Spark Power Group Inc.

Good day, ladies and gentlemen, and welcome to the Spark Power Corp investor call and webcast. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Richard Perry, CFO at Spark Power. Sir, the floor is yours.

Good morning, and thank you for joining Spark Power's 2022 third quarter conference call. Joining me on the call today are Richard Jackson, Spark Power's President and CEO, and Tom Duncan, Spark Power's Executive Vice President and Chief Operating Officer. On today's call, we will discuss the company's third quarter performance, including key business drivers. We will also provide an update on some of the key strategic initiatives that we have been undertaking to streamline our business and position Spark Power for long-term profitable growth and value creation. In a moment, I will hand over the call to Rich Jackson, who will comment on our business highlights for the third quarter and some of our key strategic initiatives. I will then provide a financial overview of the quarter and will conclude by briefly detailing some of the reasons why we believe Spark Power is well positioned for long-term success. Following our prepared remarks, we will open up the call for Q&A. Before proceeding, I would like to remind listeners that our presentation contains certain forward-looking statements that are based on current expectations and are subject to several risks and uncertainties, and actual results may differ materially. Further information identifying risks, uncertainties, and assumptions, and additional information on certain non-IFRS measures referred to in this call can be found in the disclosure documents filed by SPARC Power with the securities regulatory authorities available on CDAR.com. Forward-looking statements are made as of the date of this call, Tuesday, November 15, 2022. Except as expressly required by applicable law, SPARC Power assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. With that, I will now hand the call over to Rich Jackson, President and CEO of SparkPower.

Thank you, Richard, and good morning, everyone. Thank you for joining us on today's call. We remain very pleased with the ongoing momentum we are seeing in our business. This not only extends to the ongoing financial improvements we have been realizing, but also with respect to our key strategic priorities for 2022. This quarter, we once again reported strong results, which were in line with our expectations. This included revenue in line with the record revenue we reported in Q2 2022, as we continue to see strong demand across both Canada and the US for our core technical services and renewables businesses. The diverse platform of complementary services that we have built differentiates us in the industry and is allowing us to capitalize on market tailwinds in both core segments. As part of our focus on driving sustainable, profitable growth and moving forward, Our team is successfully positioning SparkPower as a trusted partner with our customers, and during the quarter, we continue to grow our business with the addition of several new customers. Our approach to selectively pursuing only profitable revenue opportunities is really beginning to crystallize. Alongside our recent pricing initiatives to mitigate inflationary pressures and our broader cost rationalization initiatives, we are starting to see margin enhancements. For a third consecutive quarter, we were able to deliver sequential improvement in EBITDA margins. We anticipate further improvement in margins in the quarters to come. As we've talked about recently, a primary area of focus for Spark Power this year has been on progressing towards the completion of our OneSpark business integration and streamlining efforts. This includes optimizing our platform and organizational structure, as well as establishing consistent business processes, technology, and KPI measurement across the organization. I'm happy to report that these initiatives, which began in 2021, remain on track to be completed in early 2023. Significant progress made year to date includes launching new commercialization initiatives earlier in the year, completing the majority of our integration work, flattening our management structure, and concluding our founder transition. We have been optimizing our footprint, have consolidated and closed five branches year to date, based on market density and profitability, better aligning our business to market opportunities. We have also been evaluating potential opportunities to optimize our asset base, including with respect to our fleet, inventories, and equipment. To date, we have realized approximately six and a half million of pro forma annualized SG&A cost savings through our various initiatives, and we expect to realize the full benefits of these initiatives through 2023. And while we are nearing the end of our restructuring efforts and our position to move forward into the future as one spark, we are building a culture of operational excellence and continuous improvement as part of our focus on driving sustainable, profitable growth moving forward. Other business highlights of the third quarter included the first go-live for our new ERP system, which Richard will elaborate on in a moment. While there is still more work to be done, we believe we can now see the light at the end of the tunnel on the significant restructuring and integration initiatives we've been undertaking. We expect to close out 2022 on strong footing, positioning us to deliver ongoing value creation in 2023 and beyond with our OneSpark operating model. Subsequent to quarter end, we also announced two key corporate developments that I wanted to highlight. Firstly, at the end of October, we announced that we have entered into a binding agreement to divest our Bullfrog Power business unit which comprises our sustainability solution segment. While Bullfrog was critical to helping establish our company as a leader in sustainability, it represents a low single-digit percentage of our revenue, and we felt that it was non-core to our go-forward strategy focused on our core technical services and renewables businesses. As a result, we determined that this was an appropriate time to sell the business. Importantly, we believe that there will be continued opportunities to work with Bullfrog moving forward in a mutually beneficial capacity, leveraging one another's expertise. I would like to take a moment to thank all of Bullfrog's great employees for their many contributions to Spark Power, and we believe that the future remains bright for Bullfrog moving forward. Closing of the sale of Bullfrog is expected to occur by the end of the month. Proceeds from the transaction will be used to reduce our debt and fund our working capital needs, while providing capital to support the growth of our other business units. As we also noted via press release at the end of October, we remain in advanced negotiations with our senior lender on terms of an amended and restated credit facility. The amendments are expected to provide spark power with additional liquidity and operating flexibility to meet the needs of the business and its next stage of growth and maturity. This includes extending the maturity date of our facility and re-establishing traditional financial covenants. We expect to finalize the amended credit facility concurrent with the closing of the bullfrog sale. With much of the heavy lifting now behind us, we look forward to embarking on the next stage of our strategy, capitalizing on the market tailwinds and the multitude of profitable growth opportunities available to spark power. Indeed, we will launch our new Let's Grow Better strategy in early 2023, and I look forward to sharing the details behind the strategy as we close out its formulation in the coming weeks. Before handing the call back to Richard, I would like to extend our gratitude to our hardworking and passionate employees, without whom the improvements we have seen would not have been possible. They have been the difference maker as SPARC makes its way through the maturity curve. I would also like to thank our other stakeholders, including the investors who have stood by SPARC Power throughout the recent challenging headwinds. We believe we are truly building something great here, and this will become increasingly evident as we continue to execute on our strategic plan. I'll now turn the call back to SparkPower CFO Richard Perry to discuss our Q3 financial results.