Workhorse Group, Inc.

Greetings. Welcome to the Workhorse Group's fourth quarter and full year 2024 earnings call. At this time, all participants will be in listen-only mode. A question and answer session will follow today's formal presentation. If anyone should require operator assistance, please press star zero from your telephone keypad. As a reminder, this conference is being recorded. At this time, I'll now turn the conference over to Stan March. Mr. March, you may begin.

Thank you, Rob. Good morning. We'd like to welcome all of you to WorkHorse's 2024 results call. Before we begin, I'd like to note that we posted our results for the year ended December 31st, 2024 via press release, as well as filed our 2024 10K with the SEC this morning. You can find both of these documents and an accompanying presentation that will form the basis of today's conversation on this call in the investor relations section of our website. We'll be tracking along with the presentation during the call. Joining me on the call today are Rick Douk, our CEO, and Bob Ganan, our CFO. For today's agenda, please turn to slide three. Following my opening remarks, I'll hand it over to Rick, who will give you an update on our strategic and operational priorities throughout 2024. And Bob will then walk us through the financial results before discussing our continued actions to preserve cash and extend our financial runway. Then Rick will wrap us up before we open the call to questions. Our disclaimer can be found on slide four. Some of the comments that will be made today are forward-looking and are subject to certain provisions and are also subject to risks and uncertainties. You can find the full disclaimer in our 10-K, which, again, was filed this morning as well as in today's press release. I'll now turn the call over to Rick Doubt. Rick?

Thanks, Stanley. Good morning, everyone. Thank you all for taking the time to join us today to discuss our 2024 results. Let's jump right into slide five. As we navigated 2024 and moved into 2025, it's clear that the landscape and pace of adoption for commercial EVs continues to shift. Recent regulatory pauses like the state of California withdrawing its waiver request to the EPA and a temporary freeze on federal fleet procurement have created tremendous uncertainty in the marketplace. Several fleets have paused or delayed their EV investment plans. Fortunately, a few have not, and several states continue to move forward with their plans to electrify their state-funded fleets. Here at Workforce, we did not build our business model around political cycles. We built it on designing, building, and selling great trucks with great people and with great business partners. What remains constant is that our vehicles, especially the W56 family of products, are proving their value in real-world operations in the last mile delivery space. Beyond the numbers, drivers and owners are noticing the difference. The W56 offers smooth ride and acceleration, quiet handling, and much better visibility, factors that improve safety and reduce driver fatigue while also lowering operating costs. In the fourth quarter, based on direct customer feedback after multiple fleet demos, we launched the new W56 208-inch wheelbase truck in both strip chassis and step band variants as a longer wheelbase version of the initial W56. We have seen positive customer response to this new vehicle and have already received a purchase order for 13 of the 208-inch wheelbase step bands, which we expect to begin delivering in the second quarter of this year. We also received approval for the sale of our W750 and W56 step van models in Canada last month, which is an important market that was not previously open to us with these step vans. We are scheduled to start demos of both vehicles with a large national fleet in Canada up in April and May. While we worked hard to sell more trucks, we have also worked to reduce our operating costs in order to extend our operating runway as a startup EV company. We made significant reductions in headcount and other spending activities across the board in 2024. Those reductions were tough, but they were necessary. People, process, product, and partners have been the guiding principles of our mission from the start of our leadership tenure here at Workhorse. We've achieved a lot of what we set out to accomplish through rigorous process discipline and product innovation. But I want to take a moment to talk about our people. Our team is the driving force behind everything we've accomplished that you see on this slide, and their dedication and, at times, sacrifice have been nothing short of extraordinary. When challenges arose, our leadership team led by example by taking pay cuts or deferrals. Over the past year, every member of our workforce has stepped up, taking on increased workloads, foregoing pay raises, and reduced benefits, including the suspension of 401 contributions, and endured both an extended furlough and a 60% reduction in staffing, all with the shared goal of conserving every dollar to secure our future. Our entire team is fully dedicated to our long-term success, even in the face of the uncertain and turbulent commercial EV market conditions we face today. Despite these challenges and EV market segment realities, our workforce attrition has been remarkably low. Rather than run for the exit, our team has leaned in, working harder than ever, finding ways to innovate, increase efficiency, reduce costs, and deliver exceptional products with fewer resources. This is a team that believes wholeheartedly in our vision, in our products, and our ability to succeed. Together we are weathering the storm, more united and more focused, and poised to continue driving the company forward. We stay focused on what is in our control, and to do our best to adapt to those market factors like changing government mandates, tariffs, and customer EV purchasing plans that are outside of our control. You have heard me speak in the past about our financing arrangement with ATW, which provides us important support to execute on our product roadmap and manufacturing operations. ATW has been an excellent financial partner for us. We continue to look for effective and efficient ways to finance the company going forward. With minimal debt, over $40 million of inventory, and a 420,000 square foot plant that we own, which sits on over 100 acres of land, we still have financial leverage to help us extend our runway here at Workhorse. Moving to slide six, let me take a moment to discuss our continued product development work. Over the past three years, we've made moves to establish Workhorse as a leader in the medium-duty EV space, something many others in this industry can't claim. While others have stumbled and have failed, we have stayed focused and executed on our strategy. We have built-in-house manufacturing capabilities to produce complete stepvans, making us the only North American-based OEM capable of doing so. Every other EV chassis supplier is 100% reliant on Morgan Olsen and Utilamaster for the installation of cabs and bodies based on 50 plus year old designs. We have achieved full market coverage in the class four to six commercial step van segment. We've met both FMVSS and CMVSS certification requirements and successfully tested our vehicles both on the test track and in engineering labs. and most importantly in the real world with last mile fleets across the country and at our own FedEx ground routes here in the greater Cincinnati area. We've established the processes and systems to support long-term business growth, including a national dealer network, a capable service and parts supply network with trained service technicians, and a customer support infrastructure. We have qualified for major state and federal incentive programs, including California's important HFIP and ISEF certification programs. We have been awarded both federal and state government procurement contracts, including source well on GSA. We've achieved approval to import vehicles into Canada. We will start those new product demos in April and May. And we've completed successful demos with extremely positive feedback from several fleet operators. We have successfully passed every single customer demo that we've done over the past two years across the country. And we are continuing to push forward. Our W5628 wheelbase model recently received full regulatory approval, met all FMVSS and CMVSS certification requirements, and successfully completed 250,000 highway equivalent miles in the durability testing. As I said earlier, we've already secured fleet orders for this model. which are scheduled to ship in April and May, proving that it's a viable, no-compromise commercial vehicle solution that fleet customers want. In addition, we're working on a reduced-range 140-kilowatt W56, which remains on track for Q3 start of regular production. Again, this development was initiated specifically at the request of one of the largest last-mile fleets in North America, who is seeking a lower-cost step van with a 100-mile range versus a 150-mile range. Across our product lineup, we now work with more than 30 certified upfit and body partners across the country to provide fleet ready configurations with unlimited options. Our recent awards from the city of Tacoma, Washington through SourceWell are an example of the importance of these upfitter partnerships. One of our dealers in California also recently was awarded DGS contracts to sell both the W4CC and W56 vehicles to government funded fleets in the state of California. We are confident our people, our products, our supplier and dealer partners, our engineering capabilities, our manufacturing processes, and our service and updating networks position as well to take advantage of near-term and long-term opportunities when fleets choose to start their transition to EVs. Moving to slide seven, let me talk a bit more about our W56 step van and its proven performance in the field. Let me start by saying that Workhorse simply designs and makes great commercial work trucks. They just have to be commercial electric vehicle work trucks. The W56 was designed for the demands of last mile delivery fleets. With a range of 150 plus miles, a cargo capacity of up to 1,200 cubic feet, and expected 15 to 20 year estimated operating life based on durability testing results, it's engineered for the job. Fleet operators are seeing tangible savings, averaging 27 to 31 miles per gallon equivalent compared to just six to seven for typical ICE vehicles. Even in states without incentives, EV operating costs are still 22% lower than equivalent gasoline or diesel fuel powered trucks. When you factor in reduced maintenance and lower energy costs, the total cost of ownership delivers a payback in just four to five years without relying on any government subsidies. One of the strongest validations of our product comes from our work with FedEx and its independent FedEx Ground service providers. In 2024, we successfully demoed the W56 with Federal Express in Memphis and signed a three-year master framework agreement with FedEx, and we delivered our first 15 trucks last year. We expect an RFQ mid-year for 2025 orders, and we're seeing increased demand from FedEx ground contractors across the U.S. Take, for example, a FedEx ground contractor in the San Francisco Bay Area who purchased a W56 last year. After more than six months in service, he told us, and I quote, the W56 is the best EV step van we've driven. Nothing else comes close. That same sentiment is echoed by FedEx contractors in California, Minnesota, and Pennsylvania who are adding W56 to their fleets. When we recently visited FedEx terminals in the Bay Area, we saw rows of competitor EV steps sitting idle, waiting on spare parts, waiting on service, or waiting on answers. Some even had failed breaks. Workhorse customers don't have that problem. Our well-designed and well-built trucks, combined with a superior dealer support and service network, is setting us apart from other startup EV OEMs and even some of the traditional automotive trucks OEMs in the commercial EV market. One of the most telling examples of W56 performance happened just a few weeks ago. A potential customer in California had concerns about whether our vehicles could reliably handle their long delivery routes, which could be up to 150 miles long. So we put it to the test. A driver picked up the W56 from our dealer in Southern California and drove it 165 miles to the customer's location. This was all highway driving, 55 to 60 miles an hour through steep mountainous terrain. When they arrived, the truck had 12% state of charge remaining. The entire trip was logged via Geotab Telematics, recording 40.21 miles per gallon equivalent and used just 76% of the battery's charge. This was an unloaded vehicle, but the distance, highway speeds, and elevation changes made it a true test of capability, and the W56 delivered, exceeding the stated range of 150-plus miles. In another tough test, we conducted a multi-quarter demo with a large industrial supplies and linen company. The W56 handled a 45-mile daily route. carrying between 5,000 to 8,000 pounds of payload every day for more than six months with only one downtime incident that was addressed by our engineering and service teams overnight. These real-world demonstrations continue to validate the strength and capability of our W56 product family. As previously stated, from a product, production, and operating system standpoint, we have succeeded at much of what we set out to do. What we can't control is the market's readiness to buy commercial EV step vans at scale. We are currently at the table with Fortune 500 national accounts, government entities, and last-mile delivery fleets that have aggressive net-zero goals. Publicly, they remain committed to electrification and meeting strict greenhouse gas emission standards. They need reliable, durable, and capable commercial vehicles that deliver real-world performance without operational tradeoffs. That's exactly what Workhorse and specifically our W56 provides, a no compromise, zero tailpipe emission solution that is built to work. As Scott Davidson, CEO of Revolve put it, and I quote, Workhorse has proven to be a standout partner in the transition to electric vehicles. We're excited to continue bringing Workhorse vehicles into our ecosystem and helping more fleets operate efficiently and deploy next generation technology. Turning to slide eight, throughout 2024, we continue to electrify our own fleet of vehicles being used in our Stables by Workhorse initiative. We now have 13 electric vehicles in our fleet, including both W750 and W56 step van models, and we delivered 154,000 packages to FedEx customers during the 2024 peak holiday season. Our electric fleet at Staples provides firsthand data on the benefits and challenges of independent fleet operators' experiences while executing last-mile delivery operations. It also provides important insights into how fleet customers can plan for and manage their own transition to EV operations. And the real-world data backs up that enthusiasm. During the peak holiday season in December, W56 is in service with contractors in Northern and Southern California, Minnesota and our own operations in Ohio consistently achieved uptime of 93% to 97% on a daily basis. That's a critical differentiator versus competitor EV products and even with older ICE commercial products. The bottom line is that our trucks work. With that, I'll turn the call over to Bob to discuss our financial results.