Embark Announces Third Quarter 2022 Financial Results
08 Novembro 2022 - 9:35AM
Embark Technology, Inc. (Nasdaq: EMBK) (“Embark”), a leading
developer of autonomous technology for the trucking industry, today
announced financial results for the quarter ended
September 30, 2022 and provided a business update.
“We are proud of the consistent expansion of the
Embark Coverage Map culminating with the recent launch of the
Coast-to-Coast backbone covering nine transfer point sites and
opening 9.5B miles of annual freight to our carrier partners,
representing 28% of shipping volumes in the Sunbelt,” said Alex
Rodrigues, CEO of Embark. “As we close out 2022, we expect to
deliver the first Embark-equipped TTP truck to Knight-Swift as they
prepare to operate AV trucks within their fleet with their own
staff in 2023. Embark has made significant progress on
our technical capability roadmap this year, and we are on track to
complete our evasive maneuvers milestone next month, clearing
another critical hurdle to commercial deployment of Embark
Driver.”
Key Company Highlights
- Announced the
Launch of the Coast-to-Coast Backbone of the Embark Coverage Map.
The Coverage Map contains nine transfer point sites in cities
across the Sunbelt, including new locations in Dallas, El Paso,
Atlanta, and Jacksonville, to accommodate planned freight volume in
key markets and provide anticipated operational support for
carriers and shippers using Embark-powered trucks. Embark secured
optimized real estate sites and support services through its
partnerships with Alterra Property Group and Ryder.
- Reaffirms 2022 Cash
Flow Spend Guidance of $100 million to $115 million Reflecting Our
Focused Spend Strategy. Continued operational process improvements,
focused hiring and efficiencies enable us to reaffirm our 2022 free
cash flow spend guidance of $100 million to $115 million.
- Embark’s 1-for-20
Reverse Stock Split Completed in August 2022. Embark shareholders
overwhelmingly approved the 1-for-20 reverse stock split based on
the closing price as of August 16, 2022. Embark’s common stock
began trading on a split-adjusted basis when the market opened on
August 17, 2022.
- Penny Herscher
Appointed Independent Board Chairperson and Chair of Compensation
Committee. Ms. Herscher is an accomplished public company board
director, executive and entrepreneur in the high tech industry with
more than 15 years of experience as CEO and as a public company
board director. She joins Embark’s Board as Chairperson and
Compensation Committee Chair.
Third Quarter 2022 Financial
Highlights
- Cash and cash
equivalents were approximately $191.0 million as of
September 30, 2022.
- Net loss was $35.4
million for the three months ended September 30, 2022, or $1.53 per
share, compared to $19.1 million, or $2.69 per share, for three
months ended September 30, 2021. Net loss was $68.2 million for
nine months ended September 30, 2022, or $2.98 per share, compared
to $47.8 million, or $6.73 per share, for nine months ended
September 30, 2021.
- Adjusted EBITDA
loss was $24.7 million for three months ended September 30, 2022,
compared to adjusted EBITDA loss of $14.2 million for the three
months ended September 30, 2021. Adjusted EBITDA loss was $71.8
million for the nine months ended September 30, 2022 compared to
adjusted EBITDA loss of $35.0 million for the nine months ended
September 30, 2021.
- Stock-based
compensation was $10.9 million for the three months ended September
30, 2022 compared to $0.6 million for the three months ended
September 30, 2021. Stock-based compensation was $39.9 million for
the nine months ended September 30, 2022 compared to $1.7 million
for the nine months ended September 30, 2021.
- Net cash used in
operating activities was $66.3 million for the nine months ended
September 30, 2022 compared to $32.9 million for the nine months
ended September 30, 2021.
- Free cash flow
spend was $29.4 million for the three months ended September 30,
2022 compared to $13.6 million for the three months ended September
30, 2021. Free cash flow spend was $74.1 million for the nine
months ended September 30, 2022 compared to $35.6 million for the
nine months ended September 30, 2021. Embark reaffirms its expected
free cash flow to spend for 2022 to be in the range of
$100 million to $115 million.
For a reconciliation of a non-GAAP figure to the
applicable GAAP figure please see the table captioned
“Reconciliation of GAAP and Non-GAAP Results” set forth at the end
of this press release.
Webcast and Conference Call
Information
The Company will discuss these results and other
related matters at 5:30 a.m. Pacific Standard Time on November 8,
2022 in a live webcast, which will also be archived for replay on
the Company’s website at https://investors.embarktrucks.com/. The
Company will post the earnings press release and earnings
presentation under the “Quarterly Results” section on the Investor
Relations website. This press release is being furnished as a
Current Report on Form 8-K with the Securities and Exchange
Commission, and will be available at www.sec.gov.
About Embark
Embark Technology, Inc. (Nasdaq: EMBK) is an
autonomous vehicle company building the software powering
autonomous trucks, focused on improving the safety, efficiency, and
sustainability of the approximately $730 billion a year U.S.
highway truck freight market. Headquartered in San Francisco, CA
since its founding in 2016, Embark is America’s longest-running
self-driving truck program and partners with some of the largest
shippers and carriers in the nation.
Embark’s mission is to realize a world where
consumers pay less for the things they need, drivers stay close to
the homes they cherish, and roads are safer for the people we love.
To learn more about Embark, visit embarktrucks.com.
Contacts
Investor Relations:
investorrelations@embarktrucks.comMedia: Misha Rindisbacher,
press@embarktrucks.com
Forward-Looking Statements
This press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934 and
the “safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. Embark’s actual results may differ from their
expectations, estimates and projections and consequently, you
should not rely on these forward-looking statements as predictions
of future events. Words such as “expect,” “estimate,” “project,”
“budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,”
“will,” “could,” “should,” “believes,” “predicts,” “potential,”
“continue,” and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements
include, without limitation, Embark’s expectations with respect to
future performance. These forward-looking statements also involve
significant risks and uncertainties that could cause the actual
results to differ materially from the expected results. Factors
that may cause such differences include, but are not limited to:
(1) ability to expand into new markets; (2) changes in the
applicable laws or regulations; (3) the possibility that Embark may
be adversely affected by other economic, business, and/or
competitive factors; (4) the impact of the global COVID-19
pandemic; (5) funding requirements for R&D and
commercialization activities; and (6) other risks and uncertainties
separately provided to you and indicated from time to time as
described in filings and potential filings by Embark with the U.S.
Securities and Exchange Commission (the “SEC”), including those
discussed in the Annual Report on Form 10-K for the year ended
December 31, 2021, filed on March 21, 2022, Form S-1 filed on June
1, 2022, and other documents filed with the SEC from time to time.
These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Embark cautions that the foregoing list of factors is not
exhaustive and not to place undue reliance upon any forward-looking
statements, including projections, which speak only as of the date
made. Embark undertakes no obligation to and accepts no obligation
to release publicly any updates or revisions to any forward-looking
statements to reflect any change in its expectations or any change
in events, conditions or circumstances on which any such statement
is based.
Embark Technology, Inc. Consolidated
Condensed Balance Sheets(in
thousands)(unaudited) |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
191,040 |
|
|
$ |
264,615 |
|
Restricted cash, short-term |
|
65 |
|
|
|
130 |
|
Prepaid expenses and other current assets |
|
9,416 |
|
|
|
12,746 |
|
Total current assets |
|
200,521 |
|
|
|
277,491 |
|
Restricted cash, long-term |
|
812 |
|
|
|
275 |
|
Property, equipment and software, net |
|
17,686 |
|
|
|
9,637 |
|
Operating lease right-of-use assets |
|
22,941 |
|
|
|
— |
|
Other assets |
|
6,365 |
|
|
|
3,596 |
|
Total assets |
$ |
248,325 |
|
|
$ |
290,999 |
|
Liabilities and stockholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
2,758 |
|
|
$ |
2,497 |
|
Accrued expenses and other current liabilities |
|
9,226 |
|
|
|
3,142 |
|
Current portion of operating lease liabilities |
|
3,251 |
|
|
|
— |
|
Short-term notes payable |
|
492 |
|
|
|
358 |
|
Total current liabilities |
|
15,727 |
|
|
|
5,997 |
|
Long-term notes payable |
|
1,421 |
|
|
|
722 |
|
Warrant liability |
|
1,621 |
|
|
|
49,419 |
|
Non-current portion of operating lease liabilities |
|
20,090 |
|
|
|
— |
|
Other long-term liability |
|
110 |
|
|
|
50 |
|
Long-term deferred rent |
|
— |
|
|
|
177 |
|
Total liabilities |
$ |
38,969 |
|
|
$ |
56,365 |
|
Commitments and contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock |
|
— |
|
|
|
— |
|
Class A common stock |
|
2 |
|
|
|
36 |
|
Class B common stock |
|
— |
|
|
|
9 |
|
Additional paid-in capital |
|
460,440 |
|
|
|
417,492 |
|
Accumulated deficit |
|
(251,086 |
) |
|
|
(182,903 |
) |
Total stockholders’ equity |
|
209,356 |
|
|
|
234,634 |
|
Total liabilities and stockholders’ equity |
$ |
248,325 |
|
|
$ |
290,999 |
|
|
|
|
|
|
|
|
|
Embark Technology, Inc.Consolidated
Condensed Statement of Operations(in thousands,
except share and per share
data)(unaudited) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
$ |
21,691 |
|
|
$ |
11,481 |
|
|
$ |
59,427 |
|
|
$ |
26,823 |
|
General and administrative |
|
16,050 |
|
|
|
4,593 |
|
|
|
56,741 |
|
|
|
11,585 |
|
Total operating expenses |
|
37,741 |
|
|
|
16,074 |
|
|
|
116,168 |
|
|
|
38,408 |
|
Loss from operations |
|
(37,741 |
) |
|
|
(16,074 |
) |
|
|
(116,168 |
) |
|
|
(38,408 |
) |
Other income (expense): |
|
|
|
|
|
|
|
Change in the fair value of derivative liability |
|
— |
|
|
|
(1,010 |
) |
|
|
— |
|
|
|
(5,783 |
) |
Change in fair value of warrant liability |
|
1,390 |
|
|
|
— |
|
|
|
47,799 |
|
|
|
— |
|
Other income (expense) |
|
181 |
|
|
|
12 |
|
|
|
(413 |
) |
|
|
18 |
|
Interest income |
|
758 |
|
|
|
13 |
|
|
|
931 |
|
|
|
83 |
|
Interest expense |
|
— |
|
|
|
(2,058 |
) |
|
|
(332 |
) |
|
|
(3,735 |
) |
Loss before provision for income taxes |
|
(35,412 |
) |
|
|
(19,117 |
) |
|
|
(68,183 |
) |
|
|
(47,825 |
) |
Net loss |
$ |
(35,412 |
) |
|
$ |
(19,117 |
) |
|
$ |
(68,183 |
) |
|
$ |
(47,825 |
) |
Net loss attributable to common stockholders, basic and
diluted |
$ |
(35,412 |
) |
|
$ |
(19,117 |
) |
|
$ |
(68,183 |
) |
|
$ |
(47,825 |
) |
Net loss per share attributable to common stockholders: |
|
|
|
|
|
|
|
Basic and diluted, Class A and Class B |
$ |
(1.53 |
) |
|
$ |
(2.69 |
) |
|
$ |
(2.98 |
) |
|
$ |
(6.73 |
) |
Weighted-average shares used
in computing net loss per share attributable to common
stockholders: |
|
|
|
|
|
|
|
Basic and diluted |
|
23,145,180 |
|
|
|
7,111,106 |
|
|
|
22,880,503 |
|
|
|
7,111,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Embark Technology, Inc.Consolidated
Condensed Statements of Cash Flows(in
thousands)(unaudited) |
|
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
Cash flows from operating activities |
|
|
|
Net loss |
$ |
(68,183 |
) |
|
$ |
(47,825 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
Depreciation and amortization |
|
1,438 |
|
|
|
756 |
|
Amortization expense - right-of-use assets - operating leases |
|
1,841 |
|
|
|
— |
|
Stock-based compensation, net of amounts capitalized |
|
39,942 |
|
|
|
1,661 |
|
Issuance of warrants for services |
|
— |
|
|
|
1,775 |
|
Change in fair value of warrants |
|
(47,799 |
) |
|
|
— |
|
Net amortization of premiums and accretion of discounts on
investments |
|
— |
|
|
|
265 |
|
Loss on sale of property, equipment and software |
|
(147 |
) |
|
|
— |
|
Amortization of debt discount |
|
— |
|
|
|
3,735 |
|
Change in the fair value of derivative liability |
|
— |
|
|
|
5,783 |
|
Issuance of common stock for services |
|
666 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
Prepaid expenses and other current assets |
|
3,144 |
|
|
|
(911 |
) |
Other assets |
|
(2,769 |
) |
|
|
(3,229 |
) |
Accounts payable |
|
1,055 |
|
|
|
2,759 |
|
Other long-term liabilities |
|
60 |
|
|
|
49 |
|
Accrued expenses and other current liabilities |
|
4,482 |
|
|
|
2,324 |
|
Net cash used in operating activities |
|
(66,270 |
) |
|
|
(32,858 |
) |
Cash flows from investing activities |
|
|
|
Maturities of investments |
|
— |
|
|
|
48,239 |
|
Purchase of property, equipment and software |
|
(8,201 |
) |
|
|
(2,380 |
) |
Proceeds from sale of property, equipment and software |
|
399 |
|
|
|
— |
|
Deposit for purchase of trucks |
|
— |
|
|
|
(400 |
) |
Refund of deposit for trucks |
|
— |
|
|
|
47 |
|
Net cash provided by (used in) investing activities |
|
(7,802 |
) |
|
|
45,506 |
|
Cash flows from financing activities |
|
|
|
Cash proceeds received from convertible note payable |
|
— |
|
|
|
25,001 |
|
Payment towards notes payable |
|
(346 |
) |
|
|
(140 |
) |
Proceeds from exercise of stock options |
|
1,319 |
|
|
|
149 |
|
Repurchase of early exercised stock options |
|
(4 |
) |
|
|
— |
|
Deferred offering costs |
|
— |
|
|
|
(827 |
) |
Net cash provided by financing activities |
|
969 |
|
|
|
24,183 |
|
Net increase (decrease) in cash, cash equivalents and restricted
cash |
|
(73,103 |
) |
|
|
36,831 |
|
Cash, cash equivalents and restricted cash at beginning of
period |
|
265,020 |
|
|
|
11,460 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
191,917 |
|
|
$ |
48,291 |
|
Supplemental disclosures of cash flow
information: |
|
|
|
Cash paid during the year for interest |
$ |
18 |
|
|
$ |
— |
|
Supplemental schedule of noncash investing and financing
activities |
|
|
|
Acquisition of property, equipment and software in accounts
payable |
$ |
1,038 |
|
|
$ |
71 |
|
Acquisition of trucks by assuming notes payable |
$ |
1,420 |
|
|
$ |
278 |
|
Right-of-use assets obtained in exchange for lease obligations |
$ |
24,782 |
|
|
$ |
— |
|
Deferred offering costs in accrued liability |
$ |
— |
|
|
$ |
3,275 |
|
Stock-based compensation capitalized into internally developed
software |
$ |
1,144 |
|
|
$ |
160 |
|
Vesting of early exercised stock options |
$ |
43 |
|
|
$ |
39 |
|
Issuance of common stock for services |
$ |
666 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and Non-GAAP
ResultsEmbark Technology,
Inc.Reconciliation of Adjusted
EBITDA(in
thousands)(unaudited) |
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net loss |
$ |
(35,412 |
) |
|
$ |
(19,117 |
) |
|
$ |
(68,183 |
) |
|
$ |
(47,825 |
) |
Interest income and expense, net |
|
(758 |
) |
|
|
2,045 |
|
|
|
(599 |
) |
|
|
3,652 |
|
Depreciation and amortization |
|
604 |
|
|
|
282 |
|
|
|
1,438 |
|
|
|
756 |
|
Amortization on right-of-use assets -operating leases |
|
837 |
|
|
|
— |
|
|
|
1,841 |
|
|
|
— |
|
EBITDA |
$ |
(34,729 |
) |
|
$ |
(16,790 |
) |
|
$ |
(65,503 |
) |
|
$ |
(43,417 |
) |
Stock-based compensation expense(1) |
|
10,919 |
|
|
|
562 |
|
|
|
39,942 |
|
|
|
1,661 |
|
Change in fair value of warrant liabilities(2) |
|
(1,390 |
) |
|
|
— |
|
|
|
(47,799 |
) |
|
|
— |
|
Change in the fair value of derivative liability |
|
— |
|
|
|
1,010 |
|
|
|
— |
|
|
|
5,783 |
|
One-time adjustment(3) |
|
480 |
|
|
|
1,000 |
|
|
|
914 |
|
|
|
1,000 |
|
Upfront CEF commitment fee (noncash)(4) |
|
— |
|
|
|
— |
|
|
|
666 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
(24,720 |
) |
|
$ |
(14,218 |
) |
|
$ |
(71,780 |
) |
|
$ |
(34,973 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects, for the periods presented,
stock-based compensation expense related to the issuance of stock
options, Restricted Stock Units (RSUs) including performance-based
restricted stock units (PSUs) and Common Stock Units (CSUs) to
Embark employees and non-employees.(2) Reflects the decrease in the
fair values of Embark's warrants.(3) Professional service fees
incurred in connection with business combination in 2021 and
committed equity financing in 2022.(4) Upfront commitment fee
incurred in connection with committed equity facility (“CEF”) in
2022.
Embark Technology, Inc.Free Cash
Flow(in
thousands)(unaudited) |
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash used in operating activities (GAAP) |
$ |
(26,004 |
) |
|
$ |
(12,773 |
) |
|
$ |
(66,270 |
) |
|
$ |
(32,857 |
) |
Capital expenditures including truck deposits, net of returns |
|
(3,399 |
) |
|
|
(833 |
) |
|
|
(7,802 |
) |
|
|
(2,733 |
) |
Free cash flow (Non GAAP) |
$ |
(29,403 |
) |
|
$ |
(13,606 |
) |
|
$ |
(74,072 |
) |
|
$ |
(35,590 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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