Hyliion Holdings Corp. — FY2023 Form 10-K
Reporting period: Year ended December 31, 2023. This is an annual filing; the financial statements provided compare full-year 2023 with full-year 2022, not standalone fourth-quarter results.
Business context
Hyliion designs and develops power generators. In November 2023, it decided to wind down its electrified powertrain business and focus on developing and commercializing its fuel-agnostic KARNO generator. The company plans to retain its powertrain technology and explore potential sales or future uses of related technology and tangible assets.
Financial results and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $0.7 million | $2.1 million |
| Gross loss | $1.0 million | $6.7 million |
| Research and development | $82.2 million | $110.4 million |
| Selling, general and administrative | $42.6 million | $42.0 million |
| Exit and termination costs | $11.5 million | — |
| Net loss | $123.5 million | $153.4 million |
| Net loss per share | $0.68 | $0.87 |
| Cash used in operating activities | $117.0 million | $116.9 million |
Revenue fell 68% as sales of Hybrid products declined; Hyliion does not expect further non-KARNO revenue following the wind-down. Net loss narrowed 19%, reflecting lower R&D expense and higher interest income, partly offset by exit costs. Interest income was $13.8 million, up from $5.7 million.
At year-end, cash and cash equivalents were $12.9 million, short-term investments $150.3 million and long-term investments $128.2 million. Current assets totaled $181.7 million versus current liabilities of $15.1 million. Total liabilities were $22.1 million, including operating lease obligations; the filing reports no borrowings. Total equity was $306.3 million. Management expects $220–$230 million in cash and investments at the end of 2024 under its current projections and believes available resources can fund the business for at least 12 months from the financial statement issuance date.
Material changes, outlook and risks
- The powertrain wind-down is expected to be substantially complete by the end of Q1 2024. The plan is estimated to generate $20.4 million in total charges and expenses: $11.5 million was recorded in Q4 2023, with a further $8.9 million expected in Q1 2024, before any recoveries from asset resales. Actual costs may differ.
- The workforce was reduced by approximately 175 people, or 67%; about 85 full-time employees remained at year-end, excluding employees working on the wind-down.
- Hyliion reported a 125 kW KARNO development unit under testing and said it was designing a 200 kW BETA unit for initial deployments. Initial customer deployments were anticipated for late 2024. These are plans, not completed commercial sales; the generator had not been commercialized as of year-end.
- Management expects continued near-term losses. Key execution risks include generator design, testing and reliability; scaling additive manufacturing; supplier concentration; customer adoption; certification and regulatory requirements; and the possibility of needing additional capital over time.
- Hyliion received an NYSE notice in November 2023 because its average closing share price over 30 trading days was below $1. The company had six months to regain compliance and stated a reverse stock split could be considered, subject to approvals.
- The company recorded $1.1 million of Cedar Park economic-development grant funding as a liability because it had not met the agreement’s conditions; the funding is subject to refund. The company said pending ordinary-course legal matters were not expected to have a significant adverse effect.
Investor verification priorities
- Track whether the KARNO BETA units meet performance, efficiency, emissions, reliability and durability targets, and whether late-2024 deployments occur on schedule and generate revenue.
- Reconcile the projected 2024 ending cash and investments with actual spending, including remaining wind-down costs, KARNO development, equipment investment and share repurchases.
- Verify the final wind-down charges and cash payments, and whether asset sales produce proceeds or trigger impairment charges.
- Monitor supplier and manufacturing capacity, required certifications, customer orders, and any financing needs or dilution.
- Check NYSE continued-listing compliance and the status of the grant repayment obligation.