Completed $45.35 million Registered Direct offering led by M&G and Motherson securing production capital needs
Signed strategic agreement with Motherson, a global automotive supplier, to strengthen REE's supply chain management and cost structure, improve working capital efficiencies and expand outreach to global OEMs
Kicked-off U.S. production in Michigan with Roush as contract manufacturer for full vehicle assembly, with start of production planned for Q4 2024 and deliveries in 2025
Narrowed Q2 2024 net loss by 57% QoQ while concurrently reducing free cash flow burn by 19% QoQ
Increased order book by 15% QoQ, and by 289% YoY, which is valued at approximately $60 million to date as demand for Powered by REE vehicles continues to grow; REE's dealership network expands to 78 sales and service location in the U.S.
Observed significant growth of OEM interest in REE's software-defined EV technology
Company will hold a conference call at 8:30 a.m. ET today, September 26, 2024, which can be accessed via webcast at investors.ree.auto or web registration; and via conference call dial-in
TEL AVIV, Israel, Sept. 26, 2024 (GLOBE NEWSWIRE) -- REE Automotive Ltd. (NASDAQ:REE) ("REE" or the "Company"), an automotive technology company and provider of full by-wire electric trucks and platforms, today announced financial results for the three months ended June 30, 2024 alongside significant updates.
"The past few months have been pivotal for REE, marking key milestones we've worked toward for years. Our strategic manufacturing agreement with Motherson Group ("Motherson"), a global leader in engineering and automotive supply, is transformational, which we believe will enable us to scale faster while avoiding common operational challenges faced by others in the EV space," said Daniel Barel, Co-founder and CEO of REE. "We believe our product offering is the best in an underserved market, and demand continues to grow from fleets and OEMs. With our recent investment round, our funding is solid, and we've begun U.S. production of our P7 line with Roush. We're executing our strategy, focusing on technology leadership and cost reduction. I'm grateful to Motherson, M&G, and our long-term investors for their support, and to our global teams for their dedication."
Recent Highlights:
Operations:
Strategic partnership with Motherson to allow faster and more stable production scaleup alongside improvement to working capital. REE will leverage the extensive experience and capabilities of Motherson, a global engineering and manufacturing specialist and one of the world's leading automotive suppliers. For FY24, Motherson achieved gross revenue of $17.2 billion. Motherson will manage sourcing and supply chain of all production parts and support the assembly of the REEcorner® and REE P7 electric trucks, the first full by-wire ("XBW"), software-driven certified medium duty electric truck available on the market today. The collaboration with Motherson is expected to drive operational and manufacturing improvements to REE's production line, supply chain management, lower bill of materials (BOM), improved productivity and cost structure.
Contract manufacturing kickoff with Roush for full vehicle assembly for North America. During Q2 2024 REE signed a contract with Roush, a leading global product development supplier operating across more than 30 countries and subsequent to quarter end the Company has kicked off production and is preparing Roush's Michigan based facility to begin assembly of Powered by REE vehicles in Q4 2024. Roush will be supported by a joint Motherson and REE team, who will be responsible for quality checks, logistics and testing. REE will continue to manufacture its proprietary REEcorner® technology in its Coventry Integration Center in the UK where it already kicked off REEcorner production.
Production plan updates to address strong customer pull and capitalize on savings and efficiencies. The strategic supply chain management agreement with Motherson and the U.S. production kickoff at Roush, are expected to materially accelerate our ability to service customers at scale. Given the unmet market need and customer feedback on our superior product and technology we anticipate significant order growth. Now that we have secured the capital required for production, the execution of the strategic agreement with Motherson and the production kickoff at Roush, we are updating our production plan to start deliveries in 2025 in order to utilize our renewed capabilities while addressing the strong customer-pull we see and to capitalize on the significant saving and efficiencies our collaboration with Motherson is expected to enable. We believe the revised production and revenue plan will benefit our ability to address larger follow-on orders from fleets and OEMs and, coupled with the expected improved unit costs, accelerate the road to meaningful free-cash flow generation.
Business:
Orderbook increased by 15% QoQ, and by 289% YoY, valued today at approximately $60 million representing more than 400 P7 EVs ordered from 24 different customers across North America. This diverse orderbook allows REE access to more than 200 fleets. In addition, 50,000+ government and education entities can now purchase REE's software-defined electric trucks through a 4 years Sourcewell contract. We continue to receive strong positive customer feedback from our demo program as we continue to deliver more and more P7-C demo trucks to our dealers across the U.S.
REEcorner business line continues to show strong potential with now three OEMs considering integrating our REEcorners. We continue to see growing interest in our software defined technology by traditional and new OEMs considering integrating our REEcorners into their product line-ups thus gaining access to software-defined EV technology. We believe that, although this is a long-cycle business, continued expansion of our market leadership and continued execution on our strategic vision will result in the opportunity to license our XBW technology across vehicle classes and categories, making REE the "intel Inside" of automotive.
REE's authorized dealer network, one of North America's largest of pure commercial EVs, continues to expand now covering 78 sales and service points. This is a key strength for our fleet-customers who seek nationwide service and support.
Programs are ongoing with Penske and U-Haul. During Q2 2024, REE delivered a P7-C upfitted with a 16-foot Wabash DuraPlate® body to Penske Trucks Leasing which began to offer Powered by REE electric vehicles to its customers for demos and orders across North America. Concurrently, U-Haul received the first P7-S platform and is evaluating it as the first solution to support the electrification of its fleet.
Airbus autonomous program. Airbus has fitted Powered by REE® truck with basic A350 airliner controls to demonstrate the first ever an autonomous drive on runways in France as part of Airbus' three-year "Optimate" project. According to Airbus, they expect to see this technology tested in a full flight within one year in the A350 with more platforms to come. This project further improves the future of aviation, airport ground traffic management and safety, and REE's technology is in its core.
Financials:
Secured $45.35 million (gross) registered direct offering led by M&G and Motherson priced at $4.122 per share, a 39% premium to the closing price on September 13, 2024.
Second quarter net loss narrowed by 57% QoQ to $10.8 million compared to $25.2 million in Q1 2024 and narrowed by 59% year-over-year (YoY) compared to $26.2 million in Q2 2023. The QoQ decrease was mainly driven by an increase in recognition of grants from the UK government, income from remeasurement of warrants and derivative liabilities, lower engineering costs related to the development of the P7 EV Platform, a decrease in income tax expenses as well as other operational efficiencies. The YoY decrease was mainly driven by an increase in recognition of grants from the UK government, income from remeasurement of warrants and derivative liabilities, lower engineering costs related to the development of the P7 EV Platform, lower share-based compensation expense as well as other operational efficiencies.
Non-generally accepted accounting principles (non-GAAP) net loss in the quarter narrowed by 41% QoQ to $12.4 million compared to $21.2 million in Q1 2024 and narrowed by 43% from $22.0 million in Q2 2023.
Free cash flow (FCF) burn continued to narrow in Q2 2024, with a 19% reduction from Q1 2024, consistent with the trend in full year 2023 when REE reported a 25% YoY decrease in FCF burn.
REE ended Q2 2024 with liquidity of $60.5 million comprised of cash and cash equivalents and short-term investments, inclusive of a $15 million credit facility.
REE raised approximately $1.4 million in proceeds between April 1, 2024 and September 26, 2024 by issuing 263,455 Class A Ordinary Shares under the At the Market Offering Agreement with H.C. Wainwright & Co., LLC.
A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
REE AUTOMOTIVE LTD.Condensed Consolidated Statements of Comprehensive LossU.S. dollars in thousands (except share and per share data) (Unaudited)
Three Months Ended
Six Months Ended
June 30,2024
March 31,2024
June 30,2023
June 30,2024
June 30,2023
Revenues
$
—
$
160
$
943
$
160
$
943
Cost of revenues
651
804
943
1,455
943
Gross loss
$
(651
)
$
(644
)
$
—
$
(1,295
)
$
—
Operating expenses:
Research and development expenses, net
8,063
15,358
19,337
23,421
38,211
Selling, general and administrative expenses
6,931
7,170
8,087
14,101
18,930
Total operating expenses
14,994
22,528
27,424
37,522
57,141
Operating loss
$
(15,645
)
$
(23,172
)
$
(27,424
)
$
(38,817
)
$
(57,141
)
Income (loss) from warrants remeasurement
2,586
(706
)
—
1,880
—
Financial income, net
2,130
131
1,076
2,261
2,137
Net loss before income tax
(10,929
)
(23,747
)
(26,348
)
(34,676
)
(55,004
)
Income tax expense (income)
(142
)
1,436
(137
)
1,294
(171
)
Net loss
$
(10,787
)
$
(25,183
)
$
(26,211
)
$
(35,970
)
$
(54,833
)
Net comprehensive loss
$
(10,787
)
$
(25,183
)
$
(26,211
)
$
(35,970
)
$
(54,833
)
Basic and diluted net loss per Class A ordinary share (1)
$
(0.84
)
$
(2.28
)
$
(2.61
)
$
(3.01
)
$
(5.49
)
Weighted average number of ordinary shares used in computing basic and diluted net loss per share (1)
