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Wednesday, 03/02/2022 6:53:17 AM

Wednesday, March 02, 2022 6:53:17 AM

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earnings

XL Fleet Corp. (NYSE: XL) (“XL Fleet” or the “Company”), a leading provider of fleet electrification solutions, today announced fourth quarter and full-year 2021 financial results.

Fourth Quarter, Full-Year 2021 and Recent Highlights

Generated revenue for fourth quarter of 2021 of $8.0 million, compared to $10.9 million in the prior year
Realized gross loss for the fourth quarter of 2021 of $1.6 million, compared to gross profit of $2.0 million in the prior year
Exited fourth quarter of 2021 with cash and cash equivalents of approximately $352 million
Appointed automotive and mobility sector veteran Eric Tech as new CEO of XL Fleet, effective December 1, 2021
Appointed Chris Goldner as Interim CFO, effective February 1, 2022, following departure of Cielo Hernandez
Announced pilot program award with Department of Defense to prototype fuel-savings technology for tactical vehicles
Received CARB executive order approval to sell electric refuse vehicles co-developed with Curbtender, Inc.
Initiated Strategic Review, focused on narrowing business offering to most profitable business areas and opportunities

Management Commentary & Outlook

“XL Fleet continued to diversify its solutions portfolio in 2021, most notably with the May acquisition of World Energy Efficiency Services, which helped to offset demand and supply chain issues continuing to face the drivetrain business,” said Eric Tech, CEO of XL Fleet. “World Energy generated $7.7 million of revenue for the fourth quarter of 2021 and over $20 million for the full-year 2021, which was ahead of the forecast set at the time of the acquisition. We exited the year with $352 million in cash on the balance sheet, positioning us offensively and defensively in the road ahead.”

“Since joining XL Fleet, I have taken a comprehensive review of all aspects of our business to assess the offerings, strategy, and growth opportunities,” added Mr. Tech. “While our Strategic Review remains ongoing, I have identified several near-term opportunities and actions that align our talent, technology and resources, while best positioning XL Fleet over the long-term.”

“First, we will focus on organizing our leadership and talent in a way that maximizes synergies across our business,” continued Mr. Tech. “Second, we will narrow focus of our hybrid offering to platforms and applications that are most scalable and provide the most substantial return on investment. And third, we will continue to preserve our strong cash position, with an intent on identifying transformational M&A that enhances shareholder value while setting the state for long-term growth resulting from the global needs for decarbonization. I am invigorated by the work that remains ahead, and stand confident in XL Fleet’s ability to leverage its platform, experience and resources to help drive decarbonization for the benefit of all.”

Fourth Quarter 2021 Financial Results

Revenue totaled $8.0 million in the fourth quarter of 2021 compared to $3.2 million in the third quarter of 2021 and $10.9 million in the fourth quarter of 2020. Revenue from the sale of drive systems in the fourth quarter of 2021 totaled $0.3 million compared with $0.6 million in the third quarter of 2021, and $10.9 million in the fourth 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 fourth quarter of 2021 totaled $7.7 million, compared to $2.6 million in the third quarter of 2021 and $6.4 million in the fourth quarter of 2020 on a pro forma basis. The increase from the third quarter of 2021 was due to the seasonality of the business driven by sales cycles and other dynamics in the business.

Gross loss was $1.6 million for the fourth quarter of 2021, compared to a gross profit of $0.7 million in the third quarter of 2021 and gross profit of $2.0 million in the fourth quarter of 2020. Gross margins for the fourth quarter of 2021 were negative (20%), compared to gross margins for the third quarter of 2021 of positive 22%. The decrease in gross margins was primarily driven by increased inventory reserves. Adjusted EBITDA was ($14.6) million for the fourth quarter of 2021, compared to ($14.2) million for the third quarter of 2021 and ($1.8) million in the fourth quarter of 2020.

Net loss was ($15.1) million for the fourth quarter of 2021, compared to net loss of ($7.5) million in the third quarter of 2021 and ($38.4) million in the fourth quarter of 2020. Net loss for the fourth quarter of 2021 includes a non-cash gain from the change in fair value of warrant liability of $8.2 million, compared to a non-cash loss of ($35.0) million in the fourth quarter of 2020. Adjusted net loss was $15.3 million for the fourth quarter of 2021, compared to adjusted net loss of ($14.7) million in the third quarter of 2021. A reconciliation of EBITDA to adjusted EBITDA and net loss to adjusted net loss is set out in the tables below.

Full-Year 2021 Financial Results

Revenue totaled $15.6 million for full-year 2021, compared to $20.3 million for full-year 2020. Gross loss totaled ($0.7) million for full-year 2021, compared to a gross profit of $2.7 million for the full-year 2020. Adjusted EBITDA for full-year 2021 totaled ($50.0) million, compared to ($14.7) million for the full-year 2020.

Balance Sheet and Capital

Cash and cash equivalents as of December 31, 2021 totaled $351.7 million compared to $329.6 million as of December 31, 2020. Total debt outstanding as of December 31, 2021 was approximately $0.1 million. XL Fleet has approximately 140.5 million shares of Common Stock outstanding as of December 31, 2021.

Fourth Quarter 2021 and Recent Operational & Business Updates

In February 2022, XL Fleet announced that it appointed Chris Goldner to serve as Interim Chief Financial Officer, effective February 1, 2022, following the resignation of Cielo Hernandez from her position as Chief Financial Officer. The Company is undertaking a search for a permanent successor.

In December 2021, XL Fleet received an Executive Order from the California Air Resources Board (“CARB”) for the sale of its battery electric Ford F-600 platform for the zero emission refuse vehicle being co-developed with Curbtender, Inc. The development of the battery electric Curbtender Quantum is expected to be completed for production before the end of 2022, and will be XL Fleet’s first all-electric, zero emission vehicle platform.

In December 2021, XL Fleet announced the installation of charging infrastructure to power Apex Clean Energy’s electrified vehicle deployments. Apex Clean Energy, a leading clean energy company, electrified its work truck fleet with XL Fleet plug-in hybrid and hybrid systems on its F-Series pickup trucks earlier in 2021.

In November 2021, XL Fleet announced that it was awarded a pilot project with Department of Defense to prototype fuel-saving technology for tactical vehicles. The Department of Defense pilot program is part of a future contract opportunity to leverage the hybrid conversion technology for tens of thousands of vehicles in a variety of U.S. military applications.

In November 2021, XL Fleet announced that its Board of Directors appointed Eric Tech as Chief Executive Officer of XL Fleet, effective December 1, 2021, following the resignation of Dimitri Kazarinoff from his position as Chief Executive Officer to pursue other career opportunities.
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