Workhorse Group, Inc.

Greetings. Welcome to Workhorse Group fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to John Williams, Chief Communications Officer. Thank you. You may begin.

Thank you, operator, and good afternoon, everyone. I'd like to welcome all of you to Workhorse's fourth quarter and full year 2025 earnings call. Before we begin, I'd like to note that we have posted our results for the fourth quarter and full year ended December 31, 2025 via press release in 8K and filed our associated annual report on form 10K with the SEC. You can find the release and an accompanying presentation in the investor relations section of our website. We will be tracking along with the presentation during this call. Joining me on today's call are Scott Griffith, our Chief Executive Officer, and Bob Ganan, our Chief Financial Officer. For today's agenda, please turn to slide three. Following my opening remarks, I will hand it over to Scott, who will give you an overview of the combined company and our strategic priorities. Bob will then walk us through our financial results for the quarter and full year, as well as our capital position. Scott will then close this out before we open up the call for questions. Our cautionary statements can be found on slide four. Some of the comments that will be made today are forward-looking statements, which are based on current expectations, projections, or opinions about future periods. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties are discussed in today's press release and in our filings with the SEC, including our Form 10-K. Now, I'll turn it over to Scott.

Thanks, John. Good afternoon, everyone, and thank you for joining us. This is a milestone moment for Workhorse, our first earnings report as a combined company following the completion of our merger with Motive Electric Trucks in December 2025. Before I get into the substance of what we've accomplished and where we're headed, let me briefly introduce myself for those I haven't yet had the chance to meet. I came to Workhorse through our merger with Motive, where I served as Chief Executive Officer. Before that, I spent much of my career building and scaling technology-driven transportation businesses, including operating and board roles at Ford, EVgo, Zipcar, Boeing, and TruMotion. I took on this role because I believe Workhorse has the right products, the right customers, and the operational foundation to build a profitable scale business in the medium duty commercial truck market. I've seen what it looks like when the technology is right, the market is ready, and the execution is focused. That's where we are. Let me start with what Workhorse is today. The new workhorse is a leading North American medium-duty commercial vehicle OEM with a portfolio spanning classes 4, 5, and 6. We bring more than 20 years of combined operating experience, more than $860 million in previously invested capital, and a growing presence in the $23 billion North American medium-duty truck market. The proof of our platform is on the road. Our vehicles operating in customer fleets have now surpassed 20 million real-world miles across more than 1,100 vehicles deployed with some of the largest commercial and public sector fleets in North America. These are not test vehicles. These are trucks in daily service, running delivery routes, generating real operational data through our embedded telematics platform, and delivering consistent documented results. We serve 10 of the largest medium-duty commercial truck fleets in North America, and we continue to see repeat purchase behavior, which we believe is a strong signal of customer satisfaction in this market. At the close of the merger in December, we made three clear commitments. Complete the integration, expand our product portfolio, and strengthen our financial position. In just over three months, here's where we stand. On integration, our board and governance structure are in place. Workforce and office integrations are nearly complete, and we have finished a full review of our enterprise systems and operating processes. We expect full enterprise integration to be complete over the next two to three quarters with our manufacturing consolidation at Union City, Indiana, wrapping up by the end of Q2 2026. We're targeting to exit 2026 with a run rate of 20 million in annualized cost synergies from the merger across manufacturing efficiency, headcount reductions, the elimination of other duplicative administrative functions, and other synergies including the elimination of redundant expenses, supply chain cost savings, and reduced overall facility costs stemming from the consolidation of our operating locations. On our product portfolio, our teams are working together on a new cycle plan and product roadmap that charts a path for the commonization of key components of our hardware and software platforms, along with the development of a proprietary Class 5-6 cab chassis to unlock a larger slice of the full $23 billion Class 4-6 commercial truck marketplace. And as I discuss in a moment, we've already taken our first concrete step, the introduction of a new lower cost configuration of the W56 step van. We anticipate having additional pricing flexibility across our platforms as we realize merger synergies lower our bill of materials costs by utilizing commonized components across platforms and expanding our product line. On financial position, we entered the year with a stronger balance sheet following the merger. And as we disclosed, when we closed the merger, we put employees at closing a new $40 million customer order lending facility to support working capital to fulfill orders. I'm pleased with how far we've come in a short amount of time, but there's more to be done. Now let me tell you how we get from here to a larger-scale profitable business and why we believe the path is clear and achievable. Let's start with the market. The medium-duty truck market in North America is large, approximately $23 billion in annual sales, and it's ripe for disruption. To understand why the timing is right, consider what has happened to how finished goods have Before 2020, e-commerce was a meaningful but smaller channel, roughly 11% to 12% of U.S. retail. The pandemic accelerated the use of e-commerce over bricks and mortar stores by more than 40% in a single year. And critically, that shift in demand to online didn't revert. It reset to a new normal. Total U.S. retail sales are forecast to reach $6.2 trillion by 2030, with e-commerce accounting for 29% of that total, according to Forrester Research. The front door to homes and offices had become the point of sale, and the truck that shows up at that door is the last link in the chain. That shift has forced a fundamental redesign of logistics networks and supply chains. The old hub-and-spoke logistics model is giving way to distributed fulfillment, hyperlocalized inventory, smaller and more numerous distribution nodes located closer to the end customer. This results in shorter mid-mile and last-mile routes and higher density for deliveries. The result is visible in the data. Annual mileage for medium-duty vehicles has grown from roughly 31,000 miles in 2020 to nearly 48,000 miles in 2025, even as heavy-duty truck mileage has declined. The shift is also evident in smaller delivery van segments as well. Cox automotive data shows Rivian-registered 2,230 Class II electric vehicles in 2022. That increased to 7,679 in 2023 and grew to a total of over 33,000 vehicles registered between 22 and 2025. The key takeaways we see here, delivery freight is moving closer to the customer and rapidly growing networks. The routes are getting shorter and more predictable. and many of the additional vehicles doing this work are squarely in class four through six. This isn't a trend. It's a structural reallocation of freight, and it plays directly into our strengths at Workhorse. While this structural shift occurred, most commercial fleets continue to run ice truck platforms that are often unconnected, expensive to maintain, and increasingly out of step with what operators and regulators demand. Now, after all of this recent growth and change in transport networks, we're seeing a new trend emerging among some of the largest commercial fleet operators. As they adjust to the new normal in commerce, companies are embarking on a massive restructuring of many of their networks with a focus on network optimization, depot consolidation, adding smaller same-day mini-warehouse nodes for final and last-mile delivery. Companies ranging from FedEx, UPS, Purolator, Cintas, Amazon, Pepsi, Frito-Lay, and many more are looking at how to use data and AI to optimize routes, add automation, and reduce transportation network operating costs. In addition, they're looking to add safety and driver assistance features as they move from next day to same-day delivery and fulfillment commitments. Software-defined vehicles and electrification are well suited for this segment. Medium-duty routes are predictable, and most routes are depot-based and well within the range of today's batteries. Vehicles return to depot overnight for charging, and the operating cost savings are significant and can be verified. Our stables by workhorse division, which operates as an independent FedEx contractor in Ohio, has documented savings of approximately 64% on fuel and maintenance compared to internal combustion vehicles, derived from three years of real-world mixed fleet comparisons. That's not a projection. That's operational data. So while most of these routes are primarily being served by internal combustion-powered trucks today, The economic, operational, and environmental benefits of replacing those ICE trucks with software-defined electric vehicles are becoming clearer to these large fleet operators. We're seeing similar data and EV adoption trends in another key segment we serve, school buses and shuttles. We believe these trends will continue as we introduce our next generation of vehicles with even better economic and operating benefits versus internal combustion trucks. To sum it up, we're not starting from zero. Our commercial fleet customers already have over 1,100 of our trucks on the road, with 10 of North America's largest medium-duty fleets, more than 20 million cumulative miles driven, and a growing purchase order backlog. The momentum at Workhorse is real. Now let's talk about our path to profitability. Here's the key insight. We don't need a large slice of this market to reach profitability. We believe we only need a very small one. The installed North American medium-duty fleet is estimated to be about 5 million vehicles. Annual truck production runs at about 200,000 to 250,000 units per year, which ACT research pegs as roughly the average replacement rate for these classes of trucks. We believe capturing approximately 1% of that annual market for roughly 2,500 vehicles per year is very achievable. And based on our modeling, we believe that doing so would enable us to reach cash flow breakeven by the end of 2028. For a company that is already trusted by 10 of the largest fleets on the continent, that's not a stretch goal. We believe it is a modest, executable milestone. And here's the second point. We already have the manufacturing capacity to get there. Our Union City, Indiana facility can produce more than 5,000 vehicles per year on a single operating shift. Our anticipated break-even volume of approximately 2,500 units represents just 50% of that existing capacity. We do not need to build new facilities. We do not need to invest significant capital in manufacturing infrastructure. The plant is built, tooled, and ready. Getting to profitability is a question of executing our product development plans, ramping up production and sales execution, not investing substantial capex into new manufacturing equipment and facilities. So how do we get there? The first lever is cost. We need to drive down the bill of materials and bring our vehicles to price points that are competitive with conventional ICE trucks. This is where we believe our merger synergies, our platform commonization strategy, our economies of scale, and our supply chain discipline can all come together. We're already seeing the early results. We just launched a new lower configuration of the W56 step van featuring 140 kilowatt battery option. That's not a minor adjustment. It reflects the first wave of synergy savings being passed directly to our customer base. As we commonize hardware and software across our class four, five, and six lineup, the savings can compound. Shared architecture means lower per unit costs, fewer unique components, the source and inventory, and faster speed to market for new configurations. We're targeting a minimum of 20 million in annualized cost synergies from the merger integration alone, and our product roadmap designed to unlock further reductions as we scale. We believe we have a clear, executable plan to reach ICE-comparable pricing. And when we get there, combined with the estimated 60% operating cost advantage our trucks already deliver, the total cost of ownership argument becomes extremely compelling for any fleet operator. The second lever is sales. Let me walk through our strategy for reaching our profitability target. We have a broadened product line. The merger with Motive expanded our product portfolio beyond the W56 step van to include vehicles that serve Class 4 shuttles, transits, Type A school buses, and work truck applications. And it adds to the opportunity to sell to the state, local, education, or sled fleet segment. This is meaningful. It's opened up an entirely new customer category for Workhorse and expands the number of early adopting fleet operators we can serve with the compelling electric options. We go to market through a blended approach, internally staffed national account development, targeting new and large existing customers, bodybuilders, and fleet as a service providers. This is complemented by a dealer network that extends our reach into regional and mid-market fleet operators and provides leverage for after-sales and parts support. I'm pleased to report we fully integrated both sales teams and approaches since we closed the merger, and we are already seeing active and growing customer engagement as a result. Our sales strategy is focused on three primary paths to growth. First, we're deepening existing accounts. Our repeat purchase rate from current customers is extremely strong, and these relationships are the most efficient source of near-term volume. Yesterday's announcement of another Purolator follow-on order is a good example of this. Second, we're actively targeting fleets and states with meaningful compliance requirements and purchase incentives for zero-emission vehicles, where the economics of adoption are most compelling right now. This is also where we're continuing to push into Canada, where we have a well-established relationship with Purolator. Third, as I mentioned earlier, we're pursuing municipal fleet operators, state, local, and education, where procurement timelines can be longer, but order volumes are substantial, and the environmental and compliance drivers are strong. We're seeing positive trends in opportunity creation, progression, and closings that reflect the early impact of the operational and strategic changes we've implemented since the merger closed. As we close out Q1, this progress is translating into a strengthening sales backlog that we believe supports our plans for 2026 and beyond. The final piece is capital. Executing on this plan, ramping production, investing in our product roadmap, and growing our sales organization requires a stronger balance sheet than where we are today. We're actively working to evaluate financing alternatives, increasing engagement with analysts, and attending investor conferences as part of that work. We believe that strengthening our balance sheet at this stage will position us to capitalize on the commercial momentum we are building and invest in the roadmap I've described. We'll share more of the details as they become available on capital formation. With that, let me turn it back over to Bob to walk through the financial details.