Nikola Corporation Reports Second Quarter 2023 Results
•Executing on business plan, increasing cash position, and decreasing cash use
•Continuing to build sales momentum with 45 wholesales and 66 retail deliveries in Q2
•Began serial production of the hydrogen fuel cell electric truck July 31; first customer deliveries expected in September
•18 customer orders to Nikola and dealers for over 200 hydrogen fuel cell electric trucks
•Continued hydrogen refueling ecosystem development with partners
•Increased unrestricted cash by $107.1 million in Q2
PHOENIX – August 4, 2023 -- Nikola Corporation (Nasdaq: NKLA), a global leader in zero-emissions transportation and energy supply and infrastructure solutions, via the HYLA brand, today reported financial results and business updates for the quarter ended June 30, 2023.
“Nikola has turned the corner and is well on the way to executing our business plan and achieving profitability,” said Nikola CEO Michael Lohscheller. “We have nearly doubled our unrestricted cash position while also substantially reducing our spending. We continue to drive forward in our mission to decarbonize heavy duty trucking and ensure Nikola is successful for the long haul.”
“Our management team is highly focused on delivering trucks to customers at scale and making the most of our first mover advantage in the hydrogen refueling ecosystem” Lohscheller continued.
Execution of Strategic Priorities
During the second quarter we made substantial progress on the realignment of resources with our strategic priorities:
•Continued building sales momentum delivering 45 wholesale and 66 retail battery-electric trucks, the best retail quarter to date
•Increased our unrestricted cash position by $107.1 million while substantially reducing our adjusted free cash flow to below our $150 million target for the quarter
•Raised $233.2 million through capital raise and asset monetization, and improved visibility into future capital needs to fully fund the business model
•Closed down battery production operations of Romeo Power, Inc. (“Romeo”) and are establishing a battery pack line in Coolidge for our battery-electric trucks
•Completed the sale of European joint venture to Iveco
•Made substantial progress in the development of the hydrogen refueling ecosystem with partners
Hydrogen Fuel Cell Electric Truck
On July 31, 2023, we officially began serial production of the hydrogen fuel cell electric truck. The first customer deliveries are expected to take place in September. To date, 18 customers have placed orders for over 200 hydrogen fuel cell electric trucks with Nikola and dealers (1). During the second quarter, the remainder of the 10 gamma trucks were fully built and commissioned. Gamma trucks will be used in final vehicle validation and customer pilot testing.
Battery-Electric Truck
During the second quarter we continued to build sales momentum on the battery-electric trucks, wholesaling 45 to dealers with 66 retail sales. We expect sales momentum to continue building as customers realize the total cost of ownership benefits of zero-emissions trucks and additional government support is introduced to accelerate the transition to zero-emissions.
Energy Infrastructure
Our HYLA team is focused on ensuring there is adequate hydrogen supply to meet truck sales volumes in 2023 and beyond. We continue to move the hydrogen refueling ecosystem forward with well capitalized partners that align with our capital-efficient strategy. Voltera and Nikola are collaborating on the recently announced partnership, and we have begun the station development process for eight (8) initial stations. Our first station in Ontario, California is expected to
1.Orders are subject to receipt of purchase order from dealers to Nikola 1
go into operation by the end of 2023. We have also secured over $50 million in grant funding from various California agencies, reducing the capital costs for hydrogen stations.
On July 19, 2023, we announced Fortescue Future Industries (FFI) acquired the Phoenix Hydrogen Hub project, further validating our capital efficient strategy. We are negotiating an offtake agreement with FFI, which is intended to support hydrogen demand from Nikola truck customers starting in 2025.
In the near term as permanent station infrastructure is built, we are securing adequate fueling solutions to enable trucking operations for early customers. We expect to deploy nine (9) hydrogen mobile fuelers at several locations in California by the end of 2023 to support zero-emissions trucking operations.
Coolidge, Arizona Manufacturing Facility
In Coolidge, the Phase 2 assembly expansion has been completed and the new mixed-model line capable of building both battery-electric and hydrogen fuel cell electric trucks has been installed. The current production capacity of the facility is 2,400 trucks / year on three (3) shifts.
Progress continued on the fuel cell power module assembly line. We expect the fuel cell power module assembly line to be completed in Q4 of this year. Fuel cell power modules utilized in hydrogen fuel cell electric trucks in 2023 will be built and shipped to Coolidge by Bosch.
Progress also continued on the battery pack line installation in Coolidge. When we resume battery-electric truck production, the battery packs utilized will be built at our facility in Coolidge.
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Second Quarter Financial Highlights
Three Months Ended June 30,
Six Months Ended June 30,
(In thousands, except share and per share data)
2023
2022
2023
2022
Trucks produced
33
50
96
50
Trucks shipped
45
48
76
48
Total revenues
$
15,362
$
18,134
$
26,039
$
20,021
Gross profit (loss)
$
(27,631)
$
(29,257)
$
(50,328)
$
(28,826)
Gross margin
(180)
%
(161)
%
(193)
%
(144)
%
Net loss from continuing operations
$
(140,010)
$
(172,997)
$
(285,261)
$
(325,938)
Net loss
$
(217,828)
$
(172,997)
$
(386,922)
$
(325,938)
Adjusted EBITDA (1)
$
(125,068)
$
(95,615)
$
(228,756)
$
(177,588)
Net loss from continuing operations per share, basic and diluted
$
(0.20)
$
(0.41)
$
(0.45)
$
(0.78)
Non-GAAP net loss per share, basic and diluted(1)
$
(0.20)
$
(0.25)
$
(0.41)
$
(0.45)
Weighted-average shares outstanding, basic and diluted
708,692,817
425,323,391
629,630,362
420,266,181
(1) A reconciliation of the non-GAAP versus GAAP information is provided below in the financial statement tables in this press release.
Webcast and Conference Call Information
Nikola will host a webcast to discuss its second-quarter results and business progress at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time) on August 4, 2023. To access the webcast, parties in the United States should follow this link: https://www.webcast-eqs.com/register/nikiola20230804/en.
The live audio webcast, along with supplemental information, will be accessible on the Company's Investor Relations website at https://nikolamotor.com/investors/news?active=events. A recording of the webcast will also be available following the earnings call.
About Nikola Corporation
Nikola Corporation is globally transforming the transportation industry. As a designer and manufacturer of zero-emission battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen station infrastructure, via the HYLA brand, Nikola is driven to revolutionize the economic and environmental impact of commerce as we know it today. Founded in 2015, Nikola Corporation is headquartered in Phoenix, Arizona. For more information visit our website or Twitter @nikolamotor.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of federal securities laws with respect to Nikola Corporation (the "Company"), including statements relating to: the Company's future performance, business plan, strategy and milestones; expectations related to manufacturing facility expansion and truck manufacturing schedule; the Company’s expectations with respect to its capital needs; expectations relating to battery module and pack manufacturing; expectations relating to fuel cell power module manufacturing; expected orders and deliveries of trucks and the timing thereof; expectations related to sales momentum; the Company’s belief that it has turned the corner, that it has competitive and first mover advantage; the Company’s business outlook; the Company’s plans to ensure adequate hydrogen supply; and terms and potential benefits of planned and actual collaborations with strategic partners. These forward-looking statements generally are identified by words such as "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," and similar expressions. Forward-looking statements are predictions, projections, and other statements about future events based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: design and manufacturing changes and delays, including global shortages in parts and materials; general economic, financial, legal, regulatory, political and business conditions and changes in domestic and foreign markets; the effects of inflation and COVID-19; the outcome of legal, regulatory and judicial proceedings to which the Company or Romeo is, or may become a party; demand for and customer acceptance of the Company’s trucks; the results of customer pilot testing; the execution and terms of definitive agreements with strategic partners
3
and customers; the failure to convert LOIs or MOUs into binding orders; the cancellation of orders; risks associated with development and testing of fuel cell power modules and hydrogen storage systems; risks related to the rollout of the Company’s business and milestones and the timing of expected business milestones; the effects of competition on the Company’s business; the availability of and need for capital; the Company’s ability to achieve cost reductions and decrease its cash usage; the grant, receipt and continued availability of federal and state incentives; and the factors, risks and uncertainties regarding the Company's business described in the "Risk Factors" section of the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2023 filed with the SEC, in addition to the Company's subsequent filings with the SEC. These filings identify and address other important risks and uncertainties that could cause the Company's actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
Use of Non-GAAP Financial Measures
This press release references Adjusted EBITDA , adjusted free cash flow and non-GAAP net loss per share, basic and diluted, all of which are non-GAAP financial measures and are presented as supplemental measures of the Company's performance. The Company defines Adjusted EBITDA as earnings before interest expense, taxes, depreciation and amortization, stock-based compensation expense, and certain other items determined by the Company. Non-GAAP net loss is defined as net loss adjusted for stock-based compensation expense and certain other items determined by the Company. Non-GAAP net loss per share basic and diluted is defined as non-GAAP net loss divided by weighted average basic and diluted shares outstanding. These non-GAAP measures are not substitutes for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles in the United States (GAAP) and should not be considered as an alternative to any other performance measures derived in accordance with GAAP.
The Company believes that presenting these non-GAAP measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.
4
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Revenues:
Truck sales
$
12,006
$
17,383
$
22,061
$
17,383
Service and other
3,356
751
3,978
2,638
Total revenues
15,362
18,134
26,039
20,021
Cost of revenues:
Truck sales
40,203
46,781
73,223
46,781
Service and other
2,790
610
3,144
2,066
Total cost of revenues
42,993
47,391
76,367
48,847
Gross loss
(27,631)
(29,257)
(50,328)
(28,826)
Operating expenses:
Research and development (1)
64,514
63,106
126,320
137,663
Selling, general, and administrative (1)
58,764
79,868
101,461
157,051
Loss on supplier deposits
17,717
—
17,717
—
Total operating expenses
140,995
142,974
245,498
294,714
Loss from operations
(168,626)
(172,231)
(295,826)
(323,540)
Other income (expense):
Interest expense, net
(8,749)
(2,808)
(18,582)
(3,019)
Revaluation of warrant liability
41
3,341
315
2,907
Gain on divestiture of affiliate
70,849
—
70,849
—
Loss on debt extinguishment
(20,362)
—
(20,362)
—
Other income (expense), net
(5,546)
(27)
(5,630)
1,806
Loss before income taxes and equity in net loss of affiliates
(132,393)
(171,725)
(269,236)
(321,846)
Income tax expense
—
2
—
2
Loss before equity in net loss of affiliates
(132,393)
(171,727)
(269,236)
(321,848)
Equity in net loss of affiliates
(7,617)
(1,270)
(16,025)
(4,090)
Net loss from continuing operations
(140,010)
(172,997)
(285,261)
(325,938)
Discontinued operations:
Loss from discontinued operations
(52,883)
—
(76,726)
—
Loss from deconsolidation of discontinued operations
(24,935)
—
(24,935)
—
Net loss from discontinued operations
(77,818)
—
(101,661)
—
Net loss
$
(217,828)
$
(172,997)
$
(386,922)
$
(325,938)
Basic and diluted net loss per share:
Net loss from continuing operations
$
(0.20)
$
(0.41)
$
(0.45)
$
(0.78)
Net loss from discontinued operations
$
(0.11)
$
—
$
(0.16)
$
—
Net loss
$
(0.31)
$
(0.41)
$
(0.61)
$
(0.78)
Weighted-average shares outstanding, basic and diluted
708,692,817
425,323,391
629,630,362
420,266,181
5
(1) Includes stock-based compensation as follows:
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Cost of revenues
$
668
$
—
$
1,399
$
—
Research and development
6,574
9,300
15,660
18,007
Selling, general, and administrative
18,467
45,541
33,198
90,362
Total stock-based compensation expense
$
25,709
$
54,841
$
50,257
$
108,369
6
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
June 30,
December 31,
2023
2022
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
226,673
$
225,850
Restricted cash and cash equivalents
600
10,600
Accounts receivable, net
19,998
31,638
Inventory
86,635
111,870
Prepaid expenses and other current assets
73,010
27,943
Assets subject to assignment for the benefit of creditors, current portion
—
29,025
Total current assets
406,916
436,926
Restricted cash and cash equivalents
68,082
77,459
Long-term deposits
17,329
34,279
Property, plant and equipment, net
483,043
417,785
Intangible assets, net
89,564
92,473
Investment in affiliates
58,289
62,816
Goodwill
5,238
6,688
Other assets
9,040
8,107
Assets subject to assignment for the benefit of creditors
—
100,125
Total assets
$
1,137,501
$
1,236,658
Liabilities and stockholders' equity
Current liabilities
Accounts payable
$
45,767
$
93,242
Accrued expenses and other current liabilities
173,957
179,571
Debt and finance lease liabilities, current (including zero and $50.0 million measured at fair value, respectively)
13,417
61,675
Liabilities subject to assignment for the benefit of creditors, current portion
—
49,102
Total current liabilities
233,141
383,590
Long-term debt and finance lease liabilities, net of current portion
348,392
290,128
Operating lease liabilities
5,072
6,091
Other long-term liabilities
28,165
6,684
Deferred tax liabilities, net
15
15
Liabilities subject to assignment for the benefit of creditors
—
23,671
Total liabilities
614,785
710,179
Commitments and contingencies
Stockholders' equity
Preferred stock
—
—
Common stock
77
51
Additional paid-in capital
2,944,504
2,562,855
Accumulated deficit
(2,421,772)
(2,034,850)
Accumulated other comprehensive loss
(93)
(1,577)
Total stockholders' equity
522,716
526,479
Total liabilities and stockholders' equity
$
1,137,501
$
1,236,658
7
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June 30,
2023
2022
Cash flows from operating activities
Net loss
$
(386,922)
$
(325,938)
Less: Loss from discontinued operations
(101,661)
—
Loss from continuing operations
(285,261)
(325,938)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
11,762
9,676
Stock-based compensation
50,257
108,369
Equity in net loss of affiliates
16,025
4,090
Revaluation of financial instruments
7,906
192
Revaluation of contingent stock consideration
(2,472)
—
Inventory write-downs
12,718
10,890
Non-cash interest expense
19,363
2,457
Loss on supplier deposits
17,717
—
Gain on divestiture of affiliate
(70,849)
—
Loss on debt extinguishment
20,362
—
Other non-cash activity
1,015
273
Changes in operating assets and liabilities:
Accounts receivable, net
11,640
(16,726)
Inventory
11,725
(60,468)
Prepaid expenses and other current assets
(48,583)
(12,631)
Other assets
(2,041)
(608)
Accounts payable, accrued expenses and other current liabilities
(59,474)
15,395
Long-term deposits
(1,293)
(8,281)
Operating lease liabilities
(779)
(277)
Other long-term liabilities
3,097
(224)
Net cash used in operating activities
(287,165)
(273,811)
Cash flows from investing activities
Purchases and deposits of property, plant and equipment
(87,719)
(67,316)
Divestiture of affiliate
35,000
—
Payments to Assignee
(2,724)
—
Investments in affiliates
(84)
(23,027)
Net cash used in investing activities
(55,527)
(90,343)
8
Cash flows from financing activities
Proceeds from the exercise of stock options
1,040
565
Proceeds from issuance of shares under the Tumim Purchase Agreements
67,587
123,672
Proceeds from registered direct offering, net of underwriters discount
63,806
—
Proceeds from public offering, net of underwriters discount
32,244
—
Proceeds from issuance of common stock under Equity Distribution Agreement, net of commissions paid
61,565
—
Proceeds from issuance of convertible notes, net of discount and issuance costs
52,075
183,510
Proceeds from issuance of Collateralized Promissory Notes
—
50,000
Proceeds from issuance of financing obligation, net of issuance costs
49,605
38,582
Proceeds from insurance premium financing
3,909
—
Repayment of debt and promissory notes
(5,057)
(25,000)
Payments on insurance premium financing
(2,381)
—
Payments on finance lease liabilities and financing obligation
(255)
(192)
Net cash provided by financing activities
324,138
371,137
Net increase (decrease) in cash and cash equivalents, including restricted cash and cash equivalents
(18,554)
6,983
Cash and cash equivalents, including restricted cash and cash equivalents, beginning of period
313,909
522,241
Cash and cash equivalents, including restricted cash and cash equivalents, end of period
$
295,355
$
529,224
Cash flows from discontinued operations:
Operating activities
(4,964)
—
Investing activities
(1,804)
—
Financing activities
(572)
—
Net cash used in discontinued operations
$
(7,340)
$
—
9
Reconciliation of GAAP Financial Metrics to Non-GAAP
(In thousands, except share and per share data)
(Unaudited)
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
(in thousands)
Net loss from continuing operations
$
(140,010)
$
(172,997)
$
(285,261)
$
(325,938)
Interest expense, net
8,749
2,808
18,582
3,019
Income tax expense
—
2
—
2
Depreciation and amortization
5,524
6,565
11,762
9,676
EBITDA
(125,737)
(163,622)
(254,917)
(313,241)
Stock-based compensation
25,709
54,841
50,257
108,369
Loss on supplier deposits
17,717
—
17,717
—
Gain on divestiture of affiliate
(70,849)
—
(70,849)
—
Loss on debt extinguishment
20,362
—
20,362
—
Revaluation of financial instruments
5,633
196
5,434
192
Regulatory and legal matters (1)
2,097
12,970
3,240
27,092
Adjusted EBITDA
$
(125,068)
$
(95,615)
$
(228,756)
$
(177,588)
(1) Regulatory and legal matters include legal, advisory, and other professional service fees incurred in connection with a short-seller article from September 2020, and investigations and litigation related thereto.
Reconciliation of GAAP to Non-GAAP Net Loss, and GAAP to Non-GAAP Net Loss per Share, basic and diluted
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
(in thousands, except share and per share data)
Net loss from continuing operations
$
(140,010)
$
(172,997)
$
(285,261)
$
(325,938)
Stock-based compensation
25,709
54,841
50,257
108,369
Loss on supplier deposits
17,717
—
17,717
—
Gain on divestiture of affiliate
(70,849)
—
(70,849)
—
Loss on debt extinguishment
20,362
—
20,362
—
Revaluation of financial instruments
5,633
196
5,434
192
Regulatory and legal matters(1)
2,097
12,970
3,240
27,092
Non-GAAP net loss
$
(139,341)
$
(104,990)
$
(259,100)
$
(190,285)
Non-GAAP net loss per share, basic and diluted
$
(0.20)
$
(0.25)
$
(0.41)
$
(0.45)
Weighted average shares outstanding, basic and diluted
708,692,817
425,323,391
629,630,362
420,266,181
(1) Regulatory and legal matters include legal, advisory, and other professional service fees incurred in connection with a short-seller article from September 2020, and investigations and litigation related thereto.
