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Dive Brief:
- Hydrogen fuel cell technology company Hyzon Motors is refocusing its growth on the waste industry and core North American markets, the Illinois-based startup announced Monday. a press release.
- The business was geared towards a global presence that included not only North America but also Europe, Australia and New Zealand. In the first quarter, the company also saw an increase in revenue in the quarterly revenue amount due to sales of coach buses as well.
- Hyzon said it will “explore a full range of strategic options for the Company, which could potentially include selling the Company and/or divesting its European and Australia/New Zealand businesses and subsidiaries, among other alternatives “, as well as a possible reduction in the workforce.
Dive Insight:
Amid an international reach, Hyzon recently reported its biggest ever revenue for a quarter, describing the 2024 first quarter result as a financial milestone.
The company posted $10 million in quarterly revenues compared to none during the prior year period. This was mainly due to the deployment of 10 coach buses at Fortescue Metals Group in Australia in 2023, Hyzon CEO Parker Meeks said. earnings call last month.
However, following a review of its operations, Hyzon wants to focus its financial resources and investments on the North American market instead “as it prepares to begin its significant large fleet test programs on both platforms in the U.S. and Canada this summer,” the company said. .
Hyzon is not alone in adjusting its market development plans. A year ago, rival Nikola shifted its presence from Europe, selling a stake in a joint venture with the Iveco Group for $35 million and announcing plans to focus on North America.
In a similar move in 2023, Hyzon started dating from its commercial presence in China, citing concerns financial challenges and risks.
The company is very focused on its balance sheet, using its resources to continue making progress to demonstrate the value of the business and showing strategic partners “that we are uniquely ahead,” Meeks told Trucking Dive in an interview in May.
Hyzon has also made progress in reducing expenses as it seeks to transition to more reliable revenue. Quarterly net cash burn in Q1 was $29.6 million, according to quarterly earnings presentationand an adjusted count put it at $24 million.
The adjusted metric excluded two significant costs: about $2.9 million in proceeds from the sale of the upstate New York facilities and an $8.5 million Securities and Exchange Commission settlement payment. The The SEC claims last year when Hyzon misled investors, but in a settlement that excluded liability, The company settled for $25 million.
Taking those exclusions into account, Hyzon had its “lowest quarterly net cash burn in 10 quarters,” CFO Stephen Weiland said on the earnings call.
Cash and cash equivalents were $82.6 million as of March 31, per an earnings presentation. Meeks told Trucking Dive that means the company has enough cash for the rest of the year, and the company is also looking to raise strategic capital in parallel.