Pioneer Power Solutions, Inc.

Today, ladies and gentlemen, and welcome to the Pioneer Power Solutions Incorporated third quarter 2022 earnings results call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Brett Moss. Please go ahead.

Thank you and welcome. The call today will be hosted by Nathan Mazurek, Chairman and Chief Executive Officer, and Walter McHale, Chief Financial Officer. Following this discussion, there will be a Q&A session open to participants on the call. We appreciate the opportunity to review the third quarter 2022 financial results, as well as discuss recent business highlights. 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 the current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary text regarding forward-looking statements contained in the earnings release issued earlier today and in the posted version of these prepared remarks, both of which apply to the content of the call. I'd now like to turn the 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. This was an important quarter for us with continued strong orders and significant revenue growth. And we believe that this sequential progress will accelerate in the fourth quarter and continue into 2023. Based on our backlog and confirmed delivery schedules, we are confident that projected fourth quarter revenue will enable us to meet our full-year target of 50% year-over-year revenue growth. This guidance obviously signals that we expect to end the year on a very strong revenue note, and indeed, we fully expect that momentum to continue into 2023. Significantly, in the third quarter, we also expanded our gross margins as evidenced by the 130 base increase in gross margins as compared to the third quarter last year. On an operational level, it's important to note that excluding the ongoing investments to support our new strategic initiatives and associated overhead, our divisions delivered more than $200,000 in positive EBITDA contribution margins. From a sales and marketing perspective, demand for both our eBlock and eBoost product suites continues to accelerate. These two new solutions are directly addressing application issues and power challenges in the distributed energy generation and EV charging verticals. Both of these market segments are enjoying strong secular tailwinds, and our solutions directly address the opportunities these catalysts create. Let me start with the distributed generation market and e-block. Distributed generation is the concept of integrating multiple energy inputs, including zero-emission options like solar, wind, battery, and or hydrogen, and traditional sources, such as direct utility connections. eBlock allows the user to effectively manage, control, and protect all these inputs, facilitating peak shaving, peak skimming, and general resilience. In addition, eBlock provides these solutions in a compact, outdoor, Competitive Skid Mounted Package. In December of 2021, we announced a $12 million order for our e-block distributed generation platform from a major big box retailer. During the second quarter, as a reminder, shipments were delayed to this customer based on the customer's receiving schedule. As expected, revenues accelerated in the third quarter, and we believe this pace will accelerate further in the fourth quarter as driving a significant portion of 2022 sales revenue. We also anticipate similar-sized follow-on orders from this same customer for additional stores in 2023 and beyond. Beyond this large big-box retailer, additional customers in other market verticals are also deploying eBlock. For example, this past July, we announced a large data center order integrating eBlock customers to efficiently control the various energy sources as part of this particular energy developer's net zero initiative. This was eBlock's first entry point into the data center market, and we believe it represents a very large market opportunity for us over the next several years as data center developers and owners continue to push for a more diversified resilience package and a lower carbon footprint. In fact, we expect additional orders both with the end user and with the prime contractor who brought us into this particular market. Finally, in October, we announced that one of the largest automakers in the world awarded us an $8 million order for our e-block systems as part of their cutting-edge power delivery infrastructure for a new massive manufacturing campus which will focus on their electric vehicle and battery production. Our focus now is to leverage this early success of eBlock and bring eBlock to a much wider group of energy developers and users. Our current backlog includes $13.8 million of eBlock orders to be delivered over the next 12 to 18 months, including scheduled shipments on the $12 million order from the major big box retailer, deliveries to the data center and new auto plant as well. We expect to benefit from continued e-block order growth over the next several years. Turning to our e-boost mobile charging platform, we continue to see growing interest in our anytime, anywhere mobile EV charging solution. To review, one year ago, only one year ago, we created the e-boost mobile charging business comprised of three delivery platforms. 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. Third, eBoost Pod is a primarily 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 or 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 electrical vehicle charging. In emergency situations such as a power outage, eBoost can serve as a backup power source with convenient power connectors and outlets available on board. In the last year, we have booked almost $2 million of eBoost business and delivered almost $1 million of value product year-to-date. Initial adopters have been casino electric truck and school bus manufacturers and electric passenger vehicle manufacturers. We are realizing our strongest sales traction with a wider group of truck and bus manufacturers, dealers, and fleet operators. We are also actively working with electric aviation businesses, roadside assistant businesses, and logistics providers on additional e-boost units. The need is clear. Sales of electrical vehicles have significantly outpaced the charging infrastructure. Retailers, restaurants, hotels, casinos, concert trade shows, and other sports venues, workplaces want to move quickly to add charging solutions. During the quarter, we added new use cases, including the ability to rapidly recharge EVs as they are disembarked from ocean-going freight carriers. As more and more fleets are electrified, mobile and on-demand charging will become increasingly important, and e-boost fills this unique niche. We fully expect e-boost to represent dynamic growth and profits for us in 2023. Lastly, we also expect the Inflation Reduction Act to expand consumer incentives for electric vehicles and provide financial support and incentives for electric vehicle charging, renewable energy, and energy storage. In particular, the goal of converting federal, state, and local government vehicle fleets to EVs will help grow the size and velocity of this changing landscape and create near-term demand for fixed and mobile charging. These developments will accelerate the demand for our e-block and e-boost products and services. With that, let me turn the call over to Walter, our Chief Financial Officer, to discuss our financial results.