Workhorse Group Inc. Reports Q3 2023 Results Amidst Challenges and Progress
Workhorse Group Inc. (NASDAQ:WKHS) reports Q3 2023 sales of $3.0 million, a significant increase from $1.5 million in Q3 2022.
Net loss narrowed to $30.6 million in Q3 2023 from $35.4 million in the same period last year.
Company revises full-year revenue guidance to $10 million to $15 million due to HVIP voucher delays.
Workhorse is the first to receive approval for a new HVIP certification program in California.
On November 14, 2023, Workhorse Group Inc. (NASDAQ:WKHS) released its 8-K filing, announcing its financial results for the third quarter ended September 30, 2023. The company, known for pioneering zero-emission commercial vehicles, faced significant challenges due to the unavailability of HVIP vouchers in California, which impacted its ability to deliver W4 CCs and W750s during the quarter. Despite these challenges, Workhorse CEO Rick Dauch expressed optimism, stating,
We are now in a position to execute free of constraints."
Financial Highlights and Challenges
Workhorse's Q3 2023 sales reached $3.0 million, up from $1.5 million in the same period last year, primarily due to the reversal of a $2.4 million sales allowance. Cost of sales decreased to $6.6 million from $9.5 million year-over-year, reflecting a reduction in inventory reserves and adjustments. SG&A expenses saw a significant decrease to $11.8 million from $34.8 million, mainly due to a reduction in expenses associated with the settlement of securities and shareholder derivative litigation incurred in the previous year. R&D expenses also decreased slightly to $5.8 million from $6.1 million.
Net loss for the quarter was $30.6 million, an improvement from a net loss of $35.4 million in Q3 2022. The company ended the quarter with $38.9 million in cash and total working capital of $71.9 million. However, due to the HVIP voucher delays, Workhorse has revised its 2023 full-year revenue guidance to be in the range of $10 million to $15 million.
Operational and Strategic Developments
Workhorse has made strides in its commercial EV segment, launching production of the W56 stripped chassis and step van models, and increasing production of the W750 step van. The company also expanded its commercial footprint by adding two new certified dealers and received IRS approval as a Qualified Manufacturer for the Commercial Clean Vehicle Credit.
In the aerospace business, Workhorse began drone assembly and sold additional drone aircraft. The company is exploring strategic alternatives for this segment, which may include a sale or strategic partnership.
Balance Sheet and Income Statement Summary
The balance sheet shows a solid position with current assets totaling $97.8 million, including cash and cash equivalents of $38.9 million. The company's total liabilities stand at $33.5 million, resulting in total stockholders' equity of $112.8 million.
The income statement details a gross loss of $3.5 million for Q3 2023, with total operating expenses of $17.5 million. The net loss per share of common stock was $0.14 for the quarter.
Looking Ahead
Workhorse CFO Bob Ginnan acknowledged the impact of the HVIP voucher delays on the financial results and outlook for the year, but also noted the company's efforts to strengthen its financial position, including discussions for additional financing to support growth plans.
Workhorse management held a conference call to discuss the results and answer questions, emphasizing their commitment to navigating through market disruptions and focusing on long-term shareholder value.
For investors and potential GuruFocus.com members, Workhorse Group Inc.'s Q3 2023 earnings report reflects a company that is navigating through external challenges while making strategic progress in its product offerings and market positioning. The company's revised revenue outlook and ongoing efforts to secure additional financing underscore its proactive approach to managing current market dynamics and investing in future growth.
Explore the complete 8-K earnings release (here) from Workhorse Group Inc for further details.
This article first appeared on GuruFocus.
