10-QPeriod: Q3 FY2010

Tesla, Inc. Quarterly Report for Q3 Ended Sep 30, 2010

Filed November 12, 2010For Securities:TSLA

Summary

Tesla, Inc. (TSLA) filed its Form 10-Q for the period ending September 29, 2010, detailing its financial performance and operational developments. The company reported total revenues of $31.2 million for the third quarter of 2010, a decrease from $45.5 million in the prior year's same quarter. This decline was primarily driven by lower automotive sales, though offset partially by new development services revenue. Despite reduced revenues, gross profit saw an increase to $9.3 million from $7.7 million, driven by improved product mix and early contributions from development services. The company's operational expenditures, particularly in research and development and selling, general, and administrative, increased significantly due to investments in the Model S development and expanding operations. This led to a wider operating loss of $37.8 million for the quarter, compared to $4.3 million in the prior year. Tesla raised significant capital through its Initial Public Offering (IPO) and a concurrent private placement with Toyota in July 2010, bringing in substantial cash which, combined with existing cash reserves and a Department of Energy loan facility, is expected to fund operations for the next 24 months.

Financial Highlights

25 data points
Beta

Revenue

$31.24M

29.8% Gross Margin

Net Income

-$34.94M

-111.8% Net Margin

Cash & Equivalents

$96.56M

Free Cash Flow

-$53.73M

Financial Statements
Beta
Revenue$31.24M
Cost of Revenue$21.95M
Gross Profit$9.30M
R&D Expenses$26.70M
SG&A Expenses$20.43M
Operating Expenses$47.13M
Operating Income-$37.83M
Interest Expense$298K
Net Income-$34.94M

Key Highlights

  • 1Total revenues decreased to $31.2 million in Q3 2010 from $45.5 million in Q3 2009, primarily due to lower automotive sales.
  • 2Gross profit increased to $9.3 million from $7.7 million year-over-year, driven by higher-margin development services and improved product mix.
  • 3Operating expenses surged, especially R&D and SG&A, leading to an operating loss of $37.8 million, significantly wider than the $4.3 million loss in Q3 2009.
  • 4The company successfully completed its Initial Public Offering (IPO) and a private placement with Toyota in July 2010, raising substantial capital.
  • 5Tesla drew down $56.6 million from its Department of Energy loan facility for powertrain and Model S development.
  • 6Cash and cash equivalents stood at $96.6 million at quarter-end, with an additional $88.1 million in restricted cash designated for the DOE loan facility.

Frequently Asked Questions

Tesla reported total revenues of $31.2 million for the three months ended September 30, 2010, a decrease from $45.5 million for the same period in 2009. This was mainly due to lower automotive sales, although new development services revenue partially offset this decline.

Tesla's profitability declined significantly. Despite an increase in gross profit to $9.3 million, a substantial rise in operating expenses (particularly R&D and SG&A) resulted in an operating loss of $37.8 million, a considerable increase from the $4.3 million operating loss in the prior year's quarter. The net loss widened to $34.9 million.

Tesla's key financing activities included the completion of its Initial Public Offering (IPO) in July 2010, which generated $188.8 million in net proceeds. Additionally, the company raised $50.0 million from a private placement with Toyota Motor Corporation. Tesla also drew down $56.6 million from its Department of Energy loan facility to support its Model S and powertrain development.

As of September 30, 2010, Tesla had $96.6 million in cash and cash equivalents. This was supplemented by $88.1 million in restricted cash held in a dedicated account related to its DOE loan facility, bringing total cash and cash equivalents to $184.7 million. The company stated that its current capital is expected to fund operations for the next 24 months.