Earnings call transcript Q1 2023

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Operator

Good afternoon, and welcome to the Pioneer Power First Quarter 2023 Financial Results Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Brett Maas with Hayden IR. Please go ahead.

Brett Maas

welcome. and you, Thank will Officer; by Officer; Walter of Murickan, today and and Mazurek, Chief President Mobility. Executive Michalec, Pioneer be call Nathan hosted Chairman Geo The Chief Financial

Q&A this highlights. session call. Following appreciate to results quarter opportunity the the will discuss as there be well We open participants as on discussion, to the first financial review a recent business

and me get you this recorded started, being let remind webcast. we Before is call

now current expectations During could contained statements on this Chairman differ call, which the are content call. please to the to subject forward-looking will CEO. cause turn forward-looking refer cautionary the to release issued that over assumptions These to statements. and Nathan, the risks in management to Nathan make the applies statements results and go call Mazurek, materially. uncertainties are to earlier today, Please ahead. text and based of and actual regarding like earnings I'd

Nathan Mazurek

Thank We for both you you, unique fourth the Brett, and XXXX, us, solutions joining first be an last is up of a quarter for grow the and and quarter revenue to momentum carried to us year record year's into shaping of terms thank Demand from for at all year strong this in good profit. afternoon, and continues today. our outsized pace.

our markets with new We for evolve customers better orders to purchase new us expand opportunities, the customers. the and customers are we needs providing our and vertical dynamic to solutions adding are of serve and continue Existing solutions. our

another nearly we year growth. XX% to revenue XXXX XXXX, be in XX% growing After of anticipate

quarter our sale following a positive the XXXX. GAAP income. transformer for in of our this August second significant profitable net reset be turnaround year. full to consecutive the our expect This was also Indeed, business with of our and marks business in We

our have and leverage us volume sustainable achieve EPS. point reached a enables annual We improved essentially projected where to operating

are least of projecting results, between quarter-to-quarter annual XXXX. some XXXX, rate $XX to million in similar in for $XX to continue revenue at we and XX%, volatility growth While million we our experience a representing

and much sheltered We expansion loss our margin to from also carryforwards. net expect net our continued of operating income taxes income positive due with

and earnings noted secular both I the on generational our earlier experiencing. inextricably address transition e-Bloc is durable calls, linked solutions drivers catalysts X directly E-BOOST energy with our nation As to

users compact Our switch automatic integrated source scheme, power. e-Bloc control of protection than electrical one power an and and for suite transfer is of solutions of circuit system, specifically outdoor more designed

battery to to gas storage, facilities any engines electrical natural internal allows system. doing e-Bloc add fuel energy like solar, cells sources without or upgrades additional their existing

facilitating effectively and Additionally, e-Bloc and shaving, all general allows the skimming user these protect resilience. inputs, peak control to manage, peak

benefits all As these a compact noted earlier, in e-Bloc package. skid-mounted competitive outdoor presents

costs large supermarkets their are businesses water just hospitals, such and solar physical retailers well lowering control a a primary growing ensuring as facilities users reducing inputs, senior multi-location initiative as rapidly including better markets end reliable with generation want to prisons as steady centers, for supply. wind, their and carbon is Our The name e-Bloc data centers, utilities, their to as and few. living power-sensitive critical large distributed footprint, energy like footprint,

today to EV for to power with put, e-Bloc very charging -- are Large Simply concerned also future. only strong the stronger. in their to and businesses their about them the like ever-increasing and primary supply market understandably users of getting ability continue grid requirements the current for is power

Mobile platform. to charging Turning our E-Boost

cases unique orders ever-expanding and increasing anytime, EV continue anywhere use to see for solution. mobile charging We our

ultimate and immobility Our system, E-BOOST system high-speed propane-fueled is powered charging sustainably the a portability. providing

several platform, is the E-BOOST portfolio comprised reminder, As of platforms. E-BOOST a

charge a of EV facility a in and with smallest on brings This quintessential charging. convenient location within dispatchable the on-demand vehicles any and charging to is footprint. enables the EV an else with forklift generator for It demand providing to electrical the EV It depots convenient thereby their trailer. location, easy convenience high-capacity and car brings mobility EVs. that and a EV skid-mounted on gives version truck-mounted way Mini just dealerships and charging anywhere E-BOOST any that board provides is truck option E-Boost charging of high-capacity vehicles anxiety. truck services on owners and at range G.O.A.T. a any charging EV of a eliminating

mobility multiple cultural that and events can solution the options balances gatherings effort higher and with Mobile specifically demand other charging. elevated or E-Boost be EV specific Mobile for to is short-term high-speed towing E-Boost available for at large businesses, for provides of capacity and the fulfill a minimal trailer-mounted need on charging and notice. sports

situations EV emergency or outage. E-Boost can customizable solution solutions, a outlets power and can E-BOOST power power Pod fast service all and backup is power a with mostly as provide available the higher stationary such vehicles needs, Like to convenient connectors other X and more pod finally if necessary. it Serving moved are high-speed be The charging especially source board. charging capacity as simultaneously. can in on DC also

a the manufacturer units management domestic and the recently truck country's customers manufacturers, largest to a of dealers, operators controlling large and largest authority their provided target fleet additional nation's fleet electric and Today, associated electric to units school delivery new operators new the package some management airports. large bus and included one transportation like. manufacturer, units bus providers, buses, companies, trucks have We a of to of

equipment, farming pieces E-off-road infrastructure of e-boats, equipment, e-jetskis, vertical anything e-sprayers e-tractors, construction markets eSports E-BOOST encompasses that of forth, aircraft market particular the equipment. mobiles, and along equipment, eVTOL are all the so for for active air and taxis, Other snow off-highway include equipment, lines like these electric take-off of things which market, landing electric including the or and future charging

order network interstate components have and The National funding or our is in to that NEVI incentives national stations Infrastructure federal providing domestically grant charging companies to also program EV-charging highways. and Electric Vehicle a U.S. manufacture their along

be for XXXX XXXX catalyst NEVI NEVI implementation state begin the and in the us significant and and of expect as program. funding governments a authorities program the We to

solution have appealing of especially rural and and industrial permanent significantly need where their in infrastructure an uneconomical. augment infrastructure. parts is nation's underserved solution and commercial charging outpaced Unquestionably, cars just particularly of buses in are to equipment trucks, E-BOOST is true where infrastructure. with sectors trucks, EV the warehouse the fleets companies highways Our solutions of This sales our EVs, buses, charging

solutions organizations quickly employees charging for company and fleets. to are Many customers, moving add

niche. We have EV recharge to solutions car this large to vehicles sold fills E-BOOST manufacturers unique directly as

E-BOOST in XXXX growth As beyond. a drive profit us in significant we to expect result, generation and for

call financial our our CFO, to first Walter, of discuss quarter. the me let the over turn that, to results With

Walter Michalec

Thank everyone. you, Nathan, and good afternoon,

which e-Bloc was to And period or million $X.X increased E-BOOST the momentum quarter integrates up revenue mentioned, this of XX% to profit. $X.X shaping Nathan a Pioneer's As and when carried terms to up million were to both Critical million XX% Solutions and $X.X first during compared year-over-year. a manufactures segment, which Revenue be $X.X year. strong up XXXX, $X.X in year year into Pioneer us, million. last the X% quarter million, T&D of Power of our same our our last revenues solution, is segment, quarter from record for the fourth first year from

productivity last $X.X sales significant profit during XX.X% of the due to our for The of gross favorable margin profit mix XX% and e-Bloc our sales improved $XXX,XXX quarter profit gross from our Systems, million margin margin was a first Power to or or quarter first facility. year. a gross was the to increased a Gross primarily increase gross a compared of manufacturing

first Selling, of million quarter of general expenses the to XX% XXXX, general $X.X were in to compensation. expenses $XXX,XXX administrative $X.X Approximately for And million and in increase an sales, and SG&A administrative of SG&A was the prototypes investments revenues when of for compared related marketing, our selling, quarter. of personnel ago stock-based incremental approximately also year of solutions. the E-BOOST and in quarterly $XXX,XXX includes XX%

intentional and is solution. targeted designed this new to This drive demand for spend

$XXX,XXX new to income quarter business We loss line. compared XXXX investments year. build during continue the $XXX,XXX last operating expect swing of we approximately of XXXX a for when first through these this ever-growing $XX,XXX, quarter out an Operating was the first positive of to of as

or share. loss $XXX,XXX during per the diluted of first income first was share for diluted $XXX,XXX quarter of basic and Net per the $X.XX basic quarter to net and a $X.XX negative or compared XXXX of XXXX.

cash of to of balance We million March on X Turning December and bank on XXXX. cash XX, had million debt at hand at $XX.X XX, $XX.X the sheet. compared to hand XXXX

Accordingly, and cash we XXXX. represents This needs. our near-term of confident that capitalized to investments are at approximately we XX, $X.XX share are per address March cash sufficiently

our new XX% as grow expansion significant said, when well with we As and expect we Nathan in the believe XXXX in deliver XXXX to as at our primarily demand least positive continued growth revenue accelerating for and XXXX. on compared by to backlog, margin net income. Based can solutions, we

generate net the for year We income back positive share. earnings turn also any full to to and I concludes remarks. call questions. This my operator the now expect per

Operator

[Operator Instructions].

question first Our Dayal Wainwright. come with H.C. Amit will from

Amit Dayal

Nathan, guidance, of sequentially can through expect now we the XXXX? to quarters respect rest With stronger the

Nathan Mazurek

of in correct, expectation, the That's of revenue both in and terms terms EPS.

Amit Dayal

the give Understood. now? what's on backlog And maybe you right some can then in granularity us

Nathan Mazurek

of so the the United large most say Several for we large car a large two, States, don't our it elsewhere. is forth. the product. the one one California water facility of backlog I'd manufacturers customers of I e-Bloc there's in But in comprised project, large Most -- and the and is of itself detail mean, south EV -- one the of utilities, the campus/manufacturing one

is manufacturer that I larger projects, sort larger out the for aircraft Some of for and detailed and as large trend one-offs. One these things to of guess, project separately. they're an getting the we've a opposed is

So the this is year. that's about backlog what

Amit Dayal

$XX now? levels as of terms to million, of full grow getting from do million to in then at close How of these Understood. you And we the availability? capacity capacity level are get we revenues, $XX sort

Nathan Mazurek

Right.

booked with especially been of what we've because Angeles, facility point of kind in last that's been earnest view, in month dealing is at Los the XXX. statistical our The done. is XXXX from So

how some way the we're do it going of the which out be we it year. more do helps. going is next issue the facility to mix, of is product is So do And to same only

about subcontracting the going legacy think operations we some that still value us out of probably for the can Some today. we doing probably done. The mostly getting not out itself, We still actively add and on that that That less engaged do view, is testing capacity, maybe wiring, point that in of shift. it everything maybe today. the -- and engineering, is could taking be we're a by us XX% from one assembly XX%, do to critical

do order making that rubicon of cross the out of that's capital XXXX in expenditures. profits the we first the facility the business. How of and increase So without volume sort type

Amit Dayal

chain side, how everything deliver you you supply against The just to And me. are comfortable outlook? last up for for one this is set with

Nathan Mazurek

say So I would that comfortable. we're relatively

with On manageable. and great not ordering anymore. side, unless to It's anymore, it's lead from of of It's have it which We're price that. exotic not living as are not point times into types The kind of we're as the increases you still stable that all the it. crazy components very e-Bloc used view. you're be. terrible Obviously, of

say On they weeks, If the side, E-BOOST means engines are that XX. a problem. still XX

most year So are engines a out.

this E-BOOST been last that to in we getting ordering invested as wouldn't frankly, going And that the already think anything and continues holding we ahead able without root. to year, product be the that inventory we've deliver we take that to So inventory really by year. of use we're

we've been little ahead So bit. re-upping constantly a

spending fourth and test the and I we're And the want the any from be with have we with the inventory greatest we quarter to that try that were doing line that the to we judicious went primarily just doesn't We the cash first up it. all either, that to obviously, able us testimonial keep use good for it but cash all E-BOOST, the do below about think and in quarter. don't

is So something going right.

Operator

Instructions]. [Operator

come will question Mark Boyd Shawn next from Capital. Our with Next

Shawn Boyd

you me Afternoon, okay? hear

Nathan Mazurek

We can, Shawn.

Shawn Boyd

Great.

would processes XX%, If comment it I to expansion. capacity. potential correctly, XX% of that's the the back that heard optimization go to the regarding capacity add want outsourcing revenue and increasing the to certain Just

it? $XX guidance and million about So to think from million XX% the take we beyond that. add Is your then XX% $XX that to way should

Nathan Mazurek

Right.

first correct. is The of your part statement

don't revenues. The is represent little XX% inaccurate our that doesn't know, represents, because of a our second of I business revenues. XXX% It part

of however, increase an that. So that's

we side, do. E-BOOST we're get really to now. be all E-BOOST not Minneapolis-based able we out great side. of for that the challenge that We right right facing service the the a on constraint capacity But would this confident the need can get 'XX, On with we we're now, deal balance to hope out the and business, that units of That we're year. to

Shawn Boyd

Got it.

there. point Great Okay.

that to on is XX%... T&D this just So Solutions XX% the side,

Nathan Mazurek

That Correct. Correct. Correct.

Shawn Boyd

the clear, year hear this I hopefully of -- million couple million on E-BOOST And million was you last $X be just to a and that on to year. is that, $X and

Nathan Mazurek

Correct, correct.

Shawn Boyd

Correct. That clarifies.

I if let's could, substantial. move is to now gross So margin, XX%

you know to that more So that in the can clarity drivers a at level? I little keep gave a -- you bit gross margin and script, little elaborate biggest on the that bit but of

Nathan Mazurek

I I better product but Yes. do, that's what the I -- to mean classic detailed the too know, that the on margin mean, it's more product don't I don't The it more mix. want the it, -- is. and e-Bloc get we is.

-- the enough But margin equipment, that we together almost not other XXX% that We lumped it's things get mix. to that the adding and can't down value that enough furnish we're just shooting pieces that's margin other yes, of get we're for. slows expansion. to need Sometimes with of kind

Shawn Boyd

And All in backlog. well, also go if $XX that can and this then I'd keep how be million to right. does so Okay. backlog -- -- out. you got on you've not ahead -- through remiss But

that the XXXX is comment made booked. largely You've

can that much scheduled pretty as we that XX% -- you've fourth of to Is hold Can door. the most get the this at it in out the kind how of margin? quarter... you business So rest this got of

Nathan Mazurek

margins to with love those were given view, for. of in -- right that. exactly gross the productivity we Yes. of respect, I we've to view. able works it want. I gone it. we But The -- shoot -- mean the point higher a mean never scale, price achieve that volumes we we the We a purchase every way given that's for out are mix, it, achieve would right helped the from point from It's

doing -- to what we're going forward. that's do we're what So expecting that's

Shawn Boyd

Got it.

cadence. me now for is Okay. And thing the just for last order

this So implied -- for we start kind if quarter. a but -- way works, can you I'm and give and this after on about is it of at great Down probably the me business? the again? the to typically that Or then quarter company, my million the in $X looking were drop the ramp just order year and your into fourth talk can But million throughout of just orders anything just ramping big off is experience $X and you with kind March you cadence general correctly, quarter.

Nathan Mazurek

is -- the and cadence The bigger jobs the getting are projects bigger. Yes. and

stopped point good from So a it's come maybe timing of have sort in. that second large of the We it's view, and we've bad. like announce quarter. also maybe orders in stopped don't and We

the quarter, in active. book-to-bill cadence go strong. You something backlog is of I to orders But up what April kind size, then down comes the kind say of the of that on very or if the changes. unbelievably so the you'll dynamic and is given were XX, that the dramatically so what have till But their the still second was end see the and wait and of would revenues.

Operator

will question come Private from next a Investor. Our [indiscernible],

Unidentified Analyst

to has factors increase do quarter expenses from the $X.X from million the What or question XXXX QX. were first SG&A to to contributed My the the $X.X to XXXX quarter-over-quarter? million the what with the

Walter Michalec

Yes. I can one, Jonathan. Sure. that take

$XXX,XXX that. Roughly So quarter investment e-Bloc $X.X our investments continued attributable our of really incremental was in million or initiatives. E-BOOST and that the the in -- increase, majority was to so

normalize down. you quarter, to kind without were those XXXX, would actually there. scale as in if to up, which ramp the are are So first investments, going and SG&A be to we they But going throughout but continue those remove of

Unidentified Analyst

that going in said you had see earlier And that QX was XXXX, of also the in part we that stock-based expensed place employee expense compensation Do take number? that in of kind your to XXXX. is remarks in You is SG&A XXXX?

Walter Michalec

Yes.

my sorry, of $XXX,XXX compensation. to I'm quarter is that So about related SG&A the was stock-based comment current

XXXX, and had So about roughly QX both $XXX,XXX of -- have quarters QX of had XXXX roughly $XX,XXX. did

Unidentified Analyst

the SG&A expenses be to to quarters the comparable in we in forward Do XXXX see XXXX? going

Walter Michalec

of our and control But any scrub most or save don't expect where For do as take we would over on costs a up we down. more relatively I see yes, part, significant the SG&A, speaking, to goal well. say, but swings is can

Operator

question [indiscernible], next come Private will Our a Investor. from

Unidentified Analyst

increase that you to and only Or that Are Los My planning the is some case Angeles those plans fact or Los tasks. question year, outsource Is the there the orders simpler for to your the the to of you another e-Bloc you fully take about factory through your seem e-Bloc is kind in build you growing. it you can yet? plans have the of factory? the be to you just is after Angeles? -- makes booked sales that Do the go production build have fastest

Nathan Mazurek

Yes.

-- So that's a every struggle to -- great have. this challenge That's really with day, Chris. we it's

goal the in growth It's it. XXXX. is first just manufacturing, not but to engineer -- So to be meet the how able have we we do continued growth

able stories any through We kinds management that on be these to project to customers these these shepherd demand complicated jobs. have of of

than to this more we're second lot every on chances of lot personnel It's going go We If forward. the an to continue to it's the a of right market. not get continue in achieve So don't solution growth. we a to level, just deliver excellent don't facility.

the So yes, first. that's

to The have first XXXX. a step is in do how exciting reasonable growth continue we and

situation You're best do do assembly right. And more? becomes it Is only? to we course, want Of the expand? it then Is the we solution.

bus custom look your we hope have view engineering, the the that think the is that informs we the we work. value that at off we big stuck that is is So have value terms that of this cuff, it so

testing a lot these of have is complicated value very The wiring that that into and units. the big goes we

continue doing we're the what them, sure are of back end have to we're vanilla-type make kind We corner to all -- walls? exactly make to Do we we Do critical pans? that right not less those are now. I'm doing have functions not more things posts need So we functions make. have do customer. all the to them Other we're that if make we for or time?

any So need in does we the on that would move forward. that have of would that to process the our again parts of kind think order we expansion to value-added that facility focus be

Chris. I that -- doesn't Los to Angeles I'm necessarily It sorry, well. off, have expansion in doesn't be you cut as

Unidentified Analyst

No, no worries.

So is each e-Bloc customer engineered for piece?

Nathan Mazurek

mean customer case is every answer. longer Every different. I use is that's I So different. mean, a

you're user. less If

-- job you're kind themselves? yours is will many going there is to If receiving a going and if Do lend have Every is of you're additional sort there, gas engineered, going different. line? variations are among be similar. to they know supermarket I of of have customer. what to water is Every points be of the they're custom service they even Every senior to answer kind every more they Does are things different. solar? themselves different. going don't of living So does it the hospital very, very similar, center and but store power you're what But same short that chain, lend a the that especially is utility clearly, the based size on to want, be of be

little So to in there's that respect, glam-off. very

Unidentified Analyst

to see of good Well, some you technological multiple... have Okay. kind

Nathan Mazurek

more to way. XXX in Close of immediate sort a

stores. any now haven't yet. backlog with out They reflects X additional Our come right

units, this perfectly. only comfortable, they've and is hope hear as a received we the don't for normally, great. which as working them, the but hear It was We -- get move monitor hear them, is as big XX, only expect we they they everything We we means from all complaints. data

among even given would units there XXXX. tomorrow to forth, internal rumors that XXXX, that's are expect engineers whispers and and So with submittal be None of their more There are and in them their they process, something all we released. if so things. certain release of definitely and in be expectations all

Unidentified Analyst

sold take per $XXX,XXX on just stores, the order initial So store. was X,XXX about that average I you unit if per -- the

$XXX about a stores, million So you're opportunity? talking X,XXX

Nathan Mazurek

mean In And they tend Correct. a years. they laid over do time that down, be realistic as time higher going X but were go is to don't would up. typically prices internally that's go frame out correct. I this obviously, they to those in things

X is order be The of first part years. it's out indication, any going spread XX means really over the to

Operator

from a come Our Investor. last question will Private [indiscernible],

Unidentified Analyst

Yes. quarter. that. Nathan, good congratulations for the thank My you on

Nathan Mazurek

Thank you, Ray.

Unidentified Analyst

mentioned engines and -- quarter there things on some the I the about that e-Bloc an and comments a congratulations. Is propane the E-BOOST you comments -- engines the Thanks to need again for on any for heard thereof. of that availability supply respect with engines, you further and interaction good generation. between to

Nathan Mazurek

on technologies might thank Thank me Yes. only Ray, the as and call information me stay sending toes I'll as pioneer. for be interesting out on far you you you, making and there and might thank what I'll here. that help me technological processes separately other my

expect thank for lot pollination you Ray. technological a be cross-selling of interaction. lot that, a or not more. always So or it cross to between there's of e-Bloc Yes, E-BOOST. between interaction and I There's not

adding the the don't particular the we customer's the in engines what using use. and project on an it XX. way, the an to don't e-Bloc engine. E-BOOST, alternator way they're furnish X, the they're care. of doing agnostic kind application. using as using user to X, They're in On It for of the controller are using us. wants fitting they're engines, mechanically and I using determines We're We're only charger a of we On job. a size a the tanks and for the course, side, it and

the That's heart So do is on us The passive else generating dump is the one on. engine frankly the Everything affect the E-BOOST. power. going the engines what's there. or of

Operator

over to back any Mazurek, I remarks. concludes the to This Nathan question-and-answer our closing like turn session. would for conference

Nathan Mazurek

time on call. our All again we updating support, look your and for all you to right. next forward and Thank you

Operator

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

disconnect. You now may

Pioneer Power Solutions (PPSI) 15 May 232023 Q1 Earnings call transcript