Earnings call transcript Q2 2023

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Operator

Good afternoon and welcome to the Pioneer Power Solutions 2023 Second Quarter Financial Results Conference Call. [Operator Instructions]. Please note this event is being recorded.

I would now like to turn the conference over to Kim Rogers with Hayden IR. Please go ahead.

Kim Rogers

welcome. and you, Thank

today's Officer; be Officer, Walter of Murickan, on and and Mazurek, Chief President eMobility. Executive Michalec, Pioneer call us Nathan will Chairman, Geo Joining Chief Financial

will management highlights. be We Following the review results XXXX to second opportunity a discuss as comments Q&A well appreciate open the as call prepare to participant. quarter financial the session recent business

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

current expectations well. During could statements release on forward-looking the this earnings differ issued the call, of are to to subject regarding forward-looking call will cause refer contained cautionary the to to that content today’s assumptions These statements. and earlier risks management make results materially. uncertainties today, are Please in applies as statements text and based and actual which

I'd turn to and Nathan, please Nathan call ahead. to CEO. over now like go Mazurek, Chairman the

Nathan Mazurek

us today. second growing reflects strong line across joining a was segments, Thank efficiencies, great you profitable, all that was reflects X-time revenue our optimal non-cash relating both and stock-based the better product profitability operating record bottom more XXX% compensation. leverage, you, revenue and for a up for both and afternoon, thank growth that excluding the nearly Kim. year-over-year This to was business and resulting The a in charges solidly demand manufacturing mix. with for us quarter, divisions Good quarter performance delivering

GAAP these for segments full in generate approximately investments, charges, even generated better to e-Boost and are so we are we positive continue in far. year invest with stock-based per XXXX. monies income, profitability net net delivering still we compensation our non-cash expect for we large executing share plan Both if $X.XX our to the Notably, income to not significant business. Even as primarily essentially

year. revenue second products, Our $X.X and last T&D for quarter XXX% $X.X million the e-Bloc which grew includes power to unit, related of solutions compared to our system million

revenue $X.X was T&D million last $XX year's year-to-date, up versus Indeed, million. to XXX%

quarterly includes Our year. and critical which power revenue year-to-date segment, grew compared last our mobile XX% charging revenue XX% platform, e-Boost to

the loss addition, second compared our consistent from In quarter margins organic. Notably, is million of pioneer's second have $X.X and in a a year-to-date T&D now ago. months EBITDA growth entirely been has GAAP improved last XXX% year. quarter in $XXX,XXX segment of last six Gross up to the $XXX,XXX of in exponentially EBITDA, year a positive of specifically delivering loss both the first of positive since $X.X million of segments in year, revenue

its achieve In power addition, moving the has we critical fully which a segment operating for expect narrowed our towards XXXX. of to year losses positive full and is margin,

has e-Bloc now strong in Our around hundreds e-Bloc solution We and installations charging, key health hospital, will of innovative and performance. been highly manufacturing and a from our driver facilities, microgrids. be country, the and solar-based ranging to continue locations, flexible EV have retail

deployed being better enabling We utilization, this its are the continue cases part utility footprint. costs, include California, are large distributed for delivering like to These control improved a the carbon and energy and resiliency, water power utilities, of sophisticated its in where as e-Bloc use see one reduce water better e-Bloc. system, year to manage new we systems

distributed beginning expect order e-Bloc carrying of the the on year that data end demand The only substantial relevant away secured from solutions. last centers diesel-powered but for toward is to XXXX Another more to and XXXX. issues. to We This power in growing over raw first is a data data embrace power the increase are required market each is that for beginning centers, center. the Pioneer's to deliver by of AI generation critical is where just increased turn resiliency and and market has us consumption data emergence center massive project our not traditional of

that expect project leading and to model as will with hopefully serve and additional as particular center and this data construction customer, owners developers other a installation flagship-type this data successful well. We partners, particular of their a center deployments

customers are returning, in prior and specific additional all is market, the works because additional retail ordering stores for. for addition, that providing they In especially had the bargained the is providing and e-Bloc benefits units specific

energy cost-effective, continues renewable resources environmentally The potential as friendly. battery and sources, solar to other distributed more generation utilize grow, and to storage combined to reliable, customers with seek market make

generation anticipated cannot it today, produce for requirement, to As the years. making enterprises. not enough distributed a an stands U.S. option over demand, satisfy expect the many XX To power next

charging growth rapidly in delivering business the Fairfield's first significantly also revenue invest a as and with that recently most ordered We're expectations growing years electric we only a to platform ago. started Fairfield, unit our only fleet. bus What product continue the date, of that further did include a public platform, is not from of market this two mobile city we our prototype, become acceleration. trailer and years November have concept addressing To ago XXXX e-Boost indeed has in exists of an portion California e-Boost e-Boost several service mounted a to of in

e-Boost. the supporting market the e-Boost first multiple in of addressing autonomous a electrification, several fully we rollout grow the to major concerns, vehicles fleet market. this cities. continue growing expect their our for is initial division support of autonomous to driving government global the This The bus municipal award automaker to units environmental With transportation electric and ordered grants

rollouts. two trailer to electric vehicle demand cities business, vehicles, autonomous support for and be into integrated expansion took to fleet's mounted merchant's e-Boost offering. delivery these More are more fleet driverless taxis. geographic the including of management This to approving solutions large charging will Merchants Fleet, e-Boost lead more

the as in expect of to fleet We their fleets. facilitate companies management electrification other embrace e-Boost order to well

transportation agency e-Boost of a A trailer mobile their fleet cars. buses Northeastern XXKW for major acquired and

in a provided manufacturing the two state from at of e-Boost have facilities. charging electric systems overseas charge port fast deployed We California to propane-powered to vehicles imported mobile be

trucks, learned of experience electric market many don't in first the cars, system, there. years of last was for and two most the opportunities buses, and application the obvious from stop ways we that the the our e-Boost While have

For mandates mean equipment airlines each several airport every example, they diesel electric all could mobile from the serve. have ground years. to This at internal their needs next on service almost to airline over that capabilities almost convert charging demand that

the charging areas meaningful vertical equipment additional Each next over particularly and and mining well flexible construction, infrastructure takeoff of is opportunities a Additionally, charging these Each important. fill in these for EV the us option watercraft charging the as trends are represents to offerings as transitioning all-electric years. landing mobile of where requires electric gap several solutions. to

to This intended, We also of goal innovate developing expanding continue and addressable the market. of with e-Boost. Supercharging, revenue variations new our includes e-Boost, pun with our

building Specifically, units emergency are we slash for tow smaller applications. truck-type

and for We solution. concierge mobile certain demand absolutely users deployments, are designing charging and options less that a expensive charging similar for lower powered zero-emission

are configurations We of on working battery-only e-Boost.

We expect the before to these unveil of extensions end of product most XXXX.

more in to our of believe XXXX. all versions prior will generate to full incremental to many second contributing Based e-Boost based will EBITDA the we addition, begin positive And we growth believe we this additional and we compared access pipeline use year. on successful, year we first have on offerings, half expect the to half successful the of opportunities, in the more of Ultimately, customers. cases these built e-Boost on give potential already us

massive addressable new proven emerge. every is offering Our from The and at day, it are markets and energy current of era and solutions. Pioneer competitive new cases almost edge is use transition customers real the

second over quarter. call Walter, our the turn to officer me let that, With discuss to Chief for financial results the our financial

Walter Michalec

Nathan, everyone. Thank and you, good afternoon

this $X.X XXX% Pioneer divisions revenue compared As million integrates quarter or increased $XX.X approximately solution period a with which when mentioned, from the to Nathan performances. the quarter $X.X up great second year. was for last during Pioneer's to of delivering million, was during revenue consolidated systems million both our Revenue second our million quarter. $X.X and e-block segment, manufactures XXX% same T&D power strong

$X.X As same year. last the million period revenue of compared during to

second to gross our profit sales in margin year. ATS our critical profit higher $XX,XXX during XX% of periods. the the profit mix the e-Bloc our last both were was due and $X.X was driving, and manufacture equipment, expansion gross improvement quarter comparable was breaking to to revenue higher The improved essentially margin, of segment, of gross up power margin, we Consolidated segments to systems, million continue second favorable to from scale even mobile a revenue. or charging million, Revenue which compared XX% solutions power significant $X.X of and during integrates utilization gross quarter e-Boost margin as and for manufacturing

investments the $X.X quarter is intentional Selling the compensation up general of and in administrative for revenue to This Approximately to million XXX,XXX $XXX,XXX quarter. targeted quarterly were also related and of XX% SG&A includes solutions. these the solutions. approximately stock-based million XXXX, sales, XX% incremental personnel, marketing, for when prototypes new year-ago X-time drive of SG&A non-cash $X.X second an to expense was our in in e-Boost increase of expenses demand designed compared for spending and

these these to XXXX business expect investments as We as grow. lines they continue through new build we and

Finally, higher the wage expense. to contributed costs, including increase salaries in SG&A and benefits,

includes an $XXX,XXX a second $X.X XXXX, more in again than year. of the swing expense operating Our for positive million of last compared was operating the non-cash loss of stock-based compensation to of loss, second $X.X X-time quarter which of million $XXX,XXX quarter

of income $XX.X the compared the NOL an note $XXX,XXX non-cash negative year. and of in June to per share and out the same the share as a second approximately million to back last $X.XX has compared XXXX, period of future loss that $X.X second sheltering pioneer income or loss It's $XXX,XXX was of during forwards quarter in per operating XXth, the to XXXX. company during important generated approximately basics of from for income diluted operating taxes. the diluted net quarter stock-based basic federal we If carry XXXX loss $X.XX second million of negative quarter, $X million X-time compensation Net or

or one-time the during to out or share generated approximately approximately non-cash second per million the loss a year. negative backing per compared $XXX,XXX. compensation of income Pioneer quarter, last expense $X.XX second share during of $X net quarter the $X.XX $XXX,XXX Also, stock-based net of a of

first results, Looking the increase the year-to-date of briefly compared year. total $XX.X the months was XX.X XXth, during million of at XXXX an last million, the June revenue for months six consolidated to six XX% and

approximately period critical during first million segment to gross profit same was the the of gross XX% year the from revenue Loss year $XXX,XXX first first last as solution compared $X.X compared of the million segment a T&D for $XXX,XXX profit six or to from the increased year. loss the the X% half gross from the power during period operations compared XXXX, XXX%, months of for increased as of operations the Revenue XX% Total months revenues and than for was from in a of six XXXX. the of more or margin, $X.X half XXXX. approximately first to same

for of One-time months non-cash $XXX,XXX, was six months for compensation respectively. and first the year the the $XXX,XXX six stock-based last and first year

generated a loss Excluding half half Pioneer $XXX,XXX a stock-based during than the from income XXXX, the million operations operations of to of compensation, $X of during million. of first first compared more positive $X.X from XXXX, swing approximately of

$XXX,XXX year. Our a negative compared a to million the stock-based net EPS were or loss this of loss out approximately for first the during diluted to share, in and $XXX,XXX per backing during the per the expense period positive Once $X.XX months net Pioneer first of $X.XX six negative basic $X.XX basic and six diluted $X.X was same again, months of XXXX. or generated share compensation

the cash on cash on debt per XXXX. XXXX. our on of of $XX.X bank XXth, had hand cash address near-term balance This and that, needs. sufficiently of cash June XXth, approximately we zero are sheet. million to share zero we compared approximately XXXX, XXst, million Accordingly, $X.X December are and represents bank We at June capitalized and to to investments Turning confident debt $X.XX

grow expansion year. well and to with deliver half continued current and our can demand significant least solutions, by expect for primarily as as accelerating we on net we XXXX backlog, the in We in believe the Based XX% at positive of revenue second the growth our margin new income.

positive expect and income generate Additionally, to we full-year earnings per share. net

This turn now concludes the to the questions. my remarks. back call over operator I any for

Operator

Instructions]. [Operator

from comes C. H. Please go question with The first Wainwright. ahead. Joshi Sameer

Sameer Joshi

understand, in any Was what Thank some the afternoon. Also, so surprises just excellent Great. quarter the to Nathan, you. expedited? congratulations Walter, top-line on on the deliveries on side there Good quarter. of getting this positive great. terms and made wanted

Nathan Mazurek

quarter little no this there Yeah. quarter There -- was from bit were of is it was of day the I of the there your or real the first shift was gave unfolded the really so Sameer, one comments. thankfully, quarter that you you, thank that mean, guidance this years. last way second quarter, that hungover kind the year. but would. large, a The we the first There kind for couldn't a and surprises. one thought if by remember. job stand It we we into of hangover not was larger, of the But for

half the I will and you math, year. what the a we come can to will and second -- year little mean, of the So, in the all bit you do come even meet or hopefully can guidance for exceed the fully expect in

Sameer Joshi

That's of on what this come and revenues your expected guidance specifically, the the e-Boost? looks But half, proportion what like. E-Block and it backlog would from second

Nathan Mazurek

from is vast the majority second year. so coming of E-block, half the especially Yeah, this

second than prepared incrementally, will had the in it have better half half. a remarks or As we e-Boost first the said

of bit end revenue. wild good to when of sort a as generally contribution don't little the shipping such and So those things card that's have we visibility a realizing that up

be that a half should even the that's the So little make stronger. second mix. bit But,

E-block is for hard XXXX. it here driving very

to in we're the XXXX. e-Boost year for too it's where expect to XXXX. the I remarks that substantially that it we that expect, early drive and stronger about prepared it XXXX, But came hope on in We side but talk across expecting a hard

Sameer Joshi

remind increase a you may be if as And is us will maybe product? going And improve. better e-Boost to margin profitability revenues

Nathan Mazurek

part, for of it's there's issue way. new, Every lot some mean, price get There single model there's no our that custom. to it is a definitely with things. missteps. track I on how e-Boost, is better. Yeah, some should so We The one all these

expected worse. over then far, sometimes place, it's and so And been the all know? you sometimes than Better

We -- don't the the belts just expectations, have for our don't thought. margin. yet we great with but we exactly never go project So, the plus to don't in units enough -- we under minus enough hit we've we what or have

Sameer Joshi

receiving markets and construction you -- you or e-Boost, already are into the new from sectors? leads already these orders identified this you On -- do these airlines, you mining, have are

Nathan Mazurek

those with and of We about serious I discussions anything didn't haven't ago. them. segments but And these received are that, emerged, orders we all from are any know through in segments, months These that's with these of his through mobile hard out way. work trying charging the the and getting are our and e-Boost opportunities proper the Geo and word team make solution, synonymous to how coming

Sameer Joshi

Understood.

capacity there expected any of the product is and and CapEx R&D the incremental In e-Boost, some terms development of additional OpEx, also in for dollars second half?

Nathan Mazurek

expenditures spending deliver for less capital on more expand R&D No, the capacity test we're of on we're hopefully e-Boost we'll what and need this in limits year Because the actual towards to we to limits, e-Boost. the that coming Minneapolis.

to don't to in really do not business we going physically grow, So, for I we're just it. that can't heavy think it's work. doing be order --

Los each case be everything it, we're do don't operating enhance budget it at so load -- efficient in the current the fixed some that forth, and away. a expand facility from physically just right Angeles the overhead that profitability. trying possible I not of statistical XXX. more And for our the it's reach. we're e-Bloc, in to in but a We're don't benefit to getting now not So, the lose to and think we and year because have should of be do to and outside advantage a we I'm of think that,

Sameer Joshi

GAAP for as expect cadence this again XXXX, expense this the should we next second Understood. side. the of then XQ comp In in XQ one normalized, And and then stock-based XQ, higher, the the half, stock-based half… SG&A second saw last last same on being we comp expense, the were

Nathan Mazurek

it. I'm expecting not

the was it's made arrangement It of year an and in guess again, a done, granted Last by we keep I stay is fully disclosed. manifested I was that quarter. the all term. second incentivized to So, stock a And itself couple board, long the CFO the to months our grant with for answer was no. us ago,

-- of other don't I awards. So, any don't we know

Sameer Joshi

Yes.

the half. coming be down So will in OpEx on the basis second GAAP

Nathan Mazurek

Correct.

Operator

[Operator if is question me from I Semical Weiss with Instructions]. mispronounced. Excuse next Scott The Capital.

Unidentified Analyst

on caused have which quarter, new that's quarters as demand that in side, are there are question has I these two opportunities Is the talk And you look in that about happened the something out one all over last and then to on great excited you verticals. newer inflection Congrats quarter. this you you months related demand? that, seeing most next XX months? about vertical XX the to the

Nathan Mazurek

experiencing of Both think still we mean, parts. I are two demand. in so Yes, business strong the

the on think data on e-Bloc where to what's match that our we their to expect and from with a going extremely centers. profit seriously generation, them, that taking every get big people markets, So, I demand, side distributed water needs see power we the are level. volume the greater flagged and that on That's and I

year what's to going the going not it's offerings. launched It's we those thought chart. cars, drive but really it On e-Boost traditional, e-Boost, side, the next still traditional going or which to trucks, is the is in be initial be reasons the electric traditional, and to mobile the buses, so,

make next it the going It's want yet, go it next that years. do market but going to this I this to the it year, I to is But to it as a for an as year? order is of XXXX, but think maybe their is do will a or the construction very and as won't there most And kind transition quickly make don't electric we vehicle next several But equipment's as against of move them it's going going it the is. airline we get way, in not to take push, fence. believe longer. definitely seriously. pushing to it one not gonna XXXX see but long transition from over They they're even taking tailwind. that Is

Unidentified Analyst

the for side say, back, we penetrating data Going into into couple this in were besides the data of of And technology? inning what centers a dig you? center market who you and else on data center a technology providing are Can this using years, is centers e-Bloc second? kind data

Nathan Mazurek

exists room it is I you that answer. in where doing no error who's to simple that know, technology in there structure applications I work the -- can't no date proven there is critical compact, is for a

power thinking backup a sources as flag they As in really the that are it from they grid away this as and what variety of And other beach, start from just and get diesel the regular into they integrating that for power doing are from power it wants serves our hoping Everybody of first seat. planting works. we project reasons, here is. sets a

So, went away particular and gas using this natural what's They user. or they are gonna diesel they natural are using whatever from whatever happen? they are

a combination are several everything any this? Was switched to. don't then They're -- there be have don't of after have Was the failure? that's any they wanna don't What that. people they using a using don't was they I nanoseconds. choice when sources in diesel think be to want They service? there that that

Unidentified Analyst

it. you. Okay. Appreciate Great. Thank

Nathan Mazurek

weeks Chicago. Alright, few Scott. you See in a in

Operator

next Capital. Globus with Please go Kreinberg ahead. The David is question from

David Kreinberg

afternoon. Congratulations fantastic the on Hi. Good quarter.

Just in think guidance a Is this revenues. quick question. you was from million year? The the them I locked expected retailer revenues of year, last $XX had that it any

Nathan Mazurek

without out from any went We No. them. revenue expected

David Kreinberg

Right.

your year, out last one that $XX at customer. look was from of I $XX if million I So, million think

almost the going that through one from business, XX. were customer that if are them, right? that you you X So, Is this tripling actually I without year. back out,

Nathan Mazurek

over the it into first over year. the of Some quarter, hung right? XXX%, Almost

David Kreinberg

Okay.

So, of that. there revenues bit is, a in little

Nathan Mazurek

the... little we year. did bit But is this a Correct. then, There of

David Kreinberg

ahead. Go

Nathan Mazurek

targeted almost said, The potential they XXX have we is, have stores. as

else hopefully I if You in expecting sometime delivered But, deliver which would going in news have we can't on, my good sometime today XXXX. would announce. XX. them that I speak some mean more this anything I'm don't it year, hand know, to we've anything but from is

David Kreinberg

great. Okay, Congratulations again.

Nathan Mazurek

David. you, Thank

Operator

conference closing This question Nathan back session. concludes to the any and Mazurek to the answer I'd remarks. for turn like over

Nathan Mazurek

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

Operator

concluded. now thank attending is conference The presentation. today's for And you

now may You disconnect.

Pioneer Power Solutions (PPSI) 14 Aug 232023 Q2 Earnings call transcript