VMC(VEV) - 2023 Q4 - Annual Report

Report Overview This section provides a high-level summary of the company's financial and operational performance Q4 & FY 2023 Financial Results Announcement Vicinity Motor Corp. announced Q4 and FY 2023 results, detailing $5.1 million Q4 revenue and 71 VMC 1200 electric truck invoicing - Q4 2023 deliveries included 11 Vicinity™ Classic Transit Buses[2] - Q4 2023 revenue reached $5.1 million[2] - 71 VMC 1200 electric trucks were invoiced for 2024 delivery[4] Fourth Quarter 2023 and Subsequent Operational Highlights This section details key operational achievements and management commentary from Q4 2023 Management Commentary Management emphasized increasing operational execution and sales momentum in Q4 2023 across all product lines - The VMC 1200 provides an ideal entry into the underserved commercial EV market, with an attractive price point enhanced by Canadian federal and provincial rebates[5] - VMC 1200 was approved for Quebec's Écocamionnage Program, providing a CAD$85,000 incentive for commercial freight electrification[5] - Partnership with ADASTEC to develop an SAE Level-4 automated Vicinity Lighting EV transit bus (Vicinity Autonomous Lightning EV) for North America, with initial deployments in Q2 2024[6] - The transit bus business maintained a solid recurring customer base and strong order momentum, retaining market leadership in the Canadian mid-sized heavy-duty segment[8] - Order backlog exceeded $125 million as of December 31, 2023, with over 75% from electric vehicles[9] Key Operational Achievements Vicinity Motor Corp. achieved key operational milestones in Q4 2023, including substantial order backlog, increased revenue, and EV truck invoicing - Order backlog as of December 31, 2023, exceeded $125 million, with electric vehicles accounting for over 75%[7] - Revenue increased to $5.1 million in Q4 2023, primarily driven by the sale of 11 Vicinity™ Classic transit buses[7] - Invoiced 71 EV trucks to dealers in December 2023, with revenue recognition and delivery scheduled for 2024[7] - Secured four new VMC 1200 distribution agreements, establishing new dealerships in strategic Canadian markets (Ontario, Quebec, Alberta)[7] - Secured new orders for twenty Vicinity™ Classic Clean Diesel Buses from Autobus La Québécoise for 2024 delivery[7] - Partnered with ADASTEC to create an SAE Level-4 automated Vicinity Lighting EV transit bus, with deployment agreements for Michigan State University and Buffalo Niagara Medical Campus in mid-2024[7] Fourth Quarter 2023 Financial Results Vicinity Motor Corp. reported significant financial improvements in 2023, with full-year revenue increasing to $19.1 million and gross profit improving to $2.1 million Key Financial Metrics Vicinity Motor Corp. reported significant financial improvements in 2023, with full-year revenue increasing to $19.1 million and gross profit improving to $2.1 million Revenue Performance | Metric | Q4 2023 (USD in millions) | Q4 2022 (USD in millions) | YoY Change (Q4) | FY 2023 (USD in millions) | FY 2022 (USD in millions) | YoY Change (FY) | | :----------------- | :------------ | :------------ | :-------------- | :------------ | :------------ | :-------------- | | Revenue | $5.1 million | $2.0 million | +155% | $19.1 million | $18.5 million | +3.2% | | Primary Driver (Q4) | 11 bus deliveries | 11 trucks | | | | | Gross Profit/Loss Analysis | Metric | Q4 2023 (USD in millions) | Q4 2022 (USD in millions) | YoY Change (Q4) | FY 2023 (USD in millions) | FY 2022 (USD in millions) | YoY Change (FY) | | :----------------- | :------------ | :------------ | :-------------- | :------------ | :------------ | :-------------- | | Gross Loss | $(0.4) million | $(0.6) million | Improved | | | | | Gross Loss % of Revenue | (9%) | (28%) | Improved | | | | | Gross Profit | | | | $2.1 million | $0.4 million | +425% | | Gross Profit % of Revenue | | | | 11% | 2% | Improved | Cash Flow from Operating Activities | Metric | Q4 2023 (USD in millions) | Q4 2022 (USD in millions) | YoY Change (Q4) | FY 2023 (USD in millions) | FY 2022 (USD in millions) | YoY Change (FY) | | :-------------------------------- | :------------ | :------------ | :-------------- | :------------ | :------------ | :-------------- | | Cash Used in Operating Activities | $5.7 million | $3.9 million | +46.2% | $24.7 million | $9.1 million | +171.4% | Net Loss and EPS | Metric | Q4 2023 (USD in millions) | Q4 2022 (USD in millions) | YoY Change (Q4) | FY 2023 (USD in millions) | FY 2022 (USD in millions) | YoY Change (FY) | | :----------------- | :------------ | :------------ | :-------------- | :------------ | :------------ | :-------------- | | Net Loss | $9.1 million | $3.8 million | +139.5% | $16.6 million | $18.0 million | -7.7% | | EPS (Basic & Diluted) | $(0.20) | $(0.08) | | $(0.36) | $(0.45) | | Adjusted EBITDA Performance | Metric | Q4 2023 (USD in millions) | Q4 2022 (USD in millions) | YoY Change (Q4) | FY 2023 (USD in millions) | FY 2022 (USD in millions) | YoY Change (FY) | | :----------------- | :------------ | :------------ | :-------------- | :------------ | :------------ | :-------------- | | Adjusted EBITDA Loss | $3.2 million | $1.4 million | +128.6% | $6.9 million | $7.4 million | -6.8% | Cash and Cash Equivalents Summary | Metric | Dec 31, 2023 (USD in millions) | Dec 31, 2022 (USD in millions) | YoY Change | | :-------------------------- | :----------------- | :----------------- | :---------- | | Cash and Cash Equivalents | $2.0 million | $1.6 million | +25% | Fourth Quarter and Full Year 2023 Results Conference Call This section provides details for the Q4 and FY 2023 results conference call, including access and replay information Conference Call Details This section provides details for the Q4 and FY 2023 results conference call, including access and replay information - Date & Time: Tuesday, April 2, 2024, 4:30 p.m. Eastern time[17] - U.S./Canada Dial-in: 1-877-407-3982; International Dial-in: 1-201-493-6780; Conference ID: 13745184[17] - Webcast available at: Vicinity Motor Q4 & FY2023 Webcast[17] - Playback available through Wednesday, May 1, 2024, via phone replay (U.S./Canada: 1-844-512-2921, International: 1-412-317-6671, replay pin 13745184) and webcast[18] About Vicinity Motor Corp. This section provides an overview of Vicinity Motor Corp., a North American supplier of electric vehicles for public and commercial sectors Company Profile Vicinity Motor Corp. is a North American supplier of electric vehicles for public and commercial sectors, leveraging a dealer network and manufacturing partners - Vicinity Motor Corp. is a North American supplier of electric vehicles for both public and commercial enterprise use[19] - The company supplies flagship electric, CNG, and clean-diesel Vicinity buses, as well as the VMC 1200 electric truck[19] - Leverages a dealer network and relationships with manufacturing partners to serve transit and industrial markets[19] Contact Information This section provides contact details for the Company's VP Corporate Development and Investor Relations - Company Contact: John LaGourgue, VP Corporate Development, 604-288-8043, IR@vicinitymotor.com[20] - Investor Relations Contact: Lucas Zimmerman, MZ Group - MZ North America, 949-259-4987, VMC@mzgroup.us[20] Legal and Financial Disclosures This section outlines legal and financial disclosures, including cautionary notes on forward-looking statements and non-GAAP financial measures Cautionary Note Regarding Forward-Looking Statements This section advises on forward-looking statements, highlighting inherent risks and uncertainties that may cause actual results to differ materially - The press release includes 'forward-looking information' and 'forward-looking statements' identified by words like 'expects', 'anticipates', 'believes', etc[21] - Forward-looking statements involve various risks and uncertainties, and actual results could differ materially from those anticipated[21] - Important factors include economic conditions, vehicle sales volume, market prices for parts, operational strategies, facility operations, COVID-19 impact, supply chain recovery, strategic partnerships, and debt terms[22] - Vicinity assumes no obligation to update forward-looking statements or beliefs, opinions, projections, or other factors, should they change, except as required by law[22] Non-GAAP Financial Measures This section defines non-GAAP financial measures, specifically Adjusted EBITDA, noting they lack standardized IFRS meanings but are useful for assessing performance - Non-GAAP and other financial measures do not have standardized meaning prescribed by IFRS and may not be directly comparable to similar measures presented by other issuers[23] - Data presented is intended to provide additional information and should not be considered in isolation or as a substitute for IFRS measures[23] - Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, foreign exchange gains or losses, certain non-recurring/non-operating income and expenses, and share-based compensation[24] - Adjusted EBITDA is considered a meaningful metric in assessing the Company's financial performance and operational efficiency[24] Adjusted EBITDA Reconciliation This section provides a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to Net Comprehensive Loss Adjusted EBITDA Reconciliation Table | | 3 months ended | 3 months ended | Year ended | Year ended | | --- | --- | --- | --- | --- | | | December 31, | December 31, | December 31, | December 31, | | (US dollars in thousands - unaudited) | 2023 | 2022 | 2023 | 2022 | | Net Comprehensive loss | (9,108) | (3,828) | (16,633) | (17,948) | | Add back | | | | | | Stock based compensation | 470 | 668 | 929 | 1,380 | | Interest | 1,876 | 482 | 5,036 | 2,258 | | Gain on modification of debt | — | — | (492) | (803) | | Change in fair value of embedded derivatives | (580) | — | (605) | — | | Write down of intangible asset | 5,037 | — | 5,037 | — | | Foreign exchange (gain) loss | (1,546) | (629) | (1,728) | 3,253 | | (Gain) loss on disposal of property and equipment | (6) | — | (6) | 27 | | Inventory write down | 178 | 1,227 | 178 | 1,227 | | Income tax expense | (9) | (98) | — | 202 | | Amortization | 510 | 754 | 1,419 | 2,966 | | Adjusted EBITDA | (3,178) | (1,424) | (6,865) | (7,438) | Consolidated Financial Statements The Consolidated Financial Statements provide a comprehensive overview of the company's financial position, performance, and cash flows Consolidated Statements of Financial Position The Consolidated Statements of Financial Position detail the company's assets, liabilities, and equity as of December 31, 2023 and 2022 Financial Position Data | | Dec 31, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | Change (USD in thousands) | Change (%) | | :------------------------------------ | :--------------- | :--------------- | :--------- | :--------- | | Current Assets | | | | | | Cash and cash equivalents | 2,026 | 1,622 | 404 | 24.9% | | Trade and other receivables | 5,599 | 2,655 | 2,944 | 110.9% | | Inventory | 23,273 | 10,068 | 13,205 | 131.1% | | Prepaids and deposits | 9,748 | 3,801 | 5,947 | 156.5% | | Total Current Assets | 40,646 | 18,146 | 22,500 | 124.0% | | Long-term Assets | | | | | | Intangible assets | 9,815 | 14,273 | (4,458) | -31.2% | | Property, plant, and equipment | 23,734 | 22,613 | 1,121 | 5.0% | | Total Assets | 74,195 | 55,032 | 19,163 | 34.8% | | Current Liabilities | | | | | | Accounts payable and accrued liabilities | 10,162 | 4,942 | 5,220 | 105.6% | | Credit facility | 15,926 | 628 | 15,298 | 2436.0% | | Current portion of deferred revenue | 4,429 | 2,382 | 2,047 | 86.0% | | Current debt facilities | 8,499 | 6,587 | 1,912 | 29.0% | | Convertible debt | 2,658 | — | 2,658 | N/A | | Total Current Liabilities | 43,508 | 16,573 | 26,935 | 162.5% | | Long-term Liabilities | | | | | | Other long-term liabilities | 9,355 | 1,503 | 7,852 | 522.4% | | Total Liabilities | 52,998 | 18,200 | 34,798 | 191.2% | | Shareholders' Equity | 21,197 | 36,832 | (15,635) | -42.4% | Consolidated Statements of (Loss) Income The Consolidated Statements of (Loss) Income for 2023 and 2022 show increased revenue and gross profit, but also higher expenses leading to a net loss Statements of (Loss) Income Data | (In thousands of US dollars, except for per share amounts) | Year ended Dec 31, 2023 (USD in thousands) | Year ended Dec 31, 2022 (USD in thousands) | Change (USD in thousands) | Change (%) | | :------------------------------------------------------ | :-------------------------- | :-------------------------- | :--------- | :--------- | | Revenue | | | | | | Vehicle sales | 13,651 | 13,165 | 486 | 3.7% | | Other | 5,399 | 5,310 | 89 | 1.7% | | Total Revenue | 19,050 | 18,475 | 575 | 3.1% | | Cost of sales | (16,914) | (18,035) | 1,121 | -6.2% | | Gross profit | 2,136 | 440 | 1,696 | 385.5% | | Expenses | | | | | | Sales and administration | 9,730 | 9,526 | 204 | 2.1% | | Stock-based compensation | 929 | 1,380 | (451) | -32.7% | | Amortization | 862 | 2,572 | (1,710) | -66.5% | | Interest and finance costs | 5,036 | 2,258 | 2,778 | 123.0% | | Change in fair value of embedded derivatives | (605) | — | (605) | N/A | | Write-down of intangible asset | 5,037 | — | 5,037 | N/A | | Gain on modification of debt | (492) | (803) | 311 | -38.7% | | Foreign exchange (gain) loss | (1,728) | 3,253 | (4,981) | -153.1% | | Total Expenses | 18,769 | 18,186 | 583 | 3.2% | | Loss before taxes | (16,633) | (17,746) | 1,113 | -6.3% | | Current income tax expense | — | 202 | (202) | -100.0% | | Net loss | (16,633) | (17,948) | 1,315 | -7.3% | | Loss per share (Basic & diluted) | (0.36) | (0.45) | 0.09 | -20.0% | | Weighted average number of common shares outstanding | 45,605,239 | 39,650,426 | 5,954,813 | 15.0% | Consolidated Statements of Cash Flows The Consolidated Statements of Cash Flows for 2023 and 2022 indicate increased cash used in operating activities, offset by substantial cash from financing activities Cash Flow Data | (In thousands of US dollars) | Year ended Dec 31, 2023 (USD in thousands) | Year ended Dec 31, 2022 (USD in thousands) | Change (USD in thousands) | Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Cash used in operating activities | (24,697) | (9,082) | (15,615) | 171.9% | | Cash used in investing activities | (1,945) | (10,698) | 8,753 | -81.8% | | Cash provided by financing activities | 27,014 | 17,368 | 9,646 | 55.5% | | Effect of foreign exchange rate on cash | 32 | (368) | 400 | -108.7% | | Increase (decrease) in cash and cash equivalents | 404 | (2,780) | 3,184 | -114.5% | | Cash and cash equivalents, beginning | 1,622 | 4,402 | (2,780) | -63.1% | | Cash and cash equivalents, ending | 2,026 | 1,622 | 404 | 24.9% |