REE Automotive (NASDAQ: REE), a leader in e-Mobility, today
announced its financial results for the second quarter of 2021. REE
is focused on executing milestone deliverables on its signed
strategic collaborations spanning market segments including trucks,
walk-in vans, Mobility-as-a-Service and autonomous vehicles. The
Company closed its merger with 10X Capital Venture Acquisition
Corp. on July 22, 2021.
Daniel Barel, REE Automotive Co-Founder and
Chief Executive Officer: “Through the first half of 2021 we
advanced our position as a go-to partner for bringing EVs to market
across most commercial vehicle classes, establishing collaborations
with market leaders and securing diverse geographic and segment
industry share. With our disruptive technology and business model,
we aim to bring the ‘Intel Inside’ approach to the automotive
industry so that future EVs will be ‘Powered by REE’.
“We now have five new REEcorner™ designs being
prepared for production in our global engineering center in the UK
where our headcount is growing rapidly, allowing us to execute on
our production readiness timeline. We are also opening our U.S.
headquarters and first Integration Center in Texas to be closer to
our North American production partners and customers. As we expand
our global presence, we look to capitalize on the ever-growing
global demand for zero-emission EVs. This is further reinforced by
public sector mandates such as the U.S. federal government’s, which
announced a target for EVs to make up 50% of all vehicle sales in
the country by 2030.”
First Half 2021 Commercial
Progress:
REE secured four major collaborations that
expanded its industry footprint across segments:
- Hino Motors, a subsidiary of Toyota
Motor Corporation and a global leader in heavy & medium duty
trucks: Advanced and solidified a pre-existing 2019 cooperation
agreement with Hino Motors to a business alliance for the
development and marketing of the modular FlatFormer EV platform
‘Powered by REE’. The jointly developed modular EV will be designed
to address a large variety of applications and use cases such as
cargo, logistics, people movers and utility via an interchangeable
service module (top hat).
- Magna International, the world’s
largest vehicle contract manufacturer: Secured strategic
collaboration agreement with Magna International to jointly develop
and market a fully modular EV that is ’Powered by REE’. Together
the companies will explore future vehicle development opportunities
across a variety of use cases, including Mobility-as-a-Service in
the light commercial vehicle market.
- J.B Poindexter’s EAVX: Signed a
strategic collaboration with EAVX, an EV-focused business unit of
JB Poindexter & Co. (the parent company of Morgan Olson, the
leading producer of walk-in van bodies in North America), to
develop commercial electric vehicles ‘Powered by REE’ for the North
American market. The first joint program prototype will target the
fast-growing U.S. walk-in van market via a joint sales team.
- Navya, which is currently
active with autonomous vehicles in 23 countries: Expanded footprint
in the autonomous vehicle segment with a strategic collaboration
agreement with Navya Group to jointly develop a L4 autonomous
system ‘Powered by REE’ and driven by Navya.
Technology and Supply
Chain Advancements:
- Developed and introduced five next
generation REEcorner™ architecture designs to support vehicle
classes 1 to 6.
- Received 5 patent grants and filed
26 new patent applications in the first half of 2021.
- Established and staffed REE’s
Engineering Center of Excellence in the UK to industrialize REE’s
products and manufacturing with state-of-the-art testing and
engineering equipment.
- Selected Austin, Texas as the site
of REE’s U.S. headquarters and its first CapEx-light Integration
Center. The U.S. Integration Center is expected to have annual
capacity of 40,000 modular EV platforms to support 2023 mass
production targets.
- Signed joint development of a new
lightweight and efficient electric propulsion system with American
Axle & Manufacturing.
- Grew headcount1 to 184 employees
from 84 employees at year-end 2020, primarily in R&D.
Financial Highlights:
- Gross proceeds from the merger were
approximately $348 million with transaction costs of approximately
$63 million. As of July 22nd, 2021, the Company had approximately
$300 million in cash which is sufficient to execute on the
Company’s business plan.
- GAAP net loss of $31.2 million in
the second quarter of 2021, compared to $12.6 million in the first
quarter 2021 and $33.9 million in the second quarter of 2020,
primarily related to non-cash stock-based compensation.
- Non-GAAP net loss of $11.1 million
in the second quarter of 2021, compared to $8.5 million in the
first quarter of 2021 and $2.5 million in the second quarter of
2020.
Outlook
Based on current market conditions and the current regulatory
environment, the Company expects to achieve the following:
- Continue to execute on REE’s
commercial programs, including the delivery of prototypes for
non-public road tests.
- Expand industry penetration through
additional partnerships and expansion of variety of EV types
‘Powered by REE’.
- Extend supply chain capacity by
executing additional collaborations with leading suppliers.
- Break ground on US headquarters and
integration center.
- Reiterating 35% increase in
headcount to achieve target of approximately 250 FTEs by year end
compared to June 30, 2021.
- Total annual capital and
operational expenditures on a non-GAAP basis in 2021 are expected
to increase by approximately 25%, or between $15 million and $16
million, as compared to a previous expectation of $64 million. The
change is attributed to increased engineering spend to support
growth in additional customer programs.
1 Employee headcount includes both internal direct employees and
external consultants deployed to REE on an FTE basis.
Webcast and Conference Call
Information
The Company will host a conference call at 8:30
a.m. Eastern Time on Tuesday, August 17, 2021, to discuss results
and latest developments. Individuals wishing to participate in the
webcast can access the event at the Company’s website by visiting
https://investors.ree.auto/ or via
https://edge.media-server.com/mmc/p/vt9v6s2i. If you wish to
participate in the call, please dial 1-877-407-9039 domestically or
1-201-689-8470 internationally. When you call, please enter
Confirmation Code 13722316, and provide your name and company
affiliation.
The call will be recorded and a replay will be
available to interested parties on REE’s Investors website at
https://investors.ree.auto/. In addition, a replay service will be
available up to 11:59 p.m. EST on Tuesday, August 31, 2021, by
dialing +1-844-512-2921 or +1 412-317-6671 internationally and
entering the ID number 13722316.
Use of Non-GAAP Financial Measures
The Company has disclosed financial measurements
in this press release that present financial information considered
to be non-GAAP financial measures. These measurements are not a
substitute for GAAP measurements, although the Company's management
uses these measurements as an aid in monitoring the Company's
on-going financial performance. Non-GAAP net earnings (loss) and
non-GAAP earnings (loss) per share, measure earnings and operating
income (loss), respectively, excluding non-recurring or unusual
items that are considered by management to be outside the Company’s
standard operation and excluding certain non-cash items. Adjusted
EBITDA is a non-GAAP financial measurement that is considered by
management to be useful in comparing the profitability among
companies within the industry by reflecting operating results of
the Company excluding non-operating factors. There are limitations
associated with the use of non-GAAP financial measures, including
that such measures may not be comparable to similarly titled
measures used by other companies due to potential differences among
calculation methodologies. Thus, there can be no assurance whether
(i) items excluded from the non-GAAP financial measures will occur
in the future or (ii) there will be cash costs associated with
items excluded from the non-GAAP financial measures. The Company
compensates for these limitations by using these non-GAAP financial
measures as supplements to GAAP financial measures and by providing
the reconciliations for the non-GAAP financial measures to their
most comparable GAAP financial measures. Investors should consider
adjusted measures in addition to, and not as a substitute for, or
superior to, financial performance measures prepared in accordance
with GAAP.
Contacts: |
|
Investor Relations |
Media |
Limor Gruber |
Keren Shemesh |
VP Investor Relations | REE Automotive |
Chief Marketing Officer | REE Automotive |
+972-50-5239233 |
+972-54-5814333 |
investors@ree.auto |
media@ree.auto |
REE AUTOMOTIVE LTD.
Condensed Consolidated Statements of
OperationsU.S. dollars in thousands (except share
and per share data)(Unaudited)
|
Three Months Ended |
Six Months Ended |
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Revenues |
- |
|
6 |
|
89 |
|
6 |
|
217 |
|
Cost of sales |
4 |
|
11 |
|
204 |
|
15 |
|
345 |
|
Gross
loss |
(4 |
) |
(5 |
) |
(115 |
) |
(9 |
) |
(128 |
) |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
Research and development expenses, net |
9,545 |
|
7,149 |
|
18,191 |
|
16,694 |
|
20,153 |
|
Selling, general and administrative expenses |
21,590 |
|
5,448 |
|
15,711 |
|
27,038 |
|
18,219 |
|
Total operating expenses |
31,135 |
|
12,597 |
|
33,902 |
|
43,732 |
|
38,372 |
|
Operating
loss |
(31,139 |
) |
(12,602 |
) |
(34,017 |
) |
(43,741 |
) |
(38,500 |
) |
Financial income, net |
8 |
|
4 |
|
166 |
|
12 |
|
293 |
|
Net loss before income
tax |
(31,131 |
) |
(12,598 |
) |
(33,851 |
) |
(43,729 |
) |
(38,207 |
) |
Income tax expense |
45 |
|
- |
|
- |
|
45 |
|
- |
|
Net loss |
(31,176 |
) |
(12,598 |
) |
(33,851 |
) |
(43,774 |
) |
(38,207 |
) |
Net comprehensive
loss |
(31,176 |
) |
(12,598 |
) |
(33,851 |
) |
(44,774 |
) |
(38,207 |
) |
Basic and diluted net
loss per share |
(0.16 |
) |
(0.07 |
) |
(0.22 |
) |
(0.22 |
) |
(0.26 |
) |
Weighted average number of
ordinary shares and preferred shares used in computing basic and
diluted net loss per share(1)(2) |
198,999,979 |
|
193,705,500 |
|
156,865,876 |
|
196,367,365 |
|
148,751,527 |
|
_______
(1) Shares and per share data are presented on a
retroactive basis to reflect the stock split following completion
of the Merger on July 22, 2021.
(2) Total number of Class A Ordinary Shares
outstanding as of August 17, 2021 is approximately 230 million, and
Class A Ordinary Shares outstanding on a fully diluted basis
assuming all outstanding warrants and issued equity incentive
awards are exercised, is approximately 363 million.
REE AUTOMOTIVE LTD. CONDENSED
CONSOLIDATED BALANCE SHEETSU.S. dollars in
thousands (except share and per share data)
|
June 30, |
|
|
December 31, |
|
|
2021 |
|
|
2020 |
|
|
Unaudited |
|
|
Audited |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
$ |
30,010 |
|
|
$ |
44,707 |
|
Restricted cash |
923 |
|
|
800 |
|
Short-term deposits |
- |
|
|
1,667 |
|
Inventory |
267 |
|
|
271 |
|
Trade receivables |
11 |
|
|
55 |
|
Other accounts receivable and prepaid expenses |
1,698 |
|
|
428 |
|
Total current assets |
32,909 |
|
|
47,928 |
|
|
|
|
|
|
|
NON-CURRENT ASSETS: |
|
|
|
|
|
Deferred transaction costs |
3,961 |
|
|
328 |
|
Property and equipment, net |
1,400 |
|
|
755 |
|
Total non-current assets |
5,361 |
|
|
1,083 |
|
|
|
|
|
|
|
TOTAL ASSETS |
$ |
38,270 |
|
|
$ |
49,011 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
Trade payables |
$ |
2,167 |
|
|
$ |
970 |
|
Other accounts payable and accrued expenses |
6,728 |
|
|
2,260 |
|
Deferred revenues |
578 |
|
|
- |
|
Total current liabilities |
9,473 |
|
|
3,230 |
|
TOTAL LIABILITIES |
9,473 |
|
|
3,230 |
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
Ordinary and Preferred shares(1) |
- |
|
|
- |
|
Additional paid-in capital |
181,749 |
|
|
154,959 |
|
Accumulated deficit |
(152,952 |
) |
|
(109,178 |
) |
Total shareholders' equity |
28,797 |
|
|
45,781 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
38,270 |
|
|
$ |
49,011 |
|
_______
(1) Shares and per share data are presented on
a retroactive basis to reflect the stock split following completion
of the Merger on July 22, 2021.
REE AUTOMOTIVE LTD. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWU.S. dollars
in thousands (Unaudited)
|
Six Months EndedJune 30, |
|
2021 |
|
|
2020 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
(17,399 |
) |
|
(4,026 |
) |
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Proceeds from deposits |
1,667 |
|
|
- |
|
Purchase of property and equipment |
(900 |
) |
|
(308 |
) |
Net cash provided by (used in) investing activities |
767 |
|
|
(308 |
) |
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of warrants to preferred shares |
2,657 |
|
|
- |
|
Payments of deferred offering costs |
(599 |
) |
|
- |
|
Proceeds from issuance of Preferred shares, net |
- |
|
|
25,825 |
|
Net cash provided by financing activities |
2,058 |
|
|
25,825 |
|
|
|
|
|
|
|
Increase (decrease) in cash, cash equivalents and restricted
cash |
(14,574 |
) |
|
21,491 |
|
Cash, cash equivalents and restricted cash at beginning of
year |
45,507 |
|
|
27,712 |
|
Cash, cash equivalents and restricted cash at end of
period |
$ |
30,933 |
|
|
$ |
49,203 |
|
Reconciliation of GAAP Financial Metrics to
Non-GAAPU.S. dollars in thousands (except share
and per share data)(Unaudited)
Reconciliation of Net Loss to Adjusted
EBITDA
|
Three Months Ended |
|
Six Months Ended |
|
|
Jun 30, |
|
Mar 31, |
|
Jun 30, |
|
Jun 30, |
|
Jun 30, |
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net Loss on a GAAP Basis |
(31,176 |
) |
(12,598 |
) |
(33,851 |
) |
(43,774 |
) |
(38,207 |
) |
Interest income |
(23 |
) |
(30 |
) |
(161 |
) |
(53 |
) |
(308 |
) |
Income taxes |
45 |
|
- |
|
- |
|
45 |
|
- |
|
Depreciation and amortization |
95 |
|
74 |
|
37 |
|
169 |
|
65 |
|
Share-based compensation |
20,027 |
|
4,106 |
|
31,332 |
|
24,133 |
|
33,652 |
|
Adjusted EBITDA(1) |
(11,032 |
) |
(8,448 |
) |
(2,643 |
) |
(19,480 |
) |
(4,798 |
) |
________
(1) Adjusted EBITDA excludes non-GAAP
adjustments for share-based compensation.
Reconciliation of GAAP research and development expenses
to Non-GAAP research and development expenses; GAAP
selling, general, and administrative expenses
to Non-GAAP selling, general, and
administrative expenses; GAAP net loss to Non-GAAP
net loss, and GAAP net loss per Share, basic and diluted to
Non-GAAP net loss per Share, basic and diluted
|
Three Months Ended |
|
|
Six Months Ended |
|
Jun 30, |
|
|
Mar 31, |
|
|
Jun 30, |
|
|
Jun 30, |
|
|
Jun 30, |
|
|
2021 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
GAAP research and development expenses |
9,545 |
|
|
7,149 |
|
|
18,191 |
|
|
16,694 |
|
|
20,153 |
|
Share-based compensation |
(1,537 |
) |
|
(1,645 |
) |
|
(16,864 |
) |
|
(3,182 |
) |
|
(17,742 |
) |
Non-GAAP research and development
expenses |
8,008 |
|
|
5,504 |
|
|
1,327 |
|
|
13,512 |
|
|
2,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling, general, and administrative
expenses |
21,590 |
|
|
5,448 |
|
|
15,711 |
|
|
27,038 |
|
|
18,219 |
|
Share-based compensation(1) |
(18,490 |
) |
|
(2,461 |
) |
|
(14,468 |
) |
|
(20,951 |
) |
|
(15,910 |
) |
Non-GAAP selling, general, and administrative
expenses |
3,100 |
|
|
2,987 |
|
|
1,243 |
|
|
6,087 |
|
|
2,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
(31,176 |
) |
|
(12,598 |
) |
|
(33,851 |
) |
|
(43,774 |
) |
|
(38,207 |
) |
Share-based compensation |
(20,027 |
) |
|
(4,106 |
) |
|
(31,332 |
) |
|
(24,133 |
) |
|
(33,652 |
) |
Non-GAAP net loss |
(11,149 |
) |
|
(8,492 |
) |
|
(2,519 |
) |
|
(19,641 |
) |
|
(4,555 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic and diluted net loss per share |
(0.06 |
) |
|
(0.04 |
) |
|
(0.02 |
) |
|
(0.10 |
) |
|
(0.03 |
) |
____________
1) In June 2021 the Company issued ordinary
shares to a Strategic Partner. As a result, the Company recorded
share-based compensation expenses in the amount of $15.9 million in
selling, general and administrative expenses.
About REE AutomotiveREE Automotive (NASDAQ:
REE) is an automotive technology leader creating the cornerstone
for tomorrow's zero-emission vehicles. REE’s mission is to empower
global mobility companies to build any size or shape of electric or
autonomous vehicle – from class 1 through class 6 - for any
application and any target market. Our revolutionary, award-winning
REEcorner technology packs traditional vehicle drive components
(steering, braking, suspension, powertrain and control) into the
arch of the wheel, allowing for the industry's flattest EV
platform. Unrestricted by legacy thinking, REE is a truly
horizontal player, with technology applicable to the widest range
of target markets and applications. Fully scalable and completely
modular, REE offers multiple customer benefits including complete
vehicle design freedom, more space and volume with the smallest
footprint, lower TCO, faster development times, ADAS compatibility,
reduced maintenance and global safety standard compliance.
Headquartered in Israel, with subsidiaries in
the USA, the UK and Germany. REE has a unique CapEx-light
manufacturing model that leverages its Tier 1 partners’ existing
production lines. REE’s technology, together with their unique
value proposition and commitment to excellence, positions REE to
break new ground in e-Mobility. For more information visit
https://www.ree.auto.
Caution About Forward-Looking StatementsThis
communication includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts, may be
forward-looking statements. Words such as “may,” “will,” “should,”
“likely,” “anticipates,” “expects,” “intends,” “plan,” “projects,”
“believes,” “views,” “estimates”, “future”, “allow”, “aims”,
“strives” “endeavors” and similar expressions are used to identify
these forward-looking statements. These statements include, among
other things, the Company’s statements about the Company’s
strategic and business plans, relationships or outlook, the impact
of trends on and interest in its business, intellectual property or
product and its future results. These forward-looking statements
are based on REE’s expectations and beliefs concerning future
events and involve risks and uncertainties that may cause actual
results to differ materially from current expectations. These
factors are difficult to predict accurately and may be beyond REE’s
control. Forward-looking statements in this communication or
elsewhere speak only as of the date made and REE undertakes no
obligation to update its forward-looking statements, whether as a
result of new information, future developments or otherwise, should
circumstances change, except as otherwise required by securities
and other applicable laws. In light of these risks and
uncertainties, investors should keep in mind that results, events
or developments discussed in any forward-looking statement made in
this communication may not occur. Uncertainties and risk factors
that could affect REE’s future performance and cause results to
differ from the forward-looking statements in this release include,
but are not limited to: REE’s ability to commercialize its
strategic plan; REE’s ability to maintain and advance relationships
with current Tier 1 suppliers and strategic partners; development
of REE’s advanced prototypes into marketable products; REE’s
ability to grow and scale manufacturing capacity through
relationships with Tier 1 suppliers; REE’s estimates of unit sales,
expenses and profitability and underlying assumptions; REE’s
reliance on its UK Engineering Center of Excellence for the design,
validation, verification, testing and homologation of its products;
REE’s limited operating history; risks associated with REE’s
commercial production in 2023 and thereafter; REE’s dependence on
potential suppliers, some of which will be single or limited
source; development of the market for commercial EVs; intense
competition in the e-mobility space, including with competitors who
have significantly more resources; risks related to the fact that
the Company is incorporated in Israel and governed by Israeli law;
REE’s ability to make continued investments in its platform; the
impact of the ongoing COVID-19 pandemic and any other worldwide
health epidemics or outbreaks that may arise; the need to attract,
train and retain highly-skilled technical workforce; changes in
laws and regulations that impact REE; REE’s ability to enforce,
protect and maintain intellectual property rights; REE’s ability to
retain engineers and other highly qualified employees to further
its goals; and other risks and uncertainties set forth in the
sections entitled “Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” in REE’s final prospectus relating to
its business combination filed with the U.S. Securities and
Exchange Commission (the “SEC”) on July 1, 2021 and in subsequent
filings with the SEC. While the list of factors discussed above and
the list of factors presented in the final prospectus are
considered representative, no such list should be considered to be
a complete statement of all potential risks and uncertainties.
Unlisted factors may present significant additional obstacles to
the realization of forward-looking statements.
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