Good afternoon, and welcome to the Vicinity Motor Corp First Quarter 2022 Earnings Call. All participants will be in a listen-only mode. Should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to the Chief Executive Officer, William Trainer. Please go ahead, sir.
Thank you, operator, and good afternoon, everyone. I'm pleased to welcome you to today's first quarter 2022 corporate update conference call. The first quarter of 2022 was highlighted not only by continued order momentum, but by strategic expansion of our North American distribution network with the addition of several exciting new dealers who placed orders for dozens of new vehicles, helping to drive penetration of our growing portfolio of all electric vehicles. Our backlog for 2022 delivery grew to over $90 million, much of which is for electric vehicles, reflecting our rapid transition in product mix to meet the ever-changing needs of our transit customers.
Our high demand electric truck and electric shuttle bus market continues to expand to fill the gaps for periods of lower transit bus deliveries, with the first quarter seeing new orders for over 250 VMC 1200 EV trucks from Canadian automotive dealers. We fortified our balance sheet in the first quarter, fully funding our nearly complete Ferndale, Washington facility. The focus of this facility is Buy American compliant production, allowing us to further penetrate the U.S. market with an American-built offering. This raise, supplemented by our cash position and our $20 million Canadian line of credit, has positioned us to significantly ramp up deliveries to our growing dealer base in the second half of 2022. To penetrate for the robust growth 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 for many EV manufacturers are facing. That being said, we naturally are not immune to the pressures facing automotive suppliers today and some level of near-term headwinds exist. In addition, to support our continued innovation efforts as we further electrify our portfolio, we have appointed global automotive engineering executive, Dennis Gore, as Vice President of Engineering, bringing 35+ years of experience from companies like Gillig, Zero Motorcycles, Honda, and Mitsubishi Motors, among others. His experience will prove absolutely invaluable as we grow our all-electric product offering.
On the investor relations front, we have remained extremely active in presenting at several leading automotive industry and investor conferences nationally, including the Advanced Clean Transportation Expo, which we just finished this past week, Planet MicroCap Showcase 2022, Winter Wonderland Best Ideas Conference, Stifel 2022 Transportation and Logistics Conference, and the Canaccord Carbon and Energy Transition Conference. While the broader market, particularly in the EV space, has seen pressure in the recent market downturn, the fundamentals of our operations are extremely positive. Now with that, I'll turn it over to Dan to review the financial results for our quarter ended March 31, 2022. Dan?
Thanks, William. Good morning, everyone. I will constrain my portion to a brief review of our financial results. The full breakdown is available in our regulatory filings and in the press release that crossed the wire after market closed today. Please note that I will refer to adjusted EBITDA and other non-GAAP measures. For the calculation of adjusted EBITDA and other non-GAAP measures, please refer to the Q1 MD&A, which is available on SEDAR. In addition, all figures are in U.S. dollars unless otherwise stated. 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 previous period.
Gross margin in the quarter ended March 31, 2022 decreased to $200,000 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 has continued 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 an adjusted EBITDA of $2.1 million in the first quarter of 2021. Cash and cash equivalents as of March 31st, 2022 total $11 million as compared to $4.4 million as of December 31st, 2021. During the quarter, the company fortified its balance sheet through a $12 million financing to fund the Ferndale, Washington facility. In addition to being awarded a CAD 2.6 million non-repayable grant from Canada Foundation for Innovation.
Our company is in a strong position. We have a strong balance sheet, are well positioned to execute, and the fundamentals of our operations are very positive. However, in response to current supply chain challenges, we are revising our guidance for fiscal year 2022, which had been previously announced November 12, 2021. Revenue guidance is being revised to a range of $70-$90 million, and EBITDA guidance is being revised to a range of $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. I'd now like to pass it back to William Trainer to offer some closing remarks, after which we will begin our question and answer session.
Thank you, Dan. Looking ahead, we will finalize foundation building efforts as we prepare for significant growth in the second half to deliver upon our $90 million U.S. backlog, including the continued expansion of our dealer network, strengthening of our supply chain, and ramp up of production. We continue to believe we are incredibly well-positioned to create long-term value for our shareholders as we empower our customers to create more sustainable public transportation systems. I look forward to providing additional updates in the months to come. Now I'd like to hand it back to the operator to begin our question and answer period. Operator?
We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Chris Souther with B. Riley. Please go ahead.
Thanks, thanks for taking my question here. Maybe just on the lower guide here. Are you seeing any cancellations or should we just think about it as the bulk of activity shifting to early 2023 and maybe just, you know, framing the overall backlog, you know, where do we stand as far as visibility between, you know, the 2022 guide and what's in store for 2023? You know, if you could do that by product line, I think would be helpful for folks as well.
Okay, Dan here. Just quickly on this. We're not seeing canceled orders right now. This is not demand driven at all. This is supply driven. What we are seeing is difficulty in obtaining some parts or, in some cases, we're waiting on some other parts as well, some new parts. From a product line perspective, we have very few problems with our diesel and CNG buses. We're seeing it on the EV side of our business right now, specifically the VMC Optimal, where we've cut our projections to about a third of what we had before in our projections. We're also the VMC Lightning, we've also cut back projections there for this year.
Some of those we're expecting into next year as well.
Got it. Okay. Maybe just, you know, on some of the key choke points here as far as supply chains, you mentioned the chassis availability for the Optimal. You've added Proterra for battery supply, so it sounds like you're feeling better on that front. Just, you know, can you walk through what the other components that are big challenges right now, and is it related to, you know, stuff coming from China or you know, other factors, I think would be helpful.
Yeah. Hello, Chris. It's Will here. Yeah. What we're seeing is really what the industry's been seeing and why there's been, you know, a tremendous amount of redoing your guidance here. We see chip-related products that has been giving the bulk of the problems. That's pretty much rampant throughout the industry. You know, anything that has a computer chip in it is seeing some kind of delay. You know, we've tried to mitigate that by, you know, buying volumes and trying to hold more stock, but we still see some related issues there.
Okay. Just last one, timing on, can you provide any timing update on Ferndale? What needs to happen still, when it comes in production? How should we think about CapEx shaping up for the remainder of the year here?
Well, on the building itself, we're in good shape. The roof is on, the sides are on. We're actually seeing components going inside the building now. We have the paint booth installed. I think the crane is scheduled to go in here shortly. Parts are on site, so we don't see any real slowdown in getting the building completed. We still will see the building looking like a finished building here coming up in the next month or two. And then of course, you gotta outfit it. We pave in June, so you gotta have everything pretty much wrapped up before you start paving, and that's where we see ourselves.
That's good to hear. I'll hop in the queue. Thanks, guys.
Thank you.
Our next question comes from Poe Fratt with Alliance Global Partners. Please go ahead.
Yeah, good afternoon. If you wouldn't mind just talking about the cadence for the rest of the year. You know, if you look at the rest of your guidance you're putting out, it's EBITDA in the CAD 5 million-CAD 7 million range, and then revenue in the CAD 65 million-CAD 85 million range, roughly. Can you just talk about, you know, what kind of delivery expectations are associated with those numbers?
Sure. Thanks, Poe. Dan here. Our guidance is actually $70-$90 for revenue, and it's $3 million-$5 million for EBITDA. Q1 was obviously pretty light in deliveries. Q2, we'll see more deliveries for Q2. We'll be closer to neutral for EBITDA for Q2, and then the bulk of our earnings will be in the last half of the year.
Great. Yeah, Dan, I was incorporating the first quarter actuals into the, you know, netting them out of guidance to look at the rest of the year.
Oh, okay. Sorry. Understood.
Yeah. No, that's all right. When you look at your expanded distribution network, anything additional that we should be expecting over the near term to fill out the distribution network? Or is that gonna take a little bit of, you know, some time from the standpoint of, okay, we have Ferndale up and running, and we can actually deliver products to get people over the finish line there?
Yeah. You know, what we see coming up here is, you know, we've got a fairly healthy backlog right now. You know, we'll be building that backlog out into 2023, and you know, that's where we really see the Ferndale facility. We'll get product delivered out of Ferndale this year, but you know, we've got some inspections coming up here, I think it's in June or early July. We've got the California team coming up to take a look at it for some bids we have on the go there, to make sure that the facility is, you know, up to the standards that they're looking at, which we'll meet the standards there.
We should see a pretty good order intake starting to come in for that 2023. You know, 2023, the growth is gonna be coming out of that factory.
Okay. When I look at, you know, your comment that some of the deliveries were pushed from 2022 into 2023, how should I be thinking about the, you know, early part of 2023 relative to what's gonna happen over the second half of 2022? Maybe if you could even quantify, you know, that $90 million of backlog, how much of that should be realized over the second half of the year or the rest of the year and relative to, you know, what would be potentially realized in 2023?
Right. You know, I do wanna avoid giving, you know, quarterly guidance for every quarter coming out. I can say that we'll be pretty heavily back-weighted, or back-end weighted for the year. You know, our goal is to get out CAD 70 million-CAD 90 million in revenue this year. That's where we are right now. Our backlog is actually a bit more than CAD 90 million, but that's what we've, you know, that's what we're announcing right now.
All right. Thanks for your help.
Thank you.
Again, if you have a question, please press star then one. Our next question comes from Robin Cornwell with Catalyst Research. Please go ahead.
Thank you, and good afternoon. My first question is really related to the Washington plant. Several points on that. One is, have you had any inflationary impact? I think I asked this question the last time. We hear so much about cost jumping, and have you seen that reflected in your construction?
Hi, Robin. Dan here. No, we have not seen too much inflationary pressure. We saw some inflation coming at the beginning of the project, and we locked in some pricing. We pre-purchased the steel back when it was cheaper at the beginning of the project, and we locked in the price of the building itself with the people that are building the plant. The inflationary pressure has not really hit us right now. We're on budget, on time with this project.
What's the labor situation like as to staffing the plant? Again, we hear so much about shortage of skilled labor.
We've been working very closely with the economic development groups of the Washington State government down there. They've been really receptive to us. They'll be actually helping us host a job fair. We're not anticipating to see the shortages. T here's a very diverse skill set down in Washington. You know, you've got Boeing, and you've got a lot of other large corporations down there. I think, you know, what we have to offer is pretty attractive, and we're not anticipating seeing any problems there.
Okay. What do you anticipate production-wise for 2022 out of that plant completed vehicles?
We are ramping up slower than you know you need to run some through and then ramp up. You know, I think we're in the neighborhood of 25-35 units is what we're starting off with.
Did your revision of the revenue include lower production out of the Washington plant?
It reflects overall everything.
Okay. One clarification. When you diversified your battery supply with Proterra. You've got three basic suppliers. How do you manage with the order flow? You've ordered so many batteries from BMW, and they don't deliver. Are you saying that you can switch to Proterra? How does that work?
Yeah. We can. You know, we designed all of our own software in there to be able to take multiple types. You know, the BMW batteries that we have on order and that we're producing, we have all those batteries in stock as we speak. The Proterra batteries, we have a very secure long-term supply agreement with them. You know, being said, you know, our Washington state factory is very close to where the battery manufacturing is right now. Their battery manufacturing is in California. Very close deliveries.
Okay, great. Thank you. That's all for me.
This concludes our question and answer session. I would like to turn the conference back over to William Trainer for any closing remarks.
Thank you, operator, and I'd like to thank each of you for joining our earnings conference call. We look forward to continuing to update you on our ongoing progress and growth. If we are unable to answer any of your questions, please reach out to our U.S. IR firm, MZ Group. We'll be more than happy to assist. Thank you all.
Finally, I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results and industry prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's regulatory filings for a list of associated risks, and we would also refer you to the company's website for more supporting industry information. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.