Vicinity Motor Corp.

Good afternoon, and welcome to the Vicinity Motor Corp First Quarter 2022 Earnings Call. All participants will be in a listen-only mode. Should you need any 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 your telephone keypad. 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 the Chief Executive Officer, William Treanor. Please go ahead, sir.

Thank you, Operator, and good afternoon, everyone. I'm pleased to welcome you to today's first quarter 2022 Corporate Update Conference Call. The first quarter of 2022 was highlighted not only by continued order momentum, but by strategic expansion of our North American distribution network, with the addition of several exciting new dealers who placed orders for dozens of new vehicles, helping to drive penetration of our growing portfolio of all electric vehicles. Our backlog for 2022 delivery grew to over 90 million U.S., much of which is for electric vehicles, reflecting our rapid transition in product mix to meet the ever-changing needs of our transit customers. Our high demand electric truck and electric shuttle bus market continue to expand to fill the gaps for periods of lower transit bus deliveries. We're at the first quarter seeing new orders for over 250 VMC 1200 EV trucks from Canadian automotive dealers. We fortified our balance sheet in the first quarter fully funding our nearly complete Ferndale, Washington facility. The focus of this facility is Buy America compliant production, allowing us to further penetrate the U.S. market with an American-built offering. This raise, supplemented by our cash position and our $20 million Canadian line of credit, has positioned us to significantly ramp up deliveries to our growing dealer base in the second half of 2022. To penetrate for the robust growth ahead, we have taken steps to shore up our supply chain in this time of uncertainty. Chiefly, we have secured a 600 vehicle battery supply agreement with Proterra, a leading EV battery systems provider, supplementing our supply from various other providers, such as BMW and Electrovia. These steps are taken with the goal of eliminating any single point of failure within our battery supply chain, a common pain point for many EV manufacturers are facing. That being said, we naturally are not immune to the pressures facing automotive suppliers today, and some level of near-term headwinds exists. In addition to support our continued innovation efforts, as we further electrify our portfolio, we have appointed Global Automotive Engineering Executive Dennis Gore as Vice President of Engineering, bringing 35-plus years of experience from companies like Gillibus, Zero Motorcycles, Honda, and Mitsubishi Motors, among others. His experience will prove absolutely invaluable as we grow our all-electric product offering. On the investor and relations front, we have remained extremely active in presenting at several leading automotive industry and investor conferences nationally, including the Advanced Clean Transportation Expo, which we just finished this past week, Planet Micro, CAP Showcase 2022, Winter Wonderland Best Ideas Conference, Stiefel 22 Transportation and Logistics Conference, and the Canaccord Carbon and Energy Transition Conference. While the broader market, particularly in the EV space, has seen pressure in the recent market downturn, the fundamentals of our operations are extremely positive. Now with that, I'll turn it over to Dan to review the financial statements Results for our quarter ended March 31st, 2022. Dan? Thanks, William.

Good morning, everyone. I will constrain my portion to a brief review of our financial results. The full breakdown is available in our regulatory filings and in the press release that Cross the Wire Aftermarket closed today. Please note that I will refer to adjusted EBITDA and other non-GAAP measures. For the calculation of adjusted EBITDA and other not-in-gap measures, please refer to the Q1 MD&A, which is available on CDAR. In addition, all figures are in U.S. dollars, unless otherwise stated. Revenue decreased to $3.2 million in the first quarter of 2022, as compared to $21.5 million in the same year-ago quarter. The decrease in revenue is primarily driven by six deliveries versus 67 deliveries in the previous periods. Gross margin in the quarter ended March 31, 2022 decreased to $200,000, or 7% of revenue, as compared to $3.4 million, or 16% of revenue, in 2021. Gross margins were affected by product mix and the low volume of buses delivered. Shipping difficulties and global supply chain disruptions in the availability of chassis for our VMC Optimal products and certain bus components has delayed a large portion of expected deliveries during the end of 2021 and has continued into 2022. Cash used in operating activities in the first quarter of 2022 totaled $5.1 million as compared to cash provided by operating activities of $2.9 million in the first quarter of 2021. Net loss in the quarter ended March 31st, 2022 was $2.9 million or 8 cents per share. as compared to a net income of $1.6 million, or 5 cents per share, in the first quarter of 2021. Adjusted EBITDA loss for the first quarter of 2022 was $2.1 million, as compared to an adjusted EBITDA of $2.1 million in the first quarter of 2021. Cash and cash equivalents as of March 31, 2022, total $11 million, as compared to $4.4 million, as of December 31st, 2021. During the quarter, the company fortified its balance sheet through a $12 million financing to fund the Ferndale Washington facility, in addition to being awarded a Canadian dollar $2.6 million non-repayable grant from a Canadian government foundation. Our company is in a strong position. We have a strong balance sheet, are well positioned to execute, and the fundamentals of our operations are very positive. However, In response to current supply chain challenges, we are revising our guidance for fiscal year 2022, which had been previously announced November 12, 2021. Revenue guidance is being revised to a range of 70 to 90 million U.S. dollars, and EBITDA guidance is being revised to a range of 3 to 5 million U.S. dollars. Lack of availability of parts in the supply chain, shipping conditions overseas, and availability of chassis for the VMC optimal products have caused delays to our production timelines and externally affected our ability to meet previously stated figures. I'd now like to pass it back to William to offer some closing remarks, after which we will begin our question and answer session.