Workhorse Group Inc. (Nasdaq: WKHS) , an American technology company focused on providing sustainable and cost-effective drone-integrated electric vehicles to the last-mile delivery sector, today reported financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Financial Results
Sales for the first quarter of 2021 were recorded at approximately $521,000 compared to approximately $84,000 in the first quarter of 2020. The increase in sales was primarily related to an increase in trucks delivered. There were a total of six trucks delivered in the first quarter.
Cost of goods sold increased to $6.2 million from $1.7 million in the same period last year. The increase in cost of goods sold was primarily related to an increase in the volume of trucks shipped as well as an increase in employee costs.
Selling, general and administrative (“SG&A”) expenses increased to $6.9 million from $5.6 million in the same period last year. The increase in SG&A expenses was primarily attributable to an increase in employee and consulting costs.
Research and development (“R&D”) expenses increased to $3.9 million compared to $1.9 million in the same period last year. The increase in R&D expenses was primarily related to an increase in employee costs, the finalization of the design of the C-Series electric delivery truck and continued development of the HorseFly delivery drone.
Other loss increased to $136.6 million from other income of approximately $865,000 in the same period last year. The loss was primarily related to the reduction in fair value of the Company’s investment in Lordstown Motor Corporation (Nasdaq: RIDE). This loss is non-cash and is determined by the stock price of RIDE as of March 31, 2021, which was $11.77 at the time of closing.
Interest income, net increased to $14.9 million, compared to $13.0 million in the same period last year. The increase in interest income was primarily related to non-cash fair value adjustments related to our convertible notes outstanding during these periods.
Net loss was $120.5 million, compared to net income of $4.8 million in the same period last year. Excluding non-cash adjustments, operating loss for the first quarter of 2021 was $16.5 million, compared to $9.1 million in the same period last year.
As of March 31, the Company had approximately $205.1 million in cash.
CWEB Analysts have initiated a HOLD Rating for Workhorse Group Inc. (Nasdaq: WKHS). The fundamentals of the company are strong but a staggering loss in its first quarter has raised some concerns. Second quarter will be the test for Workhorse Group. If losses have decreased we can see a Strong Buy opportunity and positive cash flow.