Workhorse has reported financial results for the second quarter ended June 30, 2020.
Sales for the second quarter of 2020 were recorded at $92,000 compared to $5,500 in the second quarter of 2019.
This comes as the cost of goods sold increased to $1.5m from $930,000 in the second quarter of 2019.
The increase was primarily driven by increases in labor and materials relating to costs for the C-Series production.
Selling, general and administrative expenses increased to $3.9 million from $2.0 million in the same period last year, down to increases in consulting expenses, higher employee related costs and incentive stock expenses.
The firm’s CEO, Duane Hughes, explained: “”In the first half of this year we accomplished a series of major operational and EV industry milestones, culminating in the first official deliveries of our C-Series trucks to Ryder just a few weeks ago.”
Adding: “Additionally, after acquiring the requisite various state and federal approvals in recent months, we are now the only medium duty BEV OEM permitted and able to sell and deliver our vehicles in all 50 states, which should allow us to further distance ourselves as the first movers in the last-mile EV space.
“Widening our sales funnel through tax incentives, government programs and strategic partnerships, all of which we now have, will allow us greater opportunities to build on our growing backlog. We are now focusing on maximizing our efficiency and output as we look to ramp production throughout the remainder of this year to meet our ambitious delivery campaign goals.”
Looking at R&D, expenses for this increased to $1.6 million from $1.2 million in the second quarter of 2019. The increase was mostly due to increases engineering, staffing and consulting expenses was related to the design of the C-Series.
Interest expense, net increased to $124.3 million compared to an interest expense, net of $15.9 million in the same period last year.
The company’s CFO, Steve Schrader, added: “It should be noted that this significant increase of $108.4 million in interest expense was almost exclusively due to the change in fair value of our convertible note and the mark-to-market adjustment for some non-dilutive warrants issued to a lender.
“Both of these GAAP adjustments are non-cash and primarily dependent on the underlying stock components of financial instruments. These large adjustments were the result of a stock price of $17.39 on June 30th compared to $1.81 on March 31st. Due primarily to these non-cash adjustments, our net loss was $131.3 million compared to a net loss of $20.1 million in the second quarter of 2019.
“A better indication of operating performance would be loss from operations which was $7.0 million this quarter compared to $4.1 million in the second quarter of 2019.”