Power Solutions International, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Power Solutions International, Inc. has filed its Q1 2024 10-Q report, detailing financial performance and corporate information.</b>

AI Summary

POWER SOLUTIONS INTERNATIONAL, INC. (PSIX) filed a Quarterly Report (10-Q) with the SEC on May 7, 2024. Power Solutions International, Inc. filed a 10-Q for the period ending March 31, 2024. The filing covers the first quarter of fiscal year 2024. The company's principal executive offices are located at 201 Mittel Drive, Wood Dale, IL 60191. The company was incorporated in Illinois. The filing references loan agreements with Weichai, including a $25 million loan agreement dated May 12, 2023, a $50 million loan agreement dated December 10, 2021, and a $30 million loan agreement dated March 22, 2024.

Why It Matters

For investors and stakeholders tracking POWER SOLUTIONS INTERNATIONAL, INC., this filing contains several important signals. This 10-Q filing provides investors with the latest quarterly financial data, enabling them to assess the company's performance and make informed investment decisions. The inclusion of specific loan agreements and customer concentration details offers transparency into the company's financial structure and key business relationships.

Risk Assessment

Risk Level: medium — POWER SOLUTIONS INTERNATIONAL, INC. shows moderate risk based on this filing. The company's financial health and operational stability are subject to risks related to customer concentration, as indicated by the specific mention of Customer A, B, and C in relation to revenue and accounts receivable.

Analyst Insight

Monitor customer concentration risks and the impact of the various Weichai loan agreements on the company's financial leverage and liquidity.

Key Numbers

• 2024-03-31 — Reporting Period End Date (10-Q filing)
• 2024-05-07 — Filing Date (10-Q filing)
• 2024-01-01 — Quarter Start Date (10-Q filing)
• 25000000 — Loan Amount ($25 Million Loan Agreement with Weichai)
• 50000000 — Loan Amount ($50 Million Loan Agreement with Weichai)
• 30000000 — Loan Amount ($30 Million Loan Agreement with Weichai)

Key Players & Entities

• POWER SOLUTIONS INTERNATIONAL, INC. (company) — Filer name
• 201 MITTEL DRIVE (location) — Business and mailing address
• WOOD DALE (location) — City for business and mailing address
• IL (location) — State for business and mailing address
• 60191 (location) — ZIP code for business and mailing address
• Weichai (company) — Party to loan agreements
• Customer A (company) — Mentioned in relation to revenue and accounts receivable concentration
• Customer B (company) — Mentioned in relation to revenue concentration

FAQ

Risk Factors

• Customer Concentration Risk [medium — market]: The company faces risks due to significant revenue and accounts receivable from a limited number of customers, including Customer A, B, and C.

Key Dates

• 2024-03-31: Quarter End Date — End of the reporting period for the 10-Q filing.
• 2024-05-07: Filing Date — Date the 10-Q was officially submitted to the SEC.
• 2023-05-12: Weichai Loan Agreement — Date of a $25 million loan agreement.

Key Financial Figures

• $0.001 — g) of the Act: Common Stock, par value $0.001 per share Indicate by check mark whet

Filing Documents

• psix-20240331.htm (10-Q) — 974KB
• exhibit311-ceocertificatio.htm (EX-31.1) — 10KB
• exhibit312-cfocertificatio.htm (EX-31.2) — 10KB
• exhibit321-ceocertificatio.htm (EX-32.1) — 7KB
• exhibit322-cfocertificatio.htm (EX-32.2) — 6KB
• psix-20240331_g1.jpg (GRAPHIC) — 21KB
• 0001137091-24-000014.txt (&nbsp;) — 6368KB
• psix-20240331.xsd (EX-101.SCH) — 41KB
• psix-20240331_cal.xml (EX-101.CAL) — 81KB
• psix-20240331_def.xml (EX-101.DEF) — 166KB
• psix-20240331_lab.xml (EX-101.LAB) — 553KB
• psix-20240331_pre.xml (EX-101.PRE) — 394KB
• psix-20240331_htm.xml (XML) — 959KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Forward-Looking Statements 3

Forward-Looking Statements 3

Financial Statements 4

Item 1. Financial Statements 4 Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023 4 Consolidated Statements of Income for the three months ended March 31, 2024 and 2023 (Unaudited) 5 Consolidated Statements of Stockholders' Equity (Deficit) for the three months ended March 31, 2024 and 2023 (Unaudited) 6 Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (Unaudited) 7

Notes to Consolidated Financial Statements (Unaudited) 8

Notes to Consolidated Financial Statements (Unaudited) 8

Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures About Market Risk 32

Item 3. Quantitative and Qualitative Disclosures About Market Risk 32

Controls and Procedures 33

Item 4. Controls and Procedures 33

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings 34

Item 1. Legal Proceedings 34

Risk Factors 34

Item 1A. Risk Factors 34

Unregistered Sales of Equity Securities and Use of Proceeds 34

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 34

Defaults Upon Senior Securities 34

Item 3. Defaults Upon Senior Securities 34

Mine Safety Disclosures 34

Item 4. Mine Safety Disclosures 34

Other Information 34

Item 5. Other Information 34

Exhibits 35

Item 6. Exhibits 35 Signatures 35

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS Certain statements contained in this Quarterly Report on Form 10-Q for the three months ended March 31, 2024, (the "Quarterly Report") that are not historical facts are intended to constitute "forward-looking statements" entitled to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may involve risks and uncertainties. These statements often include words such as "anticipate," "believe," "budgeted," "contemplate," "estimate," "expect," "forecast," "guidance," "may," "outlook," "plan," "projection," "should," "target," "will," "would" or similar expressions, but these words are not the exclusive means for identifying such statements. These forward-looking statements include statements regarding Power Solutions International, Inc.'s, a Delaware corporation ("Power Solutions," "PSI" or the "Company"), projected sales, potential profitability and liquidity, strategic initiatives, future business strategies, warranty mitigation efforts and market opportunities, improvements in its business, improvement of product margins, and product market conditions and trends. These statements are not guarantees of performance or results, and they involve risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, there are many factors that could affect the Company's results of operations and liquidity and could cause actual results, performance or achievements to differ materially from those expressed in, or implied by, the Company's forward-looking statements. The Company cautions that the risks, uncertainties and other factors that could cause its actual results to differ materially from those expressed in, or implied by, the forward-looking statements include, without limitation, the factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and from

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par values) As of March 31, 2024 (unaudited) As of December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 33,063 $ 22,758 Restricted cash 3,165 3,836 Accounts receivable, net of allowances of $ 5,476 and $ 5,975 as of March 31, 2024 and December 31, 2023, respectively; (from related parties $ 733 and $ 777 as of March 31, 2024 and December 31, 2023, respectively) 49,291 66,979 Income tax receivable 412 550 Inventories, net 88,800 84,947 Prepaid expenses and other current assets 34,338 26,312 Total current assets 209,069 205,382 Property, plant and equipment, net 14,911 14,928 Right-of-use assets, net 26,350 27,145 Intangible assets, net 3,549 3,914 Goodwill 29,835 29,835 Other noncurrent assets 3,089 3,099 TOTAL ASSETS $ 286,803 $ 284,303 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable (to related parties $ 27,626 and $ 24,496 as of March 31, 2024 and December 31, 2023, respectively) $ 72,821 $ 67,355 Current maturities of long-term debt 117 139 Revolving line of credit 45,000 50,000 Finance lease liability, current 76 76 Operating lease liability, current 4,123 3,912 Other short-term financing (from related parties $ 94,820 as of both March 31, 2024 and December 31, 2023) 94,820 94,820 Other accrued liabilities (to related parties $ 2,222 and $ 1,833 as of March 31, 2024 and December 31, 2023, respectively) 28,794 31,999 Total current liabilities 245,751 248,301 Deferred income taxes 1,532 1,478 Long-term debt, net of current maturities 77 90 Finance lease liability, long-term 75 94 Operating lease liability, long-term 24,095 25,070 Noncurrent contract liabilities 2,185 2,401 Other noncurrent liabilities 9,864 10,786 TOTAL LIABILITIES $ 283,579 $ 288,220 Commitments and Contingencies (Note 9) STOCKHOLDERS' EQUITY (DEFICIT) Preferred stock – $

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies and Other Information Nature of Business Operations Power Solutions International, Inc. ("Power Solutions," "PSI" or the "Company"), a Delaware corporation, is a global producer and distributor of a broad range of high-performance, certified, low-emission power systems, including alternative-fueled power systems for original equipment manufacturers ("OEMs") of off-highway industrial equipment and certain on-road vehicles and large custom-engineered integrated electrical power generation systems. The Company's customers include large, industry-leading and multinational organizations. The Company's products and services are sold predominantly to customers throughout North America as well as to customers located throughout the Pacific Rim and Europe. The Company's power systems are highly engineered, comprehensive systems which, through the Company's technologically sophisticated development and manufacturing processes, including its in-house design, prototyping, testing and engineering capabilities and its analysis and determination of the specific components to be integrated into a given power system (driven in large part by emission standards and cost considerations), allow the Company to provide its customers with power systems customized to meet specific OEM application requirements, other technical customers' specifications and requirements imposed by environmental regulatory bodies. The Company's power system configurations range from a basic engine integrated with appropriate fuel system components to completely packaged power systems that include any combination of cooling systems, electronic systems, air intake systems, fuel systems, housings, power takeoff systems, exhaust systems, hydraulic systems, enclosures, brackets, hoses, tubes and other assembled componentry. The Company also designs and manufactures large, custom-engineered integrated electrical power

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