Westport Fuel Systems Inc. (WPRT) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of Westport Fuel Systems Inc. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer and use of same. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the corporation that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure. During the meeting, we'll have a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Mr. Daniel Hancock, Board Chair of Westport Fuel Systems Inc. Please go ahead, Mr. Hancock.

Good day, ladies and gentlemen, and welcome to the Westport Fuel Systems' Annual Meeting of Shareholders. This is Dan Hancock speaking. I'm the Chair of Westport Fuel Systems' Board of Directors, and I'm so pleased you have joined us on this webcast for our virtual shareholder meeting today. This virtual meeting is open to the public via webcast. Registered shareholders and duly appointed proxyholders can participate, vote or submit questions during the meeting's live webcast. In order to handle certain voting procedural matters in an efficient manner, we are requesting that all registered shareholders and proxyholders record their votes for the election of our individual directors with our scrutineers in advance. We are recording today's meeting, and a replay will be available for anyone unable to attend the meeting. The replay will be made available under the Investors section of Westport's website. I would like to introduce the senior members present with us today, following which we will conduct a formal shareholders' meeting, and we will conclude with a question-and-answer session with management. As mentioned, I'm Dan Hancock, Chair of the Board of Directors, and I've been a member of the Westport Fuel Systems' Board since 2017. I would now like to present the members of the Westport Fuel Systems' Management on the call here today. Dan, let's start with you.

Hello. This is Dan Sceli speaking. I'm the Chief Executive Officer and a Director of Westport Fuel Systems.

Good morning. I'm Bill Larkin, Westport Fuel Systems' Chief Financial Officer.

Good day. I'm Lance Follett, Executive Vice President, Corporate Development and the Chief Legal Officer with Westport Fuel Systems.

Great. Thank you all for being here today. I'll now ask Larry Kyle, Westport Fuel Systems' Vice President, Legal and Intellectual Property and also Corporate Secretary, to lead the formal part of the meeting.

Thank you, Dan, and good day to everyone. I'm pleased to present the formal portion of our meeting today. Please keep in mind that even though we are using a virtual platform, the normal rules of procedure for corporate meetings will apply. If you wish to participate in the formal meeting, you must be a registered shareholder or a proxyholder and as per instructions announced in the company's notice of meeting, have preregistered for this meeting. If you are a registered shareholder or a proxyholder who did not register in advance of entering this meeting, you will not be able -- sorry, you will unfortunately be -- you will unfortunately be unable to vote or participate in the formal portion of the meeting. Access to the webcast can be found on the company website at wfsinc.com. At any time, anyone can reach out to the company at [email protected] with questions and inquiries. To ensure that we cover the required business, we have prearranged with certain persons to move and second certain motions. This is not intended to discourage participation. At each opportunity for participation, the operator will announce instructions for how registered shareholders and proxyholders can enter the question queue or place votes. During the conduct of the formal business, questions and comments should be limited to the specific proposal then under consideration. The formal meeting will now come to order. As noted, I will act as Secretary of the Meeting, and I will ask Computershare to act as Scrutineer. The meeting materials were mailed out to shareholders and filed online on April 4, 2025, so I will dispense with the reading of the notice of the meeting. The Scrutineer has reported that the required quorum is present because 249 shareholders are present on the webcast or by proxy, representing 58.63% of the outstanding shares. For your information, copies of the financial statements for the financial year ended December 31, 2024, are available in the mailed annual report or on the company's website at wfsinc.com. Printed copies of the annual report may be requested by e-mailing [email protected] or calling (604) 718-2046. The first item of formal business is the election of directors. The Board fixed the number of directors to be elected at 6. Each of the following individuals have been nominated for election as directors for the ensuing year or until their successors are elected or appointed: Anthony Guglielmin, Dan Hancock, Dan Sceli, Eileen Wheatman, Karl-Viktor Schaller, Michele Buchignani. Is there a motion?

This is Bill Larkin, and I move that the persons nominated to be elected as directors.

This is Lance Follett, and I second the motion.

The motion is now open for discussion, if any, by registered shareholders and proxyholders on the webcast. [Operator Instructions] We will pause a few moments while we wait for any questions on this motion.

There are no questions in the queue. We can continue.

You have heard the motion, and as there is no further discussion, we will proceed with the vote for the directors. As previously noted, due to conducting this meeting by webcast voting and the requirement to determine the individual votes cast for each director, we will need to receive your votes for each director individually. Voting can now be completed using the voting button on your screen. [Voting]

Thank you. Voting has closed. We will move on. While we wait final figures in respect to the voting for nominated directors, I can advise that based on the size of the management proxy vote received, the nominated individuals have been duly elected as directors of Westport Fuel Systems. The final voting totals for each director will be available in the report of voting results to be issued by the corporation after this meeting. The next item of business is the appointment of auditors. Management has nominated KPMG LLP, chartered accountants, to be appointed as the auditors of Westport Fuel Systems Inc. to hold office until the close of the next Annual Meeting of Shareholders and the Board of Directors has been authorized to set the remuneration. Is there a motion?

This is Bill Larkin, and I move that KPMG be appointed as auditors.

This is Lance Follett, and I second that motion.

Motion is now open for discussion, if any, by registered shareholders and proxyholders on the webcast. [Operator Instructions] We will pause a few moments while we wait for any questions on this motion.

There are no questions for discussion in the queue. We can continue.

Computershare will now open the poll for votes. Please vote using the voting function on your screen. [Voting]

Voting has closed. While we wait for the final voting figures to be tabulated, I can confirm that based on the size of the management proxy vote received, KPMG has been duly appointed as auditors and the motion is carried. We also have before us an advisory say-on-pay resolution for consideration, approving Westport Fuel Systems' approach to executive compensation. The summary of executive compensation is described in the information circular. This resolution does not have a binding effect, is being conducted on an advisory basis only and should not be considered to in any way diminish the role and responsibilities of the Board of Directors of the corporation. This resolution is intended to guide the Board of Directors on whether shareholders accept the approach to executive compensation disclosed in the information circular. Can I have a motion, please?

This is Bill Larkin. I move that the meeting accept the approach to executive compensation as described in the information circular.

This is Lance Follett, and I second the motion.

The motion is now open for discussion, if any, by registered shareholders and proxyholders on the webcast. [Operator Instructions] We will pause a few moments while we wait for any questions on this motion.

Larry, we have no questions, we can continue.

You have heard the motion, and as there is no further discussion, we will proceed with the advisory vote. Please use the voting function on your screen to submit your vote. [Voting]

Voting has closed. Based on the previous proxies received by the management nominees, I can advise that the advisory vote is carried. We also have before us a special resolution approving the sale of Westport Fuel Systems Italia S.r.l. in accordance with the terms of the sale and purchase agreement dated as of March 30, 2025, among the corporation Westport Fuel Systems Italia S.r.l. and a wholly owned investment vehicle of Heliaca Investments Coöperatief U.A., a Netherlands-based investment firm supported by Ramphastos Investments Management B.V., a prominent Dutch venture capital and private equity firm. Can I have a motion, please?

This is Bill Larkin, and I move the meeting approve a special resolution approving the sale of Westport Fuel Systems Italia S.r.l. as described in the information circular.

This is Lance Follett, and I second the motion.

The motion is now open for discussion, if any, by registered shareholders and proxyholders on the webcast. [Operator Instructions] We will pause a few moments while we wait for any questions on this motion.

There's no questions, we can continue.

Thank you. You have heard the motion, and as there is no further discussion, we will proceed with the vote. Please use the voting function on your screen to submit your vote. [Voting]

Voting has closed. While we wait for the final voting figures to be tabulated, I can confirm that based on the size of the management proxy vote received, the special resolution approving the sale of Westport Fuel Systems Italia S.r.l. is carried. Thank you. We will now take questions from the webcast. Any registered shareholder or proxyholder who preregistered and wishes to ask a question may submit a question through the Q&A function on your screen.

Thanks, Larry. We have 1 question. It's for our CEO, Daniel Sceli. So Dan, will you please walk us through our post divestiture strategy, including where we see our potential growth from both our Cespira business as well as our high-pressure business?

Sure. Thank you, Ashley. We are divesting of the light-duty business in Europe to simplify and focus the management team on our core strategy. The core strategy is decarbonizing hard-to-decarbonize mobility. We have the 2 businesses, the high-pressure controls business and the Cespira HPDI business, which is a joint venture with Volvo. Our focus will split the 2 businesses. One is primarily an on-engine business that HPDI that we intend to grow through our joint venture the mandate of the joint venture is to grow it with multiple OEMs around the world. And we'll be supporting that and driving that through further investment. The high-pressure control business is a business that we want to move from being a components play to a systems play and we intend to grow that business out, expanding beyond the hydrogen market that it started in and taking advantage of a pendulum swing to the natural gases. Natural gases are moving from being the short-term bridge to hydrogen to a reality of being a foundational fuel for a long term. And our technologies can be agnostic to the various fuels, and we will continue to grow those out through investments in our operations in Canada and our operations in China.

Thanks, Dan. We have no further questions on the line. So Dan Sceli, I'll turn it over to you to wrap this up.

Thank you, Ashley. Thank you all for your questions and interest in Westport Fuel Systems. You can always reach us at (604) 718-2046 or [email protected]. Dan Hancock, over to you.

This concludes our Annual General Meeting of Shareholders. And on behalf of the Board of Directors and management, we thank you all for your participation today.

This concludes today's conference call. Thank you for participating, and have a pleasant day.

Thank you.