Company: Vicinity Motor Corp
Listings :TSXV , NASDAQ
Ticker: VMC.V & VEV
Market cap at time of publication: $104 MCAD
Stock price at time of publication: $ 2.95 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
ESGFIRE comment: Vicinity Motors today (31/3 2022) released their fourth quarter and full 2021 results. There was an impressive revenue growth of 113 % to 41,7 million USD in the full year of 2021. The fourth quarter itself did not see any significant changes as revenues went to 2,3 million USD from 3,5 million USD. The slight decrease can most likely be explained by the fact that orders are paid upon delivery and as most of us know there has been a major semi conductor shortage and supply chain issues during 2021 following the COVID pandemic. We are a bit worried about the gross margins and EBITDA margins of the company which are still negative but we hope that this will turn to better figures as the company continues to scale up and continue to deliver on its order backlog of 100 million CAD for 2022. We continue to see an upside in Vicinity Motors shares as the company is now valued at less than 1X sales for 2022 and has target prices of 15-32 CAD by external analysts.
Press release in full below:
VANCOUVER, BC – March 30, 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 fourth quarter and full year ended December 31, 2021.
Fourth Quarter 2021 and Subsequent Operational Highlights
Secured order backlog exceeding CAD$100 million intended for delivery in 2022, including orders for over 250 VMC 1200 EV trucks from Canadian automotive dealers.
Signed a 10-year licensing agreement to serve as the exclusive North American and European distributor for Optimal-EV, a developer and manufacturer in the low-floor electric shuttle bus and electric delivery truck segments.
Agreement enables access to $30 million in orders for the Optimal E1 and S1 products.
Announced strategic collaboration agreement with EAVX, a business unit of North American commercial automotive leader JB Poindexter, to sell Vicinity’s proprietary electric chassis for upfitting into next-generation municipal and delivery vehicles.
Fortified its balance sheet through a CAD$10.3 million debt financing, a $17.0 million underwritten public offering of common shares supplementing Vicinity’s undrawn CAD$20.0 million revolving credit facility and driving a $4.4 million cash position.
Subsequent to the close of the fourth quarter, the Company completed 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.
Delivered 131 Vicinity buses in 2021, as compared to 55 buses delivered in 2020.
Delivered 12 Vicinity buses in the fourth quarter of 2021, eight of which were sold from the Company’s lease pool and excluded from revenue, as compared to six for the fourth quarter of 2020.
Presented at several leading industry and investor conferences nationally including the Winter Wonderland Best Ideas Conference, Stifel 2022 Transportation & Logistics Conference, Canaccord Genuity Carbon & Energy Transition Conference, Sequire Clean Tech & EV Conference, SNN Network Canada Virtual Event 2021, APTA TRANSform Conference & Expo, CALACT 2021 Autumn Conference & Expo, and the LD Micro Main Event.
“The fourth quarter of 2021 and subsequent period was marked by continued order momentum across our continually expanding product portfolio – combined with multiple strategic partnerships and agreements to expand our breadth and depth as a company,” said William Trainer, Founder and Chief Executive Officer of Vicinity Motor Corp. “While revenues from our transit bus business are at times irregular and see some periods of lower deliveries, our foundation building in 2021 has positioned us with the capability to deliver our backlog of over CAD$100 million in 2022.
“This is a significant accomplishment made possible through our tier-1 strategic partnerships and the continued expansion of our all-electric product line, which has positioned Vicinity as an emerging leader in the EV transit vehicle sector. The highly successful rollout of our VMC 1200 EV truck, for which we already have over 250 orders from several dealers across Canada, will help to smooth the inherently fluctuating revenues from our transit bus business. This is supplemented by partnership with EAVX for EV chassis sales and sales of the Optimal-EV vehicles that we maintain exclusive license to – providing additional revenue streams that are less correlated to our core bus business.
“To prepare for the robust growth we see ahead, we have taken steps to shore up our supply chain in this time of uncertainty. Chiefly, we have secured a 600-vehicle battery supply agreement with Proterra – a leading EV battery systems provider – supplementing our supply from various other providers such as BMW and Electrovaya. These steps are taken with the goal of eliminating any single point of failure within our battery supply chain – a common pain point many EV manufacturers face.
“We ended the year with a fortified balance sheet to support our growth initiatives, supplementing our cash position and CAD$20 million line of credit with strategic financings to support our product line expansion and construction of our ‘Buy-America’ compliant U.S. assembly facility in Ferndale, Washington. Construction of our Ferndale facility is on-track and we expect to begin initial shipments in the second half of this year – allowing us to further penetrate the U.S. market with an American-built offering.
“Looking ahead, continued sales of our expanded EV product line will strengthen our offering within the next-generation electric vehicle space, and the addition of our partnerships with EAVX and Optimal-EV will serve to further solidify our emerging leadership position. Taken in tandem, we are well positioned to create sustainable, long-term value for our shareholders,” concluded Trainer.
Fourth Quarter and Full Year 2021 Financial Results
All figures stated in this press release are in U.S. dollars unless stated otherwise.
Revenue in 2021 grew to $41.7 million, a 113% increase as compared to revenue of $19.6 million in 2020. Revenue in the fourth quarter of 2021 totaled $2.3 million, as compared to $3.5 million in the fourth quarter of 2020.
Gross margin in 2021 grew 64% to $4.2 million, or 10% of revenue, as compared to $2.6 million, or 13% of revenue, in 2020. Gross margin in the fourth quarter of 2021 totaled ($0.3) million, as compared to $1.7 million in the fourth quarter of 2020. Gross margins were affected by sales mix, as well as a loss on the disposal of eight buses sold from the Company’s lease pool relative to the low volume of buses sold in the fourth quarter.
Cash provided by operating activities in 2021 totaled $3.6 million, as compared to cash used in operating activities of $5.7 million in 2020.
Net loss in 2021 was $7.3 million, or $(0.24) per share, as compared to a net loss of $3.2 million, or $(0.13) per share, in 2020. Net loss in the fourth quarter of 2021 totaled $4.8 million, or $(0.14) per share, compared to a net loss of $0.4 million, or $(0.02) per share, in the fourth quarter of 2020.
Adjusted EBITDA loss in 2021 totaled $2.7 million, as compared to an adjusted EBITDA loss of $1.6 million for 2020. Adjusted EBITDA loss for the fourth quarter of 2021 totaled $2.2 million, as compared to an adjusted EBITDA of $0.2 million in the fourth quarter of 2020.
Cash and cash equivalents as of December 31, 2021 totaled $4.4 million, as compared to $1.0 million as of December 31, 2020. Subsequent to the close of the fourth 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.
Fourth Quarter and Full Year 2021 Results Conference Call
Management will host an investor conference call at 8:30 a.m. Eastern time today to discuss Vicinity Motor Corp.’s fourth quarter financial results, provide a corporate update, and conclude with Q&A from telephone participants. To participate, please use the following information:
Q4 2021 Conference Call and Webcast
Date: Wednesday, March 30, 2022
Time: 8:30 a.m. Eastern time
U.S./Canada Dial-in: 1-877-300-8521
International Dial-in: 1-412-317-6026
Conference ID: 10164603
Please dial in at least 10 minutes before the start of the call to ensure timely participation.
A playback of the call will be available through Saturday, April 30, 2022. To listen, call 1-844-512-2921 within the United States and Canada or 1-412-317-6671 when calling internationally. Please use the replay pin number 10164603. A webcast will also be available by clicking here: Vicinity Motors Q4 2021 Webcast.
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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