Romeo Power, Inc. (“Romeo Power” or the “Company”) (NYSE: RMO),
an energy technology leader delivering advanced electrification
solutions for complex commercial vehicle applications, today
announced its financial results for the third quarter ending
September 30, 2021.
Recent Business Highlights
- Achieved year end commitment to have approximately 1 gigawatt
hour of installed capacity at Romeo Power’s Vernon facility.
- Secured a new facility in Cypress, CA enabling expansion of
production and test lab capacity, positioning the Company to meet
expected increase in market demand and continued technology
development.
- Announced a collaboration to integrate Dynexus Technology’s
state-of-the-art battery performance and sensor technology to
further enhance Romeo Power’s industry-leading and comprehensive
approach to managing battery cell safety, performance, and overall
life cycle value.
- Improved parts availability for both battery cells and
components to support production volume scale-up.
- Continued to strengthen our organization in key functions and
added manufacturing headcount to support production growth and
capabilities.
Third Quarter Financial Update
- Generated revenues of $5.8 million, a 753% increase over the
prior year as the Company launched product shipments to the
Company’s largest customer.
- Cash, cash equivalents and investments as of September 30,
2021, were $181 million, reflecting continued strong
liquidity.
Management Commentary
“Romeo Power made meaningful progress during the third quarter
laying additional foundation to support its growth. We strengthened
manufacturing capabilities to support a key commercial launch and
to prepare for the continued revenue growth we expect as market
demand for our industry-leading technology increases,” said Susan
Brennan, President and Chief Executive Officer. “We focused the
incredible energy of our entire organization to further improve
processes, expertise and infrastructure required to continue
establishing Romeo Power as a commercial scale provider of
cutting-edge technology and products. We also entered into a
collaborative relationship with Dynexus Technology, which will
further enhance many facets of our business including production
efficiency through cell quality management, battery monitoring and
life cycle management. We believe that this collaboration will be
another step to further extending the value of Romeo Power’s
technology and products for our customers and end users.”
“In addition, our new, state-of-the-art facility in Cypress, CA
will not only be the home for our expanded and efficient mass
production lines, but it will also provide the capability to run
pilot scale development for new customers and products while
simultaneously producing at commercial scale for more mature
programs. We will double our lab space, which is critical to
providing the range of technical resources necessary to support
production, validate customer programs and develop new products. We
believe that we are taking the steps required to further reinforce
our position in an exciting and growing market for commercial
electric vehicles.”
Conference call information
Romeo Power will host a conference call at 2:00 p.m. U.S.
Pacific Time (5:00 p.m. U.S. Eastern Time) today, November 15,
2021. Participating on the call will be Susan Brennan, President
and Chief Executive Officer, and Kerry Shiba, Chief Financial
Officer and Treasurer of Romeo Power. To access the conference
call, parties should visit the events section of the Investor
Relations website at https://investors.romeopower.com/. A recording
of the webcast will also be available following the conference
call.
Forward Looking Statements
Certain statements in this press release may constitute “forward
looking statements” within the meaning of the “safe harbor”
provisions of the United States Private Securities Litigation
Reform Act of 1995. When used in this press release, the words
“estimates,” “projected,” “expects,” “anticipates,” “forecasts,”
“plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,”
“future,” “propose” and variations of these words or similar
expressions (or the negative versions of such words or expressions)
are intended to identify forward-looking statements. These
forward-looking statements, including, without limitation, express
or implied statements concerning the Romeo Power’s expected
collaboration with Dynexus Technology, the expansion of production
and test lab capacity at Romeo Power’s new facility in Cypress, CA,
Romeo Power’s expectations regarding its future financial
performance, the demand for safe, effective, affordable and
sustainable EV products, Romeo Power’s ability to produce and
deliver such products on a commercial scale, and Romeo Power’s
expectations that its customers will adhere to contracted purchase
commitments on the currently expected timeframe are not guarantees
of future performance, conditions or results, and involve a number
of known and unknown risks, uncertainties, assumptions and other
important factors, many of which are outside Romeo Power’s
management’s control, that could cause actual results or outcomes
to differ materially from those discussed in the forward-looking
statements. Important factors, among others, that may affect actual
results or outcomes include: Romeo Power’s ability to execute on
its plans to develop and market new products and the timing of
these development programs; Romeo Power’s ability to increase the
scale and capacity of its manufacturing processes; Romeo Power’s
estimates of the size of the markets for its products; the rate and
degree of market acceptance of Romeo Power’s products; the success
of other competing technologies that may become available; Romeo
Power’s ability to identify and integrate acquisitions; Romeo
Power’s potential need for and ability to secure additional
capital; the performance of Romeo Power’s products and customers;
potential litigation involving Romeo Power; demand for battery
cells and supply shortages; the potential effects of COVID-19; and
general economic and market conditions impacting demand for Romeo
Power’s products. You should carefully consider the foregoing
factors and the other risks and uncertainties described in the
Company’s filings with the SEC. If any of these risks materialize
or our assumptions prove incorrect, actual results could differ
materially from those implied by our forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Romeo Power undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
Note Regarding Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures,
including EBITDA and Adjusted EBITDA. “EBITDA” is defined as
earnings before interest income and expense, income tax expense or
benefit, and depreciation and amortization. “Adjusted EBITDA” has
been calculated using EBITDA adjusted for stock-based compensation,
change in the fair value of warrants, a gain from extinguishment of
a Paycheck Protection Program (“PPP”) loan, investment loss, net
and derivative expense. The Company believes that both EBITDA and
Adjusted EBITDA provide additional information for investors to use
in (1) evaluating our ongoing operating results and trends and (2)
comparing our financial performance with those of comparable
companies, which may disclose similar non-GAAP financial measures
to investors. These non-GAAP measures provide investors with
incremental information for the evaluation of our performance after
isolation of certain items deemed unrelated to our core business
operations. EBITDA and Adjusted EBITDA are presented as
supplemental measures to our GAAP measures of performance. When
evaluating EBITDA and Adjusted EBITDA, you should be aware that we
may incur future expenses similar to those excluded when
calculating these measures. In addition, our presentation of these
measures should not be construed as an inference that our future
results will be unaffected by unusual or non-recurring items.
Furthermore, our computation of Adjusted EBITDA may not be directly
comparable to similarly titled measures computed by other
companies, as the nature of the adjustments that other companies
may include or exclude when calculating Adjusted EBITDA may differ
from the adjustments reflected in our measure. Because of these
limitations, EBITDA and Adjusted EBITDA should not be considered in
isolation, nor should these measures be viewed as a substitute for
the most directly comparable GAAP measure, which is net income
(loss). As appropriate, the most directly comparable GAAP financial
measures and information reconciling these non-GAAP financial
measures to the Company’s financial results prepared in accordance
with GAAP are included in this press release.
About Romeo Power, Inc.
Founded in 2016 and headquartered in Los Angeles, California,
Romeo Power (NYSE: RMO) is an energy technology leader delivering
advanced electrification solutions for complex commercial vehicle
applications. The company’s suite of advanced hardware, combined
with its innovative battery management system, delivers the safety,
performance, reliability and configurability its customers need to
succeed. To keep up with everything Romeo Power, please follow the
company on social media @romeopowerinc or visit romeopower.com.
Financial Statements
Romeo Power, Inc.
Unaudited Condensed
Consolidated Statements of Operations and Comprehensive (Loss)
Income
(Dollar amounts in thousands,
except share and per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenues:
Product revenues
$
2,740
$
51
$
3,818
$
2,097
Service revenues
3,019
624
3,921
2,229
Total revenues
5,759
675
7,739
4,326
Cost of revenues:
Product cost
7,904
716
17,884
5,182
Service cost
2,565
1,080
3,357
2,669
Total cost of revenues
10,469
1,796
21,241
7,851
Gross loss
(4,710)
(1,121)
(13,502)
(3,525)
Operating expenses:
Research and development
4,732
1,817
10,295
5,213
Selling, general and administrative
17,607
4,945
54,393
10,303
Total operating expenses
22,339
6,762
64,688
15,516
Operating loss
(27,049)
(7,883)
(78,190)
(19,041)
Interest expense
(4)
(265)
(16)
(783)
Change in fair value of public and private
placement warrants
6,134
—
124,254
—
Gain from extinguishment of PPP loan
3,300
—
3,300
—
Investment gain (loss), net
266
—
(23)
—
Other expense
—
(228)
—
(1,614)
(Loss) income before income taxes and
loss in equity method investments
(17,353)
(8,376)
49,325
(21,438)
Loss in equity method investments
(611)
(540)
(1,817)
(1,272)
Benefit from income taxes
11
—
1
—
Net (loss) income
(17,953)
(8,916)
47,509
(22,710)
Other comprehensive income
(loss)
Available-for-sale debt investments:
Change in net unrealized losses, net of
income taxes
(61)
—
(369)
—
Net losses reclassified to earnings, net
of income taxes
161
—
314
—
Total other comprehensive income (loss),
net of income taxes
100
—
(55)
—
Comprehensive (loss) income
$
(17,853)
$
(8,916)
$
47,454
$
(22,710)
Net (loss) income per share
Basic
$
(0.13)
$
(0.11)
$
0.36
$
(0.30)
Diluted
$
(0.13)
$
(0.11)
$
0.35
$
(0.30)
Weighted average number of shares
outstanding
Basic
134,017,528
78,639,037
131,307,617
76,900,247
Diluted
134,017,528
78,639,037
135,342,504
76,900,247
Romeo Power, Inc.
Unaudited Condensed
Consolidated Balance Sheets
(Dollar amounts in thousands,
except share and per share data)
September 30, 2021
December 31, 2020
Assets
Current assets
Cash and cash equivalents
$
53,278
$
292,442
Investments
127,798
—
Accounts receivable, net of allowance for
expected credit loss of $117 and $238 at September 30, 2021 and
December 31, 2020, respectively
2,623
841
Inventories, net
15,256
4,937
Insurance receivable
6,000
6,000
Deferred costs
88
—
Prepaid inventories
11,891
493
Prepaid expenses and other current
assets
4,893
776
Total current assets
221,827
305,489
Restricted cash
3,000
1,500
Property, plant and equipment, net
10,618
5,484
Equity method investments
37,183
35,000
Operating lease right-of-use assets
5,287
5,469
Deferred assets
5,018
—
Prepayment - long-term supply
agreement
64,703
—
Other noncurrent assets
2,807
3,100
Total assets
$
350,443
$
356,042
Liabilities and stockholders’
equity
Current liabilities
Accounts payable
$
10,287
$
2,900
Accrued expenses
9,595
2,844
Contract liabilities
709
815
Current maturities of long-term debt
10
2,260
Operating lease liabilities, current
855
853
Legal settlement payable
6,000
6,000
Other current liabilities
1,120
384
Total current liabilities
28,576
16,056
Long-term debt, net of current portion
32
1,082
Public and private placement warrants
3,718
138,466
Operating lease liabilities, net of
current portion
4,533
4,723
Other noncurrent liabilities
—
17
Total liabilities
36,859
160,344
Commitments and contingencies
Stockholders’ equity
Preferred stock ($0.0001 par value,
10,000,000 shares authorized, no shares issued and outstanding at
September 30, 2021 and December 31, 2020)
—
—
Common stock ($0.0001 par value,
250,000,000 shares authorized, 134,096,818 and 126,911,861 shares
issued and outstanding at September 30, 2021 and December 31, 2020,
respectively)
13
12
Additional paid-in capital
447,684
377,253
Accumulated other comprehensive loss
(55)
—
Accumulated deficit
(134,058)
(181,567)
Total stockholders’ equity
313,584
195,698
Total liabilities and stockholders’
equity
$
350,443
$
356,042
Romeo Power, Inc.
Unaudited Condensed
Consolidated Statement of Cash Flows
(Dollar amounts in
thousands)
Nine Months Ended September
30,
2021
2020
Cash flows from operating
activities:
Net income (loss)
$
47,509
$
(22,710)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization
1,833
1,404
Amortization of investment premium
paid
1,486
—
Stock-based compensation
14,933
784
Inventory provision
1,617
—
Change in fair value of public and private
placement warrants
(124,254)
—
Gain from extinguishment of PPP loan
(3,300)
—
Loss in equity method investments
1,817
1,272
Non-cash lease expense - operating
leases
182
176
Non-cash lease expense - finance
leases
212
211
Derivative expense
—
1,614
Other
303
—
Changes in operating assets and
liabilities:
Accounts receivable
(1,782)
(689)
Inventories
(11,936)
(1,902)
Prepaid and other current assets
(14,930)
(218)
Prepayment - long-term supply
agreement
(64,703)
—
Accounts payable
7,014
2,734
Accrued expenses
5,415
2,163
Interest accrued on notes payable
—
741
Deferred costs
(88)
—
Contract liabilities
(106)
458
Operating lease liabilities
(188)
(165)
Other, net
189
1
Net cash used in operating activities
(138,777)
(14,126)
Cash flows from investing
activities:
Purchase of investments
(308,970)
—
Proceeds from maturities of
investments
120,030
—
Proceeds from sales of investments
59,296
—
Equity method investment
(4,000)
—
Capital expenditures
(4,998)
(561)
Net cash used in investing activities
(138,642)
(561)
Cash flows from financing
activities:
Issuance of convertible notes
—
1,924
Issuance of term notes
—
4,450
Proceeds from PPP loan
—
3,300
Issuance of common stock
—
5,027
Exercise of stock options
18,481
15
Exercise of stock warrants
21,580
—
Warrant redemption payments
(72)
—
Principal portion of finance lease
liabilities
(234)
(212)
Net cash provided by financing
activities
39,755
14,504
Net change in cash, cash equivalents and
restricted cash
(237,664)
(183)
Cash, cash equivalents and restricted
cash, beginning of period
293,942
1,929
Cash, cash equivalents and restricted
cash, end of period
$
56,278
$
1,746
Reconciliation of cash, cash equivalents
and restricted cash to the condensed consolidated balance
sheets:
Cash and cash equivalents
$
53,278
$
246
Restricted cash
3,000
1,500
Total cash, cash equivalents and
restricted cash
$
56,278
$
1,746
Romeo Power, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures (Unaudited)
(Dollar amounts in
thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net (loss) income
$
(17,953)
$
(8,916)
$
47,509
$
(22,710)
Interest expense
4
265
16
783
Benefit from income taxes
(11)
—
(1)
—
Depreciation and amortization
834
454
1,833
1,404
EBITDA
$
(17,126)
$
(8,197)
$
49,357
$
(20,523)
Stock-based compensation
4,315
132
14,933
784
Change in fair value of public and private
placement warrants
(6,134)
—
(124,254)
—
Gain from extinguishment of PPP loan
(3,300)
—
(3,300)
—
Investment (gain) loss, net
(266)
—
23
—
Derivative expense
—
228
—
1,614
Adjusted EBITDA
$
(22,511)
$
(7,837)
$
(63,241)
$
(18,125)
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