Today's News |
Westport Fuel Systems Reports First Quarter 2022 Financial Results, Revenue up 6% to US$76.5 million, Net Income Rises
Monday, May 9, 2022Company Profile | Careers | Follow Company
Vancouver, BC, May 9, 2022--(T-Net)--Westport Fuel Systems Inc. (TSX:WPRT / Nasdaq:WPRT) today reported financial results for the first quarter ended March 31, 2022 and provided an update on operations. All figures are in U.S. dollars unless otherwise stated.
FIRST QUARTER 2022 HIGHLIGHTS
David M. Johnson, Chief Executive Officer, Westport
"The first quarter of 2022 was challenging as our industry continues to deal with significant gaseous fuel price fluctuations due to the ongoing uncertainty in supply levels and geopolitical risk. Despite the challenging macroeconomic environment, our OEM business continues to grow, we generated 21% growth year over year. Looking forward, the long-term outlook for our company is strong. There is still a need for clean, affordable transport and we remain in a prime competitive position; our products are here, available now, and are making a difference today. Our work with hydrogen is generating significant interest for the company and attention globally. Hydrogen HPDI broadens the call for our proprietary HPDI technology, reaching all the way to zero-carbon green hydrogen future that will have a positive impact on the industry and the global transportation market." said David M. Johnson, Chief Executive Officer.
1Q22 OPERATIONS
CONSOLIDATED RESULTS | |||||||
($ 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.
SEGMENT INFORMATION
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.
SEGMENT RESULTS | 1Q22 | |||||||||||
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 |
SEGMENT RESULTS | 1Q21 | |||||||||||
Revenue | Operating Income (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 |
LIQUIDITY
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.
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.
FINANCIAL STATEMENTS & MANAGEMENT'S DISCUSSION AND ANALYSIS
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.
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 ongoing semiconductor shortages 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. [ MORE ] |
Company Careers |
||||||||||||||||||||||||||||||
|
Other Recent Company News |
||||||||||||||||||||
|