Phoenix Motor Inc. (Nasdaq: PEV) (the “Company” or “Phoenix”), a leader in manufacturing of all-electric, medium-duty vehicles, today reported financial and operational results for the second quarter of 2023.
Second Quarter 2023 Financial Highlights
- Net revenues decreased 23% to $1.2 million, compared to $1.5 million in Q2 2022, as a significant increase in revenue from electric vehicle sales was more than offset by a decline in forklift sales.
- Gross loss amounted to $0.1 million, compared to gross profit of $0.3 million in Q2 2022.
- Net loss was $3.2 million, compared to a net loss of $1.9 million in Q2 2022.
Recent Company Highlights
- In July, Phoenix announced a purchase order for 13 Zero Emission Vehicles from Los Angeles World Airports (LAWA). The order was executed through National Auto Fleet Group (NAFG) and will include various battery configurations and Phoenix’s inverter package which offer AC power for tools, compressors and other auxiliary loads, powered straight from the high voltage DC batteries. The all electric, zero-emission trucks are funded, in part, by the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) program.
- Also in July, Phoenix announced the recent delivery of an all-electric, zero-emission service truck to the San Bernardino City Unified School District. This electric vehicle was funded in part by the California HVIP voucher program.
- Earlier in July, Phoenix announced that it had expanded its EV shuttle bus fleet at Los Angeles International Airport with WallyPark Airport Parking with the delivery of three new all-electric shuttle buses to the airport parking service provider. The addition of these new vehicles augments WallyPark’s current fleet of over 30 electric shuttle buses and supports its mission to lower fleet maintenance costs and to support the energy transition by providing cleaner air.
“We continue to make progress on the development and sales of our fourth-generation vehicles, which are currently undergoing validation testing here at our Anaheim facility. We expect to launch production and commercial sales during 2023,” the Company’s CEO, Xiaofeng Denton Peng commented. “We have built a tremendous order backlog and have executed multiple partnerships to further support the sales pipeline of our Gen 4 vehicles over the next several years. We are also expanding our Retrofit Solutions business and are exploring multiple additional paths to create shareholder value. We are confident in our business model and excited about our future growth prospects,” Mr. Peng continued.
Start of Production of Gen 4 Vehicles this Year
Phoenix expects to achieve SOP (start of production) of its fourth-generation vehicles for the medium-duty EV market during 2023. The Gen 4 development will provide several advantages versus the current Gen 3 models, specifically:
- Asset Light Business Model: Gen 4 marks the deployment of the Company’s “asset light” business model both upstream and downstream. Upstream, Phoenix is leveraging its strategic alliances with R&D partners and engineering suppliers to develop Gen 4 more efficiently. Downstream, Phoenix is partnering with both customers and third party manufacturers to develop manufacturing and assembly facilities at strategic locations around the country.
- Scale: The Company anticipates scaling of its production, utilizing its current Anaheim facility as well as customer and third-party assembly facilities. The Anaheim manufacturing facility is being reconfigured to increase production capacity and to utilize it as a showcase facility and training center to ensure processes and procedures are standardized across the entire production network.
- Reduced Costs: Gen 4 is expected to achieve lower production and materials costs compared to Gen 3 vehicles, benefiting from standardization of processes and procedures, as well as components and sub-assemblies—a benefit which will carry over to Gen 5 production as well.
- Battery Supply: The Company expects it will benefit from its partnership with CATL for the long-term supply of K-Packs and related products for its Gen 4 electric vehicles.
Gen 5 Will Offer Chassis Independence in 2024
Design, development and production planning for Phoenix’s Gen 5 vehicles will leverage on Phoenix’s experience and benefit from the development of its Gen 4 line of vehicles. Unique highlights of Gen 5 are expected to include:
- Ground-up Chassis Design: The Company will be producing its own ground up, purpose-built chassis in 2024.
- Chassis Independence: The development of Gen 5 will provide Phoenix with chassis independence, overcoming one of the major impediments facing the industry.
- Lower Costs: Phoenix should be able to produce its chassis for far less than the cost it is paying to acquire chassis today.
- Increased Design Flexibility and Customer Satisfaction: Phoenix’s ground up chassis will enable it to customize vehicle designs to meet specialized needs, while maintaining standardized processes and procedures, increasing the Company’s capacity to accommodate customer requirements and meet the evolving needs of the transforming electric vehicle market.
Conference Call Information
Phoenix Motor Inc. will host a conference call and webcast on Tuesday, August 15th at 5:00 PM ET to discuss these results. Interested investors and other parties may access a live webcast of the conference call which will be available on the Events and Presentations page on the Investor Relations section of Phoenix’s website at https://phoenixmotorcars.com/investor-relations/events-and-presentations/default.aspx. The call can also be accessed live via telephone by dialing (888) 660-6373 or for international callers (929) 203-1975 and referencing Phoenix Motorcars.
An archive of the webcast will be available after the call on the Events and Presentations page on the Investor Relations section of Phoenix’s website, along with Company’s earnings press release.
About Phoenix Motor Inc.
Phoenix Motor Inc., a pioneer in the electric vehicle (“EV”) industry, designs, builds, and integrates electric drive systems and light and medium duty EVs and sells electric forklifts and electric vehicle chargers for the commercial and residential markets. Phoenix operates two primary brands, “Phoenix Motorcars”, which is focused on commercial products including medium duty EVs (shuttle buses, school buses, municipal transit vehicles and delivery trucks, among others), electric vehicle chargers and electric forklifts, and “EdisonFuture”, which intends to offer light-duty EVs. Phoenix endeavors to be a leading designer, developer and manufacturer of electric vehicles and electric vehicle technologies. For more information, please visit: www.phoenixmotorcars.com.
Forward-Looking Statements
This press release contains forward-looking statements, as that term is defined in the Private Litigation Reform Act of 1995, that involve significant risks and uncertainties. Forward-looking statements can be identified through the use of words such as “may," "might," "will," "intend," "should," "could," "can," "would," "continue," "expect," "believe," "anticipate," "estimate," "predict," "outlook," "potential," "plan," "seek," and similar expressions and variations or the negatives of these terms or other comparable terminology. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company's current expectations and speak only as of the date of this release. Actual results may differ materially from the Company's current expectations depending upon a number of factors. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s ability to convert concept trucks and vans into production and sales; the Company’s product development timeline and expected start of production; development of competitive trucks and vans manufactured and sold by the Company’s competitors and major industry vehicle companies; the Company’s ability to scale in a cost-effective manner; the Company’s future capital requirements and sources and uses of cash; the Company’s ability to obtain funding for its future operations; the Company’s financial and business performance; changes in the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; the implementation, market acceptance and success of its business model; expectations regarding the Company’s ability to obtain and maintain intellectual property protection and not infringe on the rights of others; and other risks associated with managing the growth of the business, and those other risks and uncertainties that are described in the "Risk Factors" section of the Company's 2022 annual report filed on Form 10-K filed with the Securities and Exchange Commission. Except as required by law, the Company does not undertake any responsibility to revise or update any forward-looking statements.
| PHOENIX MOTOR INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands, except for share and per share data | ||||||||
| June 30, 2023 | December 31, 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 382 |
|
$ | 139 |
|
||
| Accounts receivable, net | 1,771 |
|
1,510 |
|
||||
| Inventories | 2,190 |
|
4,560 |
|
||||
| Prepaid expenses and other current assets | 1,041 |
|
1,344 |
|
||||
| Restricted cash, current | 250 |
|
— |
|
||||
| Amount due from a related party | 75 |
|
168 |
|
||||
| Total current assets | 5,709 |
|
7,721 |
|
||||
| Restricted cash, noncurrent | — |
|
250 |
|
||||
| Property and equipment, net | 2,775 |
|
2,492 |
|
||||
| Security deposit | 208 |
|
208 |
|
||||
| Right-of-use assets | 3,423 |
|
3,797 |
|
||||
| Net investment in leases | 217 |
|
— |
|
||||
| Intangible assets, net | 1,394 |
|
1,704 |
|
||||
| Goodwill | 4,271 |
|
4,271 |
|
||||
| Total assets | $ | 17,997 |
|
$ | 20,443 |
|
||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,031 |
|
$ | 1,359 |
|
||
| Accrued liabilities | 648 |
|
650 |
|
||||
| Advance from customers | 1,650 |
|
1,230 |
|
||||
| Deferred income | 486 |
|
503 |
|
||||
| Warranty reserve | 302 |
|
325 |
|
||||
| Derivative liability | 294 |
|
— |
|
||||
| Lease liabilities - current portion | 761 |
|
719 |
|
||||
| Long-term borrowing, current portion | 3 |
|
3 |
|
||||
| Total current liabilities | 6,175 |
|
4,789 |
|
||||
| Lease liabilities - non-current portion | 2,809 |
|
3,225 |
|
||||
| Convertible notes | 1,170 |
|
— |
|
||||
| Long-term borrowings | 143 |
|
147 |
|
||||
| Total liabilities | 10,297 |
|
8,161 |
|
||||
| Stockholders' Equity: | ||||||||
| Common stock, par $0.0004, 450,000,000 shares authorized, 21,291,924 and 20,277,046 shares issued and outstanding as of June 30, 2023, and December 31, 2022, respectively | 8 |
|
8 |
|
||||
| Additional paid-in capital | 42,209 |
|
40,836 |
|
||||
| Accumulated deficit | (34,517 |
) |
(28,562 |
) |
||||
| Total stockholders’ equity | 7,700 |
|
12,282 |
|
||||
| Total liabilities and stockholders’ equity | $ | 17,997 |
|
$ | 20,443 |
|
||
| PHOENIX MOTOR INC. | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (In thousands, except for share and per share data) | ||||||||
| Three Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| Revenues | $ | 1,158 |
|
$ | 1,499 |
|
||
| Cost of revenues | 1,219 |
|
1,174 |
|
||||
| Gross profit (loss) | (61 |
) |
325 |
|
||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 3,100 |
|
2,290 |
|
||||
| Operating loss | (3,161 |
) |
(1,965 |
) |
||||
| Other income (expense): | ||||||||
| Interest (expense) income, net | (2 |
) |
(2 |
) |
||||
| Others | 8 |
|
54 |
|
||||
| Total other income, net | 6 |
|
52 |
|
||||
| Loss before income taxes | (3,155 |
) |
(1,913 |
) |
||||
| Income tax provision | (22 |
) |
(12 |
) |
||||
| Net loss | $ | (3,177 |
) |
$ | (1,925 |
) |
||
| Net loss per share of common stock: | ||||||||
| Basic and diluted | $ | (0.15 |
) |
$ | (0.11 |
) |
||
| Weighted average shares outstanding | 21,261,704 |
|
17,984,615 |
|
||||
| PHOENIX MOTOR INC. | ||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| (In thousands) | ||||||
Six Month ended June 30, |
||||||
2023 |
|
2022 |
||||
| Cash flows from operating activities: | ||||||
| Net loss | (5,955 |
) |
(4,247 |
) |
||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||
| Depreciation and amortization | 843 |
|
855 |
|
||
| Gain on sales-type leases | (99 |
) |
— |
|
||
| Gain on disposal of fixed assets | — |
|
(54 |
) |
||
| Provision for doubtful accounts | 10 |
|
— |
|
||
| Write-down of inventories | 98 |
|
— |
|
||
| Forgiveness of PPP loan | — |
|
(586 |
) |
||
| Stock-based compensation expenses | 146 |
|
115 |
|
||
| Warranty reserve | (23 |
) |
(20 |
) |
||
| Amortization of ROU | 491 |
|
— |
|
||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (271 |
) |
(49 |
) |
||
| Inventories | 2,002 |
|
(1,607 |
) |
||
| Prepaid expenses and other assets | 405 |
|
(3,213 |
) |
||
| Accounts payable | 672 |
|
567 |
|
||
| Accrued liabilities | (2 |
) |
101 |
|
||
| Deferred revenue | (17 |
) |
(227 |
) |
||
| Advance from customer | 420 |
|
(9 |
) |
||
| Lease liability | (491 |
) |
— |
|
||
| Amount due from related party | 93 |
|
— |
|
||
| Net cash used in operating activities | (1,678 |
) |
(8,374 |
) |
||
| Cash flows from investing activities: | ||||||
| Proceeds from disposal of property and equipment | 273 |
|
— |
|
||
| Purchase of property and equipment | (766 |
) |
(8 |
) |
||
| Proceeds from disposal of fixed assets | — |
|
273 |
|
||
| Loan lent to a related party | (400 |
) |
— |
|
||
| Proceeds from repayment from a related party | 400 |
|
— |
|
||
| Net cash (used in) provided by investing activities | (766 |
) |
265 |
|
||
| Cash flows from financing activities: | ||||||
| Repayment of borrowings | (4 |
) |
(5 |
) |
||
| Proceeds from IPO | — |
|
13,438 |
|
||
| Proceeds from capital injection by a shareholder | — |
|
7 |
|
||
| Proceeds from convertible notes | 1,464 |
|
— |
|
||
| Proceeds received from standby equity purchase agreement | 1,227 |
|
— |
|
||
| Net cash generated from financing activities | 2,687 |
|
13,440 |
|
||
| Increase in cash, cash equivalents and restricted cash | 243 |
|
5,331 |
|
||
| Cash, cash equivalents and restricted cash at beginning of the period | 389 |
|
2,683 |
|
||
| Cash, cash equivalents and restricted cash at end of the period | 632 |
|
8,014 |
|
||
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Contacts
Investor Relations Contact
Mark Hastings, Senior Vice President & Head of Investor Relations
909-984-0815
