Pioneer Power Solutions(PPSI) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues for Q2 2022 were $4.3 million, down 24% year-over-year, primarily due to approximately $3 million in expected shipments being delayed [24] - Gross profit for Q2 2022 was $81,000, approximately 2% of revenues, compared to $495,000 or approximately 9% of revenues in Q2 2021, reflecting lower revenue and reduced absorption of fixed overhead costs [25] - Net loss for Q2 2022 was $2.5 million, or a net loss per share of $0.26, compared to a net loss of $686,000 or $0.08 per share in Q2 2021 [29] Business Line Data and Key Metrics Changes - The e-Bloc solution has seen growing market demand, with a significant order of $12 million from a major retailer, although $3 million in systems were delayed due to customer site readiness issues [7][8] - E-Boost product line generated $129,000 in revenue during the quarter, with expectations for E-Boost to represent up to 10% of annual revenue in 2022 [17][19] Market Data and Key Metrics Changes - The company is positioned to benefit from trends in distributed energy generation and electric vehicle charging, with increasing interest from grocery stores, office buildings, and large enterprises [9] - The recent passage of the Inflation Reduction Act is expected to bolster incentives for electric vehicles and provide financial support for charging infrastructure, which could drive demand for the company's offerings [21][22] Company Strategy and Development Direction - The company aims for full-year revenue growth of at least 50% in 2022 compared to 2021, despite Q2 delays [7][20] - Investments in sales, marketing, and product development for e-Bloc and E-Boost solutions are intended to drive demand and support growth [27][32] Management's Comments on Operating Environment and Future Outlook - Management remains confident in achieving significant growth in 2022 and 2023, despite Q2 challenges [6][20] - The company expects stronger performance in the second half of 2022, both in revenue and net income, as delayed shipments are fulfilled [20] Other Important Information - As of June 30, 2022, the company had $9.8 million in cash and expects to convert a significant portion of accounts receivable into cash before year-end [35][36] - The company is confident in its capitalization to support near-term initiatives and strategic goals [36] Q&A Session Summary Question: Timeline for the retailer customer units - Management indicated that the timeline is still impacted, but they expect to achieve revenue growth from other customers and projects [40] Question: Inventory composition at the end of Q2 - The inventory primarily consists of components ordered for the retailer project, with expectations for increased receivables to convert to cash [41] Question: Expected gross margins for future deliveries - Management expects gross margins to trend around mid-20% levels as deliveries to the service customer pick up [42] Question: Impact of the Inflation Reduction Act on the pipeline - While it is too early to determine specific impacts, management believes the Act will drive demand for charging infrastructure, benefiting the company [43] Question: Revenue cadence for Q3 versus Q4 - Management anticipates Q3 to be heavier in terms of revenue, with Q4 expected to be even stronger [44] Question: SG&A expense trends for the second half - Management hopes to maintain SG&A levels similar to Q2, without significant increases [46]