Workhorse Group Inc.WKHS

Workhorse Group Inc. Revenue Disclosure

10-KFiled Mar 1, 20221 min read
REVENUE
During the years ended December 31, 2021, 2020 and 2019, the Company recognized sales, net of returns and allowances, of approximately $(0.9) million, $1.4 million, and $0.4 million, respectively. The majority of sales recognized during the last three years relate to the Company's automotive business, consisting primarily of sales of C-1000 vehicles.

During the third quarter of 2021, the Company announced its decision to suspend deliveries of our C-1000 vehicles and recall previously delivered vehicles when management determined additional testing and modifications are required to bring the
C-1000 vehicles into full compliance with Federal Motor Vehicle Safety Standards. In connection with the recall, the Company agreed to refund our customers for all C-1000 vehicles previously purchased by them.

The Company determines its allowance for estimated returns based on known pending returns and historical trends in product returns. The refund liability as of December 31, 2021 and 2020, was $2.4 million and zero, respectively.

The Company also records an asset for our right to recover products from customers settling a refund liability. The Company measures the asset at the asset's former carrying amount, less any expected costs to recover, and updates the measurement of the asset arising from changes in expectations about products to be returned. The asset for recovery as of December 31, 2021 and 2020 was $1.6 million and zero, respectively.
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Historical Timeline

Fiscal YearFiled
2021Mar 1, 2022Showing above
2020Mar 1, 2021

About Revenue Disclosures

Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.

Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.

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