Electric vehicle maker Canoo Inc. has had its struggles over the past year but now is ready to move forward and focus on key milestones including scaling up production at its Oklahoma facilities, company Chief Executive Officer Tony Aquila said Thursday.
Aquila spoke during a conference call after the startup company posted fourth quarter results that showed an $80.24 million loss. In response to an analyst's questions, he said production would hit a 20,000 unit annual rate by the end of this year.
Aquila said the company had more than $2.8 billion in its order pipeline for companies including Bentonville-based Walmart. In November 2021, Canoo said it planned to move its headquarters to Bentonville.
The quarterly loss equaled 25 cents per share, compared to a loss of $138.11 million, or 60 cents a share, in the year ago quarter. The average estimate of two analysts had predicted a fourth quarter loss of 35 cents per share, according to Yahoo Finance.
For its fiscal 2022, Canoo reported a loss of $487.69 million, or $1.81 a share compared to $346.77 million or $1.52 per shared for the company's fiscal 2021.
Canoo noted it has $36.6 million in cash as part of its fourth quarter reporting. The company also said it settled an investigation by the Securities and Exchange Commission with a $1.5 million payment. The investigation first mentioned by Canoo in April of 2021 focused on Canoo's merger with special purpose acquisition company Hennessy Capital Acquisition Corp. and other related issues.
Canoo released its results after market close on Thursday.
During the conference call, the company's new Chief Financial Officer Ken Magnet said Canoo is exploring financing options moving forward. During the call, Aquila noted the settlement of the SEC investigation will vastly improve the company's options for various types of loans.
Tomas Jandik, professor of finance and the Dillard's Chair in Corporate Finance at the University of Arkansas' Walton College of Business in Fayetteville said Thursday that while the company did beat earnings estimates, Canoo's fourth quarter news wasn't what investors were looking for.
"I'm really worried," Jandik said. "They're burning through cash and nowhere near the start of production."
He said the news on the SEC investigation was minor and not something investors were concerned about.
Jandik said financing will still be a challenge for the company, noting share prices have spiraled downward since February when Canoo said it made a deal to sell shares to institutional investors at a discount to generate much-needed cash. The move will result in about $52.5 million for the company coffers for general working capital. Since the move, the company's shares have traded below $1.
"They have to show they're out of this cash-burning stage," Jandik said of Canoo.
In trading Monday, Canoo shares closed at 62 cents, up less than a cent or about 1% on the Nasdaq exchange. In after hours trading shares slumped 4% after the conference call ended. Shares have traded as low as 54 cents and as high as $6.25 over the past year.
In November, Canoo said it will shift production during the first half of 2023 to its new Oklahoma City manufacturing location announced earlier that month. At the time, Canoo said the facility will produce Canoo's Lifestyle Delivery Vehicle and Lifestyle Vehicle for delivery to customers in 2023 and employ up to 500.
The location will be capable of producing 20,000 units annually by the end of 2023 with the capability to expand on a 120-acre campus. That production rate could double to 40,000 units in 2024, the company said. This facility acts as a bridge to the MegaMicro Factory in Pryor, Okla., the company said at the time.
That same month Canoo said it will make its own battery modules at an Oklahoma facility close to its future manufacturing center. The 100,000-square-foot facility will be used to build proprietary battery modules as well as energy management systems and thermal control technology for the company's multipurpose vehicle platform.