Canoo (GOEV) 30 Mar 232022 Q4 Earnings call transcript

Greetings and welcome to the Canoo Fourth Quarter and Full Year 2022 Earnings Release Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Kunal Bhalla, Senior Vice President, Corporate Development and Capital Markets. Thank you.

You may begin.

everyone, quarterly welcome, conference and you, to earnings Canoo's call. Thank

Tony Chairman have Manget; Tony Murthy. through update our with Ramesh then I quarter. strategy. share Ken and the and provide business. on me Ramesh capital Ken Today, the run CFO, the Investor, CEO, financial will for an with Aquila; CAO, And raise will will along results

open the call then questions. will We for up

significant we may These make forward-looking and on actual based our expectations. to materially. advised statements are current results subject be risks differ and uncertainties, Please may

of we future Form release recent discussion to file including SEC, may and business, a the factors results refer that most our XX-Q For with that the and could our please X-Ks. earnings on Form financial XX-K affect disclosure and today's in reports and other

such our assume of currently information by to All today of are obligation as no based to law, statements and as on are any us. statements. required we Except available made update

call, we'll During discuss measures. this non-GAAP financial

can found find today's can reconciliation which measures financial section release, earnings measures non-GAAP be GAAP these financial the our to website. in IR of You on of the

page. towards Now, the the link page of webcast the the bottom and please video left access landing to navigate

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our stakeholders. on long-term of growth our you and or many This focused We're all focused is news. means for no and As we're already discipline know, news. news big creation milestones on impactful meaningful value

news. Tony to to over to some news, not Turning about Over it big but you, Tony. talk old

thank full QX and for our and you, us XXXX you, joining everyone, Kunal, results. for year Thank

their hard thank to our like our work mission. I'd for to it, associates into getting Before and dedication all

fleets. skill innovation envelope on and milestones. consumers means an focus on specific set mindset, We a to requires what are pushing That EV and technology, the and

create last like achievements advanced to of extremely macroeconomic an volatile recap high-tech company we to year. significant during climate. a journey the I'd mobility in our some continue As our

taken stakeholders to I'd And on since all were to immediately us I started that with milestones and there they strategy. focus we now our in look thank and achieved. we the verification the at that have transition. through the like focused jumped believers, in we sincerely became the you have on If steps can CEO, that the of worked headlines, hung those while realignment

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ends paves approved something Our focus agreement happen for with work in refounding. be the the hope significant past the management Company's a and itself, This of our from we still staff by commission on the us will to needs chapter weeks. entirely to few the way next the

excited about price efficiency transition issues continues have been legacy not Our our has stakeholders of a eliminate reflected legacy The we hard in as future entire the shareholders are matters, in for work the of expensive management to And company. to from continue and increases direction our upon achieving milestones. to distraction. increasingly shares. team today matters us. all only it as we legacy ability the been sacrifice is lost associates to big Canoo these And and our for address all the and Legacy

we and increase invest to business opportunities long-term-focused that like largest everyone the levels de-risk success. and the to I'd remind shareholder on as investor, help continuously its many for

realignment. helped especially during the us more has discipline just-in-time become Our efficient,

long-term of we a markets. capital others the However, complexity and as a portion access of We cycle, the markets added portion market as the conditions. has see accessing just but more this capital in current it the

managed goal value and at the capital It's better creation. view. dilution strategy with with total aim of having consistent is on to Our the a back the investors return long-term look

not faces, about the investors EV advantages, industry the about opportunities which alerting are the led charge talk We great. factors the only by to risk and that

our signed engagement As continue have shown, and up a we on focus to have will pipeline. we model customers, customer solid and customer three-stage world-class we on growing

milestone-driven put of capital the as event the just-in-time we raises the We us. work realignment to and have remained legacy business on focused and behind

We will be to on phase, just-in-time. versus efficient capital allow next milestones phase. cost, will event-based focused more now on the that use or of enter sources. long-term and And focus the more This lower we'll us make

reflect workforce volatile Phase up the back. you to X support City; We facility -- as to kicked training ramp manufacturing our an completed the very we facility proud state charge Partnering to XXX U.S. in U.S. including EV led with SOP to off and jobs manufacturing Nation we which a heartland, manufacturing us of walk you establish and with in as performance, X mixed hiring Phase in environment XXXX SOP committed navigated announced the and through module as and vehicle But in Oklahoma key manufacturing creation, Cherokee Oklahoma. believe the economic employees programs, know, the Michigan; milestones. view our production. the bring we of; there scale let our job OKC, to establishing Oklahoma we we manufacturing to Pryor, of battery are

lead nation mitigating to stepped reduced address the serious Chinese the on on protection. our share source China and IP in the from components. potential settlement, We by previously U.S. resilience leakage We the allied concerns to purchase focusing investor IP and had risk.

delivering focused more to the chain manufacturing optimization, risk. and parts, cart focus We on achieve lowest on is room counts vehicles. continuous the of will believe reduced supply under This to We still reduced one optimize we come into a We build materials, begin of basis. X,XXX and BOM vehicles. there EV further per as also

And validation. Difficulty] our of orders vehicles, [Technical received points strategy. product has Fleet our been thousands sales. of has multiple

like Zeeba, and Now, CBRE the we're our very of Schindler proud customer names Elevator to add have customers Kingbee, to Walmart, to recently partners.

and being excited beyond. in America the received in is electrify well product we fleets market, are the help Our and to working

to in These We specific develop and XXX American modular highly the our administrations. and LTV, supported our in tactical have it This by past current delivered been deliver light actions validates did vehicle, and use we Army U.S. innovation. days. cases. ability We rapidly architecture both the to the LTV. platform order achieved

IRA validation our The a tailwind. strategy and strong of bill provides is

For will maximum sourcing fleet vehicles government most XXXX, validates realignment consumer benefit from fleet commercial placed $X,XXX Canoo use in rules, IRA of focus large vehicles on credit cases. qualify customers the unit. for the the to new and our into of first allowed credit. This service per Under strategy don't

Timing shifted backdrop. cost reflect, bringing the the resourcing China transition of mishired of with manufacturing. account We constraining the into of of being de-synchronized stand up we and strategy struggled over, capital exposure. from as and we some factor. we away As struggled milestones, here the and certain We the especially was components with underestimated a Delays areas. timely our under taking impacts complexity in and macroeconomic realignment in of also today the and and onshore legacy

As we start will on to behind put better future. we matters the us, be our legacy focused

Let through strategy milestones. and some our of you us recent walk

overhang, Our capital-raising to matters non-dilutive especially long-term legacy strategy improves SEC is maturing, capital. low-cost, as which remove like access our we the

been us even last all a of XX and some We longer. these have months, lot through

design milestones important on milestones. our R&D turbulence of and organization, we from the market As better achieving track an these to current help migrating growing record launch will mature, based premarket manage a and hitting continue to delivery us manufacturing market

The to organizational and with come launch shift changes design risks. premarket manufacturing delivery and and market from will R&D some

more as good on Defense continuing of align and per military, certain our is the of our down with FTE geographic government, mix Department focused cost very On we changes becoming R&D markets. our side, going like a in innovation segments specific customer expansion and result as fleet,

We our the customers newly of are of the implemented and one -- bill. for realignment our be fortunate to ourselves allows in that to our IRA first access benefits us the

with LDV, XXX-mile Now, Further, let our remain our recent already for some temperature higher by on those triple-digit share making reliable. range continue is which than persistent highlights. to customer among certification focus is received proved heat to base. We quarter improving. and and retention We excellent our fourth we what conditions. durable in This vehicles of will and up XX% and targeted most advanced EPA freezing me in the the deliveries Walmart of the below many in

book. We growth XXX% X% Others quarter time billion order last growth a or We now and since year. over had the last this $X.X have declining. have been flat

our customer demand to and a to hard for the see work teams. journey of product, and strong continue it's engineering We tribute design, manufacturing, our

So, we're very proud.

in initial announced of international expansion, our Olayan Arabia. with The partner Saudi distribution GCC the we as that phase

more American in strategy We coming clear our with quarters. and expansion North make will how aligns strategy geographic share the our

in place. facility. have has on Oklahoma being readiness rate. automated, and exiting OKC. battery run high-speed Other continues put is the remain a XX,XXX progress, Pryor General we arrived XXXX City focused equipment at lines to arrived at manufacturing assembly line Highly at

will coming you in progress weeks quarters. on update We the the and

and Department awarded use our has of us markets. which This technology IP and versatility of emerging scalable battery in monetization. technology and Defense additional -- The manufacturer important cases our different a advanced manufacturer. contract an to is equipment for manufacturer, and environments. speaks technology TEM, OEM, currently of an of use to multiple testing multiple original equipment versus the technology original the adaptable U.S. And that layers be systems can

of in shortly on EVP the and strengthening their CFO as and areas himself introduce and guidance. Ken with added Ken a the and results update Manget an financial of raising, will wealth Tony We as and finance experience provide in continue strategic manufacturing. capital our announced management We Tony Elias bring respective team. Operations. Ken Ramesh

to take And I'd like time now to Ken. introduce this

the that with in you better debt including and structured my more equity with multiple on growth automotive of career pre-IPO diversified actively to I'm mission Pension managing perspective is I sell basis. R&D I've for timing working spent the global capital billion and all is billions leverage on sources to XXXX-XXXX needs diverse finalizing side, where Plan, shift companies. public becoming capital capital I'm aligning -- and in the of I'm excited to focused plan. OEMs. time Tony where most our and Ontario a at on be better very I've ground capital met financing as the first today. Canoo's a markets, be towards to from focus hit major running, raises, equity we areas I Teachers' transition capital in invested first a pleased Canoo. manufacturing. experience of non-dilutive strategy in while years my engineering at and team of The was My the of team $XX our scale Subsequently, with milestone equity, and to

offering recently led I first of our was that registered $XX.X oversubscribed. million direct

Tony what improve on a is As of the the be strategy picking now will in described I strategy. mission more just-in-time which diversification we base. us before, focused this capital milestone-driven allocating raise shareholder raise, to from up moving to our of a

My efforts quarter align be will coming manufacturing across better focus this online base. in the to of capital with supply the

carefully improve We our will capital implement and allocation to capital we manage of efficiency until strategy. cash continue more our aligned

Ramesh will through walk the results. now

We operations for $XXX.X Turning in million, used Cash cash compared QX was flow. million, million and to of respectively, cash same was the million XXXX. ended million XX, ended period respectively, $XXX.X quarter year and equivalents. for in $XXX.X lower previous quarter. 'XX cash to operations $XX.X than December with XXXX, and the the used for year XX% the periods in Cash $XX.X and

respectively, and were XX million, XXXX, for respectively, December XXXX. Capital and and XX, $XX.X and $X.X for to ended $XX.X million million December year XX, months quarter X the million, compared ended $XXX.X respectively, the expenditures

XX XX, used compared financing December activities by respectively. million XXXX, ended ended and cash months activities and to was $XXX.X Net for XX, XX $XX.X and XXXX, the months financing the $XXX.X respectively, net X was for million $X million, provided and cash X December million,

to income Moving statement. the

the XXXX quarter $XX.X development for of spend bell we to curve results had in year the million follows: a moved fourth research in period. quarter as We as manufacturing. R&D prior expenses Our from $XX.X preproduction our compared and are million to

to compared R&D of than 'XX XX% our spend lower second first R&D R&D XXXX. XX% spend 'XX in was 'XX, lower half and QX Our of the in in half was spend QX

to the in million period. SG&A the expense million quarter year was compared $XX.X $XX.X for prior

Our SG&A and 'XX was spend than lower QX XX% lower of XX% XXXX. QX than

to to in is compared program. completion in GAAP loss net of $XXX.X quarter part Gamma period. prior year million GAAP loss the This net was $XX.X million of the attributed for our the a

negative was compared to the quarter $XX.X for period. prior in EBITDA the million $c.X Adjusted year negative million

million research million year. to year follows: $XXX.X $XXX year EBITDA of as in the million are the year. negative prior results to compared was XXXX Adjusted negative year the year compared fiscal Our for $XXX.X was net the the for $XXX.X in net development $XXX.X expenses in and the GAAP of in to $XXX.X SG&A GAAP compared was in million compared $XXX year. the loss year for $XXX.X year. loss to expense prior million a prior million million the prior million

forecasted We XX% expenses had year. a second operating the reduction half the for previously in of

in XX% However, reduction depreciation. and a operating expenses, we stock achieved excluding compensation

to our guidance. Turning forward-looking

We continue and our with tactical milestones. to prudent to spend be with align

as Our to $XX and million million $XX follows: guidance million. XXXX capital OpEx, for $XX expenditures, QX is million; $XX to

Turning Kunal. it to back

Ken Tony, about Thanks, we product production Ramesh. and customers. our and deliveries of to XXXX scale We're begin excited as all our our

the for line open please questions. Operator,

first from Wainwright. H.C. Amit Instructions] comes [Operator question with Our Dayal

for I are? the or Just to us begin XXXX and guess, give could remind us, you with, delivery Tony, what targets production

may be can't you muted. hear Speaker, you. We

Yes.

fine-tuning XX,XXX to with exit, be with confidence to run year equipment. will lot with everybody, ramp on we know quarterly the a do now, just our with or the quarters. what based With Yes. a things on right know the that Sorry But We basis, and run customers about focused strong schedules that, as XX,XXX the we deliveries a of exit installation that. the we rate in cautious apologize. as than rate we be -- muted. be the a more we up we'll have schedules on weekly I can a that at and were to all we're delivery certainty basis we respect

at the like is terms or would facilities production XX% number the of in at to say XX%, relative even are maybe of start happening of to sort initial you preparedness then, you activity And a being higher now, able right sort at that activity? some

and and to the those them we in bunch of some whole robotics We Oklahoma tested relocated now then yes, the that, did all items, So down activities Phase of initial majority which SOP X, torn we a City. Michigan.

few programmed would at say, for example, XX%-ish the it. ground, the items on There test are We and probably in already that range line and that arrived the some somewhere north that pieces tested. they're put So battery of probably ground, I the and of found we XX% have new up that, run a manufacturer. now to time. to have inbound. a workflows been are areas tested, with what's And have at But from we're us items the longer semi-manual on some put on in lead the the are a taking we little gave we where stake where confidence bit rate. which we or workflows have have which longer need manual around ground working But the about vendors, unit workflow XX,XXX

all just Thank in them, hiring who on starting and of in be floor, you. the putting that terms activity? And the production people then folks you folks adjacent to this, of are will just already terms that,

Yes.

your terms the needs. right hiring do et positioned lot you right And cetera, feel a about jobs, mean, you finding things? people of are just these confident in how for wondering headline now, I about there's but of

Yes. about on multiple on only shed a fact now to the by kind based we better train to comes years zigzagged the We Look, Cherokee that labor to people Pryor, I'd concentrated and and from of opportunities. We've bit now and say where risk splitting labor being focus City feel our good Oklahoma our for of with Pryor, partnered the in we've we studied the to up. on Nation Oklahoma Oklahoma diversifying it sit give in shed. Oklahoma confidence ways little today state the

of we associates. what to through just ramp that is think got work first I still

it tools. have, using training Now, we'll it, We completed AI but center. the new equip facility be has already to a we need

above, ahead, in what manufacturers, teams scale. rate process. you respect run with, like great up And most it team on to a get peers people XX,XXX, I think experienced doing scale. needs, with the experience that we of the of trying manufacturing to phases to from step the XX,XXX think have some we're we at because of to XX,XXX, into will, in early our -- you and bringing now, performed bringing hiring, I our learn earlier bit your And upgraded as the But tasks. if we're question to And different have come it trying

last one for one Just Ken. for me, maybe

what the do on that Any would color options, of of have options helpful. terms you? in non-dilutive In you financing front be

Yes.

coming exploring to that sources, We're two. of be We was expect a the discussing in of or quarter earlier. diversified background funding the leveraged I some number which describing

can I that add well. as to

respect Energy loan getting to that addressed, nature. SEC, couldn't For legacy the matters couldn't of we of things especially Department example, some the -- actually of like program for with we file prior things and to in the

start us this track for we record. Now, are exponential our access to team's as establish management opportunities capital to

next ROTH Irwin MKM. question with comes Our from Craig

here. my Hey. detail kind to mix, just me. XXX% bit a orders year. that It's segments, if anything additionally Andrew great. give Thanks could in I you in for question. you for you. order little growth just see of on be And wondering on would for could news one Craig a quick Great -- the size, where over taking just this strength what you're demand, seeing maybe more share Thank was

Yes. Sure.

they're we well. higher gets margin for and can are us our our look, Grade A, higher been on addition But because have that for type on margin know in workflows BBB as meet customers that's because to so return these around focused that, So to to very credit good get and orders. customer multiyear the of And customers orders we have we a us cost those capital. workflows, long-term unique generally going reduce the capital,

So, the the limited primarily the LDV of focused around large, been units and mix with fleets. primarily has medium-sized LV

order do and can we more of users. to allocation the out figure and to the the small individual working the are book We orders

a maintenance, because area very worked leading don't out items. that is of and their before distribution we'll companies problems on some us get of we vehicles rollout doing built also you from that the of some have rollout this be other do for repair, with come to so our service, concentrated but We have a of the them, to initiative. same it anticipate support had as great mass team we well that has that some past So,

where think we rating financing get good we'll some So, is announcing at coming orders, look those non-dilutive of large the to that items the book be our I as really up concentrated, quarters. very in credit

Jaime from next Perez our question Lafferty. with R.F. comes And

that have along? you Tony, how as Walmart do is any on as going far update the order

fine. Going along

And here In it pretty us. to with taper we're a so We've schedule. fact, distribute working as They've been got today delivering little delivery part just with. well them well. their can shortly amazing work to Actually, strategy. they're bit of fleet partner schedule to vehicles we will per robust they the trying customers bigger an announce a as we'll other some back for us be that as as

our all right what expectations that's say So, is were. that's to And now. original at above me appropriate moving everything for or probably

All right. enough. Fair Yes.

I that's Thanks think for have I all a the questions tonight. lot.

worries. No

comes [Operator Pavel James. Raymond Molchanov Instructions] next question with from Our

that XXX the having days it tax was too the first is to early way it demand? Is is credit, say Now stimulating the Reduction Act to? Inflation the commercial incentive, it we're supposed market EV much on it into how effect

and target more -- for of companies, for business actually, the think I it's it's a business performance. a big target

amount enter navigate the of other And things. of helped. point companies there's So, even didn't It's it's that a cover -- because decision. charging emerged the of they some issues -- extra medium-sized to just a and for it's it it's kind pipeline. them the tipping we But been this businesses, affordable really now for within actually as it's additive. really tremendous really into have But

are makes additive difficulty to So, in Act more the transition, helping that Reduction the customers have that sense. Inflation if super -- the is

I and is adoption Right. prospective to absolutely guess mean, X.X-year. all variable fallen the talk as I Yes, diesel maybe oil about have a to curve that gasoline does. the to prices levels customers? that you headwind in the it counterbalancing at Is and lowest

Yes.

greenhouse versus on are companies focused I at on. return X gas so you X think if kind of, your will, capital because would be it emission targets that time on for it's a those and selling immediate or

for cost platforms companies, they ownership the the think I issue. of and testing total us, Right -- basis. know these better look a it's so miles marginal the we thousands of the long because life the we as looking the deliveries. of that's are these positive just with vehicle, capital, math. from outcome And at -- proved bigger return on capital life of for a and return still mean, of long-term very I on now, at on a are the

would they time, basis are for which still we the those the small, have that your I at steaming But So, user slowing point, to ahead. focused down. imagine imagine small on I would this business, customers individual not are

LDV X period are right When you payback say, something that? or what now, X at, think about a like let's for, we years, like, the looking

it. on depends use It how they

the greater can most With on our of daily see capital, more deliveries as the actually are do but we emerging. customers return accelerates our they bigger XX% what fact customers range most that these which requiring, is basis they a than can now of not our get of a all customers, amount on lot

X.X And so, as payback on be, depending period as soon years. can the them,

day. may you. that Thank as as Have today's great All parties session call. concludes a question-and-answer well disconnect. conference And today's