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{"id":25658,"date":"2023-03-09T21:42:34","date_gmt":"2023-03-09T21:42:34","guid":{"rendered":"https:\/\/scienceandnerds.com\/2023\/03\/09\/arrival-is-running-out-of-cash-and-fast\/"},"modified":"2023-03-09T21:42:36","modified_gmt":"2023-03-09T21:42:36","slug":"arrival-is-running-out-of-cash-and-fast","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2023\/03\/09\/arrival-is-running-out-of-cash-and-fast\/","title":{"rendered":"Arrival is running out of cash \u2014 and fast"},"content":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/03\/09\/arrival-is-running-out-of-cash-and-fast\/<\/a><\/br>
\nArrival is running out of cash \u2014 and fast<\/br>
\n2023-03-09 21:42:34<\/br><\/p>\n

\n

The high cost of trying to develop and produce vehicles, a business pivot<\/a> and three restructurings<\/a> has taken a toll on commercial EV maker Arrival. And it doesn\u2019t look like it\u2019s going to get any easier for the company.<\/p>\n

Arrival, which went public in 2021 via a\u00a0merger with a special purpose acquisition company<\/a>, posted preliminary fourth-quarter and full-year earnings reports Thursday. The gist? Arrival is burning through cash and is on the hunt for more.<\/p>\n

Curiously, Arrival has pushed its earnings call and \u201cbusiness update\u201d to March 13<\/a>. (Public companies traditionally hold a call with investors and analysts the same day they report earnings.) These extra few days will allow the \u201ccompany to potentially finalize a transaction which, if consummated, would provide additional liquidity and further extend its runway.\u201d<\/p>\n

Arrival didn\u2019t disclose any details about the transaction and it\u2019s unclear if the company is selling assets, raising funds or both.<\/p>\n

The EV maker also issued a range for its quarterly and full-year losses, another odd move that suggests the company hasn\u2019t finalized its accounting. The range doesn\u2019t soften the news. Arrival is a sieve.<\/p>\n

The company has yet to generate any revenue and doesn\u2019t expect to until 2024<\/a>. Which means its results are all about expenses.<\/p>\n

Arrival reported a net loss of between $588 million and $597 million in the fourth quarter compared to a $67 million loss in the same year-ago period. That huge jump in losses is due in part to non-cash impairment charges and write-offs of about $406 million, according to the company. Even with that write-down removed, the company still saw its losses expand nearly threefold.<\/p>\n

Net losses for 2022 were between $998 million and $1 billion compared to a loss of $1.3 billion in the previous year. That might not seem so bad, in terms of comparison. However, Arrival notes that the full-year 2021 loss included a one-time non-cash charge of $1.2 billion that was associated with the merger of itself and CIIG.<\/p>\n

A loss is a loss is a loss. However, what that last detail tells us is that costs in 2022 were actually substantially higher than the previous year, despite the company still not generating revenue.<\/p>\n

The numbers are still eye-popping even on an adjusted EBITDA basis, which removes items like earnings before interest taxes, depreciation and amortization. Arrival reported an adjusted EBITDA loss in the fourth quarter of between $162 million and $172 million compared to a loss of $85 million in same year-ago quarter.<\/p>\n

Arrival said the increase in losses was due to $70 million in salary and contractor costs \u201cnot capitalized\u201d in the fourth quarter, as well as a $25 million expense for parts and subassemblies. That \u201cnot capitalized\u201d term is likely associated with the large number of layoffs that occurred last year. Costs can be capitalized when there is a long-term benefit. Salaries and contractor costs increased QoQ and YoY, but they are categorized as \u201cnot capitalized\u201d because of the layoffs.<\/p>\n

It was the same case in the full-year adjusted EBITDA results with Arrival posting a net loss of $379 million to $380 million in 2022 compared to a comparable adjusted loss of $203 million in 2021. The company said there was an added $102 million in salary and contractor costs \u201cnot capitalized\u201d and a $38 million increase in parts and <\/span>and subassemblies expenses.<\/p>\n

Those \u201cnot capitalized\u201d costs are likely to continue in the first quarter since the company cut more workers this year. In January, Arrival announced its third restructuring in a year with plans to cut its workforce<\/a> by about 50% to about 800 employees globally. Arrival said the layoffs along with other reductions in real estate and third-party spending will help it cut operating costs by $30 million a quarter.<\/p>\n

Arrival saw its administrative expenses also increase fourfold to $133 million in the fourth quarter of 2022, compared to the same period a year ago.<\/p>\n

And finally, there\u2019s the cash position. The company\u2019s cash fell by 33%, or about $126 million, to $205 million in the fourth quarter. The company said it used that cash for short-term obligations (aka working capital spend) as well as to repay interest on loans and lease liabilities and capital expenditures.<\/p>\n

Taking into account the company\u2019s expenses, $205 million is not going to be enough to keep its wheels turning through the rest of the year. And unless that unknown transaction delivers an EV van-load of cash, the company\u2019s demise may happen quicker than expected.<\/p>\n<\/p><\/div>\n

<\/br><\/br><\/br><\/p>\n

Science, Tech, Technology<\/br>
\n<\/br>
\nSource:https:\/\/techcrunch.com\/2023\/03\/09\/arrival-is-running-out-of-cash-and-fast\/<\/a><\/br><\/br><\/p>\n","protected":false},"excerpt":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/03\/09\/arrival-is-running-out-of-cash-and-fast\/ Arrival is running out of cash \u2014 and fast 2023-03-09 21:42:34 The high cost of trying to develop and produce vehicles, a business pivot and three restructurings has taken a toll on commercial EV maker Arrival. And it doesn\u2019t look like it\u2019s going to get any easier for the company. Arrival, which went public […]<\/p>\n","protected":false},"author":1,"featured_media":25659,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26,17,8],"tags":[],"class_list":["post-25658","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-science","category-tech","category-technology"],"yoast_head":"\nArrival is running out of cash \u2014 and fast - Science and Nerds<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/scienceandnerds.com\/2023\/03\/09\/arrival-is-running-out-of-cash-and-fast\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Arrival is running out of cash \u2014 and fast - Science and Nerds\" \/>\n<meta property=\"og:description\" content=\"Source:https:\/\/techcrunch.com\/2023\/03\/09\/arrival-is-running-out-of-cash-and-fast\/ Arrival is running out of cash \u2014 and fast 2023-03-09 21:42:34 The high cost of trying to develop and produce vehicles, a business pivot and three restructurings has taken a toll on commercial EV maker Arrival. 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