Canoo reports loss of $91 million in 1Q but pledges 20,000 car production this year

 

Canoo, the EV maker with plans for manufacturing plants in Oklahoma City and Pryor, admitted this week it lost nearly $91 million in the first quarter of the year.

But the company also continued with its pledge to build 20,000 cars by the end of this year.

Canoo reported a GAAP net loss and comprehensive loss of $90.7 million for quarter compared to a net loss of $125.4 million a year earlier. Its adjusted net loss was $72 million for the three months ended March 31, 2023, down from the $120.1 million in adjusted net loss at the end of March 2022.

Chairman and CEO Tony Aquila told analysts on Monday the production lines are being readied in Oklahoma City and some production will be underway by the end of the second quarter. He also said Canoo plans to have annual production of 40,000 vehicles by the end of 2024.

“Medium to long term demand for zero emission, technology driven vehicles will continue to grow rapidly as the average age of vehicle has reached an all-time high between 12 to 14 years depending on the segment,” he offered.

“These numbers prove that the stage is set for zero emission, technology driven vehicles especially in the TAM’s and the geographies we are focused on where there is current demand and high-volume buyers. We also believe that we are focused on the geographies and segments where there is available capital and favorable regulatory conditions,”

Even as Aquila spoke of the company’s plans, stocks remained in the 60 cent range on Monday. At the close of Monday’s trading, Canoo showed a day’s gain of 1.95% or $0.012, closing at 60 cents a share.

Below is the financial status released by the company.

  • Our LDV vehicle is eligible for the full IRA commercial tax credit of $7,500 in 2023
  • 25% reduction in annual operating expenses compared to last fiscal year
  • Secured favorable long-term lease for Oklahoma City manufacturing facility
  • Focused on exiting 2023 at a 20K run-rate, which opens the ability for us to move to 40k run-rate by 2024 to meet demand
  • Targeting Gross Margin positive in 2025

First Quarter & Recent Business Updates:

  • Raised over $150 million in on and off balance sheet financing
  • Battery module manufacturing system delivered at Pryor facility
  • Initial installation of general assembly line at Oklahoma City facility
  • 5% Q-o-Q growth in stage 2 and 3 orders

First Quarter Financial Highlights:

  • As of March 31, 2023, we had cash and cash equivalents of $6.7 million. After giving effect to the issuance and sale by the Company of convertible debentures of $48.0 million and exercise of warrants of $15.0 million on April 25, 2023, our cash balance would have been $69.7 million as of March 31,2023.
  • GAAP net loss and comprehensive loss of $90.7 million for the three March 31, 2023, compared to a GAAP net loss and comprehensive loss of $125.4 million for the three March 31, 2022. The GAAP net loss and comprehensive loss for the three months ended March 31, 2023 included a gain of $2.5 million on the fair value change of the contingent earnout shares liability.
  • Adjusted EBITDA of $(67.1) million for the three months ended March 31, 2023, compared to $(117.4) million for the three months ended March 31, 2022.
  • Adjusted Net Loss of $72.0 million for the three months ended March 31, 2023, compared to $120.1 million for the three months ended March 31, 2022.
  • GAAP Net Loss per share of $(0.22) for the three months ended March 31, 2023, compared to $(0.54) for the three months ended March 31, 2022.
  • Adjusted EPS of $(0.17) for the three months ended March 31, 2023, compared to $(0.51) for the three months ended March 31, 2022.
  • Net cash used in operating activities totaled $67.2 million for the three months ended March 31, 2023, compared to $120.3 million for the three months ended March 31, 2022.
  • Net cash used in investing activities was $18.4 million during the three months ended March 31, 2023, compared to $2.0 million net cash provided by investing activities during the three months ended March 31, 2022.

Second Quarter 2023 Business Outlook

Based upon our current projections, Canoo expects:

  • Operating Expenses (excluding stock-based compensation and depreciation) of: $40 million to $60 million
  • Capital Expenditures of: $10 million to $20 million