Spruce Power Announces Actions to Exit Legacy XL Fleet Drivetrain Business
December 19 2022 - 7:30AM
Business Wire
-- Completes Business Model Transformation into
a Pure-play Clean Energy Provider-- --Stronger Financial Position
with Substantially Reduced Cash Usage--
Spruce Power (NYSE: SPRU) (“Spruce” or the “Company”; formerly
known as XL Fleet), a leading owner and operator of distributed
solar energy assets across the United States, today announced
completion of its strategic transformation to a pure play clean
energy solutions business:
- Spruce Power will cease operations of its hybrid and
drivetrain-related business lines, including all product
development and commercial activities.
- The Company entered into a definitive agreement whereby The
Shyft Group USA, Inc. (“Shyft”), a wholly owned subsidiary of The
Shyft Group, Inc. (NASDAQ: SHYF), will assume completion of a pilot
development agreement with the Department of Defense related to
vehicle hybridization (“DOD program”). Spruce will retain rights to
potential future royalties from the program. Related to the
development opportunity, Shyft will acquire from XL Fleet certain
technical equipment and assume a lease in Wixom, Michigan related
to the initiative. Shyft is also expected to offer employment to
engineers and others currently employed by XL Fleet.
- In a separate transaction, Spruce has sold certain battery
inventory and its legacy hybrid technology to RMA Group, a leading
automotive and equipment supplier in Southeast Asia.
The Company anticipates that these actions will be completed by
January 1, 2023 and should significantly reduce future operating
cash use. Additionally, Spruce believes that the previously
disclosed warranty reserve is sufficient to meet probable claims
covering those vehicles currently under warranty.
“These actions transform our business into a pure-play provider
of clean energy solutions to residences and small businesses,” said
Eric Tech, Chief Executive Officer of Spruce Power. “We are excited
that our former colleagues will have a new opportunity with Shyft
to bring EV solutions to specialty commercial vehicle
manufacturing, assembly, and upfit. We wish them well in the
transition.”
Tech continued, “With these steps, our business transformation
is complete, and we enter 2023 in a strong position, able to unlock
the value of Spruce Power as a streamlined and refocused company.
As a pure play renewable energy provider, we can soon transition
the Chief Executive Officer role from me to our President Christian
Fong. We expect to announce that transition in the weeks
ahead.”
About Spruce Power
Spruce Power is a leading owner and operator of distributed
solar energy assets across the United States. We provide
subscription-based services that make it easy for homeowners and
small businesses to own and maintain rooftop solar and battery
storage. Our as-a-service model allows consumers to access new
technology without making a significant upfront investment or
incurring maintenance costs. Our company has more than 51,000
subscribers across the United States. For additional information,
please visit www.sprucepower.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:
expectations regarding the growth of the solar industry, home
electrification, electric vehicles and distributed energy
resources; the ability to successfully integrate the Spruce Power
acquisition; the highly competitive nature of the Company’s
business and markets; the ability to execute on and consummate
business plans in anticipated time frames; litigation, complaints,
warranty claims, product liability claims and/or adverse publicity;
results of operations, financial condition, regulatory compliance
and customer experience; the potential loss of 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; risks
related to the rollout of the Company’s business and the timing of
expected business milestones, including supply chain and labor
shortage challenges in the solar panel markets; the effects of
competition on the Company’s future business; the availability of
capital; and the other risks discussed under the heading “Risk
Factors” in the Company’s Annual Report on Form 10-K filed on March
31, 2022, subsequent Quarterly Reports on Form 10-Q 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.
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Investor Contact: investors@sprucepower.com Media Contact:
PR@sprucepower.com
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