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Workhorse Group (NASDAQ:WKHS) reported Q3 sales were up 98% year-over-year to $3.0M. The increase in sales was primarily driven by the reversal of a $2.4M sales allowance in the current period related to the sale of W4 CC vehicles in Q2 of 2023. EPS was -$0.14 vs. -$0.22 a year ago.
Cost of sales decreased to $6.6M during the quarter compared to $9.5M in the same period last year. The decrease was primarily due to a $2.9M reduction in inventory reserves and adjustments in the same period a year ago as a result of the disposition of C-Series inventory. Lower sales volume in the current period reduced costs by $1.0M, which was offset by a $1.2M increase in employee compensation and related expenses as the company continued to expand its Union City, Indiana workforce to support future vehicle production.
CEO update: “In Q3, we completed both durability and systems testing, which enabled us to launch production of the W56 stripped chassis and step van models on time. We also increased production and successfully completed customer demonstrations of the W750 step van. We added two new certified dealers to our commercial vehicle network. At our Aero business, we continue to work closely with UPS Flight Forward to put our aircraft on their FAA Part 135 certificate. We sold UPS additional drones for FAA certification and field testing. Across both our Commercial Vehicle and Aerospace businesses, our teams are delivering with dedication and hard work to create high quality, reliable, industry-leading products for our customers.”
Looking ahead, WKHS now expects 2023 revenue of $10M to $15M.
Workhorse Groupo (WKHS) said that it is evaluating a broad range of strategic alternatives for its Aero business, which may include a sale of the business, strategic partnership, another transaction or the continued execution of the company’s strategic plan for Aero within Workhorse. No timetable has been set for the completion of the process.
Shares of Workhorse Group (WKHS) moved down 8.78% to $0.40 in premarket trading on Tuesday after posting another unprofitable quarter.