Nikola Corporation (NKLA) on Q1 2021 Results - Earnings Call Transcript

Operator: Greetings and welcome to the Nikola Corporation's First Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. We begin today's call with a short video, followed by management's prepared remarks. A brief question-and-answer session will follow the formal prepared remarks. As a reminder, this conference is being recorded. We will now begin the video presentation. Thank you. It's now my pleasure to introduce Britton Worthen. Britton Worthen: Thank you and good afternoon everyone. Welcome to Nikola Corporation's First Quarter 2021 Earnings Call. With me today is Mark Russell, Chief Executive Officer of Nikola; and Kim Brady, Chief Financial Officer. During today's call, we will share our views on the business environment and our financial results for the March 2021 quarter and our outlook for the June 2021 quarter and the full year 2021. The press release detailing our financial results were distributed a little after 6 a.m. Pacific Time earlier this morning. The release can be found on our Investor Relations section of the company website, along with presentation slides that accompany today's call. Today's presentation and Q&A includes certain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and as a result are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from forward-looking statements in this communication. For more information about factors that may cause actual results to materially differ from forward-looking statements, please refer to the earnings press release we issued today, as well as the risk factors section of our annual report on Form 10-K and our quarterly report Form 10-Q filed with the Securities and Exchange Commission, in addition to the Company's subsequent filings with the SEC. Forward-looking statements speak only as of the day they are made. Readers should be cautioned not to put undue reliance on forward-looking statements. With that, I will now hand the call over to Mark. Mark Russell: Thanks Britton. Welcome to our first quarter 2021 earnings call. We're going to provide you an overview of what we've achieved including updates on the Nikola Tre BEV testing and validation. And progress on a manufacturing facilities in Ulm, Germany and Coolidge, Arizona. And provide you an update on the recent developments and announcements, including our sales and service partnership with RIG360. Our collaboration with OGE and IVECO in Germany for hydrogen infrastructure, our collaboration to install hydrogen stations at existing travel Centers of America locations and the announcement of our collaboration with total transportation services. After this business update, I'll turn it over to Kim and he'll discuss financial results for the quarter and of course, we'll do our best after that to answer your questions. Let's kick off with an update on the status of the Nikola Tre BEV, battery-electric Vehicle or BEV, we will begin with the first batch of five trucks which we've commissioned and are going through validation testing that progress continuing in the first quarter. The trucks are exceeding our expectations so far in the winter testing. We're working to complete the commissioning and the validation of those first batches. Number one is still on the proving grounds for power train validation. Number two is in the process of road load data acquisition and poster correlation. The number three remains in Arizona for software HMI and controls development. Number four is also in Arizona for commissioning and is preparing for customer demos and other events which have been happening this past week. Kim Brady: Thanks Mark, and good morning, everyone. In the first quarter net loss was $120.2 million. And on a non-GAAP basis, adjusted EBITDA totaled negative $53.4 million. Adjusted EBITDA excludes, among other items, one, $50.3 million in stock-based compensation; two, $14.9 million on regulatory and legal matters and other professional service fees incurred in connection with the short seller article from September 2020 and three, $1.8 million in normal depreciation and amortization. Research and Development expenses for the first quarter were $55.2 million, including $10.3 million of stock-based compensation expense. R&D expenses consist mainly of costs incurred in the development, building, testing, and validation of Nikola trade battery-electric and fuel cell trucks. SG&A expenses were approximately $65.4 million, of which $39.9 million is stock-based compensation expense, and $14.9 million is legal and regulatory cost. As of March 31, 2021, our total headcount exceeded 530 employees and is growing at a rapid pace as we continue to build our teams in engineering, manufacturing and energy. Turning to the balance sheet, we ended the first quarter with $763.8 million of cash and cash equivalent. We have no debt outstanding as of March 31 aside from our Phoenix headquarters lease obligation. Our capital expenditures totaled $24.5 million year-to-date and are comprise of the construction of our Coolidge Greenfield manufacturing facility, and equipment, as well as investments in supplier tooling related to trade BEV production. We ended the quarter with approximately 394 million shares outstanding, weighted average shares in both basic and diluted for the first quarter were approximately $392.2 million and $392.5 million respectively. Diluted weighted average shares enclose the impact of the private warrants. Operator: Our first question is from Paul Koster of JP Morgan. PaulKoster: Yes, thank you for taking my question. Mark, I've got a sort of bundle of questions to start with, which is, you're now starting to show the BEV vehicles to customers. What is the response? Do you think that you're going to get customer orders soon? Do you believe that you still are on track for that target of potentially as much as 600 sales by the fourth quarter? I know you can only fulfill 100 because of the supply constraints. But do all of those numbers still match? And finally on that bundle of questions, what's the latest on the supply constraints around the battery? MarkRussell: Of course, yes. So the response so far to Tre BEV production prototypes has been very positive. We actually had fleets in here to our Phoenix headquarters and on our local Phoenix test track this week. We had 25 fleets represented in our customer days this week that came in and actually had a chance to ride in the trucks look under the hood, as metaphorically speaking and have some technical presentations. And then they of course, had a good tour of our facilities here. And an update on the Coolidge Greenfield and Germany Brownfield. So very positive reception, at this point we don't know about longer range truck that's coming to the market. Our Tre BEV is coming to the market with a 750 kilowatt battery. The closest we know of competitively right now is 550. So we're 200 kilowatts, more energy on board the truck that will translate into longer range, will continue to validate the actual range that we're going to advertise. But it should be the longest range truck out there. It's also relatively short wheelbase compared to a lot of US Class 8 trucks. It's got great visibility for the driver and outstanding visibility for the driver and with the short wheelbase as a great turning radius. It's very maneuverable. And of course for applications for Metropolitan deliveries, regional return to base kind of routes, that's going to be an ideal truck. And again, range is always an issue or almost always an issue for these customers. And so having a long-range truck, we think is going to be a really a great thing for customers in the market. So very positive reception. We again, we are trying to finalize agreement for launch. And the model for our launch customers is Anheuser Busch, that's been our launch customer for the fuel cell vehicles for a long time, because they stepped up early and said we'd like to be a launch customer and partner with you in developing the vehicles. That's the kind of relationship we're looking for the Tre BEV. Anybody will, I haven't, I've yet to talk to any customer who doesn't want a truck to test and wouldn't be willing to buy one for testing and evaluation. What we're looking for at this point is launch customer. So those negotiations are ongoing. And we had a number of those target customers in here this week. So we are cautiously optimistic that we'll be able to put that in place in the near future. And second question, on the production delays, we've already explained to you the situation on battery cells, we do believe and we have confirmation from our supply chain, that we are going to receive enough cells to complete enough trucks to stick with our current guidance of between 50 and 100 units that we'll be able to finish this calendar year. Other parts are now we have greater concern. We are looking of course for chips, touch screens; there are potential shortages of a number of different parts at this point. I think all of you who follow up companies in the space know that the supply chain is under strain for a number of parts. And we're confident we're going to be able to build trucks. And we were sticking with our guidance of 50 to 100 because we don't know of any reason why we can't do that at this point. But there is the possibility that shortages will affect us. Because they're just across the industry and across the globe at this point. And we'll keep you updated on that we'll know more, of course, at the end of - by the end of the next quarter; we'll keep you updated on that. PaulKoster: Quick follow up the pace at which you're executing now is really breathtaking. And of course will it eventually become a nice problem to have, which is that you'll need more capital to build out the infrastructure. When do you think the need to, for new capital will arise? And can you just give us some sense of how you're prepping for that eventuality. KimBrady: Paul, thank you. As you know, we have been consistent in our communication about going to market sometime this year. In terms of preparation, we are well prepared, and we are in conversations with our underwriters. And we feel confident at the right time that we'll be able to execute additional capital raise. Operator: Our next question is from Jeff Osborne of Cowen & Company. JeffOsborne: Yes, I was wondering if we can get back to the battery supply commentary, how are things shaping up for next year, just given a lot of folks are having to put deposits down for the year ahead. Do you have confidence and the ability to - go ahead? MarkRussell: Jeff, that's a great question. Because the suppliers that we rely on, which are Korean based and home base, they have other production facilities, but they're based in Korea. And they are holding off on 2022 commitments until at least until June. And probably my guess is we won't be able to firm that up until July. So you'll probably have to wait another quarter before we get final commitments on allocation for '22. And that's the situation; everybody's going to be on allocation, what they're willing to give you. And we're doing our best to make sure that we get as much as we need to be able to build the trucks that we can build and that we know we can sell without constraint because of battery cells. But we won't know for sure, for at least another I'd say 45 to 90 days, what the allocation is going to be for 2022. KimBrady: Jeff having that said, we want you to recognize that we are having active discussions with the cell suppliers about 2022 as well as 2023 supplies. And as you stated, some of the cell suppliers are requesting that we make initial down payments for potential support in terms of dedicated lines. And so that's something that we are actively evaluating and having discussions and in fact we have a supplier that will be here next week. JeffOsborne: It's good to hear. The second area I want to pivot to was on the hydrogen side, can you just remind us or refresh us what the strategy is there in terms of the five stations, I think when you initially went public, you would place an order with now for five electrolyzers, you've now I guess, identified three sites, with the two from TA looking out more broadly in '22 and '23, do you still have this ambitious plan for a nationwide network over the next four or five, six years? Or are you going to do that more scaled back and much more regionally focused, say on the southwest? MarkRussell: No, Jeff, we absolutely are committed to the plan that we outlined previously. And we'll start that network here in North America with stations in California and Arizona, given the APS rate schedule that we have in the coverage area of that utility, which extends to the California border, along Interstate 10. That's going to allow us to produce hydrogen very cost effectively competitive with diesel. And so in addition to stations where we might produce and dispense on site here in Arizona, because we have the right power structure, and in the western part of Arizona, accessible, particularly to the corridors that lead into California, we're likely to do a hub facility, that would likely be a dispensing station, but we're going to be producing a lot more hydrogen than is required for that location. Because we're going to move that hydrogen into higher cost locations, in this case in Southern California, so where we don't get the electric rate to make your competitively priced hydrogen, we'll make it nearby, in this case, just over that border in Arizona, and then we'll move the hydrogen into those dispensing locations so that the two locations that we'll be making public with TA in the very near future, are very strategically located, particularly for our launch customer, Anheuser Busch, which has a brewery in Van Nuys, California, to be able to fuel their loads in and out. So we feel better about this than ever, is no longer theoretical, that we have all the building blocks in place, including electricity, which is up to 90% of the total cost of the hydrogen over the life of the station. And we have that in place now. And then we'll be adding additional city pairs and geographic regions in various parts of the country. And following probably the same model, which will be a mix of producing and dispensing locations and then hub locations where we will move hydrogen to dispensing locations only. And that model will probably be what we follow across the United States. Similarly in Europe, we will be doing something similar with a possible difference of what we just announced with OGE. So IVECO is also participating in that consortium with OGE, which is the largest pipeline operator in Germany. And they are going to be distributing very green hydrogen by the way; a lot of that hydrogen will be sourced from North Sea wind power. And they'll make that with the electrolyzer facilities, onshore in the northern Netherlands. And then it will be pipeline distributed throughout Northern Europe. And we'll start dispensing that from pipeline distribution. And it was stations that we're going to build in Germany that should be the most cost effective and green hydrogen in the world when we start actually, it's very exciting way to start there in Europe that should be very cost effective and competitive. Operator: Our next question is from Jeff Kaufman of Vertical Research Partners. JeffKaufman: Thank you very much. Good morning. Thank you for that video. I think it was great to see the trucks in motion at least until we can see them live. I was just curious you're measuring top speed and efficiency upgrades. Do you have any measurements yet on what your realized I guess miles per gallon equivalent on the battery trucks are? And also in terms of range testing, have you - how are the maximum drivable ranges testing out so far? MarkRussell: Well, Jeff, the range is as I mentioned earlier, one of the chief selling points of this vehicle it should be the longest range battery electric vehicle that we know of Class 8 heavy truck in the world that we know that this point 750 kilowatts on board, we know it's going to translate into really good range. We've already had some range testing results, and they are - I'll just tell you they're very impressive. This is going to be a really long-range battery truck. And we have of course, there's a lot of work yet to be done before we can actually translate that into a representation of miles per gallon equivalent. But right now the results are very encouraging very positive so far. JeffKaufman: Okay, thank you. And I think you answered this in your commentary in terms of what the trucks are doing to get commissioned. So there are no customers actually testing the trucks themselves yet, correct? MarkRussell: That is correct. All of our testing is internal, although this past week, we allowed customers in the vehicles and of course, they were doing their own inspections. And we were, we'd get their physical hands on the vehicle, but they were at the test track facilities, we won't have customer fleet testing for a little bit and for a few more months. Operator: Our next question is from Chris McNally with Evercore ISI. ChrisMcNally: Thanks team. Two questions. The first is maybe a little bit more detail on the hydrogen station strategy. If we look at the TA announcement, you answered a little bit of the question with Jeff, I just wanted to dive in high level just over the next two years how much of sort of your needs are covered by the two stations with TA plus the central hub, is it 30%, 50% something much more, just to understand how many more of these separate agreements may be coming. MarkRussell: So, Chris, our target is to supply 100% of the trucks that we deliver, 100% of our fuel with the stations that we provide, that's - it's a bundled lease. So the city pair we're targeting first is Phoenix and Los Angeles. And so we need fuel in Los Angeles, we need fuel here in Phoenix, we have 1,000 ton dispensing station at our headquarters here in Phoenix, which has been operating on a prototype test basis for some time now. But we'll be adding to that. So that we have retail, open to the public retail station here in the Phoenix metropolitan area, we'll have - we'll start out with the two stations in Los Angeles. And then in between, on the border, we will - we're planning to build a hub facility as I've described. So that will allow us to provide fuel between Phoenix and Los Angeles, it will also provide fuel for out and back routes be from Phoenix, and from Los Angeles, out and back up to half the range of the vehicle of course. And then the next thing - the next stage for this region will be to provide coverage in Central California somewhere in the Bay Area most likely, which is just about the right distance stuff 100 miles from the Los Angeles, nearest Los Angeles station. And then of course, eventually infill stations for those for that area so that you can provide the coverage that you need. The idea is that we have enough fuel to fuel the trucks that we deliver in that geography. And we'll be doing that same thing delivering the trucks and the fuel synchronized as we move to other city pairs and other geographies around the country. KimBrady: Chris, as you recall, our 2023 forecast for hydrogen truck is approximate 2,000 units. And we assume that represents about 10 stations in terms of an 810 commercial station equivalent, as Mark indicated that in some locations, we will have stations where we generate hydrogen on site. Other locations we may have a hub and transport to dispensing stations. And there may be areas where we may actually procure hydrogen via long term offtake agreements. And so I think that probably gives you some combination of how we're looking at ultimately delivering hydrogen at the pump level. But you shouldn't assume that it will be all 10 a ton dispensing stations where we generate hydrogen outside. MarkRussell: Although we do have as was, I think somebody asked earlier about the longer lead time item which is the electrolyzers themselves. We do have a $30 million electrolyzer order in process with now so there'll be producing and delivering the electrolyzers for up to the first five stations if there are tons of pieces. We may - as we may adjust the sizing depending on the needs of the local, the exact location of course. ChrisMcNally: And Mark, I very much appreciated the math and that the 215 rule is super helpful as well. I guess what I'm thinking about high level is how much actually is the TA agreement where you sort of have this ability to expand, right? This could be a foundation agreement, sort of the two stations work out. And then they're your partners for other cities and geographies, versus maybe having a couple of partners. So a couple of agreements that look like TA that way maybe for different geographies or different economics, different revenue models, I guess that was a little bit more the focus of my question, as opposed to the actual math on the stations. MarkRussell: Understand, Chris. And that's absolutely true, we're very pleased to be partnering up with TA, they have a very good coverage of stations in the places where we're going to need to be, they also have - tend to have larger locations, they have - they never did, they never have skimped on the land for their stations. So they're, the actual amount of land that they have in each location is a little bit higher than some of their competitors, they are larger than the competitors, which is very helpful for us. We don't need a lot of land for dispensing. Usually, a truck stop will have enough space for us to put the dispensing equipment in there, if we're only dispensing. And these first two stations, by the way, will be dispensing only we'll be moving the hydrogen in there. They're in high cost locations for electricity in California than in the Los Angeles space. And so we'll be moving the hydrogen. And so those will be relatively simple, and relatively inexpensive stations compared to ones where we are producing and dispensing on site. So we'll be looking at other potential partnerships as well, we were already doing that have been in discussions for some time with a lot of potential partners on the hydrogen infrastructure side. You'll see us do other things on that front, as we go forward. ChrisMcNally: Great, super appreciate the detail. And then the seconds on order for progression. Nice to see the orders from total in California. I just was curious if we could maybe get an update on whether we could also see a launch customer for the over the BEV, particularly in Europe, does that make still much sense to think about a major launch customer for Europe, or could it be an accumulation of several smaller orders, but specifically for Europe. MarkRussell: So Chris, at this point, we do like having a launch customer, we've been very fortunate to have Anheuser Busch, as a partner for the launch of the fuel cell vehicle now for several years, where they've helped us to develop the vehicles, they helped us in testing, we're going to have a couple of prototypes in their fleet. We'll tell you more about that, coming up here in the next couple quarters. And that's just a really excellent way to bring a new vehicle to market. And so we're looking for that kind of launch customer with the Tre BEV, TTSI which we just announced a couple of days ago is going to be one of our launches. And that's going to be a great place for us to test the Tre BEV applicability in a port and dredge application; they agreed to take up to 30 of the Tre BEV there. The agreements that we do the testing and they'll take up to 30 of the 100 will be Tre BEVs. And then 70 will be Tre fuel cells, which of course in the dredge operation have the advantage of additional range and runtime and quicker refueling. But there's a lot of applications for dredge that we think the battery-electric vehicle will be just fine. And they do too. So that's a good place to launch. We're still - we're in discussions with other potential launch customers on other applications for the Tre BEV, which of course are focused on Metropolitan deliveries, regional deliveries, where you can stay within the range constraints of the Tre BEV. And again, we're going to have a longest range of any battery-electric heavy truck that we know of at this point. So we feel really good about that. As I mentioned, we have 25 fleets represented here this week to come in and kick the tires, metaphorically speaking, and had a great week with them. Those discussions are continuing. We, of course, can always place test vehicles ones and twos, with customers, everybody-- the only question people have is when can I get my test, when can I try one. But we're focused at this point of our development on launch customers. Because we know we can sell that we can put the ones and twos into the market without much problem. But we'd rather at this point have one or two, maybe three launch customers. And so we're working on that if we can do it. Operator: Our next question is from Edison Yu from Deutsche Bank. EmmanuelRosner: Hey, that is Emmanuel Rosner. First topic want to cover is the total transportation of order 400 trucks or Letter of Intent? Could you maybe drill down more into the mix of that, for BEV versus FECV? Are these based on - is the order based on specific range performance commitments. And then also what kind of pricing would you expect? And also what sort of the operational plans to kind of convert this to firm orders? MarkRussell: Sure, Edison, the split, the anticipated split is going to be 70:30, 30 battery trucks, and 70 fuel cell trucks. And the four operations at TTSI are running in Los Angeles and Long Beach requires them to get two full shifts every 24 hours, at least. So they turn these trucks very quickly. Typically, they have a one quick turn between the two shifts, and then a longer turn, where you can actually have the truck offline a little bit longer. So the first between the first and second shift, they call that hot seat, because the driver, the next driver gets in while the seat is still warm, is that quick, and you do not be able to fuel really quickly. That's the reason that's huge to the fuel cell trucks, because the Quick Change is that doesn't allow for up for a battery charge, you have to be able to fill in the same timeframe that you can fill a diesel truck, which we can do with a fuel cell truck, we can - that refueling can be accomplished in 10 to 15 minutes, which is about the same time as a diesel. And so that is really suitable. And that's why they skewed the order 72 to a fuel cell and 30 batteries. But battery works just fine for range, you don't need the long range that you get from a fuel cell truck in a dredge operation typically, you need runtime, but not so much range, they're usually not exceeding. They will certainly not exceed the range normally, for a lot of their use cases of the Tre BEV; it's going to be the longest range truck out there at 750 kilowatts on board. So that's not a problem. The challenge is the recharge time. Right now our fastest recharge units that we're using are 350 kilowatts. And to go from the lowest recommended state of charge for recharging to 80%, which is the ideal recharge target for battery life takes about 99 minutes at this point for us in our testing. So that's a little bit longer than they need for a hot seats shift change, but they can recharge on the longer term after the second shift. So this is stuff we're working on with TTSI great partner for us. They're really committed to greening up their fleet. And we really excited to be working with them to figure out how to solve the challenge for dredge operations, which as you know in Southern California is one of their biggest problems for carbon and other emissions in Southern California, because they - it's one of the busiest ports in the world there. KimBrady: Edison with your question in terms of timing of converting this into a firm order, we do have commitment to deliver test vehicles sometime next year for hydrogen fuel cell trucks as well as battery electric trucks. And we are working also with TTSI. And helping them in terms of procuring government subsidies on these trucks in terms of pricing is more favorable than what we have out into our model. EmmanuelRosner: Understood, that's really helpful and insightful. Just one last question. Just trying to get a sense after the customer days, you're still aiming for 4Q deliveries, when could we maybe expect to know who those initial 50 to 100 truck customers will be or who they will be - will there be some sort of announcement communicated about the profile or who exactly those are? MarkRussell: Sure. So obviously, TTSI is one, they will be in launch, there'll be getting early units. We'll be working with them for sure. And we've as I mentioned before, we'd like to add to that another one or two, launch customers who we would be able to partner with them in similar vein, and we're working on that right now. We've made some really good progress on that front this week. And we hope to be able to announce those soon. Operator: Our next question is from Joseph Spak of RBC Capital Markets. JosephSpak: Thank you very much. I know you've highlighted Anheuser Busch as a key partner and customer and know against you talked about even using them for this phase two for this TA announcement. Can you just talk a little bit more about how that relationship has progressed over maybe the past couple of months? And I think you're required to get them some hydrogen prototypes by the end of the year. Is that still the case? And is that on target? MarkRussell: Joseph. So they, we've shared a goal with them to be on the cutting edge of this, from the beginning, that was their corporate objective includes some very strong targets for them to hit by 2025 for actual operations and emissions reductions. And that's for them as part of imbeds worldwide commitments. So very strong corporate commitment, laudable corporate commitment, that kind of partner that we're looking for, is really committed. And as you know, we were able to do a demo run hauling beer from the flagship brewing St. Louis, using fuel cell prototype. We did that last, over a year ago, right, just over a year ago. And we do share a goal to have regular deliveries being made on a pilot basis by the end of 2021 with Anheuser Busch, and so we're working on that very diligently. The two prototype vehicles that we're targeting for that purpose are actually underway in the shop. And we're on track for that at this point. JosephSpak: Okay. I thought maybe I misheard. But I was wondering if you could clarify, I thought you said in the prepared remarks today Coolidge capacity was 2,500. I thought that was supposed to be about 5k in phase one. Did something change? Are you talking about different points along the goal here? KimBrady: So, Joe, as you know, we are building out the Coolidge facility in phases. And by the end of phase one, we do believe that capacity will be approximately 2,500 to 3,000. And then when we start phase two, beginning of 2022, and that will be accomplished by beginning of 2020, end of 2022. And that capacity will likely increase to something around 15,000 units. And then when we actually start phase three of our facility in beginning of 2023, and then complete that by end of 2023, the capacity will be about 35,000 units running two shifts. And so I think what you may be referring to something that we shared last year, and we have decided in terms of phase one to phase two, to delay some of the capacity, we will have plenty of capacity in terms of what we have committed to the market, as you know, the next year volume commitment for battery-electric truck is 1,200 units. JosephSpak: Okay, last one for me. I know during or about a month ago or so there was a report that the head of Nikola fuel cell development left and like I realized employees come and go all the time. But I don't think investors have a great sense for maybe advantage of the team. So can you just provide an update on leadership there and that team? MarkRussell: Absolutely, that transition was not unexpected, that employee has staying in the space by the way, joined and helped start a fueling and dispensing company don't understand he is, that's what he loves to do. We have more resources, leadership people capacity in that space than we've ever had. At this point, that team is so much bigger and more capable than it was previously. That particular employee did great work while they were here, but we are absolutely not missing a beat and going forward with a really strong team on that front. As the people who are customers, other people that we're working with, that work with that team, inevitably very impressed with what we've been able to do there. We've got some of the best people from around the world on the team. Operator: Our next question is from Michael Shlisky of Collier Securities. MichaelShlisky: Hey, good morning, I wanted to ask first about the TravelCenters arrangement. I was kind of wondering if you could tell us a little bit about what's in it for TravelCenters. Are you going to be paying them rent to use part of their real estate? And they are going to take a cut of the - to sell the hydrogen, just gives us sense as to what they might be getting out of the deal from what you can tell. KimBrady: Great question. Right now as you know, we are still working on some of those details. But at this foundation, it is anticipated when it comes to dispensing economics, that we will share 50:50 in terms of revenue and profit, just recognize this our dispensing station, so many, which means that we will provide hydrogen from hub, and we will transport it. So significant portion of the margin we expected to capture at the production facility on our side. MarkRussell: So as a true partnership, there'll be a transfer price from Nikola to the station for hydrogen, and then the margin over that will be split between us. And that's also be the approach we take on the infrastructure capital requirement. MichaelShlisky: Okay, got it. And then I want to ask, secondly, about RIG360, I guess first, how have they communicated to you about their availability with technicians, trained technicians to service electric vehicles? And knowing that it takes roughly 12 months to train somebody new at the Lincoln, or UTI type of schools out there? And maybe secondly can give us a sense is you looking at partnerships with other dealership networks elsewhere in the country at this time? MarkRussell: No, great question, Mike. So that's one of the great benefits of the RIG360 agreement. And to answer your - the last part first, we are absolutely looking at adding to that. We intend to have continental coverage dealerships here in North America; we'll be doing the same in Europe, by the way. And so we were looking for sales and services support through our dealers. Coast to coast and North to Southern Europe, coast to coast in North America. So what the dealers are providing and their commitment that they're making is to provide both sales and service support. So they're adding salespeople, and then they're training service technicians doing - done on both fronts where the service technician training is cooperative with us. We have our existing service and support group here at corporate and they have their own techs and there'll be this dealer techs will be training alongside us. So the dealers have made a commitment and well, future dealers will be making a commitment to hire and train techs and we'll cooperate with them in that training and help provide it and then they will be also adding sales representation. They also are going to be flooring vehicles so don't have to have vehicles for display for demo. And in some cases for immediate delivery from inventory. So they actually fulfill part of the purpose of a launch customer for us and that they are going to be helping us get the vehicles sold distributed services and supported and launching. Operator: Our next question is from Daniel Ives with Wedbush Securities. DanielIves: Yes, thanks. Just one question so when you talk about Q4, whether it's 50 to 100. And in just some of the orders, especially going to 2022. I get this point is the only constraint supply from a chip perspective, rather than on the demand side. Could you just be clear about that in terms of just hitting those goals? Is it really just pure supply constraints? Thanks. MarkRussell: Daniel, that's a great question. And my answer is yes. It's going to be constrained. We could certainly do more if we had all of the parts that we're going to need and we are going to - we already constrained by cells, as we mentioned, we do have commitment now to get enough cells from the supplier to get in that 50 to 100 range, but not more. We are looking at the other possible constraints chips being a prominent one, of course. And we're trying our best to make sure that one of those things doesn't drop us below that number. If we could get all of the parts to do more, we would definitely look at doing more. But you have to remember that the demand for these vehicles has not gone down at any time, the combination of carrots and sticks out there gets more and more compelling. We call it carrots and sticks because there are incentives, the carrot side where people are increasing the incentives. And by the way, that was just an increase in the incentive on carbon capture for blue hydrogen, just in the last couple of weeks I understand. And but other people are looking to follow California in terms of their incentive scheme, a number of states have announced that recently that they want to follow the California model, which will increase the carrot here, the more incentives to move. On the other side, you've got the sticks. You've got people who are passing sale bans, and then even operation bans within specific jurisdictions. And that's worldwide. And we don't see anybody backing off on us. We haven't seen anybody back off. And yet we see people, the number of jurisdictions that are doing that being added to pretty much every month at this point. So the demand is not going to go down as demand is not going to be the problem for this industry, which is one of the reasons why we're, we welcome and encourage our erstwhile competition, it's going to take the best efforts of all of us to meet this demand. We're going to have to in the next period of years; we have to figure out how to completely replace the internal combustion fleet. And right now it's not a matter of that would be nice. In many cases, it's a matter of regulatory requirement or a law. So between the incentives and the requirements and the mandates, the demand is not going to go down. I don't see how it goes down from here. There are no further questions at this time. I would like to turn the floor back to Mark Russell for closing remarks. Mark Russell: We appreciate everybody being here to this morning and being interested in Nikola following us. We're grateful for your support. And we'll talk to you next quarter. Thanks. Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a great day.
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Nikola Corporation's Financial Struggles and Bankruptcy Filing

  • Nikola Corporation (NASDAQ:NKLA) faces significant challenges, including a mass recall and legal issues, amidst competition in the electric vehicle market.
  • The company is set to release its quarterly earnings with an expected EPS of -$2.30 and revenue of approximately $40.86 million, despite filing for Chapter 11 bankruptcy.
  • Nikola's financial metrics reveal a negative P/E ratio of -0.038 and a debt-to-equity ratio of 0.93, indicating moderate debt levels but overall financial struggles.

Nikola Corporation, trading as NASDAQ:NKLA, is an electric vehicle manufacturer based in Phoenix, Arizona. The company, once valued at $30 billion, is known for its electric semi-trucks. Despite its promising start, Nikola has faced significant challenges, including a mass recall of its vehicles and legal issues involving its founder. The company competes in the electric vehicle market, which includes major players like Tesla and Rivian.

Nikola is set to release its quarterly earnings on February 20, 2025. Analysts predict an earnings per share (EPS) of -$2.30 and revenue of approximately $40.86 million. However, the company has recently filed for Chapter 11 bankruptcy, planning to auction its assets. This decision follows a series of setbacks, including a significant drop in stock price and challenges in raising capital.

The bankruptcy filing reveals Nikola's assets are valued between $500 million and $1 billion, while liabilities range from $1 billion to $10 billion. Despite this, the company plans to maintain limited operations, including HYLA fueling, until March 2025. Nikola enters bankruptcy with $47 million in cash to support these activities and the asset sale process, as highlighted by CEO Steve Girsky.

Nikola's financial metrics reflect its struggles. The company has a negative price-to-earnings (P/E) ratio of -0.038 and a price-to-sales ratio of 0.52, indicating investors pay $0.52 for every dollar of sales. The enterprise value to sales ratio is 2.52, while the enterprise value to operating cash flow ratio is -0.37, showing negative cash flow from operations.

The company's debt-to-equity ratio is 0.93, indicating a moderate level of debt compared to equity. Nikola's current ratio is 1.17, suggesting a slightly higher level of current assets than liabilities, which may indicate short-term financial health. Despite these figures, the company's negative earnings yield of -26.50% highlights its lack of profitability.

Nikola Corporation's Financial Struggles and Bankruptcy Filing

  • Nikola Corporation (NASDAQ:NKLA) faces significant challenges, including a mass recall and legal issues, amidst competition in the electric vehicle market.
  • The company is set to release its quarterly earnings with an expected EPS of -$2.30 and revenue of approximately $40.86 million, despite filing for Chapter 11 bankruptcy.
  • Nikola's financial metrics reveal a negative P/E ratio of -0.038 and a debt-to-equity ratio of 0.93, indicating moderate debt levels but overall financial struggles.

Nikola Corporation, trading as NASDAQ:NKLA, is an electric vehicle manufacturer based in Phoenix, Arizona. The company, once valued at $30 billion, is known for its electric semi-trucks. Despite its promising start, Nikola has faced significant challenges, including a mass recall of its vehicles and legal issues involving its founder. The company competes in the electric vehicle market, which includes major players like Tesla and Rivian.

Nikola is set to release its quarterly earnings on February 20, 2025. Analysts predict an earnings per share (EPS) of -$2.30 and revenue of approximately $40.86 million. However, the company has recently filed for Chapter 11 bankruptcy, planning to auction its assets. This decision follows a series of setbacks, including a significant drop in stock price and challenges in raising capital.

The bankruptcy filing reveals Nikola's assets are valued between $500 million and $1 billion, while liabilities range from $1 billion to $10 billion. Despite this, the company plans to maintain limited operations, including HYLA fueling, until March 2025. Nikola enters bankruptcy with $47 million in cash to support these activities and the asset sale process, as highlighted by CEO Steve Girsky.

Nikola's financial metrics reflect its struggles. The company has a negative price-to-earnings (P/E) ratio of -0.038 and a price-to-sales ratio of 0.52, indicating investors pay $0.52 for every dollar of sales. The enterprise value to sales ratio is 2.52, while the enterprise value to operating cash flow ratio is -0.37, showing negative cash flow from operations.

The company's debt-to-equity ratio is 0.93, indicating a moderate level of debt compared to equity. Nikola's current ratio is 1.17, suggesting a slightly higher level of current assets than liabilities, which may indicate short-term financial health. Despite these figures, the company's negative earnings yield of -26.50% highlights its lack of profitability.

InvestorPlace's Grim Outlook on Nikola Corporation: Financial Struggles and Market Volatility

InvestorPlace's Analysis on Nikola Corporation: A Grim Outlook

InvestorPlace's recent analysis on Nikola Corporation (NKLA:NASDAQ) paints a grim picture for the electric vehicle (EV) manufacturer, placing it among stocks to sell due to its precarious financial situation and troubled past. This perspective is rooted in a series of challenges that have plagued Nikola, including a significant revenue shortfall in the first quarter of 2024 and the legal troubles of its founder, Trevor Milton. The company's financial struggles are highlighted by a nearly $1 billion loss last year, casting doubt on its recovery prospects despite efforts to raise capital. This situation aligns Nikola with other struggling EV companies like Mullen Automotive and Faraday Future Intelligent Electric, which also face financial instability and uncertain futures.

Despite these challenges, Nikola showed a glimmer of hope as its stock rose by 1.8% in premarket trading, following an announcement that its first-quarter loss was narrower than expected. This news came as a surprise to investors, as the company managed to reduce its net losses to $147.7 million, or 11 cents per share, down from $169.1 million, or 31 cents per share, in the previous year. However, this improvement in losses was overshadowed by a significant revenue miss, with earnings falling to less than half of what was anticipated. This mixed financial performance indicates that while Nikola is making efforts to stabilize, it still faces a steep uphill battle in terms of revenue generation.

The stock's recent performance further underscores the company's volatility. NKLA's share price experienced a 4.69% decrease to $0.6075, with fluctuations between $0.573 and $0.6188 during the trading session. This volatility is part of a broader trend seen over the past year, where NKLA's share price ranged from a high of $3.71 to a low of $0.521. With a current market capitalization of approximately $823.88 million and a trading volume of 138.2 million shares, Nikola's market presence is significant yet marred by instability.

This financial and operational instability places Nikola in a precarious position within the EV market. The company's efforts to narrow its losses are noteworthy, yet the substantial revenue miss and ongoing legal and reputational challenges cast a long shadow over its future prospects. As Nikola strives to navigate these turbulent waters, the skepticism expressed by experts like Michael Ashley Schulman from Running Point Capital Advisors seems warranted. The company's path to recovery appears fraught with obstacles, making it a risky bet for investors looking for stability and growth in the EV sector.

Baird Sees Significant Potential for Nikola, Stock Jumps 10%

Baird analysts started coverage on Nikola (NASDAQ:NKLA) with an Outperform rating and a price target of $2.00. Shares jumped more than 10% intra-day on Wednesday.

The analysts noted the considerable potential in the zero-emissions trucking market and believe that Nikola has now successfully assembled the right management team to exploit this opportunity. They view Nikola's proprietary design and software as major differentiators compared to traditional diesel trucks. The analysts anticipate several potential catalysts for Nikola in the near future, particularly in its Truck and Energy divisions. These include advancements in manufacturing processes, forthcoming announcements regarding customers and partnerships, and the expansion of hydrogen infrastructure.

The analysts suggest these developments could positively impact Nikola's market position and valuation.