Envirotech Vehicles(EVTV) - 2019 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Sales revenue for Q2 2019 was approximately $4.4 million, compared to $744,000 in the same period last year, representing a significant increase [8][28] - Year-to-date sales revenue for the first half of 2019 was approximately $4.8 million, compared to $1.2 million in the first half of 2018, indicating strong growth [8][28] - The backlog at June 30, 2019, was $10.7 million, up from $6.3 million in the same period last year [8] Business Line Data and Key Metrics Changes - The company successfully received a purchase order for four electric cargo vans from Santa Clara County, which is included in the backlog [9] - The company showcased its electric trucks and vans at various events, receiving positive feedback and interest from multiple school districts and municipal agencies [11][16] - The company entered into an exclusive two-year sales and service agreement with Pro-Motive EV and JFP Holdings, expanding its distribution capabilities [12] Market Data and Key Metrics Changes - The Bay Area Air Quality Management District released $50 million in funding for zero-emission vehicles, which could benefit the company [19] - An additional $142 million is expected to be added to the California Air Resources Board program, although delays could push funding into early 2020 [20] Company Strategy and Development Direction - The company aims to capitalize on the growing demand for zero-emission vehicles and believes it can achieve profitability in 2020 [17] - The company is focusing on expanding its product line, including trucks, cargo vans, chassis, and neighborhood electric vehicles (NEVs) [26] - The management team is actively working to strengthen the supply chain and explore alliances with manufacturers in China [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting analyst consensus revenue estimates for the full year 2019, supported by the current backlog [25] - The company is optimistic about the potential growth from its diversified product offerings and the positive feedback received from customers [15][16] - Management acknowledged ongoing delivery issues that have impacted revenue recognition but noted improvements from subcontractors [13][14] Other Important Information - The company has cash and cash equivalents of $7.9 million as of June 30, 2019, with outstanding debt of $4.3 million [40] - General and administrative expenses decreased significantly due to a reduction in non-cash stock-based compensation [31][33] Q&A Session Summary Question: Can you provide any color on what was delivered and to whom? - The $4.4 million in revenue was primarily from drivetrain deliveries to Blue Bird [42] Question: Is the $10.7 million backlog adjusted for canceled orders and completed deliveries? - Yes, the backlog was nearly $19 million before cancellations [43] Question: How do you expect the next two quarters to look? - The expectation is to fill the majority of the remaining backlog, indicating flat to higher quarters compared to Q2 [44] Question: What are the supplier chain issues primarily related to? - The issues stem from manufacturing changes at Cummins, which have caused delays in production [45] Question: How will the company balance execution on current orders with increased sales capacity? - Sales activities are focused on new electric vehicle products while operations handle drivetrain orders [50] Question: What are the anticipated expenses associated with the new property in California? - The expense is less than $10,000 a month, and the property will be used for vehicle storage, demonstrations, and R&D [52] Question: How would you characterize your relationship with Blue Bird? - The relationship is good, but Blue Bird has moved to purchase directly from Cummins, which may affect competitiveness [56] Question: What is the competitive landscape like? - There are many competitors in the space, but the company believes it has a unique position with its purpose-built vehicles [58][60]