Vicinity Motor Corp.

Greetings, and welcome to the Vicinity Motor Corp. Fourth Quarter and Full Year 2022 Corporate Update Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. Before we begin the formal presentation, I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results and industry prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's regulatory filings for a list of associated risks, and we would also refer you to the company's website for more supporting industry information. I would now like to hand the call over to William Treanor, founder and chief executive officer of Vicinity Motor Corp. William, the floor is yours.

Thank you, operator, and good afternoon, everyone. I'm pleased to welcome you to today's fourth quarter and full year 2022 corporate update conference call. 2022 was a transformational year, expanding our capabilities beyond our strong legacy in transit buses and into a leading commercial EV manufacturer. The fourth quarter continued our pace of evolution with new orders and partners for our VMC-1200 and Vicinity Lightning product lines and continued progress on our new Ferndale, Washington production facility. Additional sales and distribution wins for our portfolio of electric vehicles were propelled by intense customer demand for our commercial EVs, particularly in the Class III segment with the Vicinity VMC-1200. New government incentives for EV adoption in the pipeline are building interest and support from enterprise customers and government agencies as fleets seek to be part of our shared electric future. To support the working capital needs of our VMC-1200 production ramp, we recently secured and expanded 30 million U.S. dollar credit facility with Royal Bank and the Export Development Bank of Canada, while maintaining existing financing to support bus production. We are also in the process of certifying as a free trade zone to enable us to better service the entirety of the North American market. This credit facility, paired with the installation of our power solution, receipt of our certificate of occupancy for our Ferndale manufacturing campus, And our in-process free trade zone status puts us in a position to significantly increase our production capabilities with the onset of U.S. assembly operations in the first half of 2023. We partnered with DSMA, a premier transaction originator and advisor in the North American automotive and heavy equipment sectors. to expand our North American dealer network for the VMC-1200. By working with DSMA, we'll be able to more rapidly secure high-value dealer partnerships that will maximize our ability to deliver VMC-1200 trucks to market while ensuring the highest level of customer service and satisfaction. New orders, including a $100 million U.S. purchase order for 1,000 VMC 1200 vehicles from Pioneer Auto Group helped us grow our backlog to over 150 million US dollars, with the vast majority of which are for electric vehicles, specifically the VMC 1200, which has rapidly become our most in-demand product. Our VMC 1200 supply chain is fairly insulated from the global supply chain disruptions that have impacted our transit bus business, which pushed the delivery of many of our bus orders into 2023. Initial VMC 1200 deliveries began in November. We've delivered 18 VMC 1200 vehicles as of March 30th, 2023, with 100 more vehicles currently in production. We expect these sales to gradually ramp up to meet the immense demand we're seeing for this product line. With final electric components installed and receipt of our certificate of occupancy at our new Ferndale Washington facility, we now expect Ferndale to begin to supplement our Canadian assembly capabilities in the first half of 2023. Taken as a whole, We are confident in our ability to drive significant revenue growth in 2023. Now with that, I'll turn it over to Dan to review the financial results for the quarter and year-ended December 31st, 2022. Dan?

Thank you, William. Good afternoon, everyone. I will keep my portion to a condensed review of our financial results. A full breakdown is available in our regulatory filings and in the press release that crossed the wire after market closed today. Revenue in 2022 totaled $18.5 million, as compared to $41.7 million in 2021. Revenue in the fourth quarter of 2022 totaled $2 million, compared to $2.3 million in the fourth quarter of 2021. Gross profit in 2022 totaled $0.4 million, or 2% of revenue, as compared to $4.2 million, or 10% of revenue in 2021. Gross profit in the fourth quarter of 2022 totaled negative $0.6 million, as compared to negative $0.3 million in the fourth quarter of 2021. Gross margins were negatively affected by product mix, the low volume of vehicles delivered, and a write-down of aged bus inventory and aftermarket parts. Consistent with the rest of the automotive industry, shipping difficulties and global supply chain disruptions and the availability of certain bus components have delayed a large portion of 2022 expected deliveries. Margins beyond 2022 are expected to be more in line with historical margins realized in 2018 and 2019, with the exception of some introductory pricing for new EV products. Cash used in operating activities in 2022 totaled $9.1 million as compared to 3.6 million in 2021. Net loss in 2022 totaled $18 million or negative 45 cents per share as compared to $7.3 million or negative 24 cents per share in 2021. Net loss in the fourth quarter of 2022 totaled $3.8 million or negative 9 cents per share compared to a loss of $4.8 million or negative 14 cents per share in the fourth quarter of 2021. Adjusted EBITDA loss in 2022 totaled $7.4 million as compared to $2.7 million in 2021. Adjusted EBITDA loss in the fourth quarter of 2022 totaled $1.4 million as compared to $2.2 million in the fourth quarter of 2021. Cash and cash equivalents as of December 31st, 2022 totaled $1.6 million as compared to $4.4 million as of December 31st, 2021. During the fourth quarter, the company fortified its balance sheet through an opportunistic use of the company's at-the-market, or ATM, program, generating $5.3 million in net proceeds. In addition, the company raised $4 million Canadian in gross proceeds from debenture financing announced earlier this month. Supplementing this, as Will noted, The company's credit facilities were expanded by $30 million to support VMC 1200 production. We believe we are well positioned for a high level of operational execution in 2023, with the fundamentals of our operations expected to further strengthen as we ramp up deliveries throughout the year. I'd like to now pass it back to William to offer some closing remarks, after which we'll begin our question and answer session.