ROCHESTER, N.Y., Aug. 8, 2023
/PRNewswire/ -- Hyzon Motors Inc. (NASDAQ: HYZN) ("Hyzon" or the
"Company"), a high-power hydrogen fuel cell technology developer
and global supplier of zero-emission heavy-duty fuel cell electric
vehicles ("FCEVs"), today announced its second quarter 2023
financial and operational results.
Recent Highlights
- Deployed ten FCEVs under commercial agreements and collected
$2.9 million in cash
year-to-date
- U.S. 110kW truck program moved from prototype to
production
- Completed 15 vehicle trials in North
America since trial program launch in March 2022
- Five 110kW FCEVs truck orders from Performance Food Group
("PFG") expected to be delivered in late 2023
- Successfully completed six single-stack 200kW Fuel Cell System
("FCS") B-samples in the second quarter in addition to three
completed in the first quarter of 2023
- Appointed Matthew Foulston, an
accomplished finance executive, to the Board of Directors
- Net loss attributable to Hyzon of $(60.2) million and loss per share of
$(0.25)
- EBITDA(1) of $(59.4)
million and adjusted EBITDA(1) of
$(33.0) million
- Unrestricted Cash, cash equivalents, and short-term investments
of $172.4 million as of
June 30, 2023, and approximately
$158 million as of July 31, 2023
"Hyzon has made significant strides in the second quarter, both
in the advancement of our 200kW fuel cell technology and in the
commercialization of our heavy-duty fuel cell electric truck
platforms, " said Parker Meeks,
Hyzon Chief Executive Officer. "We have been hard at work
streamlining our vehicle offerings, operations, and geographies,
and we are proud of the progress we have made at our U.S. fuel cell
system production facility. Looking ahead to the remainder of the
year, we are excited by the continued advancement of our commercial
pipeline across our focused FCEV platforms, with commercial
deployments ongoing toward our 10-20 vehicle goal this year. We
believe our intense focus and disciplined execution of our
operational milestones as well as significant improvements to
streamline our business have positioned Hyzon well in the
accelerating hydrogen industry."
(1) These non-GAAP
financial measures have been reconciled to the nearest GAAP measure
in the tables under "Non-GAAP Financial Measures" within this press
release. These measures may not be comparable to other similarly
titled measures computed by other companies, because all companies
may not calculate in the same fashion.
|
Second Quarter 2023 Business Highlights
Fuel Cell Electric Vehicle Deployments
By the end of
the second quarter, Hyzon had deployed seven vehicles under
commercial agreements to customers in 2023; three additional
vehicles were deployed subsequent to the quarter end. Of those
vehicles, three were deployed to customers in Europe, while seven coach buses were deployed
to a customer in Australia and are
currently in the process of completing final site acceptance
steps.
With a total of ten vehicles deployed to date, Hyzon met the
lower end of its previously announced 2023 guidance of 10-20
vehicles deployed under commercial agreements. Hyzon also has
collected $2.9 million in cash
receipts year-to-date against those vehicles.
U.S. 110kW Truck Program Moves from Prototype to
Production
At the beginning of August, the Company completed
its first U.S. 110kW truck built with production tooled components,
which has progressed to a third-party test track in Michigan for durability testing. With this
vehicle, built in collaboration with Fontaine Modification, the
Company's third-party assembly partner, Hyzon's U.S. 110kW program
moves from prototype to production. By commercializing the 110kW
vehicle, Hyzon builds experience through product realization and
customer engagement to support the future deployment of 200kW
FCEVs.
North America Trial Program Expansion and Commercial
Relationship Activation
The Company's North American trial
program continued to expand, with 15 trials completed since
March 2022, of which seven trials were completed in 2023. The
Company has accumulated over 40,000 miles on its conventional truck
platform in customer trial and track testing, gaining experience
with and learnings from real world operations for future FCEV
deployments.
Five 110kW FCEV Agreement Reached with Performance Food Group
with 15 additional 200kW FCEVs upon successful completion of 200kW
Trial
In June, Hyzon signed its first commercial agreement
in the U.S. with PFG for five FCEVs in a pilot phase, with the
potential for up to 50 FCEVs total. The first five FCEVs will be
upfit with Hyzon Class 8 110kW fuel cell systems, and an additional
15 FCEVs will be upfit with Hyzon's next-generation single-stack
200kW fuel cell system conditional on a successful 200kW vehicle
trial. Following these vehicles, PFG and Hyzon also have agreed to
work together regarding a mutually agreeable option for 30
additional FCEVs. The first five vehicles remain on track to be
delivered in 2023.
Six Single-Stack 200kW Fuel Cell System B-samples completed
in the second quarter of 2023, from three completions in the first
quarter of 2023
In the second quarter, the Company announced
completion and factory acceptance testing of six single-stack 200kW
FCS B-samples at its production and innovation center in
Bolingbrook, IL. This followed
successful completion and factory acceptance testing of the initial
three single-stack 200kW FCS during the first quarter of
2023. The Company achieved this efficiency improvement in
part by successfully commissioning Hyzon's proprietary, automated
roll-to-roll Membrane Electrode Assembly ("MEA") production line,
the semi-automated single cell manufacturing line, and the fully
automated fuel cell stack manufacturing line. The Company remains
on track to complete the additional 16
B-samples in the second half of 2023 for a total of 25 200kW
B-samples in 2023, along with C-sample declaration by the end of
2023.
New Board Member Appointment
In July, the Company
appointed Matthew Foulston, an
accomplished finance executive who served as CFO for three publicly
listed companies: Covetus, Treehouse Foods, and Compass Minerals.
Foulston serves as the Chair of the Audit Committee and as a member
of the Compensation Committee.
Second Quarter 2023 Financial Results
For the quarter ended June 30, 2023, the Company reported
cost of revenue of $2.4 million,
research and development ("R&D") expense of $12.6 million, and selling, general, and
administrative ("SG&A") expenses of $49.1 million. The current quarter SG&A
expense included elevated legal and regulatory charges of
$25.9 million, of which $22.0 million represents a loss contingency
accrued in light of management's assessment of the SEC
investigation. The Company expects $7.0
million of this accrual to be paid within the next twelve
months. There is no assurance that this loss contingency accrual
will be adequate to resolve matters covered by the SEC
investigation. Net loss attributable to Hyzon was $(60.2) million, as compared to net income
attributable to Hyzon of $42.0
million for the quarter ended June
30, 2022. The change was largely driven by greater non-cash
gains of $8.4 million and
$66.1 million for the changes in
estimated fair value of private placement warrant liability and
earnout liability, respectively, reported for the quarter ended
June 30, 2022. Basic and diluted loss
per share was $(0.25) for the quarter
ended June 30, 2023. For the second
quarter ended June 30, 2022, the
Company reported basic income per share of $0.17 and diluted income per share of
$0.16.
For the six months ended June 30, 2023, the Company
reported cost of revenue of $3.2
million, R&D expense of $21.9
million, and SG&A expense of $80.0 million. The year-to-date SG&A expense
included elevated legal and regulatory charges of $33.6 million, of which $22.0 million represents loss contingency accrued
in light of management's assessment of the SEC investigation. The
Company expects $7.0 million of this
accrual to be paid within the next twelve months. There is no
assurance that this loss contingency accrual will be adequate to
resolve matters covered by the SEC investigation. Net loss
attributable to Hyzon was $(90.5)
million, as compared to net income attributable to Hyzon of
$35.5 million for the six months
ended June 30, 2022. The change was
largely driven by greater non-cash gains of $9.9 million and $69.3
million for the changes in estimated fair value of private
placement warrant liability and earnout liability, respectively, as
well as a non-cash net gain of $10.1
million due to a fair value change in equity securities
reported for the six months ended in June
30, 2022. Basic and diluted loss per share was $(0.37) for the six months ended June 30, 2023. For the six months ended
June 30, 2022, the Company reported
basic and diluted income per share of $0.14.
As of June 30, 2023, unrestricted
cash, cash equivalents and short-term investments were $172.4 million, approximately $36.6 million lower than the March 31, 2023 balance of $209.0 million. The current quarter net cash
outflow is the lowest since the fourth quarter of 2021. As of
July 31, 2023, unrestricted cash,
cash equivalents and short-term investments were approximately
$158 million. Approximately
$5 million of the $14 million July spend was for our annual D&O
insurance coverage.
Non-GAAP Financial Measures
The Company reported
adjusted EBITDA of $(33.0) million
and $(60.3) million for the three and
six months ended June 30, 2023,
respectively. The Company reported adjusted EBITDA of $(28.0) million and $(48.8) million for the three and six months
ended June 30, 2022. The changes in
adjusted EBITDA were primarily due to higher personnel related
costs driven by increased global headcount and continued investment
in advancing our hydrogen-powered fuel cell technology. These
non-GAAP financial measures have been reconciled to the nearest
GAAP measure in the tables under "Non-GAAP Financial Measures"
within this press release.
Conference Call Information
The Hyzon management
team will host a conference call to discuss its second quarter 2023
financial results on Tuesday, August 8,
2023, at 8:30 a.m. Eastern
Time. The conference call can be accessed by dialing 1 (833)
470-1428 and entering the access code 848699. International
participants can access the call via the corresponding number
listed here and enter the access code 848699.
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 March 31, 2023 filed on June 7, 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)
|
|
June 30,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
140,536
|
|
$
60,554
|
Short-term
investments
|
31,879
|
|
194,775
|
Accounts
receivable
|
950
|
|
29
|
Related party
receivable
|
324
|
|
6,578
|
Inventory
|
44,008
|
|
35,553
|
Prepaid expenses and
other current assets
|
8,542
|
|
15,365
|
Total current assets
|
226,239
|
|
312,854
|
Property, plant, and
equipment, net
|
21,893
|
|
22,420
|
Right-of-use
assets
|
8,536
|
|
9,181
|
Investments in equity
securities
|
15,030
|
|
15,030
|
Other assets
|
13,351
|
|
15,411
|
Total Assets
|
$
285,049
|
|
$
374,896
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
7,743
|
|
$
13,798
|
Accrued
liabilities
|
23,564
|
|
25,587
|
Related party
payables
|
424
|
|
433
|
Contract
liabilities
|
6,836
|
|
3,919
|
Current portion of
lease liabilities
|
1,899
|
|
2,132
|
Total current liabilities
|
40,466
|
|
45,869
|
Long term
liabilities
|
|
|
|
Lease
liabilities
|
6,727
|
|
7,492
|
Private placement
warrant liability
|
321
|
|
1,122
|
Earnout
liability
|
3,591
|
|
10,927
|
Deferred income
taxes
|
526
|
|
526
|
Other
liabilities
|
16,719
|
|
1,901
|
Total Liabilities
|
$
68,350
|
|
$
67,837
|
Commitments and
contingencies
|
|
|
|
Stockholders' Equity
|
|
|
|
Common stock, $0.0001
par value; 400,000,000 shares authorized, 244,708,119 and
244,509,208 shares issued and outstanding as of June 30, 2023 and
December 31, 2022, respectively.
|
25
|
|
25
|
Treasury stock, at
cost; 3,769,592 shares as of June 30, 2023 and December 31, 2022,
respectively.
|
(6,446)
|
|
(6,446)
|
Additional paid-in
capital
|
375,818
|
|
372,942
|
Accumulated
deficit
|
(149,094)
|
|
(58,598)
|
Accumulated other
comprehensive loss
|
(2,898)
|
|
(153)
|
Total Hyzon Motors Inc. stockholders'
equity
|
217,405
|
|
307,770
|
Noncontrolling
interest
|
(706)
|
|
(711)
|
Total Stockholders' Equity
|
216,699
|
|
307,059
|
Total Liabilities and Stockholders'
Equity
|
$
285,049
|
|
$
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
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
—
|
|
$
46
|
|
$
—
|
|
$
2,934
|
Operating expense:
|
|
|
|
|
|
|
|
Cost of
revenue
|
2,410
|
|
1,370
|
|
3,248
|
|
2,023
|
Research and
development
|
12,597
|
|
10,483
|
|
21,937
|
|
17,419
|
Selling, general, and
administrative
|
49,098
|
|
20,065
|
|
79,955
|
|
39,817
|
Total operating
expenses
|
64,105
|
|
31,918
|
|
105,140
|
|
59,259
|
Loss from operations
|
(64,105)
|
|
(31,872)
|
|
(105,140)
|
|
(56,325)
|
Other income (expense):
|
|
|
|
|
|
|
|
Change in fair value
of private placement warrant liability
|
160
|
|
8,415
|
|
801
|
|
9,938
|
Change in fair value
of earnout liability
|
916
|
|
66,096
|
|
7,336
|
|
69,337
|
Gain (loss) on equity
securities
|
—
|
|
(2,448)
|
|
—
|
|
10,082
|
Foreign currency
exchange gain (loss) and other expense, net
|
280
|
|
(1,454)
|
|
1,430
|
|
(2,604)
|
Investment income and
interest income, net
|
2,494
|
|
54
|
|
5,060
|
|
71
|
Total other income (expense)
|
3,850
|
|
70,663
|
|
14,627
|
|
86,824
|
Net income (loss) before income
taxes
|
$
(60,255)
|
|
$
38,791
|
|
$
(90,513)
|
|
$
30,499
|
Income tax
expense
|
—
|
|
—
|
|
—
|
|
526
|
Net income (loss)
|
$
(60,255)
|
|
$
38,791
|
|
(90,513)
|
|
29,973
|
Less: Net loss
attributable to noncontrolling interest
|
(7)
|
|
(3,208)
|
|
(17)
|
|
(5,503)
|
Net income (loss) attributable to
Hyzon
|
$
(60,248)
|
|
$
41,999
|
|
$
(90,496)
|
|
$
35,476
|
|
|
|
|
|
|
|
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
Net income (loss)
|
$
(60,255)
|
|
$
38,791
|
|
$
(90,513)
|
|
$
29,973
|
Foreign currency
translation adjustment
|
(931)
|
|
(235)
|
|
(1,735)
|
|
(24)
|
Net change in
unrealized gain (loss) on short-term investments
|
(691)
|
|
$
—
|
|
(988)
|
|
—
|
Comprehensive income (loss)
|
$
(61,877)
|
|
$
38,556
|
|
$
(93,236)
|
|
$
29,949
|
Less: Comprehensive
income (loss) attributable to noncontrolling interest
|
22
|
|
(2,840)
|
|
5
|
|
(5,009)
|
Comprehensive income (loss) attributable to
Hyzon
|
$
(61,899)
|
|
$
41,396
|
|
$
(93,241)
|
|
$
34,958
|
Net income (loss) per share attributable to
Hyzon:
|
|
|
|
|
|
|
|
Basic
|
$
(0.25)
|
|
$
0.17
|
|
$
(0.37)
|
|
$
0.14
|
Diluted
|
$
(0.25)
|
|
$
0.16
|
|
$
(0.37)
|
|
$
0.14
|
Weighted average common shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
244,628
|
|
248,056
|
|
244,585
|
|
247,999
|
Diluted
|
244,628
|
|
258,265
|
|
244,585
|
|
258,772
|
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
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss)
|
|
$
(60,255)
|
|
$
38,791
|
|
$
(90,513)
|
|
$
29,973
|
Interest (income)
expense, net
|
|
(304)
|
|
(54)
|
|
(439)
|
|
(71)
|
Income tax
expense
|
|
—
|
|
—
|
|
—
|
|
526
|
Depreciation and
amortization
|
|
1,111
|
|
702
|
|
2,193
|
|
1,606
|
EBITDA
|
|
$
(59,448)
|
|
$
39,439
|
|
$
(88,759)
|
|
$
32,034
|
Adjusted for:
|
|
|
|
|
|
|
|
|
Change in fair value of
private placement warrant liability
|
|
(160)
|
|
(8,415)
|
|
(801)
|
|
(9,938)
|
Change in fair value of
earnout liability
|
|
(916)
|
|
(66,096)
|
|
(7,336)
|
|
(69,337)
|
(Gain) loss on equity
securities
|
|
—
|
|
2,448
|
|
—
|
|
(10,082)
|
Stock-based
compensation
|
|
1,628
|
|
1,859
|
|
2,987
|
|
3,052
|
Regulatory and legal
matters (1)
|
|
25,894
|
|
2,773
|
|
33,636
|
|
5,503
|
Adjusted EBITDA
|
|
$
(33,002)
|
|
$
(27,992)
|
|
$
(60,273)
|
|
$
(48,768)
|
|
|
(1)
|
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. Also, includes legal loss contingency accrual of $22.0
million from discussions with the SEC regarding potential
resolution of the SEC investigation.
|
Free Cash
Flow
|
|
The following table
reconciles cash flow used in operating activities to our free cash
flow (in thousands):
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flow used in operating
activities
|
|
$
(36,045)
|
|
$
(38,784)
|
|
$
(82,058)
|
|
$
(68,880)
|
Less: Capital
expenditures
|
|
(1,223)
|
|
(3,757)
|
|
(2,684)
|
|
(7,652)
|
Free cash flow
|
|
$
(37,268)
|
|
$
(42,541)
|
|
$
(84,742)
|
|
$
(76,532)
|
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SOURCE Hyzon Motors Inc.