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spk05: Good day and welcome to the Newbee Holding Corporation first quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Eduardo Royas. Please go ahead, sir. Thank you.
spk00: On today's call are Gregory Paulan, Chief Executive Officer, and David Robson, Chief Financial Officer of Nuvi. Earlier today, Nuvi issued a press release announcing its first quarter 2022 results. Following prepared remarks, we will open the call up for questions. Before we begin, I would like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect Nuvi's best current judgments, They are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward-looking projections. These risk factors are discussed in Newby's filings with the SEC and in the earnings release issued today, which are available on our website. Newby undertakes no obligation to revise or update any forward-looking statements to reflect future events or circumstances. With that, I would like to turn the call over to Gregory Poilon, Chief Executive Officer of Newby.
spk01: Gregory? Thanks, Eduardo. and good day to all. Thank you for joining us as we review our results for the first quarter of 2022. In the short period since our last earning call in late March, we have continued to see strong secular tailwinds for vehicle electrification and the adoption of vehicle-to-grid technology, B2G. As an example, I'd like to start today's call by highlighting our recent announcement of a Memorandum of Understanding, or MOU, with the U.S. Department of Energy, DOE. This announcement is not only an example of the continued expansion in interest in V2G, but the recognition at the federal level of the critical role that V2G will play in the energy transition. We view the DOE's decision to form this partnership to be an admission that transportation electrification cannot unfold with the grid today as is. The load requirements and variation associated with EVs charging are simply too high. However, While EVs will be a source of stress on the grid, bidirectional charging and the vehicle-to-grid technology that we have pioneered for over a decade also render EVs a key part of the solution. The federal government realizes vehicles should evolve to becoming paid grid resources. To elaborate briefly on the MOU as a collaboration partner to the DOE, we'll be working with government agencies, utilities, and electrification industry leaders to accelerate the commercialization of Vehicle-to-Grid, Vehicle-to-Building, Vehicle-to-Home, and other vehicle grid integration technologies, or what they are calling Vehicle-to-Everything, or V2X. We chose Nuvi because it recognizes that we are best positioned to be a leading enabler of the solution given our experience in commercially deploying V2G around the world. To Nuvi's grid-integrated vehicle, or GIVE platform, we are able to aggregate and provide power for EVs at scale back into the grid by creating virtual power plants. We integrate electric vehicles into the grid in the most efficient way possible, generating revenue for the customer and lowering the total cost of ownership. Our solutions have resonated well with school districts and operators of commercial fleets given the predictability of their vehicle schedule and their hyper-focus on cost. And we look forward to leveraging our learning and continuing to learn as we work with the DOE and our partners in this MOU. Turning now to a summary of key accomplishments in the first quarter of 2022. As discussed on our last earning call, we announced several exciting partnerships in Q1, including one, a joint venture with 2021 AI to collaborate exclusively on the integration of their artificial intelligence platform with the new B2G platform. Two, a partnership with Swell to offer combined solar, stationary battery storage, and intelligent EV charging for residential and commercial markets. Three, LIVO's first commercial win, a 10-year contract with the Troy School District that marks the largest and first 100% planned zero-emission school bus conversion in the Midwest, all of which we've discussed in more detail on our last call. Each of these partnerships is critical, we believe, to maintaining and growing a competitive edge and providing the value we can deliver for fleets around the world as they go electric. Since the last earning call, the momentum has continued to build. On 2021.ai, we've made good progress executing on our business plan for the joint venture, which is called Astraea AI. We recently held a summit at our headquarters in San Diego and executed a collaboration agreement. We think that Astraea AI is supposed to be a great sales enabler for us. Astraea is bringing a full AI environment that not only offers the ability to run different types of models, but also provides additional governance tools necessary to run an AI platform commercially. Our JV is going to deliver products such as forecasting, a worldwide-type database, predictive maintenance, and energy insights and reporting, all of which support this intersection between transportation and energy. This all forms part of our broader integrated offering as we look to continuously make our intelligent platform even smarter. In early April, we have announced our qualification to start commercial operations in the Japanese energy market, receiving approval from the transmission system operator along with all our partners, Toyota Tsusho and Shubu Electric. Our GIF platform demonstrated it can successfully discharge power from large industrial stationary storage batteries to provide power to the grid and absorb demand fluctuation that results from big power sources. This milestone built on a series of small-scale demonstration projects we successfully completed a few years ago in Japan using EV batteries and is an example of how we continue to evolve and grow our partnerships over time. Over the next few months, we will leverage these stationary batteries in order to provide capacity back to the grid and support electric vehicle deployments. As we expand our reach into the commercial fleet business, we have two key announcements bringing more diversity to our product offering and more flexibility to our megawatts under management rollout. Earlier this week, we disclosed an agreement with Power Electronics a global manufacturer of solar inverters and charging hardware. ProEvTronics will add Nuvi V2G certified capabilities to their existing bidirectional chargers for customers in North America and Europe. This partnership is very important to us as it expands Nuvi's existing line of medium and heavy duty charging station offering for fleet customers on a global scale and helps de-risk our supply chain in charging hardware, which is of course critical to our business. Also this week, we announced an alliance with Centro, a designer and manufacturer of electric, light, and medium-duty commercial vehicles. Centro will begin to offer bundled newbie charging packages to commercial fleets with their U.S. product lineup in the Class 4 market. This is a new market category for us, and we are pleased to be able to enter it with Centro and their very attractive, relatively low-cost vehicle. Centro allows us to diversify OEM offering for our fleet-as-a-service solution and in the future, partnership in our V2G hubs concept. Adding new OEMs, expanding our product range, and securing V2G hubs are all core to our strategy, and our partnership with Centro checks all these boxes. Wins such as these have supported Nuvi's recent recognition, such as being named as 2022 BNF Pioneer by Bloomberg New Energy Finance last month. An award we are very proud and which inspires us to continue to push ourselves even further on our quest to play a foundational role in intelligently electrifying the planet. Turning now to megawatts under management, which we have discussed the past couple of quarters as an indicator of the potential revenue growth amid their commercial wins. As of March 31st, 2022, we had 16.9 megawatts under management. This reflects roughly 15% increase from December 31, 2021, and tripled the amount compared to the prior year. Taking an even higher level, we are pleased that our pipeline continues to do very healthy as well. Our qualified pipeline currently stands at approximately 225 million. As noted last time, we consider our qualified pipeline to be those potential customers where we have a memorandum of understanding in place or where we are working towards a definitive agreement. Remind you that we do not expect to convert 100% of our pipeline Further, products and services can be either sold outright to our customers or through a multi-year agreement, which would affect timing on revenue recognition. Our business developments will inherently continue to be lumpy from quarter to quarter when it comes to the pace of commercial wins, changes in backlog, and order flow, which David will touch in a few minutes. However, critically, we remain in numerous active discussions with customers, many of which we have framework agreements with, with or are in late-stage negotiation with. In abiding on this, as discussed in our last call, the school bus market remains critical to us, but there are many other segments for our V2G offering. These include with fleet management companies, government fleets, including in more isolated locations that have grid infrastructure challenges and mobile storage systems. Further, we continue to expand existing partnerships and grow our V2G hub models. We're also pursuing partnerships with multiple universities. Universities are valuable collaborators and provide a channel for B2G expansion and deployment, given their large fleet and diverse use cases, rich talent pool, and the ability to partner on an academic level. University partnerships are also important because they offer us the opportunity to dive into new and emerging B2G verticals, such as the automotive, airport, data science, and maritime segments. As select universities tend to have deep expertise and existing partner ecosystem within these certain segments. In the process, we also help foster the workforce that will be required for the electrification of transportation. We look forward to hopefully crossing the finish line on several existing partnerships and developments in the month ahead and discussing these in more details on our next goal. I will now turn the call over to David to discuss our financial results before I wrap up with some prepared remarks and we can open to Q&A.
spk04: Thanks, Gregory. I will start with a recap of first quarter 2022 results. In the first quarter, we generated total revenues of $2.4 million compared to $799,000 in the first quarter of 2021. This represents a year-over-year increase of nearly 200%. primarily due to hardware and service revenues growing by more than seven times, reflecting the sale of five electric school buses and an increase in revenues from the sale of charging stations. The sales of these EVs during the first quarter is a means for us to deploy hardware that can expand our platform to grow megawatts under management and create an avenue for future grid service revenues. This supports our business model of short-term hardware sales with potential long-term grid service revenues. Product and service revenues in the first quarter of 2022 represented 95% of total revenues compared with 39% of first quarter 2021 revenues. We expect product and service revenues to be the lion's share of revenues going forward. Margin on product and service revenues was 4.9% for the first quarter 2022 compared to 59.2% for the first quarter last year. Our gross margins were lower than the prior year, primarily due to the aforementioned bus sale and higher installation expenses on charging station deployments. Total operating costs, excluding cost of sales, were $9.8 million for the first quarter of 2022, compared to $5.7 million in the first quarter of 2021. This increase was primarily attributable to increased costs associated with being a public company, an increase in payroll costs from increased staffing, and the costs associated with Levo, which we established last year. On a sequential basis versus the fourth quarter of 2021, the increase was $1.3 million up from $8.5 million, largely due to higher legal and professional fees and higher costs to support LIVO mobility. Cash operating expenses excluding cost of sales, stock compensation, and depreciation and amortization was $8.7 million in the first quarter of 2022 compared to $7.4 million in the fourth quarter of 2021. LIVO incurred half a million dollars in operating expenses during the first quarter. Other income was $458,000 in the first quarter of 2022 versus a $288,000 expense in the year-ago quarter. Net loss attributable to Nuvi common stockholders for the first quarter of 2022 was $9.2 million compared to $5.4 million for the first quarter of 2021. Now, turning to our balance sheet, We had approximately $23.7 million in cash as of March 31, 2022, and remain in a good position with the funding from the transaction and our pipe investment. As an aside, and subsequent to the first quarter end, we disclosed last week that we entered into an at-the-market offering agreement pursuant to which Nuvi may offer and sell shares of its common stock and an aggregate offering price of up to $25 million. We used 8.6 million in cash during the first quarter, primarily attributed to 7.9 million in net cash losses, 0.6 million in higher working capital, and 0.3 million in fixed asset purchases associated with our new corporate office space, offset by 0.2 million in foreign currency exchange rate gains. Inventory decreased by $1.8 million to $9.3 million at the end of the first quarter from $11.1 million at the end of the fourth quarter 2021. The decrease was primarily driven by the sale of buses and charging stations, as discussed earlier. Accounts payable decreased by $2.5 billion to $3.2 million at the end of the first quarter from $5.7 million at the end of the fourth quarter of 2021. The decrease was driven primarily by the payment for the purchase of DC charging stations received in the fourth quarter of last year. Now, turning to our megawatts under management and estimated future grid service revenues, as Gregory noted, megawatts under management is a metric we use to quantify the aggregated amount of electric capacity from the deployment of our V2G chargers V1G chargers, and stationary batteries that Nuvi manages and can supply under ideal conditions. Currently, our megawatt center management includes chargers and batteries located throughout the United States, Europe, and Japan. During the first quarter, we added 2.2 megawatts under management, increasing our total megawatts under management to 16.9 from 14.7 megawatts at the end of the fourth quarter of 2021. The 16.9 megawatts under management was comprised of 4.2 megawatts from DC chargers, 5.7 megawatts from AC chargers, and 7.1 megawatts from stationary batteries. At the end of the first quarter, 6.7 of the 16.9 megawatts under management included customer agreements allowing for Nuvi to earn future grid service revenues. As we create future V2G hubs, we will further expand our megawatts under management. This brings me to the estimated future grid service revenues associated with our megawatts under management and megawatts to be deployed, which is based on a combination of contracted grid service revenues and immersion-exposed revenues. Contracted grid service revenues results from negotiated revenues per kilowatt year to be paid by the utilities. Merchant exposed grid service revenues is projected based on a number of factors and inputs, including the types of vehicles connected to our network, the expected use patterns for those vehicles, the length of term of the customer agreements, and the geographies of the deployments. Depending on the geographic regions of our deployments, the grid service revenue opportunities will vary. We are currently seeing grid service revenues ranging between $85 per kilowatt year up to $300 per kilowatt year. These revenues include a combination of contracted services and merchant exposed services. Given the long-term nature of our customer deployments, these revenues are generally recurring over a period of 10 to 12 years. At March 31st, our hardware and services backlog was $4 million. Backlog declined from the end of the fourth quarter due to strong sales in Q1 and the timing to convert our existing qualified pipeline into backlog. As Gregory touched earlier, our qualified pipeline remained strong at approximately $225 million. Although not all of our qualified pipeline will convert into backlog, the size of our qualified pipeline demonstrates the potential for Nuvi to significantly grow Megawatt Center management which is building at a faster pace in 2022 than we expected in 2021. And with more megawatts under management, we're able to offer more services, which can generate larger amounts of grid service revenues. And with that, let me turn it back to Gregory for some closing thoughts before we go to Q&A.
spk01: Thanks, David. 2022 is off to a strong start, and as we diversify and expand our partner base, expand our megawatts under management, and grow our revenues. The tailwinds for V2G remain strong, and our recent MOU with the DOE underscores the importance of V2G in the energy transition and a significant role as a pioneer for this technology. Our wins in the first quarter position us well for the future, and the conversation we are having across a variety of partner types excite us about what is to come over the balance of the year. We look forward to speaking with you again on our second quarter 2022 earning calls. With that, we'll now turn the call back over to the operator to begin our Q&A. Operator?
spk05: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question, please press star then two.
spk07: At this time, we will pause momentarily to assemble our...
spk05: And our first question will come from Brian Dobson with Chardon Capital Markets. Please go ahead.
spk02: Hi, good evening. Thanks for taking my question. Hey, Brian. Hey. So you recently signed a memorandum of understanding with the U.S. Department of Energy. What type of long-term opportunities do you believe that could open for the company?
spk01: I think there are a couple aspects that are associated with it. One is obviously to make sure that markets are accessible for EVs and the diversity of energy markets are accessible for electric vehicles that have bi-directional capabilities. And also harmonize some of those things. For example, there's a ruling from FERC called 2222 that is being implemented right now. And we just need to make sure that the V2G piece can access, you know, FERC 2222 is targeting behind the meter energy storage and V2G is included in that. So the execution on FERC 2222 is important. Another piece I think that matters for the DOE is standardization and, you know, We also strongly believe in standardization. We think it's important that all those resources are accessible and can be controlled. And the last piece is making sure that you do all of that while you are taking care of the ultimate customer experience by the drivers, to make sure that all of this is not impacting the drivers. So we think it's all very much in line with our own strategy and our own path.
spk02: Great. Thanks very much. And, you know, a similar question. You also gained approval from the Japanese transmission system operator. You know, could you speak to some of the opportunities that that could lead to?
spk01: Can you say it again? I think I have a connection issue.
spk02: Just regarding your recent approval from the Japanese transmission system operator, could you speak to some of the strategic opportunities that that approval could lead to?
spk01: Yes, absolutely. So, you know, depending on the market that you're addressing, what you always need to look at as an entry point. You know, Japan at this point, you know, after shutting down all their nuclear power plants, they had – EV path was less important to them. And so storage in Japan has been a very exciting way to help them further introduce renewable generation and help them to keep their grid stable. And so that has been the entry point. In the meantime, over the last three years, we've been working with the regulator in looking at how V2G would also be able to participate into those markets. And we're expecting that to happen over the next 18 months or so. And so this is a way for us to establish ourselves, build experience in participating in those markets through stationary storage, and then to, over time, bring a variety of unidirectional vehicles as well as B2G vehicles. And again, you should expect that to happen over the next 12 to 18 months as we are rolling out in Japan. And so the first step is expanding the amount of stationary storage we have over there and then to combining with EVs.
spk02: Yeah, excellent. And my final question, we've been speaking with many of the charging companies, and the feedback we're hearing is unanimously positive regarding the consumer demand for vehicle-to-grid charging technology. Do you think that there'll be more opportunities for you to partner in ways similar to the partnership that you have with Wallbox regarding your technology and some of their products?
spk01: Absolutely. I think, you know, so first of all, at this point, we are very, very focused on fleets, right? And it's emphasized that as an organization. But we, you know, like the Wallbox, we are, you know, as I said, deepening our feet in the consumer space. We don't see ourselves becoming a consumer company, but we see ourselves working with partners, either charging station manufacturers or vehicle manufacturers, in order to support them in deploying V2Gs. and we think that the consumer opportunity is going to be very, very large. We see the fleet opportunity being the underlying value with less volatility in terms of how we are managing those vehicles, and then combining that with the consumer on top of it, which are going to be naturally more volatile because the use of those vehicles is a lot more random. But the combination of those two is very, very exciting for us, and the way we address this random aspect is, For example, the work that we are doing with Astra AI, our AI platform, and our partnership with 2021.ai in order to account for all that volatility in how we are treating those vehicles in participating into the bioenergy markets we are getting into.
spk02: Excellent. Thank you very much for the call.
spk03: Thanks.
spk05: Again, if you have a question, please press star then 1. Our next question will come from Eric Stein with Craig Hallam. Please go ahead.
spk06: Hi, Gregory. Hi, David. Hey, Eric.
spk03: Hi, Eric.
spk06: Hey. Hey, so, you know, just thinking about the demand you're starting to see early here, and obviously people trying to answer the million-dollar question about when does the dam kind of break. I mean, do you feel like people are waiting for the lottery, you know, for the infrastructure funding? And once that sorts itself out, you can start to see that ramp? Or how are you kind of thinking about things playing out over the next, call it, nine to 12 months?
spk01: I don't think people are waiting for the infrastructure bill because there is already quite a bit of money available. And we see just a lot of activity. I think for us, You know, we talked a little bit about it. We see very large opportunities that we are working on right now. And it's just a question of, you know, we've talked about our qualified pipeline. And it's just a question of bringing those large opportunities to a close. And as you know, right, the bigger the opportunity, the more time it takes to close it. But, you know, we're very, very excited about the opportunities that we are facing. And we don't think that people are just waiting for the infrastructure money to come out. in order to make those decisions.
spk03: And I would say, Eric, the supply chain is a factor, so it is taking longer to get supply of finished vehicles and components that go in it. So that's just a short-term issue, not a long-term issue.
spk06: Okay. And maybe, you know, don't want to put words in your mouth, but just curious if you agree that that the, you know, as you said, you've got to get through the process, but, you know, third-party funding from Levo or the other sources that are out there, I mean, would you agree that that is more important than the infrastructure funding in terms of, you know, starting to see adoption going forward? Yes. Yeah, absolutely.
spk01: You know, the infrastructure bill, I mean, money in general is paying for the first one, three, four, five pluses. But like the commitment from Troy, right, is really about doing the whole fleet. And they understand that the infrastructure bill is not going to pay for all of it. That's why they are coming in and they are working with Levo.
spk06: Yep, got it. You know, just sticking with Levo a little bit, I know that the main focus of it is school buses. But just curious, what other end markets, whether it's commercial vehicles, other fleets, do you see that as being a meaningful part of the portfolio once Levo is really up and running, or do you expect it to really be largely school buses?
spk01: I think the baseline is school buses. A lot of the expertise from the team is around the school buses, but I think that there are opportunities. No, maybe opportunities outside of just the pure school bus business.
spk04: All right. I mean, we're seeing those opportunities.
spk03: So Gregory said school bus leads are a focus, but we're also seeing opportunities. We're talking to customers who have interest beyond school buses through Levo.
spk06: Okay, gotcha. Maybe last one for me, just an update on BYD. I mean, I know you have a number of collaborations and partners. You know, that one was a pretty noteworthy one that goes back a few quarters, but maybe just an update on that.
spk01: Yeah, I mean, we are executing on integration. I did a little bit of work to get done there, and that's underway. And then, you know, we are working with them on a few different opportunities. that we have not been able to share yet, but we hope we'll be able to share some of that very soon.
spk07: Okay. Thanks a lot. Thank you.
spk05: This concludes our question and answer session. I would like to turn the conference back over to Gregory Qualen for any closing remarks.
spk01: Thank you very much for listening to us today, and we look forward to sharing more about our progress over the next quarter. Thank you.
spk05: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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