Pioneer Power Solutions, Inc.

Good day and welcome to the Pioneer Power Solutions Incorporated second quarter 2022 earnings results call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brett Moss, investor relations of Hayden IR. Please go ahead.

Thank you and welcome. The call today will be hosted by Nathan Masaryk, Chairman and Chief Executive Officer, and Walter Michalik, Chief Financial Officer. Also on the call today is Gio Marikian, President of the company's recently launched Pioneer Power Mobility Mobility, I'm sorry, Mobility Business Unit. Following this discussion will be a Q&A session open to participants on the call. We appreciate the opportunity to review the second quarter 2022 financial results as well as discuss recent business highlights. Before we get started, sorry about this, before we get started, let me remind you this call is being recorded in webcast. During this call, management will make forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary text regarding forward-looking statements containing the earnings release issued earlier today and the posted version of these prepared remarks, both of which apply to the content of the call. I now enter this call over to Nathan Masaryk, Chairman and CEO. Nathan, please go ahead.

Thank you, Brett. Good afternoon, and thank you all for joining us today for our conference call. Market demand for our new solutions eBlock and eBoost continues to grow quite rapidly. As a reminder, both of these solutions were only introduced in the second half of last year. And over the past few quarters, we have continued developing additional prototypes and first commercial units, expanding our internal sales team, broadening our third party sales channels, and investing in marketing support. This growing market demand, including customer provided timelines and expectations, have reinforced our confidence that 2022 and 2023 will be significant growth years for Pioneer. Indeed, we are today reiterating our guidance of full-year revenue growth for 2022 of at least 50% over prior year levels. We are reaffirming this goal even as the revenue in this second quarter was severely impacted by customer-driven delays. More specifically, In December of 2021, we announced a $12 million order for our eBlock distributed generation solution from a major retailer. As often happens when working with one very large customer, delivering timing can change. And during the quarter, approximately $3 million in systems were completed, validated, and scheduled for delivery, but delayed by the customer due to site readiness issues. The customer remains fully committed to this project and has already made progress payments of about 50% of the project value. If the original schedule had been left unchanged, we would have delivered revenue growth of approximately 30% in the quarter. Nevertheless, we are highly confident that we will ultimately ship the majority of these orders along with additional units scheduled for delivery during the second half of 2022. We believe and continue to believe Pioneer is well positioned to benefit from two powerful secular catalysts, distributed energy generation and electrical vehicle charging. Specifically regarding distributed generation, grocery stores, office building, factories, universities, and other large enterprises are seeking to take advantage of secondary power sources, such as natural gas, fuel cells, as well as green sources like wind and solar. Our e-block solution enables them to easily and efficiently combine and control these sources in tandem with direct utility power and energy storage, driving down costs, adding resilience, and reducing their carbon footprint. E-block can be deployed quickly, often with little or no permitting or interconnect requirements, and usually with no interruption to their current operations. And we can and indeed have done so easily add electrical vehicle charging infrastructure to this solution. Our $12 million order from a large retailer was a prime example of eBlock in action. Our focus now is to leverage this initial success to bring eBlock to a much wider group of energy developers and users. To that end, during the second quarter, we booked an initial purchase order. part of a larger ultimate deployment for an e-block solution at a hyperscale data center in San Jose, California. This data center is owned and operated by one of the largest cloud internet companies in the world and indeed will be the first repowering of a hyperscale data center supported by renewable natural gas, ensuring that operations continue even during brownouts or blackouts. In addition, By using renewable natural gas rather than traditional diesel, we will be able to help this particular company accelerate delivering on its carbon negative objectives. The initial order to be shipped in the first half of 2023 is for just under a million dollars for four units, with expectations of 22 units total once the project is complete. Turning to our eBoost product, the mobile charging solutions, that we unveiled last year, we continue to see growing interest in our anytime, anywhere mobile charging equipment. The need is clear. Sales of electrical vehicles have outpaced the charging infrastructure. Retailers, restaurants, hotels, casinos, concert trade shows, sports venues, all workplaces want to move quickly to add charging solutions. As we have stated in prior calls, We have created an entirely new business unit, Pioneer Power Mobility, to support the eBOOST product line. eBOOST is a self-contained, high-capacity, sustainably powered mobile charging solution. We have created three delivery platforms for this solution. First, eBOOST GOAT, G-O-A-T, which stands for generator on a truck. This is a truck-mounted EV charging solution, which is fully mobile. and can provide high-speed charging anywhere. Second, eBoost Mobile is a trailer-mounted or skid-mounted portable solution that provides multiple options for towing or forklift relocation and can be available at specific businesses, large sports and cultural events, and can be relocated with minimal effort and on short notice. And finally, eBoost Pod is primarily a stationary EV charging solution with as-needed mobility that can provide EV charging to multiple vehicles. This is the ideal solution for gas stations, hotels, and other retail locations that utilize EV charging to increase customer traffic and retention or as a brand differentiator. All three eBoost platforms are designed to provide on-demand power needs in addition to the primary task of high-speed charging. In emergency situations such as a power outage, e-boost can serve as a backup power sources with many convenient power connectors and outlets available on board. In the near term, we see manufacturers of electric trucks and buses moving most quickly towards e-boost adoption. During the quarter, indeed, we shipped two e-boost skid-mounted systems to be used by the nation's largest school bus manufacturer in connection with its electric school bus offering. We recognized $129,000 in e-boost revenue from this order in the quarter. Mobile charging solutions are required at truck and bus dealerships, and manufacturers are reselling and or leasing our e-boost solution to their dealers and customers, paired with purchases of their new electric offerings. As a result, we are in discussions with multiple potential customers and our addressable market continues to grow. New opportunities beyond this, including electric aviation, marine craft, automotive dealerships, as well as many military applications have presented themselves as well. We expect eBoost to represent as much as 10% of our annual revenue in 2022, a significant achievement considering we only introduced eBoost in November of last year. In addition, we fully expect eBoost revenue to double in 2023 from its 2022 levels. As I noted early in the call, the delayed shipments which impacted our second quarter have not deterred us from reiterating our outlook on full year revenue growth of at least 50% in 2022 compared to 2021 levels. We expect the second half of the year to be stronger, both the top and bottom line, as compared to the first half of the year, even as we invest in sales, marketing, facility, and product development to support e-boost and e-block. In addition, we are extremely encouraged by the recent passage of the Inflation Reduction Act. We believe that this act bolsters incentives for electric vehicles and provides a myriad of financial support for electric vehicle charging, renewable energy, and energy storage. provide important support indeed accelerators for Pioneer's targeted markets. In addition, the goal of converting federal and many state and local government vehicle fleets to electric vehicles also will help grow exponentially the size and the velocity of this changing landscape and create near-term demand for fixed and mobile charging. Finally, the favorable tax Implications of the act will contribute to a faster transition to electric transportation, driving higher demand for electric vehicle charging infrastructure. With that, let me turn the call over to Walter, our CFO, to discuss our financial results.