GreenPower Motor Co(GP) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - GreenPower achieved record revenues of $7.726 million for Q2 2023, a 67% increase from $4.629 million in the same quarter of the previous fiscal year [24] - Gross profit for the quarter was $1.755 million, representing 22.7% of revenues, compared to 20.6% in the previous year [25] - The company reported a record revenue of $11.6 million for the six months ended September 30, 2022, a 52% increase from $7.6 million in the same period last year [26] Business Line Data and Key Metrics Changes - Revenue was generated from the sale of three Type-D school buses, one Nano BEAST Type-A school bus, 21 EV Star 22-foot cargo vehicles, three EV Stars, and 29 EV Star cabin chassis [24] - The integration of Lion Truck Body is expected to impact margins in the short term due to the ramp-up of operations [38][40] Market Data and Key Metrics Changes - GreenPower secured 85 vouchers under the California HVIP program for various vehicle types, indicating strong demand for its products [15] - The federal government introduced new programs, including a $40,000 tax credit for medium-duty vehicles starting January 1, 2023, which is expected to boost sales [13] Company Strategy and Development Direction - GreenPower is focusing on expanding its manufacturing capabilities with a new facility in West Virginia, which will serve as its primary North American school bus manufacturing center [8] - The company aims to leverage its acquisition of Lion Truck Body to vertically integrate its supply chain and optimize products for electric vehicles [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fiscal year being transformative, with expectations for increased sales and improved delivery cadence [23] - The company is focused on maintaining a gross profit margin in the 20% range while managing operating expenses effectively [30] Other Important Information - GreenPower finished the quarter with $26.7 million in working capital and approximately $2 million in available liquidity [27] - The company has over $40 million in finished goods inventory, translating into potential sales growth [31] Q&A Session Summary Question: Delivery cadence and Workhorse agreement - Management confirmed the delivery of 29 units under the Workhorse agreement and expects a more stable delivery schedule moving forward due to government funding for school buses [34][35] Question: Margins and Lion Truck Body integration - Management indicated that margins may remain suboptimal in the near term due to the integration of Lion Truck Body but expects to return to a 25% to 30% margin range over time [39][42] Question: EPA vouchers and customer engagement - Management is actively engaging with school districts and dealers to secure contracts for the newly funded clean school buses, with expectations for increased orders [48][50] Question: Sales funnel for cabin chassis products - The company is focusing on expanding its sales strategy for cab chassis products, leveraging partnerships and the recent Workhorse agreement to drive volumes [56][58] Question: Breakeven revenue levels - Management noted that breakeven dynamics are influenced by increased investments in personnel and operations, with expectations for higher revenue levels to achieve profitability [59][60]