Lordstown Motors

Lordstown Motors Reports Full-Year Loss of $101M; SEC Requests Info in Light of Report

By Josh Medore and Dan O’Brien
LORDSTOWN, Ohio – Lordstown Motors Corp.’s chairman and CEO said Wednesday that the U.S. Securities and Exchange Commission has requested information from the company in the wake of a blistering short-seller’s report issued last week.

“We have received a request for information from the SEC and we are cooperating with that inquiry,” Steve Burns told analysts during a conference call announcing the company’s first earnings report. “The board of directors have formed a special committee to review these matters.”

Burns acknowledged that the company was aware of the short-seller’s report but declined to comment further until the special committee has completed its review.

Last Friday, market short seller Hindenburg Research released a report that alleged Lordstown Motors misled investors through public statements related to the preorders and production of its new all-electric pickup, The Endurance. The company wants to begin production of the pickup in September.

Lordstown Motors Corp.’s president Rich Schmidt said during the call that the company is on track to begin production of all-electric The Endurance by late September. The company bills the Endurance as the first all-electric pickup in the United States.

In its first earnings report since going public last fall, Lordstown Motors reports a full-year net loss of $100.55 million and $630 million in cash on hand.

The earnings report, released Wednesday, did not mention the Hindenburg report. Burns refuted the report’s allegations in the earnings statement.

“We are extremely excited and proud to be so close to delivering our first beta vehicles, which we believe should solidify and spur customer demand and commitments. Beta production reflects our innovative engineering, increasingly automated factory and unique hub wheel and battery pack capabilities,” Burns said.. “Commercial fleet customers should begin to provide feedback on betas in [the second quarter]– around the time we unveil the first prototype of our second vehicle, a van, that leverages our Endurance skateboard.”

The van, the statement continued, is expected to enter production in 2022.

For 2020, Lordstown Motors reported an operations loss of $102.48 million against income of $1.92 million. The net loss per basic share was $1.04.

For the fourth quarter, the operating cost loss was $38.55 million against $316,000 in total income. The majority of income – $239,000 – was from interest. The net loss per share was 23 cents.

Also among the highlights Lordstown Motors noted were a warrant exercise in January that resulted in an additional $82 million in cash and that the company had entered the due diligence phase for the Advanced Technology Vehicle Manufacturing loan, which Lordstown Motors hopes to complete in the second quarter. If successful, Lordstown Motors would then enter negotiations for a term loan.

For 2021, there is an expected capital expenditure between $250 million and $275 million to increase plant capacity, accelerate development of the van and build additional tools to “insource componentry to create a five-star crash-rated vehicle.”

Operating expenses are projected to be $40 million and $45 million in selling and administrative costs and between $180 million and $190 million in research and development costs. The expected year-end liquidity is at least $200 million in cash and cash equivalent, not including the ATVM loan.

“As we receive feedback from our initial customers, who we plan to deliver beta vehicles to in mid-2Q21, we anticipate an acceleration of purchase commitments, just as we start targeting and following up with municipal and government fleets for potential and significant engagement opportunities,” the statement said.

Lordstown Motors’ full earnings statement can be read HERE.

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