Hyliion Holdings Corp. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Hyliion develops hybrid and electrified powertrain systems for Class 8 trucks. Its Hybrid system was commercially available in low volumes; Hypertruck ERX remained in design verification and product validation.
Financial performance and liquidity
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Revenue | $0.34 million | None reported |
| Cost of revenue / gross loss | $2.10 million / $1.76 million loss | None reported |
| Research and development | $15.81 million | $9.33 million |
| Selling, general and administrative | $9.82 million | $7.40 million |
| Operating loss | $27.39 million | $16.73 million |
| Net loss / diluted loss per share | $27.11 million / $0.16 | $16.56 million / $0.10 |
| Cash used in operating activities | $29.30 million | $10.76 million |
- Gross margin was approximately negative 517% on the quarter’s $0.34 million revenue. Cost of revenue included a $1.3 million inventory write-down and $0.2 million of warranty costs.
- At March 31, cash and cash equivalents were $227.1 million, short-term investments $134.2 million, and long-term investments $166.0 million. Current assets were $371.1 million versus current liabilities of $11.3 million.
- Total liabilities were $20.5 million, including $8.4 million of operating lease liabilities; the filing reports no borrowings in the balance sheet presented. Stockholders’ equity was $528.3 million.
- Investments had $300.1 million amortized cost and $296.2 million fair value, including $3.9 million of gross unrealized losses. Management says its capital-preservation and liquidity-focused portfolio is held to maturity.
Changes versus prior period
- Revenue began to appear from Hybrid system sales, but remained small and below related costs.
- Net loss increased 63.7% year over year. R&D rose 69.4%, primarily for Hypertruck ERX design and testing and expanded engineering, operations, and supply-chain teams; SG&A rose 32.8%.
- Operating cash use increased to $29.3 million from $10.8 million. Investing cash use was $1.9 million, largely reflecting investment purchases and maturities; financing cash use was $0.1 million.
Outlook, commentary, and risks
- Management expects continued near-term losses and says current assets are sufficient to execute its strategy and meet capital requirements for the next 12 months. It expects spending to continue on product development, commercialization, operations, and hiring.
- Management expected to complete Hypertruck ERX design verification and begin initial controlled fleet trials by year-end 2022. The schedule was extended to include seasonal testing and up to one million miles before production.
- Supply-chain shortages and extended lead times were delaying some Hybrid orders and threatened truck chassis and component availability. Hyliion had ordered Peterbilt chassis needed for 2022 and was seeking 2023 build slots and alternative component sources.
- Other risks include uncertain customer demand and commercialization, reliance on predominantly single-source suppliers, investment-market volatility, and potential COVID-19 effects. Management said no material risk-factor changes had occurred since its 2021 Form 10-K.
- Management reported effective disclosure controls at quarter-end. The company said it was not involved in material legal proceedings.
Investor verification priorities
- Track Hybrid deliveries, recognized revenue, unit economics, and whether inventory write-downs or warranty costs recur.
- Verify Hypertruck ERX testing and fleet-trial milestones against the stated year-end 2022 timeline, including chassis and component availability.
- Monitor operating cash burn and investment liquidity and fair-value changes against management’s 12-month funding assessment.
- Assess whether customer interest and supply arrangements translate into commercial orders and scalable production.