VMC.V - Earnings call transcript Q3 2022

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Operator

Greetings, and welcome to the Vicinity Motor Corp.

Third Quarter 2022 Corporate Update Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

industry formal on like including a today's future from results in the that remind those described number begin and those results financial made forward-looking to uncertainties statements call and cause of we risks presentation, subject call. that to I'd everyone regarding may and Before be are could to actual prospects, the and materially webcast differ also associated the information. to for regulatory you risks, website and company's company's would industry of refer Please a for we filings refer supporting the to list more would call Executive Trainer, I now Corp. to like Vicinity of the to Chief over and hand Founder Motor William Officer William, floor yours. the is

William Trainer

everyone. Thank conference welcome pleased call. to today's corporate you, good you update operator, afternoon, I'm third and to quarter XXXX

of strong VMC by quarter third bus momentum truck Vicinity highlighted was class XXXX lines. Lightning XXXX our product and electric electric X in The

particularly by segment were Additional demand for sales electric XXXX. of and EVs, vehicles the portfolio distribution of customer intense our our VMC in class propelled wins commercial with X

The class EV incentives of engine particular, capabilities further part customers bus invested validated product development the enterprise demand markets. demonstrated vehicle building to are and our innovation, Group, milestone electric vehicles our interest as the government the million that electrified from pipeline and $XXX Pioneer our internal in order in the through adoption OEM from all from transformational New strategy with government we've of a new combustion multi-segment evolution shared future. and our years Auto order VMC purchase goal lines, seek in for EV XXXX to emerging support expanding Vicinity's agencies of a The X fleets into be space. X,XXX the into EVs, and in leader an our rising was for for

our of of this are for a indicator to vehicles. majority vast momentum, electric which US$XXX million, sales the grew As backlog clear over

disruptions, continues chain up deliveries have bus pushed to XXXX ramp bus remains supply our VMC industry sales expect began the gradually chain and automotive for global of XXXX supply this we into business, immense meet initial product October, line. these and to demand in transit orders impact the VMC While delivery our many from we're these but seeing insulated XXXX, been fairly

first production goals, of vehicles Ferndale in our capital Our XXXX. we increasing assembled believe initial British Washington power received short-term given have switch the growing expect working we Ferndale, our XXXX in VMC for have quarter will issue, facilities we solved production. our to the be support faced certificate final occupancy the we Canada, first support of requirements To Columbia, ramping expected production with we rapidly facility here which By will are credit that year-end, that our previously. and

Taken confident our significant as a drive in are ability growth revenue to we whole, in XXXX.

vehicles. quarter, adding Idaho aggressive the in our VMC continued North Classic expansion distribution Toronto, class truck of During our and across the Washington, our for Vicinity Lightning dealers we in XXXX electric Oregon, for Canada Alaska and X reach America,

key we the our from is saw network distribution growth future Group's our Auto our sales a component As Pioneer efforts. ongoing growing order, and of

September to to review XX, financial that, for over Dan turn quarter the Dan? Now our I'll results with it ended XXXX.

Dan Buckle

our the refer I adjusted in Please A a available I will review in brief regulatory Thank to and filings press full you, release the across measures. that after market keep portion is everyone. our and note William. other non-GAAP to Good EBITDA breakdown afternoon, my close results. of wire will yesterday. financial

SEDAR. which to available refer on adjusted non-GAAP For is and the the calculation other MD&A, of EBITDA please measures, QX

of million, affected were XXXX, gross margins quarter XX, revenue XX% of to million months as ended as to for nine months XX, of compared nine loss XXXX. September months share $X.X $X.X XXXX. Adjusted net $XX.X months in XXXX, dollars – figures of the XXXX. of revenue Gross loss activities XXXX. XXXX, $X.X months third profit XX, the Adjusted $X.X loss months XXXX, million supply to as XXXX of for nine the compared XX, or million certain ended in million million third loss September the ended in the ended as nine XXXX. $XX.X nine $X.X transit September ended to million EBITDA Gross of in Subsequent EBITDA of totaled XX, to for with third the by for the XX% program. September third compared the Cash primarily months is $X.X XXXX, company ended three a in months activities of used revenue September provided Net million months loss otherwise. the balance unless all XX, of an share for of delay ended stated as operating compared September opportunistic totaled September $X.X the September XXXX. or compared XXXX. ended in XXXX, cash supply nine bus Revenue the an September continuing quarter, ended components operating to in September quarter September affecting through million September addition, volume ended an million million net raise three adjusted million compared million XX, and revenue utilizing sheet totaled EBITDA nine at-the-market the of $X.X $X.X XXXX, X% compared totaled for the Cash of XXXX. or for ended compared fortified $X.X the to $X.XX in September ended September a compared $X to EBITDA profit million In million December are product the nine totaled to or of $XX.X the XX, XXXX. global months at or million company’s Net buses XX, XXXX, XXXX. or XX, as loss global delivered for XX, disruptions. attributable September months the was was as as XX, quarter as The quarter ended U.S. XX, XX, and end September $X.X for in the $X.XX deliveries months nine equivalents as for $X.X nine million, to in the loss low $X.X quarter million to was as chain Revenue totaled ended XXXX, its cash ended $X.X quarter Gross million by to a $X $X.X decrease the million of XX% loss loss adjusted per mix the due XX% the XX, $X.X lower to of to XX, per compared XX, vehicle chain disruptions million, was deliveries. as

XXXX our working facility in We to quicker VMC support are credit our working a currently expanding and capital position. existing support ramp-up production further on

well positioned are We remain of to operations execute fundamentals the our strong. and

begin execution closing like back year session. have chain demand While to question-and-answer operational I’d for given William offer we we full some remarks, of remains positioned to high supply uncertain for very guidance environment, an XXXX will a pass our level XXXX. suspended the it and which now in we are after to strong, well

William Trainer

Dan. you, Thank

and are as our order transit resume we bus chains Looking XXXX, we million for full can ahead backlog. $XXX production success, we well particularly deliver upon positioned to incredibly fledged normalize, as supply

providing they Given chain their incentives additional system do believe the the prove face paired to that to our for months be we end VMC revenue growth to come pressures will to transit to with will what I the to updates fleets, forward a significant and doesn’t available transit subsidies in a public a XXXX electrify look create sustainable the contributor we record same to our supply more and XXXX. expect build profitability. the as significant be I customers the bus seeking foundation and users

it with to back that, to hand Operator? the I’d operator Now question-and-answer session. to our begin like

Operator

you, [Operator Please ahead. Fratt Poe question Our go from Thank Alliance Instructions] Partners. William. first Global with is

Poe Fratt

confirm X,XXX capability, understanding quick your VMC had fulfilling potential a Good afternoon. about sort you how you then the a looking an I of of at about as us should configured just My and idea out the Can trucks. also deliveries and fully be give XXXX Ferndale the should question XX,XXX XXXX? truck be per we timing is capacity, numbers month those XX Aldergrove then of just Great. order, of over of a have production year. especially course and the

William Trainer

be correct, we Ferndale, the to just down – facility, here and about real look going there, lines. out XX doing trucks do It's were this out to start come to dual yes, per can Sure. running numbers up But Ferndale of out is we that We'll Washington. actually month on are XX,XXX around ramping our it up. going of get to to of were delivering And truck we facility. down trucks, We which we up Aldergrove facility alone. if bus run could, lines capacity we if full straight run in set at

So it's for that. well very set up

Poe Fratt

for dual, flavor And between buses? when a trucks you give the mix you me and do can

William Trainer

you've got numbers the I Yes, we probably can do – than do. Dan, better

time the think think mix. close we're and I do somewhere the of able be XXX we'd – if buses to trucks there – be in about are numbers running couple X,XXX to a I we'd – both out that at we same could that

Dan Buckle

that facility. coming next for majority trucks The Yes. year of would be out

William Trainer

Yes.

Poe Fratt

just the highlight in to the the additional congratulations quarter, switching And issue into what bleeding it costs the quarter you fourth we like XXXX?\ resolved. – expect Can sounds getting maybe in should equipment first

William Trainer

to Yes, sure. that? want you Dan, take

Dan Buckle

Yes.

this point. So basically the complete is facility at

to for So landscaping on point, either we'll completion but is will complete. need QX. that all the purchased equipment But is be will see through some even be done million switching for leasing equipment since maybe financing. waiting this just We're There still gear. or that extra facility, of facility the $X an the at the

$X working a that from facility, be So shouldn't be the million. cash outlay would in portion of neighborhood but potentially the there of that for another capital

Poe Fratt

your Okay. But facility? flavor the potentially far facility, as expansion looking based. that way just [ph] as you you to much a And Ferndale again, capital a When would financed your as at give or have raise the of then CEO, working credit use how capital? for you're once can against you asset expanding look you for equipment

Dan Buckle

question. a yet it's ready to size the good so the not of facility. Yes, answer I'm

be as works. unencumbered it's correct, we for the changing now. – the is one of us current But options of on business. top different working little amending the that's truck is to priority couple of and it now our the how really facility right for are production we're to ABL looking and definitely want We It's to which possible, them within as now. bit right you're a more But why fit facility, right just truck quickly the as up at Ferndale ramp increasing a a side

a somewhere we worth asset finance of $XX million well. million $XX So potential that we the have to as was that range could in against

Poe Fratt

sorry by then, great. when deliveries side, the side, bus a on been we the issues. talk chain Okay, And supply Can there, truck you on about see deliveries I'm just should have the so of resolved pickup impacted XXXX Or the recovery timeframe? something see the fully Thanks. deliveries? or expect it that should it a up you is should in bus quarter? ramping Is fourth a we the in

Dan Buckle

to me take want you Do that?

William Trainer

able see it’d doesn’t have it a in being be we – Yes, to to that be QX, the delivered of bus here. addressed do able a lot to deliveries Yes, those got being chain buses have QX buses. of through being issue we backlog the we QX to see deliver remember, deliver currently you supply QX, we and matter. But – considerable starting

bus. the not That’s realizes what side. bus some side, anywhere I’d faced has everybody we X,XXX X,XXX like to truck why say supply when with great on We’re industry on chain a building to when is a we’re we the the line at items that look the bus have from immune to difficulties

We have about XXX on a truck.

on the lot truck simpler. chain a supply is the So

Poe Fratt

your Thanks for time. Great.

Operator

[Operator Instructions] Robin from question Catalyst ahead. The Please Cornwall Research. next is go with

Robin Cornwall

questions. for partial that’s full fix. fix was still a thanks I the Hi, my wondering taking or on plant, fix if electrical the

William Trainer

should up. but The us a No, factory to switching March is start gear allow partial it’s come come fix, think main scheduled in, does to and I Robin, sometime. it it in the

it producing So as but by be want down April, as would trucks soon to running start get can. we there up want we to – the and we

the It power us to there, in there’s will but So that’s and coming there. the like won’t we’re temporary our foreseeing major a allow but booth, that got we be things operate not some basically we’ve deliveries. why in cranes to operate that up holding able truck solution paint

Robin Cornwall

So get say will, you that you as to occupancy? allow

William Trainer

the Occupancy and facility. usage of

Robin Cornwall

any there short go to chassis. – to truck you want Optimal Okay. I in on the update were Is that the back chassis supply?

William Trainer

the don’t this at on point. we have No, really update Optimal any

Robin Cornwall

production of no is foresee XXXX? in like there that you likely So

William Trainer

point have just on in at I this update I this can’t it. – give No, on any don’t got Yes. comment at time, point. I It’s an that

Robin Cornwall

And you can the to going for me, that? margins to that share economics us the be the tell on there Is there buses. trucks are similar some with

Dan Buckle

Yes.

So margins dependent the XX% range trucks we’re a from on to us. it’s margins. bus few now; for higher very, our trucks. definitely a on that than product now, And XXs expecting could one positive really, foreign but margins around the are being right for regular it’s very the low factors, of exchange – but Right

Robin Cornwall

the okay, – Okay, sorry. and

me. for all that’s think I you. Thank

Dan Buckle

Thanks. Great.

Operator

remarks. turn over concludes the call Mr. like Trainer back closing for William This our now his session. to question-and-answer to I’d

William Trainer

to conference our to We you If firm, our on we MZ who look IR continuing thank answer happy to ongoing of I’d any would progress and to for are to joining your reach earnings you Thank operator, of questions, forward and assist. than be out please call. The you, unable our more growth. to you. update Thank each like Group,

Operator

today’s does conclude Thank for participation. and you teleconference. gentlemen, Ladies this your

wonderful your this disconnect time, may and day. at have a You lines

Vicinity Motor (VEVMQ) 16 Nov 222022 Q3 Earnings call transcript