Provaris Power: Enabling Clear Power Provide Chains by way of Progressive Hydrogen, CO2 Storage and Transport Options

We stay assured within the position that various fuels will play in driving sustainability in the way forward for the transportation and industrial utility area. Relating to hydrogen, we acknowledge the slowdown in infrastructure improvement within the world market, which has tapered the adoption of automotive and industrial purposes powered by hydrogen. The success of this market is determined by the set up of infrastructure and the manufacturing of unpolluted hydrogen, each of which have been gradual to materialize.  Nevertheless, we’re steadfast in our perception that hydrogen as a gas will prevail – though gradual versus instant – and change into a clear gas supply that’s adopted worldwide. Within the meantime, Westport presently delivers a set of confirmed and modern parts and programs for a variety of inexpensive various low-carbon fuels corresponding to pure gasoline, renewable pure gasoline, propane, and hydrogen. We’re driving cleaner efficiency by addressing decrease emissions rules with sensible purposes utilizing innovation accessible right this moment.

As we navigate the following quarter, and the following yr, Westport is strongly dedicated to driving operational excellence, nurturing innovation, and supporting Cespira, all to place the Firm for sustainable progress in an evolving panorama. We’re targeted and devoted to the current and our future.”

Dan Sceli, Chief Government Officer, Westport Gas Programs

Q3 2024 Highlights

• Revenues decreased by 14% to $66.2 million in comparison with $77.4 million in the identical quarter final yr, primarily pushed by the transition of the Heavy-Obligation OEM revenues now being mirrored within the outcomes of Cespira, of which Westport accounts for as an fairness funding.
• Web lack of $3.9 million for the quarter, an enchancment over the web lack of $11.9 million for a similar quarter final yr. This was primarily the results of an enchancment in gross margin by $1.3 million in comparison with the prior yr quarter, a major lower in working expenditures and depreciation and amortization as prices beforehand related to our HPDI enterprise at the moment are accrued by Cespira, price reductions in Westport and a internet overseas trade acquire of $1.1 million.
• Continued enchancment in Adjusted EBITDA ^[2] reaching damaging $0.8 million in comparison with damaging $3.0 million for a similar interval in 2023.
• Money and money equivalents have been $33.3 million on the finish of the third quarter of 2024. Money utilized in working actions was $9.9 million primarily from a rise in working capital of $11.4 million. Money supplied by investing actions included the sale of investments for $9.6 million associated to the gathering of $8.4 million from the formation of the HPDI JV and sale of our possession curiosity in Westport Weichai Inc. (“Weichai”), partially offset by the acquisition of capital belongings of $2.1 million. Money utilized in financing actions represented debt repayments of $7.0 million within the quarter.
• In September 2024, HPDI Expertise, the three way partnership between Volvo Group and Westport, launched as Cespira.

⁽¹⁾ This consists of revenue (loss) from Minda Westport Applied sciences Restricted and Cespira.

⁽²⁾ Gross margin, EBITDA and Adjusted EBITDA are non-GAAP measures. Please discuss with GAAP and NON-GAAP FINANCIAL MEASURES for the reconciliation to equal GAAP measures and limitations on using such measures.

Phase Data

Gentle-Obligation Phase

Income for the three and 9 months ended September 30, 2024 was $61.5 million and $194.2 million, respectively, in contrast with $60.2 million and $200.4 million for the three and 9 months ended September 30, 2023.

Gentle-Obligation income elevated by $1.3 million for the three months ended September 30, 2024 in comparison with the prior yr quarter, primarily a results of a rise in gross sales in our light-duty OEM and IAM companies and partially offset by decreased gross sales in our gas storage, DOEM, and electronics companies. For the 9 months ended September 30, 2024, Gentle-Obligation income decreased by $6.2 million in comparison with the prior yr interval, primarily pushed by a lower in gross sales in our DOEM, and gas storage companies and partially offset by a rise in gross sales in our light-duty OEM, electronics, and IAM companies.

Gross margin elevated by $1.9 million to $13.9 million, or 23% of income, for the three months ended September 30, 2024 in comparison with $12.0 million, or 20% of income, for the three months ended September 30, 2023. This was primarily pushed by a slight improve in gross sales volumes, a change in gross sales combine with will increase in gross sales to European clients and discount in gross sales to growing areas.

Gross margin elevated by $4.3 million to $41.4 million, or 21% of income, for the 9 months ended September 30, 2024 in comparison with $37.1 million, or 19% of income, for the 9 months ended September 30, 2023. This was primarily pushed by a change in gross sales combine with a rise in gross sales to European clients and a discount in gross sales to growing areas.

Westport started supplying its Euro 6 LPG gas system to its world OEM buyer in early 2024. Regardless of a slower begin to manufacturing than anticipated, Westport expects to exceed deliberate Euro 6 LPG gas system deliveries in 2024. This manufacturing provide settlement has been instrumental in enhancing income and delivering increased margins, which greater than offset the decline in income on account of a key delayed OEM buyer persevering with to work via their stock. Manufacturing for the Euro 7 LPG gas system for a similar world OEM buyer is anticipated to start mid-to-late 2025.

The Gentle-Obligation section continues to evolve our LPG gas system resolution, offering extra clients with a cost-competitive various gas resolution. Just lately, two new product platforms have been introduced using our programs. Westport was excited to be a part of the first-ever OEM hybrid automobile powered by HEV and LPG applied sciences – the Kia Niro Tri-Gas in Italy. This revolutionary product, born from Westport’s historic partnership with Kia Italia, presents three gas sources—petrol, electrical, and LPG—delivering over 1,600 km on full tanks with lowered emissions and uncompromised efficiency. Westport additionally introduced the worldwide availability of a LPG gas system for the RAM 1500 Hurricane 3.0 DI Twin Turbo engine, enabling clients to profit from decrease emissions and decrease gas prices.

Excessive-Strain Controls & Programs Phase

Income for the three and 9 months ended September 30, 2024, was $1.6 million and $7.4 million, respectively, in contrast with $3.7 million and $9.4 million for the three and 9 months ended September 30, 2023. The lower in income for the three months ended September 30, 2024 in comparison with the prior yr quarter was primarily pushed by the final slowdown within the hydrogen infrastructure improvement resulting in a slower adoption of automotive and industrial purposes powered by hydrogen.

Gross margin decreased by $0.6 million to $0.4 million, or 25% of income, for the three months ended September 30, 2024 in comparison with $1.0 million or 27% of income, for the three months ended September 30, 2023. Gross margin decreased by $0.9 million to $1.5 million, or 20% of income, for the 9 months ended September 30, 2024 in comparison with $2.4 million, or 26% of income, for the 9 months ended September 30, 2023. This was primarily pushed by decrease gross sales quantity within the quarter.

Heavy-Obligation OEM Phase

Income for the three and 9 months ended September 30, 2024 consists of income from the HPDI enterprise from January 1 to June 3, the cut-off date of the transaction to type Cespira plus income earned below a transitional companies settlement. Income for the three and 9 months ended September 30, 2024 was $3.1 million and $25.6 million, respectively, in contrast with $13.5 million and $34.9 million for the three and 9 months ended September 30, 2023.

The lower in income for the three months ended September 30, 2024 is a results of the transition of this enterprise to Cespira and the ensuing change in accounting remedy. We proceed to earn service income from Cespira below the transitional companies settlement for the quarter, which is represented on this section.

Gross margin was $0.2 million, or 6% of income, for the three months ended September 30, 2024 in comparison with $0.2 million or 1% of income, for the three months ended September 30, 2023. Gross margin decreased by $1.0 million to $0.4 million, or 2% of income, for the 9 months ended September 30, 2024 in comparison with $1.4 million, or 4% of income, for the 9 months ended September 30, 2023.

Chosen Cespira Statements of Operations Information

We account for Cespira utilizing the fairness methodology of accounting for investments.

The next desk units forth a abstract of the monetary outcomes of Cespira for the three months ended September 30, 2024 and the interval between June 3, 2024 to September 30, 2024:

⁽¹⁾ Gross margin is a non-GAAP measure. Please discuss with GAAP and NON-GAAP FINANCIAL MEASURES for the reconciliation to equal GAAP measures and limitations on using such measures.

Cespira earned income of $16.2 million for 3 months ended September 30, 2024. For the prior yr quarter, the Heavy-Obligation OEM section included our HPDI enterprise which earned $13.5 million. The income improve is essentially pushed by a rise in HPDI programs bought.

Cespira misplaced $1.1 million on gross margin for 3 months ended September 30, 2024. For the prior yr quarter, the Heavy-Obligation OEM section earned $0.2 million.

Cespira had working losses of $5.3 million for the three months ended September 30, 2024. For the prior yr quarter, Heavy-Obligation OEM had incurred working losses of $3.7 million.

As beforehand introduced, Westport and Weichai are events to a expertise improvement and provide settlement which comprises an obligation for Weichai to order, and Westport to provide, sure volumes of HPDI gas system parts previous to December 31, 2024. Important orders for HPDI gas system parts in opposition to this settlement haven’t been acquired up to now and we don’t presently anticipate that orders for any vital further volumes might be acquired previous to yr finish. Westport and Cespira proceed to collaborate with Weichai Energy Co. Ltd (“Weichai Energy”) on an HPDI gas system outfitted model of the Weichai Energy engine platforms. The events are presently discussing the following phases of this work and the obligations of every social gathering going ahead.

Q3 2024 Convention Name
Westport has scheduled a convention name on November 13, 2024, at 7:00 am Pacific Time (10:00 am Jap Time) to debate these outcomes. To entry the convention name please register at https://register.vevent.com/register/BI0e453d34cd1c4f7da856b4eec14f0d4c . The reside webcast of the convention name may be accessed via the Westport web site at https://buyers.wfsinc.com/ .

The webcast might be archived on Westport’s web site at https://buyers.wfsinc.com.

Monetary Statements and Administration’s Dialogue and Evaluation
To view Westport financials for the second quarter ended September thirtieth, 2024, please go to https://buyers.wfsinc.com/financials/

About Westport Gas Programs

At Westport Gas Programs, we’re driving innovation to energy a cleaner tomorrow. We’re a number one provider of superior gas supply parts and programs for clear, low-carbon fuels corresponding to pure gasoline, renewable pure gasoline, propane, and hydrogen to the worldwide transportation business. Our expertise delivers the efficiency and gas effectivity required by transportation purposes and the environmental advantages that tackle local weather change and concrete air high quality challenges. Headquartered in Vancouver, Canada, with operations in Europe, Asia, North America, and South America, we serve our clients in additional than 70 international locations with main world transportation manufacturers. At Westport Gas Programs, we expect forward. For extra info, go to www.wfsinc.com.

Cautionary Word Relating to Ahead Trying Statements
This press launch comprises forward-looking statements, together with statements concerning income and money utilization expectations, future strategic initiatives and future progress, way forward for our improvement packages (together with these referring to HPDI and hydrogen), the demand for our merchandise, the longer term success of our enterprise and expertise methods, intentions of companions and potential clients, the efficiency and competitiveness of Westport’s merchandise and growth of product protection, future market alternatives, velocity of adoption of pure gasoline and hydrogen for transportation and phrases and timing of present and future agreements in addition to Westport’s administration’s response to any of the aforementioned elements. These statements are neither guarantees nor ensures, however contain identified and unknown dangers and uncertainties and are primarily based on each the views of administration and assumptions that will trigger our precise outcomes, ranges of exercise, efficiency or achievements to be materially totally different from any future outcomes, ranges of actions, efficiency or achievements expressed in or implied by these ahead wanting statements. These dangers, uncertainties and assumptions embrace these associated to our income progress, working outcomes, business and merchandise, the final financial system, situations of and entry to the capital and debt markets, solvency, governmental insurance policies and regulation, expertise improvements, fluctuations in overseas trade charges, working bills, continued discount in bills, capacity to efficiently commercialize new merchandise, the efficiency of our joint ventures, the provision and value of pure gasoline and hydrogen, world authorities stimulus packages and new environmental rules, the acceptance of and shift to pure gasoline and hydrogen automobiles, the relief or waiver of gas emission requirements, the lack of fleets to entry capital or authorities funding to buy pure gasoline and hydrogen automobiles, the event of competing applied sciences, our capacity to adequately develop and deploy our expertise, the actions and determinations of our three way partnership and improvement companions, ongoing provide chain challenges in addition to different threat elements and assumptions that will have an effect on our precise outcomes, efficiency or achievements or monetary place mentioned in our most up-to-date Annual Data Type and different filings with securities regulators. Readers mustn’t place undue reliance on any such forward-looking statements, which converse solely as of the date they have been made. We disclaim any obligation to publicly replace or revise such statements to mirror any change in our expectations or in occasions, situations or circumstances on which any such statements could also be primarily based, or that will have an effect on the chance that precise outcomes will differ from these set forth in these ahead wanting statements besides as required by Nationwide Instrument 51-102. The contents of any web site, RSS feed or twitter account referenced on this press launch aren’t integrated by reference herein.

Contact Data
Investor Relations
Westport Gas Programs
T: +1 604-718-2046

GAAP and NON-GAAP FINANCIAL MEASURES

Administration evaluations the operational progress of its enterprise models and funding packages over successive intervals via the evaluation of gross margin, gross margin as a proportion of income, internet revenue, EBITDA and Adjusted EBITDA. The Firm defines gross margin as income much less price of income. The Firm defines EBITDA as internet revenue or loss from persevering with operations earlier than revenue taxes adjusted for curiosity expense (internet), depreciation and amortization. Westport Gas Programs defines Adjusted EBITDA as EBITDA from persevering with operations excluding bills for stock-based compensation, unrealized overseas trade acquire or loss, and non-cash and different changes. Administration makes use of Adjusted EBITDA as a long-term indicator of operational efficiency because it ties intently to the enterprise models’ capacity to generate sustained money circulation and such info will not be acceptable for different functions.  Adjusted EBITDA consists of the corporate’s share of revenue from joint ventures.

The phrases gross margin, gross margin as a proportion of income, EBITDA and Adjusted EBITDA aren’t outlined below U.S. usually accepted accounting rules (” U.S. GAAP “) and aren’t a measure of working revenue, working efficiency or liquidity offered in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as an analytical instrument, and when assessing the corporate’s working efficiency, buyers mustn’t take into account EBITDA and Adjusted EBITDA in isolation, or as an alternative to internet loss or different consolidated assertion of operations knowledge ready in accordance with U.S. GAAP. Amongst different issues, EBITDA and Adjusted EBITDA don’t mirror the corporate’s precise money expenditures. Different corporations might calculate comparable measures in a different way than Westport Gas Programs, limiting their usefulness as comparative instruments. The corporate compensates for these limitations by relying totally on its U.S. GAAP outcomes and utilizing EBITDA and Adjusted EBITDA as supplemental info.