Workhorse Group (WKHS) Q3 2024 earnings summary

Executive summary

• Secured a three-year master agreement with FedEx, delivering the first 15 W56 step vans and expecting further orders in 2025, with strong product validation from demos and field tests.

• Awarded a GSA contract, expanding access to federal government fleet customers and streamlining procurement.

• Expanded product portfolio with new models, including a 208-inch W56 step van certified for FMVSS and HVIP, and a 140-kWh battery option in development.

• Implemented significant cost-saving measures, including workforce reductions, executive salary deferrals, and divestiture of the Aero business.

• Ongoing liquidity challenges and Nasdaq listing compliance issues raise substantial doubt about the ability to continue as a going concern.

Financial highlights

• Q3 2024 sales were $2.5 million, down from $3.0 million in Q3 2023, mainly due to a non-recurring $2.3 million sales allowance reversal; nine-month sales were $4.7 million, down from $8.7 million.

• Gross loss for Q3 2024 was $4.1 million, compared to $3.5 million in Q3 2023; nine-month gross loss was $16.7 million.

• SG&A expenses decreased to $7.7 million from $11.8 million, and R&D expenses dropped to $2.3 million from $5.8 million, both due to headcount and consulting reductions.

• Net loss for Q3 2024 was $25.1 million, improved from $30.6 million in Q3 2023; nine-month net loss was $80.6 million.

• Cash and cash equivalents stood at $3.2 million as of September 30, 2024, down from $25.8 million at year-end 2023.

Outlook and guidance

• Focused on securing new orders, delivering products to more customers, and advancing the product roadmap, including Canadian market expansion pending certification.

• Management expects continued negative cash flow and operating losses unless additional funding is secured and sales increase.

• Anticipates orders from large national last-mile fleets and government-funded fleets, especially in California and the Pacific Northwest.