Workhorse Group (NASDAQ:WKHS) reported first-quarter revenue this morning that was much lower than Wall Street had expected, as its production of electric delivery vans got off to a slower start than planned.

Workhorse said its revenue rose to about $521,000 in the first quarter, from about $84,300 a year ago, as it delivered just six of its new C-Series electric vans to customers. Wall Street analysts polled by FactSet had expected revenue of $2.3 million, on average. 

On an operating basis, excluding noncash adjustments, Workhorse's first-quarter loss widened to $16.5 million from $9.1 million a year ago. That was somewhat better than expected: Analysts on average were looking for a loss of $19.8 million.

The company also announced a new development agreement with J.B. Poindexter, a maker of specialized truck bodies for commercial vehicles. 

The raw numbers

Metric Q1 2021 Q1 2020
Revenue $521,060 $84,300
Gross profit (loss) ($5,704,239) ($1,663,675)
Adjusted operating income (loss) ($16,453,784) ($9,131,698)
Research and development expenses $3,863,715 $1,902,236
Net income (loss) ($120,506,771) ($4,756,691)

Data source: Workhorse Group. Adjusted operating figures exclude noncash charges; see below for details.

Two white Workhorse  C-Series vans parked in front of the company's Ohio headquarters.

Workhorse shipped just six of its C-Series electric commercial vans in the first quarter. Image source: Workhorse Group.

Key points from Workhorse's business update

  • The company said that it has signed a "strategic agreement" to provide electric-truck chassis to a unit of privately held J.D. Poindexter, which will in turn offer customized electric commercial vehicles to its clients.
  • Workhorse only shipped six vehicles in the first quarter of 2021. But it wants auto investors to know that it has so far manufactured 38 of its C-Series vans since the beginning of the year. That's more than double the amount it produced in 2020. 
  • Why was the net loss so big? Workhorse took a noncash accounting charge of $136.6 million related to a decline in the market value of its 10% stake in Lordstown Motors (NASDAQ:RIDE). Lordstown's stock price fell about 41% in the first quarter of 2021; Workhorse's stake had been valued at about $330 million as of the end of 2020. 
  • Workhorse had about $205.1 million in cash and equivalents as of March 31. 

What Workhorse's CEO had to say

CEO Duane Hughes said that supplier issues and production snags limited its ability to complete vehicles in the first quarter. 

"Bottlenecks within the global supply chain and offshore shipping delays of commodity raw materials and components as well as our initial stages of production limited our capacity to produce during the first quarter," Hughes said. But things are improving: "We have had a step-function improvement in production in the last month."

Looking ahead

Workhorse said that because of the delays it faced in the first quarter, it now expects to produce just 1,000 of its C-Series vehicles in 2021. That's lower than expected; the company had said at the beginning of March that it had an order backlog of about 8,000 vehicles. 

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