Company Announces Plans to Focus on KARNO
and Wind Down Powertrain Operations, Preserving Technology for
Potential Future Use or Sale
Hyliion Holdings Corp. (NYSE: HYLN) (“Hyliion”), a developer of
KARNO generator and electric powertrain technologies, today
reported its third-quarter 2023 financial results and announced
that it will concentrate its future efforts on the KARNO generator
while winding down its powertrain operations. The Company will
preserve its powertrain technology for potential application in the
future.
This strategic shift will help maintain the company’s robust
cash position and align its KARNO generator business for future
success. The Company projects to finish 2023 with approximately
$285 million of available capital and estimates cash burn of
approximately $40 million in 2024.
Powertrain Business Transition and Technology
Preservation
With the recent receipt of CARB certification and launch of
extended fleet trials, Hyliion has completed all steps on its
well-publicized path to commercialization of the Hypertruck ERX
powertrain. Despite these accomplishments, the Company previously
announced that its Board of Directors had engaged expert advisors
to explore a range of strategic alternatives for its powertrain
business. The reasons for undertaking this strategic review
included lower-than-expected industry adoption of electrified
commercial vehicle solutions, increases in component costs,
evolving regulatory requirements, and uncertainty about the ability
to raise additional needed capital for ongoing investment in the
business.
The Company considered a range of options and concluded that
discontinuing the powertrain business and focusing on the
commercialization of the KARNO generator is in the best interest of
Hyliion and its shareholders. Hyliion intends to retain the
powertrain technology enabling the Company to explore future use,
including a resumption of powertrain commercialization or a sale of
the technology and tangible assets from the powertrain
division.
“The decision around our powertrain business was very difficult,
but we believe it is a necessary step to safeguard our financial
stability, especially given the current economic climate,” said
Hyliion’s Founder and CEO, Thomas Healy. “Our focus on KARNO aligns
with the growing demand for electricity. With commercial deliveries
planned for the upcoming year, the KARNO generator offers a more
capital-efficient path to market,” added Healy.
KARNO Generator Update
Hyliion remains committed to the ongoing commercialization of
the KARNO generator as the Company undergoes a strategic shift to
concentrate on this business segment. The Company continues to be
encouraged by the substantial progress achieved in development and
growing interest from potential customers to leverage the KARNO
generator for diverse power generating applications.
KARNO Development Highlights:
- Delivered power successfully to the grid, marking a significant
achievement in ongoing development and validation
- Executed customer showcases to grow demand for future
deliveries
- Performed simulations and in-lab testing that indicate power,
efficiency, and emissions objectives for the production unit design
will be achieved
- Demonstrated potential for future mobility applications with
Hypertruck KARNO vehicle
- Moved into a new R&D and low-volume production facility
near Cincinnati, OH
Hyliion anticipates its first revenue-generating deployments of
the KARNO generator to occur in late 2024 and is in discussions
with inaugural customers. With the strategic shift to focus on the
KARNO generator, Hyliion is positioned to achieve commercialization
with capital on hand.
Hyliion is planning to host a technology fireside chat later in
the quarter to highlight the unique capabilities of the KARNO
generator, business opportunities for near- and long-term
deployments, and key development milestones.
Financial Highlights and Guidance
Third quarter operating expenses totaled $33.3 million, compared
to $62.9 million in the prior-year quarter, which included one-time
expenses of $28.8 million associated with the purchase of KARNO
generator technology. Year-to-date expenses totaled $103.7 million,
compared to $120.8 million in the prior year period. Hyliion ended
the quarter with $324 million in cash, short-term and long-term
investments.
Forward guidance for 2023 includes full-year operating expenses
of approximately $140 million, including expenses associated with
winding down powertrain operations. Hyliion expects no additional
revenue from powertrain sales in 2023. Year-end cash and
investments are expected to total approximately $285 million with
cash burn in 2024 projected at approximately $40 million, excluding
potential revenues or monetization of powertrain assets or
technology.
About Hyliion
Hyliion is committed to creating innovative solutions that
enable clean, flexible and affordable electricity production. The
Company’s primary focus is to provide distributed power generators
that can operate on various fuel sources to future-proof against an
ever-changing energy economy. Headquartered in Austin, Texas, and
with research and development in Cincinnati, OH, Hyliion is
addressing the commercial space first with a locally-deployable
generator that can offer prime power, peak shaving, and renewables
matching. Beyond stationary power, Hyliion will address mobile
applications such as vehicles and marine. The KARNO generator is a
fuel-agnostic solution, enabled by additive manufacturing, that
leverages a linear heat generator architecture. The Company aims to
offer innovative, yet practical solutions that contribute
positively to the environment in the energy economy. For further
information, please visit www.hyliion.com.
Forward Looking Statements
The information in this press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
present or historical fact included in this press release,
regarding Hyliion and its future financial and operational
performance, as well as its strategy, future operations, estimated
financial position, estimated revenues, and losses, projected
costs, prospects, plans and objectives of management are forward
looking statements. When used in this press release, including any
oral statements made in connection therewith, the words “could,”
“should,” “will,” “may,” “believe,” “anticipate,” “intend,”
“estimate,” “expect,” “project,” the negative of such terms and
other similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
such identifying words. These forward-looking statements are based
on management’s current expectations and assumptions about future
events and are based on currently available information as to the
outcome and timing of future events. Except as otherwise required
by applicable law, Hyliion expressly disclaims any duty to update
any forward-looking statements, all of which are expressly
qualified by the statements herein, to reflect events or
circumstances after the date of this press release. Hyliion
cautions you that these forward-looking statements are subject to
numerous risks and uncertainties, most of which are difficult to
predict and many of which are beyond the control of Hyliion. These
risks include, but are not limited to, our status as an early stage
the Company with a history of losses, and our expectation of
incurring significant expenses and continuing losses for the
foreseeable future; our ability to develop to develop key
commercial relationships with suppliers and customers; our ability
to retain the services of Thomas Healy, our Chief Executive
Officer; the expected performance of the KARNO generator and
system; the execution of the strategic shift from our powertrain
business to our KARNO business, and the other risks and
uncertainties described under the heading “Risk Factors” in our SEC
filings including in our Annual Report (See item 1A. Risk Factors)
on Form 10-K filed with the Securities and Exchange Commission (the
“SEC”) on February 28, 2023 for the year ended December 31, 2022
and Form 10-Q filed with the SEC on November 8, 2023 for the
quarterly period ended September 30, 2023. Given these risks and
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. Should one or more of the risks or
uncertainties described in this press release occur, or should
underlying assumptions prove incorrect, actual results and plans
could different materially from those expressed in any
forward-looking statements. Additional information concerning these
and other factors that may impact Hyliion’s operations and
projections can be found in its filings with the SEC. Hyliion’s SEC
Filings are available publicly on the SEC’s website at www.sec.gov,
and readers are urged to carefully review and consider the various
disclosures made in such filings.
HYLIION HOLDINGS CORP.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands,
except share and per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenues
Product sales and other
$
96
$
499
$
672
$
1,011
Total revenues
96
499
672
1,011
Cost of revenues
Product sales and other
677
2,916
1,675
7,160
Total cost of revenues
677
2,916
1,675
7,160
Gross loss
(581
)
(2,417
)
(1,003
)
(6,149
)
Operating expenses
Research and development
25,115
52,678
73,472
88,543
Selling, general and administrative
8,186
10,264
30,265
32,255
Total operating expenses
33,301
62,942
103,737
120,798
Loss from operations
(33,882
)
(65,359
)
(104,740
)
(126,947
)
Interest income
3,534
1,926
10,345
3,066
Gain (loss) on disposal of assets
—
46
1
(89
)
Other income, net
26
—
14
—
Net loss
$
(30,322
)
$
(63,387
)
$
(94,380
)
$
(123,970
)
Net loss per share, basic and diluted
$
(0.17
)
$
(0.36
)
$
(0.52
)
$
(0.71
)
Weighted-average shares outstanding, basic
and diluted
181,641,060
174,345,022
180,914,250
173,945,156
HYLIION HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollar amounts in thousands,
except share data)
September 30,
2023
December 31,
2022
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
28,600
$
119,468
Accounts receivable
140
1,136
Inventory
139
74
Prepaid expenses and other current
assets
11,509
9,795
Short-term investments
153,625
193,740
Total current assets
194,013
324,213
Property and equipment, net
11,076
5,606
Operating lease right-of-use assets
7,494
6,470
Intangible assets, net
200
200
Other assets
2,038
1,686
Long-term investments
141,324
108,568
Total assets
$
356,145
$
446,743
Liabilities and stockholders’
equity
Current liabilities
Accounts payable
$
3,507
$
2,800
Current portion of operating lease
liabilities
807
347
Accrued expenses and other current
liabilities
8,867
11,535
Total current liabilities
13,181
14,682
Operating lease liabilities, net of
current portion
7,354
6,972
Other liabilities
1,248
1,515
Total liabilities
21,783
23,169
Commitments and contingencies
Stockholders’ equity
Common stock, $0.0001 par value;
250,000,000 shares authorized; 182,716,445 and 179,826,309 shares
issued and outstanding at September 30, 2023 and December 31, 2022,
respectively
18
18
Additional paid-in capital
402,978
397,810
(Accumulated deficit) retained
earnings
(68,634
)
25,746
Total stockholders’ equity
334,362
423,574
Total liabilities and stockholders’
equity
$
356,145
$
446,743
HYLIION HOLDINGS CORP.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in
thousands)
Nine Months Ended September
30,
2023
2022
Cash flows from operating
activities
Net loss
$
(94,380
)
$
(123,970
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
1,796
823
Amortization and accretion of investments,
net
(1,821
)
1,300
Noncash lease expense
1,072
922
Inventory write-down
992
5,634
(Gain) loss on disposal of assets
(1
)
89
Share-based compensation
5,170
5,268
Acquired in-process research and
development
—
28,752
Changes in operating assets and
liabilities:
Accounts receivable
996
(824
)
Inventory
(1,057
)
(5,660
)
Prepaid expenses and other assets
(1,200
)
3,097
Accounts payable
555
(5,201
)
Accrued expenses and other liabilities
(3,295
)
7,228
Operating lease liabilities
(1,254
)
(900
)
Net cash used in operating activities
(92,427
)
(83,442
)
Cash flows from investing
activities
Purchase of property and equipment and
other
(6,755
)
(2,621
)
Proceeds from sale of property and
equipment
2
33
Purchase of in-process research and
development
—
(14,428
)
Payments for security deposit, net
(45
)
—
Purchase of investments
(170,197
)
(160,116
)
Proceeds from sale and maturity of
investments
178,556
156,382
Net cash provided by (used in) investing
activities
1,561
(20,750
)
Cash flows from financing
activities
Proceeds from exercise of common stock
options
230
65
Taxes paid related to net share settlement
of equity awards
(232
)
(157
)
Net cash used in financing activities
(2
)
(92
)
Net decrease in cash and cash equivalents
and restricted cash
(90,868
)
(104,284
)
Cash and cash equivalents and restricted
cash, beginning of period
120,133
259,110
Cash and cash equivalents and restricted
cash, end of period
$
29,265
$
154,826
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231108343623/en/
Hyliion Holdings Corp. Ryann Malone
press@hyliion.com (833) 495-4466
Kellen Ferris ir@hyliion.com (737)
292-8649
Hyliion (NYSE:HYLN)
Historical Stock Chart
From Apr 2024 to May 2024
Hyliion (NYSE:HYLN)
Historical Stock Chart
From May 2023 to May 2024