ROCHESTER, N.Y., June 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"), announced its first quarter 2023 financial
results and provided a business update.
Recent Business Highlights
- Refocused the Company's core mission on the development and
production of single stack 200kW fuel cell systems, commercialized
via streamlined heavy-duty vehicle platforms.
- Strengthened governance in response to identified concerns and
material weaknesses in controls and procedures; progressing
implementation of special committee recommendations and
Sarbanes-Oxley; current on periodic filing obligations.
- Upgraded management team with addition of Chief Operating
Officer ("COO") and Chief Human Resources Officer ("CHRO");
restructured and integrated global vehicle and technology
functions, to drive increased performance, efficiency and
accountability across the Company.
- Produced and tested three single stack 200kW hydrogen fuel cell
systems in U.S., with first 200kW prototype FCEV under testing;
accumulated over 2,000 miles as of June
2023.
- Published whitepaper Designing the Future of Fuel Cells,
describing design and performance advantages of Hyzon's single
stack 200kW fuel cell system and supporting intellectual property
("IP").
- Signed the first commercial agreement in U.S. with Performance
Food Group ("PFG") with the potential for up to 50 trucks upfit
with Hyzon's proprietary fuel cell systems.
- Commercially activated key customers in Europe with initial vehicle deployments into
trials with Hylane in Germany and
Juve in Austria.
- During the first quarter of 2023, net loss was $30.3 million, EBITDA was $(29.3) million and adjusted EBITDA was
$(27.3) million.
- Reported unrestricted cash, cash equivalents, and short-term
investments of $209.0 million as of
March 31, 2023, and approximately
$185 million as of May 31, 2023.
"Hyzon has made tremendous progress over the past year to
restructure our operations and focus on the development and
commercialization of our proprietary fuel cell technology," said
Parker Meeks, Hyzon Motors Chief
Executive Officer ("CEO"). "We now have a strengthened leadership
team, streamlined vehicle offerings and a rationalized geographic
footprint to focus on three core markets. As we look to the balance
of 2023, we aim to deliver our first commercial Class 8 FCEV to a
major U.S. fleet customer, produce and validate 25 200kW fuel cell
system prototypes, and declare C-sample of the 200kW fuel cell
system. I want to thank our incredibly talented, global team for
their commitment to commercialize our 200kW fuel cell technology
and create long-term value for all our stakeholders."
Business Update and Realignment Overview:
Technology: Single 200kW Fuel Cell Focus
Hyzon owns
significant IP covering the design, development, and production of
high-power fuel cell technology. The Company increased investments
in FCEV powertrain research and development ("R&D"),
specifically for its 200kW fuel cell system, designed for mobility
applications. The standard industry approach to reach ~200kW
combines two ~100kW fuel cell systems; Hyzon's single 200kW fuel
cell system is 30% lower in weight and volume, and 25% lower in
total fuel cell system cost compared to two of its 110kW fuel cell
systems combined.
In the first half of 2023, the Company started initial
production on its Membrane Electrode Assembly ("MEA") line.
Additionally, the Company produced and tested three 200kW fuel cell
system B-samples. By the end of 2023, Hyzon aims to produce and
validate 25 200kW fuel cell system prototypes and have its C-sample
200kW declared. The Company is currently targeting second half of
2024 as Start of Production ("SOP") for the 200kW fuel cell system
in its Bolingbrook, IL
facility.
Vehicle: Single Platform per Region
Hyzon rationalized
its vehicle product offering from over 20 distinct vehicle variants
globally to one vehicle platform developed in each of our three
core markets: conventional platform developed in the U.S., cabover
platform developed in Europe, and
rigid platform developed in Australia. Hyzon also 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 upfitted with Hyzon Class 8 110kW fuel cell systems,
and an additional 15 FCEVs will be upfitted with Hyzon's
next-generation single 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. In Europe, customer trials under commercial
agreements have also commenced; in Australia, the rigid platform has received ISO
certification and commercialization has begun.
Geography: Growth Led, Government Supported
Hyzon
conducted an in-depth evaluation of its global market presence,
assessing near-term growth opportunities and current and future
potential customer commercialization to prioritize its development
activities and resources. The Company's goal was to refocus its
geographic presence to markets with strong government support for
energy transition, high growth expectations and margin expansion
opportunities, along with large fleet customers with clear
decarbonization ambitions. The Company determined that the U.S.
(California, port drayage),
Europe (Germany, Austria and Netherlands), and Australia-New
Zealand are the most prudent markets to focus on, due to
government mandates, commercial appetite for clean-energy
alternatives and attractive financial opportunities. As a result of
this evaluation, the Company commenced its exit of the commercial
market in China, and acquired the
remaining 49.5% equity interest of Hyzon Motors Europe B.V. from
the Company's prior joint venture partner, Holthausen Clean
Technologies Investments B.V. to better serve customers and their
needs in Europe.
Organization: Expanded Expertise, Centralized
Functions
Since the launch of Hyzon's reorganization in
August 2022, Hyzon has streamlined
its management reporting lines to pivot to a centralized,
integrated business organization structure and reallocated
resources to focus on the commercialization of its fuel cell
technology. Additionally, Hyzon has strengthened its management
team with a series of appointments both organically and from
technology-led companies. Parker
Meeks, formerly Hyzon's Chief Strategy Officer, was named
CEO. Jiajia Wu, Hyzon's Chief
Accounting Officer since 2021, was additionally named interim Chief
Financial Officer. Dr. Bappa
Banerjee, formerly of Wabtec and Caterpillar, joined as COO,
a newly created position at Hyzon. Dr. Banerjee's focus will be on
centralizing Hyzon's core component engineering and supply chain
management, and streamlining interface engineering and vehicle
homologation. Additionally, Sue
Sun-LaSovage joined as CHRO to oversee staff investment and
retention critical to scaling Hyzon's business.
Governance: Prioritized and Strengthened
In response
to self-reported accounting concerns raised in July 2022, the Company's Board of Directors
formed a special committee of independent directors to investigate
these issues, with the assistance of outside counsel and other
advisors. During this period, the Company identified several
material weaknesses and has been diligently working on measures to
improve its governance framework. The Company is also improving its
control environment through Sarbanes-Oxley implementation, and has
made additions to its management and board of directors.
First Quarter 2023 Financial Results
For the quarter
ended March 31, 2023, the Company
reported Cost of Revenue of $0.8
million, R&D expense of $9.3
million and selling, general, and administrative expenses of
$30.9 million. Net loss attributable
to Hyzon was $30.2 million, including
non-cash gains from a change in estimated fair value of private
placement warrant liability of $0.6 million and earnout liability of
$6.4 million. Basic and diluted loss
per share was $(0.12) for the quarter
ended March 31, 2023. For the prior
year first quarter ended March 31,
2022, the Company reported a net loss attributable to Hyzon
of $6.5 million, resulting in basic
and diluted loss per share of $(0.03).
At the end of the first quarter of 2023, cash and short-term
investments were $209.0 million,
approximately $46.3 million lower
than the fourth quarter of 2022. The change in cash includes legal
payments of $11.4 million in
connection with the Special Committee Investigation, the SEC and
regulatory investigations and other litigation matters,
$4.7 million paid to strategic
consultants, $1.5 million invested in
capital expenditures and associated deposits, $1.1 million paid to cancel the Orten
business combination, $1.0 million
paid for accounting and audit services related to the restatements,
and $0.3 million paid to our
former Executive Chairman and Chief Technology Officer.
Non-GAAP Financial Measures
The Company reported
EBITDA of $(29.3) million, and
Adjusted EBITDA of $(27.3) million
for the three months ended March 31,
2023. Adjusted EBITDA was driven primarily by (a) non-cash
items from change in estimated fair value of earnout liability of
$6.4 million and private placement
warrant liability of $0.6 million,
for a total of $7.0 million, and (b)
stock-based compensation of $1.4
million and (c) regulatory and legal expenses of $7.7
million. 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.
HYZON MOTORS INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in thousands,
except share and per share amounts)
(unaudited)
|
|
March 31,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
101,623
|
|
$
60,554
|
Short-term
investments
|
107,392
|
|
194,775
|
Accounts
receivable
|
1,292
|
|
29
|
Related party
receivable
|
6,995
|
|
6,578
|
Inventory
|
42,126
|
|
35,553
|
Prepaid expenses and
other current assets
|
12,461
|
|
15,365
|
Total current
assets
|
271,889
|
|
312,854
|
Property, plant, and
equipment, net
|
22,580
|
|
22,420
|
Right-of-use
assets
|
8,943
|
|
9,181
|
Investments in equity
securities
|
15,030
|
|
15,030
|
Other assets
|
13,332
|
|
15,411
|
Total
Assets
|
$
331,774
|
|
$
374,896
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
16,043
|
|
$
13,798
|
Accrued
liabilities
|
16,290
|
|
25,587
|
Related party
payables
|
780
|
|
433
|
Contract
liabilities
|
5,248
|
|
3,919
|
Current portion of
lease liabilities
|
2,055
|
|
2,132
|
Total current
liabilities
|
40,416
|
|
45,869
|
Long term
liabilities
|
|
|
|
Lease
liabilities
|
7,177
|
|
7,492
|
Private placement
warrant liability
|
481
|
|
1,122
|
Earnout
liability
|
4,507
|
|
10,927
|
Deferred income
taxes
|
526
|
|
526
|
Other
liabilities
|
1,666
|
|
1,901
|
Total
Liabilities
|
$
54,773
|
|
$
67,837
|
Commitments and
contingencies
|
|
|
|
Stockholders'
Equity
|
|
|
|
Common stock, $0.0001
par value; 400,000,000 shares authorized,
244,561,071
and 244,509,208
shares issued and outstanding as of March 31, 2023 and
December 31, 2022, respectively.
|
25
|
|
25
|
Treasury stock, at
cost; 3,769,592 shares as of March 31, 2023 and December 31, 2022,
respectively.
|
(6,446)
|
|
(6,446)
|
Additional paid-in
capital
|
374,243
|
|
372,942
|
Accumulated
deficit
|
(88,846)
|
|
(58,598)
|
Accumulated other
comprehensive loss
|
(1,247)
|
|
(153)
|
Total Hyzon Motors
Inc. stockholders' equity
|
277,729
|
|
307,770
|
Noncontrolling
interest
|
(728)
|
|
(711)
|
Total Stockholders'
Equity
|
277,001
|
|
307,059
|
Total Liabilities
and Stockholders' Equity
|
$
331,774
|
|
$
374,896
|
HYZON MOTORS INC.
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands,
except per share amounts)
(unaudited)
|
|
Three Months
Ended
March
31,
|
|
2023
|
|
2022
|
Revenue
|
$
—
|
|
$
2,888
|
Operating
expense:
|
|
|
|
Cost of
revenue
|
838
|
|
653
|
Research and
development
|
9,340
|
|
6,936
|
Selling, general, and
administrative
|
30,857
|
|
19,752
|
Total operating
expenses
|
41,035
|
|
27,341
|
Loss from
operations
|
(41,035)
|
|
(24,453)
|
Other income
(expense):
|
|
|
|
Change in fair value
of private placement warrant liability
|
641
|
|
1,523
|
Change in fair value
of earnout liability
|
6,420
|
|
3,241
|
Gain on equity
securities
|
—
|
|
12,530
|
Foreign currency
exchange gain (loss) and other expense, net
|
1,150
|
|
(1,150)
|
Investment income and
interest income, net
|
2,566
|
|
17
|
Total other income
(expense)
|
10,777
|
|
16,161
|
Net loss before
income taxes
|
$
(30,258)
|
|
$
(8,292)
|
Income tax
expense
|
—
|
|
526
|
Net
loss
|
(30,258)
|
|
(8,818)
|
Less: Net loss
attributable to noncontrolling interest
|
(10)
|
|
(2,295)
|
Net loss
attributable to Hyzon
|
$
(30,248)
|
|
$
(6,523)
|
|
|
|
|
Comprehensive
loss:
|
|
|
|
Net
loss
|
$
(30,258)
|
|
$
(8,818)
|
Foreign currency
translation adjustment
|
(804)
|
|
211
|
Change in unrealized
gain (loss) on short-term investments
|
(297)
|
|
—
|
Comprehensive
loss
|
$
(31,359)
|
|
$
(8,607)
|
Less: Comprehensive
loss attributable to noncontrolling interest
|
(17)
|
|
(2,169)
|
Comprehensive loss
attributable to Hyzon
|
$
(31,342)
|
|
$
(6,438)
|
Net loss per share
attributable to Hyzon:
|
|
|
|
Basic
|
$
(0.12)
|
|
$
(0.03)
|
Diluted
|
$
(0.12)
|
|
$
(0.03)
|
Weighted average
common shares outstanding:
|
|
|
|
Basic
|
244,541
|
|
247,940
|
Diluted
|
244,541
|
|
247,940
|
Non-GAAP Financial
Measures
|
The following table
reconciles net loss to EBITDA and Adjusted EBITDA (in
thousands):
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2023
|
|
2022
|
Net
loss
|
|
$
(30,258)
|
|
$
(8,818)
|
Interest income,
net
|
|
(135)
|
|
(17)
|
Income tax
expense
|
|
—
|
|
526
|
Depreciation and
amortization
|
|
1,082
|
|
904
|
EBITDA
|
|
$
(29,311)
|
|
$
(7,405)
|
Adjusted
for:
|
|
|
|
|
Change in fair value of
private placement warrant liability
|
|
(641)
|
|
(1,523)
|
Change in fair value of
earnout liability
|
|
(6,420)
|
|
(3,241)
|
Gain on equity
securities
|
|
—
|
|
(12,530)
|
Stock-based
compensation
|
|
1,359
|
|
1,193
|
Regulatory and legal
matters (1)
|
|
7,742
|
|
2,730
|
Adjusted EBITDA
|
|
$
(27,271)
|
|
$
(20,776)
|
|
|
(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.
|
|
|
Conference Call Information
The Hyzon management team will host a conference call to discuss
its first quarter 2023 financial results on Thursday, June 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 is a global supplier of
fuel cell electric mobility, with US operations in the Rochester, Chicago and Detroit areas, and international operations in
the Netherlands, Australia, and China. Hyzon is an energy transition
accelerator and technology innovator, providing solutions in the
transport sector with a focus on commercial vehicles and hydrogen
supply infrastructure. Utilizing its proprietary hydrogen fuel cell
technology, Hyzon's mission is to supply zero-emission heavy duty
trucks to customers in North
America, Europe and around
the world to mitigate emissions from diesel transportation - one of
the single largest sources of carbon emissions globally. The
Company 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
To supplement
its consolidated balance sheet and statement of operations and
comprehensive loss, which are prepared and presented in accordance
with U.S. generally accepted accounting principles ("GAAP"), Hyzon
Motors Inc. reports EBITDA and Adjusted EBITDA which are non-GAAP
financial measures. EBITDA is determined by taking net 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, provides
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.
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 about our business
outlook, 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, 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.
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SOURCE Hyzon Motors Inc.