Romeo Power, Inc. Class A

Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Romeo Power's first quarter fiscal 2022 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. It's now my pleasure to turn the call over to Ashley Gruenberg of the Alpha IR Group. Please go ahead, Ashley.

Thank you and welcome. Joining me today are Susan Brennan, Chief Executive Officer, Kerry Sheba, Chief Financial Officer, Lauren Webb, Chief Strategy and Commercial Officer, Anne Devine, Chief Operating Officer, and Dr. A.K. Pruji, Chief Technology Officer. Please note that our first quarter 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-Q is also filed with the SEC earlier today. Slide two of that PowerPoint outlines our safe harbor statements. Along those lines, I want to remind everyone that this conference call will contain forward-looking statements, including our expectations of future results, sales, availability, 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 in 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, I'll turn the call over to Susan Brennan for opening remarks. Susan?

Thank you, Ashley. Good afternoon, all, and thank you for joining us today. As you can see on slide three, we have an exciting discussion lined up for you. Our business momentum is accelerating, and thus, I have asked some members of our senior leadership team to join us today. Our agenda for today's presentation is as follows. I will open up the call with an overview of our first quarter and some recent business highlights. Lauren will then discuss our commercial strategy and recent successes. Then Ann will walk through some of the positive operational results we have achieved during the first quarter. AK will then provide a deeper dive into our technology, focus and differentiation. Then Carrie will wrap up the presentation with first quarter financial results and closing remarks before we take your questions. Turning to slide four, we are proud to have made significant steps on our path towards growth in the first quarter of 2022. We delivered total revenues of $11.6 million in the first quarter, which was consistent with the annual expectations we outlined for you last quarter. This meaningful increase in revenues reflects higher deliveries of our battery modules and packs, continuing the trajectory that was established in the second half of last year. As we continue to work towards our mission of powering the world's transition to electrification, we have expanded our total addressable market by expanding into new, previously untapped market verticals and vehicle types. This wider commercial scope has allowed us to pursue a broad range of potential customer relationships within these markets, offering us new avenues for long-term revenue expansion. As our battery products and technology gain further traction across the industries in which we are participating, production and scalability matter. Our sales growth and the deeper adoption of our offerings by the market are predicated on our ability not only to increase, but also to enhance our production processes and quality. We continue to be encouraged by the steps we are making operationally, and that is evident through the improved fixed cost leverage and scale that we have achieved as we have increased production volumes. This year, we have seen daily production rates increase up to 75% versus the fourth quarter of last year. This increased manufacturing throughput has been supported by adding a third shift at our Vernon, California facility. The increase in our production capabilities and volumes has been made possible by our team's pointed focus on key areas of process improvement as we expand our capabilities. Ann will speak on this later in the call. Additionally, we have also met all of our milestones and remain head of schedule in the ongoing transition of operations to our new manufacturing facility in Cypress, California. This new, larger location will further allow us to streamline operations, increase delivery levels, execute against our major contracts, and keep our R&D department and our manufacturing operations under one common roof. These enhancements will allow us to capture increased cost efficiencies and productivity, which will further reduce operating costs relative to our revenues as we take a new business and work down our existing backlog, which currently sits at $412 million based on minimum purchase commitments as of quarter end. Slide five gives you a visual sense for how our commercial momentum is accelerating. Our new management team came on board starting in the summer of last year. While this was important foundationally for our company, the purchase of our prior joint venture in February of this year was truly transformational. It gave us back full control of our intellectual property and R&D. Very importantly, it also opened new markets and geographies for us to pursue. Our commercial momentum is clearly evident on this slide. As you can see, how quickly our commercial wins followed this event. Working chronologically, in early February, we signed a three-year contract extension with a long-standing customer and leader in the commercial vehicle industry. The minimum value of this extension is $17 million. Then in March, we captured numerous wins, including a new multi-phase commercial program with Indigo Technologies an automotive OEM that powers both rideshares and delivery vehicles. Next, we announce a collaboration with Wright Speed, now Revo Powertrains, a leading designer and manufacturer of EV powertrains to safely repower school buses, transit buses, and certain medium and heavy duty trucks into zero emission vehicles. In another major milestone, we began shipping the first units of 80 kilowatt hour production pedigree packs to a key customer who is a heavy duty commercial electric vehicle manufacturer. Moving to May, we just recently announced that we were selected by a new customer as the sole provider of lithium ion batteries for its next generation low speed electric vehicles. Lastly, The importance of full ownership of our solutions can be seen by the fact that we have secured four new pilot program customers, two of which were previously restricted by clauses within our joint venture agreement. Given this momentum and the breadth of conversations that our commercial and technology teams are having today, I believe we have only scratched the surface of what Romeo is capable of. and we look forward to continuing to deliver exciting new partnership opportunities. To summarize, I am extremely proud of the Romeo team and the progress we are making commercially and operationally. We continue to strengthen our partnerships, leverage new opportunities, and streamline our operations. As our industry continues to grow and evolve, we are well positioned to power vehicle electrification across multiple industries and further advance our leading EV battery technology. With that high-level overview, I would now like to turn the call over to Chief Strategy and Commercial Officer Lauren Webb, who will speak further about the exciting commercial sales and partnership activities occurring at Romeo Power.