• Sep 12, 2012
Smith Electric Vehicles has been patiently waiting to go public on Wall Street, and the time might soon arrive. The Kansas City, MO-based maker of electric delivery vehicles supplies trucks to clients such as Coca-Cola, FedEx Corp. and DHL, and filed for its initial public offering in November.

UBS Investment Bank, Deutsche Bank Securities and Barclays are lead underwriters for the deal, which is expected to contain 4.45 million shares at between $16 and $18 in its IPO. Smith Electric Vehicles expects to sell 4.2 million of those shares in the offering (selling stock holders will offer the rest) and the Nasdaq IPO is expected to bring in about $76 million. The proceeds raised will primarily be used for paying down debt. The U.S.-based company was purchased in 2011 from its UK-based parent company, which has been in operation in Europe since the 1920s. Smith Electric Vehicles puts out the Smith Newton and Smith Edison electric vehicles, which can be configured for multiple applications. They're built at manufacturing facility in Kansas City and outside of Newcastle, UK.

The public stock sales date has not yet been provided, and the funding has been needed for a while. Last year, Smith reported a net loss of $52.5 million on $49.9 million in revenue, and said it lost $27.3 million in the first six months of this year, compared with $21.2 million during the same period last year.

They're being bought as fleet trucks by several companies, but they are costing more than comparable diesel-powered vehicles. Going public can be very good for an EV maker to become profitable, but it does take a lot of hard work, creativity, and dedication.


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  • 19 Comments
      Spec
      • 2 Years Ago
      Good for them! They word a narrow specialized market that can probably absorb some of the higher costs easier. And for local delivery within a city, electric does a great job.
      Breconeer
      • 2 Years Ago
      Incidentally, the image here is an older one showing an outdated website address on the side of the truck. The url is now www.smithelectric.com
      Breconeer
      • 2 Years Ago
      IPO ROADSHOW PRESENTATION - video & slides. Well worth watching. It runs for 38 minutes. After the video stops, check for further unseen slides before ending. Every aspect is addressed here. http://www.retailroadshow.com/roadshows.asp
      imoore
      • 2 Years Ago
      I'm waiting for one of my local school systems to get one of Smith's electric buses. I actually like it.
      Dave D
      • 2 Years Ago
      I've always thought that delivery vehicles or possibly school buses, would be the first break through area for pure EVs. There are plenty of low speed, low mileage routes that work for both and they play to the strengths of EVs. The delivery vehicles are probably easier to start with because they don't have to deal with the liability and eons of testing that will have to go into vehicles that haul our children around (at least until people get more comfortable with EVs in general). But I'm very excited to see someone on a good road to success. It does seem a little early for an IPO and I hope it won't hurt them because it does bring baggage on what you can do financially and reporting wise which is very hard on a company trying to establish itself. Hopefully they will be able to turn the money to their advantage and do well. I certainly wish them all the best and will probably put a little money into their stock. Hell, as long as it's something you can afford to lose...why not put your money where your mouth is and support a company whose taking a shot.
        Nick
        • 2 Years Ago
        @Dave D
        "why not put your money where your mouth is and support a company whose taking a shot." Well said. It's a risky bet, but risky bets also have potentially large rewards in case things go well.
      Rotation
      • 2 Years Ago
      Are you kidding me? Look, nothing against the company, I like the company. But companies really should be more established before going public. I guess the underwriters just don't reject anyone anymore.
        Breconeer
        • 2 Years Ago
        @Rotation
        Smith have been building electric roadgoing vehicles since 1920. Tens of thousands of their delivery floats have been used throughout Europe - some of them lasting 30 years or more in daily use. This is a company that knows how to build and maintain electric vehicles - not some brand new startup. It's only the ownership and location that's changed.
        EZEE
        • 2 Years Ago
        @Rotation
        The U.S.-based company was purchased in 2011 from its UK-based parent company, which has been in operation in Europe since the 1920s.
      ev_ftw
      • 2 Years Ago
      Those are pretty big bonuses for an unprofitable company. No thanks, I'll pass on this one.
      Nick
      • 2 Years Ago
      They've been around for a long time, but I've never seen one up to this day. I hope they will do well under the new owners, we need this type of trucks, the more the better!
      Breconeer
      • 2 Years Ago
      The Smith stock will reportedly commence trading on Nasdaq on Friday 21st September, with the launch price made known the evening before, once the banks involved have sussed how much interest they find this week and next week among prospective investors. The UK company that used to own Smith, Tanfield Group, still hold a substantial stake in it - around a quarter. Anyone who thinks the Smith ipo might go well could, if they wanted, buy stock in Tanfield (London stockmarket ticker TAN) in expectation that the Tanfield price might rise in the days before the ipo.
      Marcopolo
      • 2 Years Ago
      Like Breconeer, I have a vested financial interest in seeing this company succeed. Smith Electric Vehicles is a very old UK manufacturer of specialist EV vehicles. Under Tanfield Group ownership, and aided by Ford Motors (UK) , Smiths produced the first viable commercial EV delivery vehicles and trucks, manufactured for more than 60 years. The purchase of Smith by US interests, and relocation to the US, was a sad day for the UK. (and a bitter testimony to the failed policies of the previous UK Labour Government.) Smiths' products are commercially viable, well tested and prove. Smith's business plan is worthy of consideration by anyone seeking an investment opportunity in EV manufacture. Smith Electric Vehicles of Kansas City, Missouri, gives every appearance of being a well managed, company focus on good business practice. It's directors and senior managers have solid records as successful business executives. It's of some concern that the management seems to be light on engineering or automotive industry experience, but as Elon Musk has proven, maybe that's not so important. This is the sort of company that both institutional and private investors with an 'Ethical' investment should support. Like wise it's a suitable recipient for DOE funding. Good fortune to Smith !
        oktrader
        • 2 Years Ago
        @Marcopolo
        My hat's off to your emotional sensibilities here, Marco, but this is a dead end. How can they justify an IPO? Simply to retire a huge debt? There’s no evidence of a viable business here. Vehicle gross margins from the prospectus: 2008: -53% 2009: -63% 2010: -39% 2011: -48% 2012 (H1): -97% As you can see, there is no trend at all toward a positive value. If you cannot get GM>0, you certainly can’t be profitable. (It’s easy to see why Tanfield unloaded it.) Even the service/spare side, where money is generally printed in large capital equipment businesses, has only been positive in two years, and then in low single digits. A very bright red flag, to be sure. Yet the prospectus tells us: “We anticipate that we will continue to sell our vehicles at a gross loss through the fourth quarter of 2012, turning to a positive gross margin in the first quarter of 2013”. How will this happen? Apparently by the “cost down” initiative, which targets material cost decreases from 18 to 30% for various models. OK… so what about the next 60%? Also, the rate of increase in SG&A is stunning, with a CAGR of 46% against a revenue CAGR of 15%. Are they prepared to downsize this spending by half, right at the time they are promising significant new market penetration? Don’t get me started on executive comp. Good Lord. Don’t look at it during lunch. Sorry to all you Smith loyalists. Your heartfelt connection to this venerable brand is entirely understandable, and it would be a shame to see it flounder. But I will say that if this IPO actually comes off at a market cap >$75M, well, here’s yet another chance to ride an electrification story stock back to earth. I’m not at all saying that electric trucks can’t be successful. They can. But this public raise is a loser.
          DaveMart
          • 2 Years Ago
          @oktrader
          Yeah Nick. This sounds like vulture fund fodder. Maybe tasty vulture fodder, but even so.... The way the Leaf is selling, I am wondering if Nissan would be better off using some of their US capacity to build trucks. I have no idea though how rolling trucks down car production line would work, presumably it wouldn't, but they seem likely to have the spare battery capacity, and if they have a tough time selling their projected production of 150,000 Leaf cars there should be enough space to set up a truck line at some point. Not good times, folks.
          Marcopolo
          • 2 Years Ago
          @oktrader
          @ oktrader To a certain extent, I agree with you and Dave Martin. Of course, I would have been much happier if a highly experienced corporation like Polaris Industries had bought Smith Electrics. However, converting debt into equity, isn't such an unusual concept and with a little more talent in fleet marketing/sales, Smiths could easily survive the current difficulties. More worrying is the lack of corporate/industrial planning. Issues such as supply chain, production, capital raising should have been resolved long ago since the product's a fairly mature design. Why the Company didn't apply for DOE funding, is another mystery. Smith's directors , all appear to be well credentialed and experienced business executives. My concern is that building and selling Commercial EV's requires a highly motivated and very experienced entrepreneur with deep pockets and existing cash flow, or a giant corporation with vast resources and an intimate knowledge of market. With all due respect to the current directors, none would appear to be an Elon Musk, Carlos Ghosn, or Allan Mulally. Smith need to raise a great deal more capital than $75 million dollars if they are to thrive. Still, I wish Smith good fortune, and if it all goes wrong, I'm confident that a buyer could be found for Smith to ensure survival.
          Nick
          • 2 Years Ago
          @oktrader
          Sure is, but who knows, maybe a Russian oligarch will swoop in and make an offer for the whole company.
        DaveMart
        • 2 Years Ago
        @Marcopolo
        Unfortunately Smith is being heavily impacted by the problems of being a first mover: 'But Smith Electric has also burned through cash, racking up $128 million in losses since 2009. As The Kansas City Star reported in June, the company’s accountants, after reviewing Smith Electric’s 2011 financial results, said the recurring losses and questions about its ability to raise more capital had raised doubts about the company’s continuing as “a going concern.” Smith Electric’s financial fortunes didn’t improve in the first half of 2012, when it posted a $27.4 million loss, compared with $21.3 million for the same period in 2011. The $11.5 million loan plus other cash available to the company will pay for operating expenses through the end of September, Smith Electric’s latest filing said. A successful initial public offering would give the company another year to operate, the filing said, pay for plans to reduce costs, and allow it to improve a New York facility that Smith Electric wants to become another assembly site. A review of the SEC filings shows issues with suppliers at both Smith Electric’s Kansas City plant and another it owns in the United Kingdom. Both assemble components — including the chassis, motor and battery — made by other companies. Some of those companies have had their own financial problems, causing an uneven flow of components. The relatively small suppliers also have high costs, as well as some reliability and quality problems have increased Smith’s warranty costs. Part of the company’s planned fix is to switch to larger companies that make “automotive grade” components at a lower cost. Smith Electric’s wants to reduce its cost by as much as 30 percent, to make its trucks more competitive with diesel vehicles. In its filings, the company said it had identified new suppliers and qualified some, but needed additional funds for engineering work, letters of credit and other requirements to get the others lined up. David Hurst, an analyst with Pike Research, said Smith Electric’s quandary isn’t unusual for companies making electric trucks. The supply chain will improve, but that could take a couple of years, he said, and larger suppliers want to be sure they will be paid before starting a new line. ' http://www.kansascity.com/2012/09/03/3794953/smith-electric-scales-back-production.html Times are tough all over in the electric vehicle space.
      Rotation
      • 2 Years Ago
      Are you kidding me? Look, nothing against the company, I like the company. But companies really should be more established before going public. I guess the underwriters just don't reject anyone anymore.
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