Workhorse Group's Q2 2024 earnings call provided insights into the company's strategic, operational, and financial progress. The call, led by Vice President, Corporate Development and Communications, Stan March, included updates from CEO, Richard Dauch, and CFO, Robert Ginnan.
Strategic and Operational Highlights
Workhorse made significant strides in its EV product roadmap, with the development of reliable, capable products and a world-class manufacturing plant. The W56 has proven to be a success, with positive customer feedback and initial orders coming in. The company is also working on two new variants of the W56, with testing and early production expected by year-end or in early 2025.
The company has taken critical actions to reduce expenses and extend its financial runway, including the divestiture of the aerospace business, headcount reductions, and furloughs. These measures have allowed Workhorse to conserve cash and position itself for future commercial fleet demand.
Financial Highlights
Workhorse's financial results for the quarter reflected the challenges in the EV market, with slower than anticipated industry-wide adoption rates due to government policy delays and infrastructure issues. The company's sales net of returns and allowances were $800,000, compared to $4 million in the same period last year, primarily due to lower W4 CC vehicle sales.
Cost savings initiatives, including a reduction in employee compensation and related expenses, have helped Workhorse reduce its cash burn rate from approximately $11 million a month to $4 million per month. The company has also enacted a 1 for 20 reverse stock split to regain NASDAQ compliance.
Market Opportunity
Workhorse is optimistic about the long-term market opportunity of the EV transition, despite the current challenges. The company is focused on securing new orders, delivering world-class products and services, and advancing its product portfolio roadmap. The potential for large-scale fleet orders, including from the U.S. Postal Service, is a key priority.
Investor Questions
During the Q&A session, investors inquired about the balance sheet, the company's pipeline of customers for 2025, and the development of a new, complementary EV product. Workhorse leadership provided detailed responses, highlighting the company's focus on financial sustainability and product innovation.
Conclusion
Workhorse Group's Q2 2024 earnings call underscored the company's resilience in the face of challenges in the EV market. With a strong focus on product development, cost savings, and strategic partnerships, Workhorse is well-positioned to navigate the transition to electric vehicles and capture future commercial fleet demand.