Power Solutions International Announces Record Second Quarter 2024 Financial Results

EPS were $0.94, an increase of $0.66
from a year earlier,

Debt decreased $5.0 million, 

Shareholder Equity increased to $24.8 million.

WOOD DALE, Ill., Aug. 12, 2024 (GLOBE NEWSWIRE) — Power Solutions International, Inc. (the “Company” or “PSI”) (OTC Pink: PSIX), a leader in the design, engineering and manufacture of
emission-certified engines and power systems, announces second quarter 2024 financial results.

Second Quarter 2024 Results

Today, Power Solutions International, Inc., reported record profit for the three months ended June 30, 2024, with net income of $21.5 million and diluted earnings per share of $0.94, compared to
net income of $6.4 million and diluted earnings per share of $0.28 for the second quarter of 2023.

Dino Xykis, Chief Executive Officer, commented, “I am pleased to report that in the second quarter, we achieved record-breaking results with a gross margin of 31.8% and net profit of $21.5 million.
Our sales performance was driven by high demand in the power systems market, offset by the decrease in sales from some of our transportation customers and the softness we observed in the industrial
market. Our team has demonstrated remarkable dedication to profit maximization and cost management, which has significantly bolstered margin, profitability and shareholder equity this quarter.”

Xykis continued, “Looking ahead, we remain optimistic about sales increase for the remainder of the year, thanks to the continued robust demand for products in the power systems, especially PSI
products serving the growth of Data Center markets that PSI has been actively pursuing since last year. We have successfully secured and are in the process of finalizing several major multi-year
sales agreements with key customers for Data Center applications. These strategic partnerships are poised to drive future growth in this segment now and in the future. Our focus remains on
leveraging these opportunities to drive further profitable growth and deliver sustained value to our shareholders.”

Sales for the second quarter of 2024 were $110.6 million, a decrease of $11.3 million, or 9%, compared to the second quarter of 2023, as a result of lower sales of $14.1 million and $15.8 million
within the industrial and transportation end markets, respectively, partially offset by an increase of $18.6 million in the power systems end market. Higher power systems end market sales are
primarily due to increased demand for products across various applications, with the largest increases attributable to products used within the packaging market such as enclosures serving the
fast-growing Data Center market, as well as oil and gas products and demand response products. We are strategically prioritizing the rapidly expanding Data Center sector, improving and increasing
our manufacturing capacity and capabilities to meet and exceed our customers’ evolving demand for our products. The decreased sales within the transportation end market were primarily attributable
to lower sales in the truck and school bus market as customer products have evolved, and new compliance and regulatory requirements have changed engine product offerings. Decreased industrial end
market sales are primarily due to decreases in demand for products used within the material handling and arbor care markets, as well as the direct effects of enforcement of the Uyghur Forced Labor
Prevention Act (“UFLPA”), which limited the Company’s ability to import certain raw materials in early 2024.

Gross profit increased by $8.2 million, or 31%, during the second quarter of 2024 as compared to the same period in the prior year. Gross margin in the second quarter of 2024 was 31.8%, an increase
of 9.7 percentage points compared to 22.1% in the same period last year, primarily due to improved mix, pricing actions, higher operating efficiencies, lower warranty costs primarily attributable
to the Company’s sales shift away from some of our transportation customers.

Selling, general and administrative expenses decreased during the second quarter of 2024 by $6.0 million, or 57%, compared to the same period in the prior year, mostly attributable to a decrease in
the legal reserve, lower professional fees, and the decrease selling expenses associated with decreased sales in the transportation segment.

Interest expense was $2.9 million in the second quarter of 2024 as compared to $4.6 million in the same period in the prior year, largely due to reduced outstanding debt, partially offset by higher
overall effective interest rates.

Net income was $21.5 million, or net income per share of $0.94 in the second quarter of 2024, compared to net income of $6.4 million, or net income per share of $0.28 for the second quarter of
2023.

Debt Update

The Company’s total debt was approximately $135.1 million at June 30, 2024, while cash and cash equivalents were approximately $28.8 million. This compares to total debt of approximately
$145.2 million and cash and cash equivalents of approximately $22.8 million at December 31, 2023. Included in the Company’s total debt at June 30, 2024, were borrowings of $40.0 million
under the Uncommitted Revolving Credit Agreement (“Credit Agreement”) with Standard Chartered Bank, borrowings of $25.0 million, $50.0 million, and $19.8 million respectively, under
the various Shareholder Loan Agreements, with Weichai America Corp., its majority stockholder, as described in more detail in the Company’s Form 10-Q for the first quarter of 2024. The Company made
payments totaling $5.0 million related to the Credit Agreement, during the second quarter of 2024. The Company is proactively seeking opportunities to optimize and strengthen our debt
structure.

Outlook for 2024

The Company expects its sales in 2024 to increase by approximately 3% versus 2023 levels, a result of expectations for strong growth in the power systems end market paired with flat sales in the
industrial end market and a forecasted reduction in the transportation end markets. Notwithstanding this outlook, which is being driven in part by expectations for continuous improvement in supply
chain dynamics, including timelier availability of parts and a continuation of favorable economic conditions within the United States and across the Company’s various markets, the Company cautions
that significant uncertainty remains as a result of supply chain challenges, inflationary costs, commodity volatility, and the impact on the global economy of the war in Ukraine and Israel, among
other factors.

About Power Solutions International, Inc. 

Power Solutions International, Inc. (PSI) is a leader in the design, engineering and manufacture of a broad range of advanced, emission-certified engines and power systems. PSI provides integrated
turnkey solutions to leading global original equipment manufacturers and end-user customers within the power systems, industrial and transportation end markets. The Company’s unique in-house
design, prototyping, engineering and testing capabilities allow PSI to customize clean, high-performance engines using a fuel agnostic strategy to run on a wide variety of fuels, including natural
gas, propane, gasoline, diesel and biofuels.

PSI develops and delivers complete power systems that are used worldwide in stationary and mobile power generation applications supporting standby, prime, demand response, microgrid, and
co-generation power (CHP) applications; and industrial applications that include forklifts, agricultural and turf, arbor care, industrial sweepers, aerial lifts, irrigation pumps, ground support,
and construction equipment. In addition, PSI develops and delivers powertrains purpose-built for medium-duty trucks and buses including school and transit buses, work trucks, terminal tractors, and
various other vocational vehicles. For more information on PSI, visit www.psiengines.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding the current expectations of the Company about its prospects and opportunities. These forward-looking statements are 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 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 impact of the macro-economic environment in both the U.S. and internationally on our business and expectations regarding growth of the industry; uncertainties
arising from global events (including the Russia-Ukraine and Israel-Hamas conflicts), natural disasters or pandemics, and their impact on material prices; the effects of strategic investments on
our operations, including our efforts to expand our global market share and actions taken to increase sales growth; the ability to develop and successfully launch new products; labor costs and
other employment-related costs; loss of suppliers and disruptions in the supply of raw materials; the Company’s ability to continue as a going concern; the Company’s ability to raise additional
capital when needed and its liquidity; uncertainties around the Company’s ability to meet funding conditions under its financing arrangements and access to capital thereunder; the potential
acceleration of the maturity at any time of the loans under the Company’s uncommitted senior secured revolving credit facility through the exercise by Standard Chartered Bank of its demand right;
the impact of rising interest rates; changes in economic conditions, including inflationary trends in the price of raw materials; our reliance on information technology and the associated risk
involving potential security lapses and/or cyber-attacks; the ability of the Company to accurately forecast sales, and the extent to which sales result in recorded revenues; changes in customer
demand for the Company’s products; volatility in oil and gas prices; the impact of U.S. tariffs on imports, the impact of supply chain interruptions and raw material shortages, including compliance
disruptions such as the UFLPA delaying goods from China; the potential impact of higher warranty costs and the Company’s ability to mitigate such costs; any delays and challenges in recruiting and
retaining key employees consistent with the Company’s plans; any negative impacts from delisting of the Company’s common stock par value $0.001 from the NASDAQ Stock Market and any delays and
challenges in obtaining a re-listing on a stock exchange; and the risks and uncertainties described in reports filed by the Company with the SEC, including without limitation its Annual Report on
Form 10-K for the fiscal year ended December 31, 2023 and the Company’s subsequent filings with the SEC.

The Company’s forward-looking statements are presented as of the date hereof. Except as required by law, the Company expressly disclaims any intention or obligation to revise or update any
forward-looking statements, whether as a result of new information, future events or otherwise.

Results of operations for the three and six months ended June 30, 2024, compared
with the three and six months ended June 30, 2023 (UNAUDITED):

NM   Not meaningful
*      See reconciliation of non-GAAP financial measures to GAAP results below

See Notes to Consolidated Financial Statements

Non-GAAP Financial Measures

In addition to the results provided in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) above, this press release also includes non-GAAP (adjusted)
financial measures. Non-GAAP financial measures provide insight into selected financial information and should be evaluated in the context in which they are presented. These non-GAAP financial
measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP, and non-GAAP
financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies. The non-GAAP financial measures should be considered in conjunction with
the consolidated financial statements, including the related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations within the Company’s Form 10-Q
for the quarter ended June 30, 2024. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated below.

The Company believes that Adjusted net income, Adjusted net income per share – diluted, EBITDA, and Adjusted EBITDA provide relevant and useful information, which is widely used by analysts,
investors and competitors in its industry as well as by the Company’s management in assessing the performance of the Company. Adjusted net income is defined as net income as adjusted for certain
items that the Company believes are not indicative of its ongoing operating performance. Adjusted net income per share – diluted is a measure of the Company’s diluted earnings per common share
adjusted for the impact of special items. EBITDA provides the Company with an understanding of earnings before the impact of investing and financing charges and income taxes. Adjusted EBITDA
further excludes the effects of other non-cash charges and certain other items that do not reflect the ordinary earnings of the Company’s operations.

Adjusted net income, Adjusted net income per share – diluted, EBITDA, and Adjusted EBITDA are used by management for various purposes, including as a measure of performance of the Company’s
operations and as a basis for strategic planning and forecasting. Adjusted net income, Adjusted net income per share – diluted, and Adjusted EBITDA may be useful to an investor because these
measures are widely used to evaluate companies’ operating performance without regard to items excluded from the calculation of such measures, which can vary substantially from company to company
depending on the accounting methods, the book value of assets, the capital structure and the method by which the assets were acquired, among other factors. They are not, however, intended as
alternative measures of operating results or cash flow from operations as determined in accordance with U.S. GAAP.

The following table presents a reconciliation from Net income to Adjusted net income for the three and
six months ended June 30, 2024 and 2023 (UNAUDITED):

The following table presents a reconciliation from Net income per share – diluted to Adjusted net income per share – diluted
for the three and six months ended June 30, 2024 and 2023 (UNAUDITED):

The following table presents a reconciliation from Net income to EBITDA and Adjusted EBITDA
for the three and six months ended June 30, 2024 and 2023 (UNAUDITED):

1. Amounts reflect non-cash stock-based compensation expense and have no material impact on the Adjusted net income per share – diluted for the three and six months ended June 30, 2024 and 2023.
2. Amounts include legal settlements for the three and six months ended June 30, 2024 and 2023.
3. Amounts include insurance recoveries related to a prior year incident and have no material impact on the Adjusted net income per share – diluted for the three and six months ended June 30, 2024
   and 2023.

CONTACT: Contact:

Power Solutions International, Inc.
Randall D. Lehner
General Counsel
630-373-1637
[email protected]