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01/10 17:12
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed but overall negative outlook. The partnership with Gateway Fleets and expansion into Canada are positive, but the lack of revenue guidance and customer demand shifts pose significant risks. Financial discipline is evident, but declining sales and increased interest expenses are concerning. The reverse stock split and funding actions indicate financial instability. The Q&A section does not provide additional clarity. Overall, the negative factors outweigh the positives, leading to a likely stock price decline between -2% and -8% over the next two weeks.
Sales $600,000 (decrease of $700,000 year-over-year from $1.3 million) due to the Aero divestiture and decreased W4 CC and W56 truck sales.
Cost of Sales $5.2 million (decrease of $2.3 million year-over-year from $7.4 million) primarily driven by lower sales volume, partially offset by lower inventory reserves of $500,000 and lower direct and indirect labor costs of $1.6 million due to lower headcount.
Selling, General and Administrative Expense $6.8 million (decrease of $7.3 million year-over-year from $14.1 million) primarily due to a $4.4 million decrease in employee compensation and related expenses, a $1 million decrease in consulting expenses, and other reductions in legal, marketing, IT, and corporate insurance expenses.
Research and Development Expenses $1.5 million (decrease of $2 million year-over-year from $3.5 million) primarily driven by a $1.3 million decrease in employee compensation related expenses and a $400,000 decrease in consulting expenses.
Interest Expense $5.3 million (increase from $1.3 million year-over-year) primarily due to recognition of interest expense related to higher outstanding convertible note balances.
Cash and Cash Equivalents $2.6 million as of March 31, 2025.
Restricted Cash $27.9 million as of March 31, 2025.
Accounts Receivable $27,000 as of March 31, 2025.
Other Receivables $100,000 as of March 31, 2025.
Inventory (net of reserves) $41.3 million as of March 31, 2025.
Accounts Payable $11.1 million as of March 31, 2025.
Total Working Capital $13.7 million as of March 31, 2025.
Capital Expenditures $118,000 during Q1 2025.
Monthly Operating Cash Burn Reduced to below $3 million a month, materially lower than a year ago.
Operating Costs Reduced by $9.3 million compared to Q1 2024.
W56 Step Vans Orders: Year-to-date, Workhorse booked purchase orders for a total of 27 W56 step vans, with deliveries expected in the next 60 to 120 days.
FedEx Deliveries: Delivered FedEx's 2024 order of fully equipped W56 step vans, expected to be deployed at three terminals by the end of Q2.
New Model Launch: Began delivering the extended wheelbase 208-inch W56 step van to a national fleet, providing a larger electric alternative.
W4 CC Electric Work Trucks: A municipality in Washington State purchased W4 CC vehicles for recycling and trash bin service.
Gateway Fleets Partnership: Secured an initial order from Gateway Fleets for deployment across their vehicle network, marking a significant new relationship.
International Expansion: Received CMVSS certification for W56 and W750 vehicles for sale in Canada, expanding international footprint.
Dealer Network Expansion: Added two new Ziegler Company dealers and expanded certified service network with two new partners in key metro markets.
Cost Reduction: Successfully reduced operating expenses by $9.3 million year-over-year.
Production Efficiency: Maintained a lean operating environment, converting inventory to revenue.
Reverse Stock Split: Completed a reverse stock split to regain NASDAQ compliance, aiding in long-term capital access.
Focus on Fleet Orders: Emphasized building and shipping key customer orders and securing additional purchase orders.
Customer Demand Shifts: Customer demand in the commercial EV market is shifting, which may impact sales and market positioning.
Competitive Pressures: Competitors are facing challenges with product quality and delivery, which could affect Workhorse's market share.
Supply Chain Challenges: The company is assessing new North American battery suppliers to strengthen its supply chain, indicating potential vulnerabilities.
Financial Viability: Workhorse is focused on cash preservation and maintaining financial discipline amid fleet adoption delays and shifting government incentives.
Regulatory Issues: The company is navigating changing government incentives and mandates, which could impact sales and operational strategies.
Operational Costs: Despite reducing operating expenses, the company acknowledges the need for ongoing cost reduction to ensure financial stability.
Market Uncertainty: The EV landscape is uncertain, leading to a lack of specific annual revenue guidance and potential volatility in sales.
Funding Needs: Workhorse is pursuing additional funding to support long-term growth, indicating potential financial risks.
Customer Demand: Customer demand in the commercial EV market is shifting, with Workhorse focused on designing and building dependable electric trucks.
W56 Step Van Orders: Year-to-date, Workhorse booked purchase orders for 27 W56 step vans, with deliveries expected in the next 60 to 120 days.
Partnership with Gateway Fleets: Workhorse has established a partnership with Gateway Fleets for electric vehicle leasing and charging solutions, laying the foundation for long-term collaboration.
FedEx Engagement: Workhorse delivered FedEx's 2024 order of W56 step vans and anticipates receiving the 2025 RFQ from FedEx in Q2.
Expansion of Dealer Network: Workhorse expanded its dealer and service networks, adding new partners to enhance market coverage.
International Expansion: Workhorse received certification for the import and sale of W56 and W750 vehicles into Canada, broadening its international footprint.
Production Capabilities: Workhorse is ramping production in line with demand and finalizing testing of a new 140 kilowatt W56 variant.
Financial Discipline: Workhorse reduced operating expenses by $9.3 million year-over-year and aims to maintain financial discipline.
Sales Momentum: Workhorse aims to ship more trucks in Q2 than in all of last year, indicating an increase in sales momentum.
Revenue Guidance: Workhorse will not provide specific annual revenue guidance due to uncertainty in the EV landscape.
Capital Expenditures: Workhorse spent about $118,000 on capital expenditures in Q1 and expects similar spending in Q2.
Cash Preservation: Workhorse reduced monthly operating cash to below $3 million and continues to seek additional funding for long-term growth.
Reverse Stock Split: In March, Workhorse completed a reverse stock split that brought them back into NASDAQ compliance, which is an important milestone for supporting long-term plans and near-term access to capital.
Funding Actions: Workhorse is working with ATW on near-term funding needs, which, while dilutive to shareholders, is necessary to buy time for larger fleet orders and secure additional long-term funding.
The earnings call highlights several challenges: decreased sales revenue, increased cost of sales, and dependence on incentives. Despite positive aspects like improved net loss and cash position, uncertainties around the Motiv merger and supply chain risks persist. Q&A insights show ongoing cost concerns and reliance on incentives. These factors, combined with the challenging market for electric vehicles, suggest a negative sentiment, likely leading to a stock price decrease of -2% to -8% over the next two weeks.
Workhorse shows positive momentum with increased revenue, reduced net loss, and strategic partnerships. Despite not providing specific revenue guidance, the expansion into Canada and partnership with Gateway Fleets are promising. The Q&A session highlighted growth opportunities, sufficient financing, and plans to enhance the product portfolio. The positive sentiment from analysts, coupled with improved financial metrics and strategic growth plans, suggests a positive stock price movement over the next two weeks.
The earnings call shows positive trends in financial performance and product development, with increased revenue, improved margins, and strong demand for the W56. However, the lack of specific revenue guidance and potential risks in market demand and execution balance these positives. The absence of a share repurchase program and ongoing uncertainties in the EV market further suggest a cautious outlook. The Q&A section did not reveal significant new insights to alter this assessment. Overall, these factors suggest a neutral stock price movement over the next two weeks.
The earnings call presents a mixed but overall negative outlook. The partnership with Gateway Fleets and expansion into Canada are positive, but the lack of revenue guidance and customer demand shifts pose significant risks. Financial discipline is evident, but declining sales and increased interest expenses are concerning. The reverse stock split and funding actions indicate financial instability. The Q&A section does not provide additional clarity. Overall, the negative factors outweigh the positives, leading to a likely stock price decline between -2% and -8% over the next two weeks.
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