Hyliion Holdings Corp. (NYSE: HYLN) (“Hyliion”), a developer of
sustainable electricity-producing technology, today reported its
first-quarter 2024 financial results.
Key Business Highlights
- Announced that H2 Energy Group has executed a letter of intent
to purchase up to 10 KARNO generator units that will operate on
hydrogen rich syngas produced from sustainable processes
- Announced partnership with BayoTech to introduce Hyliion and
BayoTech’s innovative solutions to each other’s customers
- Reiterated plans to deliver initial KARNO generator units to
customers in late 2024
- Reported today that customer commitments are secured for 2024
production capacity and actively building a backlog of commitments
for 2025 generator deliveries
- Hosted event with customers and other stakeholders to showcase
KARNO technology and development progress
- Repurchased 8.7 million shares for $11.3 million as part of the
company’s $20 million Stock Repurchase Program
- Ended the quarter with $264 million of cash and
investments
- Reaffirmed guidance of $40 to $50 million cash expenditures in
2024 for KARNO development and capital investments
Executive Commentary
“I'm excited with the progress we've achieved in the past
quarter as we remain on course for the initial deployment of KARNO
generators to customers later this year," stated Thomas Healy,
Hyliion’s Founder and CEO. "The growing interest from customers in
our technology is promising, and we anticipate expanding our order
backlog throughout this year for 2025. Additionally, we're swiftly
increasing our production capacity by introducing additive printers
to our Austin, Texas facility to meet rising demand."
KARNO Commercial Updates
Hyliion is initially developing a locally-deployable 200kW
generating system which it intends to deliver to initial deployment
customers in late 2024. Target markets in the commercial power
space include EV Charging, Waste Gas, Prime Power and Mobility
applications. Initial customer deployments will target each of
these markets to demonstrate the versatility of the KARNO generator
as well as key product attributes and differentiators versus
competing technologies, including efficiency, emissions, fuel
flexibility, and operating and maintenance costs.
Hyliion also recently announced that H2 Energy Group has
executed a non-binding letter of intent for the purchase of up to
10 KARNO generators that will be fueled by hydrogen-rich syngas. H2
Energy specializes in the production of hydrogen using completely
sustainable and renewable biomass. The letter of intent outlines
the plan for five KARNO generator units to be installed in 2025 and
includes an option for the purchase of five additional generators
upon successful deployment of the initial units. Hyliion also
announced a partnership with BayoTech, a full-service hydrogen
supplier, allowing the companies to introduce their innovative
solutions to each other’s customers, enhancing the product
offerings of both companies.
Hyliion recently hosted a KARNO generator showcase event at its
Cincinnati engineering and development facility, welcoming guests
including customers, regulators, media representatives, government
officials, supplier partners, and other stakeholders. Attendees had
the opportunity to witness the KARNO generator in action and
explore its underlying technology, including additive manufacturing
and the fuel oxidation process with hydrogen. Additionally, the
company provided updates on recent development progress, plans for
initial generator deployments and the scaling up of production
capacity.
KARNO Generator Development
Hyliion is developing a revolutionary new electrical generator
powered by a linear heat motor that is expected to deliver
step-change improvements in performance characteristics compared to
conventional electricity generating systems, including efficiency,
emissions, maintenance requirements, noise levels and fuel
flexibility. The KARNO generator is enabled by the latest advances
in additive manufacturing technology.
The development of the KARNO generator remains on track for
initial customer deployments in late 2024. The company has been
testing its Alpha version of the generator and earlier this year
began printing components for its BETA version, which is the
production-intent design. The company is taking delivery of
additive manufacturing machines at its Austin, Texas facility,
slated to become Hyliion’s primary KARNO generator printing,
manufacturing and assembly center starting in 2025. Additive
printers on hand and on order account for most of the capacity
required for planned generator production in 2025.
Powertrain Wind-Down
In November 2023, Hyliion announced that it was winding down its
powertrain business segment to maintain the company’s strong cash
position as it furthers development of KARNO generator technology.
The company has retained the powertrain technology, enabling it to
explore future use or sale of the technology and tangible assets.
Most wind-down activities were completed through the first quarter
of 2024, while efforts to monetize powertrain assets and technology
will continue throughout the year.
Financial Highlights and Guidance
First quarter operating expenses totaled $19.0 million, compared
to $31.9 million in the prior-year quarter. First quarter expenses
include $4.4 million of exit and termination charges directly
related to the wind down of the powertrain business. Net loss in
the quarter was $15.6 million, compared to $28.8 million in the
first quarter of 2023.
The company repurchased 8.7 million shares of stock in the first
quarter for $11.3 million as part of the $20 million share
repurchase program announced in late 2023. Total cash expenditures
for the quarter were $35.3 million, including share repurchases,
$14.1 million for KARNO development, SG&A expenses, and capital
spending and $9.9 million for outlays related to powertrain
wind-down activities, net of asset sales. Total cash and
investments remaining at the end of the quarter were $264
million.
For 2024, total cash consumed by KARNO development and capital
investments is expected to be between $40 and $50 million, down
compared to $131 million in cash consumed by the company in 2023.
This estimate excludes cash payments associated with the stock
repurchase program, payments associated with the ongoing wind down
of powertrain operations, and cash generated from the sale of
powertrain assets. Hyliion expects to achieve commercialization of
the KARNO generator with the capital on hand.
Projections for 2025 include growth of KARNO generator
deliveries with proceeds from sales in the low double-digit
millions of dollars. The company also projects gross margins to be
approximately break-even or slightly negative and cash spending to
grow modestly compared to 2024.
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, Ohio, Hyliion is
initially targeting the commercial and waste management industries
with a locally deployable generator that can offer prime power as
well as energy arbitrage opportunities. 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
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
13, 2024 for the year ended December 31, 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 differ 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 March
31,
2024
2023
Revenues
Product sales and other
$
—
$
310
Total revenues
—
310
Cost of revenues
Product sales and other
—
691
Total cost of revenues
—
691
Gross loss
—
(381
)
Operating expenses
Research and development
7,968
20,918
Selling, general and administrative
6,592
10,981
Exit and termination costs
4,431
—
Total operating expenses
18,991
31,899
Loss from operations
(18,991
)
(32,280
)
Interest income
3,396
3,462
Gain on disposal of assets
3
2
Other expense, net
—
(15
)
Net loss
$
(15,592
)
$
(28,831
)
Net loss per share, basic and diluted
$
(0.09
)
$
(0.16
)
Weighted-average shares outstanding, basic
and diluted
178,482,894
180,118,044
HYLIION HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollar amounts in thousands,
except share data)
March 31, 2024
December 31,
2023
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
14,715
$
12,881
Accounts receivable
122
40
Prepaid expenses and other current
assets
6,559
18,483
Short-term investments
126,703
150,297
Assets held for sale
5,973
—
Total current assets
154,072
181,701
Property and equipment, net
12,701
9,987
Operating lease right-of-use assets
6,992
7,070
Other assets
1,360
1,439
Long-term investments
122,529
128,186
Total assets
$
297,654
$
328,383
Liabilities and stockholders’
equity
Current liabilities
Accounts payable
$
2,119
$
4,224
Current portion of operating lease
liabilities
1,436
847
Accrued expenses and other current
liabilities
6,948
10,051
Total current liabilities
10,503
15,122
Operating lease liabilities, net of
current portion
6,207
6,792
Other liabilities
534
203
Total liabilities
17,244
22,117
Commitments and contingencies
Stockholders’ equity
Common stock, $0.0001 par value;
250,000,000 shares authorized; 184,016,695 and 183,071,317 shares
issued at March 31, 2024 and December 31, 2023, respectively;
175,304,238 and 183,034,255 shares outstanding as of March 31, 2024
and December 31, 2023, respectively
18
18
Additional paid-in capital
405,118
404,045
Treasury stock, at cost; 8,712,457 and
37,062 shares as of March 31, 2024 and December 31, 2023,
respectively
(11,370
)
(33
)
Accumulated deficit
(113,356
)
(97,764
)
Total stockholders’ equity
280,410
306,266
Total liabilities and stockholders’
equity
$
297,654
$
328,383
HYLIION HOLDINGS CORP.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in
thousands)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities
Net loss
$
(15,592
)
$
(28,831
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
572
524
Amortization and accretion of investments,
net
(973
)
(194
)
Noncash lease expense
78
302
Inventory write-down
—
231
Gain on disposal of assets
(572
)
(2
)
Share-based compensation
1,320
2,040
Carrying value adjustment to assets held
for sale
5,564
—
Changes in operating assets and
liabilities:
Accounts receivable
(82
)
299
Inventory
—
(1,026
)
Prepaid expenses and other assets
(7,382
)
(5,313
)
Accounts payable
(2,573
)
215
Accrued expenses and other liabilities
(3,066
)
(1,144
)
Operating lease liabilities
4
(340
)
Net cash used in operating activities
(22,702
)
(33,239
)
Cash flows from investing
activities
Purchase of property and equipment and
other
(2,818
)
(2,988
)
Proceeds from sale of property and
equipment
572
2
Purchase of investments
(23,707
)
(31,394
)
Proceeds from sale and maturity of
investments
53,861
33,533
Net cash provided by (used in) investing
activities
27,908
(847
)
Cash flows from financing
activities
Proceeds from exercise of common stock
options
48
19
Taxes paid related to net share settlement
of equity awards
(295
)
(195
)
Repurchase of treasury stock
(11,043
)
—
Net cash used in financing activities
(11,290
)
(176
)
Net decrease in cash and cash equivalents
and restricted cash
(6,084
)
(34,262
)
Cash and cash equivalents and restricted
cash, beginning of period
21,464
120,133
Cash and cash equivalents and restricted
cash, end of period
$
15,380
$
85,871
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Hyliion Holdings Corp. press@hyliion.com
ir@hyliion.com
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