Announces First Commercial Delivery of Fuel
Cell Electric Truck in U.S.
ROCHESTER, N.Y., Nov. 14, 2023 /PRNewswire/ -- Hyzon
Motors Inc. (NASDAQ: HYZN) (Hyzon or the Company), a leading
hydrogen fuel cell technology developer and global supplier of
zero-emission heavy-duty fuel cell electric vehicles (FCEVs), today
announced its third quarter 2023 financial and operational
results.
Recent Highlights
- Delivered first revenue-generating FCEV to a customer in
North America at Port of Los
Angeles/Long Beach, commercially entering drayage market
- Deployed 14 FCEVs under commercial agreements and collected
approximately $3.6 million in cash
year-to-date; raises low end of 2023 guidance to 15-20 vehicles
deployed under commercial agreements
- Fuel cell production facility in Bolingbrook, Illinois on track for 2024 Start
of Production (SoP) with less than $5M of CapEx remaining; estimating an initial
annual capacity of over 700 200kW FCSs on three shifts
- Strengthened executive leadership team through appointment of
Stephen Weiland as CFO
- Reported lowest quarterly cash burn over the last eight
quarters, including third consecutive quarter of declining cash
burn
- Unrestricted cash, cash equivalents, and short-term investments
of $137.8 million as of September 30, 2023, and approximately
$129 million as of October 31, 2023
"This was a remarkable quarter as Hyzon continues to accelerate
the global transition to clean energy by developing and
commercializing our proprietary, leading zero-emission fuel cell
technology," said Parker Meeks,
Chief Executive Officer of Hyzon. "We believe that Hyzon is at an
inflection point as we recently made our first commercial delivery
in the U.S., are advancing our customer pipeline, and expect less
than $5 million in capital
investments to reach Start of Production at our fuel cell
manufacturing facility. All of this, combined with the significant
tailwinds for the hydrogen ecosystem from recently advanced
government subsidy programs, put Hyzon in a strong position to lead
in the race to decarbonization."
Third Quarter 2023 Business Highlights
Fuel Cell Electric Vehicle Deployments
By the end of
the third quarter, Hyzon had deployed 13 vehicles under commercial
agreements to customers in 2023; one additional vehicle was
deployed subsequent to the quarter end. Of those vehicles, one was
deployed in North America, three
were deployed to customers in Europe, and ten coach buses were deployed to a
customer in Australia.
With a total of 14 vehicles deployed to date, Hyzon raises the
low end of its guidance to 15-20 vehicles deployed by year end,
from its previous guidance of 10-20 vehicle. Hyzon also has
collected approximately $3.6 million
in cash in the first three quarters of 2023 against those
vehicles. The Company's North American trial program continued
to expand, with 18 trials completed since March 2022, of which 10 trials were completed in
2023, gaining experience with and learnings from real world
operations for future FCEV deployments.
Significant Commercial Progress, with Agreements
Signed and Trials Initiated and/or Completed
Subsequent to
the quarter-end, Hyzon made what the Company believes is the
industry's first publicly-announced commercial sale and delivery of
a heavy-duty fuel cell electric truck in North America. The vehicle was delivered to a
fleet operating out of the Port of Los Angeles/Long Beach,
commercially entering the drayage market for fuel cell trucks,
which the Company expects to represent a significant addressable
market.
Also subsequent to the quarter-end, the Company announced the
commercial trial deployment of its first Heavy Rigid fuel cell
electric waste collection truck to REMONDIS Australia, one of the
world's largest waste service and recycling companies. The
commercial trial is expected to convert to a full vehicle purchase
if certain trial performance targets are met. Hyzon is on track to
launch the first U.S. trial of the refuse truck platform in the
first half of 2024 in California,
with customer deliveries expected to begin in 2025.
The Company also signed a commercial agreement with New Zealand's largest heavy-duty truck fleet
owner, TR Group, for up to 20 vehicles powered by the 200kW fuel
cell system, at TR Group's option pending a successful trial
planned to begin March 2024.
Single-Stack 200kW Fuel Cell System B-Samples
Development
The Company continued its progress along the
standard automotive product development methodology it is following
for its next generation 200kw fuel cell, advancing toward SOP. In
2H 2023, the Company completed factory acceptance testing of nine
single-stack 200kW FCS B-samples at its production and innovation
center in Bolingbrook, IL. The
Company remains on track to complete a total of 25 200kW B-samples
and declare C-Sample by the end of 2023 and begin SOP of its 200kW
fuel cell system in 2024.
The Company's world-class fuel cell production facility in
Bolingbrook, Illinois has less
than $5 million in capital
investments remaining to complete the SOP of the 200kW FCS in 2024.
Upon SOP, the facility is projected to have initial annual capacity
for over 700 200kW FCSs on three shifts. The Company expects that
initial annual capacity to satisfy volume forecasts through 2025,
with plans for capacity expansion by using lean production to
mitigate bottlenecks and constraints.
Advancement & Commercialization of Fuel Cell
Technology
Hyzon continues to build on its strong foundation
of fuel cell Intellectual Property (IP). In Q3, Hyzon was granted
an additional 10 exclusively-owned patents, bringing its total
patent base to 158 (applied and granted), with 80 patents applied
and granted since 2021.
Subsequent to the quarter end, the Company announced an
amendment to its IP agreement with affiliates of Horizon, Hyzon's
majority controlling shareholder and an advanced hydrogen fuel cell
solutions company. Under the amendment, Hyzon expands its market
access to stationary fuel cell power applications in North America, in addition to its existing
access to global fuel cell mobility markets. The amendment also
covers the option for Hyzon and Horizon to pursue joint development
of a single stack 300kW fuel cell system, which Hyzon previously
announced as part of its product roadmap.
Board of Directors and Leadership Updates
Subsequent
to the third quarter, in November, the Company appointed
Stephen Weiland as Chief Financial
Officer. Steve brings two decades of experience at companies
including Caterpillar, leading financial operations, driving
diverse growth capital programs, executing transactions in
Cleantech, and implementing critical financial processes.
In July, the Company appointed Matthew
Foulston, an accomplished finance executive who served as
CFO for three publicly listed companies, to its Board of Directors.
In August, Hyzon's Board of Directors elected Erik Anderson as Chairman, replacing
George Gu who resigned his position.
Anderson is a global innovation leader and investor, with
leadership roles spanning various sectors. In addition, the Board
elected Andrea Farace as Vice
Chairman of Hyzon's Board. Farace is an accomplished executive and
leader with a long global career spanning more than 40 years in
finance and general business management.
Announced Final Resolution of SEC Investigation
In
September, Hyzon announced a final resolution of the investigation
by the SEC, subject to court approval. Without admitting or denying
the allegations in the SEC's complaint, Hyzon has agreed to pay a
civil monetary penalty of $25 million
in three installments: $8.5 million
within 30 days of entry of final judgment; $8.5 million by December
31, 2024; and $8 million
within 730 days of entry of final judgment. Further details
regarding the resolution can be found in the SEC's complaint and
proposed final judgments, which are publicly available.
Third Quarter 2023 Financial Updates
As of September 30, 2023,
unrestricted cash, cash equivalents, and short-term investments
were $137.8 million, approximately
$34.6 million lower than the
June 30, 2023 balance of $172.4 million. Cash burn of $34.6 million during the quarter represented the
lowest quarterly cash burn over the last eight quarters, including
third consecutive quarter of declining cash burn since the fourth
quarter of 2022. As of October 31,
2023, unrestricted cash, cash equivalents, and short-term
investments were approximately $129
million.
"We are pleased to have delivered this quarter the lowest cash
burn in the last eight quarters, driven by operational
efficiencies, cash management, lower legal and professional
services expenses and managing personnel levels to support the
business. These results give us confidence to share that our cash
burn guidance is unchanged for both the second half of 2023 and the
full year of 2024. We have demonstrated our ability to drive below
$10 million per month of core cash
burn already in the month of October", said CEO Parker Meeks. "In addition to our cash burn
reduction momentum, we remain focused on opportunistically raising
capital, including a possible strategic raise which we continue to
explore. The resolution of the SEC investigation removed a
material obstacle. We believe Hyzon has significant strategic
value, with leading technology, minimal remaining capital spending
requirements through our 200kW fuel cell system SoP, and increasing
customer agreements and deliveries."
Conference Call Information
The Hyzon management team will host a conference call to discuss
its second quarter 2023 financial results on Tuesday, November 14, 2023, at 8:30 a.m. Eastern Time. The conference call can
be accessed by dialing 1 (888) 800-7840 and entering the access
code 5240234. International participants can access the call by
dialing 1 (646) 307-1856 and entering the access code 5240234.
To listen to the live audio webcast and Q&A, visit the Hyzon
investor relations website at investors.hyzonmotors.com. A replay
and transcript of the webcast will be available on the website
within 24 hours after the call. Hyzon's earnings press release and
related materials will also be available on the Company's investor
relations website.
About Hyzon Motors Inc.
Hyzon Motors is a global supplier of high-power fuel cell
technology focused on integrating the technology into zero-emission
heavy-duty hydrogen fuel cell electric vehicles. Hyzon's low-cost,
clean hydrogen infrastructure approach synchronizes supply with
demand, accelerating the deployment of zero emission trucks.
Utilizing its proven and proprietary hydrogen fuel cell technology,
Hyzon aims to supply zero-emission heavy duty trucks to customers
in North America, Europe, Australia, and New
Zealand to mitigate emissions from diesel transportation -
one of the single largest sources of global carbon emissions. Hyzon
is contributing to the adoption of fuel cell electric vehicles
through its demonstrated technology advantage, fuel cell
performance, and history of rapid innovation. Visit
www.hyzonmotors.com.
Use of Non-GAAP Financial Information
EBITDA and Adjusted EBITDA
To supplement its Consolidated Balance Sheets and Statements of
Operations and Comprehensive Income (Loss), which are prepared and
presented in accordance with U.S. generally accepted accounting
principles ("GAAP"), Hyzon reports EBITDA and Adjusted EBITDA which
are non-GAAP financial measures. EBITDA is determined by taking net
income (loss) and adding interest income or expense, income tax
expense or benefit, depreciation and amortization. Adjusted EBITDA
is determined by taking EBITDA and adding non-cash stock-based
compensation expense, change in fair value of private placement
warrant liability, change in fair value of earnout liability, gain
(loss) on equity securities and other special items determined by
management, if applicable. We believe that these non-GAAP measures,
viewed in addition to and not in lieu of our reported GAAP results,
provide useful information to investors by providing a more focused
measure of operating results, enhances the overall understanding of
past financial performance and future prospects, and allows for
greater transparency with respect to key metrics used by management
in its financial and operational decision making. The non-GAAP
measures presented herein may not be comparable to similarly titled
measures presented by other companies. EBITDA and Adjusted EBITDA
has been reconciled to the nearest GAAP measure in the tables
within this press release.
Free Cash Flow
In addition to reporting Hyzon's cash flow generation and usage
based upon the operating, investing, and financing classifications
included in the Consolidated Statements of Cash Flows, the Company
also reports free cash flow, a non-GAAP financial measure which
represents net cash used in operating activities less capital
expenditures. The Company believes free cash flow is an important
measure of operating performance because it provides management and
investors with a measure of cash that is available for mandatory
payment obligations and investment opportunities. Free Cash Flow
has been reconciled to the nearest GAAP measure in the tables
within this press release.
Forward-Looking Statements
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, are forward-looking
statements. When used in this press release, 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, including
statements relating to the Company's expectations regarding actions
to focus and restructure its business and its expectations
regarding the benefits of actions taken and that may be taken in
the future in furtherance of such efforts, its beliefs and
expectations regarding its technology and the performance and
capabilities of its fuel cells and FCEVs; its outlook regarding its
business milestones and the expected timing and benefits thereof,
including commencement of commercial production of its fuel cell
systems and FCEVs, its beliefs and outlook regarding momentum in
its business, and its beliefs regarding its competitive position
and the benefits thereof, 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,
Hyzon disclaims any duty to update any forward-looking statements,
all of which are expressly qualified by the statements in this
section, to reflect events or circumstances after the date of this
press release. Hyzon 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 Hyzon, including risks and uncertainties described in
the "Risk Factors" section of Hyzon's Form 10-K for the year ended
December 31, 2022 filed with the SEC
on May 31, 2023, Form 10-Q for the
quarter ended June 30, 2023 filed on
August 8, 2023, and other documents
filed by Hyzon from time to time with the SEC. These filings
identify and address other important risks and uncertainties that
could cause actual events and results to differ materially from
those contained in the forward-looking statements, such as risks
related to the ability to convert non-binding memoranda of
understanding or vehicle trial agreements into binding orders or
sales (including because of the current or prospective financial
resources of the counterparties to Hyzon's non-binding memoranda of
understanding and letters of intent), or the ability to identify
additional potential customers and convert them to paying
customers. Hyzon gives no assurance that Hyzon will achieve its
expectations.
HYZON MOTORS INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in thousands,
except share and per share amounts)
(unaudited)
|
|
September
30,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
110,614
|
|
$
60,554
|
Short-term
investments
|
27,193
|
|
194,775
|
Accounts
receivable
|
297
|
|
29
|
Related party
receivable
|
321
|
|
6,578
|
Inventory
|
41,233
|
|
35,553
|
Prepaid expenses and
other current assets
|
11,510
|
|
15,365
|
Total current
assets
|
191,168
|
|
312,854
|
Property, plant, and
equipment, net
|
19,549
|
|
22,420
|
Right-of-use
assets
|
5,082
|
|
9,181
|
Investments in equity
securities
|
15,030
|
|
15,030
|
Equity method
investment
|
8,328
|
|
8,500
|
Other assets
|
6,056
|
|
6,911
|
Total
Assets
|
$
245,213
|
|
$
374,896
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
4,587
|
|
$
13,798
|
Accrued
liabilities
|
22,893
|
|
25,587
|
Related party
payables
|
443
|
|
433
|
Contract
liabilities
|
7,737
|
|
3,919
|
Current portion of
lease liabilities
|
1,896
|
|
2,132
|
Total current
liabilities
|
37,556
|
|
45,869
|
Long term
liabilities
|
|
|
|
Lease
liabilities
|
6,071
|
|
7,492
|
Private placement
warrant liability
|
561
|
|
1,122
|
Earnout
liability
|
4,898
|
|
10,927
|
Deferred income
taxes
|
526
|
|
526
|
Accrued SEC
settlement
|
16,500
|
|
—
|
Other
liabilities
|
1,317
|
|
1,901
|
Total
Liabilities
|
$
67,429
|
|
$
67,837
|
Commitments and
contingencies
|
|
|
|
Stockholders'
Equity
|
|
|
|
Common stock, $0.0001
par value; 400,000,000 shares authorized, 244,998,491 and
244,509,208 shares issued and outstanding as of
September 30, 2023 and December 31,
2022, respectively.
|
25
|
|
25
|
Treasury stock, at
cost; 3,769,592 shares as of September 30, 2023 and December
31,
2022, respectively.
|
(6,446)
|
|
(6,446)
|
Additional paid-in
capital
|
377,951
|
|
372,942
|
Accumulated
deficit
|
(193,148)
|
|
(58,598)
|
Accumulated other
comprehensive income (loss)
|
103
|
|
(153)
|
Total Hyzon Motors
Inc. stockholders' equity
|
178,485
|
|
307,770
|
Noncontrolling
interest
|
(701)
|
|
(711)
|
Total Stockholders'
Equity
|
177,784
|
|
307,059
|
Total Liabilities
and Stockholders' Equity
|
$
245,213
|
|
$
374,896
|
HYZON MOTORS
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
|
(in thousands,
except per share amounts)
|
(unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
—
|
|
$
5
|
|
$
—
|
|
$
2,939
|
Operating
expense:
|
|
|
|
|
|
|
|
Cost of
revenue
|
3,286
|
|
8,203
|
|
6,534
|
|
10,226
|
Research and
development
|
10,857
|
|
9,241
|
|
32,794
|
|
26,660
|
Selling, general, and
administrative
|
21,044
|
|
36,103
|
|
100,999
|
|
75,920
|
Restructuring and asset
impairment
|
4,885
|
|
—
|
|
4,885
|
|
—
|
Total operating
expenses
|
40,072
|
|
53,547
|
|
145,212
|
|
112,806
|
Loss from
operations
|
(40,072)
|
|
(53,542)
|
|
(145,212)
|
|
(109,867)
|
Other income
(expense):
|
|
|
|
|
|
|
|
Change in fair value
of private placement warrant liability
|
(240)
|
|
3,447
|
|
561
|
|
13,385
|
Change in fair value
of earnout liability
|
(1,307)
|
|
18,034
|
|
6,029
|
|
87,371
|
Gain (loss) on equity
securities
|
—
|
|
—
|
|
—
|
|
10,082
|
Foreign currency
exchange gain (loss) and other expense, net
|
(3,877)
|
|
(4,539)
|
|
(2,447)
|
|
(7,143)
|
Investment income and
interest income, net
|
1,441
|
|
947
|
|
6,501
|
|
1,018
|
Total other income
(expense)
|
(3,983)
|
|
17,889
|
|
10,644
|
|
104,713
|
Loss before income
taxes
|
$
(44,055)
|
|
$
(35,653)
|
|
$
(134,568)
|
|
$
(5,154)
|
Income tax
expense
|
—
|
|
—
|
|
—
|
|
526
|
Net
loss
|
$
(44,055)
|
|
$
(35,653)
|
|
$
(134,568)
|
|
(5,680)
|
Less: Net loss
attributable to noncontrolling interest
|
(1)
|
|
(10,858)
|
|
(18)
|
|
(16,361)
|
Net income (loss)
attributable to Hyzon
|
$
(44,054)
|
|
$
(24,795)
|
|
$
(134,550)
|
|
$
10,681
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss):
|
|
|
|
|
|
|
|
Net
loss
|
$
(44,055)
|
|
$
(35,653)
|
|
$
(134,568)
|
|
$
(5,680)
|
Foreign currency
translation adjustment
|
2,721
|
|
862
|
|
986
|
|
838
|
Net change in
unrealized gain (loss) on short-term investments
|
286
|
|
131
|
|
(702)
|
|
131
|
Comprehensive
loss
|
$
(41,048)
|
|
$
(34,660)
|
|
$
(134,284)
|
|
$
(4,711)
|
Less: Comprehensive
income (loss) attributable to
noncontrolling interest
|
5
|
|
(9,705)
|
|
10
|
|
(14,714)
|
Comprehensive income
(loss) attributable to Hyzon
|
$
(41,053)
|
|
$
(24,955)
|
|
$
(134,294)
|
|
$
10,003
|
Net income (loss)
per share attributable to Hyzon:
|
|
|
|
|
|
|
|
Basic
|
$
(0.18)
|
|
$
(0.10)
|
|
$
(0.55)
|
|
$
0.04
|
Diluted
|
$
(0.18)
|
|
$
(0.10)
|
|
$
(0.55)
|
|
$
0.04
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
244,885
|
|
248,164
|
|
244,686
|
|
248,054
|
Diluted
|
244,885
|
|
248,164
|
|
244,686
|
|
257,828
|
Non-GAAP Financial
Measures
|
|
EBITDA and Adjusted
EBITDA
|
The following table
reconciles net income (loss) to EBITDA and Adjusted EBITDA (in
thousands):
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
(loss)
|
|
$
(44,055)
|
|
$
(35,653)
|
|
$
(134,568)
|
|
$
(5,680)
|
Interest (income)
expense, net
|
|
(419)
|
|
(279)
|
|
(858)
|
|
(350)
|
Income tax
expense
|
|
—
|
|
—
|
|
—
|
|
526
|
Depreciation and
amortization
|
|
967
|
|
839
|
|
3,160
|
|
2,445
|
EBITDA
|
|
$
(43,507)
|
|
$
(35,093)
|
|
$
(132,266)
|
|
$
(3,059)
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
Change in fair value of
private placement warrant liability
|
|
240
|
|
(3,447)
|
|
(561)
|
|
(13,385)
|
Change in fair value of
earnout liability
|
|
1,307
|
|
(18,034)
|
|
(6,029)
|
|
(87,371)
|
(Gain) loss on equity
securities
|
|
—
|
|
—
|
|
—
|
|
(10,082)
|
Stock-based
compensation
|
|
2,156
|
|
1,063
|
|
5,143
|
|
4,115
|
Executive transition
charges (1)
|
|
—
|
|
517
|
|
—
|
|
517
|
Regulatory and legal
matters (2)
|
|
2,576
|
|
7,859
|
|
36,212
|
|
13,362
|
Acquisition-related
expenses (3)
|
|
—
|
|
8,440
|
|
—
|
|
8,440
|
Restructuring and asset
impairment
|
|
4,885
|
|
—
|
|
4,885
|
|
—
|
Adjusted EBITDA
|
|
$
(32,342)
|
|
$
(38,695)
|
|
$
(92,616)
|
|
$
(87,463)
|
|
|
(1)
|
The 2022 executive
transition charges include a separation payment and salary expense
for technical advisory services related to the former Executive
Chairman.
|
(2)
|
Regulatory and legal
matters include legal, advisory, and other professional service
fees incurred in connection with the short-seller analyst article
from September 2021, and investigations and litigation related
thereto. The nine months ended September 30, 2023 includes the
legal loss contingency accrual of $25.0 million from the final
resolution, subject to court approval, of the SEC
investigation.
|
(3)
|
Acquisition-related
expenses incurred for potential and actual acquisitions that are
unrelated to the current operations and neither are comparable to
the prior period nor predictive of future results. The 2022
expenses relate to the Orten business combination
cancellation.
|
Free Cash
Flow
|
|
The following table
reconciles cash flow used in operating activities to our free cash
flow (in thousands):
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flow used in
operating activities
|
|
$
(30,014)
|
|
$
(47,338)
|
|
$
(112,072)
|
|
$
(116,218)
|
Less: Capital
expenditures
|
|
(3,267)
|
|
(3,668)
|
|
(5,951)
|
|
(11,320)
|
Free cash
flow
|
|
$
(33,281)
|
|
$
(51,006)
|
|
$
(118,023)
|
|
$
(127,538)
|
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SOURCE Hyzon Motors Inc.