Nearly four in 10 production employees at Workhorse Group Inc. (NASDAQ: WKHS) are sidelined by the COVID-19 virus or awaiting test results, the electric delivery van maker said Monday.
In addition to the pandemic, Workhorse also blamed its primary battery supplier’s inability to meet demand. The company ditched its projection of building 300-400 composite-body electric trucks by the end of the year.
“We view this as only a delay in our progress,” Workhorse CEO Duane Hughes said in a press release. “We’ve introduced several new battery supplier options into our supply chain and will have supplemental volume additions in the first quarter of 2021.”
The company plans to build 1,800 of its vans in 2021, depending on how the pandemic plays out, Hughes said.
Big miss on sales and earnings
Workhorse reported a third-quarter net loss of $84.1 million compared with a loss of $11.5 million a year ago. Sales of $565,000 compared favorably to just $4,000 in sales in the same quarter a year ago. But they missed analysts’ estimates by $1.25 million, according to investor site Seeking Alpha.
Workhorse paid more from practically everything in the July-September quarter compared to a year ago. Cost of goods sold increased to $2.8 million from $1.4 million because of higher labor and materials costs in building the C-Series van.
Selling, general and administrative expenses increased to $6 million from $2.6 million in the same period last year. Consulting expenses, employee-related costs and incentive stock expenses all rose. Research and development expenses were flat at $1.6 million.
Noncash net interest expense increased to $74.3 million compared to $5.9 million in the same period last year. The increase was due mostly to a change in fair value of a convertible note redeemed as stock.
New order buoys hope
Workhorse said Monday it received a purchase order for 500 C-1000 delivery vehicles from Pritchard Companies. Pritchard is a network of dealerships that sells more than 30,000 trucks annually in all 50 states.
The C-Series delivery trucks are certified by the U.S. Environmental Protection Agency and California Air Resources Board. They can be sold in all 50 U.S. states.
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