Hyliion (HYLN) 15 Nov 242024 Q3 Earnings call transcript

Good morning. Thank you for standing by. My name is Fella, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hyliion Holdings Third Quarter 2020 Earnings Release Conference Call. [Operator Instructions] I would now like to hand the conference over to Greg Standley. ahead. go Please

good XXXX and to Holdings Hyliion Thank conference morning, call. quarter earnings third you, everyone. Welcome

On today Officer. A statements certain and on that Jon outlook. this the during Executive business call regarding Hyliion's Panzer, Chief call conference we at our the are Investor Thomas today's Relations company's Chief investors.hyliion.com. Please is call, forward-looking Financial and slide website accompanies our presentation available Healy, note Officer; make will

based on statements anticipated are Forward-looking predictions events other projections expectations about statements current are and assumptions. and that

subject such, factors this As statements materially and could cause to on are risks from uncertainties. actual call. made differ Many results to forward-looking

For more release as Commission. our such may from forward-looking the information statements Securities filings please with as company's well the our that and press cause results refer Exchange to and materially both on differ to factors presentation

I are forward-looking on law. update information undue unless cautioned required duty call statements and you. And now put not applicable to You undertake no over to this will reliance by Thomas. turn the to we Thank

joining you by XXXX joined quarter call. Today, and Panzer. earnings thank third Hyliion's am us CFO, for I Jon our Hello, for

the Over additional growing and and Today, updates interest sector, for we're to our have to generator. deliveries beta With prepare excited line, development development work coming KARNO quarter, progress. the deployments the commercialization from share commercialization stage adopter components beta our on the progress an the the data base cover this generator commercialization generator, customer moved Office provide the I'll early center plans, like as market the to last the in and seeing, weeks. on the that road product testing of we its on validation early milestone Research deliveries. and XXX-kilowatt our we've development, and our now finish, for early KARNO the recent completing I'm we've made especially substantial our of details in key announce start I'd approach as Naval past contract. To customer we on to of to start, pleased second to I'm achieved time strides adopter update

the our These Over seen closely flexibility emissions. other align solutions target that KARNO needs with generator, the our printers deliver KARNO the fuel off of highlight of is further receiving believe customers the we and generators. industry. In our units both running and end components to The first manufacturing and to the complete year from we we're high weeks, before and its manufacturing results generation kick qualities generator key the low efficiency, markets plan the to assembly XX/X coming takeaway of in Austin steps will and additive a they validation still are in past currently of promising from testing here the facilities, testing the power in the we have vendors differentiate Cincinnati we've of year. couple customer parts while that

however, testing these that sites some units customer deployed dozen plan directly moved XXXX. to deployed in early early customer-specific perform be their units in sites, at field will a Our produce the be early of all Initially, about units. we planned had adopter customer adopter is to our will locations, go to others requirements before initially to will facility while at final being

various mentioned performance. to customer is goal we've their KARNO cases deployment the integrate As previous unit showcase in early the to of calls, use into generators

scale. make units, will to these adjustments the performance ready closely necessary the technology to and operational is of provide monitor support We ensure immediate any

enhancements and from end of line highest gain early our year, the year deliver at first with essential we'll recognition customers. design next the sale. Starting This for occur As through product we once criteria the previously, of generators the that we've revenue for quality including units process key performance will confirmed future iterative meet and adopter their the specification, terms this units. noted design going units and insights of incorporate operation to deliver to modifications half is into ensuring in

have to the expect approach feedback production, vessels and systems, the begin allows into working scaling to and in KARNO the the U.S. generator up around like recent announced KARNO deployments excited KARNO of power in continue will Key advanced Naval with both flexibility, contracts Research $XX now within will around benefit partnership vessels. the maintenance we new with Naval stand on their Office goal contracts environments about unique services, X recognizing the Office sectors incorporate for value now revenue revenue and and commercial the and X in some new revenue deploy and that Office of will total adopter validate identified future, business services the be the any R&D of and future this QX. win of explore from in $XX.X us I'm We're similar our characteristics. This This also recognizing Through of the Including sometime the up for the a before of use Navy along agreements, starting operational from highlight quarter. to future mid-XXXX. generators. supporting power closely sales with expect development Navy's begin stationary will solutions sales with we we along across potential to government-awarded from recognizing with core us pleased believe earlier generator sale Naval of performance fuel share military earlier development to various the our significant to enthusiastic and contract business the KARNO generator's to this generator our necessary to to for enable we noise services with the which I'm contract, early R&D contract, mid-XXXX. Shifting Office Research from system our of XXX-kilowatt these R&D Research our officially as aligned this Research in low to strategy objectives, we we'll the the attributes the starting the and considerable applications. other million. we part for with identifying to begin collaboration, begin commercialize accomplishments. As sale of future addition deployment of technology. generators with KARNO to periods up in potential This fixes includes Navy Naval naval be in contract low million

to This multiple successful of fuel a hydrogen a gas, KARNO then various mixtures announced recently demonstration also composition and to through The gas. syngas adaptability transitions began sources, fuel to generator sources. offering with operation, for like of adapt different seamlessly particularly and customers beneficial and demonstration finally during sectors unmatched This mid test fuels vary flexibility. and operation. gas highlights operating capability We renewable may on fuel the shifted natural generator's the nitrogen-rich where oil is natural unique in

that market to XXXX. updates. ship that to report we number we pleased the plan exceed I'm have turning of to some letters Now exciting intent in secured of units

leader deliver power definitive interest signed the an the to and Inc., and power are up in over We intent we of our KARNO achieving the of aligning A to generators dozen early expect transform generation generators revenue of with strong nonbinding course pilot market of millions year. the KARNO with letters year, the previously This to these low LOI Please confidence demand deployment in next highlights ANA, equipment that rental execution the mobile a units also in to multiple to subject X in several agreements. industries. sales applications. double-digit few across note industrial mobile of ago, weeks potential shared guidance

The rental the with in We deployment to KARNO emission provide after entry sector. from expect needs, meeting aligns in us XXXX a that generation an industry data generator us accelerate agreement. In intelligence KARNO allowing generation leader. parties that data the computing, a demand centers partnership this a generator is substantial execute delivers into the to power industry of ANA KARNO requiring will power plans cloud of high artificial interest strict the with increased power. analytics and strategic definitive generator we've The recent solution offering more market, seen while established standards. well quarters, reliability, their initial rapid growth the data dispatchable the for with start driving each adoption center

generator generators KARNO be X-megawatt its into system. of first as early serve requirement for ensuring in megawatts contains system centers. at independently smaller for development operation, data a an Power XXXX. units data shaft over to critical XXX and from XXX, One advantage X-megawatt end demands demand. source, megawatts Equivalent XX the backup facilities major begin operate large-scale to higher power a primary generator for accelerated [ to ] output We this levels. plan XXX-kilowatt than single unit integrated next centers more sites. request operating power can XXX-kilowatt design. This deploying uninterrupted These together the providing can modular a generator with Our centers. year larger the and achieve to XX on development both like to diverse to of flexible usually for in line available our expected meet system or KARNO time to KARNO X customers low arrays for Each is scale is power XXX generators range

from we've their and of manufacturing these on to other fuels requires and leader qualifies energy as rapidly an the California, Lastly, KARNO demand, source capability to utilities opportunities we The to utilities like is KARNO been announced a emissions organizations option standard. it renewable expanding that and past and aiming RPS under new biofuels, hydrogen This sources quarter To in renewable our opens California's a generator meet now meet milestone make additive renewable electricity legislation a this the requirements. reduction. renewable capabilities major portfolio for qualification generators Austin. portion operate adoption attractive within in

number the our printers with coming we've Colibrium advanced and conclusion, a on transitioning components of for increase scheduled of we reducing the delivery additional excellent from second we In a production growth the larger to costs. In manufacturing our print ] units to working additive Over also conventional select next M-line initiatives. existing will by more machines, less providing expect fronts, machines by continue delivery strategic reducing to our our Additive, GE These make manufacturing. production parallel, first engagement market parts complex months, progress lasers, and up half the printers company. enhanced grown improve ] while support designed [ the through capacity. to [ take multiple past fleet print product specifically volume these system development, for Together, area significantly prints weeks, additive for capacity of Aerospace of X throughput In aim we're efficiency greater efforts scale year. production and of to consolidating

call the the deliveries to this ramp-up hand production followed in culminates financial initial over a and in cover Jon by outlook. coming beginning to I'll with results XXXX. With our All that, and launch weeks commercial of now

you, down down and this partly in morning, powertrain the to spending Thomas, quarter quarter the this $XX.X XXXX. everyone. Operating for of in the year million, KARNO of related by wind expenses business, third million Thank in good compared year. were the This and the $XX.X of an flat expenses with our offset decrease second to quarter increase third

During of exit sale the the of expenses, and and quarter, powertrain by discontinued termination powertrain credit which we a ongoing partly shutdown the recorded certain offset $XXX,XXX costs. by assets business, was driven

X million of net $XX.X sale Year-to-date in $XXX.X to the the quarter, of operating about down powertrain net quarter in third of million $XX.X in termination $X.X asset $XX.X the compared XXXX. was expenses loss Our the gains. and quarter include from but totaled XXXX flat total compared first costs, XXXX. third in Expenses million, exit million to quarters million second of

to and the income mostly expect to powertrain noted of coming is we do the quarter, cash realize complete, continue quarters of assets. except from wind-down As in last sale the we

execute repurchased purchase resulting May, early not to a of our later recent average repurchasing inception, price at do activity Since we XX.X may aggregate further share of share million, resume in if cost shares appropriate. $XX deemed $X.XX. date million of an as repurchases program to and repurchases, an price our but of we upon the As strengthening and due suspended expect for

$XX.X down and Breaking We cash cash investments and the $XX cash. sales our during our to core million, million. third net far, income. quarter interest of and machines activities the quarter totaled investments the We cash of $XX use asset investment was third restricted of and capital with million, directed million cash Year-to-date, $XX additive thus printing $XXX on and spending Turning on including position. uses investments including balance spent were development the million finished of related about previously towards mostly equipment. KARNO year investments purchase for sheet. Capital of

In activities, approximately proceeds. on of spent asset addition share repurchases, $XX to the million net spent shutdown million sale we on also powertrain $X

grow powertrain the expect year costs, KARNO capital be far the the additive spending that rate run exit due operating slightly in to will quarter little and printers We will of expenses, to in than termination deliveries higher and so fourth that compared third quarter excluding a this Texas. faster

to For continue $XX for in the full expenditures expect we our be KARNO business approximately cash will XXXX that year, total generator million.

As and capital between spending cash that fluctuate down based operating now timing forecast includes Note excludes the activities repurchases, spent or deliveries and end asset upon year. expenses, income, a printer cash the proceeds. for up and reminder, of shutdown our share could also sale interest powertrain this forecast the but of

quarter to generator in with year of we mentioned earlier, first the Thomas from of the customers adopter XXXX. ramp expect up KARNO begin quarter services R&D revenue fourth early to and deployments this recognizing As in

generator deployments, of to sometime will currently the Hyliion commercialization expect include KARNO the These occur of to mid-XXXX. the and payments of timing as commercialization. the and terms achievement around and generator certification to subject as as will payments well of be criteria. of recognition the While performance paid operating these permitting sale We of be timing generator the the of revenue terms

For realize activities. related $X to than to this quarter revenue less the we development of of and million research expect fourth year,

improve gross be We including as previous realize millions in but XXXX we negative, in are double-digit purchasing. expect that the scale margins and revenue dollars, to also R&D we maintaining production to low quickly services. guidance Initially, we be efficiencies to expect for of in

gross on a XXXX currently late be margins are basis cash early XXXX. targeting breakeven to We approximately measured by or

forecast. Beyond that time firm a frame, we haven't yet developed

we to today expect future, capital on will we have including generator sufficient hand sales. KARNO foreseeable Finally, of continue commercialization for be that the

call back turn Thomas. I'll the to Now over

Thank you, Jon.

reiterate we over seen the for can unique interest, ahead and technology questions. the well to role the demand solutions our the call power past significantly the need generation distributed open about believe future With in year. a transition. Operator, energy for I'd more Hyliion we excitement market call this to play we questions, the Before like to is and quarters that. We've now beyond increase for our growing open pivotal the positioned and

] And your Instructions] Gen the Sean first line comes [Operator question [ from A. of Milligan with

experience would delivering. of beta Or terms kind you just period in head the operating First key or question has of beta like exit as in been you the of learnings period is curious is kind and any as into I'm expect? what your you takeaways? the system

I Yes. the appreciate question.

do set. reliability kind linear a good get had the better electric of lot were learnings where bearings, to just version So alpha around the look back it. the of from to launching of a a the just We ago, year we how performance we of out gen motor, were there

at into out. all phase, that done. start It's this the that great of still in it. operating means a We're is will by So beta, us but development of and to very year. promising, customer end track was are pleased really what And the test the completed we the moved being then looking got of the into testing a to validation to be able which did that them things those we is learnings design put phase. on to deliveries very able lot that saw, you with Alpha as We we incorporated version level,

great with initial call, where like be run getting highlighted job getting those a with field, in and get lining and adopter new great that's customer all they're catch of we've up improvements. any make ready closely for advancements thankfully, of really there this And and to deliveries. done early is if as They able things really So to kind we'll the units, just lot a helped learnings these early units we'll partnership being are side It customers. them a units working feedback. And learnings with of their then of these realize the on us are these able to these this development. on be alpha there, product the of we're to seems make

And I upsizing a just I center could of is Okay. size together housing. was you've on? hoping is more. generators of the there confirm, talk any size so inside about then little or bit product KARNO just XX there there, it's risk Like you to data KARNO wanted bringing you're just kind to already the worked

Yes. Great question.

around XX So of plan X-shaft all then inside systems, the enclosure, is that there'll accessories be the that. but

think cooling together. So like will you when about system, that handling integrated air the the be system,

as is the packaging things risk, redesigning And to of this so development from actual more opposed down a side the generator.

we that to this set And of changing XXX-kilowatt, isn't changing the generator the so that around packaging, standpoint, is go run. the from the the what's developing over it all really make of learnings accessories carry gen more

good we'll to make data just initial saw those being up today, that's where Bloom great gigawatt believe systems do see market recently So for power announcement we the then solutions. demand. we position a able Energy of to driver a And center their deliveries a do of from be X-megawatt generation for of as we space in there, fuel Actually, XXXX. in cell of out to an be

So and looking out seeing for the of demand space just I we're our points and solution, the positively a or alternative like the on-site that like for very to solutions generator. need power fuel linear think generation cells

potentially about thinking those you how realize but 'XX and metrics your not of cost cells in how just scale And if gen I but That's segues I in ask like to of KARNOs you're yet, at in stack of traditional terms that more, like question, customers buying sets, 'XX? couple next KARNO-competing are fuel terms up or do great. like can kind a my versus efficiency,

Yes.

as couple really out of things differentiators. a stand that there's So

X cost, upfront less the fuel being So than offering. system. seen on next what just is size the cell expensive generator plan the which is of we've providers KARNO we The

looking X/X at probably fuel of the in cell. we're So the of order about of size magnitude a

power, will things density, is This of much Bloom acre announcement provided one really centers have land just you that for how a the of out of -- the they of constraints. emphasis looking how help can for is be power -- data had may have So energy seen and many in land. stuff they're with lot an an important they because on

so And big is this of power then out positive. do other a membranes the of over cells the and maintenance the with downsides be out proven that's obviously, provide can replaced. we And to more if the deteriorate but need you of amount land, same more advantage will see, time. time, fuel and one reliability, over of be Those

that's so And with advantage see the generator where KARNO as well. an we

Instructions] comes question [Operator line of with the your Jackson next from And Northland. Ted

around your a and -- and fuel I bloom necessarily for producing on unit meat -- my a So Actually, you what they're not of -- revenue we I on regards production capacity with that lot and to questions. couple went for XXXX, when you guys it don't sold thing. questions And right when capacity know your you into basis? is comment it, have of But production cells of XXXX. a just had so a But the you, linear Q&A. was

Yes.

we're next to year. several ship of So expecting dozens units

generate then go that will of low the this dozen year. we're is But double-digit the And millions time, expecting, we'll at and in revenue -- definitive. more through, so several units as we get of get we'll for what

say, units, go do just year? sense, would Would their have units, think through I those for you or how that during some if revenue compliance, it units, call generating you makes all fiscal be you to will of and XX don't X,XXX could of you revenue expect were them qualification many I know, to if to those on recognize the

I'll take Ted. that one,

maybe recognition. I about what Thomas can revenue So saying summarize was earlier

Just to recap.

then units. we're up and first out come the So be the we mid to product. all this addressing sales and think units At what customers to into revenue those of going deployment to start that ramp officially that going we expect said And be and there, previous learnings. we're that And will sometime able delivering around R&D, and we next recognize is to those then to we are opportunities the then done to year, any from with from sales quarter going issues year, point. commercialize later early then with expecting the all we'll that be forward point, of

our So units, as few next I those both think all think the he units a this of safe in year. that to recognize we sold and to we about it is way estimate year be about Thomas, able of talking was would revenue dozen

new And installed that predicated the capacity that is then with beyond XXXX. on regards for you in to referenced to strategy or that part installation of the the Is XXXX? and looking growth in the production equipment the then of that call you're equipment earlier, be

Yes.

over quarter So be will the volume is installed last equipment -- for that has the been us XXXX. with assisting

from Now we machines shared deliveries GE. actually have do order next call, second on during half anticipate of as into more we the year, the

We just greatest machine also the we're of and away out taking next GE. shared weeks of delivery additive from latest

later ] volume. that those plan orders look that volume to units then [ place we'll more are So assist will to installed will ramp towards XXXX, XXX. assist in we that But also XXXX are as Obviously, up. throughout XXXX come next earlier the more focused year at year units more XXXX with with probably

because GE just producing more will then just that you are machines, an for machines coming capacity, you. mentioned but that equipment that And of it's increase you not more same of have it's the in order the that's capable

production capacity in So it put that a the cost best when -- current in capacity mean much terms your ability, the I how XXXX. manufacturing about think capacity couple in And for that take Where your place. is units. we of of dozen capacity you investment to of does XXXX, will

I'll take it. take at shot I'll that. a

a -- couple year not As of it's several mentioned, next dozen Thomas more versus it's like units units. dozen

units going next taking year. So of printers additive throughout to of we're delivery be

grow our capability. continuously to going that's So

it the dozen we'll of end the X you more at than capacity So as about is next to units. year have think that have

If capacity you beyond into start additional to potential looking -- that. XXXX, we're additional look also at

going -- those it's just and capacity it So our growing all know a to be then number we're printers. be more that getting What getting for we units The is we you next like. various we're plus of the just that to our dozen and year estimate next getting minus. you higher of should gave a definitive least grow just should continuously units going 'XX. throughput of forth is, growing. what One to then mean timing don't we the means. number and And it, at things. based looks have, several have through from I printers we the just so because -- a upon yet what few more time deliveries as It's of we're year, will or printing have We is in think think over that it's it about way that

that do 'XX far fact on than away. giving mean many to... of pretty I Shifting at game, stage you're more the know it's this it. I I you're so the And is appreciate And No. do color the giving companies

I can add X thing, Ted.

about You color just you on just capital, more little give that. -- had asked so a maybe

overall said, that also this what be And million we for you said we up spending this we If year, next year to compared said of look should that modestly $XX about at capacity. capital cash year. then

to, timing depending number, bit a some year, next similar maybe right little So going deliveries. and so on it's higher that's would that now, again, capital, a and include

into gives versus kind of production a bit an that just you capacity question of little your insight capital spending. of So

you, be contract. with And play Navy then last research for going into over coming revenue into my going question to the the that's

around year. what's about then this contract of, with it some we of about of revenue, in the And revenue. pure million the you are kind color of or is should you that curious, $X than less any in length costs a think actually play? I'm guess, how the margin there generate make associated sort some timing, of I the So brackets Can terms for put how terms

Yes, that. I'll answer

So pursuing first the Naval number we behalf actually Navy, of are O&R, on we of now mentioned a right of actively of all, have is the we contracts which with Office and Research more.

this but a of isn't thing, a process. more type a of one-and-done So continuous

In back bit we've smaller executing under little in going a the been past. even much fact, ones, just agreements,

be will a more it So of process. continuous

So and work. significant associated for amount support year. on. up there of that's our associated of positive R&D lot into of course, with of number be and We military mentioned units, other of is capabilities for building -- built it's into and reasons. our and it costs it, company KARNO forecast like it next a will costs and developing the revenue testing does But setting definitely KARNO terms applications. our very It's it for the future -- with upon a be It us work for sales for different it revenue. is and There really will so a units, even testing in fairly selling includes new based doing fuels

it it of recognizing the very we fact into to look offerings be do And that we're core so part service we going at as future. expect revenue as And means base the positive. a our

you but over see would nothing kind part. just military can it's KARNO the generator. the understand of trying a have to in lot on of like what terms It's drives -- your obvious interest positive. the of I'm activity revenue No, in

others one milestones that's as I KARNO, So of think and all. I it. and it P&L, your such flowing about guess, delivery think through then just, I [indiscernible] guess, How is

It's exactly. work. engineering Yes,

units be services, thing direct that it's source test would fourth services to KARNO purchase and even it's the oversee of we on. our sale of materials, labs of other So and so

that. bit all So of it's a of little

gen to just It's a the XXX-kilowatt same. that is for thing to the is add system the nice The military set.

news, done carries So obviously, any into deployments military our over the other that's as it well. testing with and good validation

nice XXX-kilowatt system. thing it's So is, the X

with question next the Gen. your from of And comes Sean Milligan line

manufacturing XXXX, to and of go lead the kind thinking to to side the equipment just ordering. you're there and just wanted that back the question ask Just about chain for supply ahead the and center data And a there. a times like at of you XX market ones when center very coming data obviously The from about orders there delivering out is gen of talk right testing big. sets least the side, one and that's printers

ramp like So and of you just could order quickly you those about orders, deliver kind printer how could them? if talk after how you quickly

Yes.

multiple them. a lag we the printers for then we it's place when when quarter receive So between orders and

machine thing we one delivery though, Now note, and GE. out of here the to greatest are of taking latest is

the So do and order production I between GE as starts expect up those go to think decrease time delivery we ramping as forward we that machines of machines.

Calibrium additive, is GE. called which amounts at capabilities. in business was within just quarter, production news, very is Germany Now this I great a tremendous facility, they've and established additive over it of GE's got other their past actually

a with So we we needed source scale able But printer to plan if to. there great other companies on that to be have We they well are would also we also continuing out them. -- them. there from relationship with as

So out others we in more think with capacity, I to do we'll as on But is that's need other going order need can GE as closely the that have. I to we the think how of and/or work that we're we we get on existing more we we printers something get the capacity. printers about thing scale think focus

familiar additive with pull. those are are can So there manufacturing, you levers who for

you lasers, can of power. laser can the number You increase increase

powder things will can the You make that's these more productive. All welded. the increase machines depth of the being

take is we're and it do these of as to in base the out machines going make on that's how productive focusing an effort possible. get existing to printer have be order in more we as we so And XXXX

turn remarks. [Operator showing the I Thomas this Healy And questions time. Instructions] to at would like back closing no further to for I'm call

earnings Well, call. joining XXXX third our for thank you, quarter everyone,

a we're of today, expected we're production space. the the year and coming the the as commercial that place progress able LOIs made that data that seeing capacity on the lot address front really demand has interest our in out to of with exceed As having X-megawatt you of market next be center acceleration to solution well as heard been seeing from

that, the there. the is exciting of customer getting all just out away with milestone though, important and initial So weeks deliveries most

on the next as able Thank much more to earnings us. So we're we that you you call. and very forward looking being for share joining update to

Thank gentlemen, And you this today's all call. Thank for ladies presenters. concludes and you, joining. conference

disconnect. now may You