Scharfsinn86 Note: I have covered Westport Fuel Systems Inc. or "Westport" (NASDAQ: WPRT) previously, so investors should view this as an update to my earlier articles on the company. Last week, Westport Fuel Systems reported mixed Q2/2024 results with revenues coming in below and profitability altead of consensus expectations mostly due to a $13.3 million gain resulting from the transfer of the company's High Pressure Direct Injection ("HPD") operations to a recently established joint venture ("the Volvo j ...

Westport Fuel Systems Inc. (WPRT) incurred a loss of 43 cents per share in the second quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of 55 cents. The company had incurred a loss of 60 cents in the year-ago period. WPRT registered consolidated revenues of $83.4 million, missing the Zacks Consensus Estimate of $86 million. The top line also fell from $85 million generated in the corresponding quarter of 2023. The company delivered an adjusted EBITDA of negative $2 million compared with ...

Core Insights - Westport Innovations (WPRT) reported a quarterly loss of $0.43 per share, better than the Zacks Consensus Estimate of a loss of $0.55, and an improvement from a loss of $0.60 per share a year ago, resulting in an earnings surprise of 21.82% [1] - The company achieved revenues of $88.64 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 2.80% and showing an increase from $85.02 million year-over-year [2] - Westport shares have declined approximately 14.7% year-to-date, contrasting with the S&P 500's gain of 12.1% [3] Earnings Outlook - The future performance of Westport's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - Current consensus EPS estimate for the upcoming quarter is -$0.49 on revenues of $84.68 million, and for the current fiscal year, it is -$2.23 on revenues of $343.44 million [7] Industry Context - The Automotive - Original Equipment industry, to which Westport belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

June 30, 2024 and December 31, 2023 | | | June 30, 2024 | | December 31, 2023 | | --- | --- | --- | --- | --- | | Assets | | | | | | Current assets: | | | | | | Cash and cash equivalents (including restricted cash) | $ | 41,522 | $ | 54,853 | | Accounts receivable (note 6) | | 93,789 | | 88,077 | | Inventories (note 7) | | 56,407 | | 67,530 | | Prepaid expenses | | 6,482 | | 6,323 | | Total current assets | | 198,200 | | 216,783 | | Long-term investments (note 8) | | 45,647 | | 4,792 | | Property, plant and ...

VANCOUVER, British Columbia, Aug. 13, 2024 (GLOBE NEWSWIRE) -- Westport Fuel Systems Inc. ("Westport") (TSX:WPRT / Nasdaq:WPRT), a leading supplier of advanced alternative fuel systems and components for the global transportation industry, reported financial results for the second quarter ended June 30, 2024, and provided an update on operations. All figures are in U.S. dollars unless otherwise stated. Over / (Under) 2Q24 2Q23 1H24 1H23 % "In the second quarter of 2024, we remained focused on implementing t ...

Participants may register up to 60 minutes before the event by clicking on the call link and completing the online registration form. Upon registration, the user will receive dial-in info and a unique PIN, along with an email confirming the details. At Westport Fuel Systems, we are driving innovation to power a cleaner tomorrow. We are 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 globa ...

Driving Cleaner Performance Q1 2024 Results Westport Fuel Systems This presentation contains forward-looking statements, including statements regarding, the timing and completion of the joint venture with Volvo, future revenue expectations, timing and production of LPG products with OEM customers, future demand for LPG, future growth in markets, future of our development programs (including those relating to HPDI and Hydrogen), the demand for our products, the future success of our business and technology s ...

Financial Data and Key Metrics Changes - Q1 2024 revenues decreased by 6% year-over-year to $77.6 million, primarily due to decreased volumes in the delayed OEM business [7][29] - Gross margin decreased to $11.7 million or 15% of revenue, down from $13.3 million or 16% of revenue in Q1 of the previous year [30] - Adjusted EBITDA loss increased by $2.1 million to $6.6 million [38] Business Line Data and Key Metrics Changes - OEM revenue for Q1 2024 was $49.3 million, down $7 million compared to the prior year, with sales volumes decreasing in delayed OEM, fuel storage, and light-duty OEM businesses [39] - Independent aftermarket revenue increased to $28.3 million, up $2.4 million year-over-year, driven by sales growth in North America, Western Europe, and South America [33] - Electronics business sales volumes increased, driven by higher sales to a key customer [32] Market Data and Key Metrics Changes - The Chinese natural gas vehicle market expanded to over 100,000 commercial vehicles in 2023, with ongoing collaboration with OEM partners [21] - Sales in Africa and Eastern Europe declined, while sales increased in North America, Western Europe, and South America [33] Company Strategy and Development Direction - The company has established three main priorities for 2024: driving success via the HPDI joint venture with Volvo, improving operational excellence, and reimagining a hydrogen-powered future [8][9] - The HPDI joint venture with Volvo is expected to accelerate the commercialization of Westport's fuel system for long-haul and off-road applications [10] - The company is focusing on cost-cutting measures across all levels to ensure sustainable growth and profitability [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that while Q1 revenues were disappointing, they are optimistic about a recovery in Q2, aligning with seasonal trends [80] - The company is well-positioned to benefit from increasing government support for hydrogen as a fuel source, particularly in North America and Europe [14][15] - Management emphasized the importance of managing inventory and working capital effectively to enhance liquidity [48][49] Other Important Information - The company incurred $1.5 million in one-time expenses related to severance and costs associated with setting up the joint venture [31] - The company is restructuring its presence in India to improve cash flow generation [12] Q&A Session Summary Question: Can you talk about customer inventories and sell-through? - Management indicated that they are seeing an increase in sell-through as a key customer works through excess inventory, with orders expected to ramp up in the latter half of the quarter [47] Question: How big an opportunity is there to generate cash from working capital? - Management acknowledged significant progress in improving working capital and reducing receivables, with inventory reduction being a key focus area [49] Question: What are the commitments from the Chinese OEM partner? - Currently, there are no production orders, but development orders are ongoing, and management is optimistic about future production orders [57][109] Question: What underpins the $70 million revenue expectation from hydrogen components? - The expectation is based on ongoing development projects with Tier 1 suppliers, with increasing production purchase orders anticipated as the hydrogen ecosystem evolves [58][60] Question: How is the company managing cost reductions? - Management is implementing aggressive cost-cutting measures across the organization, with a focus on aligning costs with current business size while also aiming for top-line growth [68][69] Question: What is the timeline for organizational restructuring? - Corporate cost-cutting is expected to show benefits by year-end, while operational cost reductions will take longer to implement effectively [99]

[Consolidated Financial Statements](index=1&type=section&id=Consolidated%20Financial%20Statements) This section presents the audited consolidated financial statements, including the balance sheets, statements of operations, shareholders' equity, and cash flows, along with the independent auditor's report [Report of Independent Registered Public Accounting Firm](index=2&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued an unqualified opinion on Westport Fuel Systems Inc.'s consolidated financial statements for the years ended December 31, 2023 and 2022, stating they are presented fairly in conformity with U.S. GAAP. A separate unqualified opinion was also issued on the effectiveness of the company's internal control over financial reporting as of December 31, 2023. The auditor identified no critical audit matters - The auditor, KPMG LLP, provided an **unqualified opinion**, confirming the financial statements for 2023 and 2022 are **fairly presented** in accordance with **U.S. generally accepted accounting principles**[3](index=3&type=chunk) - The company's internal control over financial reporting as of December 31, 2023, was deemed **effective**, receiving an **unqualified opinion** from the auditor[4](index=4&type=chunk)[10](index=10&type=chunk) - The audit for the current period did not identify any **critical audit matters**, which are issues that are material and involve especially challenging, subjective, or complex judgments[7](index=7&type=chunk) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, Westport Fuel Systems Inc. reported total assets of $355.7 million, a decrease from $407.5 million in 2022. Total liabilities slightly decreased to $195.3 million from $203.5 million. Consequently, total shareholders' equity declined significantly to $160.4 million from $204.0 million, primarily due to an increased accumulated deficit Consolidated Balance Sheet Summary (in thousands of USD) | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $216,783 | $277,219 | | **Total Assets** | $355,748 | $407,451 | | **Total Current Liabilities** | $134,837 | $135,519 | | **Total Liabilities** | $195,300 | $203,485 | | **Total Shareholders' Equity** | $160,448 | $203,966 | - Cash and cash equivalents decreased from **$86.2 million** in 2022 to **$54.9 million** in 2023[16](index=16&type=chunk) - The accumulated deficit grew from **$(1,024.7) million** in 2022 to **$(1,074.4) million** in 2023, contributing to the reduction in shareholders' equity[16](index=16&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the year ended December 31, 2023, revenue increased to $331.8 million from $305.7 million in 2022. Despite higher revenue, the net loss widened to $49.7 million from $32.7 million in the prior year. The loss per share increased to $2.90 from $1.91. The 2022 results included a significant one-time gain on sale of investment of $19.1 million, which was absent in 2023 Statement of Operations Summary (in thousands of USD, except per share amounts) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Revenue** | $331,799 | $305,698 | | **Loss from Operations** | $(45,883) | $(50,266) | | **Net Loss** | $(49,718) | $(32,695) | | **Net Loss Per Share** | $(2.90) | $(1.91) | - Revenue grew by **8.5%** year-over-year[17](index=17&type=chunk) - The net loss in 2023 was impacted by a **$2.9 million loss on extinguishment of royalty payable**, whereas 2022 benefited from a **$19.1 million** gain on the sale of an investment[17](index=17&type=chunk) [Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Total shareholders' equity decreased from $204.0 million at the end of 2022 to $160.4 million at the end of 2023. The decline was primarily driven by the net loss of $49.7 million for the year, which was partially offset by $4.5 million in other comprehensive income from cumulative translation adjustments Shareholders' Equity Reconciliation (in thousands of USD) | Description | Amount | | :--- | :--- | | **Balance at Dec 31, 2022** | $203,966 | | Stock-based compensation | $1,727 | | Net loss for the year | $(49,718) | | Other comprehensive income | $4,473 | | **Balance at Dec 31, 2023** | $160,448 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the year ended December 31, 2023, the company used $13.2 million in cash from operating activities, an improvement from the $34.6 million used in 2022. Cash used in investing activities was $15.4 million, while financing activities used $2.2 million. Overall, cash and cash equivalents decreased by $31.3 million, ending the year at $54.9 million Cash Flow Summary (in thousands of USD) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(13,193) | $(34,615) | | **Net cash (used in) provided by investing activities** | $(15,413) | $17,647 | | **Net cash used in financing activities** | $(2,224) | $(19,423) | | **Net decrease in cash and cash equivalents** | $(31,331) | $(38,708) | | **Cash and cash equivalents, end of year** | $54,853 | $86,184 | - The improvement in operating cash flow was primarily due to **positive changes in working capital**, including a **$9.5 million** decrease in inventories and a **$5.3 million** decrease in accounts receivable[21](index=21&type=chunk) - Investing activities in 2022 were significantly boosted by **$31.4 million** in proceeds from the sale of an investment, a cash source not present in 2023[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the consolidated financial statements, covering accounting policies, specific balance sheet and income statement accounts, and subsequent events [Note 1: Company organization and operations](index=9&type=section&id=1.%20Company%20organization%20and%20operations) Westport Fuel Systems Inc. is a global company that engineers, manufactures, and supplies alternative fuel systems and components for transportation. Its products enable the use of fuels like LPG, CNG, LNG, RNG, and hydrogen in various vehicle types, and are sold in over 70 countries through OEMs and aftermarket channels - The company focuses on alternative fuel systems and components for fuels such as LPG, CNG, LNG, RNG, and hydrogen[24](index=24&type=chunk) - Products are supplied globally to over **70 countries**, serving passenger cars, trucks, and off-road applications through a network of distributors and directly to OEMs[24](index=24&type=chunk) [Note 2: Liquidity and Going Concern](index=9&type=section&id=2.%20Liquidity%20and%20Going%20Concern) Despite sustaining operating losses and negative cash flows, management has concluded that there is no substantial doubt about the company's ability to continue as a going concern for at least one year from the financial statement issuance date. The company had $54.9 million in cash at year-end 2023 and is actively managing working capital and profitability to improve cash flow. The ability to continue beyond March 2025 depends on generating positive cash flows and financing strategic objectives - Management concluded there are no conditions that raise **substantial doubt** about the Company's ability to continue as a going concern within one year[26](index=26&type=chunk) - The company continues to experience operating losses (**$45.9 million** in 2023) and negative operating cash flows (**$13.2 million** in 2023)[28](index=28&type=chunk) - As of December 31, 2023, the company had **$54.9 million** in cash and cash equivalents. A minimum cash covenant of **$15.0 million** is required under its EDC term loan[28](index=28&type=chunk) [Note 3: Significant accounting policies](index=10&type=section&id=3.%20Significant%20accounting%20policies) The financial statements are prepared under U.S. GAAP. The company's reporting currency is the U.S. Dollar, while its functional currency is the Canadian Dollar. Key policies include recognizing revenue when control of goods transfers to the customer, expensing R&D costs as incurred, testing goodwill for impairment annually, and accounting for leases by recognizing right-of-use assets and liabilities for terms over 12 months - The consolidated financial statements are presented in accordance with **U.S. GAAP**[32](index=32&type=chunk) - Revenue from product sales is recognized when the customer obtains control of the goods[44](index=44&type=chunk) - Goodwill is not amortized but is tested for **impairment** at least annually on December 31[43](index=43&type=chunk) - Stock-based compensation is measured at fair value on the grant date and expensed over the requisite service period[51](index=51&type=chunk) [Note 4: Accounts receivable](index=18&type=section&id=4.%20Accounts%20receivable) Net accounts receivable decreased to $88.1 million at the end of 2023 from $101.6 million in 2022. The decrease was primarily driven by a reduction in 'Other receivables' from $19.4 million to $6.7 million. Customer trade receivables remained relatively stable Accounts Receivable Breakdown (in thousands of USD) | Component | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Customer trade receivables | $83,175 | $82,533 | | Other receivables | $6,709 | $19,355 | | Due from related parties | $1,671 | $3,974 | | Allowance for credit losses | $(4,847) | $(5,040) | | **Total** | **$88,077** | **$101,640** | [Note 5: Inventories](index=18&type=section&id=5.%20Inventories) Inventories decreased to $67.5 million in 2023 from $81.6 million in 2022. During 2023, the company recorded a significant inventory write-down of $7.1 million, a sharp increase from $0.7 million in 2022. A major portion of the 2023 write-down ($4.5 million) was due to an engine development contract that will not be commercialized Inventory Breakdown (in thousands of USD) | Component | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Purchased parts and materials | $50,770 | $61,213 | | Work-in-progress | $2,801 | $2,423 | | Finished goods | $13,959 | $17,999 | | **Total** | **$67,530** | **$81,635** | - The company recorded inventory write-downs of **$7.1 million** in 2023, compared to only **$0.7 million** in 2022. This included a **$4.5 million** write-down from a non-commercialized engine development contract[57](index=57&type=chunk) [Note 6: Sale of investment](index=18&type=section&id=6.%20Sale%20of%20investment) In February 2022, the company sold its 100% stake in Cummins Westport Inc. (CWI) to Cummins Inc. The transaction resulted in net proceeds of $31.4 million and a pre-tax gain on sale of $19.1 million. A holdback of $10.8 million was retained by Cummins for three years to cover potential warranty obligations Gain on Sale of Investment - 2022 (in thousands of USD) | Description | Amount | | :--- | :--- | | Proceeds from sale of investment | $31,445 | | Holdback receivable | $9,713 | | Less: carrying value of investment | $(22,039) | | **Gain on sale of investment** | **$19,119** | [Note 7: Long-term investments](index=19&type=section&id=7.%20Long-term%20investments) The company's long-term investments totaled $4.8 million as of December 31, 2023, slightly up from $4.6 million in 2022. The portfolio includes interests in Weichai Westport Inc. (WWI) and Minda Westport Technologies Limited (MWTL). In 2023, an impairment loss of $413,000 was recognized on the WWI investment. The company also agreed to sell a 26% stake in MWTL to its joint venture partner, Minda - An **impairment loss** of **$413,000** was recognized on the Weichai Westport Inc. (WWI) investment in December 2023, as its fair value was assessed to be lower than its carrying amount[62](index=62&type=chunk) - The company entered into an agreement to sell a **26%** share of its **50%** interest in Minda Westport Technologies Limited (MWTL) to its partner, Uno Minda Limited[63](index=63&type=chunk) [Note 15: Long-term debt](index=24&type=section&id=15.%20Long-term%20debt) Total long-term debt, including the current portion, increased to $45.1 million in 2023 from $43.9 million in 2022. The debt portfolio consists of several term loan facilities with entities like EDC and UniCredit, other bank financing, and capital lease obligations. In 2023, the company entered into new Euro-denominated loan agreements with Banca de Credito Cooperativo, Deutsche Bank, and Rabobank totaling approximately $11.5 million. The company uses interest rate swaps to hedge against interest rate fluctuations on some of its loans Long-Term Debt Breakdown (in thousands of USD) | Component | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Term loan facilities, net | $42,879 | $41,934 | | Other bank financing | $531 | $512 | | Capital lease obligations | $1,655 | $1,416 | | **Total Long-Term Debt** | **$45,065** | **$43,862** | | Less: current portion | $(14,108) | $(11,698) | | **Long-term portion** | **$30,957** | **$32,164** | - In late 2023, the company secured three new Euro-denominated loans: **$2.2M** from Banca de Credito Cooperativo, **$7.7M** from Deutsche Bank, and **$1.5M** from Rabobank[80](index=80&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - The company is in compliance with all financial and non-financial covenants related to its financing arrangements as of December 31, 2023[86](index=86&type=chunk) [Note 16: Long-term royalty payable](index=26&type=section&id=16.%20Long-term%20royalty%20payable) In April 2023, the company settled and terminated its royalty payable agreement with Cartesian Capital Group. The company made a final payment of $8.7 million, which fully extinguished the liability that stood at $5.5 million at the end of 2022. This transaction resulted in a loss on extinguishment of $2.9 million and released the security interest on the company's HPDI 2.0 intellectual property - The company terminated its royalty payable agreement with Cartesian Capital Group in April 2023 by making a final payment of **$8,687 thousand**[89](index=89&type=chunk) - The settlement resulted in a recorded **loss on extinguishment** of **$2,909 thousand** and eliminated the entire royalty payable balance, which was **$5,538 thousand** at the end of 2022[89](index=89&type=chunk) [Note 18: Share capital, stock options and other stock-based plans](index=26&type=section&id=18.%20Share%20capital%2C%20stock%20options%20and%20other%20stock-based%20plans) On June 1, 2023, the company executed a 1-for-10 reverse stock split (consolidation) of its common shares. All share and per-share amounts have been retroactively adjusted. Total stock-based compensation expense recognized in 2023 was $1.7 million. During the year, 435,128 new share units (RSUs, PSUs, DSUs) were granted to directors, executives, and employees - The company completed a **1-for-10 reverse stock split** of its common shares on June 1, 2023. All share data has been retroactively adjusted[91](index=91&type=chunk) - Total stock-based compensation expense for 2023 was **$1,727 thousand**, compared to **$2,066 thousand** in 2022[95](index=95&type=chunk) Continuity of Share Units | Description | Number of Units (2023) | Number of Units (2022) | | :--- | :--- | :--- | | Outstanding, beginning of year | 317,432 | 186,643 | | Granted | 435,128 | 254,109 | | Vested and exercised | (44,186) | (50,384) | | Forfeited/expired | (229,731) | (72,936) | | **Outstanding, end of year** | **478,643** | **317,432** | [Note 19: Income taxes](index=30&type=section&id=19.%20Income%20taxes) The company recorded an income tax expense of $1.0 million in 2023 on a pre-tax loss of $48.7 million, resulting in an effective tax rate that differs significantly from the Canadian statutory rate of 27%. The difference is mainly due to changes in the valuation allowance ($9.5 million) and expired losses ($1.4 million). The company holds significant deferred tax assets of $280.1 million, primarily from net loss carry-forwards, but has a valuation allowance of $268.6 million against them - The company has net loss carry-forwards totaling **$778.5 million** available to offset future taxable income in various jurisdictions, with the majority having long-term or indefinite expiration dates[106](index=106&type=chunk) Net Deferred Tax Assets (in thousands of USD) | Component | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total gross deferred income tax assets | $280,131 | $259,669 | | Valuation allowance | $(268,577) | $(249,239) | | **Total deferred income tax assets** | **$11,554** | **$10,430** | - As of December 31, 2023, the company had **$5.6 million** in uncertain tax benefits, which, if recognized, would affect the effective tax rate[109](index=109&type=chunk) [Note 22: Segment information](index=34&type=section&id=22.%20Segment%20information) The company operates through three segments: OEM, Independent Aftermarket (IAM), and Corporate. In 2023, the OEM segment generated $222.7 million in revenue but had an operating loss of $31.2 million. The IAM segment had revenue of $109.1 million and operating income of $2.6 million. Geographically, Europe is the largest market, accounting for 70% of total revenue in 2023, up from 64% in 2022 Segment Performance - 2023 (in thousands of USD) | Segment | Revenue | Operating Income (Loss) | | :--- | :--- | :--- | | OEM | $222,741 | $(31,222) | | IAM | $109,058 | $2,583 | | Corporate | — | $(17,244) | | **Total** | **$331,799** | **$(45,883)** | Revenue by Geographic Region | Region | % of Total Revenue (2023) | % of Total Revenue (2022) | | :--- | :--- | :--- | | Europe | 70% | 64% | | Americas | 13% | 12% | | Asia | 10% | 15% | | Africa | 3% | 5% | | Other | 4% | 4% | - A single OEM launch partner accounted for **16%** of total revenue (**$53.7 million**) in 2023, up from **14%** (**$43.3 million**) in 2022[114](index=114&type=chunk) [Note 23: Financial instruments](index=36&type=section&id=23.%20Financial%20instruments) The company is exposed to liquidity, credit, foreign currency, and interest rate risks. Liquidity risk is managed despite a history of losses, with $54.9 million in cash at year-end. Credit risk is managed by diversifying investments and reviewing customer credit. Foreign currency risk arises from conducting business in multiple currencies, primarily the U.S. dollar and Euro. Interest rate risk on variable-rate debt is mitigated through the use of interest rate swaps - The company has a history of losses and negative cash flows, posing a liquidity risk. As of Dec 31, 2023, it has **$54.9 million** in cash and cash equivalents[120](index=120&type=chunk) - A hypothetical **200 basis point (2%)** increase/decrease in interest rates would have impacted the 2023 net loss by approximately **$0.7 million**[128](index=128&type=chunk) - A hypothetical **5%** increase/decrease in the U.S. dollar's value against the Canadian dollar and Euro would have impacted the 2023 income from operations by approximately **$0.1 million**[126](index=126&type=chunk) [Note 24: Subsequent Events](index=39&type=section&id=24.%20Subsequent%20Events) Subsequent to year-end, the company entered into significant agreements. In January 2024, it secured a new Euro-denominated loan of $3.8 million from UniCredit. More notably, in March 2024, it signed agreements with the Volvo Group to establish a joint venture (JV) for its HPDI™ fuel system technology. Volvo will acquire a 45% interest in the JV for an initial $28.4 million. This transaction is expected to have a material impact on future financial statements - On March 11, 2024, the company entered into agreements with the Volvo Group to form a joint venture (JV) focused on HPDI™ technology. Volvo will acquire a **45%** interest for an initial consideration of **$28.35 million**[136](index=136&type=chunk) - The formation of the HPDI joint venture with Volvo is expected to have a **material impact** on the company's future financial position, results of operations, and cash flows[138](index=138&type=chunk) - On January 10, 2024, the company secured an additional Euro-denominated loan of **$3.8 million** from UniCredit, maturing in 2028[135](index=135&type=chunk)

Financial Performance - Westport reported a net loss of $11.9 million for Q3 2023, consistent with the same quarter last year[12]. - Revenues increased by 9% to $77.4 million in Q3 2023, compared to $71.2 million in Q3 2022, driven by higher sales volumes in delayed OEM, electronics, and fuel storage[15]. - Adjusted EBITDA improved to negative $3.0 million in Q3 2023 from negative $4.5 million in Q3 2022, reflecting a 33% improvement[13]. - Gross margin increased by 17% to $13.2 million in Q3 2023, up from $11.3 million in Q3 2022, with gross margin percentage rising to 17%[13]. - Revenue for Q3 2023 was $77.4 million, an increase of 8.5% compared to $71.2 million in Q3 2022[35]. - Net loss for Q3 2023 was $11.9 million, slightly higher than the net loss of $11.9 million in Q3 2022[35]. - Adjusted EBITDA improved to $(3.0) million in Q3 2023 from $(4.5) million in Q2 2023[31]. - The company reported a comprehensive loss of $8.5 million for Q3 2023, compared to a comprehensive loss of $17.4 million in Q3 2022[35]. Segment Performance - The OEM segment revenue for Q3 2023 was $52.9 million, an increase from $44.1 million in Q3 2022, primarily due to higher sales volumes[19]. - The IAM segment revenue decreased to $24.5 million in Q3 2023 from $27.1 million in Q3 2022, attributed to lower sales volumes in Africa and Europe[22]. Cash and Assets - Cash and cash equivalents stood at $44.0 million at the end of Q3 2023[12]. - Total current assets decreased to $227.9 million as of September 30, 2023, down from $277.2 million at the end of 2022[33]. - Cash and cash equivalents, including restricted cash, were $43.97 million as of September 30, 2023, down from $86.18 million at the end of 2022[33]. - Total liabilities decreased to $184.3 million as of September 30, 2023, compared to $203.5 million at the end of 2022[33]. Research and Development - Research and development expenses for Q3 2023 were $5.7 million, a decrease from $6.5 million in Q3 2022[35]. Strategic Initiatives - Westport is reorganizing its partnership with Minda in India, reducing its stake from 50% to 24% for approximately $1.8 million, expected to close by the end of Q1 2024[12]. - The company anticipates improved profitability through the amended joint venture agreement, which will include future hydrogen components[12]. Shareholder Information - The weighted average common shares outstanding increased to 17.67 million in Q3 2023 from 17.12 million in Q3 2022[35]. Other Expenses - The company incurred severance costs of $4.5 million in Q3 2023[31].