REE Automotive Ltd. (NASDAQ:REE) Q4 2023 Earnings Call Transcript March 27, 2024
REE Automotive Ltd. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day and thank you for standing by. Welcome to the REE Automotive Fourth Quarter 2023 Full Year Financial Results. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Kamal Hamid, Vice President of Investor Relations. Please go ahead.
Kamal Hamid: Thank you, operator and thank you all for joining our fourth quarter 2023 conference call. We hope that you have seen our press release and shareholder letter issued earlier this morning at investors.ree.auto. If you haven’t, I encourage you to review it as it has additional insights into the topics we will talk about on today’s call. I would like to remind you that today’s call may include forward-looking statements. Any statements describing our beliefs, goals, plans, strategies, expectations, projections, forecasts and assumptions are forward-looking statements. Please note that the company’s actual results may be different from anticipated by such forward-looking statements for a variety of reasons, many of which are beyond our control, such as the ongoing military conflict in Israel.
Please refer to the company’s Form 20-F filed today, March 27, 2024, with the Securities and Exchange Commission which identifies principal risks and uncertainties that could affect our business prospects and future results. We assume no obligation to publicly update any forward-looking statements, except as required by law. In addition, we will be discussing or providing certain non-GAAP financial measures today, including non-GAAP net loss and non-GAAP operating expenses. Please see our shareholder letter for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. I will now hand the call over to Daniel Barel, our CEO and Co-Founder.
Daniel Barel: Thanks, Kamal and thank you all for joining us today. 2023 was a pivotal year for REE. We achieved key milestones in line with our original time line and derisked our go-forward path, all while keeping true to our vision to expedite and solidify the electrification of commercial trucks through a white-label approach. I’m happy to report that much of the heavy lifting is behind us on the path to commercialization with a clean sheet design and unbound by legacy thinking. Our full by-wire technology is mature. I’m proud to say that we have created the world’s first FMVSS certified full by-wire electric vehicle, allowing us to advance the state-of-the-art in the medium-duty commercial vehicle space by orders of magnitude compared to other EVs and ICE offering.
We continue to push the boundaries of our product testing vehicle dynamics and operations, having successfully conducted our second consecutive year of winter testing under extreme weather conditions. We have also made significant progress on the business side. With the strong demand we see, our order book value grew by more than 900% year-over-year and now exceeds $50 million and our dealer network continues to expand to 66 points of sales and service in the U.S. and Canada. With CARB certification and the U.S. EPA, our P7-C customers are eligible for federal and state incentives of over $100,000 per vehicle. Our first vehicle was driven off the line and has been upfitted with Knapheide body and delivered to one of our largest commercial vehicle dealers in the country.
With the first customer deliveries to our demo fleet completed and more underway, we plan to advance towards scale production later this year while remaining focused on our business plan and the P7 lineup. Alongside our significant progress, we remain financially disciplined with a 25% year-over-year decrease in cash burn with tooling investment for the REEcorners deployed. We ended the year with $86 million in cash, cash equivalents and short-term investments, including a $15 million credit bank facility. Confident in REE’s bright future, our largest institutional shareholder, M&G, has led 2 successful capital raises for a total of $24 million alongside existing and new investors and I thank them for their ongoing support and trust. With those behind us, we continue our effort to secure in advance the necessary working capital need for our first phase of production of low hundreds of trucks.
As we remain disciplined and with current market conditions, we decided to temporarily postpone the remaining production tooling investment until we raise the additional required working capital for our production plan. We target completing the remaining tooling investment by midyear in order to scale up production in the U.S. as we build against committed orders and not for inventory. This strategy ensures we do not exceed our available capital by aligning orders flow with production plans for greater capital efficiency. 2023 was a pivotal year for REE because of what we have achieved and because we have accomplished it together despite many of us facing significant geopolitical instability. For that, I am so very proud of each of our great people at team REE.
With that, we’ll open up the call for questions. Operator?
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