Westport Fuel Systems Inc. (“WFS”) (TSX:WPRT / Nasdaq:WPRT) today reported financial results for the first quarter ended March 31, 2022 and provided an update on operations. All figures are in U.S. dollars unless otherwise stated.


  • Revenues of $76.5 million, comparable to the same period in 2021 against the backdrop of the Russian-Ukraine conflict and fuel price volatility. Excluding foreign exchange translation, revenues increased by approximately 6% year-over-year.
  • Net income of $7.7 million and net income per share of $0.05
  • Gain of $19.1 million recognized for the sale of our interest in the Cummins Westport Inc. ("CWI") joint venture including the monetization of the related intellectual property
  • Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") was negative $6.1 million (see "Non-GAAP Measures" section)

"The first quarter of 2022 was challenging as our industry continues to deal with significant gaseous fuel price fluctuations due to the ongoing uncertainty in supply levels and geopolitical risk. Despite the challenging macroeconomic environment, our OEM business continues to grow, we generated 21% growth year over year. Looking forward, the long-term outlook for our company is strong. There is still a need for clean, affordable transport and we remain in a prime competitive position; our products are here, available now, and are making a difference today. Our work with hydrogen is generating significant interest for the company and attention globally. Hydrogen HPDI broadens the call for our proprietary HPDI technology, reaching all the way to zero-carbon green hydrogen future that will have a positive impact on the industry and the global transportation market."

David M. Johnson, Chief Executive Officer


($ in millions, except per share amounts)             Over / (Under)%
1Q22 1Q21
Revenues $ 76.5   $ 76.4   —%
Gross margin(2)   9.9     13.0   (24)%
Gross margin %(2)   13 %   17 %
Operating expenses   20.7     21.2   (2)%
Income from investments accounted for by the equity method(1)   0.3     6.6   (96)%
Gain on sale of investment $ 19.1   $   100%
Net income (loss) $ 7.7   $ (3.1 ) 346%
Net income (loss) per share $ 0.05   $ (0.02 ) 350%
EBIT(2) $ 8.6   $ (1.6 ) 638%
EBITDA (2) $ 11.7   $ 1.9   516%
Adjusted EBITDA (2) $ (6.1 ) $ 2.7   (326)%

(1) This includes income primarily from CWI, Minda Westport and Westport Weichai Inc. joint ventures.(2) EBIT, EBITDA, Adjusted EBITDA, and Gross Margin are non-GAAP measures. Please refer to GAAP and NON-GAAP FINANCIAL MEASURES for the reconciliation.

Revenues for the first quarter of 2022 of $76.5 million were comparable to the prior year quarter. We continue to generate growth in our Original Equipment Manufacturer ("OEM") revenues, 21% year-over-year, primarily due to the addition of our fuel storage business and modest growth in our light-duty OEM, heavy-duty OEM, and electronics businesses despite a challenging macroeconomic environment. Offsetting the growth in OEM revenues, our Independent Aftermarket ("IAM") revenues were significantly lower year-over-year, down 27% on lower volumes caused primarily by the Russian-Ukraine conflict. Foreign exchange also had a significant impact on revenues in U.S. dollar terms, primarily due to the 7% appreciation of the U.S. dollar relative to the average Euro, period over period.Net income was $7.7 million for the three months ended March 31, 2022 compared to a net loss of $3.1 million for the first quarter of 2021. The increase in net income was primarily due to the gain of $19.1 million recognized for the sale of our interest in CWI and the monetization of the related intellectual property. This was partially offset by lower gross margin from lower sales volumes in our IAM business, inflationary pressure on cost of materials and manufacturing inputs due to global supply chain disruptions and by the loss of equity income from CWI. WFS generated negative $6.1 million in adjusted EBITDA during the three months ended March 31, 2022, as compared to $2.7 million for the three months ended March 31, 2021.


Original Equipment Manufacturer Segment

OEM revenue for first quarter 2022 was $51.8 million compared with $42.7 million for the prior year quarter. The 21% increase in revenue was primarily driven by the additional revenues of $7.9 million from the acquired Stako sp. zo.o ("Stako") fuel storage business, increased light-duty OEM business sales volumes to OEMs in India, and increased sales volume in our electronics business. Our heavy-duty OEM sales volume increased 16% year-over-year, but revenue growth was partially offset by an annual contractual price reduction to our initial OEM launch partner.

Independent Aftermarket Segment

Revenue for the three months ended March 31, 2022 was $24.7 million compared with $33.7 million for the three months ended March 31, 2021. The decrease in revenue was primarily driven by decreased sales volumes to mainly Russian customers due to the Russia-Ukraine conflict, a decrease in sales to Africa which in the prior year period included a large one-time infrastructure project, and the aforementioned foreign exchange impact.

  Revenue   Operating Loss   Depreciation &Amortization   Equity Income
OEM $ 51.8   $ (6.3 )   $ 2.1   $ 0.3
IAM   24.7     (0.4 )     0.9    
Corporate       (4.1 )     0.1    
Total Consolidated $ 76.5   $ (10.8 )   $ 3.1   $ 0.3
  Revenue   OperatingIncome (Loss)   Depreciation &Amortization   Equity Income
OEM $ 42.7   $ (6.5 )   $ 2.1   $ 0.2
IAM   33.7     1.6       1.3    
Corporate       (3.3 )     0.1     6.4
Total Consolidated $ 76.4   $ (8.2 )   $ 3.5   $ 6.6


Our cash position increased by $2.7 million during the first three months of 2022 to $127.6 million from $124.9 million at December 31, 2021. The increase was primarily from the $31.4 million proceeds received from the sale of our interest in CWI and monetization of the related intellectual property, offset by the cash outflows in net working capital, investments in capital assets, and repayments of our short and long-term debt.

COVID-19, the Russia-Ukraine conflict, sanctions related to that conflict, uncertainty and volatility in fuel prices, especially in Europe, and global supply chain disruptions had a negative impact on customer demand and materially impacted our business in the quarter. Further, supply chain disruptions and high inflation continue to challenge the automotive industry with rising manufacturer costs causing pressure on gross margin in the near term as we respond with pricing and productivity countermeasures to manage our profitability. See the "Russia-Ukraine Conflict" and "Liquidity and Impact of COVID-19" sections in the Management's Discussion and Analysis ("MD&A") for further discussion. These conditions continue to persist. Consequently, the duration and severity of the impact on future quarters is currently uncertain. For the three months ended March 31, 2022, our net cash flows used in operating activities were $16.9 million, an increase of $14.3 million from $2.6 million in net cash flows used in operating activities in the same prior year period. The increase in cash used was primarily due to the net change in working capital and decrease in gross margin.

Our net cash from investing activities of $29.2 million consisted primarily of cash acquired through the sale of our investment in CWI partially offset by purchases of property, plant and equipment of $2.8 million. Net cash flows used in financing activities were $7.9 million for the first quarter 2022 primarily due to a net repayment of debt as we began paying down our debt on a quarterly basis after a period of deferral from COVID-19 relief.


The information set forth in this news release summarizes WFS' key financial and operational data for the first quarter of 2022. It is not a complete source of information for readers and readers are encouraged to read the first quarter 2022 MD&A dated May 6th, 2022, the risk factors described therein, and the unaudited condensed consolidated interim financial statements for the period ended March 31, 2022. To view WFS financial statements and our MD&A for the first quarter ended March 31, 2022, please visit https://investors.wfsinc.com/financials/. The MD&A and the unaudited condensed consolidated interim financial statements for the period ended March 31, 2022 are also available on the Canadian Securities Administrators' SEDAR website at www.sedar.com and on the United States Securities and Exchange Commission's EDGAR website at www.sec.gov.


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 the WFS condensed consolidated interim financial statements for the first quarter of 2022.


WFS has scheduled a conference call for Monday. May 9, 2022 at 7:00 am Pacific Time (10:00 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/


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 8851. The telephone replay will be available until May 16, 2022. 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.

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 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 and the Russia-Ukraine conflict 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, geopolitical risk and related sanctions, 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

Christian TweedyInvestor RelationsWestport Fuel SystemsT: +1 604-718-2046invest@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 Gross Margins as well as EBIT, 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.

EBIT, EBITDA, Adjusted EBITDA and Gross Margin 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 EBIT, EBITDA, Adjusted EBITDA, and Gross Margin differently.

($ in millions) 1Q22 1Q21
Three months ended
Income (loss) before income taxes $ 7.6   $ (2.8 )
Interest expense, net   1.0     1.2  
EBIT   8.6     (1.6 )
Depreciation and amortization   3.1     3.5  
EBITDA   11.7     1.9  
Stock based compensation   0.5     0.1  
Unrealized foreign exchange (gain) loss   0.8     0.7  
(Gain) on sale of investments   (19.1 )    
Adjusted EBITDA $ (6.1 ) $ 2.7  
($ in millions) 1Q22 1Q21
Three months ended
Revenue 76.5 76.4
Cost of revenue 66.6 63.4
Gross margin 9.9 13.0
($ in millions) 1Q22 1Q21
Three months ended
Revenue 76.5   76.4  
Gross margin 9.9   13.0  
Gross margin % 13 % 17 %
Condensed Consolidated Interim Balance Sheets (unaudited)
(Expressed in thousands of United States dollars, except share amounts)
March 31, 2022 and December 31, 2021
    March 31, 2022   December 31, 2021
Current assets:        
Cash and cash equivalents (including restricted cash)   $ 127,564     $ 124,892  
Accounts receivable     95,582       101,508  
Inventories     90,459       83,128  
Prepaid expenses     8,155       6,997  
Assets held for sale           22,039  
Total current assets     321,760       338,564  
Long-term investments     4,075       3,824  
Property, plant and equipment     62,499       64,420  
Operating lease right-of-use assets     27,344       28,830  
Intangible assets     8,785       9,286  
Deferred income tax assets     11,517       11,653  
Goodwill     3,071       3,121  
Other long-term assets     21,902       11,615  
Total assets   $ 460,953     $ 471,313  
Liabilities and shareholders’ equity        
Current liabilities:        
Accounts payable and accrued liabilities   $ 91,403     $ 99,238  
Current portion of operating lease liabilities     3,425       4,190  
Short-term debt     7,813       12,965  
Current portion of long-term debt     12,142       11,277  
Current portion of long-term royalty payable     5,200       5,200  
Current portion of warranty liability     14,027       13,577  
Total current liabilities     134,010       146,447  
Long-term operating lease liabilities     23,707       24,362  
Long-term debt     41,661       45,125  
Long-term royalty payable     5,021       4,747  
Warranty liability     3,365       5,214  
Deferred income tax liabilities     3,323       3,392  
Other long-term liabilities     5,596       5,607  
Total liabilities     216,683       234,894  
Shareholders’ equity:        
Share capital:        
Unlimited common and preferred shares, no par value        
171,180,056 (2021 - 170,799,325) common shares     1,243,077       1,242,006  
Other equity instruments     7,813       8,412  
Additional paid-in-capital     11,516       11,516  
Accumulated deficit     (984,311 )     (992,021 )
Accumulated other comprehensive loss     (33,825 )     (33,494 )
Total shareholders' equity     244,270       236,419  
Total liabilities and shareholders' equity   $ 460,953     $ 471,313  
Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss) (unaudited)  
(Expressed in thousands of United States dollars, except share and per share amounts)  
Three months ended March 31, 2022 and 2021  
    Three months ended March 31,
      2022       2021  
Revenue   $ 76,544     $ 76,443  
Cost of revenue and expenses:        
Cost of revenue     66,619       63,426  
Research and development     5,934       6,712  
General and administrative     9,191       9,290  
Sales and marketing     3,649       2,931  
Foreign exchange loss     771       731  
Depreciation and amortization     1,183       1,510  
      87,347       84,600  
Loss from operations     (10,803 )     (8,157 )
Income from investments accounted for by the equity method     293       6,577  
Gain on sale of investment     19,119        
Interest on long-term debt and accretion on royalty payable     (1,060 )     (1,749 )
Interest and other income, net of bank charges     41       547  
Income (loss) before income taxes     7,590       (2,782 )
Income tax expense (recovery)     (120 )     358  
Net income (loss) for the period     7,710       (3,140 )
Other comprehensive income (loss):        
Cumulative translation adjustment     (331 )     (2,154 )
Comprehensive income (loss)   $ 7,379     $ (5,294 )
Income (loss) per share:        
Net income (loss) per share - basic   $ 0.05     $ (0.02 )
Net income (loss) per share - diluted   $ 0.04     $ (0.02 )
Weighted average common shares outstanding:        
Basic     171,155,206       147,126,250  
Diluted     174,516,905       147,126,250  
Condensed Consolidated Interim Statements of Cash Flows (unaudited)
(Expressed in thousands of United States dollars)
Three months ended March 31, 2022 and 2021
    Three months ended March 31,
      2022       2021  
Cash flows from (used in) operating activities:        
Net income (loss) for the period   $ 7,710     $ (3,140 )
Items not involving cash:        
Depreciation and amortization     3,089       3,473  
Stock-based compensation expense     531       84  
Unrealized foreign exchange loss     771       731  
Deferred income tax     (435 )     (190 )
Income from investments accounted for by the equity method     (293 )     (6,577 )
Interest on long-term debt and accretion of royalty payable     1,060       1,749  
Change in inventory write-downs to net realizable value     (243 )     198  
Change in bad debts expense     91       48  
Gain on sale of investment     (19,119 )      
Net cash used in before working capital changes     (6,838 )     (10,636 )
Changes in non-cash operating working capital:        
Accounts receivable     6,028       6,797  
Inventories     (8,384 )     (6,875 )
Prepaid expenses     (2,270 )     3,842  
Accounts payable and accrued liabilities     (3,569 )     (3,343 )
Warranty liability     (1,856 )     620  
Net changes in non-cash operating working capital     (10,051 )     1,041  
Net cash used in operating activities     (16,889 )     (2,583 )
Cash flows from (used in) investing activities:        
Purchase of property, plant and equipment and other assets     (2,798 )     (1,662 )
Proceeds on sale of investments and assets     31,949       316  
Dividends received from joint ventures           7,878  
Net cash from investing activities     29,151       6,532  
Cash flows from (used in) financing activities:        
Payments under short and long-term facilities     (23,193 )     (23,221 )
Drawings on operating lines of credit     15,306       4,605  
Proceeds from share issuance, net           12,805  
Net cash used in financing activities     (7,887 )     (5,811 )
Effect of foreign exchange on cash and cash equivalents     (1,703 )     (2,654 )
Increase (decrease) in cash and cash equivalents     2,672       (4,516 )
Cash and cash equivalents, beginning of period (including restricted cash)     124,892       64,262  
Cash and cash equivalents, end of period (including restricted cash)   $ 127,564     $ 59,746  


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