[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Westport achieved record quarterly revenue of $85.0 million with improved gross margin, despite a net loss, driven by strategic advancements in HPDI technology and expanded LPG programs - Revenue growth was driven by increased sales in delayed OEM, electronics, fuel storage, and IAM businesses in Eastern Europe and South America, but was partially offset by lower sales in India's light-duty OEM business and reduced volumes in hydrogen and heavy-duty OEM businesses[2](index=2&type=chunk)[10](index=10&type=chunk) - Signed a non-binding letter of intent with Volvo to establish a joint venture to accelerate the commercialization of Westport's HPDI™ fuel system technology for long-haul and off-road applications[5](index=5&type=chunk)[8](index=8&type=chunk) - Expanded a Euro 7 program to supply LPG fuel systems for a global OEM, which is now forecasted to generate **€63 million** in revenue from 2025-2028, bringing the total revenue from LPG supply agreements with this OEM to approximately **€255 million**[8](index=8&type=chunk) - Completed a 10:1 share consolidation and settled with Cartesian Capital Group, extinguishing a long-term royalty payable for **$8.7 million** and releasing the security interest in HPDI 2.0 IP[2](index=2&type=chunk) Q2 2023 Key Financial Metrics | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $85.0M | $80.0M | +6% | | Gross Margin | $14.4M (16.9%) | $10.5M (13.1%) | +$3.9M | | Net Loss | $(13.2)M | $(11.6)M | +$1.6M | | Adjusted EBITDA | $(4.0)M | $(4.3)M | +$0.3M | [CEO Commentary & Outlook](index=2&type=section&id=CEO%20Commentary%20%26%20Outlook) The CEO emphasized solid first-half results and the strategic importance of the Volvo joint venture, anticipating improved performance in H2 2023 driven by new LPG fuel system production and growing demand - Despite expected lower HPDI sales volumes due to a model changeover, the company achieved record revenues and improving gross margins in Q2[4](index=4&type=chunk) - The joint venture with Volvo is described as a 'true inflection point' for Westport, validating its HPDI technology and providing it a global audience for decarbonizing long-haul transport[5](index=5&type=chunk) - The second half of 2023 will see the start of LPG fuel system production and sales to a global OEM, with an expanded Euro 7 scope, driven by the price advantage of LPG over petrol[6](index=6&type=chunk) - The company's diversified business model is positioned to perform well in H2 2023, combining sustainable core businesses with high-growth opportunities[7](index=7&type=chunk) [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) Westport's Q2 2023 revenue increased 6% to $85.0 million with improved gross margin, though net loss widened to $13.2 million due to a one-time expense, while Adjusted EBITDA slightly improved - The net loss for Q2 2023 included a one-time expense of **$2.9 million** related to the extinguishment of the Cartesian royalty payable[11](index=11&type=chunk) Consolidated Results (Q2 & 1H 2023 vs 2022) | ($ in millions, except per share) | 2Q23 | 2Q22 | % Change | 1H23 | 1H22 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $85.0 | $80.0 | 6% | $167.3 | $156.5 | 7% | | **Gross Margin** | $14.4 | $10.5 | 37% | $27.7 | $20.4 | 36% | | **Gross Margin %** | 17% | 13% | - | 17% | 13% | - | | **Net Loss** | $(13.2) | $(11.6) | (14)% | $(23.8) | $(3.9) | (510)% | | **Net Loss per Share** | $(0.77) | $(0.68) | (13)% | $(1.39) | $(0.23) | (504)% | | **Adjusted EBITDA** | $(4.0) | $(4.3) | 7% | $(8.5) | $(10.4) | 18% | [Segment Performance](index=3&type=section&id=Segment%20Performance) In Q2 2023, IAM segment revenue grew 27% to $32.6 million, while OEM revenue slightly declined to $52.4 million, leading to widened OEM operating loss and significant IAM operating income growth Segment Results (Three months ended June 30) | ($ in millions) | Revenue (2Q23) | Revenue (2Q22) | Operating Income (Loss) (2Q23) | Operating Income (Loss) (2Q22) | | :--- | :--- | :--- | :--- | :--- | | **OEM** | $52.4 | $54.3 | $(7.3) | $(5.6) | | **IAM** | $32.6 | $25.7 | $1.7 | $0.1 | | **Corporate** | — | — | $(4.6) | $(5.8) | | **Total** | $85.0 | $80.0 | $(10.2) | $(11.3) | [Original Equipment Manufacturer (OEM) Segment](index=3&type=section&id=Original%20Equipment%20Manufacturer%20%28OEM%29%20Segment) OEM segment revenue slightly decreased to $52.4 million in Q2 2023 due to lower volumes, but gross margin significantly improved to 16% driven by higher-margin sales and engineering services - The revenue decrease was primarily driven by lower sales volumes for the heavy-duty OEM business, reduced sales to customers in India, and lower volumes to hydrogen customers[13](index=13&type=chunk) - Gross margin improvement was due to higher spare parts sales, increased unit pricing on HPDI systems, and higher engineering service revenue, which offset higher production and logistics costs[15](index=15&type=chunk) - The company remains confident in the OEM outlook, citing the expanded Euro 7 business, higher volumes in delayed OEM, hydrogen growth projects, and the HPDI joint venture with Volvo[17](index=17&type=chunk) OEM Segment Financials (Q2 2023 vs Q2 2022) | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Revenue | $52.4M | $54.3M | | Gross Margin | $8.4M | $4.7M | | Gross Margin % | 16% | 9% | [Independent Aftermarket (IAM) Segment](index=4&type=section&id=Independent%20Aftermarket%20%28IAM%29%20Segment) The IAM segment showed strong Q2 2023 performance, with revenue increasing 27% to $32.6 million, driven by higher sales volumes in key regions, despite a decrease in gross margin percentage - The increase in revenue was primarily driven by higher sales volumes to Africa, Eastern Europe, and South America[19](index=19&type=chunk) IAM Segment Financials (Q2 2023 vs Q2 2022) | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Revenue | $32.6M | $25.7M | | Gross Margin | $6.0M | $5.8M | | Gross Margin % | 18% | 23% | [Financial Statements](index=6&type=section&id=Financial%20Statements) The unaudited condensed consolidated financial statements detail the company's financial position and performance, showing decreased cash, extinguished royalty payable, and a wider net loss [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets decreased to $377.6 million, primarily due to reduced cash, while total liabilities decreased to $190.8 million, leading to a decrease in total shareholders' equity Balance Sheet Summary (in thousands) | Account | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $243,872 | $277,219 | | Cash and cash equivalents | $52,265 | $86,184 | | **Total Assets** | **$377,631** | **$407,451** | | **Total Current Liabilities** | $132,456 | $135,519 | | Long-term debt | $26,945 | $32,164 | | Long-term royalty payable | $0 | $4,376 | | **Total Liabilities** | **$190,773** | **$203,485** | | **Total Shareholders' Equity** | **$186,858** | **$203,966** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2023, revenue was $85.0 million, but net loss widened to $13.2 million ($0.77 per share) due to a $2.9 million royalty extinguishment loss and increased operating expenses Statement of Operations Summary (Three months ended June 30, in thousands) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Revenue | $85,022 | $79,964 | | Cost of revenue | $70,653 | $69,457 | | **Gross Profit** | **$14,369** | **$10,507** | | Loss from operations | $(10,223) | $(11,325) | | Loss on extinguishment | $(2,909) | $0 | | **Net loss for the period** | **$(13,207)** | **$(11,579)** | | **Net loss per share** | **$(0.77)** | **$(0.68)** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2023, net cash used in operating activities significantly improved to $8.6 million, while investing and financing activities led to a net decrease in cash of $33.9 million, ending with $52.3 million Cash Flow Summary (Six months ended June 30, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,628) | $(33,404) | | Net cash (used in) from investing activities | $(7,779) | $25,670 | | Net cash used in financing activities | $(18,467) | $(16,407) | | **Net decrease in cash** | **$(33,919)** | **$(26,718)** | | **Cash and cash equivalents, end of period** | **$52,265** | **$98,174** | [Non-GAAP Financial Measures Reconciliation](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) The company reconciles non-GAAP measures like EBITDA and Adjusted EBITDA to evaluate operational performance, with Q2 2023 net loss of $13.0 million before taxes reconciling to an Adjusted EBITDA of negative $4.0 million - Management defines Adjusted EBITDA as EBITDA from continuing operations excluding stock-based compensation, unrealized foreign exchange gain or loss, and other non-cash adjustments, used as a long-term indicator of operational performance[26](index=26&type=chunk) Adjusted EBITDA Reconciliation (Q2 2023, in millions) | Metric | Amount | | :--- | :--- | | Net loss before income taxes | $(13.0) | | Interest expense (income), net | $(0.1) | | Depreciation and amortization | $3.0 | | **EBITDA** | **$(10.1)** | | Stock based compensation | $0.8 | | Unrealized foreign exchange loss | $2.4 | | **Adjusted EBITDA** | **$(4.0)** |

Condensed Consolidated Interim Financial Statements (unaudited) (Expressed in thousands of United States dollars) WESTPORT FUEL SYSTEMS INC. For the three months ended March 31, 2023 and 2022 WESTPORT FUEL SYSTEMS INC. Condensed Consolidated Interim Balance Sheets (unaudited) (Expressed in thousands of United States dollars, except share amounts) March 31, 2023 and December 31, 2022 | | | March 31, 2023 | | December 31, 2022 | | --- | --- | --- | --- | --- | | Assets | | | | | | Current assets: | | | | | | ...

Table of Contents | Letter | to Shareholders | 1 | | --- | --- | --- | | Notice | of Annual General and Special Meeting | 2 | | Section | 1: Voting | 4 | | | Solicitation of Proxies | 4 | | | Communication Process for Proxy-Related Materials | 5 | | | Voting of Common Shares | 5 | | | Currency and Nomenclature in this Management Information Circular | 7 | | | Matters to be Acted Upon | 7 | | | Interest of Certain Persons or Matters to be Acted Upon | 13 | | Section | 2: Board of Directors | 13 | | | Nominee ...

[Condensed Consolidated Interim Financial Statements (unaudited)](index=1&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) This section presents the unaudited balance sheets, statements of operations, equity, and cash flows for the period [Condensed Consolidated Interim Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Balance%20Sheets) Total assets decreased to $424.4 million and shareholders' equity slightly declined to $229.1 million as of June 30, 2022 Balance Sheet Summary (in thousands of USD) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $291,863 | $338,564 | | Cash and cash equivalents | $98,174 | $124,892 | | **Total Assets** | **$424,398** | **$471,313** | | **Total Current Liabilities** | $123,427 | $146,447 | | **Total Liabilities** | **$195,252** | **$234,894** | | **Total Shareholders' Equity** | **$229,146** | **$236,419** | [Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) The company reported a net loss of $3.9 million for the first six months of 2022, a reversal from a net income of $14.1 million in the prior year Statement of Operations Summary (in thousands of USD, except per share amounts) | Metric | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $79,964 | $79,008 | $156,508 | $155,451 | | **Loss from operations** | $(11,325) | $(3,686) | $(22,128) | $(11,843) | | **Net income (loss)** | **$(11,579)** | **$17,229** | **$(3,869)** | **$14,089** | | **Net income (loss) per share - basic and diluted** | **$(0.07)** | **$0.11** | **$(0.02)** | **$0.09** | [Condensed Consolidated Interim Statements of Shareholders' Equity](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity decreased in H1 2022, driven by a net loss and other comprehensive loss from currency translation Reconciliation of Shareholders' Equity (Six months ended June 30, 2022, in thousands of USD) | Description | Amount | | :--- | :--- | | **Balance at January 1, 2022** | **$236,419** | | Net loss for the period | $(3,869) | | Other comprehensive loss | $(4,645) | | Stock-based compensation | $1,241 | | Issuance of common shares on exercise of share units | $0 | | **Balance at June 30, 2022** | **$229,146** | [Condensed Consolidated Interim Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) Cash used in operations increased significantly, leading to a $26.7 million decrease in total cash during the first half of 2022 Cash Flow Summary (Six months ended June 30, in thousands of USD) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(33,404) | $(11,306) | | Net cash from investing activities | $25,670 | $6,063 | | Net cash (used in) from financing activities | $(16,407) | $99,859 | | **Decrease in cash and cash equivalents** | **$(26,718)** | **$96,449** | | **Cash and cash equivalents, end of period** | **$98,174** | **$160,711** | [Notes to Condensed Consolidated Interim Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section details accounting policies, liquidity risks, investment sales, debt structure, and segment performance [Note 1: Company organization and operations](index=7&type=section&id=1.%20Company%20organization%20and%20operations) The company engineers and supplies alternative fuel systems and components for the global transportation industry - The company focuses on providing alternative fuel systems (LPG, CNG, LNG, RNG, hydrogen) and components for a wide range of transportation applications globally[9](index=9&type=chunk) [Note 2: Liquidity and impact of COVID-19](index=7&type=section&id=2.%20Liquidity%20and%20impact%20of%20COVID-19) The company faces going concern risk due to operating losses, with future viability dependent on new financing or positive cash flow - The company continues to sustain operating losses and negative cash flows from operations, and its ability to continue as a **going concern beyond August 2023** depends on generating sufficient positive cash flows or obtaining financing[11](index=11&type=chunk) - As of June 30, 2022, the company has **cash and cash equivalents of $98,174 thousand**[11](index=11&type=chunk) [Note 6: Sale of investment](index=9&type=section&id=6.%20Sale%20of%20investment) The company sold its stake in the Cummins Westport Inc. joint venture, resulting in a total gain on sale of $19.1 million - The company sold its **100% interest in Cummins Westport Inc. ("CWI")** to Cummins Inc. on February 7, 2022[20](index=20&type=chunk) Gain on Sale of Investment (in thousands of USD) | Description | Amount | | :--- | :--- | | Proceeds from sale of investment | $31,445 | | Holdback receivable | $9,713 | | Carrying value of investment | $(22,039) | | **Gain on sale of investment** | **$19,119** | [Note 11: Short-term debt](index=11&type=section&id=11.%20Short-term%20debt) Short-term debt from revolving facilities decreased to $8.6 million as of June 30, 2022 Short-Term Debt (in thousands of USD) | Facility | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Revolving financing facilities | $8,610 | $13,652 | [Note 12: Long-term debt](index=12&type=section&id=12.%20Long-term%20debt) Total long-term debt decreased to $47.9 million, and the company remained in compliance with all debt covenants Long-Term Debt Summary (in thousands of USD) | Category | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Term loan facilities, net | $46,143 | $53,516 | | Other bank financing | $502 | $544 | | Capital lease obligations | $1,295 | $1,655 | | **Total Long-Term Debt** | **$47,940** | **$55,715** | [Note 15: Share capital, stock options and other stock-based plans](index=14&type=section&id=15.%20Share%20capital%2C%20stock%20options%20and%20other%20stock-based%20plans) Stock-based compensation expense increased to $1.4 million in H1 2022, with 2.5 million new share units granted - During the six months ended June 30, 2022, the company granted **2,533,288 share units**, including 1,311,890 RSUs and 1,221,398 PSUs[49](index=49&type=chunk) Stock-Based Compensation Expense (in thousands of USD) | Period | 2022 | 2021 | | :--- | :--- | :--- | | Three Months Ended June 30 | $864 | $539 | | Six Months Ended June 30 | $1,395 | $623 | [Note 18: Segment information](index=16&type=section&id=18.%20Segment%20information) OEM segment revenue grew while IAM revenue declined, with both segments reporting operating losses in H1 2022 - Revenue from Europe constituted **66% of total revenue** for the six months ended June 30, 2022, compared to 65% in the prior year period[59](index=59&type=chunk) Segment Performance (Six months ended June 30, in thousands of USD) | Segment | Revenue 2022 | Revenue 2021 | Operating income (loss) 2022 | Operating income (loss) 2021 | | :--- | :--- | :--- | :--- | :--- | | OEM | $106,101 | $90,165 | $(11,914) | $(9,883) | | IAM | $50,407 | $65,286 | $(367) | $2,744 | | Corporate | — | — | $(9,847) | $(4,704) | | **Total** | **$156,508** | **$155,451** | **$(22,128)** | **$(11,843)** | [Note 19: Financial instruments](index=18&type=section&id=19.%20Financial%20instruments) The company faces significant liquidity risk, with $112.9 million in contractual obligations due within one year - The company highlights **liquidity risk** as a key financial risk due to its history of operating losses and negative cash flows from operations[61](index=61&type=chunk) Contractual Maturities of Financial Obligations (as of June 30, 2022, in thousands of USD) | Period | Contractual Cash Flows | | :--- | :--- | | < 1 year | $112,928 | | 1-3 years | $41,449 | | 4-5 years | $15,513 | | >5 years | $15,843 | | **Total** | **$185,733** |

FOURTH QUARTER 2021 HIGHLIGHTS FULL-YEAR 2021 HIGHLIGHTS Adjusted EBITDA is a non-GAAP financial measures. Refer to section 'GAAP and Non-GAAP Financial Measures' for the reconciliation. EXHIBIT 99.1 Westport Fuel Systems Reports Fourth Quarter and Full-Year 2021 Financial Results VANCOUVER, British Columbia, March 14, 2022 (GLOBE NEWSWIRE) -- Westport Fuel Systems Inc. ("WFS") (TSX:WPRT / Nasdaq:WPRT) today reported financial results for the fourth quarter and year ended December 31, 2021, and provided an ...