Westport Fuel Systems Inc. (“
WFS”) (TSX:WPRT /
Nasdaq:WPRT) today reported financial results for the fourth
quarter and year ended December 31, 2020 and provided an update on
operations. All figures are in U.S. dollars unless otherwise
stated.
FOURTH QUARTER 2020 HIGHLIGHTS
- Record revenue of $83.9 million, an
increase of 13% over same period last year, with OEM revenue up 32%
due to continued growth in HPDI™ 2.0 sales volumes combined
with strengthening light-duty OEM sales
- Net income of $4.1 million or $0.03
per share; Adjusted EBITDA was $8.1 million, or a $4.5 million
improvement year-over-year
- Liquidity bolstered by net $27.6
million raised by shares issued under the at-the-market equity
offering, of which $13.2 million was raised following the close of
the quarter
- Announced new product development
work with current OEM partner to apply HPDI 2.0 to an upgraded base
engine platform designed to meet Euro VI Step E emission
regulations that take effect in 2024
FULL YEAR 2020 HIGHLIGHTS
- Revenue of $252.5 million, down 17%
vs. 2019 due to COVID-19 pandemic’s impact on customer demand,
partially offset by significant year-over-year growth in HPDI sales
volumes to our initial launch partner
- Net loss of $7.4 million, or $0.05
per share; Notwithstanding the pandemic's impact, recorded positive
adjusted EBITDA of $14.7 million, compared to $28.4 million in the
prior year
- Working with our lenders, we
strengthened the balance sheet, improved overall liquidity and
reduced cost of capital
- Joint venture with Weichai Power
secured certification for WP12 natural gas engine powered by HPDI
in China
- Combined our Indian businesses with UNO MINDA to create a JV to
better serve the growing market in India for gaseous fuel systems
through cost efficiencies and greater product choice
- Published enhanced Environment, Social and Governance ("ESG")
report, highlighting our commitment to ongoing ESG performance
improvements and responsible corporate citizenship
“Despite
the challenges of COVID-19, our team showed resilience and an
ongoing commitment to providing exceptional service to our global
customers. We made substantial progress on our business objectives
this year, including engine certification in China, growth in key
geographies like Europe and India, and strengthened the balance
sheet and our overall liquidity. Following facilities shutdowns in
the second quarter due to COVID-19, adoption of gaseous
fuel-powered vehicles grew. Sales of our HPDI product recovered and
surpassed 2019 volumes, and there is increasing recognition that
gaseous fuels play an important role in enabling affordable
transportation while reducing carbon emissions. More fleets are
recognizing the improved sustainability performance and lower total
cost of ownership delivered by our proven technology platform. I
was also pleased to see the strong recovery in the fourth quarter
of our Independent Aftermarket and Light-Duty OEM businesses that
were hit particularly hard during the initial outbreak of the
pandemic. We’ve entered 2021 with a strong order book, bolstered by
regulatory support to reduce carbon from transportation and growing
infrastructure investments for gaseous fuels. We remain committed
to operational excellence and innovation that delivers on the
promise of improving urban air quality and enabling economic
advantages for our customers.” David M. Johnson, Chief Executive
Officer |
4Q20 AND FULL YEAR 2020 CONTINUING OPERATIONS
CONTINUING OPERATIONS |
|
|
Over /
(Under) |
|
Over / (Under) |
($ in millions, except per share amounts) |
4Q20 |
4Q19 |
% |
FY20 |
FY19 |
% |
Revenues |
$ |
83.9 |
|
$ |
74.3 |
|
13 |
% |
$ |
252.5 |
|
$ |
305.3 |
|
(17) |
% |
Gross Margin |
13.0 |
|
13.8 |
|
(6) |
% |
39.5 |
|
68.2 |
|
(42) |
% |
Gross Margin % |
15 |
% |
19 |
% |
— |
|
16 |
% |
22 |
% |
— |
|
Operating Expenses |
13.8 |
|
19.3 |
|
(28) |
% |
61.5 |
|
89.6 |
|
(31) |
% |
Income from Investments Accounted for by the Equity Method (1) |
9.9 |
|
6.8 |
|
46 |
% |
24.0 |
|
26.7 |
|
(10) |
% |
Net Income (Loss) |
4.1 |
|
0.7 |
|
488 |
% |
(7.4) |
|
0.2 |
|
(3,800) |
% |
Net Income (Loss) per Share |
0.03 |
|
0.00 |
|
100 |
% |
(0.05) |
|
0.00 |
|
(100) |
% |
EBITDA (2) |
13.1 |
|
5.0 |
|
162 |
% |
16.1 |
|
24.9 |
|
(35) |
% |
Adjusted EBITDA (2) |
8.1 |
|
3.6 |
|
125 |
% |
14.7 |
|
28.4 |
|
(48) |
% |
(1) This includes income primarily from our
Cummins Westport Inc. ("CWI"), Minda Westport and
Westport Weichai Inc. joint ventures. (2) EBITDA and Adjusted
EBITDA are non-GAAP measures. Please refer to GAAP and NON-GAAP
FINANCIAL MEASURES for the reconciliation.
We generated revenues of $83.9 million and
$252.5 million in 4Q20 and FY 2020, compared to $74.3 million and
$305.3 million for 4Q19 and FY 2019, respectively. Revenues for the
full year 2020 decreased 17% compared to the prior year due to the
negative impact on customer demand caused by COVID-19, partially
offset by the significant growth in our HPDI sales volumes to our
initial launch partner in the second half of FY 2020. Revenue was
most significantly impacted by the pandemic during the second
quarter of 2020, with a $46.4 million reduction in revenue
representing 88% of the full year decline.
Consolidated net income for 4Q20 was $4.1
million, resulting in earnings of $0.03 per share, compared to net
income of $0.7 million, or $0.00 per share, for the same period in
2019. The improvement in net income was driven primarily by lower
operating costs, an increase in investment income from the CWI
joint venture and higher unrealized foreign exchange gain during
the current year quarter.
A net loss of $7.4 million was recorded for FY
2020 compared to net income of $0.2 million for FY 2019. Earnings
declined by $7.6 million largely as a result of lower sales caused
by the impact on demand from COVID-19, a $2.4 million net warranty
charge related to a field service campaign and a $2.7 million
decrease in earnings from our CWI joint venture. The earnings
decline caused by lower sales was partially offset by lower
operating expenses, $6.1 million in government-sponsored wage
subsidies and a higher foreign exchange gain in the current year.
The prior year results also included a $3.3 million gain recorded
on the forgiveness of government funding of HPDI development.
Notwithstanding the challenges of COVID-19, we generated $14.7
million adjusted EBITDA during the year ended December 31, 2020,
compared to $28.4 million for the year ended December 31, 2019 as
our businesses recovered over the 2H20.
SEGMENT INFORMATION
Original Equipment Manufacturer Segment
Original Equipment Manufacturer ("OEM") revenue
for 4Q20 and FY 2020 was $58.8 million and $149.6 million, compared
with $44.7 million and $164.7 million for 4Q19 and FY 2019, an
increase of $14.1 million and decrease of $15.1 million,
respectively. Revenue growth in the current quarter largely
reflected an increase in sales volumes in the Heavy-Duty OEM
business from our initial launch partner combined with a 7%
increase in the Euro to U.S. dollar exchange rate, partially offset
by the large contractual price reductions of our HPDI product in
4Q19. The year-over-year decrease in OEM revenue for FY 2020 is
mainly due to the impact of plant shutdowns in response to the
COVID-19 pandemic and the impact on customer demand in the first
half of the year, combined with lower light-duty OEM sales to
German and Russian OEMs.
Independent Aftermarket Segment
Independent Aftermarket ("IAM") revenue for 4Q20
and FY 2020 was $25.1 million and $102.9 million, compared with
$29.6 million and $140.6 million for the same prior year periods,
respectively. Revenue for the IAM business segment decreased by
$4.5 million and $37.7 million, respectively, primarily due to the
continuing impact of COVID-19 on customer demand in Western Europe
and the related shutdowns in the second quarter of 2020, partially
offset by the stronger Euro to U.S. dollar during 2020.
SEGMENT RESULTS |
4Q20 |
|
Revenue |
|
|
Operating
income (loss) |
|
|
Depreciation
& amortization |
|
Equity income (loss) |
OEM |
$ |
58.8 |
|
|
$ |
(3.0 |
) |
|
$ |
2.1 |
|
$ |
0.5 |
IAM |
25.1 |
|
|
1.3 |
|
|
1.6 |
|
— |
Corporate |
— |
|
|
0.9 |
|
|
0.1 |
|
9.4 |
CWI - 50% |
48.0 |
|
|
12.1 |
|
|
— |
|
— |
Total segment |
131.9 |
|
|
11.3 |
|
|
3.8 |
|
9.9 |
Less: CWI - 50% |
(48.0 |
) |
|
(12.1 |
) |
|
— |
|
— |
Total consolidated |
$ |
83.9 |
|
|
$ |
(0.8 |
) |
|
$ |
3.8 |
|
$ |
9.9 |
SEGMENT RESULTS |
4Q19 |
|
Revenue |
|
|
Operating
income (loss) |
|
|
Depreciation
& amortization |
|
Equity income (loss) |
OEM |
$ |
44.7 |
|
|
$ |
(6.1 |
) |
|
$ |
1.9 |
|
$ |
0.1 |
IAM |
29.6 |
|
|
2.2 |
|
|
1.9 |
|
— |
Corporate |
— |
|
|
(1.6 |
) |
|
0.1 |
|
6.7 |
CWI - 50% |
51.2 |
|
|
10.0 |
|
|
— |
|
— |
Total segment |
125.5 |
|
|
4.5 |
|
|
3.9 |
|
6.8 |
Less: CWI - 50% |
(51.2 |
) |
|
(10.0 |
) |
|
— |
|
— |
Total consolidated |
$ |
74.3 |
|
|
$ |
(5.5 |
) |
|
$ |
3.9 |
|
$ |
6.8 |
CUMMINS WESTPORT INC.
Revenue for 4Q20 decreased by $6.5 million to
$96.0 million, or 6% over the same period last year, due to lower
engine sales during the quarter. Unit sales were lower for FY 2020
compared to the prior year reflecting the impact of OEM factory
shutdowns in April and May 2020 in response to the COVID-19
pandemic. Gross margin for 4Q20 increased by $0.2 million to $28.5
million, or 30% of revenue from $28.3 million or 28% of revenue in
the prior year quarter. The increase in gross margin and gross
margin percentage resulted primarily from product mix, which more
than offset lower revenues in the current year quarter.
Operating income for Q4 2020 increased by $4.2
million to $24.3 million, or 21% over the same period last year,
primarily reflecting lower operating expenses combined with the
increase in gross margin. WFS share of CWI's net income for 4Q20
increased to $9.4 million from $6.7 million in 4Q19.
The following tables sets forth a summary of the
financial results of CWI for the years ended December 31, 2020 and
2019, and three months ended December 31, 2020 and 2019.
CUMMINS WESTPORT HIGHLIGHTS |
|
|
|
|
|
Over / (Under) |
|
Over / (Under) |
($ in millions, except unit amounts) |
4Q20 |
4Q19 |
% |
FY20 |
FY19 |
% |
Units |
2,288 |
|
2,407 |
|
(5) |
% |
7,065 |
|
7,883 |
|
(10) |
% |
Revenue |
$ |
96.0 |
|
$ |
102.5 |
|
(6) |
% |
$ |
323.5 |
|
$ |
361.8 |
|
(11) |
% |
Gross Margin |
28.5 |
|
28.3 |
|
1 |
% |
87.3 |
|
104.1 |
|
(16) |
% |
Gross Margin % |
30 |
% |
28 |
% |
— |
|
27 |
% |
29 |
% |
— |
|
Operating Expenses |
|
4.2 |
|
|
8.2 |
|
(49) |
% |
|
26.4 |
|
|
35.6 |
|
(26) |
% |
Operating Income |
24.3 |
|
20.1 |
|
21 |
% |
60.9 |
|
68.4 |
|
(11) |
% |
Net Income |
18.8 |
|
13.4 |
|
40 |
% |
47.6 |
|
53.2 |
|
(11) |
% |
WFS 50% Interest |
9.4 |
|
6.7 |
|
40 |
% |
23.8 |
|
26.6 |
|
(11) |
% |
HYDROGEN ICE
Our research and development of a heavy-duty
internal combustion engine ("ICE") running on hydrogen has the
potential of near-zero greenhouse gas emissions and much lower cost
than fuel cell vehicles or battery electric vehicles, particularly
for heavy-duty trucking and other high-load applications like
mining, marine and rail that have come to rely on the efficiency,
power, durability and reliability of diesel engines, Over the past
several months we achieved several important milestones
including:
- In January, we announced the start of a research project with
Scania to apply HPDI fuel systems with hydrogen to the latest
Scania commercial vehicle engine.
- Later in February, we released a joint publication with AVL,
the world's largest independent company for the development,
simulation and testing of powertrain systems, entitled “Total Cost
of Ownership (TCO) Analysis for Heavy Duty Hydrogen Fueled
Powertrains.” The analysis presents the case for hydrogen use in an
ICE with Westport Fuel Systems’ patented HPDI 2.0 fuel system, as
the most cost-competitive near-term pathway to reduce CO2 emissions
to near-zero from on-road long-haul transportation. The paper
undertakes a comprehensive TCO analysis, applying inputs from
Westport Fuel Systems HPDI hydrogen (H2-HPDI) simulations and HPDI
2.0 operating costs with AVL’s existing TCO models for diesel and
fuel cell powertrains.
- In March, we successfully started up and conducted initial
testing of a heavy-duty ICE running on hydrogen fuel, using our
patented and proprietary HPDI 2.0 system. The preliminary test
results validate our combustion simulations and demonstrate the
potential for hydrogen combustion with efficiency comparable to
fuel cells in heavy-duty applications. The potential benefits for
OEMs and others to avoid significant new investments that would be
required to develop and manufacture fuel cells, electric motors and
batteries that are associated with heavy-duty long haul fuel cell
electric vehicles is financially compelling, while leveraging
established supply chains, manufacturing investment and
infrastructure and economies of scale. Technical results will be
reviewed at the upcoming Vienna Motor Symposium, which takes place
April 29-30, 2021.
2021 OUTLOOK
The COVID-19 pandemic brought significant
headwinds and uncertainty to the global economy, and significantly
impacted our business, our partners and customers. Throughout these
tumultuous times, the world’s focus on decarbonizing
transportation, global climate change and the need to improve urban
air quality have strengthened, not disappeared. The world needs
affordable, clean transportation more than ever.
We are poised for growth and continued positive
momentum, considering the robust recovery in our revenues in 4Q20
somewhat tempered in the near-term by the current risks in the
supply chain the automotive industry is facing. Due to the expected
growth in our Heavy-Duty OEM business, we plan to expand our
manufacturing capacity through our vendor supplier network and our
own manufacturing capabilities to be able to meet our customer
demand. We are excited about our recent research and development of
H2 ICE technologies and the potential for further applications of
HPDI technology in other industry verticals, which will require
investment. Significant strides have been made to restore financial
stability, and we will continue to evaluate our financing options
to sustainably fund the exciting growth potential of our portfolio
of existing and emerging technologies.
FINANCIAL STATEMENTS & MANAGEMENT'S DISCUSSION
AND ANALYSIS
To view WFS full financials for the fourth
quarter and year ended December 31, 2020, please visit
https://investors.wfsinc.com/financials/
CONFERENCE CALL PRESENTATION
WFS is providing a conference call presentation
as a guide to its financial information in a quick reference format
and it should be read in conjunction with WFS full financials for
the year ended December 31, 2020.
LIVE CONFERENCE CALL & WEBCAST
WFS has scheduled a conference call for Tuesday,
March 16, 2021 at 7:30 am Pacific Time (10:30 am Eastern Time) to
discuss these results. To access the conference call by telephone,
please dial: 1-800-319-4610 (Canada & USA toll-free) or
604-638-5340. The live webcast of the conference call can be
accessed through the WFS website at
https://investors.wfsinc.com/
REPLAY CONFERENCE CALL & WEBCAST
To access the conference call replay, please
dial 1-800-319-6413 (Canada & USA toll-free) or 1-604-638-9010
using the pass code 6262. The telephone replay will be available
until March 23, 2021. Shortly after the conference call, the
webcast will be archived on the Westport Fuel Systems website and
replay will be available in streaming audio and a downloadable MP3
file.
2021 ANNUAL GENERAL MEETING OF SHAREHOLDERS
In response to the ongoing global COVID-19
pandemic, Westport Fuel Systems intends to host its upcoming Annual
Meeting of shareholders (the “Meeting”) in a
virtual only format on Wednesday, May 5, 2021 at 10:00 am Pacific
Time. In order to streamline the virtual meeting process, Westport
Fuel Systems encourages shareholders to vote in advance of the
Meeting using the Voting Instruction Form or the Form of Proxy
which will be emailed or mailed to them with the Meeting materials
at the end of March. Further instructions on voting and accessing
the meeting will be contained in the Management Information
Circular under “Section 1: Voting” – upon receipt, please review
these materials carefully.
Guest Access:
Dial-In |
+1-800-319-4610 (Canada / USA) or +1-604-638-5340
(International) |
Webcast |
http://services.choruscall.ca/links/westportagm20210505.html |
Registered Shareholders or Duly
Appointed Proxyholders Access:
Shareholder or Duly Appointed Proxyholders
access to the virtual Meeting requires early registration at the
following link – https://tinyurl.com/agmpreregistration. Please
register at your earliest convenience as registration will close
May 3, 2021 at 10:00am PT (48 hours prior to the meeting). Before
the Meeting, shareholders of record at the close of business on
March 16, 2021 may vote by completing the form of proxy or voting
instruction form in accordance with the instructions provided
herein.
Non-registered shareholders should carefully
follow all instructions provided by their intermediaries to ensure
that their Westport Fuel Systems voting shares are voted at the
Meeting. Please refer to “Section 1: Voting” of Westport Fuel
Systems Management Information Circular in respect of the Meeting
for additional details on how to vote by proxy before the Meeting
and the matters to be voted upon.
Votes placed prior to the Meeting must be
received by our transfer agent, Computershare Investor Services
Inc. by May 3, 2021 at 10:00am PT.
TERMINATION OF AT-THE-MARKET OFFERING
WFS has now terminated its previously announced
at-the-market offering program (the "ATM
Program"). Under the ATM Program WFS issued a total of
5,035,682 common shares at an average price of $5.48 per share for
gross proceeds of $27.6 million and net proceeds of
$26.7 million.
About Westport Fuel Systems
Westport Fuel Systems is driving innovation to
power a cleaner tomorrow. Westport Fuel Systems is a leading
supplier of advanced fuel delivery components and systems for
clean, low-carbon fuels such as natural gas, renewable natural gas,
propane, and hydrogen to the global automotive industry. Its
technology delivers the performance and fuel efficiency required by
transportation applications and the environmental benefits that
address climate change and urban air quality challenges.
Headquartered in Vancouver, Canada, with operations in Europe,
Asia, North America and South America, Westport Fuel Systems serves
customers in more than 70 countries with leading global
transportation brands. For more information, visit
www.wfsinc.com.
Cautionary Note Regarding Forward Looking
Statements
This press release contains forward-looking
statements, including statements regarding revenue and cash usage
expectations, future strategic initiatives and future growth,
future of our development programs (including those relating to
HPDI and Hydrogen), the impact of COVID-19 on our business, the
demand for our products, the future success of our business and
technology strategies, intentions of partners and potential
customers, the performance and competitiveness of Westport Fuel
Systems' products and expansion of product coverage, future market
opportunities, speed of adoption of natural gas for transportation
and terms and timing of future agreements as well as Westport Fuel
Systems management's response to any of the aforementioned factors.
These statements are neither promises nor guarantees, but involve
known and unknown risks and uncertainties and are based on both the
views of management and assumptions that may cause our actual
results, levels of activity, performance or achievements to be
materially different from any future results, levels of activities,
performance or achievements expressed in or implied by these
forward looking statements. These risks, uncertainties and
assumptions include those related to our revenue growth, operating
results, industry and products, the general economy, conditions of
and access to the capital and debt markets, solvency, governmental
policies and regulation, technology innovations, fluctuations in
foreign exchange rates, operating expenses, continued reduction in
expenses, ability to successfully commercialize new products, the
performance of our joint ventures, the availability and price of
natural gas, global government stimulus packages and new
environmental regulations, the acceptance of and shift to natural
gas vehicles, the relaxation or waiver of fuel emission standards,
the inability of fleets to access capital or government funding to
purchase natural gas vehicles, the development of competing
technologies, our ability to adequately develop and deploy our
technology, the actions and determinations of our joint venture and
development partners, the effects and duration of COVID-19 as well
as other risk factors and assumptions that may affect our actual
results, performance or achievements or financial position
discussed in our most recent Annual Information Form and other
filings with securities regulators. Readers should not place undue
reliance on any such forward-looking statements, which speak only
as of the date they were made. We disclaim any obligation to
publicly update or revise such statements to reflect any change in
our expectations or in events, conditions or circumstances on which
any such statements may be based, or that may affect the likelihood
that actual results will differ from those set forth in these
forward looking statements except as required by National
Instrument 51-102. The contents of any website, RSS feed or twitter
account referenced in this press release are not incorporated by
reference herein.
Contact Information
Christine Marks Investor
Relations Westport Fuel Systems T: +1 604-718-2046
invest@wfsinc.com
GAAP and NON-GAAP FINANCIAL MEASURES
Our financial statements are prepared in
accordance with U.S. generally accepted accounting principles
("U.S. GAAP"). These U.S. GAAP financial
statements include non-cash charges and other charges and benefits
that may be unusual or infrequent in nature or that we believe may
make comparisons to our prior or future performance difficult. In
addition to conventional measures prepared in accordance with U.S.
GAAP, WFS and certain investors use EBITDA and Adjusted EBITDA as
an indicator of our ability to generate liquidity by producing
operating cash flow to fund working capital needs, service debt
obligations and fund capital expenditures. Management also uses
these non-GAAP measures in its review and evaluation of the
financial performance of WFS. EBITDA is also frequently used by
investors and analysts for valuation purposes whereby EBITDA is
multiplied by a factor or "EBITDA multiple" that is based on an
observed or inferred relationship between EBITDA and market values
to determine the approximate total enterprise value of a company.
We believe that these non-GAAP financial measures also provide
additional insight to investors and securities analysts as
supplemental information to our U.S. GAAP results and as a basis to
compare our financial performance period-over-period and to compare
our financial performance with that of other companies. We believe
that these non-GAAP financial measures facilitate comparisons of
our core operating results from period to period and to other
companies by, in the case of EBITDA, removing the effects of our
capital structure (net interest income on cash deposits, interest
expense on outstanding debt and debt facilities), asset base
(depreciation and amortization) and tax consequences. Adjusted
EBITDA provides this same indicator of WFS' EBITDA from continuing
operations and removing such effects of our capital structure,
asset base and tax consequences, but additionally excludes any
unrealized foreign exchange gains or losses, stock-based
compensation charges and other one-time impairments and costs which
are not expected to be repeated in order to provide greater insight
into the cash flow being produced from our operating business,
without the influence of extraneous events.
EBITDA and Adjusted EBITDA are intended to
provide additional information to investors and analysts and do not
have any standardized definition under U.S. GAAP, and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with U.S. GAAP. EBITDA and
Adjusted EBITDA exclude the impact of cash costs of financing
activities and taxes, and the effects of changes in operating
working capital balances, and therefore are not necessarily
indicative of operating profit or cash flow from operations as
determined under U.S. GAAP. Other companies may calculate EBITDA
and Adjusted EBITDA differently.
GAAP & NON-GAAP FINANCIAL MEASURES FROM CONTINUING
OPERATIONS |
|
($ in millions) |
4Q19 |
1Q20 |
2Q20 |
3Q20 |
4Q20 |
Three months ended |
Net income (loss) from continuing operations |
$ |
0.6 |
|
|
$ |
(15.3 |
) |
|
$ |
3.0 |
|
|
$ |
0.8 |
|
|
$ |
4.1 |
|
|
|
|
|
|
|
|
Income tax (recovery) expense |
(0.9 |
) |
|
(0.7 |
) |
|
1.6 |
|
|
(0.6 |
) |
|
1.2 |
|
|
Interest Expense, net |
1.5 |
|
|
1.5 |
|
|
1.2 |
|
|
1.3 |
|
|
4.0 |
|
|
Depreciation and amortization |
3.8 |
|
|
3.4 |
|
|
3.4 |
|
|
3.4 |
|
|
3.8 |
|
|
EBITDA |
5.0 |
|
|
(11.1 |
) |
|
9.2 |
|
|
4.9 |
|
|
13.1 |
|
|
|
|
|
|
|
|
Stock based compensation |
0.5 |
|
|
0.6 |
|
|
0.6 |
|
|
0.9 |
|
|
0.3 |
|
|
Unrealized foreign exchange (gain) loss |
(2.6 |
) |
|
6.9 |
|
|
(3.6 |
) |
|
(2.3 |
) |
|
(5.3 |
) |
|
Intangible impairment |
0.7 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Asset impairment |
— |
|
|
— |
|
|
— |
|
|
0.5 |
|
|
— |
|
|
Adjusted EBITDA |
$ |
3.6 |
|
|
$ |
(3.6 |
) |
|
$ |
6.2 |
|
|
$ |
4.0 |
|
|
$ |
8.1 |
|
|
WESTPORT FUEL SYSTEMS INC. |
Consolidated
Balance Sheets |
(Expressed
in thousands of United States dollars, except share amounts) |
December 31,
2020 and 2019 |
|
|
December 31,
2020 |
|
|
December 31,
2019 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents (including restricted cash) |
|
$ |
64,262 |
|
|
$ |
46,012 |
|
Accounts receivable |
|
90,467 |
|
|
66,950 |
|
Inventories |
|
51,402 |
|
|
47,806 |
|
Prepaid expenses |
|
11,767 |
|
|
7,417 |
|
Total current assets |
|
217,898 |
|
|
168,185 |
|
Long-term investments |
|
13,954 |
|
|
10,587 |
|
Property, plant and equipment |
|
57,507 |
|
|
58,856 |
|
Operating lease right-of-use assets |
|
27,962 |
|
|
17,524 |
|
Intangible assets |
|
11,784 |
|
|
13,075 |
|
Deferred income tax assets |
|
2,140 |
|
|
1,929 |
|
Goodwill |
|
3,397 |
|
|
3,110 |
|
Other long-term assets |
|
11,621 |
|
|
6,660 |
|
Total assets |
|
$ |
346,263 |
|
|
$ |
279,926 |
|
Liabilities and Shareholders’ Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued liabilities (note 11) |
|
$ |
84,599 |
|
|
$ |
86,180 |
|
Current portion of operating lease liabilities |
|
4,476 |
|
|
4,406 |
|
Short-term debt |
|
23,445 |
|
|
3,625 |
|
Current portion of long-term debt |
|
16,302 |
|
|
9,942 |
|
Current portion of long-term royalty payable |
|
7,451 |
|
|
5,936 |
|
Current portion of warranty liability |
|
10,749 |
|
|
4,505 |
|
Total current liabilities |
|
147,022 |
|
|
114,594 |
|
Long-term operating lease liabilities |
|
23,486 |
|
|
13,118 |
|
Long-term debt |
|
45,651 |
|
|
35,312 |
|
Long-term royalty payable |
|
8,591 |
|
|
12,322 |
|
Warranty liability |
|
8,187 |
|
|
4,396 |
|
Deferred income tax liabilities |
|
3,250 |
|
|
4,445 |
|
Other long-term liabilities |
|
6,017 |
|
|
6,380 |
|
Total long-term liabilities |
|
242,204 |
|
|
190,567 |
|
Shareholders’ equity: |
|
|
|
|
Share capital: |
|
|
|
|
Unlimited common and preferred shares, no par value |
|
|
|
|
144,069,972 (2019 - 136,416,981) common shares issued and
outstanding |
|
1,115,092 |
|
|
1,094,633 |
|
Other equity instruments |
|
7,671 |
|
|
6,857 |
|
Additional paid-in-capital |
|
11,516 |
|
|
10,079 |
|
Accumulated deficit |
|
(1,005,679 |
) |
|
(998,320 |
) |
Accumulated other comprehensive loss |
|
(24,541 |
) |
|
(23,890 |
) |
Total shareholders' equity |
|
104,059 |
|
|
89,359 |
|
Total liabilities and shareholders' equity |
|
$ |
346,263 |
|
|
$ |
279,926 |
|
WESTPORT FUEL SYSTEMS INC. |
|
Consolidated
Statements of Operations and Comprehensive Income (Loss) |
|
(Expressed
in thousands of United States dollars, except share and per share
amounts) |
|
Years ended
December 31, 2020 and 2019 |
|
|
|
Years ended December 31, |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
252,497 |
|
|
$ |
305,338 |
|
Cost of
revenue and expenses: |
|
|
|
|
Cost of revenue |
|
212,953 |
|
|
237,086 |
|
Research and development |
|
20,976 |
|
|
25,172 |
|
General and administrative |
|
26,629 |
|
|
41,339 |
|
Sales and marketing |
|
11,510 |
|
|
16,380 |
|
Restructuring costs |
|
— |
|
|
825 |
|
Foreign exchange gain |
|
(4,300 |
) |
|
(2,537 |
) |
Depreciation and amortization |
|
6,239 |
|
|
7,778 |
|
Impairment on long lived assets, net |
|
479 |
|
|
688 |
|
|
|
274,486 |
|
|
326,731 |
|
Loss from
continuing operations |
|
(21,989 |
) |
|
(21,393 |
) |
|
|
|
|
|
Income from
investments accounted for by the equity method |
|
24,047 |
|
|
26,741 |
|
Interest on
long-term debt and accretion on royalty payable |
|
(7,988 |
) |
|
(7,265 |
) |
Interest and
other income |
|
2 |
|
|
4,065 |
|
Income
(loss) from continuing operations before income taxes |
|
(5,928 |
) |
|
2,148 |
|
Income tax
expense (recovery): |
|
|
|
|
Current |
|
2,438 |
|
|
3,607 |
|
Deferred |
|
(1,007 |
) |
|
(1,647 |
) |
|
|
1,431 |
|
|
1,960 |
|
Net income
(loss) from continuing operations |
|
(7,359 |
) |
|
188 |
|
Net income
(loss) from discontinued operations |
|
— |
|
|
(147 |
) |
Net income
(loss) for the year |
|
(7,359 |
) |
|
41 |
|
Other
comprehensive loss: |
|
|
|
|
Cumulative
translation adjustment |
|
(651 |
) |
|
(2,832 |
) |
Comprehensive loss |
|
$ |
(8,010 |
) |
|
$ |
(2,791 |
) |
Income
(loss) per share: |
|
|
|
|
From
continuing operations - basic and diluted |
|
$ |
(0.05 |
) |
|
$ |
0.00 |
|
From
discontinued operations - basic and diluted |
|
$ |
0.00 |
|
|
$ |
0.00 |
|
Net income
(loss) per share |
|
$ |
(0.05 |
) |
|
$ |
0.00 |
|
Weighted
average common shares outstanding: |
|
|
|
|
Basic |
|
137,092,854 |
|
|
134,224,799 |
|
Diluted |
|
137,092,854 |
|
|
144,067,256 |
|
WESTPORT FUEL SYSTEMS INC. |
Consolidated
Statements of Cash Flows |
(Expressed
in thousands of United States dollars) |
Years ended
December 31, 2020 and 2019 |
|
|
Years ended December 31, |
|
|
2020 |
|
|
2019 |
|
Cash flows
from (used in) operating activities: |
|
|
|
|
Net income (loss) for the year from continuing operations |
|
$ |
(7,359 |
) |
|
$ |
188 |
|
Items not involving cash: |
|
|
|
|
Depreciation and amortization |
|
14,034 |
|
|
16,340 |
|
Stock-based compensation expense |
|
2,368 |
|
|
1,474 |
|
Unrealized foreign exchange gain |
|
(4,300 |
) |
|
(2,537 |
) |
Deferred income tax |
|
(1,007 |
) |
|
(1,647 |
) |
Income from investments accounted for by the equity method |
|
(24,047 |
) |
|
(26,741 |
) |
Interest on long-term debt and accretion of royalty payable |
|
7,988 |
|
|
7,265 |
|
Impairment on long lived assets, net |
|
479 |
|
|
688 |
|
Inventory write-downs to net realizable value |
|
507 |
|
|
57 |
|
Other income |
|
— |
|
|
(3,317 |
) |
Change in bad debt expense |
|
299 |
|
|
831 |
|
Net cash
used before working capital changes |
|
(11,038 |
) |
|
(7,399 |
) |
|
|
|
|
|
Changes in
non-cash operating working capital: |
|
|
|
|
Accounts receivable |
|
(22,721 |
) |
|
(11,137 |
) |
Inventories |
|
(3,225 |
) |
|
(2,004 |
) |
Prepaid expenses |
|
(8,685 |
) |
|
(2,653 |
) |
Accounts payable and accrued liabilities |
|
(420 |
) |
|
3,312 |
|
Warranty liability |
|
10,940 |
|
|
4,196 |
|
Net cash
used in operating activities of continuing operations |
|
(35,149 |
) |
|
(15,685 |
) |
Net cash
used in operating activities of discontinued operations |
|
— |
|
|
(147 |
) |
Cash flows
from (used in) investing activities: |
|
|
|
|
Purchase of property, plant and equipment |
|
(7,123 |
) |
|
(8,860 |
) |
Proceeds on sale of assets |
|
207 |
|
|
— |
|
Dividends received from joint ventures |
|
20,758 |
|
|
25,045 |
|
Net cash
from investing activities |
|
13,842 |
|
|
16,185 |
|
Cash flows
from (used in) financing activities: |
|
|
|
|
Drawings on operating lines of credit and long-term facilities |
|
85,258 |
|
|
25,081 |
|
Repayment of operating lines of credit and long-term
facilities |
|
(53,523 |
) |
|
(33,258 |
) |
Proceeds from share issuance, net |
|
13,904 |
|
|
— |
|
Repayment of royalty payable |
|
(5,948 |
) |
|
(6,034 |
) |
Long-term asset securing debt |
|
— |
|
|
(553 |
) |
Net cash
from (used in) financing activities |
|
39,691 |
|
|
(14,764 |
) |
Effect of
foreign exchange on cash and cash equivalents |
|
(134 |
) |
|
(696 |
) |
Increase
(decrease) in cash and cash equivalents |
|
18,250 |
|
|
(15,107 |
) |
Cash and
cash equivalents, beginning of year (including restricted
cash) |
|
46,012 |
|
|
61,119 |
|
Cash and
cash equivalents, end of year (including restricted cash) |
|
64,262 |
|
|
46,012 |
|
WESTPORT FUEL SYSTEMS INC. |
|
Consolidated
Statements of Operations and Comprehensive Income (Loss)
(unaudited) |
|
(Expressed
in thousands of United States dollars, except share and per share
amounts) |
|
Three months
ended December 31, 2020 and 2019 |
|
|
|
4Q20 |
|
|
4Q19 |
|
Revenue |
|
$ |
83,903 |
|
|
$ |
74,325 |
|
Cost of
revenue and expenses: |
|
|
|
|
Cost of revenue |
|
70,862 |
|
|
60,465 |
|
Research and development |
|
6,365 |
|
|
5,831 |
|
General and administrative |
|
8,269 |
|
|
9,465 |
|
Sales and marketing |
|
2,720 |
|
|
4,417 |
|
Foreign exchange gain |
|
(5,278 |
) |
|
(2,678 |
) |
Depreciation and amortization |
|
1,692 |
|
|
1,617 |
|
Impairment on long lived assets, net |
|
— |
|
|
688 |
|
|
|
84,630 |
|
|
79,805 |
|
Loss from
continuing operations |
|
(727 |
) |
|
(5,480 |
) |
|
|
|
|
|
Income from
investments accounted for by the equity method |
|
9,934 |
|
|
6,801 |
|
Interest on
long-term debt and accretion on royalty payable |
|
(3,290 |
) |
|
(1,798 |
) |
Interest and
other income (expense) |
|
(652 |
) |
|
235 |
|
Income
(loss) from continuing operations before income taxes |
|
5,265 |
|
|
(242 |
) |
Income tax
expense (recovery): |
|
|
|
|
Current |
|
826 |
|
|
1,436 |
|
Deferred |
|
321 |
|
|
(2,318 |
) |
|
|
1,147 |
|
|
(882 |
) |
Net income
from continuing operations |
|
4,118 |
|
|
640 |
|
Net income
from discontinued operations |
|
— |
|
|
11 |
|
Net income
for the period |
|
4,118 |
|
|
651 |
|
Other
comprehensive loss: |
|
|
|
|
Cumulative
translation adjustment |
|
(259 |
) |
|
704 |
|
Comprehensive loss |
|
$ |
3,859 |
|
|
$ |
1,355 |
|
Income
(loss) per share: |
|
|
|
|
From
continuing operations - basic and diluted |
|
$ |
0.03 |
|
|
$ |
0.00 |
|
From
discontinued operations - basic and diluted |
|
$ |
0.00 |
|
|
$ |
0.00 |
|
Net income
(loss) per share |
|
$ |
0.03 |
|
|
$ |
0.00 |
|
Weighted
average common shares outstanding: |
|
|
|
|
Basic |
|
138,485,464 |
|
|
136,081,959 |
|
Diluted |
|
143,452,302 |
|
|
145,924,416 |
|
WESTPORT FUEL SYSTEMS INC. |
Consolidated
Statements of Cash Flows (unaudited) |
(Expressed
in thousands of United States dollars) |
Three months
ended December 31, 2020 and 2019 |
|
|
4Q20 |
|
|
4Q19 |
|
Cash flows
from (used in) operating activities: |
|
|
|
|
Net income for the year from continuing operations |
|
$ |
4,118 |
|
|
$ |
640 |
|
Items not involving cash: |
|
|
|
|
Depreciation and amortization |
|
3,803 |
|
|
3,878 |
|
Stock-based compensation expense |
|
275 |
|
|
487 |
|
Unrealized foreign exchange gain |
|
(5,278 |
) |
|
(2,678 |
) |
Deferred income tax |
|
321 |
|
|
(2,318 |
) |
Income from investments accounted for by the equity method |
|
(9,934 |
) |
|
(6,801 |
) |
Interest on long-term debt and accretion of royalty payable |
|
3,290 |
|
|
1,650 |
|
Impairment on long lived assets, net |
|
— |
|
|
688 |
|
Inventory write-downs to net realizable value |
|
29 |
|
|
(3 |
) |
Change in bad debt expense |
|
(96 |
) |
|
142 |
|
Restructuring obligations |
|
— |
|
|
(224 |
) |
Net cash
used before working capital changes |
|
(3,472 |
) |
|
(4,539 |
) |
|
|
|
|
|
Changes in
non-cash operating working capital: |
|
|
|
|
Accounts receivable |
|
(14,718 |
) |
|
1,535 |
|
Inventories |
|
3,721 |
|
|
1,388 |
|
Prepaid expenses |
|
(4,981 |
) |
|
(1,002 |
) |
Accounts payable and accrued liabilities |
|
7,062 |
|
|
92 |
|
Warranty liability |
|
423 |
|
|
2,781 |
|
Net cash
from (used) in operating activities of continuing operations |
|
(11,965 |
) |
|
255 |
|
Net cash
from operating activities of discontinued operations |
|
— |
|
|
11 |
|
Cash flows
from (used in) investing activities: |
|
|
|
|
Purchase of property, plant and equipment |
|
(2,598 |
) |
|
(3,519 |
) |
Proceeds on sale of assets |
|
207 |
|
|
— |
|
Dividends received from joint ventures |
|
6,923 |
|
|
7,295 |
|
Net cash
from investing activities |
|
4,532 |
|
|
3,776 |
|
Cash flows
from (used in) financing activities: |
|
|
|
|
Drawings on operating lines of credit and long-term facilities |
|
28,991 |
|
|
4,595 |
|
Repayment of operating lines of credit and long-term
facilities |
|
(19,969 |
) |
|
(818 |
) |
Proceeds from share issuance, net |
|
13,904 |
|
|
— |
|
Long-term asset securing debt |
|
— |
|
|
(553 |
) |
Net cash
from (used in) financing activities |
|
22,926 |
|
|
3,224 |
|
Effect of
foreign exchange on cash and cash equivalents |
|
2,447 |
|
|
1,340 |
|
Increase
(decrease) in cash and cash equivalents |
|
17,940 |
|
|
8,606 |
|
Cash and
cash equivalents, beginning of period (including restricted
cash) |
|
46,322 |
|
|
37,406 |
|
Cash and
cash equivalents, end of period (including restricted cash) |
|
64,262 |
|
|
46,012 |
|
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