Workhorse Group Inc. reported a first quarter loss of $7.9 million loss as it gets ready to start production of its W-15 electric pickup truck.
The Loveland, Ohio-based manufacturer said revenue surged to $1.8 in the first quarter compared with just $236,000 during the same period a year earlier as its vehicle sales to shipping giant UPS increased.
The stock has rallied since hitting a low over the last 52 weeks of $1.86 on March 21. Shares closed Wednesday at $2.95. That’s still down from its $7.06 close on Dec. 30, the last trading day of 2016.
“As we continue to deliver our battery-electric medium-duty trucks to our customers, we are experiencing a wide adoption of this innovative technology,” said Steve Burns, Workhorse’s chief executive. “We will continue to ramp up production and execute delivery of customer orders on a fast pace.”
This month the company announced a deal with Ryder Systems Inc. that will have the fleet management firm sell and service its line of vehicles.
The strategic partnership “unlocks more than 800 service locations in North America,” Burns said on a call with investors Wednesday. “It will also provide additional sales, and address warranty and service claims.”
Ryder also has ordered 2,500 of the new W-15 trucks. Workhorse has secured about 5,000 nonbinding orders for the extended range pickup that represents about $250-million worth of initial sales.
In the first quarter of 2017, Workhorse delivered 153 medium-duty vehicles and is preparing another 218 vehicles for production.
Workhorse made its third delivery of 125 medium-duty electric step vans to UPS. And the parcel delivery service has already requested 200 more vehicles, which is the fourth sequential order.
The company intends to leverage components in its medium-duty step vans to tap into the light-duty market.
“Pickups are 20 percent of all vehicle sales,” Burns said. “In 2016, there were 2.5 million sales of pickups versus 20,000 step vans.”
This is a growth opportunity, he said.
Having Ryder as a sales partner will not yield immediate results, but it has begun to ramp up.
“We’ve already spoken with a number of their clients, so they are already ahead of starting cold,” said Duane Hughes, chief operating officer for Workhorse. “Now it’s simply a matter of closing the business.”
The company will begin to see the fruits of the partnership “sooner rather than later,” Hughes said.
“We are staying close to ‘just in time’ production,” he said. “We purchased most of parts up front with orders and fully expect to increase inventory needs as year continues.”