Company: Vicinity Motor Corp
Listings :TSXV , NASDAQ
Ticker: VMC.V & VEV
Market cap at time of publication: $89 MCAD
Stock price at time of publication: $ 2.24 CAD
Target price: 15-32 CAD by external analysts
Business: Leading supplier of electric, CNG, gas and clean-diesel buses for
both public and commercial enterprise use in the U.S and Canada
Comparable peer : Lion Electric Market cap 2 billion USD
Website: https://vicinitymotorcorp.com/
ESGFIRE comment: Vicinity Motors numbers for the first quarter came in as expected although with a fewer deliveries than we had anticipated. The fewer than expected deliveries was mainly due to supply chain issues. More concerning however is that the company has been forced to revise their financial goals for 2022 due to ” Lack of availability of parts in the supply chain, shipping conditions overseas, and availability of chassis for the VMC Optimal products have caused delays to our production timelines and externally affected our ability to meet previously stated figures.”. The new financial projection for 2022 is that the company will see revenues of USD$70-90 million and EBITDA guidance is being revised to a range of USD$3-5 million. The previous guidance announced in november of 2021 was “Provided FY2022 financial guidance of revenues of at least $140 million and adjusted EBITDA of at least $10 million”. We are a bit concerned about what levels of production are required for the company to turn profit but we remain hopefully optimistic about the future and also hope to see the order backlog increase further from its current standing of USD$90 million.
Full press release below:
Order Backlog for 2022 Delivery Exceeds USD$90 million; Company Fortifies North American. Distribution Network with Addition of Several New U.S. and Canadian Dealers
VANCOUVER, BC / ACCESSWIRE / May 16, 2022 / Vicinity Motor Corp. (NASDAQ:VEV)(TSXV:VMC)(FRA:6LGA) (“Vicinity” or the “Company”), a North American supplier of commercial electric vehicles, today reported its financial and operational results for the first quarter ended March 31, 2022.
First Quarter 2022 and Subsequent Operational Highlights
- Secured order backlog exceeding USD$90 million, including orders for 250 VMC 1200 EV trucks from Canadian automotive dealers in British Columbia and Ontario.
- Signed multiple new distribution agreements to offer the Company’s product portfolio in the United States with:
- Hoekstra Transportation, Michigan’s largest school bus, commercial bus, cargo and custom van dealer, for the territory of Michigan, Indiana and Ohio including an initial order for eight (8) vehicles.
- Central States Bus Sales, Inc., one of the largest school and commercial bus dealers in the U.S., including an initial commitment for 18 vehicles for the central U.S. territory.
- DATTCO, Inc. a U.S. full-service passenger transportation company, for the Northeastern U.S. territory, including an initial $2 million order for both EVs and ICE vehicles.
- Soderholm Sales & Leasing, a full-service bus dealer in Hawaii and the Pacific Islands region, including an initial commitment for four vehicles.
- Expanded agreement with ABC Companies now spanning 18 states, contracted to order 18 VMC Optimal S1 shuttle buses and 3 Vicinity™ Classic buses – in addition to the previously announced 10 Vicinity Lightning™ EV buses slated for delivery in 2022.
- Appointed global automotive engineering executive Dennis Gore as Vice President of Engineering, bringing 35+ years of experience from Gillig Bus, Zero Motorcycles, Honda, Mitsubishi Motors and among others.
- Fortified its balance sheet through a $12 million financing to fund the Ferndale, Washington facility, in addition to being awarded a C$2.6 million non-repayable grant from a Canadian government foundation.
- Presented at several leading automotive industry and investor conferences nationally including the Advanced Clean Transportation Expo, Planet MicroCap Showcase 2022, Winter Wonderland Best Ideas Conference, Stifel 2022 Transportation & Logistics Conference and the Canaccord Genuity Carbon & Energy Transition Conference.
Management Commentary
“The first quarter of 2022 was highlighted not only by continued order momentum, but by the strategic expansion of our North American distribution network with the addition of several exciting new dealers to drive penetration of our growing portfolio of all-electric vehicles,” said William Trainer, Founder and Chief Executive Officer of Vicinity Motor Corp. “Our backlog for expected 2022 delivery grew to over USD$90 million, the majority of which are for electric vehicles, reflecting our rapid transition in product mix to meet the ever-changing needs of transit customers.
“We fortified our balance sheet in the first quarter, funding our nearly complete Ferndale, Washington facility. The focus of this facility is ‘Buy America’ compliant production, allowing us to further penetrate the U.S. market with an American-built offering. This raise, supplemented by our cash position and CAD$20 million line of credit, has positioned us to significantly ramp deliveries to our growing dealer base in the second half of 2022.
“However, in response to current supply chain challenges, we are revising our guidance for FY2022 which had been announced November 12, 2021. Revenue guidance is being revised to a range of USD$70-90 million and EBITDA guidance is being revised to a range of USD$3-5 million. Lack of availability of parts in the supply chain, shipping conditions overseas, and availability of chassis for the VMC Optimal products have caused delays to our production timelines and externally affected our ability to meet previously stated figures.
“Looking ahead, we will finalize foundation building efforts as we prepare for significant growth in the second half of the year and beyond – including the continued expansion of our dealer network, strengthening of our supply chain and ramp-up of production. I look forward to providing additional updates in the months to come as we continue our rapid pace of operational execution, helping to create long-term value for our shareholders,” concluded Trainer.
First Quarter 2022 Financial Results
All figures stated in this press release are in U.S. dollars unless stated otherwise.
Revenue decreased to $3.2 million in the first quarter of 2022, as compared to $21.5 million in the same year-ago quarter. The decrease in revenue was primarily driven by six deliveries versus 67 deliveries in the same year-ago quarter.
Gross margin in the quarter ended March 31, 2022 decreased to $0.2 million, or 7% of revenue, as compared to $3.4 million, or 16% of revenue, in 2021. Gross margins were affected by product mix and the low volume of buses delivered. Shipping difficulties and global supply chain disruptions in the availability of chassis for our VMC Optimal products and certain bus components has delayed a large portion of expected deliveries during the end of 2021 and into 2022.
Cash used in operating activities in the first quarter of 2022 totaled $5.1 million, as compared to cash provided by operating activities of $2.9 million in the first quarter of 2021.
Net loss in the quarter ended March 31, 2022 was $2.9 million, or $(0.08) per share, as compared to a net income of $1.6 million, or $0.05 per share, in the first quarter of 2021.
Adjusted EBITDA loss for the first quarter of 2022 was $2.1 million, as compared to adjusted EBITDA of $2.1 million in the same year-ago quarter.
Cash and cash equivalents as of March 31, 2022 totaled $11.0 million, as compared to $4.4 million as of December 31, 2021. During the quarter, the Company fortified its balance sheet through a $12 million financing to fully fund the Ferndale, Washington facility, in addition to being awarded a CAD$2.6 million non-repayable grant from a Canadian government foundation.
About Vicinity Motor Corp.
Vicinity Motor Corp. (NASDAQ:VEV)(TSXV:VMC)(FRA:6LGA) is a North American supplier of electric vehicles for both public and commercial enterprise use. The Company leverages a dealer network and close relationships with world-class manufacturing partners to supply its flagship electric, CNG and clean-diesel Vicinity buses, the VMC 1200 electric truck and a VMC Optimal-EV shuttle bus. In addition, the Company sells its proprietary electric chassis alongside J.B. Poindexter business unit EAVX, the Company’s strategic partner, for upfitting into next-generation delivery vehicles. For more information, please visit www.vicinitymotorcorp.com .
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