Embattled electric truck start-up Lordstown Motors (NASDAQ:RIDE) delivered its third-quarter results after the bell Thursday, reporting that it lost $95.8 million in the period. But the bigger news was that the launch of its first vehicle has been delayed until the second half of 2022.
Lordstown lost $0.54 per share, a bit better than the average $0.62 per share loss expected by Wall Street analysts polled by Thomson Reuters. While that was a beat, it wasn't much of one: The analysts had also expected Lordstown to report $26.47 million in revenue, but it had none.
Lordstown's shares opened Friday trading sharply lower.
Key points from Lordstown's third-quarter report
- Lordstown got a new CEO in the quarter: Auto-industry veteran Daniel Ninivaggi took the helm in August and immediately began revamping its business plan.
- Ninivaggi recently struck a deal to sell Lordstown's factory to Taiwanese contract manufacturer Hon Hai Precision Industry (OTC:HNHPF), better known as Foxconn, for $230 million in urgently needed cash. The factory sale is expected to close in April.
- Foxconn will build Lordstown's Endurance electric pickup under contract. The two companies are also exploring a deal to create other electric commercial vehicles via a joint venture that would use Foxconn's open-source electric-vehicle platform.
- But the Endurance won't go into production until Q3 2022 because of supply chain challenges and Ninivaggi's revamp of the go-to-market process. That's a full year behind the original schedule provided to investors when the company went public in 2020.
As of Sept. 30, Lordstown had $233.8 million in cash remaining on the books.
What Lordstown's CEO had to say
Ninivaggi said that the company built several Endurance prototypes in the third quarter and has now moved on to pre-production examples.
"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," Ninivaggi said. (Here, "homologation" refers to the process of getting a vehicle approved by regulators for sale in the United States.)
"We now expect that commercial production and deliveries of the Endurance will begin in the third quarter of 2022."
Looking ahead: Lordstown revised its full-year guidance
Here's what investors can now expect from Lordstown at year's end:
- Capital expenditures of between $330 million and $350 million for the full year. That's down from the range given in Lordstown's prior guidance ($375 million to $400 million), a result of the altered timing of tooling purchases in the revamped production schedule.
- Cash balance of between $150 million and $180 million, including a $100 million down payment from Foxconn for the factory purchase. (Foxconn will pay the remainder by mid-April.)
Lordstown doesn't expect to have any significant revenue until deliveries of the Endurance begin in the third quarter of 2022.