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Tesla Motors (TSLA) Cuts 2012 Revenue View, Amends Loan Agreement; Shares Off

 September 25, 2012 11:24 AM


(By Balachander) Tesla Motors Inc. (NASDAQ:TSLA) retreated sharply on Tuesday after the maker of electric vehicles slashed its revenue forecast for 2012, blaming lower deliveries of its Model S sedan.

The company also announced a follow-on offering of roughly 4.34 million shares of its common stock and said its CEO Elon Musk has indicated a preliminary interest in acquiring up to $1 million of the shares.

In a filing with the U.S. Securities and Exchange Commission, the company also said it amended its loan agreement with the U.S. Department Of Energy (DOE) this month and may seek so again if it does not raise enough capital.

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For the full year 2012, the company now expects revenue between $400 million and $440 million, down from $560 million to $600 million projected earlier. Wall Street analysts, on average, expect TSLA to post revenue of $542.6 million for the period ending December.

Tesla forecasts revenue for the third quarter in the range of $44 to $46 million, trailing market expectations of $83.03 million.

The company expects a gross margin to be negative for the third quarter, but turn positive in the fourth quarter due to higher Model S volume.

Tesla expect to deliver between 200 and 225 vehicles in the third quarter and 2,500 and 3,000 vehicles in the fourth quarter.

For 2013, Tesla plans to exceed its target of 20,000 Model S deliveries and expect to achieve a gross margin of 25 percent for the year.

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As of September 30, 2012, the company expects to have roughly $228 million in principal sources of liquidity, inclusive of the net proceeds of this offering. It expects to be close to free cash flow breakeven at the end of the fourth quarter.

The company expects that without raising capital in addition to this offering, it would need to seek an amendment from the DOE to modify the total liabilities to stockholder equity covenant for the quarter ending March 31, 2014 and the two subsequent quarters.

The company has granted the offering's underwriter, Goldman, Sachs & Co. (GS), a 30-day option to acquire up to an additional 651,740 shares.

Tesla plans to use the net proceeds from the offering for general corporate purposes.

The stock fell 6.88 percent to trade at $28.57 on Tuesday. Over the past year, shares have been trading between $22.64 and $39.95.

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