Workflow
GreenPower Motor Co(GP) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the three months ended June 30, 2024, GreenPower generated revenue of $3 million with a cost of sales of $2.8 million, resulting in a gross profit of approximately $222,000 [16] - The lower-than-anticipated gross profit margin was primarily due to overhead costs incurred from limited throughput in West Virginia and lower realized gross profit margins on prior model year inventory [16] - The company ended the quarter with nearly $14 million in working capital, including $33.7 million in inventory, of which $13.4 million was finished goods [17] Business Line Data and Key Metrics Changes - The sales pipeline for GreenPower's all-electric commercial vehicles has seen a significant uptick, including 28 specialty vehicles for deployment in Canada and over 20 EV Star passenger vans and Cargo Plus vehicles [5][6] - The company has more than 30 all-electric purpose-built school buses slated for delivery in California and Oregon over the next 90 to 120 days, complementing previous orders for the East Coast [9] Market Data and Key Metrics Changes - California has introduced legislation requiring roughly 10% of new purchases of Class 4 vehicles by fleet operators to be zero emission, which will increase to 75% over the next 10 years, creating a multibillion-dollar annual market opportunity for GreenPower [7] - The number of EV OEMs with medium-duty Class 4 all-electric offerings has been dwindling, indicating a favorable supply/demand dynamic for GreenPower [7] Company Strategy and Development Direction - GreenPower's go-to-market strategy includes both horizontal and vertical markets, focusing on medium-duty Class 4 vehicles and school buses [6] - The company is positioned to take advantage of state and federal incentives, with over $8 billion available for the transition to all-electric school buses [10] Management's Comments on Operating Environment and Future Outlook - Management noted that despite earlier market slowdowns due to regulatory uncertainties and global economic factors, demand for all-electric vehicles is rebounding with significant growth potential [4] - The company anticipates a step-up in revenue from the most recent quarter through each of the remaining quarters in the fiscal year [4][31] Other Important Information - GreenPower has received various subsidies in West Virginia, including training subsidies for employees and tax incentives, which will support production increases [24][27] - The company has been actively involved in discussions and presentations regarding EV school bus deployment and the transition to zero-emission vehicles [11][12] Q&A Session Summary Question: Update on the book of orders in hand - Management indicated that follow-on orders exist for many specialty vehicles and passenger vans, which may not yet be at the top of the sales pipeline due to the need for initial deliveries [19][21] Question: Natural margin for products - Traditionally, gross profit margins have been in the high teens, and management expects margins to improve as throughput increases in the West Virginia facility [21] Question: Availability of subsidies in West Virginia - Management confirmed that numerous subsidies are available in West Virginia, including training subsidies and tax incentives, which will support production [24][27] Question: Status of finished vehicles and inventory - The largest category of finished goods inventory is the EV Star Cab & Chassis, with over 40 EV Stars of various types, including secondhand vehicles [23] Question: Availability of liquidity - The company confirmed approximately $2 million in available liquidity on the EDC facility at the end of the quarter [29]