Workhorse(US:WKHS)2024-05-24 16:54Financial Data and Key Metrics Changes - Sales net of returns and allowances for Q1 2024 were $1.4 million, down from $1.7 million in the same period last year, primarily due to lower W4 CC vehicle sales [43] - Net loss for Q1 2024 was $29.2 million compared to $25 million in the same period last year [45] - Cash and cash equivalents as of March 31, 2024, were $6.7 million, with net inventory at $49.9 million [46] Business Line Data and Key Metrics Changes - The company has received orders for a total of 68 W56 step vans per day, indicating a strong sales pipeline [5] - Research and development expenses decreased to $3.5 million from $7.2 million year-over-year, reflecting reduced consulting and prototype costs [44] - Selling, general and administrative expenses decreased to $14.1 million from $14.7 million in the same period last year, driven by a decrease in employee compensation [66] Market Data and Key Metrics Changes - Fleets in California must register their entire fleet and target a 9% EV adoption rate by December 31, 2024, creating administrative challenges for smaller fleets [7] - The company is expanding its dealer network, adding new locations in New York City and the Midwest, aiming for 15 to 20 dealers by the end of 2024 [36] Company Strategy and Development Direction - The company is transitioning to a less capital-intensive Drones as a Service business model [3] - Focus remains on advancing the product roadmap, securing new orders, and delivering products to customers [69] - The company aims to emerge as a leader in the Class 4-6 step van and work truck segments, with a commitment to EV technology [70] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the transition to EV technologies is starting, albeit slower than expected, with discussions indicating a gradual shift among fleet customers [91] - The company is prepared for the transition and is working closely with suppliers and stakeholders to navigate challenges [24] Other Important Information - The company has temporarily furloughed employees at the Union City plant but is beginning to recall staff as orders increase [65] - The company is assessing the impact of battery tariffs and exploring alternative sourcing options for batteries [106][107] Q&A Session Summary Question: What is the current burn rate? - The burn rate for Q1 was approximately $5.5 million, expected to decrease to below $5 million in Q2 as cost reductions take effect [14][15] Question: How much finished goods inventory is on hand? - Finished goods inventory is about $20 million, with 75% in raw materials, allowing for the completion of 20 to 30 trucks [17] Question: Are recent orders contingent on subsidies? - Most W4 CC orders are tied to California HVIP incentives, while some W56 orders are not [95]