First deliveries in April did not materialize, but there is still a chance for Q2.

Workhorse announced in its Q1 2020 financial report that it has continued production efforts with deliveries planned for the second quarter of 2020. The previous target was for April.

Interestingly, the company was deemed an essential service, which allowed it to continue working throughout the period of COVID-19 lockdown.

The production and delivery target of the C-Series electric vans (currently represented by the Workhorse C1000 and smaller Workhorse C650) remains at 300-400 units in 2020.

Release Updates and Highlights

  • Continued production efforts as an "essential" business with deliveries planned for second quarter of 2020.
  • Reaffirmed previous production and delivery target of 300-400 vehicles in 2020.
  • Receiving increased interest in patented delivery truck mounted HorseFly drone capabilities from both government and commercial customers.

Workhorse CEO Duane Hughes said:

"In the first quarter we completed several major roadmap objectives which have us well-positioned to execute on our production timeline as well as improve our long-term corporate governance and competitive positioning. Because we provide vital support and infrastructure for the transportation and delivery sectors, we have been deemed an essential service, allowing us to continue working throughout the period. We will be delivering our C-Series vehicles to customers in the second quarter, and we remain on schedule to achieve our target of delivering 300 to 400 vehicles by the end of this year. To that end, we are in the final stage of preparing a detailed production plan of when we can deploy vehicles into Ryder Systems' sales channel starting in 2020 and into 2021."

Here is a short video from late April, presenting the Workhorse facility in Union City, IN:

Gallery: Workhorse C-Series Electric Step Vans

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Workhorse Group Reports First Quarter 2020 Results

CINCINNATI, May 6, 2020 /PRNewswire/ -- Workhorse Group Inc. (Nasdaq: WKHS) ("Workhorse" or "the Company"), an American technology company focused on providing sustainable and cost-effective electric vehicles to the last mile delivery sector, today reported financial results for the first quarter ended March 31, 2020.

Release Updates and Highlights

  • Continued production efforts as an "essential" business with deliveries planned for second quarter of 2020.
  • Reaffirmed previous production and delivery target of 300-400 vehicles in 2020.
  • Receiving increased interest in patented delivery truck mounted HorseFly drone capabilities from both government and commercial customers.

Management Commentary 
"In the first quarter we completed several major roadmap objectives which have us well-positioned to execute on our production timeline as well as improve our long-term corporate governance and competitive positioning," said Workhorse CEO Duane Hughes. "Because we provide vital support and infrastructure for the transportation and delivery sectors, we have been deemed an essential service, allowing us to continue working throughout the period. We will be delivering our C-Series vehicles to customers in the second quarter, and we remain on schedule to achieve our target of delivering 300 to 400 vehicles by the end of this year. To that end, we are in the final stage of preparing a detailed production plan of when we can deploy vehicles into Ryder Systems' sales channel starting in 2020 and into 2021.

"Through our recent appointments of Jacqui Dedo and Pamela Mader to our board of directors, we now have two automotive industry veterans, respectively, with experiences at international enterprises managing major vehicle production efforts. We expect their guidance will be invaluable as we look to ramp up our capacity during the second half of this year. We also further strengthened our intellectual property portfolio and made significant strides within our HorseFlyTM drone program during the period, highlighted by our provisional patent application and our recent collaborative testing efforts with UPS  and CIT, which have the potential to provide a much-needed alternative delivery method to support our medical workers and healthcare system during a truly tumultuous time."

First Quarter and Recent Operational Highlights

  • May 2020: Appointed automotive industry veterans Jacqueline Dedo and Pamela Mader to the Company's board of directors, expanding its leadership team from six to eight, including seven independent directors.
  • April 2020: Partnered with UPS and Virginia's Center for Innovative Technology (CIT) in tests evaluating the commercial drone industry's ability to provide and scale small unmanned aerial systems to support various use cases to speed and assist the U.S. healthcare system during the COVID-19 crisis.
  • April 2020: Expanded the Company's HorseFly™ patent portfolio by filing a provisional application, which is intended to protect the Unmanned Aerial System (UAS) and several of the UAS's key components and capabilities, including the ground control station, winch deliveries and aircraft structure.
  • March 2020: Showcased the Company's new C650 all-electric step van at the NTEA Work Truck Show in Indianapolis.
  • February 2020: Awarded ISO 9001:2015 certification for the Company's quality management system and received a U.S. Environmental Protection Agency (EPA) Certificate of Conformity for each C-Series all-electric delivery truck, the latter providing Workhorse vehicles the right and authority to operate on U.S. roads and highways. 

First Quarter 2020 Financial Results
Sales for the first quarter of 2020 were recorded at $84,000, compared with $364,000 in the first quarter of 2019. The decrease in sales was primarily due to a decrease in the volume of trucks shipped.

Cost of goods sold increased to $1.7 million from $1.4 million in the first quarter of 2019. The increase was primarily driven by an increase in tooling costs for the C-Series production.

Selling, general and administrative expenses increased to $5.6 million from $2.1 million in the same period last year. The increase in selling, general and administrative expenses was due primarily to increases in consulting expense, higher employee related costs, and a $1.0 million payment related to ST Engineering Hackney, Inc.

Research and development expenses increased to $1.9 million from $1.4 million in the first quarter of 2019. The increase in research and development expenses was primarily due to finalizing the design of the C-Series.

Other income was $865,000 compared to $0 in the first quarter of 2019 due to additional shares received for the LMC investment related to the Company's anti-dilution provisions.

Interest (income) expense increased $14.8 million with $13.0 million in income during the first quarter compared to an interest expense of $1.8 million in the same period last year. The significant increase in interest income was due to the mark-to-market adjustment for warrants issued to lenders as well as the change in fair value value of the Company's convertible note, both of which were based upon a lower stock price at quarter end compared to 2019 year end.

Net income was $4.8 million, compared with a net loss of $6.3 million in the first quarter of 2019.

As of March 31, 2020, the company had cash and cash equivalents of $16.8 million compared to $23.9 million as of December 31, 2019.