Fourth Quarter Illustrates Inherently Fluctuating Nature of Transit Bus Revenue Amongst a Record Full Year
VANCOUVER, BC / ACCESSWIRE / March 30, 2022 / Vicinity Motor Corp. (NASDAQ:VEV)(TSX-V: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.
Management Commentary
"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
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1536513&tp_key=cc4fa60105
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)(TSX-V: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.
Company Contact:
John LaGourgue
VP Corporate Development
604-288-8043
IR@grandewest.com
U.S. Investor Relations Contact:
Lucas Zimmerman or Mark Schwalenberg, CFA
MZ Group - MZ North America
949-259-4987
VMC@mzgroup.us
www.mzgroup.us
Canadian Investor Relations Contact:
MarketSmart Communications Inc.
877-261-4466
Info@marketsmart.ca
Neither the TSX-V nor its Regulation Service Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain "forward-looking information" and "forward-looking statements" (collectively "forward-looking statements") within the meaning of applicable securities laws. All statements, other than statements of historical fact, included herein are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible", and similar expressions, or statements that events, conditions, or results "will", "may", "could", or "should" occur or be achieved. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ materially from Vicinity's expectations include uncertainties relating to the economic conditions in the markets in which Vicinity operates, vehicle sales volume, anticipated future sales growth, the success of Vicinity's operational strategies, the timing of the completion of the vehicle assembly facility in the State of Washington, the effect of the COVID-19 pandemic, related government-imposed restrictions on operations, the success of Vicinity's strategic partnerships; and other risk and uncertainties disclosed in Vicinity's reports and documents filed with applicable securities regulatory authorities from time to time. Vicinity's forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made. Vicinity assumes no obligation to update the forward-looking statements or beliefs, opinions, projections, or other factors, should they change, except as required by law.
Non-GAAP Financial Measures
The non-GAAP financial measures presented do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be directly comparable to similar measures presented by other issuers. The data presented is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These non-GAAP measures should be read in conjunction with our consolidated financial statements.
Non-GAAP financial measure - Adjusted EBITDA
Adjusted EBITDA does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines adjusted EBITDA as earnings before interest, income taxes, depreciation and amortization, foreign exchange gains or losses, certain non-recurring and/or non-operating income and expenses, and share based compensation. Adjusted EBITDA should not be construed as an alternative for revenue or net loss determined in accordance with IFRS. The Company believes that adjusted EBITDA is a meaningful metric in assessing the Company's financial performance and operational efficiency.
The following table reconciles net earnings or losses to Adjusted EBITDA based on the consolidated financial statements of the Company for the periods indicated.
(US dollars in thousands - unaudited) | 3 months ended December 31, 2021 | 3 months ended December 31, 2020 | Year ended December 31, 2021 | Year ended December 31, 2020 | ||||||||||||
Net loss | (4,782 | ) | (410 | ) | (7,323 | ) | (3,236 | ) | ||||||||
Add back | ||||||||||||||||
Stock based compensation | 311 | 439 | 1,353 | 738 | ||||||||||||
Interest | 509 | 127 | 716 | 545 | ||||||||||||
Foreign exchange loss (gain) | 270 | (325 | ) | 341 | (548 | ) | ||||||||||
Income tax expense | 442 | 75 | 464 | 76 | ||||||||||||
Loss on disposal of property and equipment | 487 | 76 | 542 | 76 | ||||||||||||
Amortization | 571 | 191 | 1,241 | 737 | ||||||||||||
Adjusted EBITDA | (2,192 | ) | 173 | (2,666 | ) | (1,612 | ) | |||||||||
Non-GAAP financial measure - working capital
Working capital is a non-GAAP measure calculated as current assets less current liabilities. Working capital does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies.
Non-GAAP financial measure - gross profit
Gross profit is a non-GAAP measure calculated as the difference between revenue and cost of sales. Gross profit expressed as a percentage is calculated as the difference between revenue and cost of sales, divided by revenue.
Consolidated Statements of Financial Position
(In thousands of US Dollars)
| Note | December 31, 2021 | December 31, 2020 | January 1, 2020 | |||||||||||||
| $ | $ | $ | ||||||||||||||
(Restated, Note 3 and 24) | (Restated, Note 3 and 24) | |||||||||||||||
Current Assets | ||||||||||||||||
Cash and cash equivalents | 4,402 | 1,008 | 583 | |||||||||||||
Restricted cash | 5 | - | 281 | 275 | ||||||||||||
Trade and other receivables | 6 | 2,810 | 3,258 | 7,083 | ||||||||||||
Inventory | 7 | 9,416 | 25,616 | 14,862 | ||||||||||||
Prepaids and deposits | 4,178 | 1,905 | 927 | |||||||||||||
| 20,806 | 32,068 | 23,730 | ||||||||||||||
Long-term Assets | ||||||||||||||||
Intangible assets | 8 | 22,353 | 1,708 | 1,194 | ||||||||||||
Property, plant, and equipment | 9 | 10,834 | 3,167 | 3,490 | ||||||||||||
| 53,993 | 36,943 | 28,414 | ||||||||||||||
Current Liabilities | ||||||||||||||||
Accounts payable and accrued liabilities | 2,915 | 10,138 | 6,075 | |||||||||||||
Deferred consideration | 8 | 4,602 | - | - | ||||||||||||
Credit facility | 10 | - | 4,523 | 4,504 | ||||||||||||
Current portion of deferred revenue | 11 | 3,193 | 1,492 | 986 | ||||||||||||
Current portion of provision for warranty cost | 12 | 1,414 | 599 | 1,081 | ||||||||||||
Current debt facilities | 13 | 7,143 | 1,989 | 1,041 | ||||||||||||
Current portion of other long-term liabilities | 14 | 134 | 216 | 643 | ||||||||||||
| 19,401 | 18,957 | 14,330 | ||||||||||||||
Long-term Liabilities | ||||||||||||||||
Other long-term liabilities | 14 | 92 | 218 | 299 | ||||||||||||
Provision for warranty cost | 12 | 255 | 201 | 110 | ||||||||||||
Deferred revenue | 11 | - | - | 848 | ||||||||||||
| 19,748 | 19,376 | 15,587 | ||||||||||||||
Shareholders' Equity | ||||||||||||||||
Share capital | 15 | 58,055 | 37,175 | 30,082 | ||||||||||||
Contributed surplus | 15 | 6,035 | 2,618 | 2,017 | ||||||||||||
Accumulated other comprehensive (loss) income | (151 | ) | 145 | (137 | ) | |||||||||||
Deficit | (29,694 | ) | (22,371 | ) | (19,135 | ) | ||||||||||
| 34,245 | 17,567 | 12,827 | ||||||||||||||
| 53,993 | 36,943 | 28,414 | ||||||||||||||
Consolidated Statements of (Loss) Income
(In thousands of US dollars, except for per share amounts)
| Note | Year ended December 31, 2021 | Year ended December 31, 2020 | ||||||||||
| $ | $ | |||||||||||
(Restated, Note 3 and 24) | ||||||||||||
Revenue | ||||||||||||
Bus sales | 20 | 38,197 | 16,247 | |||||||||
Other | 20 | 3,511 | 3,307 | |||||||||
| 41,708 | 19,554 | |||||||||||
Cost of sales | 7, 9a | (37,473 | ) | (16,977 | ) | |||||||
Gross margin | 4,235 | 2,577 | ||||||||||
Expenses | ||||||||||||
Sales and administration | 7,812 | 4,522 | ||||||||||
Stock-based compensation | 1,353 | 738 | ||||||||||
Amortization | 872 | 480 | ||||||||||
Interest and finance costs | 10,13,14 | 716 | 545 | |||||||||
Foreign exchange loss (gain) | 341 | (548 | ) | |||||||||
| 11,094 | 5,737 | |||||||||||
Loss before taxes | (6,859 | ) | (3,160 | ) | ||||||||
Current income tax expense | 17 | 464 | 76 | |||||||||
Net loss | (7,323 | ) | (3,236 | ) | ||||||||
Loss per share | ||||||||||||
Basic & diluted | 21 | (0.24 | ) | (0.13 | ) | |||||||
Weighted average number of common shares outstanding | ||||||||||||
Basic & diluted | 21 | 30,827,688 | 25,759,134 | |||||||||
Consolidated Statements of Cash Flows
(In thousands of US dollars)
| Note | Year ended December 31, 2021 | Year ended December 31, 2020 | ||||||||||
(Restated, Note 3) | ||||||||||||
OPERATING ACTIVITIES | $ | $ | ||||||||||
Net loss for the year | (7,323 | ) | (3,236 | ) | ||||||||
Items not involving cash: | ||||||||||||
Loss on disposal of property and equipment | 542 | 76 | ||||||||||
Amortization | 1,241 | 737 | ||||||||||
Foreign exchange gain | (2 | ) | (1 | ) | ||||||||
Interest and finance costs | 10,13,14 | 716 | 545 | |||||||||
Stock-based compensation | 15 | 1,353 | 738 | |||||||||
| (3,473 | ) | (1,141 | ) | |||||||||
Changes in non-cash items: | ||||||||||||
Trade and other receivables | 6 | 471 | 3,812 | |||||||||
Inventory | 7 | 14,073 | (9,864 | ) | ||||||||
Prepaids and deposits | (2,339 | ) | (884 | ) | ||||||||
Accounts payable and accrued liabilities | (2,727 | ) | 3,648 | |||||||||
Deferred consideration | 8 | (4,602 | ) | - | ||||||||
Deferred revenue | 11 | 1,662 | (520 | ) | ||||||||
Warranty provision | 12 | 869 | (379 | ) | ||||||||
Interest paid | (340 | ) | (371 | ) | ||||||||
Cash provided (used) in operating activities | 3,594 | (5,699 | ) | |||||||||
INVESTING ACTIVITIES | ||||||||||||
Purchase of intangible assets | 8 | (17,596 | ) | (726 | ) | |||||||
Purchase of property and equipment | 9 | (6,537) | (372) | |||||||||
Proceeds on disposal of property and equipment | 9 | 729 | 220 | |||||||||
Restricted cash | 5 | 284 | (1 | ) | ||||||||
Cash used in investing activities | (23,120 | ) | (879 | ) | ||||||||
FINANCING ACTIVITIES | ||||||||||||
Proceeds from issuance of common shares | 15 | 24,087 | 6,937 | |||||||||
Share issuance costs | 15 | (2,213 | ) | (451 | ) | |||||||
Repayment of credit facility, net of fees | 10 | (4,628 | ) | (246 | ) | |||||||
Proceeds from short-term loans | 13 | 7,959 | 1,630 | |||||||||
Repayment of short-term loans | 13 | (2,038 | ) | (819 | ) | |||||||
Repayment of convertible debt | 13 | - | (17 | ) | ||||||||
Repayment of long-term loans | 14 | (222 | ) | (118 | ) | |||||||
Cash provided by financing activities | 22,945 | 6,916 | ||||||||||
Effect of foreign exchange rate on cash | (25 | ) | 87 | |||||||||
Increase in cash and cash equivalents | 3,394 | 425 | ||||||||||
Cash and cash equivalents, beginning | 1,008 | 583 | ||||||||||
Cash and cash equivalents, ending | 4,402 | 1,008 | ||||||||||
SOURCE: Vicinity Motor Corp.
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