XL Fleet Corp. (NYSE: XL) (“XL Fleet” or the “Company”), a leading provider of fleet electrification solutions for commercial vehicles in North America, today announced third quarter 2021 financial results.
Third Quarter 2021 and Recent Highlights
- Generated revenue for third quarter of 2021 of $3.2 million, compared to $6.3 million in the prior year
- Realized gross profit for the third quarter of 2021 of $0.7 million, compared to $0.8 million in the prior year
- Delivered gross margins of approximately 22%, compared to gross margins of approximately 12% in the prior year
- Exited third quarter of 2021 with cash and cash equivalents of approximately $367 million
- Expanded platform availability for XL Hybrid system on Ram 2500 & 3500 heavy duty pickup trucks and Isuzu NPR-HD
- Appointed automotive and mobility sector veteran Eric Tech as new CEO of XL Fleet, effective December 1, 2021
Management Commentary & Outlook
“Our third quarter results were negatively impacted by ongoing supply chain challenges continuing to face the global automotive industry, limiting chassis availability on which our new systems are installed,” said Tod Hynes, Founder & President of XL Fleet. “Despite lower sequential revenue, we maintained attractive gross margins driven by the first full-quarter contribution of our recently acquired World Energy business. We further expanded our solutions offering during the third quarter, including the extension of our XL Hybrid System onto popular vehicle models, including the Ram 2500 and 3500 heavy duty pickup trucks and Isuzu NPR-HD. The strategic growth of our XL Grid offering achieved during 2021 provides meaningful diversification to our business, while widening the scope and scale of the electrification services we are able to deliver to customers. XL Fleet maintains significant financial flexibility, including $367 million of cash on our balance sheet, positioning us to weather near-term pressure while continuing to execute on our strategy.”
“The unprecedented lack of commercial fleet availability plaguing the industry is expected to extend into 2022,” continued Mr. Hynes. “Our team remains focused on our long-term mission of helping to electrify the commercial fleet industry, and the partnerships we have reached throughout the year positions us well to scale our business and leverage our flexible and nimble business model to navigate the dynamic road ahead. Despite the supply challenges impeding 2021 growth, we have been focused on investing in future growth areas. In 2022, we expect to expand our business beyond North America, while delivering our first all-electric solutions in applications such as refuse and electrified refrigerated trailers. As the need for electrification continues to expand, we expect XL Fleet’s established track-record of delivering sustainability and comprehensive electrification solutions to commercial fleets to drive further success and value for all stakeholders.”
Third Quarter 2021 Financial Results
Revenue totaled $3.2 million in the third quarter of 2021 compared to $6.3 million in the third quarter of 2020. Revenue from the sale of drive systems in the third quarter of 2021 totaled $0.6 million compared with $6.3 million in the third quarter of 2020 due to negative impacts from ongoing supply chain issues including microchip shortages that have led to a lack of new fleet chassis. Revenue from XL Grid in the third quarter of 2021 totaled $2.6 million, driven by the full-quarter contribution of the World Energy acquisition completed in May 2021.
Gross profit was $0.7 million for the third quarter of 2021, compared to a gross profit of $0.8 million in the third quarter of 2020. Gross margins for the third quarter of 2021 were 22%, compared to gross margins for the third quarter of 2020 of 12%. The increase in gross margins was primarily driven by contribution from the Company’s XL Grid business, which carries higher margins than drive systems. Adjusted EBITDA was ($13.9) million for the third quarter of 2021, compared to ($6.0) million for the third quarter of 2020.
Net loss was ($7.5) million for the third quarter of 2021, compared to net loss of ($2.3) million in the third quarter of 2020. Net loss for the third quarter of 2021 includes a non-cash gain from the change in fair value of warrant liability of ($7.2) million. Adjusted net loss was ($14.7) million for the third quarter of 2021, compared to adjusted net loss of ($7.5) million in the third quarter of 2020. A reconciliation of net loss to adjusted net loss and adjusted EBITDA to adjusted net loss is set out in the tables below.
Balance Sheet and Capital
Cash and cash equivalents as of September 30, 2021 totaled $366.7 million compared to $329.6 million as of December 31, 2020. Total debt outstanding as of September 30, 2021 was approximately $0.1 million. XL Fleet has approximately 139.4 million shares of Common Stock outstanding as of September 30, 2021.
Operating Summary
Since the beginning of 2020, the Company shipped a total of 1,661 drive systems, of which, 36 drive systems were shipped during the third quarter of 2021. Drive systems shipped since the beginning of 2020 include XL Fleet’s hybrid and plug-in hybrid drive systems. XL Fleet is currently developing all electric drivetrains that we expect to deploy on new vehicles in 2022. We have also substantially expanded our XL Grid solutions with the acquisition of World Energy in May 2021.
Third Quarter 2021 and Recent Operational & Business Updates
- In November 2021, XL Fleet announced that its Board of Directors appointed Eric Tech as Chief Executive Officer of XL Fleet, effective December 1. Mr. Tech brings nearly 35 years of automotive and mobility industry experience and has held senior leadership positions at Navistar International Corporation and Ford Motor Company. He most recently served as Senior Vice President of Corporate Development at Navistar, a publicly traded global manufacturer and marketer of medium and heavy duty vehicles and parts.
- In August 2021, XL Fleet announced the availability of its hybrid electric drive system for Ram 2500 and 3500 heavy duty pickup trucks. The XLH™ system represents the Company’s first electrification product to be available for Ram Commercial, Stellantis’ line of commercial pickup trucks.
- In July 2021, XL Fleet announced the XL Hybrid System is now available on the Isuzu NPR-HD low cab forward vehicle that serves demanding applications including last mile delivery, beverage distribution, utility work and food service.
- In July 2021, XL Fleet and eNow announced a partnership including a supply agreement that entitles XL Fleet to provide battery and power electronics systems for the first 1,000 units of eNow’s innovative electrified refrigerated trailer solution. Concurrent with the agreement, XL Fleet invested $3 million in eNow with the right to acquire 100% of eNow at a pre-determined valuation.
Conference Call Information
The XL Fleet management team will host a conference call to discuss its third quarter 2021 financial results today at 5:00 p.m. Eastern Time. The conference call can be accessed live by dialing 877-407-3982, or for international callers, 201-493-6780 and referencing XL Fleet. Alternatively, the call can be accessed via a live webcast accessible on the Events & Presentations page in the Investor Relations section of the Company’s website at www.xlfleet.com. A replay will be available shortly after the call and can be accessed by dialing 844-512-2921, or for international callers, 412-317-6671. The passcode for the replay is 13723537. The replay will be available until November 29, 2021. An archive of the webcast will be available for a period of time shortly after the call on the Investor Relations section of the Company’s website at www.xlfleet.com.