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Workhorse Group (NASDAQ:WKHS), the manufacturer of cost-effective and drone-integrated electric delivery and utility vehicles, has endured a battering over the last couple of weeks as the stock registered a loss of over 43 percent relative to its all-time high share price of $30.60 on the 18th of September. Today, Workhorse shares are again in focus as the company gears up to announce its earnings for the third quarter of 2020.
Workhorse (NASDAQ: WKHS) Financial Scorecard
During the three months that ended on the 30th of September 2020, Workhorse earned $564,707 in revenue, exceeding consensus expectations by 41 percent and registering an annual increase of over 14,000 percent. The company had reported $92,000 in revenue during the last quarter.
Revenue Comparison
(All figures are in thousands of dollars; all consensus figures have been sourced from here)
Workhorse informed via a press release today that it has received an order for 500 of its all-electric C-1000 delivery vehicles from Pritchard Companies. Bear in mind that these EVs are geared toward the last-mile delivery segment and are powered by a modular battery pack system, which offers a power output of between 35 and 70 kWh – the standard four-pack configuration offers the maximum power output in this range. These EVs are also equipped with Workhorse’s proprietary telematics system, Metron.
Workhorse also reported $2.82 million in Cost of Goods Sold (COGS) and $7.56 million in operating expenses for the quarter. The company's interest expense jumped over 1,100 percent on an annual basis to $74.32 million, primarily due to a change in the fair value of the convertible notes.
Expense Comparison
(All figures are in millions of dollars)
Moreover, Workhorse reported $80.22 million in Cash and Cash Equivalent at the end of Q3 2020.
Cash Comparison
(All figures are in millions of dollars)
Finally, Workhorse registered a net loss of $84.13 million, corresponding to a GAAP EPS of -$0.78. The net loss widened due to an increase in the interest expense for the period.
EPS Comparison
(All figures are in dollars)
As far as the future outlook is concerned, Workhorse does not expect to meet its previous guidance for Q4 2020 vehicle production of 300 to 400 units due to COVID-19 and battery supply issues. The company went on to note in its press release:
"We view this as only a delay in our progress. We've introduced several new battery supplier options into our supply chain and will have supplemental volume additions in the first quarter of 2021. While we cannot predict the full impact from COVID right now, let alone in 2021, when conditions improve and the coronavirus is no longer a business issue for us and our suppliers, then we would anticipate producing approximately 1,800 units in 2021."
Investors have reacted positively to Workhorse earnings today, with the stock registering a gain of over 3 percent percent in the pre-market trading.
While Workhorse is in the red currently, it is expected to become profitable in the next two years, with consensus expectations of $4.5 million in profits for 2022. Moreover, as per the recent interview of the company’s CFO with TD Ameritrade Network, Workhorse currently has a backorder of 1,100 trucks, equating to potential revenue of $70 million.
Workhorse did not include any update regarding the much-anticipated USPS contract. As a refresher, the company remains a leading contender for a portion of the U.S. Postal Service’s (USPS) Next Generation Delivery Vehicle (NGDV) contract, meant to replace the aging fleet of USPS delivery vehicles. Expectations of Workhorse winning this contract have underpinned a substantial portion of the year-to-date rally in the stock. If any update is provided during the earnings call, we will include it in this post accordingly.
