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Proterra manufactures electric buses, battery packs for commercial vehicles and chargers for electric vehicles.
Courtesy of Proterra
Manufacturer of electric buses
Proterra
made progress over the past year, just not as much as investors were expecting. The stock fell sharply in premarket trading.
Cash might be the company’s biggest concern, and the company doubts it can survive in its current form. “When we get our 2022 [annual report on a form] 10-K, it will include management’s and our auditor’s conclusion that there are significant doubts about our ability to continue as a going concern,” CEO Gareth Joyce said on the company’s earnings call.
Proterra (stock exchange symbol: PTRA) has a minimum liquidity commitment related to its $170 million convertible debentures: the cash balance must exceed quarterly cash burned by a factor of four. At the end of the fourth quarter, the covenant was broken. It received a waiver from lenders that stretches through the first quarter.
The company ended the quarter with approximately $300 million in cash and used approximately $110 million.
If Proterra does not negotiate a settlement or receive another waiver, the $170 million in promissory notes are due immediately. Joyce says he is optimistic that a settlement can be reached with the lenders.
On the revenue and delivery front, Proterra said it delivered 199 electric buses in 2022, down 4 buses from the previous year. In addition to buses, Proterra manufactures battery packs for electric commercial vehicles as well as charging equipment and infrastructure. These companies are growing.
Proterra shipped 1,229 battery systems in 2022, 350% more than the previous year. Battery production increased by 81% to 342 megawatt hours. Charging infrastructure deliveries reached 35.3 megawatts in 2022, up from 14.5 megawatts in 2021.
Despite progress, the financial metrics lagged. Fourth quarter adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, were negative $60 million on revenue of $80 million. Wall Street expected an Ebitda loss of $50 million on sales of $86 million.
The guidance for 2023 also fell short of expectations. The company expects sales to fall between $450 million and $500 million in 2023. The midpoint of the forecast is more than 50% above full-year 2022 revenue of $309 million, but Wall Street is forecasting revenue of $517 million.
Cash problems, higher spending, lower sales, and slower-than-expected growth are driving stocks down. Proterra shares are down 26% in premarket trading on Thursday.
S&P500
Futures fell 0.3%. Futures on the
Nasdaq Composite
were flat.
When Proterra merged with a special purpose vehicle to raise money in January 2021, it was expected to achieve sales of $838 million in 2023. The business has developed more slowly than expected. Expectations are reset to this reality.
Proterra expects operating costs to decrease in 2023 and equipment spending to be approximately $25 million. Cash burn for 2023 should be just over $200 million.
As of Thursday’s start of trading, Proterra stock is down about 33% this year and about 64% over the last 12 months.
Write to Al Root at allen.root@dowjones.com
Source : www.barrons.com