XL - Earnings call transcript Q4 2020 | Spruce Power Holding Corporation

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Operator

Greetings. Welcome to the XL Fleet Fourth Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. the and to Development Vice Fleet. turn Berklas, host for now Counsel General President I’ll conference your over Jim XL And of Corporate you. Thank

You may begin.

Jim Berklas

conference welcome Thank full and XL everyone, Good results. discuss and you. Fleet’s fourth afternoon, XXXX earnings call quarter to our to

Kazarinoff, me with Dimitri Tod Officer. and President; Hynes So Executive Founder are and today Chief

to as are XL cause required you call call Form other in report in statements. We obligation risks these Tod control, statements predictions of Exchange We outlooks, refer this XX-K Company’s the expectations, disclosures law. forward-looking of Fleet’s many today’s afternoon Our the uncertainties, results those by may which annual our to undertake be These future, I will and and or to includes differ considered earnings statements, which no revise which to forward-looking to are by on our expressed Hynes. turn and over risk statements. statements from implied update Commission that, materially regarding subject our factors that any speak our beyond to forward-looking statements filings. With and release, except the or are Securities forward-looking actual may

Tod Hynes

joining Thanks, call Jim, us everyone and thanks this to for the on afternoon.

of Company’s hosting We’re of team history. end entire the year as a we’re extremely last completion our successful the earnings our first business off year. be excited at proud combination public especially of to in call our for company, our most following And capping the

customer we XL and sold clean were fleet miles our is proposition fleet with million be decade a America X,XXX our customers throughout to year Fleet a units proud overview Before that sense. more strategy solutions financial customers of started North fourth met leader When XL electrification than fleet over needs economic a cumulative over getting results, begin XXXX, full to with hundreds value through for and in and Fleet our customers. and driven Today looking XXX like today. into made brief quarter their ago, of I’d

what base. of nature paramount, allowed founding, Since strategy has factors an with our our we today of performance, trust our fleet require. to These existing the be existing way vehicle leveraging sustainability Our vehicles. By our the which while delivering purchasing installed offering the the seek the are us were we owners industry-leading commercial given the a were this strategy proud to manufacturing entry customers and are customer get normal we built record buying performance customers course reliability establish believe the where production. solutions integrated track little and process, companies changed and to already and customers price said, in they reliability fleet applications. already way they upholding operational run of into must commercial fleet their of the electrification history is our during the proven delivering on require. and market. of in We And them benefits vehicles, for our seamlessly we’re was the intentionally Simply leveraging the reliability critical

seeking electrification already systems We hybrid have the customers make range our simple scaled on the scale road. our plug-in propulsion hybrid and platform, with continue and of to to for

and range applications classes technology expand continue We to the vehicles and vehicle of manufacturers. for across our

flexibility rapidly key develop a in agnostic fleet electrification as remain we are means Our our strategy to market. has nimble technical to allowed that we us the also approach. changing This platform

cost and in to scale direct of thousands we’ve volumes we Although of of our to taken supply chain and our and many all-electric motors. strategy our to chain where contribute key automotive opportunity to and step introduce excess we’re reduce our has to developing plans This steps believe for manufacturing These positioned purchased Class components evolution. supply companies, are us also concerns in where electric vehicles expect many we and solutions. our as are for are we that greatest advantages. lies solutions purchaser the global competitors, advance next our an includes platforms batteries risks our impacting will This we and vehicles larger to the X on established new of benefit focus having

us through We since is all-electric revenues, XXXX. existing our their hybrid develop shipments we our evidenced for to of of majority lead their commercial our that expect a to as journey. in by for plug-in positions electrification trust fleets as garnered continue to the serve all-electric well and inception. customers with account choice begin reorders This and solutions provider platforms hybrid fact The have customer we

Our development. is Together, of formally under for shop power a us and position includes currently electrification. addition one comprehensive the our these In which focusing charging stop solutions solution we storage develop evolution Grid, and also solutions. introduced will fleet infrastructure, developing to power December, XL charging offerings vehicle on

access to charging. vehicle need operators and owners electrify, increasingly electric fleets As

U.S. Since proceeds project will charging that believe significant power. parts management them opportunities contacted through for across and across used the a see this partner of and CAGR throughout install their storage access serve XL order by adoption business similar Canada, the into of to to can and simplify XX% $X.X industry plug-in parking country. power operate process for other we total electrification our to upfront we from infrastructure make Grid electrification offering, Since to years. for infrastructure equipment integrate U.S. forward deal how announcement, region. UBS a customers New and use or catalyze about across exploring problem business even discussions metropolitan $XXX supply of According will to greater and conversations, charging grow million. X,XXX their associated infrastructure, reflecting has bring development, charging Arena XXXX, and recent to blueprint solutions our Fleet and that We technology the announced solar, This Fleet and robust the with our suite have estimates, the XXXX intends with and market country, as by is making the how to can deploy Fleet support stations. expanding daunting fleet the all-electric and other of combination, expected infrastructure. easier critical. York a including eliminate to our we facilities decisions XL is the footprint inquiries deployment this XL Decisions these in as Fleet, we arenas to XL charging and the in we’re In challenging the to size approximately opportunity for the deals infrastructure. and However, is our or we’ve the opportunities these been Portion EV to world. stations be a a we what these commercial be reduce the billion active March, providing most such of efficient potential generation, at further energy the costs accelerated, fleet In XL this to closing when Through of vehicle next believe towards four nearly be over navigate and internationally. on existing fleets strong We can to solutions fleets. by raised our combination and power our and hundreds announcing facilities overwhelm vehicles dozens inbound of appropriate. existing updates to can look intend including and to

currently business place the potential communicated that we As transactions. play exploring where program at a have growth. are time in combination will we role announcement, we of And in M&A our future expect active our an

that We’re focusing on to our strategic us believe scale and more and allow our be growth. services fully accelerate intended complementary to opportunities to we technology platform, integrated quickly approach will existing

over Fleet shareholder to capital believe intend business opportunities infusion global to and fleet electrification use pursue that coming it the The market our $X years. our combination are strategy XL to We just executing continues trillion is getting to value. committed from high is on for opportunity aggressively recent started. we maximize the growth

the new that us today, than at level grow potential to less fact, commercial a fleet electrification massive for vehicles X% sold segment number. in any help reflecting of U.S. powertrain In of

excited electrification pass to that, I our over a latest it to what outlook. to this review seeing prime growth. in to performance, we that are leader in accelerate that a Dimitri continues financial We’re would in and the like and we’re With we transport’s our to fleet position believe be market,

Dimitri Kazarinoff

to XXXX. I’d in like during milestones of Thanks with a far begin key and Todd. achievements and thus review XXXX

continued we the First, revenues XXXX, scaling fourth while on shipments. and significant our supply entire record We existing chain conditions market challenging for across margin, and Company in quarter delivered growth full all our the generated friction navigating gross and by positive driven rapidly platform industry. commitment, year achieving

electric XXXX. drive F-XXX chassis, for began in increase solutions to continue customer available customers. Class for This hybrid we electrification X number Super Second of we fourth includes the the the Duty quarter of where deliveries Ford systems

ability across fleet by the announced pickup, reflect platforms nimble be expansion All Chevrolet We expansions ongoing chassis. XXXX a responsive XXXX of to popular well Silverado, General Motors, XL XXXX and heavy-duty from as and GMC XXXX needs. driven as the the and such GMC, also customer Sierra as Fleet’s Chevrolet and including cutaway were vehicles customer to range and from demand

decarbonization high am already industry across for great commitments across Fleet. for patrons growth reduce charging charging. solutions serving arenas; in additionally, our To the hybrid deliver X expansion announce to where Grid two grow a Third, year. to attract area technology expand interest organization This trucks very electrification opportunity Curbtender. customers and center partnership been and recently technology we large This will design, while further a facilities excited offering vehicle a serve all expect to existing automotive to opening of leading are to are have our capabilities, area, other sector. testing approximately activity, electrification XX,XXX this continuing great facility the center I fronts: December and electrification solutions. developing commercial which we’re in application Metro are development, range we Overall, fleet Southeast a plug-in we the we we impact the working is for facility vehicles of with existing to our customer all-electric engineering management to three commercial to commercial for significant Refuse of are Company. in our hybrid options consumption To Metro the is charging incremental in in Existing wide strategically at with site be includes talent. further XX% our and fuel this also and of announced and Fourth, The team our to and This and Class achieve Michigan. solutions team as on in access adding XL proud fleet on locations. of collaboratively to to square-foot facilities vehicle innovation. continuing range successful growth our adding in substantial to across teams have Detroit X and for within through located recently drive launched seen by the electric interested will waste product nearly talent that validation complementary together continue us XL And driving state-of-the-art refuse we their interested focused a the of demand growth, central increase the and Detroit its highly support represents levels provides our

growing growth. to sales team accelerate our infrastructure and We actively are and marketing also

driven year, the third OEM an From Fleet the a half Turning and fourth plant reflecting of XL over prior with gross including strength orders disruptions, and for nearly revenue, increase cost totaled up of Gross related solutions. X the fleet $XX.X The was sales quarters totaled in an to especially seasonality to reflecting was improvements. spring revenue costs typical for the driven XX% The volume-related quarters nearly on progress in XXXX, by electrification R&D the overlay increase year times combined. first year. This of financials. team the of but scattered year pandemic triple in customer profit year, significant heavy rest the base price $X.X to over our us totaled million, XXXX across increase the expansion realization second weighting margin year. disruptions. by XXXX a and marking Research continued and dramatic $X.X with during of second and This a million the the primarily the of the our per of over chain was the $X.X realized XX.X%. prior enabled high supply the reduction, pandemic-related still despite also in of saw and level, full prior shutdowns from unit disruptions, in in million, development million year. and our Revenues

$X late year of fourth in the $XXX,XXX in gross on $XX.X growth which cash In with We fourth of capital $XXX and year prior million, $XXX million we March redemption our combination as December. sheet, up armed Pivotal as February, exited announced balance quarter. with our of with of approximately we the profits For of approximately the of additional cash reflecting XX.X%. part from following next quarter the years. business quarter, on resulted approximately was the public well extremely us the Together, in of million. equivalent execute we’re cash achieved $XX.X Gross proceeds several XXth, revenues the our of in positioning million, over million, to raise margins our strategy warrants, cash

commercial financial like long-term the creating market for of remains our focus a outlook. XXXX base would expanding to the robust comments opening our with on Before electrification, I Q&A, opportunity up significant on for make The few fleet outlook lines continued solutions. for

our already have repeat based significant growth continued on customers. our with opportunity seen business expected We including in pipeline, conversations sales

We up demand municipal expect serve over the term. the Rescue as to Plan signing American of materialize a and the catalyst pent near recent

With continues thinking remain to positive firmly the about like a how from in challenges, pandemic. significant year. thoughts place, we’d few to these the the resulting on we’re face in industry provide mind, While COVID-XX factors that

a seasonal weighted. our being for experience, in deliveries fleets First, of pattern orders half follow fleet commercial a with second majority

quarters the and XXXX In similar of a and years. XX% over the just our has in concentration fact, realized as existed XXXX, than were fourth mentioned, last several third I more of revenues

business. this expect a pattern driven with XXXX, to be pronounced continue in We and our challenges, industry-wide ramp ongoing more combined by in continued

corporate in was the prevalent had year accelerating parts country departments, the many who prospects in and orders planned clients the second Many late the these this and of municipal today. last and Second, for through particularly pandemic year. year, continuing impacted of quarters fleet XXXX, world orders the postponed in has and major orders in shortfalls. shipment in this budget potential with Together, first late

to creating Third, industries the major possible. pandemic, across during early the impacted multiple shortages lengthy the recent as caused microchip without year and vehicle period OEMs by shut have that any I noted, the in and production off other orders, been a shutdowns the new world orders fleet

of issues, a remain that possible to works today, challenges pressures significant period prevalent the time. it these from and alleviate issues While for in of resulting the remain these is industry the place impacts

first quarter Taken ongoing year, are delays, microchip flat or to together, shortages. we roughly revenue currently forecasting the million driven the and other first amid XXXX to of last be roughly compared by $X quarter as OEM

XXXX expect providing we stronger we financial revenue would the currently and pressures second seasonal potential even up for this strategy, very ‘XX fleet a accompanied growth leader Given said, significant scenario, year. a like with That to In team, these confident to industry-wide not And We’d are successfully resources seasonality formal uncertainty year the Q&A. patterns the in ongoing weighting to this see in full financial into now a to as revenues the lines the open for for combined and business the for focused build extended have orders by issues, pronounced I typical of and the of we year. majority and we market sustainable technology, the guidance. summary, emerge transportation. an realize global more the later half this expect on environment am therefore to second significant that half, our this abate,

Operator

Greg Instruction] from question. BTIG. Lewis first question your [Operator of Our state is Please

Greg Lewis

is something in And kind first that I impact the XXXX it’s afternoon, second half more tying -- you. of or and guess, more maybe something everybody. [Technical Hi. almost Thank and like that kind Difficulty] than where and Yes. it the up half? Difficulty] half. think we sounds good is Difficulty] -- first like where pushed QX the on the shortages end [Technical that about Dimitri, back that like QX, as become of versus [Technical out And getting out,

Dimitri Kazarinoff

I’m sorry, Greg.

correctly, You you some XXXX, the understood half. second to the a got depends asking be is, year. half. than out risk little a on opportunities some think deal commitments vehicle on there. of were And, with well second half from this their pushes the second are that of delivered some orders But, I we of a in are is of to current demand guess, seeing my response rather if number counting into here able bit even challenges. QX. question emerge were we breaking in your that certainly actually to I I stronger And beginning expect If the up customers that how there’s the to existing We’ve significantly do industry

have significant do visibility that. we pipeline. some a to We growing do have So,

ago, to So, we’re of substantially the months opportunity terms total six up compared in landscape.

positive And so, that’s a sign certainly for us.

Greg Lewis

a And Is type that for number? Dimitri. of upfront looks Okay, of to frame deployment I kind that Thanks that station Arena. think that, or like? there the way revenue Is to more great. about wanted little of kind any of on the charging then, an at just more EV of and bit touch revenue an what stream annuity opportunity, or

Tod Hynes

that demand and for time are enabled power also management the announced provide the been we’ve provides was charging addition two of what do together expanding arena same strategy. facilities. peak we energy business with with comprehensive that, during And is in to off us But arenas part at arenas creating charging is to those that capabilities. the The core those in opportunities There solutions, XL for or that storage, really their deals. December Grid. coming fleets And solar,

time. arenas of need they and they the of parking, power a most don’t lot a of the which lot One is benefits have of have that

electric It pairing with revenue by use infrastructure are for charging installation as and term longer parking so, revenue, vehicles can plug-in or creates there. and infrastructure revenue recurring and when that putting really an price. the patrons opportunity vehicles, the they one-time in that install not as well And

deal it be unique. a So, and combination is will every

a We number have had additional conversations. of

other We’re actively similar projects. with working

the project will based that be offering can the the every part customer. So, that’s we the the different. of adjust because of holistic on we’re offering bringing, And of benefit needs

Greg Lewis

that, day Okay, perfect. great Thank Have you a Tod. gentlemen. for

Tod Hynes

Thanks, Greg.

Operator

[Operator comes of Jed from question. state Genuity. question Dorsheimer Instruction] Please Our next Canaccord your

Jed Dorsheimer

hybrid just what between was we or starting first, -- by numbers? rough and with units, could guess I revenue split either solutions, revenue, plug-in the hybrid if

Dimitri Kazarinoff

Jed. Yes,

see We did from of XXXX. proportion We hybrid coming terms our than continued and higher revenue a availability system significantly than year. models plug-in to the in last plug-in of hybrid in the more hybrid on chasses have

opportunity is we’re more we chasses split announced we’re forward. models that lot GM seeing for with on plug-ins heavy-duty for our about technology great a certainly plug-in dependent go We’re systems, of any particular the of we some as available interest and architecture. the have and And on not seeing the pickup one cutaway one additional strategy Really for. us, things that or in

of needs on developing really specific suite that solutions the a focused of applications. We’re meet

kind we’re And to these electrification. of first this on great at gas where solutions step kinds their wedge the customers end engines, for is of the of internal so, narrow diesel, still as and combustion way competition principal are full

Jed Dorsheimer

that. And get appreciate that. I No, I

see quickest I -- about is the a of over the revenue correctly? the -- majority to twice growth to be is ASP is So, thinking plug-in would in the so I the obviously some was unit think there’s plug-in, seems that vast to that though of it Am hybrid. way shift in on from perspective, hybrid. the The reason terms the I asking revenue it’s and hybrid like

Dimitri Kazarinoff

here lots of the even in way going think part Those got hitting be up particular, with vehicle Curbtender the a pure average Company. of those both to it systems, commercial for we’re in in into solutions will won’t grow back to space, one pent diversity get the selling electric as higher market lot long-term got that’s until there’s of development in of the that’s been opportunities California well multiple the announced. think, We’ve in programs I also demand there’s of price. is, plan which XXXX, about previously these the programs, an as including applications but volume QX them, with Well, for in drive to And the development. growth be introduction California. We’ve

range that we of growing forward we And offerings look have. volume so, to the across the

Jed Dorsheimer

be -- that reconcile backlog? the So, trying I significant I to industry then if maybe in shortages a help in shouldn’t XX% the QX at I’m look I’m that’s of from QX. not seeing revenues maybe And with perspective, terms numbers. guess, chip affected. a we Could drop the to you drop Because backlog

they So, -- it how just QX should pulled into -- or pushed into out being QX? things is are were

Dimitri Kazarinoff

Yes.

actually books. mentioned, we As the OEMs off order shut have their

have And number might delivery vehicles so, dropped of industry their to these and degree while to off the overall, think, a our any customers that the maybe you has of ability for volumes customers, impacted. get been

of So, kind XXXX. here a placed Most second first see time. for in and in the the lot that and happening are the accentuating that vehicles is half accelerating delivery. with some We’ve the lull or we terms come year. pandemic a of And of the seen the orders typically of in deliveries of what’s characteristic half in year sales the

Tod Hynes

due COVID to ordering a year. Disruptions last patterns. what add and what -- just from everybody’s facilities production year seeing you’re of you’re of little shutting from Part is changed bit. down parts seeing last And carryover to

order accelerated So, book there as orders large Ford, some were Dimitri and that posing which the for of mentioned. GM

OEMs in normally retool the Now, their factories will summer.

record the of summer. or stop time a taking they think of I orders in terms they this did January And kind year, So, timeframe. -- they early pace in spring late

then the and customers cycles disruption well. there production on So, buying still is as going with some that’s from cycles

Dimitri Kazarinoff

here. split in shutdown dynamic in, yes, ordering lot was revenue happened at the orders second in that And the half half. their And put a year, at XX% because revenue we work. work first the last at a look still fleets you the OEMs, the is over that for dynamic in And half. with and Jed, is of the second did couple same in of, major of of if vehicles deliveries because the That of

vehicles. We models on are more more expanding and our offerings

going to of advantage in take the We’re half. second that

And really the behind so, dynamic. that’s what’s

Jed Dorsheimer

it. in expectation the like value Todd, going were of And story. I bit wondering this think indulge. that maybe from XL sounds than you Grid fair. a positive to that’s just I is story where That’s the is of that’s be from. Got perspective, questions sounds unpack I Two coming more a you. value my great win more more. -- if that just infrastructure the growth was if seasonality a a It terms you’d like is proposition, a could the for for you guys. It package guess,

about mind If think talking would just with be follow-up. the one associated should how more that I then, business, think have you that about And economics I helpful. wouldn’t we

Tod Hynes

that opportunities clean Grid that for commercial up solar what is their charging is onsite management, effectively are as supply, needs facilities, the electrification can transition infrastructure really given required, to storage, way The much we’re helping what as meet at XL them setting so electricity of possible the facilities. they fleets and to assess power

la So, offer some of that stations, some the carte, to may may offering. customers we need need only à other because piece only charging customers want some

it medium reduce can recognize available would customer, longer off as a cost time, for that that or opportunity end to contract, be done sell through enable eliminate to service that to to a revenue finance be other term, it. would which and it will offer it’s SPB then, charging a upfront term either asset or financial an upfront the direct to or to is essentially you the investor where wants And and to over to purchase. cost package up for So, available customers everything the already

of for we of to the best plenty business that us the flexibility. model parts one think, have I options pursue. that is there’s So, And about

budget. that’s own the the in of electrification stage use initial the what And development early of sheet under of we service identified our balance to capital have part our We and on financing funds work. do

well. the to of budget Grid vehicles So, energy deployment there’s the a support grid only $XX not assets as -- and million but charging XL

Jed Dorsheimer

I’ll jump back in queue. Thanks.

Tod Hynes

over closing We turn reached Instruction] for remarks. call of I the the Kazarinoff session. now will question-and-answer have And [Operator end Thanks. Dimitri the to

Dimitri Kazarinoff

you participating Have very Fleet. in much for day. Thank great and your a for today’s XL in interest call

Operator

conference, lines today’s participation, and your at your time. you great disconnect concludes this have and may for This you a day. Thank

Spruce Power Holding (SPRU) 1 Apr 212020 Q4 Earnings call transcript