Westport Fuel Systems Inc (WPRT) 2024 Q2 法說會逐字稿

Good day and thank you for standing by. Welcome to the Westport Fuel Systems Q2 2024 conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ashley Nuell, VP, Investor Relations. Please go ahead.

美好的一天，感謝您的支持。歡迎參加 Westport Fuel Systems 2024 年第二季電話會議。（操作員指示）請注意，今天的會議正在錄製中。現在我想將會議交給今天的發言人，投資者關係副總裁 Ashley Nuell。請繼續。

Thank you. Good morning, everyone. Welcome to Westport Fuel Systems' second quarter conference call for 2024. This call is being held to coincide with the press release containing Westport's financial results that was issued yesterday. On today's call, speaking on behalf of Westport is Chief Executive Officer and Director, Dan Sceli; and Chief Financial Officer, Bill Larkin.

謝謝。大家早安。歡迎參加 Westport Fuel Systems 2024 年第二季電話會議。這次電話會議的召開與昨天發布的包含西港財務業績的新聞稿一致。在今天的電話會議上，代表 Westport 發言的是執行長兼董事 Dan Sceli；和財務長比爾·拉金。

Attendance on this call is open to the public, but questions will be restricted to the investment community. You are reminded that certain statements made on this conference call and our responses to certain questions may constitute forward-looking statements within the meaning of the US and applicable Canadian securities laws. And as such, forward-looking statements are made based on our current expectations and involve certain risks and uncertainties. With that, I will turn the call over to you, Dan.

這次電話會議對外開放，但提問僅限於投資界。請注意，本次電話會議中所做的某些陳述以及我們對某些問題的答覆可能構成美國和適用的加拿大證券法含義內的前瞻性陳述。因此，前瞻性陳述是根據我們目前的預期做出的，並涉及一定的風險和不確定性。這樣，我會將電話轉給你，丹。

Thanks, Ashley, and good day, everyone. Today, I'll be recapping our progress and results in the second fiscal quarter of 2024, providing updates on our 2024 strategic priorities, including an update on the JV with Volvo, introducing our new reporting segments and touching on the success of our July 4 event before turning the call over to Bill to walk us through our Q2 results and new segment reporting structure in more detail.

謝謝阿什利，大家好。今天，我將回顧我們在2024 年第二財季的進展和結果，提供我們2024 年戰略重點的最新情況，包括與沃爾沃合資企業的最新情況，介紹我們新的報告部門，並談到我們7 月4 日的成功在將電話轉給比爾之前，他將向我們詳細介紹第二季的業績和新的分部報告結構。

Q2 was a solid quarter, demonstrated by improvements in our margins. Impacting results was the launch of the JV with the Volvo Group. During the quarter, we were excited to close this HPDI JV transaction, which resulted in us recognizing two months of revenue from the Heavy-Duty business and our results.

第二季度是一個穩健的季度，我們的利潤率提高就證明了這一點。與沃爾沃集團成立合資企業對業績產生了影響。在本季度，我們很高興完成了這項 HPDI 合資企業交易，這使我們確認了重型業務兩個月的收入和我們的業績。

Beginning in June, the HPDI JV was accounted for under the equity method of accounting for investments. The improvement in our margins and adjusted EBITDA we saw in the quarter reflects the initiatives we have undertaken to reduce costs and streamline our business along with initial results from our more recent growth initiatives such as our LPG fuel system sales to our OEM customer.

從六月開始，HPDI 合資公司依照投資會計權益法進行會計處理。我們在本季看到的利潤率和調整後EBITDA 的改善反映了我們為降低成本和簡化業務而採取的舉措，以及我們最近的成長舉措（例如向OEM 客戶銷售液化石油氣燃料系統）的初步成果。

Our revolving business strategy has long recognized the value of strategic partnerships and our collaboration within the HPDI joint venture exemplifies this approach. By aligning with the right partners, we amplify our strengths and leverage shared expertise to drive innovation more efficiently and effectively. As we continue to adapt and refine our focus, we have restructured our business into five key segments: The HPDI JV, Light-Duty, High-Pressure Controls and Systems, Heavy-Duty OEM, and Corporate.

我們的循環業務策略早已認識到策略夥伴關係的價值，我們在 HPDI 合資企業內的合作就是這種方法的例證。透過與合適的合作夥伴合作，我們增強了我們的優勢，並利用共享的專業知識更有效率地推動創新。隨著我們不斷調整和完善我們的重點，我們將業務重組為五個關鍵領域：HPDI 合資企業、輕型、高壓控制和系統、重型 OEM 和企業。

This reorganization strengthens the alignment between our competitive strategy and our internal operations, positioning us to deliver sustainable profitable growth over time. Our new structure empowers our team to be more agile, accountable, and sharply focused on achieving our long-term goals, while also providing added transparency and visibility into our operations in our external reporting.

此次重組加強了我們的競爭策略和內部營運之間的一致性，使我們能夠隨著時間的推移實現可持續的獲利成長。我們的新架構使我們的團隊更加敏捷、更負責任，並更加專注於實現我們的長期目標，同時也在外部報告中提高了我們營運的透明度和可見度。

We are excited to close our transformational joint venture in early June with Volvo Group acquiring a 45% interest in the JV for approximately $28 million, plus up to an additional $45 million via an earnout, subject to the performance of the joint venture. We know our partnership with Volvo is just beginning, and we are excited to continue working together. Also in June, we shared our 2023 ESG report, which highlighted our commitment to environmental stewardship, social responsibility, and strong governance.

我們很高興能夠在6 月初關閉我們的轉型型合資企業，沃爾沃集團以約2800 萬美元的價格收購了該合資企業45% 的股權，並根據合資企業的業績情況，通過收益額外支付了最多4500 萬美元。我們知道我們與沃爾沃的合作關係才剛開始，我們很高興能夠繼續合作。同樣在 6 月，我們分享了 2023 年 ESG 報告，強調了我們對環境管理、社會責任和強有力治理的承諾。

We're dedicated to sustainable operations because we see the value it brings to our customers. Guided by our core values of integrity, respect and perseverance, we're especially focused on reducing carbon emissions in the transportation -- in transportation to help clean the air and build a more sustainable future.

我們致力於永續運營，因為我們看到它為客戶帶來的價值。在誠信、尊重和堅持的核心價值的指導下，我們特別關注減少交通運輸中的碳排放，以幫助清潔空氣並建立更永續的未來。

We continue to make advancements against our three main priorities for 2024 and beyond. As a reminder, those priorities include: One, driving success via our HPDI joint venture with Volvo; two, improving operational excellence; and three, reimagining a hydrogen-powered future. Regarding our first priority, as I mentioned, we closed our HPDI joint venture in June of 2024.

我們將繼續在 2024 年及以後的三個主要優先事項上取得進展。提醒一下，這些優先事項包括：第一，透過我們與沃爾沃的 HPDI 合資企業推動成功；二、提高營運卓越性；第三，重新構想氫動力的未來。關於我們的首要任務，正如我所提到的，我們在 2024 年 6 月關閉了 HPDI 合資企業。

Although closing the JV with Volvo was a significant milestone, the hard work is still ahead of us. We have a lot to accomplish together to ensure that the JV results in the acceleration of the commercialization and global adoption of the HPDI fuel system technology for long-haul and off-road applications. Thankfully, the work has already begun. As we progress, we actively promote and develop markets for our technologies and sectors that are challenging to decarbonize, thereby expanding the joint venture's reach into the future.

儘管關閉與沃爾沃的合資企業是一個重要的里程碑，但我們仍然面臨著艱鉅的任務。我們還有很多工作需要共同完成，以確保合資企業能夠加速長途和越野應用的 HPDI 燃油系統技術的商業化和全球採用。值得慶幸的是，工作已經開始。隨著我們的進步，我們積極推廣和開發具有脫碳挑戰性的技術和行業的市場，從而擴大合資企業的未來影響力。

As I have said before, our pursuit of profitability and cost cutting is not merely a priority. It is essential. In Q2, we closed the amended Westport-Minda JV with the broader restructuring in India. It is expected to transition this initiative to generating positive cash flow. We have done a number of things to rightsize the business and cut costs where we can. Many of these changes won't be visible in the financials immediately.

正如我之前所說，我們追求獲利和削減成本不僅僅是一個優先事項。這是必要的。第二季度，我們關閉了修改後的 Westport-Minda 合資企業，並在印度進行了更廣泛的重組。預計該計劃將轉變為產生正現金流。我們已經採取了許多措施來調整業務規模並盡可能削減成本。其中許多變化不會立即在財務數據中反映出來。

However, in Q2 2024, we began to see some of our initiatives materialize. Our margins grew from 17% of revenue in Q2 of 2023 to 21% of revenue this quarter, which was achieved by implementing tighter cost controls and beginning to see the benefits of our newer growth projects supported by stronger margins.

然而，在 2024 年第二季度，我們開始看到我們的一些舉措得以實現。我們的利潤率從2023 年第二季度佔收入的17% 增長到本季度收入的21%，這是透過實施更嚴格的成本控制以及開始看到我們新的成長項目得到更強勁的利潤率支持的好處而實現的。

One of the significant changes in our recast financial segments is the additional transparency we now provide for our growing High-Pressure Controls and Systems business. Here, we are at the forefront of the clean energy revolution, designing, developing, and producing high-demand components for transportation and industrial applications. This includes fuel containment and fuel pressure management components for fuel storage and fuel delivery systems.

我們重新調整的財務部門的重大變化之一是我們現在為不斷增長的高壓控制和系統業務提供了額外的透明度。在這裡，我們處於清潔能源革命的前沿，設計、開發和生產用於交通和工業應用的高需求組件。這包括用於燃料儲存和燃料輸送系統的燃料密封和燃料壓力管理組件。

We partnered with the world's leading fuel cell and hydrogen engine manufacturers and companies committed to decarbonizing transport, offering versatile solutions that serve a variety of fuel types. While hydrogen is the key to the future decarbonization of transport, our components and solutions are already powering emission-reducing innovation today across a range of gaseous fuels, including both CNG and hydrogen.

我們與世界領先的燃料電池和氫發動機製造商以及致力於交通運輸脫碳的公司合作，提供適用於各種燃料類型的多功能解決方案。雖然氫氣是未來交通脫碳的關鍵，但我們的組件和解決方案目前已經在推動包括壓縮天然氣和氫氣在內的一系列氣體燃料的減排創新。

With decades of experience, market-leading brands, and unmatched engineering expertise, we are leading the market. While we're still small, our strategic position and innovative capabilities put us on the cusp of significant growth, ensuring we're the go-to choice for those shaping the future of clean energy today and tomorrow. In the supplementary information we provided this quarter, outlining our historical results recast under the new segments, we show this business generating revenue of $12 million in 2023.

憑藉數十年的經驗、市場領先的品牌和無與倫比的工程專業知識，我們正在引領市場。雖然我們的規模仍然很小，但我們的戰略地位和創新能力使我們處於顯著增長的風口浪尖，確保我們成為那些塑造當今和未來清潔能源未來的人們的首選。在我們本季提供的補充資訊中，概述了我們在新細分市場下重述的歷史業績，我們顯示該業務在 2023 年將產生 1,200 萬美元的收入。

Today, this segment has a pipeline of future business representing approximately $70 million in additional revenue to be generated in the latter part of the decade. Westport is excited to play a part in an innovative industry in which alternative fuels are seeing increased support and investments. We are poised to deliver now, providing alternative fuel solutions to support transport and industrial applications, and are prepared to capture the growth as hydrogen develops into the fuel source of the future in the mobility sector.

如今，該部門擁有一系列未來業務，預計在本十年後半段將產生約 7,000 萬美元的額外收入。西港很高興能在創新產業中發揮作用，在這個產業中，替代燃料得到了越來越多的支持和投資。我們現在已做好準備，提供替代燃料解決方案來支援運輸和工業應用，並準備抓住氫發展成為交通領域未來燃料來源的成長。

On July 4, Volvo and Westport marked a defining moment in the journey of our newly formed joint venture. The two companies celebrated the official launch of our partnership with an exclusive event at the University of British Columbia, the birthplace of Westport's HPDI fuel system technology.

7 月 4 日，沃爾沃和 Westport 標誌著我們新成立的合資企業發展歷程中的決定性時刻。兩家公司在西港 HPDI 燃油系統技術的發源地不列顛哥倫比亞大學舉辦了一場獨家活動，慶祝我們合作夥伴關係的正式啟動。

Leaders from both companies joined in, in the celebration of this milestone, emphasizing the significance of the partnership and driving forward HPDI's breakthrough technology and tackling the urgent challenges of climate change.

兩家公司的領導層參加了這一里程碑的慶祝活動，強調了合作夥伴關係的重要性，並推動 HPDI 的突破性技術和應對氣候變遷的緊迫挑戰。

By combining Volvo's extensive expertise in commercial vehicle and power system manufacturing with Westport's innovative fuel system technology, we are creating a powerful force for change that can make a meaningful contribution to reduce carbon emissions immediately and affordably.

透過將沃爾沃在商用車和電力系統製造方面的豐富專業知識與西港的創新燃油系統技術相結合，我們正在創造強大的變革力量，為立即且經濟地減少碳排放做出有意義的貢獻。

With that, I'll hand the call over to Bill, who will speak -- who will walk you through our financial results.

接下來，我會將電話轉交給比爾，他將發言，他將向您介紹我們的財務表現。

Good morning, and thank you, Dan. I want to start off by walking through the new segment reporting structure. As Dan mentioned, we've refined the way we view and report our business operations. Beginning with this quarter, we're reporting financial results under five new segments. These segments are the HPDI JV, Light-Duty, High-Pressure Controls and Systems, Heavy-Duty OEM, and Corporate.

早安，謝謝你，丹。我想先介紹一下新的分部報告架構。正如丹所提到的，我們改進了查看和報告業務運作的方式。從本季開始，我們將報告五個新部門的財務表現。這些細分市場包括 HPDI 合資企業、輕型、高壓控制和系統、重型 OEM 和企業。

Financial results from the HPDI joint venture being counter-form under the equity method and are also supported by enhanced disclosures in our MD&A as well as in the notes to the financial statements. Before I go over the quarterly results, I want to delve deeper and walk you through what is included in each of our new segments.

HPDI 合資企業的財務表現與權益法下的財務表現相反，並且也得到我們 MD&A 以及財務報表附註中增強揭露的支持。在討論季度業績之前，我想更深入地研究並引導您了解我們每個新細分市場中包含的內容。

First, the HPDI JV represents our recently closed joint venture with Volvo Group. The financial information presented represents one month activity during the second quarter. Light-Duty segment manufactures LPG and CNG fuel storage solutions and supply fuel storage tanks to the aftermarket OEM and other market segments across a wide range of brands.

首先，HPDI 合資企業代表了我們最近與沃爾沃集團關閉的合資企業。所提供的財務資訊代表第二季一個月的活動。輕型部門生產液化石油氣和壓縮天然氣燃料儲存解決方案，並向售後原始設備製造商和其他細分市場提供各種品牌的燃料儲罐。

The Light-Duty segment includes the consolidated results from our delayed OEM, independent aftermarket, light-duty OEM operations, fuel storage, and electronics businesses. Our High-Pressure Controls and Systems segment designs, develops, produces, and sells high-pressure components for the use of hydrogen and CNG fuels in transportation and industrial applications.

輕型車部門包括我們延遲的 OEM、獨立售後市場、輕型 OEM 業務、燃料儲存和電子業務的綜合業績。我們的高壓控制和系統部門設計、開發、生產和銷售在運輸和工業應用中使用氫氣和壓縮天然氣燃料的高壓組件。

Finally, our Heavy-Duty OEM segment reflects the results from the HPDI business for the first five months of the year until the formation of the HPDI JV, which occurred on June 3, 2024. And going forward, the Heavy-Duty OEM segment will reflect revenue earnings from a transitional service agreement in place with the HPDI joint venture. This TSA is intended to support the HPDI joint venture in the short term as the organization transitions to its own operating entity.

最後，我們的重型 OEM 部門反映了 HPDI 業務今年前五個月的業績，直至 2024 年 6 月 3 日 HPDI 合資公司成立為止。展望未來，重型 OEM 部門將反映與 HPDI 合資企業簽訂的過渡服務協議帶來的收入。該 TSA 旨在短期內支援 HPDI 合資企業過渡到自己的營運實體。

Therefore, after completing -- the completion of the activities on the TSA, there will be no additional activity in the segment. So to get a complete picture of the HPDI business presented for the quarter, combined HPDI JV in the Heavy-Duty OEM segments. As Dan mentioned, the new segments are designed to support Westport's strategic priorities and provide heightened disclosure, specifically in areas of our business where we see outsized future growth.

因此，在 TSA 上的活動完成後，該部分將不再有其他活動。因此，為了全面了解本季的 HPDI 業務，我們合併了重型 OEM 領域的 HPDI 合資企業。正如丹所提到的，新的部門旨在支持西港的戰略重點並提供更高的披露，特別是在我們看到未來大幅增長的業務領域。

We hope that the additional transparency provides our investors and analysts information to more accurately model and value Westport. To support this, we have included a recast of historical financials and supplementary information of our Q2 press release.

我們希望額外的透明度為我們的投資者和分析師提供信息，以便更準確地對西港進行建模和估值。為了支持這一點，我們對第二季新聞稿的歷史財務數據和補充資訊進行了重述。

Moving on to our second quarter results. In the quarter, we generated $83.4 million of revenue, a 2% decrease compared to the prior-year period. This was primarily driven by decreased sales volumes in our delayed OEM and fuel storage businesses. This is partially offset by increased sales volumes in electronics, High-Pressure Controls and Systems, Light-Duty OEM, and Heavy-Duty OEM revenues in the quarter.

接下來是我們的第二季業績。本季度，我們實現了 8,340 萬美元的收入，比去年同期下降 2%。這主要是由於我們延遲的 OEM 和燃料儲存業務銷售下降所致。這部分被本季電子產品、高壓控制和系統、輕型 OEM 和重型 OEM 收入的成長所抵消。

As a reminder, this is the first quarter with the HPDI joint venture, which impacted our Q2 revenue as Q2 reflects two months of HPDI sales activity in our financials with June activity being accounted for under the equity method of accounting for investments.

提醒一下，這是HPDI 合資企業的第一季度，這影響了我們第二季度的收入，因為第二季度反映了我們財務中兩個月的HPDI 銷售活動，其中6 月份的活動按照投資會計權益法進行核算。

Gross margin increased to $17.1 million, or 21% of revenue in the quarter. This is up from $14.4 million, or 17% of revenue in Q2 of '23. This is largely driven by increases in sales to our European customers and a reduction in sales of developing regions in our Light-Duty business, in addition to seeing the initial results from our cost-cutting initiatives.

毛利率增至 1,710 萬美元，佔本季營收的 21%。這高於 23 年第二季的 1,440 萬美元，佔營收的 17%。這主要是由於我們的成本削減措施取得了初步成果，而我們的輕型車業務中對歐洲客戶的銷售額增加了，發展中地區的銷售減少了。

We continue to demonstrate improvement in our adjusted EBITDA. This quarter, we reported a loss of $2 million, which was an improvement by $2 million as compared to the same quarterly period last year. The improvements in gross margin drove positive improvements in our adjusted EBITDA. However, these improvements were partially offset by higher G&A costs in the second quarter, which included $2 million in consulting and legal fees related to finalizing the HPDI joint venture.

我們繼續展示調整後 EBITDA 的改善。本季度，我們報告虧損 200 萬美元，與去年同期相比減少了 200 萬美元。毛利率的提高推動了調整後 EBITDA 的積極改善。然而，這些改進部分被第二季較高的一般管理費用所抵消，其中包括與最終確定 HPDI 合資企業相關的 200 萬美元諮詢和法律費用。

Light-Duty revenues for Q2 of '24 was $69.5 million as compared to $73.7 million for Q2 of '23. This decrease was driven by lower sales in our Delayed OEM, independent aftermarket and fuel storage businesses, and was partially offset by increased sales in our Light-Duty OEM and electronics businesses. As expected, our Delayed OEM business continued to see a lower revenue in the quarter as a key customer continue to work through their existing inventory.

24 年第二季的輕型車收入為 6,950 萬美元，而 23 年第二季的輕型收入為 7,370 萬美元。這一下降是由於我們的延遲 OEM、獨立售後市場和燃料儲存業務的銷售額下降所致，但部分被我們的輕型 OEM 和電子業務的銷售成長所抵消。正如預期的那樣，由於主要客戶繼續處理現有庫存，我們的延遲 OEM 業務本季收入持續下降。

However, we began seeing sales to the key customers progressively increase through the quarter. Gross margin of Light-Duty business increased in the quarter to $15.1 million, or 22% of revenue, as compared to $12.7 million, or 17% of revenue in Q2 of 2023. This is primarily driven by a change in sales mix with an increase in sales to European customers and a reduction in sales to developing regions.

然而，我們開始看到本季主要客戶的銷售額逐漸增加。本季輕型業務的毛利率增至 1,510 萬美元，佔營收的 22%，而 2023 年第二季為 1,270 萬美元，佔營收的 17%。這主要是由於銷售結構的變化，對歐洲客戶的銷售增加，對發展中地區的銷售減少。

This includes a full quarter of deliveries of Euro 6 LPG fuel systems to our global OEM partners. High-Pressure Controls and Systems revenue for Q2 of '24 was $3.4 million, which was an increase of $600,000, as compared to $2.8 million for Q2 of 2023. This was primarily driven by increased sales volumes in product and service revenue.

這包括向我們的全球 OEM 合作夥伴交付的歐 6 液化石油氣燃料系統的整整一個季​​度。24 年第二季的高壓控制和系統收入為 340 萬美元，比 2023 年第二季的 280 萬美元增加了 60 萬美元。這主要是由於產品和服務收入的銷售增加所致。

Gross margin increased slightly in the quarter to $700,000, or 21% of revenue, compared to $600,000, or 21% of revenue in Q2 of '23. The Heavy-Duty OEM revenue for second quarter of 2024 was $10.5 million. This is up $2 million compared to the prior year. The revenue increase was driven by an increase in product sales and engineering services for the two months in the quarter when the company wholly owned the HPDI business.

本季毛利率略有上升，達到 70 萬美元，佔營收的 21%，而 2023 年第二季毛利率為 60 萬美元，佔營收的 21%。2024 年第二季重型 OEM 營收為 1,050 萬美元。與前一年相比，增加了 200 萬美元。收入成長是由公司全資擁有HPDI業務的該季度兩個月產品銷售和工程服務的成長所推動的。

Additionally, we recorded one month of inventory sales from the company to the HPDI JV for $500,000 under our transitional services agreement. Gross margin dollars in our Heavy-Duty OEM business in the second quarter of '24 is up slightly to $1.3 million, or 12% of revenue, compared to $1.1 million, or 13% of revenue in Q2 of '23.

此外，根據我們的過渡服務協議，我們記錄了該公司向 HPDI 合資企業一個月的庫存銷售金額為 50 萬美元。2024 年第二季我們的重型 OEM 業務的毛利率小幅上升至 130 萬美元，佔營收的 12%，而 23 年第二季的毛利率為 110 萬美元，佔營收的 13%。

Regarding liquidity, our cash and cash equivalents at June 30, 2024, was $41.5 million. This is a decrease of $2.4 million as compared to the end of Q1 of '24. With respect to our cash balance, there's $8.4 million related to the closing of the HPDI joint venture that was received in July.

關於流動性，截至 2024 年 6 月 30 日，我們的現金和現金等價物為 4,150 萬美元。與 2024 年第一季末相比，減少了 240 萬美元。至於我們的現金餘額，其中 840 萬美元與 7 月收到的 HPDI 合資企業的關閉相關。

And therefore, this amount is not reflected in our cash balance at the end of the quarter. Net cash provided by operating activities was $1.5 million. That's an improvement of $2.1 million over Q2 of last year. This improvement was achieved through continued reductions in net working capital. Net cash provided by investing activities was $5.8 million.

因此，這一金額並未反映在我們季度末的現金餘額中。經營活動提供的淨現金為 150 萬美元。這比去年第二季增加了 210 萬美元。這項改善是透過淨營運資本的持續減少而實現的。投資活動提供的淨現金為 580 萬美元。

Now this included the proceeds from the sale of our investments of $20.4 million related to partial sales of our ownership interest in HPDI JV and the Minda-Westport JV. This was partially offset by capital contributions to the HPDI JV of $9.9 million and capital expenditures of $5.4 million.

現在，這包括我們出售 2,040 萬美元投資的收益，這些投資與我們在 HPDI 合資企業和 Minda-Westport 合資企業中部分出售所有權權益有關。這被 HPDI 合資企業 990 萬美元的資本出資和 540 萬美元的資本支出部分抵銷。

In the quarter, net cash used in financing activities was $8.9 million. During the quarter, we reduced our use of the revolving credit facility by $5.2 million and made $3.7 million of principal repayments. As a reminder, in Q2 of 2023, we repaid $8.7 million to settle our long-term royalty obligation with Cartesian.

本季融資活動所使用的現金淨額為 890 萬美元。本季度，我們減少了循環信貸額度的使用 520 萬美元，並償還了 370 萬美元的本金。提醒一下，我們在 2023 年第二季償還了 870 萬美元，以解決我們與 Cartesian 的長期特許權使用費義務。

Going forward, we'll continue to do what is necessary to ensure we are adequately and fully capitalized. We remain focused on our project pipeline designed to enhance our liquidity as we continue to prioritize solidifying our balance sheet. We've been actively implementing cost-savings initiatives, and we are already seeing positive results. With that, thank you, and I will turn it back to Dan. Dan?

展望未來，我們將繼續採取必要措施，確保我們擁有充足且充分的資本。在我們繼續優先考慮鞏固資產負債表的同時，我們仍然專注於旨在增強流動性的專案管道。我們一直在積極實施成本節約舉措，並且已經看到了積極的成果。就這樣，謝謝你，我會把它轉回給丹。擔？

(technical difficulty) commitment to advancing decarbonization across the mobility sector remains steadfast. As we look forward, we are invigorated by the possibilities that the future holds and are resolute in our pursuit of innovation and sustainability. I want to take a moment to thank everyone for being here. And with that, I'll turn it over to the operator to open the call for questions.

（技術難度）對推動整個出行部門脫碳的承諾仍然堅定。展望未來，我們對未來的可能性感到振奮，並堅定地追求創新和永續發展。我想花點時間感謝大家來到這裡。然後，我會將其轉交給接線員以開始提問。

(Operator Instructions)

（操作員說明）

Eric Stine, Craig-Hallum.

艾瑞克·斯坦，克雷格·哈勒姆。

Good morning, Eric.

早安，埃里克。

Hi, Dan. Hi, Bill. Good morning. Can you hear me? I know there's some weird stuff going on, on this call, but audio wise. But okay, good. Well, so I know early days for the joint venture, you've had -- or it's been in place for, what, two months. Just curious if you could kind of rank the priorities as you see them now. Have they changed at all? And could you give us an update on just thoughts of a new OEM since I know that, that was one of the objectives from the start.

嗨，丹。嗨，比爾。早安.你聽得到我嗎？我知道這次通話中發生了一些奇怪的事情，但在音訊方面。但好吧，很好。嗯，所以我知道合資企業的早期階段，或者已經存在了兩個月。只是好奇您是否可以按照您現在所看到的方式對優先事項進行排序。他們有什麼變化嗎？您能否為我們介紹一下新 OEM 的最新想法，因為我知道，這是從一開始的目標之一。

Sure. In terms of priorities, we've launched this joint venture, and our goals immediately are to get it functioning as a stand-alone business. So putting in place the business systems, the ERP, all of those things are being put in place so that we can operate it separate from Westport management team was already organized around a separate entity. There's about a nine-month rollout of actions that make all those things happen to stand-alone. So immediate priority is getting it functioning and running.

當然。就優先事項而言，我們已經成立了這家合資企業，我們立即的目標是讓它作為一個獨立的業務運作。因此，業務系統、ERP 等所有這些東西都已到位，以便我們可以獨立於西港管理團隊進行運營，而西港管理團隊已經圍繞著一個單獨的實體進行了組織。大約需要九個月的時間來推出一些行動，使所有這些事情都能獨立發生。因此，當務之急是讓它正常運作。

But running parallel and equaling priority is bringing on a second OEM. And that activity continues. It's been ongoing for some time. It was ongoing before actually, we closed the joint venture and it continues to be ongoing. And we're hoping that we'll be able to announce something as we continue to work towards winning that second OEM, which is a priority for both Westport and Volvo.

但並行運行和同等優先級正在帶來第二個 OEM。這項活動仍在繼續。它已經持續了一段時間了。實際上，在我們關閉合資企業之前，這種情況就一直在進行，並且仍在繼續。我們希望在繼續努力贏得第二家 OEM 的過程中能夠宣布一些事情，這對 Westport 和沃爾沃來說都是優先事項。

Got it. And then I have heard some talk in the market interest in HPDI in North America. And so I'm just curious -- maybe this hasn't changed from when it was part of Westport, but now that you are combined with Volvo in the joint venture, maybe how those plans are coming together. Does this help in that endeavor to get it to North America and what that might look like?

知道了。然後我聽到一些關於北美市場對 HPDI 興趣的討論。所以我只是很好奇——也許這與西港的一部分相比並沒有改變，但現在你與沃爾沃合併為合資企業，也許這些計劃是如何結合在一起的。這是否有助於將其推向北美以及可能會是什麼樣子？

Sure. So HPDI North America is one of those equal priorities, whether it's bringing on a second OEM or bringing the technology to North America through Volvo. We're -- we continue to work through engineering and development to build a system that can cross all the continents, but specifically in North America, we see the market is more CNG-focused.

當然。因此，無論是引入第二家 OEM 還是透過沃爾沃將技術引入北美，HPDI 北美都是同等優先事項之一。我們繼續透過工程和開發來建造一個可以跨越各大洲的系統，但特別是在北美，我們看到市場更加以壓縮天然氣為主。

And so we're working on a plan to fill that need and talk to other OEMs in North America. So our commercial activities will continue to move forward in building this business out.

因此，我們正在製定一項計劃來滿足這一需求，並與北美的其他原始設備製造商進行交流。因此，我們的商業活動將繼續推進，以建立這項業務。

Got it. I will -- I guess I'll stay tuned on that. And maybe my last one is just more bookkeeping. So when we think about OpEx and just the moving pieces of the -- of Westport's going forward. So you said you had $2 million that should not repeat. Was I correct in hearing that related to this formation of the joint venture. Okay. So $2 million.

知道了。我會——我想我會繼續關注這一點。也許我的最後一項只是更多的簿記。因此，當我們考慮營運支出以及西港未來發展的動態部分時。所以你說你有 200 萬美元，不應該重複。我所聽到的與組成合資企業有關的資訊是否正確？好的。那麼200萬美元。

Yeah.

是的。

And then it looks like roughly $5 million, $6 million of the Heavy-Duty OEM business, that would be roughly the OpEx level that also comes out. I mean is this kind of an all-in OpEx $15 million type of number per quarter?

然後，重型 OEM 業務看起來大約為 500 萬美元、600 萬美元，這也大致相當於隨之而來的營運支出水準。我的意思是，這是每季 1500 萬美元的總營運支出嗎？

We're continuing to look at that. As Dan mentioned, we still have quite a few cost reduction initiatives that we're working on. And so we're -- that's across our business. $15 million is about right for the current run rate, but we're going to continue to evaluate that.

我們正在繼續關注這一點。正如丹所提到的，我們仍然有很多正在研究的降低成本的措施。所以我們——這就是我們的整個業務。 1500 萬美元對於當前的運行速度來說是合適的，但我們將繼續評估這一點。

Okay. Thank you very much.

好的。非常感謝。

Thanks, Eric. Take care.

謝謝，埃里克。小心。

Chris Dendrinos, RBC Capital Markets.

Chris Dendrinos，加拿大皇家銀行資本市場部。

Yeah. Good morning.

是的。早安.

Good morning, Chris.

早上好，克里斯。

I wanted to ask about -- there was a comment, I think, it was in the financial disclosure of the MD&A, and it looks like you all exited the JV with Weichai. So if you could just speak to that and what maybe the strategy shift was there and, I guess, thoughts going forward with them? Thanks.

我想問的是——我想，MD&A 的財務披露中有一條評論，看起來你們都退出了與瀟柴的合資企業。那麼，如果你能談談這一點，也許有什麼策略轉變，我想，他們接下來的想法是什麼？謝謝。

Well, yeah. I mean it's really two separate things. This is a JV that was formed a long time ago. And then more recently, we had a small ownership percentage, and they finally exited totally from the joint venture. However, that doesn't change our relationship with Weichai and we continue to support their development activities.

嗯，是的。我的意思是這實際上是兩件不同的事情。這是一家很久以前成立的合資企業。最近，我們的持股比例很小，他們最終完全退出了合資企業。然而，這並沒有改變我們與濰柴的關係，我們將繼續支持他們的開發活動。

Got it. Thank you. And then maybe just on the Light-Duty segment. So it sounded like the mix of Light-Duty OEM was more heavily weighted to Europe and you noted a reduction in the sales in some of those developing regions. Is there any sort of a strategic shift going on with, I guess, maybe that business line? And maybe where you're focused internationally and how that impacts your growth going forward? Thanks.

知道了。謝謝。然後也許只是在輕型領域。因此，聽起來輕型 OEM 的組合在歐洲的比重更大，並且您注意到其中一些發展中地區的銷售額有所下降。我想，也許該業務線正在發生某種策略轉變？也許您在國際上關注的焦點是什麼？謝謝。

Sure. So the Light-Duty business impacts this year, so Q1, Q2 and will flow through for a bit. The primary one was the OEM that imports vehicles and installs our systems. And they tripled the size of their business, and they're launching 14 new models in the middle of all this. And so the issue there was they were uncontrolled sitting on a pile of inventory that they didn't realize they had.

當然。因此，輕型業務今年會受到影響，因此第一季、第二季將持續一段時間。第一個是進口車輛並安裝我們系統的原始設備製造商。他們的業務規模擴大了兩倍，並在此期間推出了 14 款新車型。所以問題是他們不受控制地坐在一堆他們沒有意識到自己擁有的庫存上。

So they're bleeding that off. So the big hit we're taking there is just them bleeding off that inventory. We expect those volumes to come back. We're waiting to see exactly when they're going to come back later this year, but we do expect them to come back.

所以他們正在流血。因此，我們在那裡遭受的重大打擊只是他們從庫存中流失。我們預計這些銷量將會回歸。我們正在等待他們今年晚些時候具體什麼時候回來，但我們確實希望他們回來。

The other piece was the slower launch on the Euro 6 with our OEM over there. And that has actually picked up and will be gaining volume. So we're actually fairly upbeat about the volume projections for Europe. But we're waiting to see specific numbers from the marketplace on that. So we don't see a major shift in the piece of that world that we play in. In fact, we see it getting a little bit stronger.

另一件事是我們的 OEM 在 Euro 6 上的發布速度較慢。事實上，這種情況已經有所回升，數量將會增加。因此，我們實際上對歐洲的銷售預測相當樂觀。但我們正在等待市場的具體數據。因此，我們並沒有看到我們所處的世界發生重大變化。事實上，我們看到它變得更強了。

Got it. Thanks. I guess maybe one last one if I can sneak this in here, but I think there's a receivable from -- there's a receivable from Cummins that I think you --

知道了。謝謝。我想如果我能把這個偷偷放進去的話，也許是最後一筆，但我認為有一筆來自康明斯的應收賬款，我想你有一筆來自康明斯的應收賬款--

Colin Rusch, Oppenheimer & Company.

科林·魯施，奧本海默公司。

So give this another go. Thanks so much for getting me in. So guys, can you talk a little bit about what's going on with the vehicle customers for hydrogen on the off-road opportunity? It seems to me that as the mining industry starts to work towards zero emissions and the hydrogen industry starts to look at some dedicated facilities that there might be a meaningful opportunity for you guys. I just want to understand how that's developing.

所以再試一次吧。非常感謝你讓我進來。那麼夥計們，您能談談車輛客戶在越野機會中使用氫氣的情況嗎？在我看來，隨著採礦業開始努力實現零排放，而氫工業開始考慮一些專用設施，這對你們來說可能是一個有意義的機會。我只是想了解這是如何發展的。

Yeah, sure. So we have been exploring opportunities in the off-road. Off-road is a growth segment, both inside the joint venture for HPDI and within our high-pressure components and systems world because there's a play there for that technology. We do see some interesting opportunities coming together and have been in some discussions with some customers on how to help the mining industry transform their technology. So it's early days for us on that, but it is an important priority for us, and we are starting to build out the commercial plan of how to pull it off.

是的，當然。所以我們一直在探索越野方面的機會。越野是一個成長的領域，無論是在 HPDI 的合資企業內部還是在我們的高壓組件和系統領域，因為該技術都有發揮作用。我們確實看到了一些有趣的機會，並與一些客戶就如何幫助採礦業改造其技術進行了一些討論。因此，對我們來說，現在還處於早期階段，但這對我們來說是一個重要的優先事項，我們正在開始製定如何實現這一目標的商業計劃。

Thanks so much. And just on the Light-Duty side, it seems to me that there's an opportunity around potentially licensing some of the IP that you guys have and ending up with a little bit leaner model. Can you talk a little bit about that opportunity and if that's a real thing that you guys are thinking about?

非常感謝。就輕型而言，在我看來，有一個機會可以授權你們擁有的一些智慧財產權，並最終得到一個更精簡的模型。您能談談這個機會嗎？

About licensing. Okay. So we're currently building out the capitalization of Euro 6, Euro 7 technology that's going to be ramping up over the next two years, two to three years. And that's been our primary focus. In terms of licensing, I'm not sure who -- or what you're specifically referring to, but our goal is to expand that technology across multiple OEMs. We do see a pendulum swing back the other way as I think the world sees the hydrogen ecosystem may be a little further out than we all want.

關於許可。好的。因此，我們目前正在建立歐 6、歐 7 技術的資本，這些技術將在未來兩年、兩到三年內持續增加。這是我們的首要關注點。在許可方面，我不確定是誰，或者您具體指的是什麼，但我們的目標是將該技術擴展到多個 OEM。我們確實看到了鐘擺向另一個方向擺動，因為我認為世界看到的氫生態系統可能比我們所有人想要的更遠。

In the middle of that, we have solutions, whether it's propane gas, natural -- the natural gas groups, et cetera. And we're trying to position ourselves to be that bridge in between and bring solutions. So we're going to continue to try and commercialize that across Europe, and of course, in our aftermarket around the world.

在此過程中，我們有解決方案，無論是丙烷氣、天然氣或天然氣集團等等。我們正在努力將自己定位為中間的橋樑並帶來解決方案。因此，我們將繼續嘗試將​​其商業化在整個歐洲，當然還有我們在世界各地的售後市場。

Thanks so much. I got a couple of follow-ups so I'll take them offline. Thanks, guys.

非常感謝。我收到了一些後續訊息，所以我會將它們離線。謝謝，夥計們。

Yeah. Okay.

是的。好的。

Okay. Thank you.

好的。謝謝。

(Operator Instructions)

（操作員說明）

Rob Brown, Lake Street Capital Markets.

羅布布朗，湖街資本市場。

Hey, Rob.

嘿，羅布。

Good morning. First question is on the sort of demand environment in the European HPDI market. I think that's been sort of coming back. But what's sort of your sense on how that looks over the next 12 months and some of the macro drivers there?

早安.第一個問題是關於歐洲HPDI市場的需求環境。我認為這有點回來了。但您對未來 12 個月的情況以及其中的一些宏觀驅動因素有何看法？

Yeah. I think, obviously, I mentioned just a moment ago, the view of where hydrogen is going to be coming in, in terms of the ecosystem, the entire ecosystem. I think the European market is starting to adjust to that future being a little further off. Therefore, they're turning back to the alternative fuels aside from the fuel cells and the battery electric solutions.

是的。我認為，顯然，我剛才提到了氫將在生態系統、整個生態系統方面進入何處的觀點。我認為歐洲市場正在開始適應這個稍遠的未來。因此，他們開始轉向燃料電池和電池電動解決方案以外的替代燃料。

Clearly, alternative fuel ICE engines are going to be gaining some momentum and some market share in Europe. And we're excited about that. We're also working to figure out how to get it in North America -- how to commercialize it with different OEMs in North America, including Volvo. But I think the current HPDI system on LNG has a very strong future here in Europe.

顯然，替代燃料內燃機引擎將在歐洲獲得一定的發展勢頭並佔據一定的市場份額。我們對此感到興奮。我們還在努力弄清楚如何在北美獲得它——如何與北美的不同原始設備製造商（包括沃爾沃）將其商業化。但我認為目前的液化天然氣 HPDI 系統在歐洲有著非常廣闊的前景。

Okay. Thank you. And then on the cost reduction efforts, you talked a little bit about some progress, but could you give us a sense of sort of how far you are into that and how much is yet to go?

好的。謝謝。然後，關於降低成本的努力，您談到了一些進展，但您能否讓我們了解您在這方面的進展以及還有多少進展？

Yeah. We've been digging in pretty aggressively across the company, both at a corporate level for corporate costs, which Bill can talk a bit about, and then operationally across the various segments, whether it's the Light-Duty business or even the joint venture. We're trying to make ourselves a much more rightsized and efficient business across the board. And one of the challenges is, I think we've talked about in previous calls, is the timing of making change in operations.

是的。我們一直在整個公司範圍內非常積極地深入研究，無論是在公司層面的公司成本（比爾可以談論一下），還是在各個部門的運營上，無論是輕型業務還是合資企業。我們正在努力使自己成為一家規模更合理、更有效率的企業。我想我們在之前的電話會議中已經討論過，挑戰之一是改變營運的時機。

So for instance, in Europe, a lot of the cost savings that we want to initiate there, take capital and take time. You can't just hit a switch and cost -- take costs out of a business in Europe like we could here, for instance. So are we a third of the way into it? Probably, I'd say we're a third of the way into it. And so -- and it's also a balance, right, a balance between where we're cost cutting, where we're investing for the future to take advantage of growth opportunities. So it's a bit of both.

例如，在歐洲，我們想要在那裡啟動大量成本節約，需要資金和時間。例如，你不能像我們在這裡那樣，直接按下開關和成本——從歐洲的企業中扣除成本。那我們已經完成了三分之一了嗎？也許，我想說我們已經完成了三分之一。因此，這也是一種平衡，對吧，我們削減成本和為未來投資以利用成長機會之間的平衡。所以兩者兼而有之。

Okay. Thank you. I'll turn it over.

好的。謝謝。我會把它翻過來。

Jeff Osborne, TD Cowen.

傑夫·奧斯本，TD·考恩。

Hey, Jeff.

嘿，傑夫。

Good morning. Thank you. Two questions. One is, do you have a sense of -- on the kits that are in inventory at your partner in Europe, what you've sold in versus the sell-through of those vehicles and how long that pressure will be there? Is that something that will be resolved this calendar year or no?

早安.謝謝。兩個問題。一是，您是否了解歐洲合作夥伴庫存的套件，您的銷售情況與這些車輛的銷售情況以及這種壓力會持續多久？這個問題會在今年解決嗎？

Yeah. We expect that to --

是的。我們期望--

Yeah --

是的--

Yeah, go ahead Bill.

是的，繼續吧，比爾。

So yes, it heavily impacted our first quarter. It did -- we did have some impact in the second quarter -- early in the second quarter. We actually started seeing the volumes start ramping up throughout the quarter. And those will continue to increase throughout the third quarter as we work closely with our customer.

所以，是的，它嚴重影響了我們的第一季。確實如此——我們確實在第二季產生了一些影響——在第二季初。實際上，我們開始看到整個季度的銷售量開始增加。隨著我們與客戶的密切合作，這些數量將在整個第三季度繼續增加。

As Dan mentioned, they've just grown rapidly, and they haven't put the controls and processes in place to manage their inventory. So we've gotten more actively engaged with our customer to be able to manage that and we have better foresight for their needs, their production needs inventory needs. So that business has been recovering during the quarter and will continue in the third quarter.

正如丹所提到的，他們剛剛快速成長，但還沒有建立適當的控制和流程來管理庫存。因此，我們更積極地與客戶合作，以便能夠管理這一點，並且我們對他們的需求、他們的生產需求和庫存需求有更好的預見性。因此，該業務在本季度一直在復甦，並將在第三季度繼續下去。

Perfect. And then my last question is just how to think -- I think Eric asked questions on OpEx and how to think about that and how you're aiming to reduce that. But how should we think about CapEx for the second half, that's unclear to me. Maybe it's buried in one of the documents. But what (multiple speakers) in the split of CapEx for (multiple speakers) associated with the JV?

完美的。然後我的最後一個問題是如何思考——我認為艾瑞克問了有關營運支出的問題，以及如何思考這個問題以及你打算如何減少它。但我們該如何考慮下半年的資本支出，我不清楚。也許它被埋在其中一份文件中。但是，與合資企業相關的（多個發言者）資本支出分割中的什麼（多個發言者）呢？

Well, I think a big chunk of the CapEx investment this year -- historically, we've been in, call it, the $13 million to $15 million. It's going to run a little higher this year because we've been investing in CapEx to support the -- our OEM customer for LPG components for Euro 6. So we've been investing heavily in new CapEx.

嗯，我認為今年資本支出投資的很大一部分——從歷史上看，我們一直在投資 1300 萬至 1500 萬美元。今年它的運行速度會稍高一些，因為我們一直在投資資本支出來支持我們的 OEM 客戶購買歐 6 的液化石油氣組件。因此，我們一直在新的資本支出上進行大量投資。

I think for the back half of the year, it would just be slightly lower than what we spent in the first half of the year. And then I think that will be the bulk of the CapEx spending that we need to do to support our OEM customer for delivering six components. And then as we go through this, we'll have to recast our CapEx run going forward now that the -- all the HPDI activities are in the JV, that will decline as well.

我認為下半年的支出只會略低於上半年的支出。我認為這將是我們支持 OEM 客戶交付六個組件所需的大部分資本支出。然後，當我們經歷這個過程時，我們將不得不重新調整我們未來的資本支出運行，因為所有 HPDI 活動都在合資企業中，這也會下降。

So is it feasible that, that number could be less than $10 million next year?

那麼，明年這個數字是否可能低於 1000 萬美元？

It could be. But we're actually just kicking off our annual budget process. And as part of that process, we do a deep dive in what our CapEx needs for the various programs. And so we're going through that right now.

可能是。但我們實際上才剛開始年度預算流程。作為過程的一部分，我們深入研究了各種項目的資本支出需求。所以我們現在正在經歷這件事。

Perfect. That's all I had. Thank you.

完美的。這就是我所擁有的一切。謝謝。

Okay.

好的。

Thank you. I'm showing no further questions at this time. I would like to turn it back to Dan Sceli for closing remarks.

謝謝。我目前沒有提出任何進一步的問題。我想請 Dan Sceli 作結束語。

I'd like to thank everybody for joining us today. And I hope we answered all your questions and look forward to the further calls throughout the day. That's all. Thank you.

我要感謝大家今天加入我們。我希望我們能夠回答您的所有問題，並期待全天的進一步來電。就這樣。謝謝。

This concludes today's conference call. Thank you for participating, and you may now disconnect.

今天的電話會議到此結束。感謝您的參與，您現在可以斷開連接。