Vicinity Motor Corp.

Greetings and welcome to the Vicinity Motor First Quarter 2023 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 call 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 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 files for a list of associated risks, and we'd also like to refer you to the company's website for more supporting industrial information. I would now like to turn 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 first quarter 2023 corporate update and conference call. The first quarter of 2023 was marked by significant momentum across all aspects of our business, with Ferndale set to begin initial assembly operations in the coming weeks, truck deliveries from our Canadian facility underway, and new incentives, making our products even more cost competitive with internal combustion vehicles. We are nearing completion of a batch of 50 VMC 1200 vehicles as well as several transit buses at our Canadian facility for delivery in the second quarter. Seeding products into the market and generating further demand with North American automotive dealerships alongside our partners at DSMA, a premier transaction originator and advisor in the North American automobile sector. helping to expand our North American dealer network for the VMC-1200. Our EV offerings continue to gain traction amongst dealer and commercial partner networks propelled by intense customer demand for commercial EVs, particularly in the Class III segment with the VMC-1200. New government incentives for EV adoption, such as the recent Affirmation by Transport Canada that our VMC-1200 qualifies for a $40,000 Canadian dollar federal rebate nationwide in Canada are helping to build interest and support from enterprise customers and government agencies as fleets seek to be part of our shared electrified future. Our new U.S. manufacturing campus in Ferndale, Washington has seen significant momentum as of late, with construction complete, our power solution installed, our certificate of occupancy in hand, and key hires for the facility complete. We simply need to fence our facility and we're mere weeks away from the onset of VMC 1200 production. From there, we'll ramp up our production rate throughout the year. positioning us to achieve profitability during the second half of 2023. In addition, as previously promised, we were successful in securing a foreign trade zone, also known as an FTZ, status with the US Department of Commerce for our facility in Ferndale. Certification as an FTC is a significant competitive advantage, positioning us to reduce, defer, and eliminate costs that typically occur for a business importing into the United States. Operating as a certified FTZ will allow us to offer additional value to our customers by empowering an efficient and cost-effective way to conduct business across borders, reducing import costs while accelerating supply chain velocity. Support the Immediate term ramp-up of Ferndale, we recently supplemented our $30 million VMC-specific credit facility with the Royal Bank of Canada and Export Development Canada with a further $9 million working capital credit facility with Export Development Canada, fully funding our near-term operations with non-dilutive debt financing. In addition, our transit bus business has seen supply chains improve, and to that, we have restarted delivery of transit buses to customers as of the spring of 2023. We continue to see strong demand for our vicinity classic bus line, proving out our established market leadership in the mid-size heavy-duty transit bus space. So in summary, we... We have truly been executing on all fronts and position ourselves for a breakout second half as we deliver against our incredible $150 million backlog. Now with that, I'll turn it over to Dan to review the financial results for the quarter ended March 31, 2023. Dan? Thank you, William.

Good afternoon, everyone. I will keep my portion to a brief review of our financial results. Full breakdown is available in our regulatory filings and in the press release that crossed the wire after market closed today. Revenue in the first quarter of 2023 totaled $2.7 million, as compared to $3.2 million in the first quarter of 2022. The decrease in sales was impacted by product mix, which was more heavily weighted to trucks in the first quarter of 2023. Gross profit in the first quarter of 2023 totaled $0.5 million, which or 18% of revenue as compared to $0.2 million or 7% of revenue in the first quarter of 2022. Gross margins were positively impacted by an adjustment for expired warranty. Cash used in operating activities in the first quarter of 2023 totaled $3.6 million as compared to $5.1 million in the first quarter of 2022. Net loss in the first quarter of 2023 totals $2.4 million or negative 5 cents per share as compared to a loss of $2.9 million or negative 8 cents per share in the first quarter of 2022. Adjusted EBITDA loss in the first quarter of 2023 totalled $1.4 million as compared to adjusted EBITDA loss of $2.1 million in the first quarter of 2022. Cash and cash equivalents as of March 31st, 2023 totaled $1.8 million, as compared to $11 million as at March 31, 2022. During the first quarter, the company fortified its balance sheet through the closing of a $4 million Canadian private placement of convertible debentures with strategic investors. Supplementing this, as Will noted, the company's credit facilities were expanded by $30 million to support BMC 1200 production, as of this month, a further $9 million working capital credit facility. 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 deliveries throughout the year, allowing us to transition to profitability during the second half of 2023. 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.