Q1 2024 and Recent Highlights REE Automotive achieved significant Q1 2024 milestones, including U.S. certifications, initial truck deliveries, and improved financials CEO Statement & Strategic Overview REE's CEO highlighted strong Q1 2024 momentum, including U.S. certifications, initial deliveries, and an order book over $50 million - Order book value recently crossed $50 million3 - Deliveries to customers have begun, including to Penske Truck Leasing, U-Haul International, Inc., and Airbus UpNext134 - P7-C is the first full by-wire truck to achieve U.S. FMVSS certification, making it eligible for customer incentives of over $100,000 per truck4 - Collaboration with Airbus UpNext on an autonomous program utilizing REE's P7-C full by-wire and autonomous-ready technology, opening REE to new autonomous driving markets4 Business & Technology Highlights REE's P7-C achieved U.S. FMVSS and EPA certifications, enabling deliveries to key partners and autonomous program collaboration - P7-C is the first full by-wire truck to achieve U.S. FMVSS and EPA certifications, making vehicles eligible for a U.S. federal tax credit of up to $40,000 and expected eligibility for over $100,000 with additional state incentives6 - Penske Truck Leasing began offering Powered by REE EVs to its customers, with a P7-C delivered for demos and orders across North America7 - U-Haul received and is evaluating a Powered by REE class 5 electric platform as the first solution to support the electrification of its fleet7 - Airbus selected the Powered by REE vehicle for a fully autonomous program based on REE's full by-wire capabilities7 - Deliveries have commenced to REE's distribution network of 20 dealers with 66 points of sales and service, accessing a potential of over 200 fleets across the U.S and Canada7 - Launched a demo program with over 120 demo rides performed with multiple prospects, aiming to generate follow-on orders7 Operations Highlights REE advances CapEx-light manufacturing, with its Coventry facility producing 10,000 REEcorner sets annually, and evaluates financing for scaling - Progressing with CapEx-light manufacturing strategy to achieve bill of materials break-even in the low hundreds of vehicles10 - The Coventry, UK facility for REEcorner production has an annual capacity of 10,000 vehicle sets, utilizing 13 robotic stations run by seven human operators10 - REEcorners are built upon customer order, not inventory, to optimize working capital10 - Evaluating financing options to fund scale production of full vehicles by the end of 2024 and subsequent scaling in 2025 and beyond10 Financial Highlights REE significantly narrowed its GAAP net loss by 29% QoQ to $25.2 million and Non-GAAP net loss by 33% QoQ to $21.7 million, ending Q1 2024 with $77.5 million in liquidity GAAP Net Loss Trends | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :----- | :------ | :------ | :------ | | Net Loss | $(25.2M)| $(35.2M)| $(28.6M)| - GAAP net loss narrowed by 29% quarter-over-quarter (QoQ) and by 12% year-over-year (YoY)10 Non-GAAP Net Loss Trends | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :----- | :------ | :------ | :------ | | Net Loss | $(21.7M)| $(32.2M)| $(24.0M)| - Non-GAAP net loss narrowed by 33% QoQ and by 10% YoY10 - Liquidity as of March 31, 2024, was $77.5 million, comprising cash and cash equivalents and short-term investments, inclusive of a $15 million credit facility10 - Free cash flow (FCF) burn continued to narrow in Q1 2024, with a 6% reduction from Q4 202310 - Raised approximately $15 million (gross) in proceeds through a public offering of ordinary shares led by M&G Investment Management Limited10 Non-GAAP Financial Measures Explanation REE Automotive provides non-GAAP financial measures to offer supplementary insights into operational performance and trends Purpose and Use of Non-GAAP Measures REE Automotive provides non-GAAP financial measures as a supplement to GAAP, offering useful insights into ongoing operational performance and comparability - Non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies11 - These measures are used internally for analyzing financial results and are considered useful to investors as a supplement to GAAP measures for evaluating ongoing operational performance11 - Adjusted EBITDA, non-GAAP net loss, non-GAAP operating expenses, and non-GAAP basic and diluted net loss per share are used to evaluate REE's ongoing operating results and trends13 - Free Cash Flow is considered a liquidity measure that provides useful information about the amount of cash used in operational activities and capital expenditures14 Consolidated Financial Statements REE Automotive's Q1 2024 financial statements reflect a narrowed net loss, decreased total assets, and improved cash flow from operations Condensed Consolidated Statements of Comprehensive Loss For Q1 2024, REE reported a gross loss of $0.644 million on revenues of $0.160 million, with net loss significantly narrowing to $25.183 million Condensed Consolidated Statements of Comprehensive Loss (Unaudited, U.S. dollars in thousands) | Metric | Three Months Ended Mar 31, 2024 | Three Months Ended Dec 31, 2023 | Three Months Ended Mar 31, 2023 | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | | Revenues | $160 | $455 | $— | | Cost of revenues | $804 | $913 | $— | | Gross loss | $(644) | $(458) | $— | | Research and development expenses, net | $15,358 | $28,587 | $18,874 | | Selling, general and administrative expenses | $7,170 | $8,125 | $10,843 | | Total operating expenses | $22,528 | $36,712 | $29,717 | | Operating loss | $(23,172) | $(37,170) | $(29,717) | | Net loss | $(25,183) | $(35,233) | $(28,622) | | Basic and diluted net loss per Class A ordinary share | $(2.28) | $(3.44) | $(2.87) | Condensed Consolidated Balance Sheets As of March 31, 2024, REE's total assets decreased to $130.241 million, primarily due to reduced short-term investments, while total liabilities remained stable Condensed Consolidated Balance Sheets (Unaudited, U.S. dollars in thousands) | Asset/Liability/Equity | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :--------------- | :---------------- | | Cash and cash equivalents | $53,612 | $41,232 | | Short-term investments | $23,880 | $44,395 | | Total current assets | $87,180 | $93,504 | | Total assets | $130,241 | $137,900 | | Total current liabilities | $33,837 | $35,179 | | Total liabilities | $59,904 | $59,825 | | Total shareholders' equity | $70,337 | $78,075 | Condensed Consolidated Statements of Cash Flows In Q1 2024, net cash used in operating activities improved to $(21.225) million, with investing activities providing $19.135 million and financing activities $14.471 million Condensed Consolidated Statements of Cash Flows (Unaudited, U.S. dollars in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(21,225) | $(26,430) | | Net cash provided by investing activities | $19,135 | $31,467 | | Net cash provided by financing activities | $14,471 | $68 | | Increase in cash,
REE Automotive .(REE) - 2024 Q1 - Quarterly Report