Workhorse(US:WKHS)2022-03-01 21:11Financial Data and Key Metrics Changes - Sales for Q4 2021 were recorded at a negative $2 million, down from $0.7 million in Q4 2020, primarily due to decreased volume and increased vehicle returns related to the C1000 recall [39][40] - Cost of sales increased significantly to $100 million from $7 million in the same period last year, driven by non-cash charges totaling $94 million related to the C1000 [41] - SG&A expenses rose to $15.7 million from $4.7 million, attributed to increased selling costs, legal fees, and employee-related expenses due to a larger executive team [42] - Net loss for Q4 2021 was $156.1 million compared to a net income of $280.5 million in the same period last year [45] - For the full year 2021, net loss was $401.3 million, or a loss of $3.12 per diluted share, compared to a net income of $69.8 million in 2020 [53] Business Line Data and Key Metrics Changes - The company plans to limit production of the C1000 model to 50 to 75 units by year-end 2022, focusing instead on developing two new truck chassis platforms [24][25] - The W56 chassis platform is expected to launch in Q3 2023, targeting the Class 5 and Class 6 delivery market segments, with an estimated total addressable market of approximately $1.7 billion per year [26] - The W34 chassis, aimed at Class 3 and 4 vehicles, is projected to start production in 2024, with an addressable market of about $10.4 billion per year [28] Market Data and Key Metrics Changes - The company is experiencing strong industry fundamentals driving the transition from internal combustion engine (ICE) vehicles to electric vehicles (EVs) [15] - The W750, a Class 4 vehicle, is set to bridge the gap between the C1000 and future platforms, with deliveries expected to begin in Q3 2022 [29][30] Company Strategy and Development Direction - The company is transitioning from a prototype technology start-up to a full-fledged commercial vehicle OEM, focusing on a revised strategic product portfolio [13][21] - A new technical center has been opened in Wixom, Michigan, to enhance design, engineering, and testing capabilities, with plans to be fully operational by Q3 2022 [18] - The company aims to consolidate its headquarters in Sharonville, Ohio, to improve efficiency and teamwork [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges ahead but is committed to building a new foundation for growth and executing a clear product roadmap [58] - The company is focused on enhancing its financial position and operating efficiency while investing in people, products, and processes [56] - Management expects to manufacture and sell at least 250 vehicles in 2022, generating a minimum of $25 million in revenue, with production backloaded to the second half of the year [55][86] Other Important Information - The company has secured approximately $201.6 million in cash and cash equivalents as of December 31, 2021, which is deemed sufficient for 2022 operations [54] - The company plans to establish an at-the-market equity program to opportunistically raise capital in the coming quarters [54] Q&A Session Summary Question: Update on supply chain qualification and design validation - Management is working on multiple fronts, including the W750 with GreenPower and the W56 chassis, with plans to source parts by mid-March [60][62] Question: Anticipated cash needs for operational cash flow positivity - The company acknowledges current cash burn but believes the $200 million cash balance is sufficient for the near term, with plans for future capital raises [64] Question: Key roles still to fill in the management team - The company is looking to fill three key roles: a CIO, sales leadership, and a Director of logistics and supply chain management [66] Question: Strategic partnership opportunities beyond GreenPower - Management is open to exploring additional partnerships, leveraging the expanded Union City facility and workforce [69] Question: Expected throughput at the Union City facility - The facility has a potential throughput of at least 10,000 units, depending on operational shifts and production needs [71] Question: Pricing and gross margins for upcoming vehicles - While specific pricing details are not disclosed, management assures that the W750 will be a profitable vehicle [74] Question: Status of customer orders and backlog - The company is in the process of converting orders from the C1000 to the W750, with confidence in meeting contractual obligations [92]