Workhorse Group, a small producer of electrical vans that has come beneath investigation by federal authorities, on Tuesday reported a lack of $81 million for the three months ending in September on account of rising working prices and a manufacturing stoppage associated to a recall.
The corporate additionally reported unfavorable income of $576,600 as a result of it needed to give prospects refunds for vans that it was required to take again and modify so as to adjust to federal security requirements.
Workhorse mentioned in a regulatory submitting on Monday that it was being investigated by the Securities and Change Fee and the Justice Division. The S.E.C. probe is said to buying and selling in Workhorse inventory earlier than the announcement in February that it had failed in a bid to win a big contract from the USA Postal Service, a improvement that induced a steep drop in Workhorse shares.
Of the Justice Division’s investigation, Workhorse mentioned solely that it was “associated.”
“We now have not acquired any subpoena or different request for additional paperwork from the D.O.J. with respect to this investigation,” Workhorse’s chief govt, Rick Dauch, mentioned on a convention name with monetary analysts after the earnings announcement on Tuesday. “At this level, we can’t predict the eventual scope, period or consequence of those issues.”
He mentioned Workhorse was cooperating with each the S.E.C. and the Justice Division.
Though it’s small, Workhorse gained prominence in 2019 when its founder, Steve Burns, agreed to purchase an auto plant in Lordstown, Ohio, that had been idled by Normal Motors, and President Donald J. Trump lauded the deal on Twitter. Mr. Burns then left Workhorse and fashioned Lordstown Motors and deliberate to make use of the plant to supply an electrical pickup truck.
Lordstown has struggled to place its truck into manufacturing and is itself dealing with investigations into its enterprise by the S.E.C. and the Justice Division.
On the convention name, Mr. Dauch mentioned Workhorse was attempting to determine whether or not to proceed producing the C-1000 electrical van, which it had hoped to promote to delivery corporations like Federal Categorical and UPS. He mentioned the design was “not sturdy neither is it worthwhile.”
Earlier this yr, Workhorse offered 41 of the vans earlier than it had completed ensuring C-1000 design complied with federal security requirements. The corporate suspended additional gross sales till the testing was full, took again the 41 automobiles, and has slowed manufacturing to 2 vans per week.
Mr. Dauch additionally mentioned Workhorse was attempting to plan what vans it might produce sooner or later. “We’re an actual firm,” he mentioned.
Workhorse’s inventory was buying and selling at $6.65 on Tuesday afternoon, down 3.5 p.c. Since early February, the shares have fallen greater than 80 p.c.