Twin Turbo engine, enabling clients to profit from decrease emissions and decrease gasoline prices.

Excessive-Strain Controls & Programs Section

Income for the three and 9 months ended September 30, 2024, was $1.6 million and $7.4 million, respectively, in contrast with $3.7 million and $9.4 million for the three and 9 months ended September 30, 2023. The lower in income for the three months ended September 30, 2024 in comparison with the prior yr quarter was primarily pushed by the overall slowdown within the hydrogen infrastructure growth resulting in a slower adoption of automotive and industrial purposes powered by hydrogen.

Gross margin decreased by $0.6 million to $0.4 million, or 25% of income, for the three months ended September 30, 2024 in comparison with $1.0 million or 27% of income, for the three months ended September 30, 2023. Gross margin decreased by $0.9 million to $1.5 million, or 20% of income, for the 9 months ended September 30, 2024 in comparison with $2.4 million, or 26% of income, for the 9 months ended September 30, 2023. This was primarily pushed by decrease gross sales quantity within the quarter.

Heavy-Responsibility OEM Section

Income for the three and 9 months ended September 30, 2024 contains income from the HPDI enterprise from January 1 to June 3, the time limit of the transaction to kind Cespira plus income earned beneath a transitional providers settlement. Income for the three and 9 months ended September 30, 2024 was $3.1 million and $25.6 million, respectively, in contrast with $13.5 million and $34.9 million for the three and 9 months ended September 30, 2023.

The lower in income for the three months ended September 30, 2024 is a results of the transition of this enterprise to Cespira and the ensuing change in accounting therapy. We proceed to earn service income from Cespira beneath the transitional providers settlement for the quarter, which is represented on this section.

Gross margin was $0.2 million, or 6% of income, for the three months ended September 30, 2024 in comparison with $0.2 million or 1% of income, for the three months ended September 30, 2023. Gross margin decreased by $1.0 million to $0.4 million, or 2% of income, for the 9 months ended September 30, 2024 in comparison with $1.4 million, or 4% of income, for the 9 months ended September 30, 2023.

Chosen Cespira Statements of Operations Knowledge

We account for Cespira utilizing the fairness technique of accounting for investments.

The next desk units forth a abstract of the monetary outcomes of Cespira for the three months ended September 30, 2024 and the interval between June 3, 2024 to September 30, 2024:

⁽¹⁾ Gross margin is a non-GAAP measure. Please check with GAAP and NON-GAAP FINANCIAL MEASURES for the reconciliation to equal GAAP measures and limitations on using such measures.

Cespira earned income of $16.2 million for 3 months ended September 30, 2024. For the prior yr quarter, the Heavy-Responsibility OEM section included our HPDI enterprise which earned $13.5 million. The income enhance is essentially pushed by a rise in HPDI programs offered.

Cespira misplaced $1.1 million on gross margin for 3 months ended September 30, 2024. For the prior yr quarter, the Heavy-Responsibility OEM section earned $0.2 million.

Cespira had working losses of $5.3 million for the three months ended September 30, 2024. For the prior yr quarter, Heavy-Responsibility OEM had incurred working losses of $3.7 million.

As beforehand introduced, Westport and Weichai are events to a expertise growth and provide settlement which accommodates an obligation for Weichai to order, and Westport to produce, sure volumes of HPDI gasoline system parts previous to December 31, 2024. Vital orders for HPDI gasoline system parts towards this settlement haven’t been obtained so far and we don’t presently anticipate that orders for any vital extra volumes will probably be obtained previous to yr finish. Westport and Cespira proceed to collaborate with Weichai Energy Co. Ltd (“Weichai Energy”) on an HPDI gasoline system geared up model of the Weichai Energy engine platforms. The events are presently discussing the subsequent levels of this work and the obligations of every celebration going ahead.

Q3 2024 Convention Name
Westport has scheduled a convention name on November 13, 2024, at 7:00 am Pacific Time (10:00 am Jap Time) to debate these outcomes. To entry the convention name please register at https://register.vevent.com/register/BI0e453d34cd1c4f7da856b4eec14f0d4c . The stay webcast of the convention name could be accessed via the Westport web site at https://investors.wfsinc.com/ .

The webcast will probably be archived on Westport’s web site at https://traders.wfsinc.com.

Monetary Statements and Administration’s Dialogue and Evaluation
To view Westport financials for the second quarter ended September thirtieth, 2024, please go to https://investors.wfsinc.com/financials/

About Westport Fuel Systems

At Westport Fuel Systems, we’re driving innovation to energy a cleaner tomorrow. We’re a number one provider of superior gasoline supply parts and programs for clear, low-carbon fuels resembling pure fuel, renewable pure fuel, propane, and hydrogen to the worldwide transportation trade. Our expertise delivers the efficiency and gasoline effectivity required by transportation purposes and the environmental advantages that tackle local weather change and concrete air high quality challenges. Headquartered in Vancouver, Canada, with operations in Europe, Asia, North America, and South America, we serve our clients in additional than 70 international locations with main international transportation manufacturers. At Westport Fuel Systems, we predict forward. For extra data, go to www.wfsinc.com.

Cautionary Be aware Concerning Ahead Trying Statements
This press launch accommodates forward-looking statements, together with statements concerning income and money utilization expectations, future strategic initiatives and future development, way forward for our growth packages (together with these regarding HPDI and hydrogen), the demand for our merchandise, the long run success of our enterprise and expertise methods, intentions of companions and potential clients, the efficiency and competitiveness of Westport’s merchandise and enlargement of product protection, future market alternatives, velocity of adoption of pure fuel and hydrogen for transportation and phrases and timing of present and future agreements in addition to Westport’s administration’s response to any of the aforementioned components. These statements are neither guarantees nor ensures, however contain identified and unknown dangers and uncertainties and are primarily based on each the views of administration and assumptions which will trigger our precise outcomes, ranges of exercise, efficiency or achievements to be materially completely different from any future outcomes, ranges of actions, efficiency or achievements expressed in or implied by these ahead trying statements. These dangers, uncertainties and assumptions embrace these associated to our income development, working outcomes, trade and merchandise, the overall economic system, situations of and entry to the capital and debt markets, solvency, governmental insurance policies and regulation, expertise improvements, fluctuations in overseas alternate charges, working bills, continued discount in bills, skill to efficiently commercialize new merchandise, the efficiency of our joint ventures, the provision and value of pure fuel and hydrogen, international authorities stimulus packages and new environmental laws, the acceptance of and shift to pure fuel and hydrogen autos, the comfort or waiver of gasoline emission requirements, the shortcoming of fleets to entry capital or authorities funding to buy pure fuel and hydrogen autos, the event of competing applied sciences, our skill to adequately develop and deploy our expertise, the actions and determinations of our three way partnership and growth companions, ongoing provide chain challenges in addition to different danger components and assumptions which will have an effect on our precise outcomes, efficiency or achievements or monetary place mentioned in our most up-to-date Annual Info Kind and different filings with securities regulators. Readers shouldn’t place undue reliance on any such forward-looking statements, which communicate solely as of the date they had been made. We disclaim any obligation to publicly replace or revise such statements to replicate any change in our expectations or in occasions, situations or circumstances on which any such statements could also be primarily based, or which will have an effect on the probability that precise outcomes will differ from these set forth in these ahead trying statements besides as required by Nationwide Instrument 51-102. The contents of any web site, RSS feed or twitter account referenced on this press launch will not be included by reference herein.

Contact Info
Investor Relations
Westport Fuel Systems
T: +1 604-718-2046

GAAP and NON-GAAP FINANCIAL MEASURES

Administration evaluations the operational progress of its enterprise items and funding packages over successive durations via the evaluation of gross margin, gross margin as a proportion of income, internet revenue, EBITDA and Adjusted EBITDA. The Firm defines gross margin as income much less value of income. The Firm defines EBITDA as internet revenue or loss from persevering with operations earlier than revenue taxes adjusted for curiosity expense (internet), depreciation and amortization. Westport Fuel Systems defines Adjusted EBITDA as EBITDA from persevering with operations excluding bills for stock-based compensation, unrealized overseas alternate acquire or loss, and non-cash and different changes. Administration makes use of Adjusted EBITDA as a long-term indicator of operational efficiency because it ties carefully to the enterprise items’ skill to generate sustained money move and such data might not be acceptable for different functions.  Adjusted EBITDA contains the corporate’s share of revenue from joint ventures.

The phrases gross margin, gross margin as a proportion of income, EBITDA and Adjusted EBITDA will not be outlined beneath U.S. typically accepted accounting ideas (” U.S. GAAP “) and will not be a measure of working revenue, working efficiency or liquidity introduced in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as an analytical software, and when assessing the corporate’s working efficiency, traders shouldn’t think about EBITDA and Adjusted EBITDA in isolation, or as an alternative choice to internet loss or different consolidated assertion of operations information ready in accordance with U.S. GAAP. Amongst different issues, EBITDA and Adjusted EBITDA don’t replicate the corporate’s precise money expenditures. Different firms could calculate related measures in another way than Westport Fuel Systems, limiting their usefulness as comparative instruments. The corporate compensates for these limitations by relying totally on its U.S. GAAP outcomes and utilizing EBITDA and Adjusted EBITDA as supplemental data.