Westport Fuel Systems Inc

Good morning, my name is Sintu and I will be your conference operator today. At this time, I would like to welcome everyone to the Westport Fuel Systems Q3 2023 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press the star, then two. Thank you. Ms. Ashley Ngo, you may begin your conference.

Thank you. Good morning, everyone. Welcome to Westport Fuel Systems' third quarter conference call for the 2023 fiscal year. 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 Interim Chief Executive Officer and Director, Tony Gugelman, and Chief Financial Officer, Bill Larkins. 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 call and our responses to certain questions may constitute forward-looking statements within the meaning of the U.S. 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'll turn the call over to you, Tonya.

Great. Thanks, Ashley, and good day, everyone. I'm very pleased to join you on my first call as interim CEO of Westport. Today, I'll provide an update on our strategic objectives before I turn the call over to Bill to walk us through the Q3 results. We also intend to keep our prepared remarks today brief so we can get to the Q&A. I want to start off by hitting some of the key highlights and top-line numbers for the quarter. Key to these is our excitement around our HPDI joint venture with Volvo to accelerate the commercialization and adoption of Westport's HPDI fuel system technology for long-haul and off-road applications, which I'll provide an update on shortly. Touching briefly on our financials, our third quarter results saw improvements in many of our key metrics. Westport delivered revenue of $77.4 million in the quarter, up over $6 million from the same quarter last year. In addition, we continue to deliver improved gross margins both in dollar terms and as a percentage of revenue. We also improved our adjusted EBITDA to negative $3 million for the quarter from negative $4.5 million for the same period in 2022. I'll leave it there and let Bill elaborate in a moment on more detail on the financials. in terms of our strategic priorities we remain heavily committed to these priorities including driving sustainable growth in our existing markets unlocking new and emerging markets driving operational excellence and extracting efficiencies through proven capital management now near term the immediate priority is to finalize the hpdi joint venture with volvo and to elevate the financial performance across all our businesses. I also want to walk you through a couple of other recent progresses against these priorities. First, we entered new markets with our H2 HPDI fuel system solution with a proof of concept project with a leading global provider of locomotives and related equipment for the freight and transit rail industries. Now this represents Westport's first application of the H2 HPDI system for the locomotive sector. In our view, the hard to abate medium and heavy duty as well as high horsepower sectors are where HPDI creates significant value. We believe this is an affordable path to decarbonize the rail sector without compromising performance or efficiency. This two-year project will begin immediately and is fully funded by the OEM. Second, consistent with our objective of improving profitability and strengthening our balance sheet, in September, we reorganized our business in India, including our partnership in India, by reducing our stake in our joint venture, Mindo Westport Technologies Limited, from 50% to 24%. We expect to close this transaction by the end of Q1 2024. In addition, we are amending our joint venture agreement to include hydrogen components in addition to CNG, LNG, and LPG components and kits. Importantly, though, the agreement will exclude any HPDI opportunities. Now, while this amended agreement will result in rationalization of local costs, We will maintain participation through the joint venture in a fast-growing market in India and at the same time provide access to low-cost manufacturing footprint through the joint venture. Now, Bill will provide additional details on the financial impact of this transaction in a minute. Now, moving on to an update on the progress on the joint venture with Volvo. Now, I personally had the opportunity over the last month since stepping into this role to meet with Volvo and Westport teams and can tell you that we are in a great place to bring the transaction to successful conclusion. The teams have made great progress on all items and I can say now with confidence, we plan to have the definitive agreement signed by the end of January of 2024 and have the joint venture closed and operational in the second quarter of next year. Volvo and Westport have collaborated for over 15 years and shared the vision of creating sustainable transport solutions. Volvo trucks have been on the road for over five years, utilizing our LNG HPDI system, and we look forward to a long and profitable future with the Volvo team. Now with that, I'll hand it over to Bill to walk you through our financial results.