Hyliion Holdings Corp. (NYSE American: HYLN) (“Hyliion”), a
developer of sustainable electricity-producing technology, today
reported its third-quarter 2024 financial results.
Key Business Highlights
- On track to deliver initial customer units by year-end and
reaffirms guidance of low double-digit millions in revenue for
2025
- Secured customer commitments exceeding 2025 KARNO™ generator
production capacity
- Announced revenue recognition beginning in Q4 2024 for military
development projects
- Announced plans to develop a 2-megawatt KARNO generator product
targeting the data center market, with expected deployment in
2026
- Awarded a contract for up to $16.0 million by the U.S. Navy’s
Office of Naval Research (ONR) to explore the KARNO generator for
Navy ships and stationary power
- Executed an LOI with ANA, a leader in industrial equipment, for
up to 6 KARNO units in mobile power applications
- Announced the KARNO generator qualifies under California’s
Renewables Portfolio Standard using renewable fuels such as
landfill gas, biogas and hydrogen
- Successfully demonstrated the KARNO generator’s fuel-agnostic
capabilities by transitioning between multiple fuel types without
interrupting operation
- Ended the quarter with $237.5 million of cash and
investments
- Confirmed guidance of approximately $55 million in cash
expenditures in 2024 for KARNO development including capital
investments
Executive Commentary
"Hyliion is pleased to report several exciting developments this
quarter, including a significant contract with the ONR, the planned
development of a 2-megawatt KARNO system, and customer commitments
in excess of our 2025 production capacity," stated Thomas Healy,
Hyliion’s Founder and CEO. "These milestones highlight the strong
demand for the KARNO generator and its versatility as a power
generation solution across multiple applications. We are also
looking forward to our first customer deliveries later this year,
followed by a ramp-up in deliveries throughout next year."
KARNO Commercial Updates
Hyliion is developing a locally deployable 200kW generator
system which it intends to deliver to initial customers beginning
in late 2024. Target markets in the commercial power space include
EV Charging, Data Centers, Waste Gas & Heat, Prime Power, and
Mobility applications. Initial customer deployments will target
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. The Company will
also garner useful feedback and information on the performance of
the generator in these early deployments.
The Company announced during the quarter that a new contract
with the Office of Naval Research, combined with two earlier
contracts, will provide revenue of up to $17.2 million to perform
research and development services related to KARNO generator
applications for the U.S. Navy, including the purchase of up to
seven KARNO generators. Hyliion believes the KARNO generator can
provide a versatile, efficient, and reliable power solution to meet
the unique demands of U.S. naval operations in maritime
environments. Upon successful validation and demonstration, the
KARNO generator could be used as an electric power system in future
maritime platforms and for stationary power needs.
Hyliion anticipates beginning to recognize revenue in the fourth
quarter of 2024 related to the development work and delivery of
KARNO units associated with the military contracts.
Hyliion has now secured customer commitments exceeding its 2025
production capacity, with additional letters of intent already in
place for 2026 deliveries. During the quarter, Hyliion announced
the execution of a letter of intent (LOI) with ANA, a leading
provider of innovative and reliable solutions in the industrial
equipment industry, to procure up to six KARNO generators and
launch a mobile generator application pilot trial. These customer
commitments are executed as non-binding LOIs and are subject to the
execution of definitive sales agreements prior to deliveries.
In addition, Hyliion’s KARNO generator, when operating on select
renewable fuels, is set to qualify as an eligible technology under
California’s Renewables Portfolio Standard (RPS) following the
passage of Assembly Bill 1921. This eligibility positions KARNO
technology to support California’s climate goals by delivering a
versatile, low-emission power generation solution capable of
utilizing renewable fuels such as landfill gas, biogas, and
hydrogen.
KARNO Generator Development
The Company announced plans today to develop a 2-megawatt KARNO
generator system tailored to meet the growing electricity demands
of data center operations, driven by the rapid expansion of
computing needs and artificial intelligence applications. The
generator will provide data centers with a high-power, efficient,
and low emission solution within a compact footprint roughly the
size of a 20-foot shipping container. The KARNO generator's unique
fuel flexibility and high-power density offer data center operators
an advantage over other conventional power solutions. The Company
expects initial 2-megawatt systems to be deployed in 2026.
Hyliion successfully demonstrated the KARNO generator’s
fuel-agnostic capabilities by transitioning between multiple fuel
types during operation without interruption. This achievement
highlights the generator’s ability to handle impure or mixed fuels,
making it ideal for applications in industries like oil and gas,
waste gas recovery, and other environments where fuel flexibility
is advantageous.
Hyliion continued to take delivery of additive printing machines
during the quarter at its Austin, Texas manufacturing facility and
placed orders for additional printer deliveries extending through
mid 2025. The Company expects to take delivery of its first M Line
production additive printer from Colibrium Additive, a GE Aerospace
company, in the coming weeks. These advanced printers are designed
for volume production and will assist with Hyliion’s production
ramp.
Financial Highlights and Guidance
Third quarter operating expenses totaled $14.2 million, compared
to $33.3 million in the prior-year quarter. Expenses were offset by
a credit of $929 thousand from the sale of assets related to the
discontinued powertrain business. Net loss in the third quarter was
$11.2 million, compared with $30.3 million in the third quarter of
2023. Year-to-date net loss through September 2024 was $37.7
million, down significantly from $94.4 million during the first
three quarters of 2023. Losses in 2023 were primarily driven by
spending related to Hyliion’s discontinued powertrain business.
Total changes in cash and investment balances for the quarter
were $11.2 million, driven by net operating losses and capital
expenditures, partly offset by cash generated from interest income
and powertrain asset sales. Total cash and investments at the end
of the quarter were $237.5 million.
For 2024, total cash consumed for KARNO development and capital
investments is expected to be approximately $55 million. This
estimate excludes cash payments associated with share repurchases
that have already been conducted during 2024, and payments and
asset sales associated with the wind down of powertrain operations.
Hyliion continues to expect it will achieve commercialization of
the KARNO generator with capital on hand.
Projections for 2025 include growth of KARNO generator
deliveries, with proceeds from sales and research and development
services in the low double-digit millions of dollars. The Company
is also targeting approximately break-even gross margins on a cash
basis by late 2025 or early 2026, with 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; our ability to comply with governmental
regulations related to defense spending and procurement; the
suitability of our products for defense applications; 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 and in our subsequently filed Forms 10-Q. 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 September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenues
Product sales and other
$
—
$
96
$
—
$
672
Total revenues
—
96
—
672
Cost of revenues
Product sales and other
—
677
—
1,675
Total cost of revenues
—
677
—
1,675
Gross loss
—
(581
)
—
(1,003
)
Operating expenses
Research and development
9,462
25,115
25,741
73,472
Selling, general and administrative
5,648
8,186
18,502
30,265
Exit and termination costs
(929
)
—
2,946
—
Total operating expenses
14,181
33,301
47,189
103,737
Loss from operations
(14,181
)
(33,882
)
(47,189
)
(104,740
)
Interest income
2,979
3,534
9,504
10,345
Gain on disposal of assets
—
—
3
1
Other income, net
—
26
32
14
Net loss
$
(11,202
)
$
(30,322
)
$
(37,650
)
$
(94,380
)
Net loss per share, basic and diluted
$
(0.06
)
$
(0.17
)
$
(0.21
)
$
(0.52
)
Weighted-average shares outstanding, basic
and diluted
173,612,768
181,641,060
175,302,069
180,914,250
HYLIION HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollar amounts in thousands,
except share data)
September 30,
2024
December 31,
2023
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
28,065
$
12,881
Accounts receivable
1,257
40
Prepaid expenses and other current
assets
5,678
18,483
Short-term investments
122,897
150,297
Assets held for sale
3,463
—
Total current assets
161,360
181,701
Property and equipment, net
17,428
9,987
Operating lease right-of-use assets
5,779
7,070
Other assets
1,173
1,439
Long-term investments
86,545
128,186
Total assets
$
272,285
$
328,383
Liabilities and stockholders’
equity
Current liabilities
Accounts payable
$
1,654
$
4,224
Current portion of operating lease
liabilities
1,531
847
Accrued expenses and other current
liabilities
5,975
10,051
Total current liabilities
9,160
15,122
Operating lease liabilities, net of
current portion
4,997
6,792
Other liabilities
400
203
Total liabilities
14,557
22,117
Commitments and contingencies
Stockholders’ equity
Common stock, $0.0001 par value;
250,000,000 shares authorized; 184,335,183 and 183,071,317 shares
issued at September 30, 2024 and December 31, 2023, respectively;
173,725,113 and 183,034,255 shares outstanding as of September 30,
2024 and December 31, 2023, respectively
18
18
Additional paid-in capital
407,259
404,045
Treasury stock, at cost; 10,610,070 and
37,062 shares as of September 30, 2024 and December 31, 2023,
respectively
(14,135
)
(33
)
Accumulated deficit
(135,414
)
(97,764
)
Total stockholders’ equity
257,728
306,266
Total liabilities and stockholders’
equity
$
272,285
$
328,383
HYLIION HOLDINGS CORP.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in
thousands)
Nine Months Ended September
30,
2024
2023
Cash flows from operating
activities
Net loss
$
(37,650
)
$
(94,380
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
2,140
1,796
Amortization and accretion of investments,
net
(2,489
)
(1,821
)
Noncash lease expense
1,291
1,072
Inventory write-down
—
992
Gain on disposal of assets, including
assets held for sale
(2,109
)
(1
)
Share-based compensation
3,541
5,170
Carrying value adjustment to assets held
for sale
5,564
—
Changes in operating assets and
liabilities:
Accounts receivable
(580
)
996
Inventory
—
(1,057
)
Prepaid expenses and other assets
(5,215
)
(1,200
)
Accounts payable
(2,655
)
555
Accrued expenses and other liabilities
(4,018
)
(3,295
)
Operating lease liabilities
(1,111
)
(1,254
)
Net cash used in operating activities
(43,291
)
(92,427
)
Cash flows from investing
activities
Purchase of property and equipment
(10,548
)
(6,755
)
Proceeds from sale of property and
equipment
4,110
2
Payments for security deposit, net
—
(45
)
Purchase of investments
(55,383
)
(170,197
)
Proceeds from sale and maturity of
investments
126,686
178,556
Net cash provided by investing
activities
64,865
1,561
Cash flows from financing
activities
Proceeds from exercise of common stock
options
67
230
Taxes paid related to net share settlement
of equity awards
(393
)
(232
)
Repurchase of treasury stock
(13,982
)
—
Net cash used in financing activities
(14,308
)
(2
)
Net increase (decrease) in cash and cash
equivalents and restricted cash
7,266
(90,868
)
Cash and cash equivalents and restricted
cash, beginning of period
21,464
120,133
Cash and cash equivalents and restricted
cash, end of period
$
28,730
$
29,265
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version on businesswire.com: https://www.businesswire.com/news/home/20241114223188/en/
Hyliion Holdings Corp. press@hyliion.com
Investor Relations ir@hyliion.com
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