Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Workhorse Group Inc (NASDAQ:WKHS) secured a three-year master framework agreement with FedEx, marking a significant milestone for the company.
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The company has been awarded a GSA contract, facilitating streamlined procurement processes for federal government agencies.
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Workhorse Group Inc (NASDAQ:WKHS) has expanded its product line with six products currently in production and four new models planned for next year.
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The company has achieved a reduction in operating expenses, with a 50% reduction in staff and a decrease in cash burn rate to about $3.5 million per month.
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Workhorse Group Inc (NASDAQ:WKHS) has seen increased interest and quoting activity from government-funded fleet opportunities and other major last-mile fleets.
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Sales for the third quarter decreased compared to the same period last year, primarily due to the non-recurrence of a sales allowance reversal.
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The company recorded a net loss of $25.1 million for the quarter, although this was an improvement from the previous year’s loss.
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Workhorse Group Inc (NASDAQ:WKHS) had to return eight W-4 CC vehicles, which required adjustments to their accounting policies.
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The company is operating with limited cash reserves, with only $3.2 million in cash and cash equivalents as of September 30, 2024.
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There is a need to convert potential customer interest into firm purchase orders to improve revenue and financial stability.
Q: Can you provide more details on the significance of the agreement with FedEx? A: Rick Dow, CEO: The agreement with FedEx is a game-changing milestone for Workhorse. It validates our product strategy and positions us as an approved supplier in the EV segment for FedEx, which plans to convert its 150,000-unit fleet to EVs by 2040. This agreement led to an initial purchase order for 15 W56 step vans, and we anticipate further growth in orders.
Q: What steps has Workhorse taken to manage costs and conserve cash? A: Bob Kanan, CFO: We’ve reduced our staff by 50% since the start of the year and implemented other cost-saving measures, including delaying the W56 cab chassis launch and divesting our aero business. These actions have reduced our cash burn rate to about $3.5 million per month.
Q: How is Workhorse addressing the challenges in the commercial EV market? A: Rick Dow, CEO: We focus on providing reliable and capable products tailored for the class 5 and 6 commercial market. Our strategy includes securing new orders, delivering world-class products, and expanding our product portfolio. We are also working to convert customer interest into firm purchase orders.
Q: What are the financial highlights from the third quarter? A: Bob Kanan, CFO: Sales for the quarter were $2.5 million, with a net loss of $25.1 million. We have reduced operating expenses by $7.5 million compared to the same period last year. Our balance sheet shows $3.2 million in cash and cash equivalents and $43.2 million in net inventory.
Q: What are Workhorse’s near-term priorities? A: Rick Dow, CEO: Our priorities include securing new orders, delivering products to more customers, and advancing our product roadmap. We aim to achieve breakeven free cash flow by increasing volumes and are in discussions with potential customers and government agencies to secure orders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.