Lordstown Motors Corp.

Q4 2022 revenue was recognized on deliveries of three Endurance vehicles; the company did not state a dollar revenue figure on the call. Total reported cost of sales for the fourth quarter and full year was approximately $30 million, including $635,000 of production costs and $29.4 million of depreciation and inventory write-down charges. SG&A and R&D were $37.8 million in Q4 and $246.1 million for the full year; SG&A was $22.2 million in Q4 and R&D was $15.6 million. The company said it ended 2022 with almost $222 million in cash and short-term investments, up approximately $18 million from Q3, and that the fourth quarter cash balance beat its outlook by $57 million, or 34% above the top end of the range. For 2023, Lordstown limited guidance to Q1 only, expecting cash and short-term investments of $150 million to $170 million at the end of Q1, excluding additional Foxconn funding, other equity sales, or contingent liabilities. It expects aggregate SG&A and R&D to decline slightly versus Q4, CapEx to be modestly higher, and working capital to consume less cash.

Edward Hightower focused on the company’s response to post-launch quality problems, saying Lordstown paused production to protect customers and has now identified the root causes and corrective actions for the issues. He framed the recalls and pause as consistent with company values and said the team has “line of sight” to resolving the problems, though timing remains uncertain. Strategically, he emphasized that the Endurance is a bridge to a broader commercial-fleet EV strategy and that the next vehicle program with Foxconn/MIH is becoming a larger part of the company’s focus.

Adam Kroll highlighted a year of significant cost reduction and financing, saying Lordstown raised $263 million in 2022, including $210 million from Foxconn and the rest from market equity sales. He said the company ended the year with almost $222 million in cash and short-term investments, after using $42.7 million in operations, $2.9 million in net CapEx, and receiving $63.7 million from stock issuances in Q4. He also broke out Q4 cost of sales of approximately $30 million, SG&A of $22.2 million, and R&D of $15.6 million, and warned that more capital will be needed to scale Endurance or bring the next vehicle to market. For Q1 2023, he guided to $150 million to $170 million in cash and short-term investments and said CapEx should be modestly higher while SG&A and R&D should decline slightly.

Analysts pressed on whether the Endurance quality fixes would be resolved by the end of Q1, and management declined to give timing guidance, saying it has identified issues and root causes but is not ready to say when all corrective actions will be complete. Questions also focused on the strategic OEM partnership for the Endurance, with management saying the truck’s BOM cost is materially higher than its selling price and that, absent a partner, production may be paused until one is found. On the Foxconn-backed next vehicle, management said $100 million of preferred investment will fund predevelopment, but additional capital will be needed later, likely from multiple sources rather than solely from Foxconn or equity.