RIDE - Earnings call transcript Q1 2022

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Operator

Good day and welcome to the Lordstown Motors First Quarter 2022 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to Carter Driscoll, Vice President of Corporate Development, Capital Markets and Investor Relations. Please go ahead, sir.

Carter Driscoll

operator. you, Thank thank Motors' and all joining for Good quarter you XXXX Lordstown first earnings the morning to conference call. discussion, press deck. To to today's please our to supplement IR view our release investor and go website

forward-looking our from cause Before we to and and posted the provision identifies want statements safe begin, results as uncertainties our differ is factors difficulty content may part outcomes. forward-looking in other XX-K that our predicting the quarterly risk safe update. in harbor including attention statements The for materially call for on harbor your I to website that of Form that our the cite actual filings, we posed reasons by future of to our SEC provision

CEO, Motors Dan With to Lordstown be Ninivaggi; Adam Edward Dan. and the will today I'd us that, call Hightower; Kroll. to CFO, like turn over President, Joining

Dan Ninivaggi

Carter, Thank supply the the Lordstown in everyone. the like entire with, begin the of Endurance QX. you, pleased thank faced. has in industry their challenges and to unprecedented towards the launching welcome, efforts light we've made I'm for I'd team chain particularly To extraordinary progress with

size the Our the full of course pickup number truck. remains successful Endurance one of priority launch

we what in quarter and homologation XXXX. more of where commercial full beginning building our am While we experienced engineering on Edward continue target vehicles to testing deliveries. third production the we to some provide delays commercial to to are or PPVs, and have are I report and be achieve start-up validation pre-production in detail pleased remains design final that done underway, and will

over commercial vehicles to at We van all work pickup fleet given see are market XX% the the motor in strong among the truly American the expected XX be believe of market one cost the ownership With the hub unique underserved total future in-wheel Endurance types, EV Endurance over combination believe continue offer The of radius. including The be customers, and next years. is than next control, few few focus of terms for in handling, advantages traction this interest pickup to will we trucks. will that we conventional In design, grow size a the and full requirements. years. demand, segments full-size truck and also fleet With strong costs. superior in the trucks market foreseeable specific their maintenance and for will on particularly North be will pickup and believe we of demand Endurance propulsion moving commercial turning the torque systems, more parts of BEV CAGR overall fewer have electric customer will

sales driven be plan by volumes. production our Our will respective commercial primarily

in discuss our significantly will As selling later than presentation, at our price. Edward and higher the Adam costs be launch material of bill will anticipated

reduce plan transactions. moving prototype a costs and BOM production suppliers, Foxconn time to in the our realizing have through from initiatives, benefits We of over investments the to hard tooling, VAVE

sheet off achieve needed and However, amount being, tooling production new to hard at balance manage least investments targets. on or and in hold the to limit plan capital the for we time other initial to our order larger the of

of fleet As of forecasted be vehicles small On we'll run an offer in so, best selling XX to our units for a the partners on relationships. of XXX a half months approximately last long-term over initial result, the focused number back we production next relatively XXXX. the strategic or opportunities who call,

to the XXXX. likely expect to occur XXX some produce the of are part although continue deliveries early in to We units

for through BOM Following and Endurance, other scale to chain the of including potential partnerships. initiatives, timing the expect ramp actions, we the up our reduction scope and our of Foxconn, production to closing transaction, supply with opportunities evaluate cost plan the strategic jointly OEM

detail, be more we in capital discuss be dependent, will production will As but Adam prepared. ramping will

significant turning well. Now market a the that segments. presents structure, product, objectives. in help the contract I EV and Foxconn vehicle LMC to manufacturing, plan, trains innovative certain under of market, startups global a these last to achieve as capture our But not the electrified components strategy, a brings share meaningful in with cost efficiently competitive we the success like serve conversion on and can long-term Foxconn development ambitions and differentiated platform to market. gain an us in that as a power products penetrate each mentioned quickly opportunity share with deliver commercial a OEM of automotive to call, particularly I a just but to key believe our has partnership scale, very unusual requires

increased together harmony smaller the Foxconn The open Scaling achieve our source other reduce MIH benefit from and overhead a of lower OEMs utilization, capacity the state-of-the-art EV Foxconn to over provide would platform is manufacturing being common opportunity of and excellent shared internal material In North raw XXX the plant partnership are costs. plant, At has the converted has automotive in Foxconn being with manufacturing benefits the at and Foxconn the plants largest specialized use complex that other will Lordstown is space addition million combustion whose faster. matters, strategic time. of should of potential the with square to without one more full fill plant partnership automotive facility. use by of scale or a and the America components unlock acres, Lordstown opportunity developed, in LMC significantly getting input costs all scale integrated component to and fully OEMs benefits, an vehicles X.X also that large, mobility it to automaker. the built the the feet to

supply purchasing our chain well minimize manufacturer as reduce on capabilities largest costs us contract the world, Foxconn the network As and as would we supply risks. logistics in necessary global has to production significantly better the our a own integrated power chain vehicle help and than

EVs, as a in expertise also software critical benefit multinational We to Foxconn's to manufacturer. their electronics from expertise stand integration, given hardware and

grow As over should we these together, only benefits time. improve

vertically the When of with for we and vehicles electric a new partnership development stated an agreement, transaction, MIH under for OEMs. extend that deal, because agreement would the our on Foxconn of LMC of arrangement a common made a that and the the new us would develop off announced opportunity. will use much progress vehicles last of platform. vehicle systems we with utilizing to was off we manufacturing would with requires beyond components This a in provide collaboration important an the compete scalable have a our MIH common us Finally, larger Since which platform terms integrated would part that venture Foxconn development call, allow architecture explore Foxconn contract likely joint we platform. LMC earnings vehicles of and agreement. contract Foxconn in manufacturing The view, MIH future

be past XX, I'm towards the have with to and transaction. may relationship not weekend, we've the our more close APA until annual I to on our May under progress time solid. Foxconn been with not agreed Foxconn definitive we're While down-payment launch shareholders to XX from closing, reached Endurance pleased little provide a meeting repayment moving made before and the deadline Foxconn. In conclude extend and agreements our with the reached, our readiness relationship the building day very believe This remains May

and achieving close vehicle important We that, tremendous over very very call milestones. very notwithstanding the President, I'll a unique challenges. to to Edward have We're our With Hightower. turn

Edward Hightower

Dan. you, Thank

an build product discussed Endurance we at on launch. update immediate a in Lordstown and start QX As you two to development launch in to Foxconn. our will with the February, objectives I Endurance Motors giving the are by relationship

Over vehicles the PPV with production to we our builds Endurance last or the continued make on Lordstown line. quarter, have progress preproduction

the progress completion part facility the and preparations and Lordstown completed impacted of and and vehicles and our the CAE testing. system our having over rate readiness, manufacturing experienced aluminum have builds, greatest date testing in quality impact, We for performance with engineering tests has begin Engineering some enclosure, launch. chain with disruptions, are at launch We plant. the the availability and to the speed well battery quarter correlated of and made Endurance frames, the we these vehicle PPV timing steel Computer supply Under the the The that sufficient the or disruptions governance structure, Despite our chips production analyses. commodities governing various Aided engineering Endurance for the including Endurance. validation as these planned, modules of computing performance predicted our have and body in to our also by

side rear for been frontal have we test are and crash vehicle. our crash example, performance X-star predicting results NCAP FMVSS still positive, the For and

We and EPA, certification, are process CARB homologation Endurance building PPVs the in tests the for including FMVSS. of currently and for

for on builds disruptions testing being to supply our rate our issues and capable professionals and any purchasing and of Any the teams. team of normal uncovered is experienced or issues are tirelessly by timing. vehicle and engineering resolving the highly addressed during launch chain motivated impact business launch. mitigate working build are Our Finding

to year. this CRP pleased are to of plans reaffirm commercial We QX start release in our production

in Farmington Columbus, completion, will have start PPVs Indianapolis evaluation at in Hills in Endurance and expected latest The Clean Week NAFA ACT Ohio. commercial drive deliveries our PPVs NTEA certification can in timeline and participating be week and Truck for leadership Advanced customer Given that engineering Expo, California. Transportation to teams look anticipate the R&D center. we Beach, QX. updates the conducting near forward We Lordstown Work found been fleet software this in Endurance recently our Expo Long regularly displayed of

fast-charging on of also without hub agile, gravity itself capability. get the public at many Post-launch Endurance bill the charging continues as might as be show higher and to DC the selling is the low than to the in anticipated Endurance and that future and will You this We all the costs, expect of to it. our maneuverable, responsive Endurance With level Dan materials, area. one our previously in-wheel we of cannot center our encounter hands will compromising motors, wait in two stations in significantly reducing love our focus BOM explained, they plans of price. Endurance customers for

a the value the tooling to intent Following value significantly planned series raising necessary and analysis, BOM hard projects we with costs. engineering reduce capital, have of our investments

have develop, around EV an vehicle and savings. of decision mentioned of our the on earlier, agreement Switching with as to production ambitions the expected programs these Dan realization Foxconn MIH, the the Mobility-in-Harmony electric to launch of be we open jointly platform. with is scaling programs the using of engineered, design to Foxconn's and development EV timing working product projects Foxconn, will market with Our Endurance implementation companies. industrialize been relationship battery both aligned Co-developing tied

customers Lordstown, OEM concept innovative an vehicles business new supply create MIH of contract for manufacturing These agreement other an with at model vehicles team plant, capability America around built at through ourselves objective The have at this would North Ohio we and potentially the launch. OEM chain platform, the for volumes motivated If footprint, is and time flexible and other develop vehicles from world. Foxconn users manufacturing develop market. the with where achieve experienced globally. new We lower to reached this to would new shorter to be production scale a will for and locations

Foxconn development provide product our LMC increase agreement For with of reduce breadth vehicle particular, a will in scalable product the costs, portfolio. this and our development platform,

now been As call constructive, at I Adam. Dan has to over a while will And not the been Thank Foxconn discussions definitive you. reached. our this have with stated, agreement stage turn

Adam Kroll

progress and everyone the Thank Edward's quite joining on Dan to potential morning also Lordstown. the and for first in you you, thank quarter our and of real both I'm focused Edward. challenges. I our us. enthusiasm for Good share

I and Dan chain had and supply macro As in progress of midst was the headwinds. discussed, our strong

number Endurance. priority Our production is the of one launching commercial

starting vehicle believe key hyper was get evaluating our trade-offs required serve I in of required customers' a the capital I'm call, focused and to that of managing guided in this business last large million that of plan and in production cash commercial of advance our there. the the driving needed year, our share new program. area QX. into to XXX hands we catalyst As which the success getting as On of the on position sales the will

the been As the not capital to have Notwithstanding, we advisors well markets work for with alternatives. know, sector. continue you all financing our on open available

moment, the a at limited disciplined and options to our with allocating our capital. taking balanced approach are current we However,

and plan the give production are target. pursuing the business best now, will we Endurance opportunity initial that launch For us to hit our a

around proceeds is a our capital we As of that This XXX in year believe new result, sale this the the minimum is cash target. including from to to the million, required plant the addition Foxconn. year-end remaining

other with delay to tooling hard investments hold-off year, in we investments will raise this the a sufficient for The until We trade-off originally capital. is Late resulting on QX, but in hard the will planned we principal defer operating primarily times. along tooling, bill last that costs we the cost generally year, some lead as the discussed hard of move reductions last materials call, kicked on has in from long of the and tooling tools. off we

So cost are not hard BOM other not To doing we're stopping by the for our VAVE. work than relatively XXXX modest meaningfully on inflation, tooling is impacted be clear, we deferral. or the

a plan will execute detailed sufficient when We place have we if in to raise and capital.

offset down the of capital and quarter, respect in quarter we incurred increase to more first With to X.X costs, from a million I'll from representing first with and loss each of cash million operating of XX with modest down in payment level under Now cash, the first million by APA XX/XX. a in approximately than the QX XX turn a three XXXX. XXX.X total The and million Foxconn operations from CapEx benefits. Starting of million high XX quarters million cash decrease slightly XX non-cash excluding X.X million in the the XX.X million from working XX.X from walk our results. in items almost we quarter ended million is

Lordstown expenditures. mix first in To generated increase the engineering breaking costs address with time, prior R&D spend However, from changed. R&D SG&A QX. as of we to your questions Headline essentially out was of the our for many in associated flat total has are the manufacturing facility the

costs quarter, about QX of offset increasing with parts. compares that year-end accruals other personnel be get testing lower the along and R&D obtaining with facility, headcount, indirect about costs with two-thirds our our the were a The is personnel into the within the significantly plant employee represents million. under XX.X we to as QX more levels. costs freight million manufacturing to rising when which total plant totaled Our XX.X utilities. and were by and in it our higher freight XX.X comp, includes just costs own about Directionally, half plan, stock we million This costs due largely activities quarter costs XX% associated of of operating to some related if higher engineering freight continue for production and would and activity and

outside as we are up particularly other As expected to and through increase thereafter. time, engineering with I costs testing last costs suggested activities, these variable ramp launch specialty services along decreased

approximately The XX three component XX and major to four million XX QX, compared in first were million XX million, and million costs the QX these the quarter, in XX.X XXXX, are million spend costs, QX. comparison, in For last of million quarters and two, respectively in XX.X million vehicle totaling year. R&D XX.X last in category

the components shift Over months, of there the a course has these last been how are in XX used.

After prototype early the of closing we into in XX and by in price the remaining purchase went price vehicles those vast then and The whereas the pre reimbursement operating million Foxconn, spend total vehicles testing design majority example, down of majority principle we beta toward Endurance. million the vast payments components the on of at XXXX the consisting agreement For and April of options last XXX million million flows followed XX consisting for estimated million with production To-date production, The million in XXXX, new January, common the have and early these and since and Foxconn. with level decrease launch, a an is to invested million XX.X million wanted et be in flow, quarter, initial to million ready to plant cash November, primarily million in XX this the homologation. get XXX expenses With with engineering for on to initial received normalized XX.X during for tooling last respect ongoing year. in stock dramatically should certification of from and the XX for we of cetera. to basic XX.X vehicle in cash business spend associated the September, touch of along APA designs. $XX as focus in a the I CapEx. thing executing amounts on certain purchase was shifted then paid The the for of in the costs

if XXX XXX, as have over So balance cash closes, forma of would transaction the million. pro been our

commercial With all the are Endurance on very the verge we excited. production, of

see We I'll in and to have outside our operator entirely results to all questions. for for almost XXX our Lordstown commitment I vehicle. colleagues facing and that, believe open achieve headwinds, of With eager our come working that macro I'm challenges with the mission. daily to tirelessly purpose-built it passion designing our ask and stakeholders the an up and the new team, delivering

Operator

[Operator question is First America Murphy Bank from of of Instructions] John Merrill Lynch.

John Murphy

relationship to amount start have the shareholder prior with that? triggered delayed was meeting? to you that that got XXX a payment? didn't payment? of if that that I'm the I If going guys of XXX And to that me gets trying he made What's on payment the be nature here, the is understand What get what Foxconn alluded doesn't to to and

Adam Kroll

date it's Adam. the to required be to the payments XXX John, transaction. would Yes, repay is date the Foxconn The that down us for

by that now again, then date was to been said that the didn't extended his the remarks, has date but as we So if in close Dan XXth.

payments it make that had just it. was sense? to it's the extended So, which, but data we've be the again, repaid, Does

John Murphy

Okay.

million by that's So, that paid them. XXX means been the

get So far, close that's… need be to deal. you we the I repaid mean, didn't if

Adam Kroll

XXX. all not It's

John Murphy

XXX.

Adam Kroll

yes. XXX,

XX XXX, I last of bought said was October. when the XXX they So, common that

XXX. on have or been deal the down So, payments

John Murphy

consummated? So delayed I'm days? some happens for what it be reason why And for confused, four not would so it's if

Adam Kroll

hard complex a on we've deal with. it it's delay, the Well, working been

date we get done, to just originally when done. everything that we that November, try deal, haven't everything had signed in and the gotten set we was the So to

John Murphy

I then you of if I on viable? basically if this walking right? year you've payments, deal cash the have --it's But you are and that the chicken make the egg, goes doesn't, hand that, it XXX payment, you and or is deal that incremental got to goes If the the had rest the If you think make if mentioned, through had the mean, million, me, raising million. XXX the you make and you to the through

Adam Kroll

no. No,

we haven't loan because So to filings, right. If payments the come John, the it. closed we've deal, said our fund or we the have due in down the public comes due, cash wouldn't

have avoid that. fairly in said, So close product complicated. And deal like constructive just order to expect, Foxconn. development is contract discussions agreement with we had It's the simple complicated to we The not a I joint manufacturing agreement. we've do deal. It's

it's longer dialogue. to expected. think would Foxconn And the good, fact So little than the constructive a in a agreed a extend again, we deadline, we're that sign. repayment I taken bit But say I good it's

John Murphy

price surprising. two, breakeven of crossover to But you if than kind the you then of think given guess years we to greater three of the reach profitability? point, with cost the one, I cost the And up, the think price on to about, and ramping probably projected as than when cost inflation per point crossover the of initial too sort you going that's, a not start that BOM out, at unit that's turn actually about sale, reset basis, I cost on of when greater everything's or mean, do point we

Edward Hightower

dependent. Edward. It's capital is this John, really

through heart tools the said, and we VAVE work invest investments the our plan those, to a those projects. down raise projects. we continue BOM those but get the towards capital tooling to have plan to As our to We'll have in we costs as on there a we bring

Adam Kroll

tools lead hard the time with varies. And

of what So, basis, a months. in come but on in it's, XX general, kind we'd graduated

Edward Hightower

XX of in to projects Yes, when plan implemented. that to be we is months, expect the have our we all XX

John Murphy

by, constrained it's that I moment. Is the capital, obviously, mean, constrained by

tooling? possibly is function If the you and hard had up? that that moment, and liquidity, a way handcuffed unconstrained be were of completely the Or just you could at all work the could sped things on want

Adam Kroll

projects to the longer have months, XX again, it's items, a but just we as could about saying, Some of but up there that was XX are dependent. XX speed Dan capital of some months, other lead timeline

John Murphy

you been with than Foxconn, that any you've the contract with Fisker, other manufacturing with and directly have not rumored you had there would more potentially interest? it's that much other And contract Lordstown any confirm that that and manufacturing, Foxconn automakers than be have at are discussions that are rumor an discussions Fisker automakers facility. obviously, other on Can

Dan Ninivaggi

is the that we comment alluded other then getting some think of into Yes, Endurance those Foxconn. wouldn't as I in After now. focus we'll comments. launch on opportunities, getting pursue done my the I mean, with to deal and that, I the

Operator

to concludes [Operator question-and-answer final Instructions] the turn And I'd session. ladies our remarks. conference team back over for the to like and gentlemen, this management any

Dan Ninivaggi

all in for I'd and the team, distractions the teams today. to fact in Foxconn are and Thanks core to those and hard I'd challenges support. work our that shareholders close has again, our us. to I'm as all to call. also has by that LMC the of never And who participated the particular for where their let thank proud like corporate overwhelm thanking like manufacturing, very the we engineering

sooner. program day. forward our quarter, management been next processes continue not With look fact, have never speaking every you better, and and thank to you business with if that, to improve In

Operator

all This thank you Thank We attending today's you. conference hall. for presentation. concludes today's

have You and lines may now wonderful a your disconnect day.

Nu Ride (NRDE) 9 May 222022 Q1 Earnings call transcript