XL Fleet Corp. (NYSE: XL) (“XL Fleet” or the “Company”), a
leading provider of fleet electrification solutions and energy
efficiency, today announced second quarter 2022 financial
results.
Second Quarter 2022 and Recent Highlights
- Generated revenue for second quarter of 2022 of $3.0 million,
compared to $3.7 million in the prior year
- Realized gross profit for the second quarter of 2022 of $0.6
million versus gross profit of $1.0 million in the prior year
- Exited second quarter of 2022 with cash and cash equivalents of
approximately $322.4 million
- Appointed Donald P. Klein as CFO of XL Fleet; seasoned
executive with 25+ years of public company experience
- Unveiled pre-series Curbtender Quantum refuse truck at
WasteExpo 2022; the Company’s first all-electric vehicle
- Advancing process to identify transformational M&A focused
on large and growing need for decarbonization
Management Commentary & Outlook
“Our progress towards identifying transformational M&A
accelerated during the quarter,” said Eric Tech, CEO of XL Fleet.
“We remain firmly committed to utilizing our significant financial
resources and platform to identify opportunities that deliver value
and position our company to contribute to the wide, growing and
cross-industry need for decarbonization. We have narrowed our
focus, and remain keen on identifying opportunities that achieve
our three core requirements – a business that is making an impact
on decarbonization, a leader in a mature and growing market
segment, and a company that is generating positive EBITDA. We are
more confident than ever in our ability to identify an opportunity
that checks these boxes and accomplishes the long-term strategic
objectives we set forth earlier this year.”
“During the quarter, we unveiled and made exciting progress on
our Curbtender refuse truck, our first all-electric vehicle, which
remains on target for first deliveries by the end of this year,”
continued Mr. Tech. “We continue to constantly evaluate new
opportunities for growth, while assessing the right and most
efficient uses of our resources and capital to benefit our business
and its value over the long-term.”
Consolidated Financial Results
Revenue totaled $3.0 million in the second quarter of 2022
compared to $4.8 million in the first quarter of 2022 and $3.7
million in the second quarter of 2021.
Gross profit was $0.6 million for the second quarter of 2022,
compared to a gross loss of $0.4 million in the first quarter of
2022 and gross profit of $1.0 million in the second quarter of
2021. Gross margins for the second quarter of 2022 were 19%,
compared to gross margins for the first quarter of 2022 of negative
9%.
Selling, general & administrative expenses for the second
quarter of 2022 totaled $12.8 million, compared to $11.7 million in
the first quarter of 2022 and $10.8 million in the second quarter
of 2021. SG&A expenses for the second quarter of 2022 include
approximately $2.5 million in legal fees related to previously
disclosed class action complaints and Securities and Exchange
Commission investigation.
Adjusted EBITDA totaled ($11.7) million for the second quarter
of 2022, compared to ($10.8) million for the first quarter of 2022
and ($11.4) million in the second quarter of 2021.
Net loss was $12.7 million for the second quarter of 2022,
compared to net loss of $16.1 million in the first quarter of 2022
and net loss of $10.5 million in the second quarter of 2021. Net
loss for the second quarter of 2022 includes a non-cash gain from
the change in fair value of warrant liability of $1.8 million,
compared to a non-cash gain of $2.7 million in the first quarter of
2022. Adjusted net loss was $11.7 million for the second quarter of
2022, compared to adjusted net loss of $11.4 million in the first
quarter of 2022 and adjusted net loss of $11.8 million in the
second quarter of 2021. A reconciliation of net loss to adjusted
net loss and adjusted EBITDA is set out in the tables below.
Segment Financial Results
Drivetrain: Revenues totaled $0.9
million for the second quarter of 2022, compared with $0.6 million
in the first quarter of 2022 and $1.3 million in the second quarter
of 2021. Segment loss was $3.4 million dollars, compared with a
segment loss of $5.9 million in the first quarter of 2022 and a
segment loss of $4.0 million in the second quarter of 2021. Segment
loss for the second quarter of 2022 included a non-cash inventory
obsolescence charge of $0.2 million and $0.2 million of
restructuring charges.
XL Grid: Revenues totaled $2.2
million for the second quarter of 2022, compared with $4.2 million
in the first quarter of 2022. The sequential decrease in revenue
for the second quarter of 2022 was primarily driven by significant
utility program changes and project approval delays, material
availability, and longer sales cycle times attributed to larger
project mix. Segment loss was $1.5 million dollars, compared with a
segment loss of $1.4 million in the first quarter of 2022.
Balance Sheet and Capital
Cash and cash equivalents as of June 30, 2022 totaled $322.4
million compared to $333.5 million as of March 31, 2022. Total debt
outstanding as of June 30, 2022 was approximately $0.03 million. XL
Fleet had 142 million shares of Common Stock outstanding as of June
30, 2022. Cash used in operations for the second quarter of 2022
totaled $11.2 million.
Second Quarter 2022 and Recent Operational & Business
Updates
- In May 2022, XL Fleet announced the unveiling of its pre-series
Curbtender Quantum refuse truck at WasteExpo 2022. The vehicle is
being jointly developed in collaboration with Curbtender, Inc. and
represents the company’s first all-electric refuse vehicle.
- In April 2022, XL Fleet announced that it appointed Donald P.
Klein as Chief Financial Officer of XL Fleet. Mr. Klein is an
accomplished senior executive with over 25 years of public company
finance & accounting experience. Mr. Klein has strong industry
experience and a track-record of execution in complex operating
environments.
Conference Call Information
The XL Fleet management team will host a conference call to
discuss its second quarter 2022 financial results today at 5:00
p.m. Eastern Time. The call can be accessed live over the telephone
by dialing (877) 510-3772, or for international callers, (412)
902-0125 and referencing XL Fleet. Alternatively, the call can be
accessed via a live webcast accessible on the Events &
Presentations page in the Investor Relations section of The
Company’s website at www.xlfleet.com. A replay will be available
shortly after the call and can be accessed by dialing (844)
512-2921, or for international callers, (412) 317-6671. The
passcode for the replay is 10169416. The replay will be available
until August 23, 2022. An archive of the webcast will be available
for a period of time shortly after the call on the Investor
Relations section of The Company’s website at www.xlfleet.com.
About XL Fleet
XL Fleet is a leading provider of energy efficiency and vehicle
electrification solutions for commercial and municipal fleets in
North America, with more than 170 million miles driven by customers
such as The Coca-Cola Company, Verizon, Yale University and the
City of Boston. XL Fleet’s hybrid electric drive systems can
significantly increase fuel economy and reduce carbon dioxide
emissions, decreasing operating costs and meeting sustainability
goals while enhancing fleet operations. For additional information,
please visit www.xlfleet.com.
Forward Looking Statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of the federal
securities laws. Forward-looking statements generally are
accompanied by words such as “believe,” “may,” “will,” “estimate,”
“continue,” “anticipate,” “intend,” “expect,” “should,” “would,”
“plan,” “predict,” “potential,” “seem,” “seek,” “future,”
“outlook,” and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
These statements are based on various assumptions, whether or not
identified in this press release, and on the current expectations
of management and are not predictions of actual performance.
Forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements, including but not limited to;
the effects of pending and future legislation; the highly
competitive nature of the Company’s business and the commercial
vehicle electrification market; litigation, complaints, product
liability claims and/or adverse publicity; cost increases or
shortages in the components or chassis necessary to support the
Company’s products and services; the introduction of new
technologies; the impact of the COVID-19 pandemic on the Company’s
business, results of operations, financial condition, regulatory
compliance and customer experience; the potential loss of certain
significant customers; privacy and data protection laws, privacy or
data breaches, or the loss of data; general economic, financial,
legal, political and business conditions and changes in domestic
and foreign markets; the inability to convert its sales opportunity
pipeline into binding orders; risks related to the rollout of the
Company’s business and the timing of expected business milestones,
including the ongoing global microchip shortage and limited
availability of chassis from vehicle OEMs and our reliance on our
suppliers; the effects of competition on the Company’s future
business; the availability of capital; supply chain issues
including the lack of available components and/or inflationated
component prices, including with respect to batteries, solar
panels, and other critical components, and the other risks
discussed under the heading “Risk Factors” in the Company’s current
report on Form 10-K filed on March 1, 2022, and other documents
that the Company files with the SEC in the future. If any of these
risks materialize or our assumptions prove incorrect, actual
results could differ materially from the results implied by these
forward-looking statements. These forward-looking statements speak
only as of the date hereof and the Company specifically disclaims
any obligation to update these forward-looking statements.
Use of Non-GAAP Financial Information
To supplement its consolidated financial statements, which are
prepared and presented in accordance with U.S. generally accepted
accounting principles (“GAAP”), XL Fleet Corp. reports certain
non-GAAP financial information which have been reconciled to the
nearest GAAP measures in the tables within this press release. This
prospective financial information was not prepared with a view
toward compliance with published guidelines of the SEC or the
guidelines established by the American Institute of Certified
Public Accountants for preparation and presentation of prospective
financial information or U.S. GAAP with respect to forward looking
financial information. We believe that these non-GAAP measures,
viewed in addition to and not in lieu of our reported GAAP results,
provides useful information to investors by providing a more
focused measure of operating results, enhances the overall
understanding of past financial performance and future prospects,
and allows for greater transparency with respect to key metrics
used by management in its financial and operational decision
making. The non-GAAP measures presented herein may not be
comparable to similarly titled measures presented by other
companies.
Earnings (loss) Before Interest, Income Taxes, Depreciation,
and Amortization (“EBITDA”): We define EBITDA as our
consolidated net income (loss) and adding interest expense, income
taxes, and depreciation and amortization. We believe EBITDA
provides meaningful information to the performance of our business
and therefore we use it to supplement our GAAP reporting. We have
chosen to provide this supplemental information to investors,
analysts and other interested parties to enable them to perform
additional analyses of operating results.
Adjusted EBITDA and Adjusted Net Income (Loss): We
believe that adjusted EBITDA and Adjusted Net Income (loss), which
excludes certain identified items that we do not consider to be
part of our ongoing business, improves the comparability of year to
year results, and is representative of our underlying performance.
Management uses this information to assess and measure the
performance of our operating segments. We have chosen to provide
this supplemental information to investors, analysts and other
interested parties to enable them to perform additional analyses of
operating results, to illustrate the results of operations giving
effect to the non-GAAP adjustments shown in the below
reconciliations, and to provide an additional measure of
performance.
XL Fleet Corp.
Unaudited Consolidated
Statements of Operations
For the Three and Six Months
Ended June 30, 2022 and June 30, 2021
Three Months Ended June
30,
Six Months Ended June
30,
(In thousands, except per share and share
amounts)
2022
2021
2022
2021
Revenues
3,010
3,694
7,773
4,369
Cost of revenues
2,445
2,732
7,641
4,123
Gross loss
565
962
132
246
Operating expenses: Research and development
2,404
2,809
5,393
4,221
Selling, general, and administrative expenses
12,801
10,822
24,459
18,780
Impairment of goodwill
-
-
8,606
-
Loss from operations
(14,640
)
(12,669
)
(38,326
)
(22,755
)
Other (income) expense: Interest expense, net
7
10
19
21
Gain on extinguishment of debt
-
-
(4,527
)
-
Gain on asset disposal
(7
)
21
(16
)
21
Change in fair value of obligation to issue shares of common stock
(137
)
514
(498
)
514
Change in fair value of warrant liability
(1,783
)
(2,726
)
(4,500
)
(74,731
)
Other Income
(22
)
(19
)
(29
)
(25
)
Net (Loss) Income
$
(12,698
)
$
(10,469
)
$
(28,775
)
$
51,445
Net (loss) income per share, basic
$
(0.09
)
$
(0.08
)
$
(0.20
)
$
0.37
Net loss per share, diluted
$
(0.09
)
$
(0.08
)
$
(0.20
)
$
(0.17
)
Weighted-average shares outstanding, basic
142,247,590
139,237,805
141,760,478
137,416,593
Weighted-average shares outstanding, diluted
142,247,590
139,237,805
141,760,478
137,598,535
XL Fleet Corp.
Segment Results
For the Three and Six Months
Ended June 30, 2022 and June 30, 2021
Three Months Ended June
30,
Six Months Ended June
30,
(In thousands)
2022
2021
2022
2021
As Reported DriveTrain Revenues
$
808
$
1,282
$
1,406
$
1,957
Loss from Operation
(3,404
)
(3,950
)
(9,310
)
(7,511
)
XL Grid Revenues
$
2,202
$
2,412
$
6,367
$
4,221
Loss from Operation
(1,453
)
(438
)
(2,894
)
(489
)
Corporate Revenues
$
-
$
-
-
-
Loss from Operation
(9,782
)
(8,282
)
(26,122
)
(14,754
)
As Adjusted (1)
DriveTrain Revenues
$
808
$
1,282
$
1,406
$
1,957
Loss from Operation
(3,211
)
(3,950
)
(7,599
)
(7,511
)
XL Grid Revenues
$
2,202
$
2,412
$
6,367
$
4,221
Loss from Operation
(1,453
)
(438
)
(2,894
)
(489
)
Corporate Revenues
$
-
$
-
$
-
$
-
Loss from Operation
(7,081
)
(7,357
)
(12,616
)
(13,829
)
(1) As adjusted adjusts for the following
one-time charges: Severance charges (including benefits) included
in Corporate, Inventory charge for obsolete inventory included in
DriveTrain, Goodwill impairment charge included in Corporate, Legal
charges related to SEC investigation and shareholder lawsuits
included in Corporate, Accreted contingent compensation obligation
to sellers of World Energy included in Corporate, Accelerated
amortization of right-of-use asset included in Corporate,
Non-recurring World Energy acquisition expenses included in
Corporate.
XL Fleet Corp.
Reconciliation of Non-GAAP
Financial Measures
For the Three and Six Months
Ended June 30, 2022 and June 30, 2021
Three Months Ended June
30,
Six Months Ended June
30,
(In thousands)
2022
2021
2022
2021
Reconciliation of Net (Loss) Income to EBITDA and Adjusted
EBITDA Net (Loss) Income
$
(12,698
)
$
(10,469
)
$
(28,775
)
$
51,445
Interest Expense, net
7
10
19
21
Impairment of Goodwill
-
-
8,606
-
Depreciation and Amortization
648
382
1,204
601
EBITDA
(12,043
)
(10,077
)
(18,946
)
52,067
Gain on extinguishment of debt
-
-
(4,527
)
-
Restructuring charges (1)
418
-
2,898
Severance charges related to former President and Chief Financial
Officer (2)
-
-
705
-
Legal charges related to SEC investigation and shareholder lawsuits
2,536
-
3,112
Accreted contingent compensation obligation to sellers of World
Energy
(60
)
427
(104
)
427
Change in fair value of obligation to issue shares of common stock
(137
)
514
(498
)
514
Change in fair value warrant liabilities
(1,783
)
(2,726
)
(4,500
)
(74,731
)
Non-recurring World Energy acquisition expenses
-
498
-
498
Adjusted EBITDA
$
(11,069
)
$
(11,364
)
$
(21,860
)
$
(21,225
)
Three Months Ended June
30,
Six Months Ended June
30,
(In thousands)
2022
2021
2022
2021
Reconciliation of Net (Loss) Income to Adjusted Net Loss Net
(Loss) Income
$
(12,698
)
$
(10,469
)
$
(28,775
)
$
51,445
Gain on extinguishment of debt
-
-
(4,527
)
-
Impairment of goodwill
-
-
8,606
-
Restructuring charges (1)
418
-
2,898
-
Severance charges related to former President and Chief Financial
Officer (2)
-
-
705
-
Legal charges related to SEC investigation and shareholder lawsuits
2,536
-
3,112
-
Accreted contingent compensation obligation to sellers of World
Energy
(60
)
427
(104
)
427
Change in fair value of obligation to issue shares of common stock
(137
)
514
(565
)
514
Change in fair value warrant liabilities
(1,783
)
(2,726
)
(4,500
)
(74,731
)
Non-recurring World Energy acquisition expenses
-
498
-
498
Adjusted Net Loss
$
(11,724
)
$
(11,756
)
$
(23,150
)
$
(21,847
)
(1) Amount for the three months ended June
30, 2022 represents an additional inventory obsolescence charge of
$193 and $225 of accelerated amortization of the right of use asset
relating to the Company's Quincy, IL facility that it closed as of
May 31, 2022. The amount for the six months ended June 30, 2022
consists of (i) severance charges (including benefits) of $840
relating to the termination of 51 employees relating to the
restructuring of the business; (ii) an inventory obsolescence
charge of $1,711 relating to the Company's decision to discontinue
the production and sale of certain vehicle kits; and (iii) $337 of
accelerated amortization of the right of use asset relating to the
Company's Quincy, IL facility that it plans to close as of May 31,
2022.
(2) Amount consists of severance charges
incurred with the departure of the former president of $479 in
March 2022 and the departure of the former Chief Financial Officer
of $226 in January 2022
XL Fleet Corp.
Unaudited Condensed
Consolidated Balance Sheets
As of June 30, 2022 and
December 31, 2021
June 30,
December 31,
(In thousands, except share and per share amounts)
2022
2021
Assets Current assets: Cash and cash equivalents
$
322,371
$
351,676
Restricted cash
150
150
Accounts receivable
7,051
6,477
Inventory, net
14,189
15,262
Prepaid expenses and other current assets
1,323
1,040
Total current assets
345,084
374,605
Property and equipment, net
2,239
3,495
Intangible assets, net
1,245
1,863
Right-of-use asset
5,124
4,564
Goodwill
-
8,606
Other assets
114
88
Total assets
$
353,806
$
393,221
Liabilities and stockholders' equity (deficit) Current
liabilities: Current portion of long-term debt, net of debt
discount and issuance costs
$
27
$
78
Accounts payable
2,029
3,799
Lease liability, current
774
900
Accrued expenses and other current liabilities
9,042
11,856
Total current liabilities
11,872
16,633
Long-term debt, net of current portion
6
21
Deferred revenue
1,142
691
Lease liability, non-current
4,670
3,599
Warrant liabilities
905
5,405
Contingent consideration
95
541
New market tax credit obligation
-
4,521
Total liabilities
18,690
31,411
Stockholders' equity Common stock, $0.0001 par value;
350,000,000 shares authorized at June 30, 2022 and December 31,
2021; 142,492,833 and 140,540,671 issued and outstanding at June
30, 2022 and December 31, 2021, respectively.
14
14
Additional paid-in capital
463,288
461,207
Accumulated deficit
(128,186
)
(99,411
)
Total stockholders' equity
335,116
361,810
Total liabilities and stockholders' equity
$
353,806
$
393,221
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Investor Contact: xlfleetIR@icrinc.com Media
Contact: PR@xlfleet.com
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