Romeo Power, Inc. (“Romeo Power” or the “Company”) (NYSE: RMO),
an energy technology leader delivering advanced electrification
solutions for complex commercial vehicle applications, today
announced its financial results for the first quarter ended March
31, 2021.
First Quarter Financial Update
- Generated revenues of $1.1 million for the first quarter of
2021
- Cash, cash equivalents and investments decreased by $4.9
million from December 31, 2020
- Cash, cash equivalents and investments as of March 31, 2021 of
$287.5 million
Recent Business Highlights
- Winning the trust of key OEMs: Romeo Power has secured a
long-term supply agreement whereby PACCAR will purchase the
company’s battery packs and battery management software for
heavy-duty battery-electric Peterbilt 579EVs and Peterbilt 520EV
refuse trucks in North America
- Affirming position as trusted electrification provider: Romeo
Power and Heritage Environmental Services have selected OEM
participants in the Heritage-Romeo Power Fleet Electrification
Program
- Securing long-term agreements: Romeo Power continues to both
enter into and execute on long-term agreements with OEMs and fleet
managers
- Negotiating cell supply agreements: Romeo Power is well
positioned to sign an agreement shortly for multiple GWh through a
long-term supply commitment with a top tier battery cell
partner
- Qualifying commercial battery cell suppliers: Romeo Power is
actively collaborating with both established players and newer
entrants to qualify additional battery cell suppliers that meet the
Company’s rigorous requirements for use in heavy-duty Class 6, 7
and 8 trucks
Management Commentary
“Demand for vehicle electrification continues to grow. As we
look at the sheer size of the opportunity, we are focusing on
meeting this accelerating demand, starting with heavy-duty
long-range vehicles that require the most durable and effective EV
solutions,” commented Lionel Selwood, Jr., Chief Executive Officer
of Romeo Power. He continued: “As we mark our fifth year as a
company, we continue to leverage our advanced engineering expertise
to push our technology and enhance relationships with key industry
players, driven by a shared objective to continue innovating and
pushing EV technology forward. We are proud to have earned the
trust of industry leaders, including those who face some of the
most formidable electrification challenges, such as cost-effective
long-haul trucking, and we look forward to working with the key
industry players to develop and commercialize safe, durable and
cost-effective battery system solutions.
"The OEMs and fleet managers that are serious about
electrification recognize that Romeo Power’s solutions can deliver
superior uptime, profit-per-mile and return on investment, a
winning combination for customers, suppliers and investors. This is
evident in Romeo Power’s recent wins, including a long-term
agreement with leading commercial vehicle maker PACCAR, the maker
of light-, medium- and heavy-duty trucks under the Peterbilt,
Kenworth and DAF nameplates. The level of trust placed in Romeo
Power by PACCAR to help them achieve their ambitious
electrification goals speaks volumes.
"During the first quarter, Romeo Power and Heritage
Environmental Services selected the OEMs who will participate in
the Heritage– Romeo Power Fleet Electrification Program. This
includes PACCAR, Lion Electric and Nikola, leading manufacturers
that will now be fitted with Romeo Power’s cutting-edge
electrification solutions. These packs will be supplied under
existing contracts and are subject to successful validation in the
pilot phase of the program. Romeo Power has demonstrated its
capability to help major fleet owners meet their electrification
goals, and has made building these relationships a go-to-market
priority.
"Romeo Power has prioritized collaboration with ecosystem
participants and is proud to be accelerating industry progress via
our unique testing capabilities so we can all meet the moment and
deliver on the promise of EVs everywhere.”
Conference call information
Romeo Power will host a conference call at 2:00 p.m. U.S.
Pacific Time (5:00 p.m. U.S. Eastern Time) today, May 13, 2021.
Participating on the call will be Lionel Selwood, Jr., President
and Chief Executive Officer, and Lauren Webb, Chief Financial
Officer, of Romeo Power. To access the conference call, parties
should visit the events section of the Investor Relations website
at https://investors.romeopower.com/. A recording of the webcast
will also be available following the conference call.
Forward Looking Statements
Certain statements in this press release may constitute “forward
looking statements” within the meaning of the “safe harbor”
provisions of the United States Private Securities Litigation
Reform Act of 1995. When used in this press release, the words
“estimates,” “projected,” “expects,” “anticipates,” “forecasts,”
“plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,”
“future,” “propose” and variations of these words or similar
expressions (or the negative versions of such words or expressions)
are intended to identify forward-looking statements. These
forward-looking statements, including, without limitation, express
or implied statements concerning the Company’s expectations
regarding its future financial performance, revenues and capital
expenditures, the Company’s expectations with respect demand for
its products, the magnitude and timing of future contracts, the
availability and pricing of battery cells, the Company’s ability to
secure long-term sourcing commitments, and the results of the
Heritage-Romeo Power Fleet Electrification Program are not
guarantees of future performance, conditions or results, and
involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
Romeo Power’s management’s control, that could cause actual results
or outcomes to differ materially from those discussed in the
forward-looking statements. Important factors, among others, that
may affect actual results or outcomes include: Romeo Power’s
ability to execute on its plans to develop and market new products
and the timing of these development programs; Romeo Power’s
estimates of the size of the markets for its products; the rate and
degree of market acceptance of Romeo Power’s products; the success
of other competing technologies that may become available; Romeo
Power’s ability to identify and integrate acquisitions; the
performance of Romeo Power’s products and customers; potential
litigation involving Romeo Power; demand for battery cells and
supply shortages; the potential effects of COVID-19; and general
economic and market conditions impacting demand for Romeo Power’s
products. You should carefully consider the foregoing factors and
the other risks and uncertainties described in Romeo Power’s Annual
Report on Form 10-K for the year ended December 31, 2020, and in
subsequent reports on Forms 10-Q and 8-K and other filings made
with the SEC by the Company. If any of these risks materialize or
our assumptions prove incorrect, actual results could differ
materially from those implied by our forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Romeo Power undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
Note Regarding Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures,
including EBITDA and Adjusted EBITDA. “EBITDA” is defined as
earnings before interest income and expense, income tax expense or
benefit, and depreciation and amortization. “Adjusted EBITDA” has
been calculated using EBITDA adjusted for, stock-based
compensation, and the change in fair value of Public and Private
Placement Warrants. The Company believes that both EBITDA and
Adjusted EBITDA provide additional information for investors to use
in (1) evaluating our ongoing operating results and trends and (2)
comparing our financial performance with those of comparable
companies, which may disclose similar non-GAAP financial measures
to investors. These non-GAAP measures provide investors with
incremental information for the evaluation of our performance after
isolation of certain items deemed unrelated to our core business
operations. EBITDA and Adjusted EBITDA are presented as
supplemental measures to our GAAP measures of performance. When
evaluating EBITDA and Adjusted EBITDA, you should be aware that we
may incur future expenses similar to those excluded when
calculating these measures. In addition, our presentation of these
measures should not be construed as an inference that our future
results will be unaffected by unusual or non-recurring items.
Furthermore, our computation of Adjusted EBITDA may not be directly
comparable to similarly titled measures computed by other
companies, as the nature of the adjustments that other companies
may include or exclude when calculating Adjusted EBITDA may differ
from the adjustments reflected in our measure. Because of these
limitations, EBITDA and Adjusted EBITDA should not be considered in
isolation, nor should these measures be viewed as a substitute for
the most directly comparable GAAP measure, which is net income
(loss). As appropriate, the most directly comparable GAAP financial
measures and information reconciling these non-GAAP financial
measures to the Company’s financial results prepared in accordance
with GAAP are included in this press release.
About Romeo Power, Inc.
Founded in 2016 and headquartered in Los Angeles, California,
Romeo Power (NYSE: RMO) is an energy technology leader delivering
advanced electrification solutions for complex commercial vehicle
applications. The Company’s suite of advanced hardware, combined
with its innovative battery management system, delivers the safety,
performance, reliability and configurability its customers need to
succeed. Romeo Power's 113,000 square-foot manufacturing facility
brings its flexible design and development process in-house to pack
the most energy dense modules on the market. To keep up with
everything Romeo Power, please follow the Company on social
@romeopowerinc or visit http://romeopower.com.
Financial Statements
Romeo Power, Inc.
Unaudited Condensed
Consolidated Statements of Operations and Comprehensive Income
(Loss)
(Dollar amounts in thousands,
except share and per share data)
Three Months Ended March
31,
2021
2020
REVENUES: Product revenues
$
341
$
1,588
Service revenues
-
52
Related party service revenues
713
882
Total revenues
1,054
2,522
COST OF REVENUES: Product cost
4,238
2,729
Service cost
-
153
Related party service cost
589
750
Total cost of revenues
4,827
3,632
GROSS LOSS
(3,773
)
(1,110
)
OPERATING EXPENSES: Research and development
3,771
1,802
Selling, general and administrative
17,999
2,907
Total operating expenses
21,770
4,709
OPERATING LOSS
(25,543
)
(5,819
)
Interest expense
(7
)
(254
)
Interest income
90
-
Change in fair value of public and private placement warrants
116,125
-
INCOME (LOSS) BEFORE INCOME TAXES AND LOSS IN EQUITY METHOD
INVESTMENTS
90,665
(6,073
)
Loss in equity method investments
(643
)
(696
)
Provision for income taxes
(10
)
-
NET INCOME (LOSS)
90,012
(6,769
)
OTHER COMPREHENSIVE LOSS Available-for-sale debt
investments: Change in net unrealized losses, net of income taxes
(342
)
-
Net losses reclassified to earnings, net of income taxes
38
-
Total other comprehensive loss, net of income taxes
(304
)
-
COMPREHENSIVE INCOME (LOSS)
$
89,708
$
(6,769
)
Net income (loss) per share Basic
$
0.70
$
(0.09
)
Diluted
$
0.66
$
(0.09
)
Weighted average number of shares outstanding Basic
128,788,715
74,647,985
Diluted
135,812,697
74,647,985
Romeo Power, Inc.
Unaudited Condensed
Consolidated Balance Sheets
(Dollar amounts in thousands,
except share and per share data)
March 31,
December 31,
2021
2020
ASSETS Current assets Cash and cash equivalents
$
41,278
$
292,442
Investments
246,215
-
Accounts receivable, net of allowance for expected credit loss of
$213 and $238 at March 31, 2021 and December 31, 2020, respectively
1,444
841
Inventories, net
5,689
4,937
Insurance receivable
6,000
6,000
Deferred costs
998
-
Prepaid expenses and other current assets
9,306
1,269
Total current assets
310,930
305,489
Restricted cash
1,500
1,500
Property, plant and equipment, net
6,321
5,484
Equity method investments
38,357
35,000
Operating lease right-of-use assets
5,411
5,469
Other noncurrent assets
2,893
3,100
TOTAL ASSETS
$
365,412
$
356,042
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
liabilities Accounts payable
$
5,033
$
2,900
Accrued expenses
3,094
2,844
Contract liabilities
1,672
815
Current maturities of long-term debt
2,783
2,260
Operating lease liabilities, current
855
853
Legal settlement payable
6,000
6,000
Other current liabilities
248
384
Total current liabilities
19,685
16,056
Commitments and contingencies Long-term debt, net of current
portion
559
1,082
Public and private placement warrants
11,921
138,466
Operating lease liabilities, net of current portion
4,661
4,723
Other noncurrent liabilities
-
17
Total liabilities
36,826
160,344
Stockholders' equity Preferred stock ($0.0001 par value,
10,000,000 shares authorized, no shares issued and outstanding at
March 31, 2021 and December 31, 2020)
-
-
Common stock ($0.0001 par value, 250,000,000 shares authorized,
130,529,147 and 126,911,861 shares issued and outstanding at March
31, 2021 and December 31, 2020, respectively)
13
12
Additional paid-in capital
416,308
373,129
Accumulated other comprehensive loss
(304
)
-
Accumulated deficit
(87,431
)
(177,443
)
Total stockholders’ equity
328,586
195,698
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
365,412
$
356,042
Romeo Power, Inc.
Unaudited Condensed
Consolidated Statements of Cash Flows
(Dollar amounts in thousands)
Three Months Ended March
31,
2021
2020
CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss)
$
90,012
$
(6,769
)
Adjustments to reconcile net income (loss) to net cash used in
operating activities: Depreciation and amortization
505
482
Stock-based compensation
6,553
277
Inventory provision
392
-
Change in fair value of public and private placement warrants
(116,125
)
-
Loss in equity method investments
643
696
Non-cash lease expense—operating leases
58
57
Non-cash lease expense—finance leases
71
71
Other
(113
)
-
Changes in operating assets and liabilities: Accounts receivable
(603
)
26
Inventories
(1,144
)
(961
)
Prepaid expenses and other current assets
(7,023
)
691
Accounts payable
2,630
853
Accrued expenses
250
441
Interest accrued on notes payable
-
239
Deferred costs
(998
)
-
Contract liabilities
857
367
Operating lease liabilities
(60
)
(53
)
Other, net
(77
)
(48
)
Net cash used in operating activities
(24,172
)
(3,631
)
CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of
investments
(281,124
)
-
Proceeds from maturities of investments
32,318
-
Proceeds from sales of investments
1,300
-
Equity method investment
(4,000
)
-
Capital expenditures
(1,617
)
(601
)
Net cash used in investing activities
(253,123
)
(601
)
CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of
convertible notes
-
4,924
Issuance of term notes
-
750
Issuance of common stock
-
1,277
Exercise of stock options
4,681
-
Exercise of stock warrants
21,526
-
Principal portion of finance lease liabilities
(76
)
(69
)
Net cash provided by financing activities
26,131
6,882
Net change in cash, cash equivalents and restricted cash
(251,164
)
2,650
Cash, cash equivalents and restricted cash, beginning of period
293,942
1,929
Cash, cash equivalents and restricted cash, end of period
$
42,778
$
4,579
Reconciliation of cash, cash equivalents and restricted cash
to the condensed consolidated balance sheets: Cash and cash
equivalents
$
41,278
$
3,079
Restricted cash
1,500
1,500
Total cash, cash equivalents and restricted cash
$
42,778
$
4,579
Romeo Power, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(Dollar amounts in thousands)
Three Months Ended March
31,
2021
2020
Net Income (loss)
$
90,012
$
(6,769
)
Interest expense
7
254
Interest income
(90
)
-
Provision for income taxes
10
-
Depreciation and amortization expense
505
482
EBITDA
$
90,444
$
(6,033
)
Stock-based compensation
6,553
277
Change in fair value of public and private placement warrants
(116,125
)
-
Adjusted EBITDA
$
(19,128
)
$
(5,756
)
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