WORKHORSE STOCK Q3 EARNINGS! WKHS STOCK EARNINGS! Workhorse Group Reports Third Quarter 2020 Results

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WORKHORSE STOCK Q3 EARNINGS LIVE! WKHS STOCK EARNINGS! Workhorse Group Reports Third Quarter 2020 Results

Third Quarter 2020 Financial Results
Sales for the third quarter of 2020 were recorded at $565,000 compared to $4,000 in the third quarter of 2019.

Cost of goods sold increased to $2.8 million from $1.4 million in the third quarter of 2019. The increase was primarily driven by increases in labour and materials relating to costs for the C-Series production.

Selling, general and administrative expenses increased to $6.0 million from $2.6 million in the same period last year. The increase is attributable to an increase in consulting expenses, higher employee-related costs, and incentive stock expenses.

Research and development expenses were $1.6 million, which was flat compared to $1.6 million reported in the third quarter of 2019.

Interest expense, net increased to $74.3 million compared to an interest expense, net of $5.9 million in the same period last year. The significant increase in interest expense was almost exclusively due to a change in fair value of the Company's convertible note, the loss on its conversion to stock and the loss on the redemption of Series B Preferred Stock. These GAAP adjustments are non-cash and were dependent on the underlying stock components of the financial instruments, respectively.

Net loss was $84.1 million, compared with a net loss of $11.5 million in the third quarter of 2019. The increased net loss was due to the increase in interest expense (net) just noted. With these considerations, the Company believes operating income would be a better indication of operating and cash performance. Operating income during the period was a loss of $9.8 million compared to a loss of $5.6 million in the third quarter of 2019.

As of September 30, 2020, the Company had cash, cash equivalents and short-term investments of $80.2 million compared to $23.9 million as of December 31, 2019. Subsequent to the quarter-end, the Company entered into, and closed, a convertible note financing with a group of institutional lenders for gross proceeds of $200 million. In conjunction with these efforts, Workhorse entered into a separate agreement with the holder of its prior 4.5% convertible notes to exchange the full $70.0 million outstanding principal amount of those existing notes for shares of the Company's common stock. Currently, the Company has a cash balance of over $260 million.

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