Tesla Motors Reports First Quarter 2011 Results

Non-GAAP Financial Information

Consolidated financial information has been presented in accordance with GAAP as well as on a non-GAAP basis. On a non-GAAP basis, financial measures exclude non-cash items such as stock-based compensation as well as the change in fair value related to Tesla’s warrant liability. Management believes that it is useful to supplement its GAAP financial statements with this non-GAAP information because management uses such information internally for its operating, budgeting and financial planning purposes. These non-GAAP financial measures also facilitate management’s internal comparisons to Tesla’s historical performance as well as comparisons to the operating results of other companies. In addition, Tesla believes these non-GAAP financial measures are useful to investors because they allow for greater transparency into the indicators used by management as a basis for its financial and operational decision making. Non-GAAP information is not prepared under a comprehensive set of accounting rules and therefore, should only be read in conjunction with financial information reported under U.S. GAAP when understanding Tesla's operating performance. A reconciliation between GAAP and non-GAAP financial information is provided below.

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Tesla Motors, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
			Three Months Ended
			Mar 31, 2011				Dec 31, 2010				Mar 31, 2010
Revenues
Automotive sales			$	33,628			$	29,172			$	20,585
Development services				15,402				7,114				227
Total revenues				49,030				36,286				20,812
Cost of revenues
Automotive sales				26,961				23,401				16,858
Development services				4,041				1,564				102
Total cost of revenues (1)				31,002				24,965				16,960
Gross profit				18,028				11,321				3,852
Operating expenses
Research and development (1)				41,162				37,617				13,265
Selling, general and administrative (1)				24,212				25,349				16,585
Total operating expenses				65,374				62,966				29,850
Loss from operations				(47,346	)			(51,645	)			(25,998	)
Interest income				40				63				48
Interest expense				-				-				(230	)
Other income (expense), net				(1,485	)			187				(3,221	)
Loss before income taxes				(48,791	)			(51,395	)			(29,401	)
Provision for (benefit from) income taxes				150				(37	)			118
Net loss			$	(48,941	)		$	(51,358	)		$	(29,519	)
Net loss per common share, basic and diluted (2)			$	(0.51	)		$	(0.54	)		$	(4.04	)
Shares used in per share calculation, basic and diluted (2)				95,187				94,240				7,302
Notes:
(1)	Includes stock-based compensation expense of the following for the periods presented:
	Cost of revenues		$	154			$	93			$	42
	Research and development			2,299				2,051				281
	Selling, general and administrative			3,473				5,699				3,064
	Total stock-based compensation expense		$	5,926			$	7,843			$	3,387
(2)	On July 2, 2010, the Company completed its initial public offering (IPO), pursuant to which the Company sold 11,880,600 shares of common stock. Concurrent with the closing of the IPO, the Company issued 2,941,176 shares of common stock to Toyota Motor Corporation in a private placement.
	Upon the completion of the IPO, all convertible preferred stock automatically converted into 70,226,844 shares of common stock. Additionally, 445,047 shares of common stock were issued upon the net exercise of all outstanding warrants, excluding the Department of Energy warrant, which would otherwise have expired upon the completion of the IPO.

Tesla Motors, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
		March 31,			December 31,
		2011			2010
Assets
Cash and cash equivalents		$	100,655		$	99,558
Restricted cash - current			42,943			73,597
Accounts receivable			20,260			6,710
Inventory			50,823			45,182
Prepaid expenses and other current assets			12,225			10,839
Operating lease vehicles, net			9,141			7,963
Property and equipment, net			143,372			114,636
Restricted cash - noncurrent			4,934			4,867
Other assets			22,936			22,730
Total assets		$	407,289		$	386,082
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities		$	69,469		$	49,896
Deferred revenue and development compensation			6,909			7,418
Reservation payments			39,412			30,755
Common stock warrant liability			7,509			6,088
Capital lease obligations			696			775
Long-term debt			102,484			71,828
Other long-term liabilities			13,072			12,274
Total liabilities			239,551			179,034
Stockholders' equity			167,738			207,048
Total liabilities and stockholders' equity		$	407,289		$	386,082

Tesla Motors, Inc.
Supplemental Consolidated Financial Information
(Unaudited)
(In thousands)
		Three Months Ended
		Mar 31, 2011			Dec 31, 2010				Mar 31, 2010
Selected Cash Flow Information
Cash flows used in operating activities		$	43,297		$	34,284			$	27,329
Cash flows provided by (used in) investing activities			10,111			(8,550	)			(9,379	)
Cash flows provided by financing activities			34,283			45,829				28,627
Other Selected Financial Information
Capital expenditures		$	20,476		$	17,148			$	8,473
Capital expenditures related to acquisition of Fremont facility and assets			-			6,500				-
Total capital expenditures		$	20,476		$	23,648			$	8,473
Depreciation and amortization		$	3,517		$	2,890			$	2,141
		Mar 31, 2011			Dec 31, 2010
Cash
Cash and cash equivalents		$	100,655		$	99,558
Restricted cash - current			42,943			73,597
Restricted cash - noncurrent			4,934			4,867

Tesla Motors, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(Unaudited)
(In thousands, except per share data)
		Three Months Ended
		Mar 31, 2011				Dec 31, 2010				Mar 31, 2010
Research and development expenses (GAAP)		$	41,162			$	37,617			$	13,265
Stock-based compensation expense			(2,299	)			(2,051	)			(281	)
Research and development expenses (Non-GAAP)		$	38,863			$	35,566			$	12,984
Selling, general and administrative expenses (GAAP)		$	24,212			$	25,349			$	16,585
Stock-based compensation expense			(3,473	)			(5,699	)			(3,064	)
Selling, general and administrative expenses (Non-GAAP)		$	20,739			$	19,650			$	13,521
Net loss (GAAP)		$	(48,941	)		$	(51,358	)		$	(29,519	)
Stock-based compensation expense			5,926				7,843				3,387
Change in fair value of warrant liabilities			1,421				(587	)			2,332
Net loss (Non-GAAP)		$	(41,594	)		$	(44,102	)		$	(23,800	)
Net loss per common share, basic and diluted (GAAP)		$	(0.51	)		$	(0.54	)		$	(4.04	)
Stock-based compensation expense			0.06				0.08				0.46
Change in fair value of warrant liabilities			0.01				(0.01	)			0.32
Net loss per common share, basic and diluted (Non-GAAP)		$	(0.44	)		$	(0.47	)		$	(3.26	)
Shares used in per share calculation, basic and diluted (GAAP and Non-GAAP)			95,187				94,240				7,302

Non-GAAP Financial Information

Consolidated financial information has been presented in accordance with GAAP as well as on a non-GAAP basis. On a non-GAAP basis, financial measures exclude non-cash items such as stock-based compensation as well as the change in fair value related to Tesla’s warrant liability. Management believes that it is useful to supplement its GAAP financial statements with this non-GAAP information because management uses such information internally for its operating, budgeting and financial planning purposes. These non-GAAP financial measures also facilitate management’s internal comparisons to Tesla’s historical performance as well as comparisons to the operating results of other companies. Non-GAAP information is not prepared under a comprehensive set of accounting rules and therefore, should only be read in conjunction with financial information reported under U.S. GAAP when understanding Tesla's operating performance. A reconciliation between GAAP and non-GAAP financial information is provided above.

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