electric bus manufacturer
Made progress last year, but not as much as investors were hoping. The stock was falling sharply in premarket trading.
Cash may be the biggest problem facing the company and it is doubtful that it can survive in its current form. “When we file our 2022 [annual report on a form] 10-K, it will include the conclusion of management and our auditor that there is “substantial doubt about our ability to continue as a going concern,” CEO Gareth Joyce said on the company’s earnings conference call.
Protera (ticker: PTRA) has a minimum liquidity covenant tied to $170 million in convertible debt: the cash balance must exceed four times quarterly cash consumption. At the end of the fourth quarter, the covenant was dissolved. It got a waiver from lenders that extends to the first quarter.
The company ended the quarter with approximately $300 million in cash and used approximately $110 million.
If Protera does not negotiate a settlement or obtain a further waiver, $170 million in the notes will become payable immediately. Joyce says he is optimistic a solution can be reached with the lenders.
On the earnings and deliveries front, Protera said it delivered 199 electric buses in 2022, down 4 buses year-on-year. As well as buses, Protera manufactures battery packs for electric commercial vehicles as well as charging equipment and infrastructure. Those businesses are growing.
Proterra delivered 1,229 battery systems in 2022, up 350% year over year. Battery output increased by 81% to 342 MWh. Charging infrastructure shipments are set to reach 35.3 MW in 2022, up from 14.5 MW in 2021.
Despite progress, financial metrics languished. Fourth quarter adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, was negative $60 million from $80 million in sales. Wall Street was looking for an EBITDA loss of $50 million from sales of $86 million.
Guidance for 2023 also came in below expectations. The company expects 2023 sales to fall between $450 million and $500 million. The midpoint of guidance is more than 50% above full-year 2022 sales of $309 million, but Wall Street is forecasting $517 million in sales.
Cash issue, higher expenses, lower sales and slower than expected growth dragged the shares down. Protera stock was down 26% in premarket trading on Thursday.
Futures fell 0.3%. on futures
When Protera merges with a special purpose acquisition company to raise money in January 2021, it expected To generate $838 million in 2023 sales. Business has developed at a slower pace than expected. Expectations are getting reset on that reality.
Protera expects operating expenses to decline in 2023 and equipment spending should be around $25 million. Cash use for 2023 should be slightly more than $200 million.
As of Thursday’s trading, Protera stock has fallen about 33% this year and about 64% over the past 12 months.
Write to Al Root at [email protected]