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Hyliion Reports Third Quarter 2020 Financial Results

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Hyliion Holdings Corp. (NYSE:HYLN) ("Hyliion Holdings"), a leader in electrified powertrain solutions for Class 8 commercial vehicles, today reported third quarter financial results for fiscal year 2020 for Hyliion Inc. ("Hyliion").

Key Business Highlights

  • Completed strategic combination between Hyliion Inc. and Tortoise Acquisition Corp. on October 1, 2020, yielding approximately $520 million in net proceeds to fund Hyliion's growth plans and long-term objectives
  • Installed eight hybrid electric units in the third quarter of 2020 for four fleet-based customers
  • Signed agreement with FEV North America Inc. to accelerate commercialization of the Hypertruck ERX

Executive Commentary

"With ample resources from our strategic combination, Hyliion is well-capitalized and primed to disrupt the powertrain market. Our focus in 2020 and 2021 will be to position the company for long-term sustainable growth, capturing the material market opportunity from the electrification of class 8 vehicles. Along the way, our dynamic and proprietary solutions will help our commercial vehicle customers change the way they view performance, total cost of ownership, data, and sustainability," commented Thomas Healy, Hyliion Holdings' Chief Executive Officer.

"In the third quarter of 2020, we made progress toward commercialization of our Hybrid and Hypertruck ERX solutions for the Class 8 truck market, while also establishing key partnerships. We are experiencing strong interest for our solutions and are utilizing our resources to develop a scaled infrastructure that will be able to support demand from this $800 billion market. Overall, I am pleased with the progress we have made as we remain on track to meet our product milestones in 2021," concluded Healy.

Business Impact of COVID-19

Hyliion continues to execute on its business objectives and drive growth across its platform, despite the effects of the COVID-19 pandemic on the world economy. Hyliion's management team continues to work to advance its business objectives while maintaining the safety of its employees, suppliers, and customers. Hyliion has taken actions to mitigate issues caused by the pandemic and does not believe that those disruptions will materially impact or delay its long-term objectives.

3Q20 Conference Call

Hyliion Holdings will host a conference call and webcast for investors and other interested parties to review Hyliion's third quarter 2020 financial results on Thursday, November 12, 2020 at 8:30 AM ET, which it will file with the Securities and Exchange Commission (the "SEC") on Form 8-K/A. A live webcast of the call, as well as an archived replay, will be available online on the Investor Relations section of Hyliion's website. Those wishing to participate can access the call using the links below:

Conference Call Online Registration: http://www.directeventreg.com/registration/event/5648525

Webcast: http://investors.hyliion.com/events-and-presentations

Third quarter financial results for fiscal year 2020 for Hyliion Holdings (f/k/a Tortoise Acquisition Corp.) on a standalone basis will also be filed with the SEC on Form 10-Q, and unaudited combined condensed pro formas for such period for Hyliion Holdings and Hyliion, will also be filed with the SEC under Form 8-K/A.

About Hyliion

A wholly owned subsidiary of Hyliion Holdings Corp. (NYSE:HYLN), Hyliion's mission is to reduce the carbon intensity and greenhouse gas (GHG) emissions of commercial transportation Class 8 vehicles by being a leading provider of electrified powertrain solutions. Leveraging advanced software algorithms and data analytics capabilities, Hyliion offers fleets an easy, efficient system to decrease fuel and operating expenses while seamlessly integrating with their existing fleet operations. Headquartered in Austin, Texas, it designs, develops and sells electrified powertrain solutions that are designed to be installed on most major Class 8 commercial vehicles, with the goal of transforming the commercial transportation industry's environmental impact at scale. For more information, visit www.hyliion.com.

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of federal securities laws with respect to Hyliion Holdings and Hyliion. These forward-looking statements generally are identified by words such as "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Such forward-looking statements include statements about Hyliion's ability to disrupt the powertrain market, Hyliion's focus in 2020 and 2021, the effects of Hyliion's dynamic and proprietary solutions on its commercial vehicle customers, accelerated commercialization of the Hypertruck ERX, the ability to meet 2021 product milestones, the impact of COVID-19 on long-term objectives, and the ability to reduce carbon intensity and GHG. Hyliion Holdings undertakes no obligation, and specifically declines any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to the factors, risks and uncertainties regarding the Hyliion Holdings' business described in the "Risk Factors" sections of the Hyliion Holdings' filings with the SEC, and other factors, risks and uncertainties identified and addressed in the Hyliion Holdings' filings with the SEC. Forward-looking statements reflect the reasonable understanding and belief of Hyliion Holdings as of the date they are made. Readers are cautioned not to put undue reliance on any forward-looking statement.

 

Hyliion Inc.

Condensed Statements of Operations

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

 

Nine Months Ended September 30,

 

2020

 

 

 

2019

 

Operating expenses:

Research and development

$

(8,134

)

$

(6,716

)

Selling, general and administrative expenses

 

(3,705

)

 

(1,977

)

 

Loss from operations

 

(11,839

)

 

(8,693

)

 

Other income (expense):

Interest expense

 

(5,458

)

 

(2,176

)

Change in fair value of convertible notes payable derivative liabilities

 

(1,358

)

 

823

 

Other income

 

(12

)

 

20

 

 

Total other expense

 

(6,828

)

 

(1,333

)

 

Net loss

$

(18,667

)

$

(10,026

)

 

Cumulative dividends on convertible preferred stock

 

(1,337

)

 

(1,261

)

 

Net loss attributable to common stockholders

$

(20,004

)

$

(11,287

)

 

Net loss per share, basic and diluted

$

(0.76

)

$

(0.45

)

 

Weighted-average shares outstanding, basic and diluted

 

26,269,060

 

 

25,293,066

 

 

Hyliion Inc.

Condensed Balance Sheets

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

 

 

September 30, 2020

 

December 31, 2019

Assets:

 

 

 

 

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

7,565

 

 

$

6,285

 

Accounts receivable, net

 

15

 

 

 

145

 

Prepaid expenses and other current assets

 

1,085

 

 

 

414

 

 

 

 

 

Total current assets

 

8,665

 

 

 

6,844

 

 

 

 

 

Property and equipment, net

 

1,126

 

 

 

1,635

 

Operating lease right-of-use assets

 

4,254

 

 

 

4,976

 

Intangible assets, net

 

356

 

 

429

 

Deferred transaction costs

 

4,306

 

 

-

 

Other assets

 

209

 

 

 

212

 

 

 

 

 

Total assets

$

18,916

 

 

$

14,096

 

 

 

 

 

Liabilities, redeemable, convertible preferred stock and stockholders' deficit

 

 

 

 

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

4,499

 

 

$

1,156

 

Convertible notes payable derivative liabilities

 

4,745

 

 

 

3,029

 

Current portion of operating lease liabilities

 

751

 

 

 

953

 

Current portion of debt

 

28,477

 

 

 

6,720

 

Accrued expenses and other current liabilities

 

891

 

 

 

500

 

 

 

 

 

Total current liabilities

 

39,363

 

 

 

12,358

 

 

 

 

 

Operating lease liabilities, net of current portion

 

4,253

 

 

 

4,803

 

Convertible notes payable derivative liabilities, net of current portion

 

7,620

 

 

 

5,322

 

Debt, net of current portion

 

4,132

 

 

 

9,682

 

 

 

 

 

Total liabilities

 

55,368

 

 

 

32,165

 

 

 

 

 

Series A-1 redeemable, convertible preferred stock; $0.001 par value; 24,591,554 shares authorized; 22,895,580 shares issued and outstanding at September 30, 2020 and December 31, 2019 (liquidation preference of $23,812)

 

20,250

 

 

 

20,250

 

Series A-2 redeemable, convertible preferred stock; $0.001 par value; 8,793,755 shares authorized; 8,197,359 shares issued and outstanding at September 30, 2020 and December 31, 2019 (liquidation preference of $4,304)

 

3,536

 

 

 

3,536

 

Series A-3 redeemable, convertible preferred stock; $0.001 par value; 2,545,155 shares authorized; 2,328,545 shares issued and outstanding at September 30, 2020 and December 31, 2019 (liquidation preference of $2,400)

 

2,001

 

 

 

2,001

 

 

 

 

 

Total redeemable, convertible preferred stock

 

25,787

 

 

 

25,787

 

 

 

 

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

Common stock, $0.001 par value; 69,817,317 shares authorized; 26,882,169 and 26,118,953 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

 

27

 

 

 

26

 

Additional paid-in capital

 

5,367

 

 

 

5,084

 

Accumulated deficit

 

(67,633

)

 

 

(48,966

)

 

 

 

 

Total stockholders' deficit

 

(62,239

)

 

 

(43,856

)

 

 

 

 

Total liabilities, redeemable, convertible preferred stock, and stockholders' deficit

$

18,916

 

 

$

14,096

 

 

 

 

 

Hyliion Inc.

Condensed Statements of Cash Flows

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

 

Nine Months Ended September 30,

2020

2019

Operating activities:

Net loss

$

(18,667

)

$

(10,026

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

 

665

 

 

786

 

Noncash lease expense

 

722

 

 

947

 

Paid-in-kind interest on convertible notes payable

 

1,081

 

 

428

 

Amortization of debt discount

 

4,237

 

 

1,696

 

Share-based compensation

 

165

 

 

91

 

Change in fair value of convertible notes payable derivative liabilities

 

1,358

 

 

(823

)

Change in fair value of contingent consideration liability

 

-

 

 

(20

)

Change in operating assets and liabilities:

Accounts receivable

 

130

 

 

41

 

Prepaid expenses and other current assets

 

(671

)

 

67

 

Other assets

 

3

 

 

106

 

Accounts payable

 

353

 

 

(927

)

Accrued expenses and other current liabilities

 

391

 

 

(246

)

Operating lease liabilities

 

(752

)

 

(458

)

 

Net cash used in operating activities

 

(10,985

)

 

(8,338

)

 

Investing activities:

 

Purchases of property and equipment

 

(105

)

 

(215

)

Proceeds from sale of property and equipment

 

22

 

 

-

 

 

Net cash used in investing activities

 

(83

)

 

(215

)

 

Financing activities:

Proceeds from convertible notes payable issuance and derivative liability

 

3,200

 

 

13,603

 

Proceeds from Term Loan

 

10,100

 

 

-

 

Proceeds from Paycheck Protection Program loan

 

908

 

 

-

 

Proceeds from exercise of common stock options

 

119

 

 

9

 

Payments for deferred transaction costs

 

(1,316

)

 

-

 

Payments for deferred financing costs

 

(468

)

 

-

 

Repayments on finance lease obligations

 

(195

)

 

(147

)

 

Net cash provided by financing activities

 

12,348

 

 

13,465

 

 

Net (decrease) increase in cash and cash equivalents:

 

1,280

 

 

4,912

 

Cash and cash equivalents, beginning of period

 

6,285

 

 

1,097

 

 

Cash and cash equivalents, end of period

$

7,565

 

$

6,009

 

 

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