Westport Fuel Systems Restates Second Quarter 2021 Financial Statements due to Accounting Error
September 17 2021 - 8:00AM
Westport Fuel Systems Inc. ("
WFS" or the
"
Company") (TSX:WPRT / Nasdaq:WPRT) announced that
it has filed amended and restated unaudited condensed consolidated
interim financial statements for the three and six months ended
June 30, 2021 (the "
Amended Statements") and
related amended and restated management's discussion and analysis.
The Amended Statements were required to correct an accounting error
which was identified during an internal review of one of the
Company's subsidiaries' statutory financial records. All figures
are expressed in millions of United States dollars.
The Company recently became aware of and
corrected a non-routine intercompany inventory sale of $5.7 million
in the second quarter of 2021 which was not eliminated from
reported consolidated revenue and cost of revenue. There was no
impact on gross margin, net income, or the Company’s statement of
cash flows.
The Company’s consolidated revenue for the three
and six months ended June 30, 2021 was restated to $79.0 million
and $155.5 million, respectively. The Company’s consolidated cost
of revenue for the three and six months ended June 30, 2021 was
restated to $63.3 million and $126.7 million, respectively. Line
items restated in the Amended Statements of operations and
comprehensive income (loss) for the three and six months ended June
30, 2021 are presented in the table below.
Three months ended June 30,
2021 |
As previously reported |
Amendment |
As restated |
Revenue |
$ |
84.7 |
|
$ |
(5.7 |
) |
$ |
79.0 |
|
Cost of revenue |
$ |
69.0 |
|
$ |
(5.7 |
) |
$ |
63.3 |
|
|
|
|
|
Six months ended June 30,
2021 |
|
|
|
Revenue |
$ |
161.1 |
|
$ |
(5.7 |
) |
$ |
155.5 |
|
Cost of revenue |
$ |
132.4 |
|
$ |
(5.7 |
) |
$ |
126.7 |
|
|
|
|
|
|
|
|
"At Westport Fuel Systems, we are committed to
integrity and accountability in delivering our products and
services to our customers, and to being a responsible corporate
citizen, which includes the accuracy of our financial reporting.
Notwithstanding the accounting error, our performance in the second
quarter of 2021 was another good quarter for Westport Fuel Systems
as our revenue increased by 3% sequentially and 119%
year-over-year, a reflection of the demand for our products and
services as we navigate the ongoing supply chain issues that are
challenging the global automotive industry."
David M. Johnson, Chief Executive Officer
Disclosure Controls & Procedures and Internal
Controls Over Financial Reporting
We evaluated the effectiveness of our internal
controls over financial reporting as of June 30, 2021 with the
participation, and under the supervision, of our management,
including our Chief Executive Officer and Chief Financial Officer.
Based upon this evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that as of June 30, 2021, our internal
controls over financial reporting were ineffective due to a
material weakness. Details regarding such identified weakness are
included in the amended and restated management's discussion and
analysis.
We are taking immediate steps to remediate the
material weakness identified by implementing additional controls
over the accounting for and the financial reporting of intercompany
transactions and enhancing review controls and procedures to detect
and prevent material misstatements related to intercompany
transactions. We believe these measures will remediate the material
weakness in internal control over financial reporting described in
the amended and restated management's discussion and analysis by
the third quarter of 2021. The restatement did not result from any
override of controls or misconduct.
In connection with the filing of the Amended
Statements, the Company is also filing (i) amended and restated
management's discussion and analysis in compliance with the
requirements of National Instrument 51-102 Continuous Disclosure
Obligations, and (ii) CEO and CFO certifications in compliance with
National Instrument 52-109 Certification of Disclosure in Issuers’
Annual and Interim Filings.
About Westport Fuel Systems
Westport Fuel Systems is driving innovation to
power a cleaner tomorrow. The Company 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. Westport Fuel Systems’
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, the company serves customers
in more than 70 countries with leading global transportation
brands. For more information, visit www.wfsinc.com.
Cautionary Note Regarding
Forward-Looking StatementsThis press release contains
forward-looking statements, including statements regarding our
investment in enhanced financial reporting controls, the growth
profile of the Company's business, the remediation and
effectiveness of the Company's identified disclosure controls and
procedure weaknesses. 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, solvency, governmental policies and regulation, technology
innovations, operating expenses, our ability to adequately develop
and deploy our improvements and technology, 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, Continuous Disclosure Obligations. The contents
of any website, RSS feed or twitter account referenced in this
press release are not incorporated by reference herein.
Contact
InformationChristine MarksInvestor
RelationsWestport Fuel SystemsT: +1
604-718-2046
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