Workhorse Group Inc (WKHS) 2023 Q4 法說會逐字稿

Ladies and gentlemen, greetings, and welcome to Workhorse Group's fourth quarter 2023 investor call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Workhorse's Group's Vice President of Corporate Development and Communications, Stan March. Sir, you may begin.

女士們、先生們，大家好，歡迎參加 Workhorse Group 2023 年第四季投資人電話會議。提醒一下，本次會議正在錄製中。現在我很高興向您介紹主持人，Workhorse 集團企業發展和傳播副總裁 Stan March。先生，您可以開始了。

Thank you, Donna. Good afternoon and thanks to all of you for joining us for the fourth quarter and full year 2023 results call. Before we begin, I'd like to note that we posted our results for the fourth quarter and full year that ended December 31, 2023, via press release, as well as filed our 2023 10-K. You can find both these documents as well as the accompanying presentation that will form the basis of today's conversation in the Investor Relations section of the website. We track it along with the presentation during the call.

謝謝你，唐娜。下午好，感謝大家參加我們的 2023 年第四季和全年業績電話會議。在開始之前，我想指出，我們透過新聞稿發布了截至 2023 年 12 月 31 日的第四季度和全年業績，並提交了 2023 年 10-K。您可以在網站的投資者關係部分找到這些文件以及隨附的演示文稿，這些演示文稿將構成今天對話的基礎。我們在通話期間將其與演示文稿一起追蹤。

Joining me on today's call are Rick Dauch, our CEO; and Bob Ginnan, our CFO. After my opening remarks, on slide 3, you'll see the agenda for today's call. I'll turn it over to Rick for an update on our strategic and operational priorities throughout 2023 and during the fourth quarter, and Bob will walk us through the financial results for the fourth quarter and full year and provide our outlook for 2024. Then we'll take any questions.

參加今天電話會議的有我們的執行長 Rick Dauch；和我們的財務長鮑勃金南 (Bob Ginnan)。在我致開幕詞後，您將在投影片 3 上看到今天電話會議的議程。我將把它交給Rick，了解我們2023 年全年和第四季度的戰略和運營優先事項的最新情況，Bob 將向我們介紹第四季度和全年的財務業績，並提供我們對2024 年的展望。然後我們會回答任何問題。

On slide 4, you'll see our forward-looking statement. As you know, some of the comments that we've made today are forward-looking and therefore, subject to certain provisions and as a result are subject to risks and uncertainties. You can find the full disclaimer statement in our 10-K, which was filed today, as well as in today's press release. And with that I'll now turn the call over to Rick.

在投影片 4 上，您將看到我們的前瞻性聲明。如您所知，我們今天發表的一些評論是前瞻性的，因此受到某些條款的約束，因此存在風險和不確定性。您可以在我們今天提交的 10-K 以及今天的新聞稿中找到完整的免責聲明。現在我將把電話轉給里克。

Thanks, Dan. Good afternoon, everyone. We appreciate taking the time to call in today, and thank you for your continued support of Workhorse. Today, we're going to discuss our fourth quarter and full year 2023 results and also cover the actions we're taking to position the Company for success.

謝謝，丹。大家下午好。我們非常感謝您今天抽出時間致電，並感謝您對 Workhorse 的持續支持。今天，我們將討論 2023 年第四季和全年業績，並介紹我們為公司取得成功所採取的行動。

During the year, we rolled out our first W56 step van, signed up our first W56 fleet customers and increase our production capabilities for our W4 CC and W750 vehicles. We also expanded our commercial network, adding key dealers and partners in multiple states. At the same time, we've taken actions to strengthen our financial positions (Technical Difficulty) trucks.

年內，我們推出了第一輛 W56 踏板貨車，簽約了首批 W56 車隊客戶，並提高了 W4 CC 和 W750 車輛的生產能力。我們還擴大了我們的商業網絡，在多個州增加了主要經銷商和合作夥伴。同時，我們已採取行動加強我們卡車的財務狀況（技術難度）。

As we disclosed today in our 10-K, we are in the process of completing negotiations on a financing transaction that, along with our pending sale lease back transaction and the aggressive cost cutting actions, we are taking will position our business to have the financial runway necessary to execute on our business plans.

正如我們今天在10-K 中所揭露的那樣，我們正在完成一項融資交易的談判，加上我們懸而未決的售後回租交易和積極的成本削減行動，我們正在採取的措施將使我們的業務擁有財務能力執行我們的業務計劃所需的跑道。

As part of the cost-saving actions, we are reducing headcount across the organization, the foreign executive compensation and suspending drone design and manufacturing in our aero business, which I will discuss in more detail later in my comments.

作為節省成本行動的一部分，我們正在減少整個組織的員工人數、外國高階主管薪酬，並暫停航空業務中的無人機設計和製造，我將在稍後的評論中更詳細地討論這些問題。

From a manufacturing customer service demand perspective, we have built strong capabilities. We have had initial successes last year and this year and have had key demonstrations with several large last mile fleet operators as well as state and municipal fleets which are either already underway or planned to begin in early 2024.

從製造業客戶服務需求的角度來看，我們已經建立了強大的能力。我們去年和今年取得了初步成功，並與幾家大型最後一哩車隊營運商以及州和市政車隊進行了重要演示，這些演示要么已經在進行，要么計劃在 2024 年初開始。

We'll talk about all of this in detail in moment, but I want to pause and acknowledge that I'm extremely proud of the hard work and dedication of our outstanding team here at Workhorse. Our team has overcome every obstacle place in our path, and I know that everyone of us has deeply and passionately committed to success. I'm incredibly proud of the Workhorse team and great for those for the contributions of all of our employees, including those whose jobs are impacted by the difficult but necessary actions we are taking to reduce our operating costs.

我們稍後會詳細討論所有這些，但我想暫停一下並承認，我對 Workhorse 傑出團隊的辛勤工作和奉獻精神感到非常自豪。我們的團隊克服了前進道路上的每一個障礙，我知道我們每個人都深深而熱情地致力於成功。我為 Workhorse 團隊感到無比自豪，並為我們所有員工所做的貢獻感到自豪，包括那些因我們為降低營運成本而採取的困難但必要的行動而影響工作的員工。

Moving to slide 5, let me take a few minutes to address the state of the commercial EV industry from our perspective. The Workhorse leadership and sales team spent the majority of last week at the industry tradeshow, the NTA Trade Show in Indianapolis. Every OEM and the major upgraders proudly display their future zero emission Class 3 to Class 7 commercial vehicle product lineup.

轉到投影片 5，讓我花幾分鐘時間從我們的角度闡述商用電動車產業的現況。Workhorse 領導層和銷售團隊上週大部分時間都在參加在印第安納波利斯舉行的行業貿易展 NTA 貿易展。每個整車廠和主要升級商都自豪地展示他們未來零排放的 3 級至 7 級商用車產品陣容。

There's no question that the transition to a new generation of powertrain technology is coming. The question is really when will it come? The new car Clean Fleet mandate took effect on January first out in California, but it has not yet been in force. The commercial truck industry is uncertain on how to proceed with the transition to EVs, mostly both big and small are reluctance to make large investments on the necessary infrastructure to make the shift to either natural gas or electric power vehicles, if the car mandates might get delayed or revised. Several OEMs are hedging their product development investments and supplier investments plans for EVs pushing out some timing.

毫無疑問，向新一代動力總成技術的過渡即將到來。真正的問題是它什麼時候會到來？新車清潔車隊指示於一月先在加州生效，但尚未生效。商用卡車行業不確定如何繼續向電動車過渡，如果汽車法規可能會得到落實，大多數大型和小型企業都不願對必要的基礎設施進行大量投資，以轉向天然氣或電動車。延遲或修改。一些原始設備製造商正在對沖電動車的產品開發投資和供應商投資計劃，從而推遲一些時機。

Here, Workhorse after 2.5 years of back breaking work, we feel that we are on the precipice of success, and we can and we will find a path forward. We have the products, supplier and dealer partners, engineering capabilities, business systems and manufacturing processes in place to emerge as a winner in the Class 4 to Class 6 segments. But that only happens if fleet customers, both large and small start buying our products in 2024.

在這裡，Workhorse 經過 2.5 年的艱苦工作，我們感覺到我們正處於成功的邊緣，我們能夠而且將會找到前進的道路。我們擁有適當的產品、供應商和經銷商合作夥伴、工程能力、業務系統和製造流程，能夠成為 4 級至 6 級細分市場的贏家。但這只有在大型和小型車隊客戶在 2024 年開始購買我們的產品時才會發生。

In 2023, we continued to advance our product roadmap, all while navigating and solving challenges, both internal and external to the company. Progress in this nascent commercial EV industry is not linear, and we know we will need to continue to address challenges as a pop-up. And while our results for the year were affected by issues that slowed us down, we never stopped driving forward to create a viable and profitable EV OEM company.

2023 年，我們繼續推進產品路線圖，同時應對和解決公司內部和外部的挑戰。這個新興的商業電動車產業的進展不是線性的，我們知道我們需要繼續應對作為一個彈出專案的挑戰。儘管我們今年的業績受到一些問題的影響，導致我們放慢腳步，但我們從未停止前進的腳步，致力於創建一家可行且盈利的電動車 OEM 公司。

During the year, we rolled out our first W56 step van, signed up our first fleet customers and establish our production capabilities for the W4 CC and W70 vehicles. We also expanded our commercial dealer network, adding new dealers and upfitting partners in multiple states. In our aero business. We continue to expand our relationship with key government agencies and partners.

年內，我們推出了第一輛 W56 踏板貨車，簽約了第一批車隊客戶，並建立了 W4 CC 和 W70 車輛的生產能力。我們還擴大了我們的商業經銷商網絡，在多個州增加了新的經銷商和裝修合作夥伴。在我們的航空業務中。我們繼續擴大與主要政府機構和合作夥伴的關係。

Let's review the key accomplishments and successes we achieved at Workhorse in 2023. We will have four distinct commercial EV products and production; we have four distinct commercial EV products into production. We received important HVIP certification for both our Class 4 and our Class 5, 6 vehicles. We secured initial fleet orders for the W56 step van and strip chassis, and we organically grew the Stables business. Additionally, we completed the overhaul of our Union City manufacturing complex. Workhorse Ranch is now capable of building 5,200 vehicles per year on one shift. Our lean, highly flexible production facility can ramp up staffing and production in line with future market demand.

讓我們回顧一下 Workhorse 2023 年的主要成就和成功。我們將擁有四種不同的商業電動車產品和生產；我們有四種不同的商業電動車產品投入生產。我們的 4 級和 5、6 級車輛均獲得了重要的 HVIP 認證。我們獲得了 W56 步式貨車和條形底盤的初始車隊訂單，並且我們有機地發展了馬厩業務。此外，我們也完成了聯合城製造基地的檢修。Workhorse Ranch 現在每年能夠以一個班次生產 5,200 輛汽車。我們精益、高度靈活的生產設施可以根據未來的市場需求增加人員配置和產量。

At our aero business, we sold our first units, we are on track for FAA certification first quarter this year. Landed several government funded grants all while we continue to evaluate alternatives for the business. Moving to slide 6, we have stabilized production above the W4 CC and W750 miles and handed those production over to the plant. While continually dealer programs and field demonstrations for both of these vehicles.

在我們的航空業務中，我們售出了第一批設備，我們預計在今年第一季獲得美國聯邦航空管理局 (FAA) 認證。在我們繼續評估業務替代方案的同時，我們獲得了許多政府資助的補助金。轉到幻燈片 6，我們已將 W4 CC 和 W750 英里以上的生產穩定下來，並將這些生產移交給工廠。同時不斷對這兩款車輛進行經銷商計畫和現場展示。

Notably, we successfully overcame unexpected issues with California's HVIP program and work with the California Air Resources Board to list the W4 CC & W750 in the HVIP program, in a first of its kind program for intermediate vehicle manufacturers. We were able to do this by demonstrating the strength of our service, warranty and delivery network and complete care options for customers purchasing any Workhorse badged product.

值得注意的是，我們成功克服了加州 HVIP 計劃的意外問題，並與加州空氣資源委員會合作，將 W4 CC 和 W750 列入 HVIP 計劃，這是針對中型車輛製造商的首個此類計劃。我們能夠透過向購買任何 Workhorse 徽章產品的客戶展示我們的服務、保固和交付網路的實力以及完整的護理選項來做到這一點。

With enough finished inventory in place, we have temporary pause production of these products, shifting our workforce over to focus on the ramp up of the W56 production in the first quarter. As orders materialize, we will add the necessary hourly workforce to meet future customer demand for all of our products.

有了足夠的成品庫存，我們暫時停止了這些產品的生產，將我們的員工轉移到第一季專注於 W56 產量的增加。隨著訂單的落實，我們將增加必要的小時工，以滿足未來客戶對我們所有產品的需求。

Moving to slide 7, we received final HVIP certification approved for the W56 step down in Q4, a final critical milestone, delivering these vehicles to the important California market in advance of the advance Clean Fleet regulations. We continue to increase our dealer network in California and have adjusted staff (Technical Difficulty) --

轉向幻燈片 7，我們在第四季度獲得了批准 W56 下台的最終 HVIP 認證，這是最後一個關鍵里程碑，在先進的清潔車隊法規之前將這些車輛交付到重要的加州市場。我們繼續擴大在加州的經銷商網絡並調整了人員（技術難度）——

Turning to slide 8, I wanted to share a few pictures with you of what really has been done at the Union City plant to produce our industry game-changing step van, which went from concept to production, including passing more than 250,000 miles of validation in less than 22 months.

轉向幻燈片 8，我想與您分享幾張圖片，展示聯合城工廠為生產我們改變行業遊戲規則的踏板貨車所做的實際工作，該產品從概念到生產，包括通過了超過 250,000 英里的驗證在不到22個月的時間內。

And just in case you are wondering, this is a robust and I mean a really robust vehicle based on the comments we are hearing back from our customers on these field demonstrations. I do not know of any startup OEM that could have delivered this type of product in less than two years. Chassis units are moving down the line on a consistent basis and by the end of 2024, there will be four variants of the W56 in production. We now have our fixtures and lift assist tools in place for both the chassis line as well as the body line shown in the middle of the slide. Finally, we are now painting the step vans in one of three colors. Workhorse Ranch is ready to roll and fulfill future customer orders.

如果你想知道，這是一輛堅固的車輛，我的意思是根據我們從客戶那裡聽到的關於這些現場演示的評論，這是一輛非常堅固的車輛。我不知道有哪一家新創 OEM 能夠在不到兩年的時間內交付這類產品。底盤單元正在持續生產，到 2024 年底，將生產四種 W56 變體。現在，我們已經為幻燈片中間所示的底盤線和車身線準備好了固定裝置和提升輔助工具。最後，我們現在將踏板車塗成三種顏色之一。Workhorse Ranch 已準備好滾動並履行未來的客戶訂單。

On Slide 9, we continue to have strong customer interest with W56. This is demonstrated by the receipt of our first two 15 vehicle unit orders for the step van that we expect to deliver in 2024. As we like to say here, Workhorse work two for two. We also intend to reduce a longer wheelbase version of the W56 in second half of '24 based on the direct request of several of our fleet customers, specifically in the linen & Industrial supply segments.

在投影片 9 上，我們仍然對 W56 抱持著濃厚的客戶興趣。我們收到了首批兩份 15 輛踏板車訂單，預​​計將於 2024 年交付，這一點就證明了這一點。正如我們在這裡所說的，「主力」工作是兩人合而為一。我們還打算根據我們的幾個車隊客戶（特別是亞麻布和工業供應領域客戶）的直接要求，在 2024 年下半年減少 W56 的長軸距版本。

The company has multiple product demonstrations already underway are set to begin in early '24 for several large last mile fleet operators, as well as state and municipal fleets and other smaller fleet operators. Based on the demos we've had to date, we are optimistic about the prospects for the W56 as well as our W750 and W4 CC products. We are able to go from order to delivery of a finished step van in five to six weeks.

該公司已經開始為幾家大型最後一哩車隊營運商、州和市政車隊以及其他小型車隊營運商進行多項產品演示，預計將於 2024 年初開始。根據迄今為止的演示，我們對 W56 以及 W750 和 W4 CC 產品的前景持樂觀態度。我們能夠在五到六週內完成從訂單到交付成品踏板車。

The shortest lead time for the Class 5-6 step van market in North America, including custom upfit, paint and branding. We have received extremely positive driver and fleet manager feedback reflecting the vehicle strong performance in the field, as recently as last week, the NTA show in Terminal -- one of the largest package delivery companies in the country. According to customers, the W56 is a superior truck with innovative technology.

北美 5-6 級踏板貨車市場的最短交貨時間，包括客製化改裝、油漆和品牌推廣。我們收到了非常積極的駕駛員和車隊經理的回饋，反映了車輛在該領域的強勁表現，就在上週，NTA 在 Terminal（全國最大的包裹遞送公司之一）舉行的展會上。根據客戶評價，W56是一款採用創新技術的優質卡車。

Turning to slide 10, we continue to build out our commercial dealer and service capabilities to capitalize on our product roadmap. I'm particularly excited by the significant expansion of our dealer network using our strict selection criteria. We continue to expand our dealer network with a focus on those regions, work hard clean fleet and clean chart mandates will be adopted in '24 through 2027.

轉向投影片 10，我們繼續建立我們的商業經銷商和服務能力，以利用我們的產品路線圖。我對按照嚴格的選擇標準大幅擴展我們的經銷商網路感到特別興奮。我們將繼續擴大我們的經銷商網絡，重點關注這些地區，努力清潔車隊，並將在 24 年至 2027 年期間採用清潔圖表指令。

We successfully added new certified dealers, bringing our network to 11 dealers nationwide with a 12 pending and soon to be announced. As we continue to actively expand, we have a target number of 15 to 20 deals by the end of 2024. In addition, we have added 21 upfitting partners in the past nine months. As we recently shared, we also established partnerships with WW Williams and Zane solutions to expand service and support options for customers in the field.

我們成功新增了新的認證經銷商，使我們的網路在全國擁有 11 家經銷商，其中 12 家正在申請中並即將公佈。隨著我們繼續積極擴張，我們的目標是到 2024 年底達成 15 至 20 筆交易。此外，在過去的九個月裡，我們還增加了 21 個改裝合作夥伴。正如我們最近分享的那樣，我們還與 WW Williams 和 Zane Solutions 建立了合作夥伴關係，以擴大該領域客戶的服務和支援選項。

On Slide 11, within our Stables operations, we continue to electrify our delivery fleet, which is operating multiple delivery routes here in the Cincinnati area for FedEx Ground. Organically gaining new route assignments due to our superior performance. We now have 7 Class-4 EV units in the delivery fleet and expect the whole fleet to be electrified in 2024. We executed peak season extremely well with Q4 '23 revenue up more than 90% compared to Q4 of '22, including the benefit of organically adding 20% of our assigned route at the request of FedEx.

在幻燈片 11 中，在我們的馬厩營運中，我們繼續為我們的送貨車隊提供電氣化服務，該車隊在辛辛那提地區為聯邦快遞陸運運營多條送貨路線。由於我們的卓越表現，有機地獲得了新的航線分配。目前，我們的交付車隊中有 7 輛 4 級電動車，預計整個車隊將在 2024 年實現電氣化。我們在旺季的表現非常好，23 年第 4 季的收入比 22 年第 4 季增​​長了 90% 以上，其中包括應聯邦快遞的要求有機增加 20% 的指定路線的好處。

The lessons we are learning at Stables are evaluable and give us tremendous credibility to fleets, not only FedEx, but all the fleets we meet with.

我們在 Stables 學到的經驗教訓是值得評估的，並為我們的車隊（不僅是聯邦快遞，還有我們遇到的所有車隊）提供了巨大的可信度。

Moving to our aero business on slide 12, we achieved important progress in the last year on drone deployment and delivery to customers. First, we launched production, sold and delivered our first units of the HorseFly unmanned aerial vehicle or UAV. Nevertheless, during the first quarter of '24, we have decided to suspend drone design and manufacturing and exclusively focus on less capital-intensive drones as a service model and further develop our DAS products and services in this area, where we see near term profitable growth opportunities continuing to expand.

轉到幻燈片 12 上的航空業務，我們去年在無人機部署和向客戶交付方面取得了重要進展。首先，我們開始生產、銷售和交付第一批 HorseFly 無人機。儘管如此，在2024 年第一季度，我們決定暫停無人機設計和製造，專門專注於資本密集度較低的無人機作為服務模式，並進一步開發我們在該領域的DAS 產品和服務，我們認為該領域短期內獲利成長機會持續擴大。

Driving this decision was Aero's continued ability to win additional grant awards from the USDA to support national resources conservation service. What we do for the USDA, flying drones, equipped with sensors and delivering actionable data is what our drones and the service model is all about. This service has continued to grow over the last few years as we first pioneered this capability with the USDA.

推動這項決定的是 Aero 持續獲得美國農業部額外撥款的能力，以支持國家資源保護服務。我們為美國農業部所做的事情，飛行無人機，配備感測器並提供可操作的數據，這就是我們的無人機和服務模式的全部內容。這項服務在過去幾年中持續成長，因為我們首先與美國農業部一起開創了這項功能。

In January, Workhorse receive an additional $500,000 grant and in February received a separate $350,000 grant to provide actionable data from sensor scanning to increase the efficiency of underserved farmers and ranchers land use. We are in advanced discussions with additional government agencies on future scanning and service opportunities at a significant potential grant or contract level.

1 月份，Workhorse 獲得了額外的 50 萬美元撥款，2 月份又獲得了 35 萬美元的單獨撥款，用於提供感測器掃描的可操作數據，以提高服務不足的農民和牧場主的土地使用效率。我們正在與其他政府機構就未來潛在的重要贈款或合約等級的掃描和服務機會進行深入討論。

More broadly, our strategic view for the aero business remains underway to ensure we are unlocking the most value for Workhorse shareholders, while also best positioning our aero business to capture and fund future growth opportunities as they see them.

更廣泛地說，我們對航空業務的戰略願景仍在進行中，以確保我們為Workhorse 股東釋放最大價值，同時也最好地定位我們的航空業務，以抓住他們認為的未來增長機會並為其提供資金。

With that, I'll turn it over to Bob to discuss our financial results.

接下來，我會交給鮑伯討論我們的財務表現。

Next, let's turn to Slide 13. We'll cover our full year results. For the year, sales increased $8.1 million to $13.1 million for the full year 2023 compared to $5 million in 2022. Primarily resulting from an increase in W4 CC sales and volumes. The W750, W56 products, which launched in the second half of 2023, as well as Stables by workhorse in our drone as service offering also contributed to the increase in revenue.

接下來，我們來看投影片 13。我們將報道全年業績。2023 年全年銷售額增加 810 萬美元，達到 1,310 萬美元，而 2022 年銷售額為 500 萬美元。主要是由於 W4 CC 銷售量和數量的增加。2023 年下半年推出的 W750、W56 產品以及我們的無人機即服務產品中的 Stables by workhorse 也為收入成長做出了貢獻。

Cost of sales for full year 2023 increased $0.7 million to $38.4 million compared to $37.7 million in 2022. The increase was primarily due to increased production overhead cost to support higher sales volumes, related to the new vehicle platforms and an increase in employee compensation related expenses compared to 2022 levels. This increase was partially offset by a decrease in inventory reserves, adjustments and disposals, which were driven by the disposition of C-Series inventory in 2022.

2023 年全年銷售成本增加 70 萬美元，達到 3,840 萬美元，而 2022 年為 3,770 萬美元。這一增長主要是由於與新車平台相關的生產管理費用增加，以支持更高的銷量，以及與 2022 年水平相比，員工薪酬相關費用的增加。這一增長被 2022 年 C 系列庫存處置導致的庫存儲備、調整和處置的減少部分抵消。

SG&A expenses for the full year 2023 were $55.6 million, a decrease of $17.6 million compared to $73.2 million in 2022. The decrease was driven by a $25.2 million reduction in legal expenses and expenses attributed to the securities and derivative litigation settlements recognized in the prior year. This decrease was partially offset by a $3 million increase in employee compensation related expenses, including non-cash stock-based compensation expense. $2.1 million increase in professional and other services expense and a $0.6 million increase in corporate insurance expenses.

2023 年全年的 SG&A 費用為 5,560 萬美元，比 2022 年的 7,320 萬美元減少了 1,760 萬美元。減少的原因是法律費用以及上一年確認的證券和衍生性商品訴訟和解費用減少了 2,520 萬美元。這項減少被員工薪酬相關費用增加 300 萬美元部分抵消，其中包括非現金股票薪酬費用。專業和其他服務費用增加 210 萬美元，企業保險費用增加 60 萬美元。

R&D expenses for the full year 2023 were $24.5 million, an increase of $1.3 million compared to $23.2 million in 2022. Increase was primarily driven by an increase of $1.4 million employee compensation related expenses and a $0.8 million increase in development expenses for new products. These increases were partially offset by $1.4 million decrease in consulting expense.

2023年全年研發費用為2,450萬美元，比2022年的2,320萬美元增加130萬美元。成長主要是因為員工薪酬相關費用增加了 140 萬美元，以及新產品開發費用增加了 80 萬美元。這些增加被諮詢費用減少 140 萬美元部分抵銷。

Other loss for the full year 2023 was $10 million compared to $13.6 million income in 2022. Other the loss of 2023 represents the impairment of our investment tropes. Other income in 2022 represented proceeds from the sale of C-Series inventory that was previously fully reserved. Net interest expense in the current year was driven by a fair value adjustment of our convertible notes and warrants of $8.3 million and $2.1 million fees applied in connection with securities purchase agreement and the equity line of credit purchase agreement offset by interest earned on cash balances in our money market investment account.

2023 年全年的其他損失為 1,000 萬美元，而 2022 年的收入為 1,360 萬美元。其他 2023 年的損失代表了我們投資理念的減損。2022 年的其他收入是出售之前完全保留的 C 系列庫存的收益。本年度的淨利息支出是由於我們的可轉換票據和認股權證的公允價值調整為830 萬美元，以及與證券購買協議和股權信貸購買協議相關的費用210 萬美元，由現金餘額賺取的利息抵消。我們的貨幣市場投資帳戶。

Net interest expense in the prior year was primarily related to $1.4 million of fair value adjustments. $0.3 million of contractual interest expense and $0.4 million on loss on conversion of former convertible notes, which were exchanged for common shares during 2022.

上一年的淨利息支出主要與 140 萬美元的公允價值調整有關。 30 萬美元的合約利息費用和 40 萬美元的前可轉換票據轉換損失（2022 年期間將其轉換為普通股）。

For the years ended December 31, 2023, and 2022, we incurred taxable losses and thus no provisions for income tax benefits have been recorded. Net loss for the full year 2023 was $124.6 million (sic – presentation, see slide 13, "$123.9 million") compared to a net loss of $117.3 million in 2022. Loss from operations for the year full year 2023 was $105.3 million compared to $129 million in 2022.

截至2023年12月31日及2022年12月31日止年度，我們產生了應稅虧損，因此沒有記錄所得稅福利撥備。2023 年全年淨虧損為 1.246 億美元（原文如此 — 簡報，請參閱投影片 13，「1.239 億美元」），而 2022 年淨虧損為 1.173 億美元。2023 年全年營運虧損為 1.053 億美元，而 2022 年為 1.29 億美元。

Turning to slide 14, discuss our balance sheet. As of December 31, 2023, we had inventory of 40 -- net inventory of $45 million as well as $35.8 million in cash, which includes $10 million in restricted cash. We are operating efficiently and selectively resizing our team here at Workhorse while maintaining the necessary resources and skills of the team to continue to design test and build world-class commercial trucks.

轉向投影片 14，討論我們的資產負債表。截至 2023 年 12 月 31 日，我們的庫存為 40 輛，淨庫存為 4,500 萬美元，現金為 3,580 萬美元，其中包括 1,000 萬美元的限制性現金。我們正在 Workhorse 高效運營，選擇性地調整團隊規模，同時保持團隊必要的資源和技能，以繼續設計、測試和製造世界一流的商用卡車。

Importantly, we are taking major strengths to strengthen our financial position. We entered into a sale leaseback agreement for Union City manufacturing complex in January. The agreement we entered strengthens workforces financial position reflects the investments and work our team has put into refurbishing the plant. It turned into a first-class manufacturing facility. Workforce continues to support the activities of the purchaser and closing is expected in May 8 2024.

重要的是，我們正在利用主要優勢來加強我們的財務狀況。我們於一月簽訂了聯合城製造綜合大樓的售後回租協議。我們簽訂的協議增強了員工的財務狀況，反映了我們團隊在工廠翻新方面的投資和工作。它變成了一流的製造工廠。勞動力將繼續支持買方的活動，預計將於 2024 年 5 月 8 日完成交易。

Turning to Slide 15. In our 2024 overview. Given the number of key customer demonstrations underway in Q1 and Q2, we intend to report on progress when it occurs. As a result, we will not be providing specific annual revenue or unit guidance at this time. Workhorse is entering 2024 with strong production delivery capabilities as well, a keen focus on financial discipline and cost control.

轉到投影片 15。在我們的 2024 年概述中。鑑於第一季和第二季正在進行的主要客戶演示的數量，我們打算在發生時報告進度。因此，我們目前不會提供具體的年收入或單位指導。進入 2024 年，Workhorse 也將擁有強大的生產交付能力，並高度重視財務紀律和成本控制。

As we speak, we are working hard to resolve short term liquidity issues described in our 10-K over the year. We will maintain our focus on operational excellence and cost reduction as we increase production, expand delivery of our commercial vehicles to meet our financial targets for 2024. At the same time, we will continue to evaluate opportunities to strengthen our financial position.

正如我們所說，我們正在努力解決今年 10-K 中描述的短期流動性問題。隨著我們增加產量、擴大商用車的交付，以實現 2024 年的財務目標，我們將繼續專注於卓越營運和降低成本。同時，我們將繼續評估加強我們財務狀況的機會。

With that, I'll turn it back to Rick now to conclude.

現在我將把它轉回給里克來結束。

Thanks, Bob. To wrap up the call, I want to discuss our key near term priorities, which are on slide 16. Our focus on strengthening our financial position while we continue advancing our product roadmaps and ramp up production as we secure orders for our commercial EVs. And plain and simple terms, we want to make sure we have the financial runway to build and sell trucks and provide drone services to our customers. Achieving our goal of hiring the transition to zero-emission commercial vehicle is no easy feat and it's definitely not for the faint of heart.

謝謝，鮑伯。作為這次電話會議的結束語，我想討論我們近期的主要優先事項，這些事項請參閱投影片 16。我們的重點是加強我們的財務狀況，同時繼續推進我們的產品路線圖並在獲得商用電動車訂單時提高產量。簡而言之，我們希望確保我們擁有財務跑道來製造和銷售卡車並為客戶提供無人機服務。實現我們的租賃過渡到零排放商用車的目標並非易事，而且絕對不適合膽小的人。

We believe we can. We believe we will emerge as a segment winner in this once-in-a-generation powertrain technology transition. The pace of the transition to EVs is unpredictable, and we cannot predict the speed at which the transition will occur, but we can control to ensure we are 100% ready to meet the needs of our customers. We are prepared for the transition from every touch point of the builders process.

我們相信我們可以。我們相信，在這一千載難逢的動力總成技術轉型中，我們將成為細分市場的贏家。向電動車過渡的速度是不可預測的，我們無法預測過渡發生的速度，但我們可以控制以確保我們 100% 準備好滿足客戶的需求。我們已準備好從建造者流程的每個接觸點進行過渡。

We have the people, products, processes, supplier and commercial business partners to meet the needs of the market, when this EV transition hits its stride. We need our customers to start ramping up their own transition to EV powered vehicles and believe that two or three of the largest fleets here in North America are ready to do so, hopefully soon.

當電動車轉型大步前進時，我們擁有人員、產品、流程、供應商和商業業務合作夥伴來滿足市場需求。我們需要我們的客戶開始加快向電動車的過渡，並相信北美最大的兩到三個車隊已準備好這樣做，希望很快。

Our team's perseverance in the face of market and regulatory challenges is commendable and we remain determined and optimistic. The groundwork is done, and the foundations are in place for us to be the Class 4 -- 6 segment later in the commercial EV segment. We expect to emerge a winner in this space, and we look forward to continue to do the work to get ourselves there.

我們的團隊面對市場和監管挑戰的毅力值得讚揚，我們仍然堅定和樂觀。基礎工作已經完成，為我們以後進入商用電動車領域的 4-6 級細分市場奠定了基礎。我們期望成為這個領域的贏家，並期待繼續努力實現這一目標。

Now we'll open the call for questions.

現在我們將開始提問。

Donna, I'll turn it back over to you.

唐娜，我會把它還給你。

Thank you. (Operator Instructions)

謝謝。（操作員說明）

[Sherif Elmaghrabi, BTIG].

[謝里夫·埃爾馬格拉比，BTIG]。

Hey, everyone, thanks for taking my questions. So first, I want to start with -- how do you prioritize orders between the W56, 750 and the W4SDC this year, how are you managing that capacity?

嘿，大家好，謝謝你回答我的問題。首先，我想從今年開始，您如何確定 W56、750 和 W4SDC 之間的訂單優先順序，您如何管理這些產能？

We have to separate line. We actually have three separate lines. We have a dedicated chassis lines for W56, which has a corresponding cab and box line. So that's a separate line and we can do about 5,000 vehicles a year there. We talk to our suppliers and they can ramp up that levels well.

我們必須分開行。我們實際上有三個獨立的生產線。我們有W56專用的底盤線，有相應的駕駛室和箱體線。所以這是一條單獨的生產線，我們每年可以生產大約 5,000 輛車。我們與供應商交談，他們可以很好地提高這一水平。

Within two separate lines, we have the W4 CC line, which we are building at about four a week -- four-a-day sorry, before we put it on pause. And that leads into a separate W750 line, which we can build one or two a day there.

在兩條獨立的生產線中，我們有 W4 CC 生產線，我們正在以每周大約 4 條的速度建造——抱歉，每天 4 條，然後我們就暫停了。這通往一條單獨的 W750 生產線，我們每天可以在那裡建造一兩條。

Okay. So if you add our plant, you'd see very distinct assembly lines and still leaves about a third of the plant open for future products if you want to do something there.

好的。因此，如果您添加我們的工廠，您會看到非常獨特的裝配線，如果您想在那裡做一些事情，仍然會留下大約三分之一的工廠用於未來的產品。

That's helpful. Thank you. And then on the card mandate, can you tell us what you're hearing regarding its enforcement or revision?

這很有幫助。謝謝。關於卡片授權，您能告訴我們您所聽到的有關其執行或修訂的情況嗎？

That's like the million-dollar question. We've heard both sides of the equation in terms of the California trucking association taken exception with car and car saying that they're very firm and they're going to put it in place this year. We just don't know the timing. I'd be guessing if I tried to guess right now.

這就像價值百萬美元的問題。我們聽說加州卡車運輸協會對汽車和汽車表示反對，並表示他們非常堅定，並將在今年實施。我們只是不知道時間。如果我現在嘗試猜測，我就會猜測。

So we hope sooner rather than later, and we've talked to many fleets and many fleets in California, they have a very good handle on how many trucks they have in the state. They know what they have to do to meet the car mandate by the end of the year. And that's with that gets kicked in, it's a significant demand. And we're not sure there's a whole lot of people left to fill that demand. We want to be one of them.

因此，我們希望盡快，我們已經與加州的許多車隊和許多車隊進行了交談，他們非常清楚自己在該州擁有多少卡車。他們知道必須採取哪些措施才能在年底前滿足汽車需求。隨之而來的是，這是一個巨大的需求。我們不確定是否還有很多人可以滿足這項需求。我們想成為其中之一。

That's helpful. Thanks for taking my questions.

這很有幫助。感謝您回答我的問題。

Welcome.

歡迎。

(Operator Instructions)

（操作員說明）

At this time, I would like to turn it back over to Mr. Dauch for closing comments.

現在，我想把它轉回給 Dauch 先生以供結束評論。

Well, it must be lunchtime on the East Coast, and we appreciate it. And hopefully if you have any questions reach out to stand and we'll do that and hopefully we'll be able to report some good news on our demos and that turn into orders, get our plant work and stay busy. Thanks a lot for your interest in Workhorse. Thanks, bye.

嗯，現在一定是東岸的午餐時間了，我們很感激。希望如果您有任何疑問，請站出來，我們會這樣做，並希望我們能夠報告一些關於我們的演示的好消息，並將其轉化為訂單，讓我們的工廠開始工作並保持忙碌。非常感謝您對 Workhorse 的興趣。謝謝再見。

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

女士們、先生們，感謝您的參與。今天的活動到此結束。此時，您可以斷開線路或登出網路廣播，享受剩下的一天。