Romeo Power, Inc. Class A

Welcome to the Romeo Powers fourth quarter and year-end 2021 earnings conference call and webcast. At this time, all participant lines are in a listen-only mode. For those of you participating on the conference call, there will be an opportunity for your questions at the end of today's prepared comments. Please note this conference is being recorded. An audio replay of the conference call will be available on the company's website within a few hours after this call. I would now like to turn the call over to your host, Ashley Grunberg of the Alpha IR Group. Please go ahead, Ashley.

Thank you and welcome. Joining me today are Susan Brennan, Chief Executive Officer, and Kerry Sheba, Chief Financial Officer. Please note that our fourth quarter and year-end earnings press release and a PowerPoint that we will be referring to today are both posted on the company's website at Romeopower.com, and our 10-K was also posted earlier today. Slide two of that PowerPoint outlines our safe harbor statement. Along those lines, I want to remind everyone that this conference call will contain forward-looking statements. including our expectation of future results, sales, availability, and cost of imports, production capacity, market dynamics, liquidity, cash spending, and other items. Our actual results may differ materially and adversely from those projected or discussed in these forward-looking statements. Additional information concerning factors that could cause the results to differ materially and adversely from these forward-looking statements are contained in our press release that went out earlier today as well as the disclosures in our public filings with the SEC. The company is under no obligation to update forward-looking statements. Today's call may also include a discussion of non-GAAP financial measures, as that term is defined in Regulation G. Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in compliance with GAAP. With that, please turn to slide three, and I'll turn the call over to Susan for a few opening remarks.

Thank you, Ashley. Good afternoon, and thank you all for joining us today. As Ashley mentioned, we're going to use a PowerPoint to guide our conversation as we wanted to provide a more holistic overview of our business today and our path forward. In terms of our agenda, I will start with a high-level review of our recent highlights, then Carrie will walk us through our financial results and 2022 outlooks. I will then close out with a deeper discussion of our business, our broadening in-market focus, and some recent commercial success examples. Our priorities for 2022? We will then take your questions. 2021 was a pivotal year. We gained momentum in the second half of the year as our new leadership team aligned and began to execute. In January of this year, we added two additional members to our executive team. Anne Devine as our Chief Operating Officer, and Rose Rogers as our Chief People Officer. Both have tremendous experience in critical areas our company needs, operations and production, and talent identification and development. With their addition to the team, our leadership transition is now complete. The lifeblood of this company is our industry-leading technology and intellectual property, and we continue to invest and advance our platform. We have nearly 100 engineers on the Romeo team, 50% of which are battery scientists. And our customers highly respect the talent and depth of knowledge we have developed around large-scale electrification solutions. The following are a few areas where we recently advanced our technological lead. Our team achieved several key milestones in battery safety for commercial vehicles over the last several months. Our products were developed with a rigorous requirement to set the standard for safety in this rapidly developing market. We believe the safety performance engineered into our products as tested against safety standards is both differentiating and highly valued by customers. I will speak more in depth around this later in the presentation. We announced a collaboration agreement with Dynexis Technology. a leader in battery sensing solutions and data-driven battery intelligence in the latter half of 2021. Our engineers continue to work with the Dynexis team to develop new battery diagnostics and predictive tools, and we are looking forward to the team's collective results. And third, we successfully validated the pre-production stage for a major customer who now has trucks and service that are powered by our technology and battery packs. The customer recently noted on a public call how well those initial trucks are performing. They have completed 200 plus mile journeys on a single charge and are running routes with 98% uptime so far. While our solution is just one part of that vehicle, it is one of the critical components of the systems and we are highly encouraged by their initial success. Shifting gears to operations, In the second half of 2021, we accelerated our transition to accommodate future growth. This included increasing our production team by nearly fourfold. We added a third shift as well. And year to date in 2022, we have average daily production rates that are 37% higher than the fourth quarter of 2021. Lastly, we secured our future home in Cypress, California, and are beginning the process of transitioning all operations there. As part of the preparation, we have completed multiple simulation reviews of our future production lines as they are being designed and constructed for delivery. On the commercial front, we were extremely active as well. As you saw in our press release last week, we signed a three-year extension of an existing supply agreement with one of our long-standing customers. This customer is a leader in commercial vehicles and the minimum value of the extension is approximately $17 million with additional upside possible over the same time period. Additionally, we focused our commercial team and began to pursue new electrification opportunities that will help us widen and diversify our client base over time. As a result of these new efforts, we began delivering samples to customers in rapidly emerging market sections such as marine, defense, and last mile delivery. This morning, we were pleased to announce the first phase of a collaboration with Indigo Technologies in which Indigo will develop its lightweight commercial vehicle in conjunction with our advanced battery technology. This first phase is expected to culminate in the debut of Indigo's full-size Flow show car at the LA Auto Show later this year. Moving to our supply chain. As with all companies today, we continue to manage our supply chain daily, hourly, and weekly. We continue to make headway in securing cell supply and other critical components. This included the signing of a long-term supply agreement with a Tier 1 battery cell supplier in the third quarter of 2021, and we are driving efforts to procure semiconductors through new supply relationships. Our team is working to be predictive in availability of all parts, and we will remain as diligent as possible to continue to navigate this dynamic environment. We completed the acquisition of BorgWarner's interest in the joint venture between Romeo Power and BorgWarner. This was a significant milestone for Romeo Power. We now fully control one of our most valuable assets, our intellectual property. We can now decide how we use that asset, and more appropriately, prioritize the scope and focus of our future R&D efforts to maximize our future return on investment. Most importantly, we are free to pursue a broader range of strategic and customer engagements that were previously restricted during this prior partnership. This total control should accelerate commercialization of our products across various vehicle types and electrification applications worldwide. And we are excited to have completed this important step. To summarize, I am exceptionally proud of the Romeo team. We have taken on challenges with focus and our execution of the technology continues to improve. We are strengthening partnerships with current customers while simultaneously building new relationships with prospective customers as the nascent electrification landscape changes and opportunities avail themselves. I am looking forward to a strong Q1 in 2022. We have assembled a great team and remain relentless in pursuing the mission of the company, from the CEO to the production floor. All of us have rallied around bringing electrification to the market with safety, quality, and speed. With that high-level overview, I would now like to turn the call over to Kerry for a view of our financials. Kerry?