Hello, welcome to the GreenPower Motor Company Q4 and year-end earnings call. All participants will be in listen-only mode. Should you need 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 Touch-Tone phone. Please note, this event is being recorded. I would like now to turn the conference over to Michael Sieffert, CFO. Please go ahead.
Thank you. This is Michael Sieffert, the Chief Financial Officer of GreenPower Motor Company. I would like to welcome everyone to our call to discuss GreenPower's financial results for the Q4 and year ended March 31, 2023. I'm here today with our Chief Executive Officer, Fraser Atkinson, and our President, Brendan Riley. During today's call, we may make comments or statements about our future expectations, plans, and prospects, which may constitute forward-looking statements for the purposes of the Safe Harbor Provision under the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our quarterly interim results in MD&A, filed on SEDAR and on EDGAR. These forward-looking statements relate to the date on which they are made.
We anticipate subsequent events and developments may cause the company's views to change. GreenPower disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Also, during the course of today's call, we may refer to certain non-IFRS financial measures. Reconciliation of these non-IFRS measures can be found in our MD&A, filed on SEDAR and on EDGAR, and is also located on our website at www.greenpowermotor.com. I will now pass the call over to GreenPower CEO, Fraser Atkinson.
Thanks, Michael. This was a record-setting quarter for GreenPower, as we recorded revenues in the Q4 of $15.3 million, more than three and a half times the revenue of $4.3 million for the Q4 in the previous fiscal year. We delivered 123 GreenPower vehicles in the quarter, which was also a record. The growth and deliveries for the year were equally impressive as we generated record revenues of $39.6 million in the 2023 fiscal year, an increase of 130% over the previous year's revenue of $17.2 million. We delivered 299 GreenPower vehicles, compared to 93 vehicles in the previous year. One of the most frequent questions we hear from stakeholders is: How is GreenPower's cash position?
In September 2022, we put in place an ATM or at-the-market offering. During the year ended March 31st, 2023, we had raised gross proceeds of $4.9 million. In April, we raised another $520,000 with the ATM. We have not been on the ATM since then. We have an $8 million line of credit with BMO. At year-end, we are on our line of credit for $6.6 million and had $600,000 of cash in the bank, effectively giving us about $2 million of available funding. At the end of last week, we were not having to utilize any of the line of credit. In other words, we are completely off our line and had approximately $1.5 million in cash.
We have gone from available funding of $2 million at year-end to approximately $9.5 million at the end of last week. Presently, the commercial vehicle group has 42 active or live orders and 141 signed purchase orders for various EV Star models, which excludes our Workhorse activity. This is our commercial vehicle group over and above that particular contractual arrangement. The school bus group has 63 active orders or live orders and additional purchase orders for our BEAST and Nano BEAST school buses, with deliveries for the first orders for these utilizing current inventory. I will now hand it over to Brendan for discussion on the operations.
Thank you, Fraser, and thank you everyone on the call today. You know, not only did we record record amount of our battery electric vehicles, some of the first that we accomplished over the fiscal year, things were that we delivered our first new EV Star Cargo 22 foot van. We delivered a large order of our EV Star CCs to Workhorse, the first ones of that order started. We also delivered the first of our Nano BEAST. The firsts were important for us. Our Nano BEAST won an award last year at the STN EXPO, which is currently going on. Deliveries of those have started.
As excited as I am about our record sales and deliveries of our compelling EV products, the work does continue with the bringing of our new West Virginia production facility online and the building of our national dealer network and aftersales network. Government incentives, both federal and local, are higher now than they have ever been. For example, government funding for GP BEAST, Nano BEAST, and our commercial EV Star line has now gone national and has moved GP from being just a regional player in California or the West to being a national one. We've added dealers across the country for our school buses and for our commercial EVs that are the right fit for our customers' needs, and that are the leaders in their respective areas of responsibilities. These dealers are inspired to sell and support all of GreenPower's compelling products.
Our West Virginia production facility is already building school buses. It's become a second hub for our aftersales and administrative report, as well as providing sales for the Eastern and Midwest of the U.S. School bus production training with our education partner, Bridge Valley College, located in West Virginia, is progressing. A large number of employees have already started attending classes that we co-developed with the school. Yesterday, at the Transportation Network Conference in Reno that I had mentioned previously, that goes on in Nevada every year at this time, we presented the results of our school bus pilot project in West Virginia. This is where four of our battery electric school buses were operated at different school properties throughout the state on a rotating basis.
The pilot project has proven to be so wildly successful, actually the most wildly successful pilot project I've ever been involved with on the EV space. This product shows that our BEAST and our Nano BEAST can perform in all different types of terrain, weather, and operating environments. Again, it proves that you can operate GreenPower BEASTs or battery electric vehicles without changing the way a school district performs their existing operation. Maintaining our competitive advantage is paramount as we balance expanding our production, sales, and support while keeping our costs down. To this end, we continue to nurture the funds entrusted to us by the investors and make responsible yet strategic decisions on how we allocate and spend those resources on sustainable and profitable growth. I'd like to turn it over to Michael Sieffert, GreenPower's CF O, who will cover the quarterly and year-end financial highlights.
Thank you, Brendan. The 2023 fiscal year highlights included: we generated record revenues of $39.7 million, which was an increase of 130% over the previous year's revenue of $17.2 million. Gross profit for the year was $7.3 million, compared to $3.9 million in the prior year. This sales increase was driven by record vehicle deliveries of 299 vehicles for the full year, compared to 93 in the prior year. As of March 31, 2023, we reported deferred revenue of $10 million, which includes the current portion of $8.1 million. Working capital improved to $27.7 million at the end of the Q4, compared to $25.7 million at the end of the Q3.
We finished the year with inventory of $41.6 million, and this included $31.9 million of finished goods inventory, which was primarily comprised of EV Star Transit Pluses, EV Star Cab & Chassis, EV Stars, EV Star Cargos, and BEAST and Nano BEAST school buses. During the year, we closed the contract of lease purchase in May 2022, and in August, we took possession of this 80,000 sq ft facility in South Charleston, West Virginia, to manufacture all electric school buses as well as other electric vehicles. This was the primary driver of the significant increase in our right-of-use assets over the year, which increased to $4.8 million from $100,000 at the prior year-end.
We completed the acquisition of Lion Truck Body, a truck body manufacturer located in the greater L.A. area. This was primarily funded with an assumption of a $1.5 million term loan that has a maturity in May of 2050 and an interest rate of 3.75%. Over the course of the 2023 fiscal year, the growth in our business and revenue, as well as operational enhancements, have led to improvements in our cost structure and inventory utilization. Selling general and administrative costs as a percentage of revenue have declined from 133% in the Q1 to 36% in the Q4. This demonstrates the improving operational leverage in our business model as revenues have steadily increased.
Inventory at March 31, 2023, was $41.6 million, which was 3.2 times our Q4 cost of goods sold. This was a significant improvement over the prior year, as inventory at March 31, 2022, was $32.3 million, or 8.7 times our quarterly cost of goods sold for the quarter ended March 31, 2022. Inventory represents the largest single financial asset of the company, increasing inventory turnover allows us to more efficiently utilize our financial resources. More efficient use of our inventory remains a key focus area for management. We'll now open the call for Q&A. Operator, please open the call for questions.
We will now begin the question-and-answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Craig Irwin of Roth Capital Partners.
Good morning, and I should start with a congratulations for the strong revenue result. Fraser, can you maybe give us a little bit more color on the West Virginia facility and the potential tempo of delivery, so both BEAST and Nano BEAST from that facility, and then, of course, from inventory, given that you do hold units or you did hold units coming into this calendar year?
Well, I'll start with the, and with the West Virginia, I think Brendan can probably provide some additional color commentary. We had during the year, or I shouldn't say during the year, but more recently, we have undertaken our production of our Nano BEAST, which is the first production of those vehicles in the West Virginia facility. We're currently organizing to produce the larger Type D BEAST school buses in that facility as well. That will be on the heels of the first tranche of the Nano BEAST.
Ultimately, over the course of this current fiscal year we're now in, is the objective is to be building both and having the first of those off, you know, off the production line and into our sales, you know, sales deliveries. That's kind of the first step. Our objective when we first undertook that facility was to get it up to a place where we could build 50-60 per month or a run rate of, you know, in the magnitude of 600-700+ in that facility.
On the inventory, you know, I think this is, as Michael just commented, is one of the key operational goals that we achieved during the year, which was really to not just continually build inventory, but to manage our inventory in with respect to our deliveries. I think we've been very successful in bringing it down to it as measured by, you know, what we sell in a particular quarter or what the throughput is on our cost of goods sold, is our inventory has gone from the beginning of the last fiscal year to over eight quarters to just over three quarters of effectively the inventory that we're holding. You know, much better utilization of that inventory, and that's a continued goal through the next year.
As a result of that, you know, that has significantly helped or assisted us with our available funding. Brendan, anything to add on the West Virginia?
No, Fraser, you did a great job. Thank you.
Perfect. Perfect. Thank you, guys. Next question I wanted to ask is, you know, this is, you know, an important quarter for you guys because you already have, you know, solid record with Workhorse, but it seems like you're starting to get cab and chassis sales away from Workhorse. Was hoping you could give us a little bit of color on sort of what the pipeline looks like there, as far as the deliveries that are happening and what you feel about the sales momentum right now. Also, if you could give us color on the EV Star Cargo and Cargo Plus, what the market uptake looks like, what customers are saying with these now in commercial customer hands.
I'll deal with the latter part first. As we had noted in our press release and in the earlier comments with our this earnings call, is that the commercial vehicle group, which is headed by Claus Tritt. you know, right now he has 42 live orders and 140, over 140 signed purchase orders, and that's for, you know, our cargo van and box trucks and some customers that are working with us to build out a cab and chassis to a end product, you know, like a box truck. so he has a really strong mix of in terms of the orders that we have.
You know, that's a huge step up from where we were a year ago. You know, that's looking particularly strong and on that side. On Workhorse, we've, you know, we're continuing to, you know, deliver vehicles and, you know, they have publicly announced that their W750 that utilizes the EV Star Cab & Chassis is, you know, is now going through their production process and entering the market in terms of sales in their Q3. You know, we, you know, looking ahead, we need to ensure that, you know, we're supporting their activity and the sales activity and their production levels in order to achieve their goals.
Excellent. If I could ask a Workhorse specific question, right? This quarter, 108 cabin chassis, up from 85 last quarter. Vast majority, almost all of that going to Workhorse. How should we think about the potential tempo of deliveries under this agreement that you have with them? Is this something that, you know, will both go up and down over the next number of quarters? Should we see that build gradually? Any color on sort of the way we should model this for the course of your fiscal 2024?
... Well, it's still, I would characterize it as, early days with regards to, you know, their activity and their throughput. You know, we're obviously reliant on what their successes become our successes. We really need another quarter or two under our belt, to see how that throughput is looking.
You know, I view them as a very strong partner in terms of, you know, any issues or, you know, the actual production flow through and things like that are, you know, there's good communication within the group, so we have a good feel for what we need to do or what we'll need to adjust if there's, you know, if there's some significant upticks, then we need to be adjusting our deliveries to accommodate that.
Understood. That makes complete sense. Last question for me before I jump back into the queue. Today is what? July 17th. You know, it's more than two weeks past the end of your first fiscal quarter for 2024. I know you guys are gonna be extra careful, given the challenges you had in your year-end audit, but are there maybe any high-level metrics you can share with us, like, total number of deliveries or, any other color that you can give us about, the success you had in this quarter, and how this is continuing on top of what you saw in the fourth fiscal quarter?
Well, unfortunately, we're, you know, the focus was to get this completed as your... If your reference to the auditors were, you know, we did make a change during the year to upscale to a firm that was well recognized across North America, and working with them and getting this filed at the end of last week is, you know, was a herculean effort by the finance team in particular. That was kind of the primary focus. You know, we really haven't had a lot of public communications on what we're, you know, where we were at the end of June or where we are with both, you know, the commercial vehicle group and the school bus group with some of the key activities there.
We expect to be, you know, back in a position where we can be communicating with our stakeholders and getting our next quarter out, you know, as quickly as possible so we can be talking about all those kind of metrics.
Understood. Well, congratulations on the obvious traction that you're seeing. Thanks for taking my questions.
Thanks a lot, Craig.
Our next question comes from Tate Sullivan of the Maxim Group. Go ahead.
Great. Thank you. Thank you, Fraser. You mentioned managing your cash position partly with inventory management, but also I see you have the $3 million deposit from the state of West Virginia subsequent to your fiscal year end on a $15 million order. Which should we expect additional deposits with additional orders from the state of West Virginia or counties, or was that just the starting order, please?
Well, it's a very significant order in terms of the number. You know, we didn't scan the marketplace to determine if this was the highest single order, but certainly one of the more significant orders within the school bus space for electric school buses, that is. We wanna do a good job in, you know, producing the vehicles for that order. It also gives us the ability to be scaling our West Virginia facility as we do, not just that order, but other orders that are being generated within the region.
It's, you know, is, you know, I would say, you know, we'd love to see a follow-on order, but, you know, we're pretty happy about producing vehicles pursuant to that order over the next, you know, number of quarters.
That's a great deposit number. Then on the 63 school bus orders, I think you mentioned before in your answer to the other quite, in the near term, more Nano BEAST deliveries and then shifting to more BEAST deliveries, is that fair, or did I hear that correctly?
Well, it really depends what the region is in that the BEAST which we can actually configure for up to 90 kids. That's the K to grade six level. You know, the high school, you know, allows for fewer kids within the school bus because of the obvious size differences. The 90 is, you know, is generally we're finding a lot of the orders are around 84 seats in terms of the configuration of that vehicle. That's an important metric in terms of, you know, what the school districts need to manage for their morning and their afternoon run. That fits a very specific need and requirement. The Nano BEAST is, you know, more like a Swiss Army knife. It really accomplishes a lot of different objectives.
It, you know, there's fewer number of passengers. It has more, it's more nimble and flexible. You know, and even in the charging infrastructure, generally, you know, a level two charger will accommodate that particular vehicle. Most of the sales in the, of the Type A Class four vehicles, which is the space that the Nano BEAST is directed at, and I think the number is around 80% of the sales for the Type A school buses is with, you know, with the wheelchair lift in the, you know, in the, curbside rear of the vehicle. So that particular configuration is one that really accommodates all of the different requirements that a school district has, that the larger, our larger Type D BEAST school bus, can't necessarily accommodate.
you know, that has a, has a fit for, you know, a totally different market. A good example of that is that if you're on in Manhattan or in the financial district of New York City, you'll see an awful lot of Type A school buses on the road and very few of the Type C or Type D larger school buses. That just, you know, it's more suitable for that environment and school districts, you know, where they can effectively integrate that, though, that particular vehicle, you know, that's kind of the go-to for that environment.
Thank you. Last for me is, you mentioned 42 live orders for EV Stars and configurations and 141 signed purchase orders. I think you've mentioned before, switching those signed purchase orders to live orders depends on the voucher timing, or is that not the case for all those signed purchase orders?
Some of them do have vouchers, and, you know, principally, New Jersey or the California HVIP. Some of them are related to, you know, setting up delivery, so getting the agreed upon delivery time. You know, we could have a specific vehicle and even a bin number attached to, you know, the signed purchase order with the customer and funding attached through a voucher program, and their delivery is, you know, hasn't been set as they're waiting for a charging station to be installed, or they're waiting for, you know, to get their own internal organization around the various training that we put in place with the delivery and deployment of vehicles. It really is a mixed bag.
As well, there's, in the case of, where we're building out a cab and chassis to, say, a box truck or, you know, a more sophisticated box truck with lift gates or something like that, then, you know, that takes additional time to complete that, before a delivery date can be set.
Okay. Thank you, Fraser. Thank you all.
Our next question comes from John Abe of American Research Media. Again, if you have a question, please press star, then one. Go ahead, John.
Good morning, gentlemen. Thank you for taking my call. You mentioned that you have a lot of standing inventory. Considering the fact that you've advanced so many buses to create a bus sales in California, is most of that inventory Type A or Type D?
On the school bus side, it is a mix, but there are more of the Type D than the Nano BEAST Type A.
We'll see, that's a large revenue infusion for the company if those, in fact, do transfer. Most of the inventory-
You're absolutely well, and not if they transfer, but when they transfer on to, pursuant to these orders. You know, the final finishing relative to, you know, the lettering on the side, the numbering for that particular school district, you know, is sort of the final end of the completion of the vehicle. You know, the majority of cost that has gone into that BEAST is already, you know, we've already paid for it in full, sitting in inventory. We're effectively monetizing that inventory as we get these deliveries off our books.
Lion Truck Body, in your statement, it looks like, you know, they're located in Torrance, California, a suburb of Los Angeles. Are they going to be relocating to West Virginia?
They... I mean, that's a great question, is that, you know, you know, Brendan, in particular, has talked about, you know, taking Lion Truck Body from a regional to a national player and, you know, products like the refrigerated box truck that, you know, that's the kind of vehicle that can, you know, be a national product and create much more of a national brand for Lion Truck Body. If that's the case, there's certainly an opportunity to perhaps have a second location for Lion Truck Body, and West Virginia could be a logical consideration for that. I think we're going to be pretty busy in West Virginia building school buses in the near term.
Yeah, Fraser, if I may add real quickly. This is Brendan speaking. John, that's a very good question. The Lion Truck Body product line is in the process of being completely made into kits also. Not only can we assemble those kits in places like West Virginia, but we can also ship them to our dealers that do body assembly. The kits are designed for like a dealership to do, that might have a body shop to do body assembly, because the bodies not only get shipped regionally by the dealers, but they also require body service and repair regionally. The thought is also not only.
the possibility of other Lion Truck Body locations, but also to be able to have the product so it's in such a modular format that it can be built and serviced and maintained, even through our dealership network.
In West Virginia, with the cost of living and the cost of labor being in the lowest, one of the lowest percentiles of any state in the United States, it just seems to me like it's a bit crowded to build all these different products in just 80,000 sq ft. On an interview, Brendan Riley, which was released on April 18th, was talking about looking for a second facility in the state of West Virginia. Is that something that you're still looking into?
John, this is Brendan again. We're looking at additional facilities in multiple locations. West Virginia has been a very good partner to us, and we've had amazing success to date with our West Virginia facility, both in human resources and our partnerships, and found it to be a very business-friendly environment. But we are considering a second location in West Virginia, but we're also considering a location with those that we're looking at with the second location attributes that we're looking at for West Virginia. We're also looking for that in other locations, also.
At the EV convention in India, Jupiter Wagons featured a GP product. I think it was an EV Star. How is that joint venture working with Jupiter?
Well, I'll start off on this one. We do have our a right-hand drive model of our EV Star platform that that is, you know, targeted for that. Not just that market, but there's other markets that can utilize such a product. India is a very different market than most in that, you know, price is in, you know, price sensitivity is incredibly high, regardless of, you know, whether it's a new product or a product's been around 100 years. You know, we are taking our, you know, the approach in that market on a very measured basis, which is get the product out there, see what the uptick is, see how it fits in the supply chain, and that, you know, there's a leg within their delivery model that doesn't exist in North America.
You know, it's almost like the last, the last yard within the last mile. There's nuances like that, you know, significantly impact on, you know, what the usability of our kind of vehicles, which are medium duty, they're not light duty. They, you know, our products are medium or heavy duty, so the EV Star has, you know, has a place in their supply chain that is probably a little further up than where it would be within the delivery model within North America. In short, you know, we are working with them. We do have, you know, resources in India that are working with Jupiter.
You know, the approach we're taking is very, very measured to make sure we, you know, that we understand where our product can have success before we're spending you know, an incredible amount of money to move that forward.
In your Forest River adventure, do we have any updates in regards to Forest River and your cab and chassis that you're delivering to them?
There are no updates. You know, Forest River, it preceded, you know, what we were doing with Workhorse. It preceded the acquisition of Lion Truck Body, where we have, you know, working with Lion Truck Body on specific models in the marketplace. To some extent, we've kind of supplanted, you know, the original goal or objective with Forest River, but otherwise, there's no update in terms of what we're doing with them.
Does your agreement with Forest River preclude you from working with other RV manufacturers?
No, it doesn't.
Well, thank you very much.
If Klaus is on the line, who heads our commercial vehicle group, you know, he used to work at Daimler, and of course, with the Mercedes-Benz trucks, he's, you know, got, you know, decades of experience in selling and distributing their various models. They had their 3,500 Sprinter, you know, was kind of the go-to for, you know, the smaller recreational vehicles. That's, you know, something that he has had experience with and with a product that had an awful lot of success as well.
He came out of Canoo, is that correct?
He was at Canoe for a period. That's correct.
I think during his time when he was at Canoe, didn't they secure a contract with Walmart for 4,500 units?
I think that number is right, but otherwise I would need to go back and see, you know, confirm what they've said in the public domain, but I suspect you've already done that, John.
Lastly, I noticed your next quarterly is scheduled for just a month from now. I guess I would, I'm assuming that that means that there's a lot of good news on the horizon if you're only having your reporting a month apart. Are we looking possibly at an acceleration of receivables in the next month?
You know, the overall management of our working capital is, you know, as we're communicating on our year-end call, that if you look at where we were at the year end to where we are effectively now, is that, you know, I think we've done a great job on, you know, collecting the receivables and monetizing our inventory and managing that cash flow in a fashion that has allowed us to significantly increase our available funding. Other than commenting on where we are up to now, you know, we'll let the quarter speak for itself when we're able to get it out the door and have earnings call.
Well, thank you very much, gentlemen, for fielding my call this morning. Congratulations on all your success.
Thanks, John, and all the best.
This concludes our question and answer session. I would like to turn the conference back over to Fraser Atkinson for any closing remarks.
Just to conclude our call, thanks for those that were on the call and those that are listening afterwards on our pre-recorded webcast. We really appreciate your support. The EV sector that we operate in has its own challenges as a sector as a whole. You know, we've had some ups and downs and some extremes related to those. Our focus of, you know, in terms of the business, has been on the fundamentals in terms of, you know, building a strong product line and building strong relationships with customers and partners.
More recently, we've made significant strides in terms of our operational goals, and as we've noted several times on the call, we've improved our available funding and have access, should we require it, to additional funding that will help fuel the growth that we see with our business plan. Most importantly, the, you know, we made a conscious decision several years ago to go from production pursuant to customer orders to where we were building more along an inventory with targeted sales goals. I think this past few quarters has shown the success of that strategy, where, you know, we are now getting a significant throughput in terms of our cost of goods sold as a measure against our inventory.
As Michael noted, at the beginning of this fiscal year, we're at over eight quarters in terms of that throughput, and at the end of this most recent fiscal year, we're at under four, just 3.2, 3.3. That just illustrates the significant improvements that we've made in that one area with our overall business model. Look forward to providing updates in the marketplace in terms of our ongoing successes, look forward to being engaged with our stakeholders on our next earnings call. Bye for now.
The conference has now ended. Thank you for attending today's presentation. You may now disconnect.