Lordstown Motors Reports Third Quarter 2021 Financial Results
LORDSTOWN, Ohio, Nov. 11, 2021 (GLOBE NEWSWIRE) -- Lordstown Motors Corp. (NASDAQ:RIDE), ("Lordstown Motors" or "LMC"), a provider of electric light duty trucks focused on the commercial fleet market, today released its third quarter 2021 financial results, and provided a business and financial outlook update.
Third Quarter and Recent Key Business Highlights
- Reported third quarter 2021 net loss of $95.8 million, capex of $79.9 million and cash of $233.8 million on September 30, 2021.
- Executed an asset purchase agreement with an affiliate of Hon Hai Precision Industry ("Foxconn") that will culminate in the transfer of the Lordstown plant to Foxconn, and a plan to establish a contract manufacturing agreement whereby Foxconn will manufacture the Endurance.
- Agreed to pursue a joint venture agreement with Foxconn to jointly design and develop vehicle programs for the commercial market in North America and internationally using Foxconn's Mobility in Harmony ("MIH") open electric vehicle platform.
- Signed an MoU with Cox Automotive Inc. with a mutual goal to provide service and support to all Lordstown Motors electric vehicle fleet customers.
- Received $50 million equity investment from Foxconn in October at approximately $6.90 per share; $230 million purchase price of the Lordstown plant would be pre-funded with three down payments — $100 million on or about November 18th, $50 million on February 1, 2022, and $50 million no later than April 15, 2022, subject to certain conditions. At closing, the remaining $30 million purchase price, along with reimbursement for certain operating and capital costs from September 1, 2021 through closing, will be paid.
- Net loss includes non-cash items of $11.1 million in intangible asset amortization, $6.6 million in stock compensation, and a $3.3 million gain on a fair value adjustment of warrants.
Executive Commentary
"The third quarter marked a significant strategic shift for Lordstown Motors," said Dan Ninivaggi, Chief Executive Officer of Lordstown, "We announced our Agreement in Principle ("AIP") with Foxconn regarding the sale of our Lordstown, Ohio assembly plant and the negotiation of a contract manufacturing agreement. The definitive Asset Purchase Agreement with Foxconn, implementing the AIP, was executed earlier this week."
"Our partnership with Foxconn will unlock the tremendous potential of the Lordstown automotive plant, enable us to reduce the overall cost of bringing the Endurance to market, and position us to be able to jointly develop vehicles with a partner that has significant scale, manufacturing expertise, and a commitment to electric vehicle manufacturing as one of its key global strategic priorities. As part of the transaction, LMC and Foxconn have agreed to pursue a joint venture to jointly design and develop commercial vehicle programs for North America and internationally using Foxconn's "MIH" open EV platform. Working collaboratively with Foxconn, we expect to be able to bring future vehicles to market faster and more efficiently."
"Our organization's top priority has remained bringing the Lordstown Endurance full size all-electric pickup to market as quickly and efficiently as possible. In the third quarter, we continued to build and test prototype vehicles. We also continued to execute on our ‘commercial fleet first' strategy, and have received additional non-binding indications of interest from a number of commercial customers, including fleet management companies. We have a unique vehicle in the biggest part of the market targeting commercial customers. As such, we believe that as potential future customers demo our vehicles, interest in the Endurance will grow, laying the groundwork for building out our order book as we get closer to commercial production."
"Since the beginning of the fourth quarter, we have begun building the first of what we expect to be approximately 100 pre-production vehicles that we will use to pursue a variety of validation activities aimed at achieving full homologation. This is a modest delay from earlier expectations as component and material shortages, along with other supply chain challenges, remain an issue for Lordstown Motors just as they are for the industry at large. We now expect that commercial production and deliveries of the Endurance will begin in the third quarter of 2022."
Please refer to "Forward Looking Statements" below.
2021 Financial Outlook
We are updating the financial outlook for 2021 that we previously provided on September 30th. Revised guidance is as follows:
- Endurance commercial production and deliveries beginning in the third quarter of 2022; building a limited number of vehicles for testing, validation, verification, and regulatory approvals during the remainder of 2021 and the first quarter of 2022.
- Cash balances of between $150 million and $180 million as of December 31, 2021, inclusive of the anticipated down payment of $100 million to be made by Foxconn under the Asset Purchase Agreement in November, and $15 million in issuances under the equity purchase agreement in October, but exclusive of any other potential financings.
- Capital expenditures of between $330 million and $350 million for the full year 2021, down from $375 million to $400 million, largely as a result of the timing of purchases related to tooling and production readiness.
- Selling, general and administrative (SG&A) expenses of between $105 million and $120 million and research and development (R&D) costs of between $320 million and $340 million, for the full year 2021, in each case unchanged.
Please refer to "Forward Looking Statements" below.
Conference call Information
Lordstown Motors will host a conference call at 4:30 p.m. Eastern Time today (Thursday, November 11, 2021). The call can be accessed via a live webcast that is accessible on the Events page of Lordstown Motors' Investor Relations website, as well as the investor presentation deck, at https://investor.lordstownmotors.com/. An archive of the webcast will be available shortly after the call.
Financial Results
Lordstown Motors Corp.
Consolidated Statement of Operations
(Amounts in thousands, except per share data -- Unaudited)
| Three months ended | Three months ended | Nine months ended | Nine months ended | |||||||||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||||||
| Net sales | $ | — | $ | — | $ | — | $ | — | ||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative expenses | 31,281 | 12,033 | 79,468 | 20,710 | ||||||||||||
| Research and development expenses | 56,890 | 29,966 | 225,246 | 43,220 | ||||||||||||
| Amortization of intangible assets | 11,111 | — | 11,111 | — | ||||||||||||
| Total operating expenses | $ | 99,282 | $ | 41,999 | $ | 315,825 | $ | 63,930 | ||||||||
| Loss from operations | (99,282 | ) | (41,999 | ) | $ | (315,825 | ) | $ | (63,930 | ) | ||||||
| Other income (expense) | ||||||||||||||||
| Other income (expense) | 3,467 | 58 | (13,788 | ) | 2,530 | |||||||||||
| Interest income (expense) | 9 | (557 | ) | 396 | (921 | ) | ||||||||||
| Loss before income taxes | $ | (95,806 | ) | $ | (42,498 | ) | $ | (329,217 | ) | $ | (62,321 | ) | ||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net loss | $ | 95,806 | $ | (42,498 | ) | $ | (329,217 | ) | $ | (62,321 | ) | |||||
| Loss per share attributable to common shareholders | ||||||||||||||||
| Basic & Diluted | (0.54 | ) | (0.57 | ) | (1.86 | ) | (0.85 | ) | ||||||||
| Weighted-average number of common shares outstanding | ||||||||||||||||
| Basic & Diluted | 178,761 | 73,951 | 176,573 | 73,273 | ||||||||||||
Lordstown Motors Corp.
Consolidated Balance Sheets
(Amounts in thousands except share data -- Unaudited)
| Restated | ||||||||
| September 30, 2021 | December 31, 2020 | |||||||
| ASSETS: | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 233,831 | $ | 629,761 | ||||
| Accounts receivable | — | 21 | ||||||
| Prepaid expenses and other current assets | 22,916 | 24,663 | ||||||
| Total current assets | $ | 256,747 | $ | 654,445 | ||||
| Property, plant and equipment | 362,391 | 101,663 | ||||||
| Intangible assets | — | 11,111 | ||||||
| Other non-current assets | 4,750 | — | ||||||
| Total Assets | $ | 623,888 | $ | 767,219 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 48,666 | $ | 32,536 | ||||
| Accrued and other current liabilities | 39,187 | 1,538 | ||||||
| Total current liabilities | $ | 87,853 | $ | 34,074 | ||||
| Note payable | — | 1,015 | ||||||
| Warrant liability | 3,529 | 101,392 | ||||||
| Total liabilities | $ | 91,382 | $ | 136,481 | ||||
| Stockholders' equity | ||||||||
| Class A common stock, $0.0001 par value, 300,000,000 shares authorized; 182,074,899 and 168,007,960 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | $ | 18 | $ | 17 | ||||
| Additional paid in capital | 996,146 | 765,162 | ||||||
| Accumulated deficit | (463,658 | ) | (134,441 | ) | ||||
| Total stockholders' equity | $ | 532,506 | $ | 630,738 | ||||
| Total liabilities and stockholders' equity | $ | 623,888 | $ | 767,219 | ||||
Lordstown Motors Corp.
Consolidated Statements of Cash Flow
(Amounts in thousands except share data -- Unaudited)
| Nine months ended | Nine months ended | |||||||
| September 30, 2021 | September 30, 2020 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (329,217 | ) | $ | (62,321 | ) | ||
| Adjustments to reconcile net loss to cash used by operating activities: | ||||||||
| Stock-based compensation | 12,365 | 2,022 | ||||||
| Non-cash change in fair value related to warrants | 14,918 | — | ||||||
| Amortization of intangible assets | 11,111 | — | ||||||
| Forgiveness of note payable | (1,015 | ) | — | |||||
| Gain on disposal of fixed assets | — | (2,346 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivables | 21 | (20 | ) | |||||
| Prepaid expenses | (3,001 | ) | (4,794 | ) | ||||
| Accounts payable | 10,929 | 20,587 | ||||||
| Accrued expenses and other current liabilities | 37,649 | 11,267 | ||||||
| Cash used by operating activities | $ | (246,240 | ) | $ | (35,605 | ) | ||
| Cash flows from investing activities | ||||||||
| Purchases of capital assets | $ | (255,528 | ) | $ | — | |||
| Proceeds from the sale of capital assets | — | 2,396 | ||||||
| Cash (used by) provided by investing activities | $ | (255,528 | ) | $ | 2,396 | |||
| Cash flows from financing activities | ||||||||
| Cash proceeds from exercise of warrants | $ | 82,016 | $ | — | ||||
| Proceeds from Equity Purchase Agreement | 20,000 | — | ||||||
| Issuance of common stock | 3,822 | $ | 6,404 | |||||
| Proceeds from notes payable | — | 44,353 | ||||||
| Cash provided by financing activities | $ | 105,838 | $ | 50,757 | ||||
| Decrease in cash and cash equivalents | $ | (395,930 | ) | $ | 17,548 | |||
| Cash and cash equivalents, beginning balance | 629,761 | 2,159 | ||||||
| Cash and cash equivalents, ending balance | $ | 233,831 | $ | 19,707 | ||||
About Lordstown Motors Corp.
Lordstown Motors is an electric vehicle (EV) innovator developing high-quality light duty commercial fleet vehicles, with the Endurance all electric pick-up truck as its first vehicle being launched in the Lordstown, Ohio facility. Lordstown Motors has engineering, research and development facilities in Farmington Hills, Michigan and Irvine, California. For additional information visit www.lordstownmotors.com.
Forward Looking Statements
This press release includes forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as "feel," "believes," "expects," "estimates," "projects," "intends," "should," "is to be," or the negative of such terms, or other comparable terminology. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements contained herein due to many factors, including, but not limited to: our limited operating history and our significant projected funding needs; our liquidity position ; the need to raise substantial additional capital to continue ongoing operations; risks associated with the conversion and retooling of our facility and ramp up of production; our inability to obtain binding purchase orders from customers and potential customers' inability to integrate our electric vehicles into their existing fleets; our inability to retain key personnel and to hire additional personnel; competition in the electric pickup truck market; supply chain disruptions; the potential inability to source essential components; our inability to develop a sales distribution network; the ability to protect our intellectual property rights; and the failure to obtain required regulatory approvals. Furthermore, potential supply chain disruptions, and their consequences on testing and other activities, could present challenges that impact the timing of our commercial production. Any forward-looking statements speak only as of the date on which they are made, and Lordstown Motors undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release. In addition, the closing of the transactions contemplated by the Asset Purchase Agreement is subject to certain conditions, including regulatory approvals and the negotiation and execution of a contract manufacturing agreement, so there can be no assurance that the transactions will be completed in a timely manner or at all. Further, there can be no assurance we will enter into a definitive joint venture agreement with Foxconn to co-design and develop vehicle programs.
Contacts:
Investors
Carter W. Driscoll, CFA
[email protected]
Media
Kimberly Spell
[email protected]
