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spk04: Greetings. Welcome to Easy Fill Holdings fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, John McNamara. Sir, you may begin.
spk01: Thanks. Welcome and thank you for joining us today for the EZFIL 2022 fourth quarter and full year financial results conference call. With us today for management are Mike McConnell, Chief Executive Officer, and Art Levine, Chief Financial Officer. Before we begin, as usual, we would remind everyone that certain matters discussed on today's call or answers that may be provided to questions may constitute forward-looking statements as defined under federal securities laws. Words such as may, should, projects, expects, intends, plans, believes, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements. These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the risk factors section of the company's annual report on Form 10-K, filed with the SEC, Copies of these documents are available on the SEC's website as well as on the company's website. I would now, with that, actual results may differ materially from those expressed or implied by such forward-looking statements. The company undertakes no obligation to update these statements for revisions or changes after the date of this call, except as required by law. And I'd now like to turn the call over to Mike McConnell, CEO. Go ahead, Mike.
spk02: Thanks, John. Good afternoon, everyone. Thank you for joining us today to review our 2022 quarter and full year financial results. As we noted in our press release, which we issued a short while ago, 2022 was Easyfield's first full calendar year as a public company. At the end of 2021, with one full operating quarter under our belt, we had about a dozen trucks that we serviced out of one location in Miami, and we had about 15 fleet customers that we were generating approximately $3.5 million in annual revenue. more than half of which came from one customer. Today, we're very pleased to report that after our first full year of operating results as a public company, we can point to significant growth in most of the key metrics investors look for in small growing companies. We increased our revenue by 108% from $7.2 million to $15 million. That revenue has spread much more widely across more than 100 fleet accounts, and other customers that we service with 40 trucks operating out of five locations across Florida. As previously announced in January and February, we added 19 new fleet accounts. Our customer base is as diverse as you would expect in a large state like Florida, ranging from small moving companies and pet grooming companies to one of the nation's largest retail grocers. Most recently, we also announced a three-year extension of our agreement with the organizers of the Miami Formula One Grand Prix. We expect to see the fleet account number continue to grow as the EZBuild brand becomes more widely known and respected. We're focused on improving margins throughout a combination of higher average pricing for existing and new customers and improved driver and fuel purchasing cost efficiency. We're also looking into the sale of other types of fuels that have higher margins. We will continue to look for opportunities to add innovative solutions, leverage our technology to generate additional sources of revenue from other than fuel arising out of the trend to on-demand services and supported with careful and focused investments in marketing. This will likely involve strategic partnerships with other companies that have complementary products. There's no doubt that we operate in a competitive environment, but with a $20 billion in growing fueling market in Florida, we believe there's plenty of room to grow in our home state in the short term. We will continue and evaluate opportunities to expand out of the state later in 2023. With that, I'll let Arthur walk you through the financial results. Go ahead, Arthur.
spk03: Thank you, Mike. As Mike noted, revenues for the full year from $7.2 million in 2021, a 108% increase. On a quarterly basis, fourth quarter revenue increased to $4.9 million, up from $2 million in the prior year, fourth quarter. The increase in both periods was driven by an increase in total gallons delivered as well as an increase in the average fuel margin per gallon. For the year 2022, the total gallons delivered were 3.6 million compared to 2.3 million in 2021, 56 percent increase, and our margin per gallon in 2022 rose to 45 cents from 37 cents in 2021, a 22 percent increase. As Mike mentioned, we've been adding new customers per gallon, and where possible, we are also increasing fuel margin and fees for existing customers. Operating expenses in 2022 were $12.7 million compared to $8.1 million in 2021, a 56 percent increase. The increases were mainly in payroll, sales, and marketing, insurance, technology, and public company expenses as we grew our infrastructure during the first three quarters in order to accommodate our growth and our expansion throughout Florida. Our fourth quarter operating expenses were approximately $600,000 lower year over year, primarily due to lower stock compensation, lower D&O insurance premiums, and deficiencies realized in other operating expenses. our OPEX was sequentially lower than in the third quarter by a similar amount. Depreciation and amortization for the full year was $1.8 million, up from $0.9 million in 2021, with the increase mainly due to purchases of delivery vehicles. Interest expense was $104,000 in 2022 compared to $776,000 in 2021, the decrease primarily from the early payment of pre-IPO debt. On a GAAP basis, we reported a net loss in 2022 of $17.5 million, compared to $9.3 million in the prior period. In the fourth quarter, a loss of $6.2 million included a two-percent impairment charge, primarily related to goodwill and intangibles. The majority of this impairment related to a license for technology that the company is not using and does not factor into our future plans. Adjusted EBITDA loss for 2022 was 11.4 million compared to adjusted EBITDA loss of 5.8 million in 2021. The increase in the adjusted EBITDA loss reflects significant spending on infrastructure during 2022 to grow the business. Our adjusted EBITDA for the fourth quarter improved slightly year over year and sequentially compared to mainly as a result of a tighter focus on our marketing, technology, and other spending without limiting our ability to continue to grow the top line. We will continue to be focused in our spending as we continue to grow the business. As Mike mentioned, we now have 40 trucks in our fleet, and there is still much room for our utilization to increase with the existing fleet. We will review our needs as the year progresses, and if necessary, we'll order additional trucks. We used approximately $2.6 million in cash in operations during the fourth quarter, and $11.6 million for the full year. Our cash position at December 31st was $4.2 million, compared to $16.9 million at year-end 2021. Outstanding borrowings under million. We're evaluating a number of options to increase our cash position. but there is limited detail that we can provide on those efforts at the moment. We will look to update the investment community on any new developments as soon as we have them. With that, we'll be happy to take any questions.
spk04: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. Our first question comes from Tate Sullivan from the Maxson Group.
spk05: Hi, it's Alejandro Dunyon for Tate Sullivan. Thank you for taking my question. Can you guys hear me? Yeah.
spk03: Yeah. Hi, Kate. How are you?
spk05: Hi, it's Alejandro.
spk03: Okay.
spk05: Based on the recent announcement of the Miami Grand Prix, I was kind of wondering, have you started to earn revenue related to that preparation for the May event yet? Or will you start earning revenue a little prior to the event?
spk02: Yeah, we started earning revenue in January. Alejandro, it's construction, getting the site ready, doing all the work there. It's probably going to be a six-month ramp-up period, but we've been engaged, and every day is getting more and more volume as the activities continue to grow to get ready for the event.
spk03: Yeah, I'll add to that that we expect that the largest amount of the revenue from that event will be in Q2. That's just the way the event happens during Q2, and there's the biggest concentration of our work is during the event.
spk05: Understood. And if I can have one follow-up as well. I was wondering, are the fleet contracts competitively bid or are mostly a result of your sales efforts?
spk02: I would say the majority of them are through the sales team and the sales efforts.
spk05: Great. Thanks so much. I really appreciate it.
spk02: Okay.
spk04: One reminder that if you would like to have a question at this time, to please press star 1 on your phone. There appear to be no further questions in the queue, and we have reached the end of the question and answer session. I will now turn the call over to John McNamara for closing remarks.
spk02: Hello? Anyone with closing remarks? Oh, this is Mike Donald. John may be on mute. I would just say thanks for joining the call. We're obviously very pleased with our progress in Q1 so far this year, and we're looking forward to an extremely prosperous 2023. So appreciate everybody joining the call. Thank you.
spk04: Okay. This does conclude today's conference call, and you may disconnect your lines at this time. Thank you for your participation.
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