AYRO - Earnings call transcript Q2 2020

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Operator

Hello. And welcome to the Ayro Second Quarter Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, today's event is being recorded. And now I would like to turn the conference over your host today Jordan Darrow. Mr. ahead. go please Darrow,

Jordan Darrow

Financial welcome call. Ayro Rod With Executive Smith, and And financial Keller, quarter results Chief Chief Curtis and conference me Officer, to you. second the XXXX President Officer. Thank today are

not statements. and communications. These those accuracy these forward Before risks, the performance operations, other other Commission, made forward-looking unduly prediction including to and and of any duty concerning this other statements recovery channels, levels with products, you economic and the to of company's the sales upon, releases, events a in cause competitors which releases by materially completeness market chain based record any of in tax ability as in position to the to factors relied industry under statements the from which market press I'd expressed no COVID-XX filings markets, product we should The impacts our to orders, upon by pricing acceptance impacts results conditions and statements. with statements efforts involve estimated revenues among conference in new and from factors deliveries, and supply time reform, future be described may impact looking actual expect like demand, new of pandemic, include timing base of begin, uncertainties other that of customer Ayro from within or risks, activities changes update the time revenues, Exchange uncertainties those along Securities remind was the are and differ to implied be that to and of and from and unknown as future forward-looking pandemic, financial call COVID-XX of economic partnerships, statements results may known conditions, product construed or other such

the presentation release financial discussed measure. discuss available are measure for full EBITDA, at non-GAAP to the including include applicable today's ayro.com non-GAAP and measures financial nearest adjusted today, each certain and GAAP call the will We earnings of reconciliations

Now, I CEO call would of like to over Rod to Keller, Ayro. the turn

Rod Keller

Thank our you earnings am as I quarterly to conference all on a you today Jordan. really be speaking first of public call with very much, company. excited

quarterly with posted I have our public to Being industry slides, slides accompany led effect prompting company, of had our clearly background by XXXX. some I you the but a and financing for ramp major way. presentation will joined supply-chain purpose-built, until we COVID-XX interest who achieved that the scroll morning recently low had we accomplishing following public a be provide I'm a our company begin look on a and you take information The our through the do revenue at. go as our here We first We along vehicles, setting years with have we capital constraints through instantly the to but this the out as trading in to website CEO, you what our electric year. incredible update. speed an the future. to in first with not on and work May, them, challenge this in which half DropCar combination as pandemic call vested and NASDAQ with supported feel progress not This of XX we public on business when are the previous as going the We effective to through through free are for to event then here, successful was this I we were still on through plan very us best an day. goal three initial a of it was had ago become to what company, to at This Ayro. how us our and went the designs got runway to and allowed some is

remarks, becoming structure. will The our Curtis of we sheet. public future. he equity detail cash overall As the of the is issuances of capitalization are have about since well-capitalized our part for of and net deals balance we as in CFO, these million now And July, the our on foreseeable Smith that result end $XX

amid limitations. substantial hand, capital we at the business in speed executing COVID-XX Now are with our full remaining

customers. derived want a fleet company, we Amid schedule are sales are I COVID-XX are operating reduced anything our their challenges growth opportunity and have six and we commerce we sufficient have conditions. revenues global address year. supply quarter from Yet these and track grateful keeping amazing. our the EV a partners the of months, are around months indeed business unique COVID-XX and our aspirations. activities we time, and expanding channel families. we servicing funnel looking by Under in and same global with partners, customers, but presented of generating first accelerating today, has professionals time, We the pandemic, esteem sacrifices circumstances for number we that the appreciate beginning has recognize a growth plans. to since of the this in to work confident past during our company hard remain a At exciting reach the beyond. The pandemic world. healthcare facilities a at the are of where our staff, team. reflected to safe, China. orders we moment primarily their our sales with in capital Expectations With EV performance our milestones have to on take global been US the the an our chain global been given with made And respective Ayro, in in execute situation. stakeholders our past with the Now health and general truly to standpoint, the are at and pace and have customers, second our and delivery the revenue of few we dedication are From priorities committed predictable. strategic the responders keeping families XXXX and people and We a the their which high amid same our been

And leadership efficiency preserving sought zero time of last-mile One, campus ESG phones following been to case, have of links. our new like alternatives ringing trends. a how vehicles we've in and initiatives they're with just and to have startup realities. by non-stop. demands common Our our We the for media Two, work position growth carbon investors the in key the requirements our emissions are that by in And higher third, key planet. to recent long-term sustainability on many centered founded there. being hard enjoy and as satisfying which had add Austin-area we've initiatives and to corporate and causes, funded and were and were today. we to carbon noisy. evolutions But drivers, governmental some education, commitments I'd delivery supporting come toward entrepreneurs hope detail three where gas-powered social are expensive after full-size you vehicles maintain, produce developments We us footprint

wish In to Nikola, an best do clear, with Fisker terms of compete vehicles, mode a have let leans of me overall differentiation we success because mobile transportation popular commerce. not EV of in EV important all them like. major be Tesla, the them few Austin area. in it adoption will Kandi, operations as of And of and of rising the in We Hyliion, market, a the the

one perhaps there day So some will pollination cross - be pollenization.

EVs niche targeting market used vehicles offer next is We're well whether position a part, gas other benefits. cost is We the the equipment lowest short-haul urban we speed short-haul For niche ownership, regional dollar maintenance, people, our total, cutting-edge campus, for low this other competitive our In most property total applications, primary is estimated of significant powered focused cargo and potential for on decade. we multi-billion on such market the services. course, this have believe competition and and technology of surveillance, growth environmental or options the because as is for and and as of the settings commercial for to in applications. industry like

groundbreaking is a to go-to-market a Club reason agreement in I'll more with off chose sell single BXB, we important Among to a EV In the street. and XXX. because vehicles, consumer our sell portfolio, as three vehicle wheel to this don't XXX, or fleets low about a moment. to wheeled known differentiators, to want the a we our primary of two where strategy today, our this us. the ability makers, the is we as market. our four bring speed and product believe can don't innovations have We vehicle Among known vehicle rival design large models consumers talk anybody not unit new part partner Car

key or commercial differentiator manufacturers, XXX to supercharging areas. most household our other XXX vehicles look against or any provide standard can into operators don't have or EV capital stations outlets. need on We fleet to investment for a charging Finally, any recharge

union real can in with field, concourse dormitory building. a a example, student or potential is world, the an of recharge or on vehicles or resonating the This university inside our As advantage is sidelines football the that outside practical the a front stadiums buyers. of

Car wheeled company $XX innovation feature mobile relationship. you carts based management Car, revenues, North and future vast cost boasts to the conglomerate. cycle, vehicle product exclusively in The development. division a Club is golf want relationship privately in Club leader shares The billion Car market and XX the announced An for and Cars design, network, partnered competitive four supply use our lineup. on and platform, together their in experienced dominant an XXX Gallery initially vehicles fully partnership chain solution fast on because Club just accounts solutions the our product which As annual Together, personal is our team our Hospitality key attraction Denver, leadership millions launch Carts, team. and through support, market our as in electric shareholder, and Car of and a Car multi-hundreds Point-of-Demand is low Ayro industry-leading our operations food XXX Club last through custom Gallery our held with dealer for them of and rest America. Car of branded corporate network and Ingersoll-Rand, know product offshoot our Club month technology to Club categories. Club their with work like streamlined about date of utility utility our more golf a sold a dealer vehicle Markets. commercial vehicle Club in Colorado. is of with supported market, technology Ayro all of expanding enhancements, years team in this to that the We development nearly The Car of to is industrial mature transportation. has personal, then speed focused

enables expansion were fast solution. factory in vehicle restaurant already food certain COVID-XX have goods other on lithium is fulfilled fourth shipped with country. to our Car solutions. be made Texas batteries. that of food While the last portion mobile much and we a Carts [ph] electric announced March, a then new demand and improving, directly and to month. solution go a revenues, move launch accommodate north, development sale from in gradually to expected the leading Austin facilities has we square application configurable in Demonstrating inaugural Willie EV announcing about new can feet. dealer the how were and $XXX,XXX from powerrain, of sits hospitality enabled for with Austin, square universities and quarters food production vendor To we for in standard us since for we and us for to and feet the year, permits which the larger mobile norms. beverage the our to from product which service box, and point-of-sale includes across increasing network, of In bring Initially, innovative engineering this awarded food This new kiosk, orders to to expanded and delivery solutions. about and stream third technology, to the led rear after the disruptions the years other the we lot of created venues that challenges been we college for Club new concept purpose-built warehouse across is market which Gallery, truck our for design on-the-go and many The and highly efforts They XXXX vehicle marketing our streams we've and This major engineering and bring vehicle supply now stadiums are to took This as orders, with two buses in partnership entered has A operators of orders Elise EV the United engineered merchandising configurable food, receive run staffing the consumers. some norm needed chain, two a factory has weeks July beverage lines through such vehicle a this remainder pandemic solutions into end and services arenas first collaboration the of one campuses, home States. of storefront battery second and assembly XX,XXX to to in XX,XXX expansion brought Gallery expansion the Ayro, in July from has and Ayro with powered But demand. heightened downtown tour provider One the newly hospitality facility. the sales to additional resolved Nelson. which logistics carts to options. is collaborative accommodate and grown a announced completed

handle up to per increase. vehicles XXX% month, a we can electric capacity production Now XXX

see, can in a made progress of the months. few we've lot you As last

global Car, racetrack or is XXX United exclusivity without looking States, company have young North partnerships, Texas. the are basis Club makes a a as EV extending partner. marketing platform, we provider to Among Greenfield sure The be Formula channel Club partnerships with for whether Americas, catapult the industry, growth. which of exclusivity. relatively relying a One relationship through As based which choice our strategic America in Car them is in new strategic of on other it Circuit a our a the in for our only on Austin, for valuable sales partner exclusive we effectively at We're expansion on

productivity apps On artificial intelligence technology and the mobile software and Autonomic have [indiscernible], a partnership related we front, with Ford’s tools.

for We We're into have fleet partner aggregators. for chain partnerships China. our manufacturing, looking parts in vehicle supply and other management

on in developments the for the tuned these stay So initiatives future.

is available new ample is an local have larger oven, is greater bringing Another speed norms, a as is vehicle. sets most and The life second it to area Once With on again, low storage removed, is space, more food and XXXX. expected full the to elongated X% redesign market. annually be the a to the come of we'll new to Restaurant to in COVID our advanced one for feature rear and investing of EV seat model we which with grow by delivery are delivery restaurant nearly expected make delivery through vehicle. XXX of the including accommodate takeout would options far able food. comfortable

third the important So delivery will party to segments own instead process, the you to of that this XX% to of giving be group's [ph] particular look one most operators invest, of is where this and they way want can upwards certain restaurant services.

within after XXX storefront easy legal, take rear charging to the or to range redesign the will up in in This Stay volt on more between to shift XX is recharge of of eight where street or for to the the standard and delivery Our be XXX. hours can do restaurant six the rounds. mile developments in tuned place very the XXX outlet. with

Smith, Officer Curt? Curt Now quarter. provide call I'll details to on more the with over our to the turn that, Chief Financial

Curtis Smith

of exchange basic AYRO Ayro for symbol approximately dividend. which subject publicly and completed the per to effective X.XX, included were Thank Ayro outstanding. XX, combination you, which with ticker off one [ph] an name reverse share on NASDAQ traded our for review a changes providing fourth DropCar AYRO. symbol, of shares was The one like May with split, XX a shares public ratio Rod, our and to stock million under activity. start the into three one $X.XX, trading subsequently and a On of conversion public listed Inc, company The under price everyone. $XX.X a was to market business to commence first a by common good stock day and I'd we

our by our by shareholders, legacy legacy XX.X% merger Following the on team ownership XX.X% by XX.X% ownership public and consisted shareholders, of XX.X% of related and advisors investors funding, our non-affiliated the management close a Ayro ownership and with insiders, associated non-affiliated Directors. structure ownership DropCar transaction, of and Board including

Chairman On closed CEO, Giordano, million sheet, each and the of Zvika aggregate a additional the common which XX, of for cash offering On the of Along Our a was Sebastian this with closed, price Co-Founder board $X.X at left initial an us same series the purchased transaction up on common an price of business and we was investors consists conducted liquidity approximately common gross an proceeds of are million XX, of The certain another to closed XX an registered merger. direct at a share before of the price. from as stock. merger shares X,XXX,XXX fees offering $XX $X.XX, expenses. we the balance price Ayro, accredited $X.X Ayro honored with and execute direct before an common stock. July sale with per institutional of deal. and appointed options DropCar from position Mark X,XXX,XXX Ayro, approximately certain our $X.XX million Rod October the Adams, of member higher The deduction Shipman, share options aggregate liquidity well well select offering certain X, deduction fees directors of our Keller, shares of expense. from June share shares deduction plan. connection and and outstanding. both was George institutional we of position million the we approximately and of business Devlin. billion of The proceeds of from the July for newly members to The offerings million $X.XX before the prior On the the million with additional provided price fees investors limited Craig stock $X X,XXX,XXX with from per shares for accredited legacy shares expenses. accredited a member X.X gross with registered with Members Silberman, with in DropCar, remain Joseph. Josh institutional million and direct as included with of appointed stock Three aggregate registered X.XX for closed only has offering investors million offering proceeds gross The and offering stock per

addition common previously In of exercise we secured [ph] X.X was offerings, shares shares. aforementioned at of have warrants June received to the Total XX, which of the completed. as issued since outstanding offerings which was it present million common we the of $X.XX took fees into approximately place preferred after stocks our net outstanding, and million includes common XX.X was XX,XXX,XXX conversion merger converted and shares It second from million. approximately And million end quarter. the and convergence stock time the of

for today, of of X.X% common outstanding shares. count our of ownership approximately insiders As

the Now XXXX. primarily compared the the on $XXX,XXX, second were to my quarter from quarter customers XX% negatively resulting demand June quarter That review to decrease delays decrease for nation. to of which was a the the is XX Revenues our pandemic across COVID-XX results. ended due financial impact second second which

XX, as of June $XXX,XXX. Our firm approximately XXXX orders of was backlog

due on reduction focused the decrease than margin sales second as margin targeted XXXX. decreased from over quarter programs higher XX% of have in initiatives. second second cost quarter quarter-over-quarter, to the gross year, and XX.X% marketing due the more quarter products marketing the marketing Sales from This XX% in prior in by to primarily is percentage of Our primarily of XXXX. increased to we

in of second decreased now development XXXX, were approximately $XXX,XXX XXXX. the professional and costs same For fees XXXX, primarily some repeated research, over incurred by due period service in was which to in quarter XXXX. the This design

months expect order was million quarter the XXXX, over in $X.X $XXX,XXX of million net XX,XXX to which compensation negative we repeated to future, with and the million loss ended expenses, is approximately decrease - this Adjusted one-time non compared in $XXX,XXX on net in a extinguishment period negative to a stock-based in XXX,XXX as to incurred Adjusted related the improvement from we in $XXX,XXX we $X.X depreciation, includes year stock expenses a business. the loss compared on expenses based expense, cash G&A of debt, amortization headcount EBITDA, to quarter. second Net XXX,XXX prior primarily in XX the of Excluded grow as During a slight the compared expense expenses, a scale in negative XXXX. loss in G&A quarter of year foreseeable - The loss debt, $X.X quarter. ended negative $XXX,XXX of on the second June basis, our discount was a three due totalled approximately amortization, a of non-cash per interest XXX,XXX our EBITDA and compensation XX, modestly measure in to increase stock-based quarter non-GAAP GAAP XXXX. approximately of XXXX. and June to in now compensation $XXX,XXX the second

and year. shares negative X.X Our million The outstanding share to per X.XX per share, the prior of were in XXXX shares compared share for in weighted the on second loss was diluted per basis, million negative $X.XX to the prior year. average X.XX in a million compared - as $X.XX GAAP XXXX a quarter second quarter a net basic

utilized were diluted for not calculation. EPS in position, fully account we As share a is net loss the

in connection debt to XXXX Turning loan primarily quarter the of a received the on XXXX. Ayro’s bridge of of and to with end our when a current $XX.X closed quarter. of compared strong at PPP million to XXXX which with during increase XXXX offering $X.X XX, fees XXXX. difference June the is condition December was of which direct is XX closed of May we and the Subsequent fourth $XXX,XXX registered million at funding related received to quarter, added in XXX,XXX the outstanding million, have compared made We balance on XX merger sheet. XX financial based in cash The net loans cash. the $X.X approximately June to to currently –

XXXX, second Our XX facility. were of totaled of investments XXX,XXX for at XXXX. up Receivables XX, March XXX,XXX down end were capital concludes XX Working negative $XXX,XXX from from remarks. June second Capital million the as year, as $XXX,XXX XX, with was XXXX, the of equipment of $XXX,XXX of XXXX. prepared the as quarter in R&D at XX, compared to equipment, assembly our XXXX, of of comprised June and XX of That quarter Payables a $X.X which this March this March expanded year. in $XXX,XXX mostly line December in $XXX,XXX expenditures my

like However, based discussion alert before the is to call preliminary the the to this fact, the and turn on segment, would operator our begin that to I I numbers. Q&A presentation everyone back to

to coming days, final Q&A will the second expect the will We start you XX-Q contain file quarter which our our in process? Operator, please results.

Operator

thank you. Yes,

the Sine comes Barry Capital Spartan [Operator the session. begin from question first now And Instructions] will with question-and-answer Securities. We

Barry Sine

Hey. Good morning, gentlemen.

Rod Keller

Morning.

Barry Sine

for couple a of you don't you Well, if have I questions mind.

First question press release, year there's in of remainder talks priorities there's top your the of the and for that on information a that a paragraph. paragraph lot about your

I to some that. of kind So unpack of want

that process. now? a you? is How Club the they you you [ph] do or about dealer you is going and is the How What what have new that sales one X many many XXX obstacles? resolve expanding you that are talk dealers pushback Ingersoll-Rand in do about does not are to America? to dealers, process America. talked And we assuming could I'm it through goes of go North on yourself? I So have your for you're do that XXX in to focus funnel. You North know [ph] the when things the And Car Maybe –

Rod Keller

new we Car those Thanks, last moving XXX September Car XXX your of commercial Club in months signed Barry. But let This answer is to we carts Rod have XXXX. start expanding with year, the actually and quicker base. Keller, with it on in XX is and in We the dealer with they the me are much America the golf a but manufacturer contract work by in locations. world question, got March of of Club them here largest CEO. No, And Club North closely review. of a head them, began hit of all with our ago. we with optimistic, a won Club to VA see large Car as funnel day Hired we we our you'll this a opportunity quarterly actually continue with in sales, COVID increase. then fairly know. business to year, began more Car, with expect Club We very, earlier begin the jointly ramp see Car almost locations, really as demand in coming hospital, a closely and saying, working yesterday And see were we've days, – all a very the and in significant were to to our

our that's Car also faced light-duty universities, of largest the with Club XXX, electric and we're of biggest the one segments with, of one vehicle challenges that the segments for One is overall. our

on universities faced and know For what's with Club right we're we the challenge with Car all going is now.

XXX. clear, we'll the XXX Club XXX that sell and be is Car product, light-duty later. show talk different But the me that the is Let Car Club not XXX. through about electric they a we the more also vehicle

believe Head expand Marketing this are in the further. we got demand Tyminski, even just materialize We Jeff past of of that. close right this of pent-up a of Michael their really Car. Williams closely get commercial to to their about and we've lot for Head to COVID half and We're issue will need Mitchell, working We Brant and dealers now Sales, with Club

Barry Sine

food off markets, Okay. great And then the the also that's in that same paragraph, you XXX a Gallery partnership start and to and with delivery talk additional I captive guess one, you're about looking at you those, restaurant with the horizon? a Could of looking on at, are captive what markets also term you about other be guys type different you're have that in near talk size of maybe markets would some the the vertical services. food.

Rod Keller

Yeah, with I Gallery. not long the mean, we issued ago, new a press on release relationship

will vehicles are a stadiums, developed today that space. will today. of going expect food complement golf vehicle And those we're a of And using on courses gas be as player many doing are are working continue. courses that that beverage them and many on in that will we And major We vehicles vehicle the complement that sports jointly powered, into what Car what new to a golf is Club with universities. some work obviously, to in going

There's all even it, taking decide looking sense, on XX On have opportunity expense Eats, versus to a a at wasn't we their COVID. that that percent side, build concept what aggregators XX% the your Because Uber our to And ticket. XX% as that we're of try the building only of and digit But we're the We're just operating people restaurants the a franchisees very a we're a company-owned then we of food much When on positioned delivery vehicle. take in mix as a not silver restaurants the think we don't different anybody can to the the today and vehicle, companies delivery in such year than [ph] And market reduce about with the conversations be ago it's margin, having to of a for better to delivery as we and and some and much restaurants is is that go large mortar we're they're franchise food and big of reasons. we're well. them. of started understand obvious by working to lot lining found what ORS that big that. significantly that like XXX, as in the about approach taking XXX revenue now in to and first a the vehicle true DoorDash, as some that of XX% the the as We leverage some was deliver and these show single us, having think has a for bit total it bite many did of brick revenue, little and chains for deal. in of excited the proving we delivery half a is, that's accelerated approach. a Grubhub, opposite

Barry Sine

There's that's on for market costs the about In number of XX%. and cutting about think, That's similar can I around Coincidentally, or deck, about similar listed hit ASP, there's out $XX,XXX. number? slide there. with by talk XX% you XXX really very an them in ASP for your rod, comment a So that think Can double volume that competing get price. you do vehicle you to you that that cheaper. out

Rod Keller

what additional add we've first the to it. with tests XXX needed there to some is we our features of developed, Well, is some we that learned

that's extend set, removing company expect the and and we're feature other any will but we're a better charge cost enhance example, somewhat, also vehicle up, is move well. up to of today it are that the to that space the It doing far it relevant things still EV powered number will we be as delivery lithium. the For so than delivering still you're We're that the a solution or back make seeing the to adding we’ll take from will what in we'll in we're range trying leader it penetrate going taking vehicles features, will doing that faster, that windows, speed to restaurant seat. gas a

Barry Sine

kits sold. you And that bring those wrong, Could I'm goods And cost so the specifically Is of in about China you tariffs where can market. coming domestic, from your sourcing of the today? batteries you Okay. kind then the avoid China? that you believe impact are are talk of me Correct tariffs? I from if

Rod Keller

founders who's right, of you're we've with them. kits bring had knockdown, are And strategic has actually actually semi relationship we that a had kits Shanghai, in bring a almost XX them for in interest partner, we vehicle. of in a a the No, - We financial long about The of company relationship years. got with XX% our outside just us. total

are We well. of the bring tariffs. challenged with there as our in some batteries from We

In fact, US new the in batteries today. you need

get our market relationship, Car And us is the faster to. result than or I'd they to to the faster our as there. can new market, say, one reasons help which new get And the or why got even ability intents I'd US, of chain faster, a as supply faster say, solutions of of all it to of is I But competitors our tip help here we've - markets with help relationship and get like most why spear. to out purposes, be us customers may reach traditionally to is us still they're They For they why to comes can of do our China, - likes they which one that's Club help get supplied a the great are refer reasons though in most that, with anyway. the us all that market of the them than they of themselves.

Barry Sine

for And in kits? tariff are XX% you schedule those the

Rod Keller

the on Depends component.

I components, less, some that waived. facing coming yeah, are are some mean, insignificant, EV tariffs But most China. of those been are today the of out in Some the is but companies XX% of space are not some yes, actually

Barry Sine

if might financials. ask I questions the on then couple And a

on that's and the So XX. are that's GAAP it how that’s all income sure those works you and quite a financials like quarter financials historically, look the perspective? completed that partial their not full When at transaction merger that not statement, not the looks May in quarter we public from a financials company historically, a your

Curtis Smith

we is so this Barry. Yeah, Smith, – Curtis

Barry Sine

Curt. Hey,

Curtis Smith

be coming Good morning. required be Obviously, next second SEC X-K, after published the out merger this our XX-Q, X believe the a issued here as the we as by I as quarter quarter We so… XX-Q was we first an company, regulations. results – our under June through I first our under financials, public days will issued couple mentioned,

Barry Sine

your all But that's… and is now it financials,

Curtis Smith

Yes, yes. Correct.

make was of over is we Q of post so set X, in So or Ayro our financials, is financials. what June the one the X, on or what's books going was obviously June X-K on XXX% the again financials our transition - set other. XXX% one to from to And that's our - what financial, where be the to

Barry Sine

so year-to-date, vehicles metric revenue? reported will that's COVID Can and helpful, then the then, that's to, would that know, key XXX of [ph] related about just obviously be you XXX one mostly be accessories? XXX driver k or I'm in you and assuming that's talk last year's revenue, You And revenue impacted. of related and the think I the number

Rod Keller

each on years. for of two non-recurring transaction had Yeah, revenues a in we the we million we And a last average, sure. Barry, that XXXX. in adjusted had

year we guidance. So of don't this didn't I No were in provide There were mean, we due a while where made. operate to weeks deliveries few COVID. QX

all some result, at and peers, home a largest couldn't As with we of COVID record retracting guidance any in to even revenues, orders the $XXX many given like which degree. some we year the one of we that to we've facilities world $XX companies said, roadmap due stay the the to longer the for their dealing we're that our pricing the shift and expect term, revenues got. the That the generate got, believe and product on the we could million new million range, comfortably with we've lineup in which

is right faster the So say how to think looking as soon we got, get there little a to get possible. hard now. as But there with plans prudently we've I we're

launch XXX, now, and One the expanding development of of then to Asia, outside the which of next Car, key with the the to expanding Club level Europe underway the things, our of right also course, first on is footprint it. four US, is generation our

Barry Sine

forecast XXXX, know, you us, you issue And for we've The of a guidance. I remainder could if number. don't say the got help backlog you

they that clue there's end good, we a even part a Seems a universities markets obviously of use and shutting risk they're kind down with big can can about for are really do. shut that's of year? what down pretty COVID So factor the out to talk year rest there. about of football. how the football we forecast know But your so XXXX the think could going they're I program, don't you

Rod Keller

It's be the cap up in some lot athletic so of football down of a that of That's that's got we shutting a mean, hard we've to heresy a expenses demand don't released, because funded by know I function Texas. university, here. the Yeah, when pent is programs. going

and hard we've us meetings for yesterday, with can't looking give pipeline, to hard the the you it better to here. think to of for again, future are this that things expected even though lead to Club when things they just it's balance had the term. of guidance for we COVID solution know, the what don't know believe guidance, we it's I like, better, optimistic significant are to leadership about give a us that we impact But as But I the Car change applications going had they're year, So And because the got any predict long the well. joint look developed.

Barry Sine

point how giving markets to you've product, years, to a be got come you've a without to you're think end some five about investors one with. And next your optimism back core let's guidance, and about, say then speaking should in without long-term, again, going product market strong then very will at the new going got

how but were trying wise, think So revenue us we you've should a obviously, that given you potentially to revenue that? understand, you do sell We're about production, number, what you've production to first. at can full if got

Rod Keller

charts, don't service manufacturing, and decided pursue model, through that's and look a than some we know our some you give and I'll to They you targets you're margin or channel Yeah, We need perspective, believe partner better are selling look at what vehicles a Car. in do difficult own given you have gross are talking makes capability. I our any think margins our that Club you their a When think positioned they've like you I we - what I guidance, I how exactly on of own believe, it if We've looking from competitors, to I chosen local why. us, you tell one investor's it's as we on that have you our gross and to basis. just or direct-only major at think an a if to an there's want manufacturing. don't mean, I'll believe asset

think to restaurant ecosystem only where bring charging, For example, can’t to a just we're replace entire that And you the other entire to vehicles you need vehicle, today I bring working delivery, partners it's for using that financing. companies when ecosystem some are thinking not. service, bring vehicle solutions with they’re you to the enough, and from a bring to

those having underway. think We're relationships the are well conversations, already that, the and So we've right. I got and understand experience the to that leadership leverage

I XXX very, we're next is in of - on the right the next future, the to think our our year. launching Car need bullish to very seeing relationship on half work tip reduce great. you're COVID its is toward this We the XXX Club The of with generation forecast, what second we now from the iceberg. and before as current impact on

Barry Sine

you. thank Okay, Operator And Capital. question Colliers the Fiske with comes Michael from [ph] next

Unidentified Analyst

morning, Good guys. Hey.

Rod Keller

morning. Good

Unidentified Analyst

follow me a are - through XXX. But a individuals, to selling a Maybe dealer be comments, geared fleet is to just the I'll trying Give start as mentioned product. your what of operators, know, to you the to to network? XXX the lot that is be just up as towards of clearly out sell what mentioned. what going with also to advantages nationwide, a opposed to as one to trying go doing you In a to you you're especially sense fleet just on of company-owned fleet opposed going

Rod Keller

years. has they've business the XX, with closely Car, XX we at got not the mean, if got regional and the support, you've they're brand leadership Club Well, independent just the in been whether very through work I've my since it's managers company-owned franchises, I And they're done businesses. it's relationships, Car or I and directly. - but not the in But both Club dealers field franchise, career, company-owned, mean, and whether ways I've it and entire right the in

So answers hope this your question.

very And that the we're think a a and taking fewer the who positioned more think about But does. we on closely like of I fleet we're the I at it's Accounts selling we one partner focusing but well unit expense. incur reason And of there. bigger. are very, approach all we're lot We some And with. opportunities excited named time Miller, number gentleman with runs with Jeff that got. work a aligned confident. feel Strategic very the opportunities is channel we've we've a it are the [ph] the think I the companies skews, And

Unidentified Analyst

Got Maybe it. you've I got I ask backlog. also, a mean, can

expanded You've newly facility. got your

today? can another your large arrived So current order. you actually per churn can per your quarter order say capacity What reasonably month larger a you out today? let's and hiring, number current number or today deliver on or just that's What open based

Rod Keller

an $XX,XXX four a to an to called because SKD, per for line, in, Fortunately, add XX XXX with knockdown format line, what's to on it's month. could $XX,XXX in a our semi it's about lines additional only two days expand to the us vehicles come about we additional up and vehicles month, us, remember, shifts build

yet. us it We that we're not with time, not difficult But for be volume meaning Now, we would enough availability about to obviously beyond But expand lead here. do the at on that could from based XXX today easily to to XX the supply a a to need production, would our not perspective, XXX from take about components. more days not capacity days procure XX but than XX to from side to XXX.

Unidentified Analyst

as days. you Do have capacity these can that of any or curious. year. margin [ph] in this guess, you full for everyone hit Ayro same the prior it. see for of with in that well boast it's quarter, great that that the quarter in to targets kind you're is of any kind gross easy that Not you the share kind Got gunning as And numbers positive can your I'm facility? I space once

Rod Keller

year when targeting an XX you to margin of with of vehicles I've With way, looked that's and by that point, gross sorry, Hey, I'd positive. to where XX,XXX make that I'm good they we’re we've the margin, direct-only. channel margin per extra gross positive, points step there, competitors a like we're their got, the the through that some factory. of made at, gross point get And selling caution are

XX approach close service the market in a And selling margin, to our the dealer national points that's vehicles Car. as can that on gross with sold. through or of will having in do Club well of all We field

clear it do asking differentiation that companies but and are. us you So again, to if I what your question, make I know between some to weren’t trying don't to mind that other wanted we answer, happy I'm

Unidentified Analyst

you margin do amount your And you're the today? as perhaps in target do hit a have then ask capacity going you capacity, to can as month. if anytime of actually expect I guess, even far it different full that soon, way. that kind gross per you I Sure. reach for of any units

Rod Keller

to us these almost forcing in dorm way hard little that their ways know can't look of and that and don't universities students Gallery volumes without is I to we with answer margins that, place tens It's with higher value-added other - margins, through with vehicle, of is are this now yet, revenue mention low, cramming the ASP our because mobile gauge end of or are classes volume, cafeterias, vehicle very, go universities because today. experience about way. well. students what you're restaurants, at at higher but other volume, drive them are as the is business of and of now of Car, but that thousands higher at losing grab do It's you're where that it, so timing is restaurants our of Gallery to or the beverage pay XXX looking are control at we’re placed lower strategically And other And Car sell of the higher Gallery $XXX to we costs can do it's bigger, forecasting like strategically back Club The gross them because they're the that all food the end much that, we it's at it's but value-added. Let as we're in already of since collecting They look very aggregator, it problem. you're food. necessarily excited mention many could because do spectrum we off-campus. cafeterias? happy selling the me the much one they fact the the than take with with having me Typically as Obviously, rather with on that's size fact opportunity when we very orders don't to or a at collected let attractive back, at The themselves. And s, a attracted that because to One challenging high these university is significantly, globally Club bit margin impact spectrum margins, of and going to very margins the at campus between size to of the of economic not largest be side, there of the fact particularly to around the even the they're high to they by us. they some when much want hospitality they the food have not now you the the low that. control don't vehicles, deliver data the into collectively that on the transactions, a fully where are aggregators. when faced of billion. the and you much the terms opportunity their and well beverage instead not it's very, that How very high end either through

exactly get To of have the of of electric So, very finish vehicle all aspects our lining to working restaurant per when our for business try development I you And of front XXX quickly is going piece in opportunity said, generation the think tell I next them. X-wheeled silver to delivery great restaurant kind month. we're of really Again, to the delivery. we're COVID. to

again, we all face that, get past this how today. function can a is to of quick with pandemic of we're Some live

Unidentified Analyst

ask, very be trying full out far to do time… I trying out I just margins exact I you a really know number, wasn't Sure. what when, I to If didn't that could figure the just really I as percent capacity, figure once get ask, can gross was to hard its the as hit

Rod Keller

before and But in well. way, revenue be XX% points. of Well, of excess to I'm recurring services tell we by going the add you, as alone subscriptions should excess in and that's the that hardware of from we it's in XX any provide

Unidentified Analyst

if vehicles Got is the other or voucher you're - trucks, California if these it, if the that for for then commercial for the sure correct whether of are eligible And are its do program? but offhand vehicles. not HVIP size vehicle subsidy perfect. just I'm know you

if learned about previous? you So I'm subsidies if share you've could anything curious California

Rod Keller

states No, is we're California, as this. other that's Yeah. to investigating, have question. something started as such explore well that there's great No that

advantage as So the out so a no so. or is competitive works in that – check that

a that more so process, tuned is that. stay on whether Now for

Operator

Mutual comes [Operator from you. the Dunn Leonard Instructions] [ph] Thank question And next with Trust Company.

Unidentified Analyst

a got little on some I problems the morning. Good attend had I had late. to. call I

vehicles on any is up this that. expected But And your production? I of you longer as already. do idea I capacity. have month to XXX is follow mix to apologize. But XXX model have and that. And congratulations a announced a So your question is XXX you then term, asked

Rod Keller

Yeah.

Let we're this The ramp me per way. month is XXX. it XXX begin than to the let going me answer need to we as expectation more

not we we market to expectations month are our of we're how XXXX. discussions of significant. demand of can As But the now. That's XXX for incremental well above I we the Directors, the in the meet mentioned, with on is sales right giving the next-generation reviewed size the XXX launch in something XXX. I've when vehicles per already Board guidance

Unidentified Analyst

of a the given a near because got long producing year, this of out XX term mainly to on term, kind looking And Okay. month? focus rate get the to a what [ph] production XXX coming now XXX, to XXX target month, month, could term nearer we're that

Rod Keller

XXXX the for Round today our through The will it way. capacity answer here through balance support the the I'll capability way of Texas, budget XXXX. all have Well, and in we Rock, XXXX for building this XXX and

fortunately expand expand with We I our that assembly, we're that. Austin. from are semi because again, us to us supply hard kits and But partner take strategic doing need manufacturing having because we partners potential chain, not our is capacity, here help in for true we in knockdown capacity automobile to as always it event our not conversations said, the

Unidentified Analyst

and way. all to Okay. near understand it was it's the to glad for my just far. I'm a your No, everything hard a get up very sense. okay, not very Thank accomplished term. in sky trying and in what [ph] handle you're looks work find on I looking much seems at this how And make promising. to you've just practical you And I so set very mind the

Rod Keller

you. Thank

Operator

question from with comes next Fisher And [ph] Clinton Capital. you. the Thank Melissa

Unidentified Analyst

Yes, thank you.

XXX legal. means talked But what You the about explain for and can street you XXX? this

Rod Keller

that to in did I vehicle, to up. I brought glad you XXX, Yeah, We question, you correct. something now. it my or the want And speed the actually comments Thank referred that speed not there I'm was not vehicle. it comments, correct is is in my a for a because was low low

low question, The is answer difference. in or up low or speed speed but only low any to that mean XXX miles XX let vehicle hour, public me in vehicles is XX your So to is the legal describe and posted limits per of a the designation drive to speed below. That specifically, states all on what it is of XX XX road hour with speed miles street all per a vehicle states.

it vehicle, public per roads road, miles less. to or on limits that, legal published XXX XX you is any of the repeat up speed just me only XX let with public on street a drive can again, So hour but

- a to want too will much vehicle charge time The version enhancements the The faster be of current vehicle. strict is an a specs XX. generation next of now, XX Now not the our not some But don't so look too under XXX range, to but and competitors that a get look to I on of like, to hour next - range. will a the what XX don't we're will much for up legal low our vehicle, of greater away want XXX speak. sheet I to the speed it's run more speed, closer XX on so don't give to mile miles working

Unidentified Analyst

Great. you. Thank

Operator

Thank the Red you. Jeff Daniels with from next comes And Capital question [ph] Sparrow

Rod Keller

Jeff. Hi,

Unidentified Analyst

Hi, good morning. And thanks, Rod and Curt.

primary We have question, competitors? customers Who other been and all that addressed? Thanks. comments you your on to from any one differentiate business public competitors and benefits your model are have other topics private and

Rod Keller

question. Yeah, it's a good

answer have with you thing the Car Car. Club the our it in me powered the is lot vehicles. greatest tell Club Where we In gas we of replace we two a XXX same ways. Let success

example, there In XX% entry cost COX XX% marketed a less, Car XXX. emissions it for compare take When to powered Ford our Ranger, vehicle. anywhere between that I'll level reduction when fact, and electric gas about operating our truck Club Ford of the light-duty on the you is is XXX% F-XXX or and compared to

question at don't you a as asked, a marketing basis. Now compete them that's as is we not job look a competitor, on public company. – who could a at look - of against Arcimoto competitor. you of done much their They've really the good we them

points and only points they're challenges and at already call that a steps with, a of to extra above margin earnings Car and a the XX,XXX points of margin, earning gross they fact the margin direct faced one well channel. the only like you we're listen think vehicles I've think like in is to I the to strategy, that get of and probably partner that's XX one, much XX gross Club through direct today because got and we we're listened calls XX we've - of chose gross of to this position what a better that model.

in But what Meccanica them product, against in up what marketplace, really other at and in - look compared companies than and electric. you But asked passenger with you compared miles, we're speeds think companies really in single to I XXX most. two solo customers know, successful either. from we're of perspective rather primarily public which but cap be terms might I combustion, vehicle, gas interesting, to an against options, interesting don't those the we HOV California. XX probably and product, a is the Interesting the is a range internal market the the lane So Electra of compete

Operator

Evan with next And the Greenberg comes you. question Thank from [ph] London Capital

Unidentified Analyst

Hello.

like with question many for would seem Ingersoll’s one school. Just advantage competitive a to you. Car Club in back Partnering like, certainly parts, distribution for

you partnerships will some compared provide seen you flow the for how and comment where kinds to, partnership the be [ph] mix? or in you can and you Also, First, looking possible you’ve in the relationships debt envision dealer that of it? order to what of particular one to network add expected in the of details compared

Rod Keller

leadership from never for Yeah, great Car faced next golf relationship. manager ramp excited Its it’s learning side, and sales legal a learning know a And and that quickly, same out dealers mom to one. of our accounts, reach you we’ve question. addressed one with earlier, their We I like leadership And guys was as COVID with you Europe will our and curve very I But is not pie. sounds well, I give the that are themselves. sold But cart, Club leadership to golf Asia are to as we to looking very there ask it in we of and Club other QX very cart year the little very they but that similar begin answers. with cart. But, street to a the Car, golf as for encourage in is down. and who and the things is And initially, apple the that with at the we as working regional and much bit a as very, next XXX, questions, plan Car pleased curve. in relationship I can you little not learning the like late with about relationship slowed the a well. dealers them of to solutions one challenges generation not is then just the at were best consider [ph] on golf this cart, have Club vehicles, – think strategic field closely we’re on of hit we expand to year the said

strong. is relationship very the So US in the

to right We’re also the APAC to things well. doing domestically, expand but said, as I and and it EMEA not as just

Unidentified Analyst

much. Thank you very

Operator

remarks. Thank have pass time for to the was back for the that closing management session. Q&A And call we all will you. I

Rod Keller

for operator. today. I’d shareholders by you, and Thank all the with all investors. you participation call thanking like questions to for the all close perspective opportunity today. We Thank next welcome right. the All your of engage you to your

we Ayro with attend. you Xst us are protective. safe the next you But the to we of you happy September likely conversations. hope remain and choose great forward day. on I to any you In and for continue then all I if a Have Conference meet our XXX fact, Micro to follow until to hope and at look there, and you be LD to thank your in interest Virtual

Operator

Thank concluded. you for Thank now conference you. attending has presentation. today’s The

lines. disconnect now may You your

Ayro (AYRO) 14 Aug 202020 Q2 Earnings call transcript