Workhorse Group Reports Q2 2024 Financial Results
Workhorse Group Inc. (Nasdaq: WKHS), an American technology firm dedicated to leading the shift towards zero-emission commercial vehicles, has announced its financial performance for the second quarter ending June 30, 2024.
Management Commentary
“In the second quarter, we made significant strides in advancing our EV product roadmap and worked hard to build momentum with potential customers,” stated Workhorse CEO Rick Dauch. The company conducted field demonstrations with several national fleets, established new dealer partnerships, and sparked interest through a recently awarded contract for the procurement of Class 4-8 cab chassis and related equipment. Production for the W56 vehicle is anticipated to commence in the fourth quarter, with initial orders already confirmed.
Mr. Dauch added, “While we achieved important milestones during the quarter, our financial results indicate that we have substantial work ahead. We remain hopeful about the rates of EV adoption and are making careful decisions to conserve cash and extend our financial runway.”
Executing Strategic and Financial Actions
During the second quarter, the company undertook several key actions, including:
- Delivering to Customers: Workhorse received a purchase order for 141 W4 CC cab chassis from Kingsburg Truck Sales. However, delays in voucher approvals limited revenue recognition for that quarter. The company anticipates a significant revenue recovery throughout 2024.
- Advancing EV Product Roadmap: Workhorse is finalizing engineering and testing for an expanded W56 product line, which will include a new model with a 1200 cubic feet capacity expected to be available by the end of the year.
- Expanding Dealer Network: The recent Sourcewell contract allows Workhorse to broaden its reach into government and nonprofit sectors across various regions.
- Divestiture of Aero Business: This divestiture, finalized in June, is projected to save the company around $0.4 million each month, allowing for a stronger focus on commercial electric vehicles.
- Regained NASDAQ Compliance: Workhorse received confirmation of compliance with NASDAQ's minimum bid price requirement following a reverse stock split in June.
- Conserving Cash: The company continues to manage expenses through workforce reductions and other strategies, achieving notable cost savings.
Second Quarter Financial Results
In the second quarter of 2024, net sales totaled $0.8 million, a decline from $4.0 million year-over-year, primarily due to decreased sales of W4 CC vehicles.
The company's cost of sales decreased to $7.3 million, largely attributed to lower material and consulting costs, as well as reduced employee expenses from previous furloughs.
SG&A expenses fell to $12.1 million, while R&D expenses decreased to $2.0 million due to a smaller workforce and reduced consulting costs. Net interest expense was $5.2 million, leading to a net loss of $26.3 million compared to a loss of $23.0 million in the previous year.
Conference Call
Workhorse management will host a conference call today to provide a detailed discussion of these results.
U.S. dial-in: 877-407-8289
International dial-in: 201-689-8341
About Workhorse Group Inc.
Workhorse is committed to delivering electric vehicles for the last-mile delivery sector and provides a fleet optimization telematics system that is fully integrated with its vehicles. For more information, visit workhorse.com.
Frequently Asked Questions
What were the key financial results for Q2 2024?
For Q2 2024, net sales were $0.8 million, a decrease from $4.0 million in Q2 2023, mainly due to lower sales of W4 CC vehicles.
What strategic actions has Workhorse taken in Q2 2024?
In Q2 2024, Workhorse expanded its dealer network, made progress on enhancements to its EV products, and effectively managed costs while conserving cash.
How did Workhorse's operating expenses change?
Operating expenses saw a significant reduction, with SG&A costs dropping to $12.1 million and R&D expenses falling to $2.0 million compared to the previous year.
What impact did the reverse stock split have on the company's NASDAQ listing?
The reverse stock split allowed Workhorse to regain compliance with NASDAQ's minimum bid price requirement.
What is the future outlook for Workhorse?
The company remains optimistic about the long-term market potential for electric vehicles, particularly in the Class 4-6 work truck segment, anticipating a faster adoption rate.
