REE Automotive Provides Corporate and Business Updates and Reports Second Quarter 2024 Financial Results
$45.35 Million Funding Secured, Strategic Manufacturing Agreement with Motherson, U.S. Production Kicked Off, Continued Demand Drives Orderbook to $60 Million
-- Completed $45.35 million Registered Direct offering led by M&G and
Motherson securing production capital needs
-- Signed strategic agreement with Motherson, a global automotive supplier,
to strengthen REE's supply chain management and cost structure, improve
working capital efficiencies and expand outreach to global OEMs
-- Kicked-off U.S. production in Michigan with Roush as contract
manufacturer for full vehicle assembly, with start of production planned
for Q4 2024 and deliveries in 2025
-- Narrowed Q2 2024 net loss by 57% QoQ while concurrently reducing free
cash flow burn by 19% QoQ
-- Increased order book by 15% QoQ, and by 289% YoY, which is valued at
approximately $60 million to date as demand for Powered by REE vehicles
continues to grow; REE's dealership network expands to 78 sales and
service location in the U.S.
-- Observed significant growth of OEM interest in REE's software-defined EV
technology
-- Company will hold a conference call at 8:30 a.m. ET today, September 26,
2024, which can be accessed via webcast at investors.ree.auto or web
registration; and via conference call dial-in
TEL AVIV, Israel, Sept. 26, 2024 (GLOBE NEWSWIRE) -- REE Automotive Ltd. (Nasdaq: REE) ("REE" or the "Company"), an automotive technology company and provider of full by-wire electric trucks and platforms, today announced financial results for the three months ended June 30, 2024 alongside significant updates.
"The past few months have been pivotal for REE, marking key milestones we've worked toward for years. Our strategic manufacturing agreement with Motherson Group ("Motherson"), a global leader in engineering and automotive supply, is transformational, which we believe will enable us to scale faster while avoiding common operational challenges faced by others in the EV space," said Daniel Barel, Co-founder and CEO of REE. "We believe our product offering is the best in an underserved market, and demand continues to grow from fleets and OEMs. With our recent investment round, our funding is solid, and we've begun U.S. production of our P7 line with Roush. We're executing our strategy, focusing on technology leadership and cost reduction. I'm grateful to Motherson, M&G, and our long-term investors for their support, and to our global teams for their dedication."
Recent Highlights:
Operations:
-- Strategic partnership with Motherson to allow faster and more stable
production scaleup alongside improvement to working capital. REE will
leverage the extensive experience and capabilities of Motherson, a global
engineering and manufacturing specialist and one of the world's leading
automotive suppliers. For FY24, Motherson achieved gross revenue of $17.2
billion. Motherson will manage sourcing and supply chain of all
production parts and support the assembly of the REEcorner$(R)$ and REE P7
electric trucks, the first full by-wire ("XBW"), software-driven
certified medium duty electric truck available on the market today. The
collaboration with Motherson is expected to drive operational and
manufacturing improvements to REE's production line, supply chain
management, lower bill of materials (BOM), improved productivity and cost
structure.
-- Contract manufacturing kickoff with Roush for full vehicle assembly for
North America. During Q2 2024 REE signed a contract with Roush, a leading
global product development supplier operating across more than 30
countries and subsequent to quarter end the Company has kicked off
production and is preparing Roush's Michigan based facility to begin
assembly of Powered by REE vehicles in Q4 2024. Roush will be supported
by a joint Motherson and REE team, who will be responsible for quality
checks, logistics and testing. REE will continue to manufacture its
proprietary REEcorner(R) technology in its Coventry Integration Center in
the UK where it already kicked off REEcorner production.
-- Production plan updates to address strong customer pull and capitalize on
savings and efficiencies. The strategic supply chain management agreement
with Motherson and the U.S. production kickoff at Roush, are expected to
materially accelerate our ability to service customers at scale. Given
the unmet market need and customer feedback on our superior product and
technology we anticipate significant order growth. Now that we have
secured the capital required for production, the execution of the
strategic agreement with Motherson and the production kickoff at Roush,
we are updating our production plan to start deliveries in 2025 in order
to utilize our renewed capabilities while addressing the strong
customer-pull we see and to capitalize on the significant saving and
efficiencies our collaboration with Motherson is expected to enable. We
believe the revised production and revenue plan will benefit our ability
to address larger follow-on orders from fleets and OEMs and, coupled with
the expected improved unit costs, accelerate the road to meaningful
free-cash flow generation.
Business:
-- Orderbook increased by 15% QoQ, and by 289% YoY, valued today at
approximately $60 million representing more than 400 P7 EVs ordered from
24 different customers across North America. This diverse orderbook
allows REE access to more than 200 fleets. In addition, 50,000+
government and education entities can now purchase REE's software-defined
electric trucks through a 4 years Sourcewell contract. We continue to
receive strong positive customer feedback from our demo program as we
continue to deliver more and more P7-C demo trucks to our dealers across
the U.S.
-- REEcorner business line continues to show strong potential with now three
OEMs considering integrating our REEcorners. We continue to see growing
interest in our software defined technology by traditional and new OEMs
considering integrating our REEcorners into their product line-ups thus
gaining access to software-defined EV technology. We believe that,
although this is a long-cycle business, continued expansion of our market
leadership and continued execution on our strategic vision will result in
the opportunity to license our XBW technology across vehicle classes and
categories, making REE the "intel Inside" of automotive.
-- REE's authorized dealer network, one of North America's largest of pure
commercial EVs, continues to expand now covering 78 sales and service
points. This is a key strength for our fleet-customers who seek
nationwide service and support.
-- Programs are ongoing with Penske and U-Haul. During Q2 2024, REE
delivered a P7-C upfitted with a 16-foot Wabash DuraPlate(R) body to
Penske Trucks Leasing which began to offer Powered by REE electric
vehicles to its customers for demos and orders across North America.
Concurrently, U-Haul received the first P7-S platform and is evaluating
it as the first solution to support the electrification of its fleet.
-- Airbus autonomous program. Airbus has fitted Powered by REE(R) truck with
basic A350 airliner controls to demonstrate the first ever an autonomous
drive on runways in France as part of Airbus' three-year "Optimate"
project. According to Airbus, they expect to see this technology tested
in a full flight within one year in the A350 with more platforms to come.
This project further improves the future of aviation, airport ground
traffic management and safety, and REE's technology is in its core.
Financials:
-- Secured $45.35 million (gross) registered direct offering led by M&G and
Motherson priced at $4.122 per share, a 39% premium to the closing price
on September 13, 2024.
-- Second quarter net loss narrowed by 57% QoQ to $10.8 million compared to
$25.2 million in Q1 2024 and narrowed by 59% year-over-year (YoY)
compared to $26.2 million in Q2 2023. The QoQ decrease was mainly driven
by an increase in recognition of grants from the UK government, income
from remeasurement of warrants and derivative liabilities, lower
engineering costs related to the development of the P7 EV Platform, a
decrease in income tax expenses as well as other operational
efficiencies. The YoY decrease was mainly driven by an increase in
recognition of grants from the UK government, income from remeasurement
of warrants and derivative liabilities, lower engineering costs related
to the development of the P7 EV Platform, lower share-based compensation
expense as well as other operational efficiencies.
-- Non-generally accepted accounting principles (non-GAAP) net loss in the
quarter narrowed by 41% QoQ to $12.4 million compared to $21.2 million in
Q1 2024 and narrowed by 43% from $22.0 million in Q2 2023.
-- Free cash flow $(FCF)$ burn continued to narrow in Q2 2024, with a 19%
reduction from Q1 2024, consistent with the trend in full year 2023 when
REE reported a 25% YoY decrease in FCF burn.
-- REE ended Q2 2024 with liquidity of $60.5 million comprised of cash and
cash equivalents and short-term investments, inclusive of a $15 million
credit facility.
-- REE raised approximately $1.4 million in proceeds between April 1, 2024
and September 26, 2024 by issuing 263,455 Class A Ordinary Shares under
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