Q2 2021 Ideanomics Inc Earnings Call
[music].
Greetings and welcome to the idea Nymex second quarter 2021 earnings call.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Please note that this conference is being recorded.
I will now turn the conference over to our host Tony Sklar Senior Vice President of Investor Relations. Thank you you may begin.
Thank you operator, and welcome everybody to the idea and the IMAX second quarter 2021 earnings Conference call. Joining me today Im pleased to have Mr. Alf poor, our Chief Executive Officer, Ms. Christian Health, All our Chief revenue Officer, and Mr. Conor Mccarthy, our Chief Financial Officer, a webcast of <unk>.
Today's call will be archived and available in the events and presentations section of our corporate website for a minimum of 30 days and as a reminder, this conference is being recorded.
During the call we will make forward looking statements such as dialogue regarding our revenue expectations or forecasts for the quarters and full year fiscal year 2021, and 2022 related to our business. These statements are based on our current expectations and information available as of today and are subject to a variety of risks uncertainties and assumptions actual results may differ materially.
Really as a result of various risk factors that have been described in our periodic filings with the SEC.
As a result, we caution you against placing undue reliance on these forward looking statements. We assume no obligation to update any forward looking statement as a result of any new information or future events, except as required by law.
In addition, other risks are more fully described in the idea in <unk> public filings with the U S Securities and Exchange Commission, which can be viewed at www dot FCC dot Gov.
Today August 16, 2021, the company filed its 10-Q with the SEC and afterwards issued a press release announcing its financial results. So participants on this call who may not have already done so may wish to look at those documents as we provide a summary of the results on this call. The format for today's call will be as follows Mr. Alf poor, our CEO will speak to the company.
His overview business strategy and context around your activities and developments for the second quarter 2021 and into Q3, so far Ms. Christine household will speak to the company's second quarter revenues and further revenue opportunity growth opportunities missed.
Mr. Conor Mccarthy, our CFO will speak to the company's operating and financial results for the second quarter 2021.
It is now my pleasure to hand over the conversation to our CEO Mr. Alfred poor.
Thank you Tony and thank you everyone for joining our Q2 earnings call.
We're excited to be in front of our investor community today.
Come out of the blocks hot and fast in 2021, driving and upgrading all aspects of our business and this has us well positioned for the continued execution of our strategy.
Our genomics has continued to strengthen its business quarter over quarter and Q2 was another significant quarter for the company.
We operate two distinct business units.
Genomics mobility and autonomous capital.
And both are positioned to take advantage of the growth opportunities in their respective sectors.
Our M&A and investment strategy has remained steadfast and has brought some incredible companies and leadership teams into the economics Mcguffey family in 2021, including wave and Africa Electric <unk> hybrid EMP.
This gives our genomics the most complete offering to meet the need for commercial fleet operators and the transition to zero emission vehicles.
I will begin my update with the genomics mobility business unit.
The operating company functional here in the U S.
I don't know immix is executing on what we believe is one of the most compelling vertically integrated offerings in the EV sector.
We have best in class, leading technologies and.
And the talent required to leverage our presence in the most significant global market.
This coupled with innovative financing and cross selling opportunities are enabling us to unlock demand and fleet operators.
We're a global company with operations in several companies. So as I said I will start with a U S based operations in Hawaii.
Wireless inductive charging business.
Which is benefiting from assimilating into the art genomics family and we are seeing the uptick in orders and interest that we anticipated when making acquisition.
In terms of pipeline development, which Christopher will elaborate on.
Working with a number of transit authorities port systems, and commercial fleet operators, who recognize the advantages of utilizing high power wireless charging systems.
This has us confident we will achieve significant revenues from these types of commercial customers.
Fleet operators are also showing heightened interest and wife systems for use in conjunction with autonomous vehicles as wireless charging is a critical part of making driverless conventional fleets a reality.
In recognition of the incredible potential of why we're also investing in our IP and patent strategy for both the existing and future wife products.
We completed the acquisition of U S hybrid late in Q2, and this provides us with access to a very meaningful set of technologies and components from hydrogen fuel cells through to vehicle integration capabilities.
And we are preparing to help them scale their capacity to service both on Medici brand as well as developing their ability to service OEM partners at scale.
This is an outstanding acquisition.
Nomex mobility and likewise in Elektron is transformative for us as well as the value of its contributions to the broader group.
We also completed the acquisition of electric light in Q2, which means that genomics mobility.
Only made in America EV tractor in market at this time.
We have invested in an exceptional CEO and management team to help scale. This electric business to meet the market demand with Kristin will speak to shortly.
Our <unk> Division continues to work with OEM partners to bring a range of competitive proposed commercial vehicles to market.
With an emphasis on those commercial vehicles, which offer us attractive margins such as buses tour buses yard tractors trucks and other types of vehicles in the heavy commercial sector.
In addition to the OEM partner capabilities.
We're working to integrate wave and use hybrid capabilities into our vehicles and we anticipate having those vehicles in market in 2022.
We will begin to start to show some of the some of our social media channels and.
In the meantime, we will continue our marketing and Homologation efforts, which you will be seeing more work in the coming weeks and months ahead.
And so that and the first 125 kilowatt unit has been delivered through an OEM partner for integration into the <unk> product.
<unk> integration is an important milestone for future sales and the port warehousing markets and keeps us on schedule for our 2022 plants.
Looking at our overseas businesses Meg.
<unk> has been entirely reorganized in the first two quarters of the year and we are now referring to are deciding IMAX, China as we begin to extend the products and services available beyond mix current scope and offering.
Our progress and our introduction of the way charging system in China and this is in response to market interest.
The process for wife to enter the region will take us into 2022.
As high power charging systems are subject to local certification standards.
To help us market more broadly in Asia, we have developed new partnerships and other strategic OEM relationships and we are pleased with the level of interest in our vehicle procurement financing and now wave systems Comports transit authorities from commercial fleet operators.
The deal we had previously announced with BYD NPD for 2000 units of the D. One ride hailing vehicle is being restructured at this time.
The timing for proceeding was interrupted by conditions on the ground in the PRC.
We'll provide further updates in the future and in the meantime, the deposit to the steel remains held with BYD and will be satisfied in the future restructured deal.
And our two and three wheel businesses tree electric has be impacted on an ongoing basis from COVID-19, the delta very specifically.
But it's been able to make progress despite the challenges of the pandemic introduced and Chris both Kristen will elaborate further on that during her remarks.
Our investment in generic and in Africa has performed well with an increase in the value of the share price up around 70% since our investment based on our investing a 1780 from the stocks current trading range of three plus euros.
They continue to lead the EV performance motorbike industry globally.
We recently visited with the Magicka and fill television in Italy, and we are.
Pleased to report that both companies are building exceptional products for the performance market supported by what I would consider to be the strongest technical teams available anywhere globally.
And you will see from our recent announcements we concluded the investment into <unk>, which is a division of credible.
Chairman global tier one supplier of electronics and components for some of the world's largest automotive manufacturers.
The deal includes an agreement to be the exclusive distributor in North America for Pete.
In addition to the association with pedal, which is arguably among our strongest partnerships to date given the tier one OEM clients, but technology is best in class and will be an important entrance into the grid edge sector with energy storage in ultra high power smart charging systems, which can be deployed on the temporary semipermanent and permanent basis using a.
Blend of clean renewable and grid based energy.
This is an important product for the charter market and one which will be a key revenue driver for our new infrastructure division, which will be announced in the coming weeks.
I want to conclude the ni genomics mobility.
Division by stating that we have put together an exceptional offering across the full value chain of commercial <unk> zero emission vehicles.
This offers our shareholders the ability to participate in the tremendous potential of the entire commercial fleet sector with the added advantage of being diversified within a single stock.
We have purposely assembled over the course of the past couple of years and more specifically the past 12 months. The most comprehensive offering of EV assets anywhere globally, and we are now in the execution phase.
We'll be exciting times for the company and its shareholders coming into 2022 and beyond.
Our vision for the next 36 months is to help shape the future commercial fleet operations across the three key areas evolving as part of the transition into zero emission transportation.
Which are vehicles charging and energy and.
In addition to the reduction in carbon emissions and reduce total cost of ownership benefit versus gasoline and diesel by fleets. We are also introducing innovative financial products, which will enable fleet operators to switch their capital investment model from Capex to opex by offering charging as a service and vehicle as a service and also energy of the <unk>.
Service in deregulated markets.
We believe the shift from Capex to Opex will have a profound effect on fleet operators.
Accelerating the adoption of zero emission fleets by removing the obvious barrier to entry, but having to invest in new products and infrastructure.
Turning our attention to our genomics capital I want to start with <unk> also had a record quarter in Q1, a strong quarter in Q2.
Q3, after a strong start as well.
Christopher will speak more about the business and a segment.
But it's been a pleasure working with Cumulus team through the acquisition and the simulation into the ICU IMAX family and we have some exciting initiatives that will be working on in the coming weeks and months to further increase their revenue.
Including working with the MDI keep a sponge, which we recently invested in <unk>.
<unk>. This is a for profit fund with partnerships that more than 100 minority banks with Windows. Another initiative, we'll see our genomic keeping me off looking to help.
Northern communities through both cost savings and wealth creation, while bringing in revenue for <unk>. So we're excited to be working with the funds on such a meaningful project.
Delaware Board of trade or depot for short, it's going to relaunch later in the year as justly.
And impact investing platform focused on ESG based investments.
We will have more on that for you in the coming weeks, but I would like to share with you that we've recruited exceptional talent to come in and support the relaunched and I'm excited to see this project underway.
We have recently completed the follow on investment with <unk>. After the successful launch of the technology metals exchange. After a couple of months ago and many of the metals are helping to bring to market are essential for the development of the EV automotive and aerospace sectors and.
I am providing the supply and demand side for pricing discovery for base metals for the first time. He is going to help the market managed the ever increasing demand for increasingly important metals, such as India and renting them.
In addition to the increasing value of that business and in turn our genomics investment. This provides dynamics with informational access into the supply chain and pricing for the raw materials, which are becoming prominent in the markets. We are active in.
<unk> precious metals and batteries electric motors and hydrogen fuel cells the.
The insight into which helps inform planning and decision, making within our genomics mobility.
Tim two has the potential to become a market leader in the strength and the team has impressed us with their ability to navigate the launch of the platform, which included NASDAQ as their partner and the growth. We are currently experiencing.
As I have outlined today.
<unk> is an extremely privileged position I don't want to say a big thank you to everyone involved in helping us build a world class organization.
And that includes our of course, our large and diverse investor base.
Shane Mcmahon has recently taken on the role of chairman and it's coming to help us with the anticipated growth by bringing these energy these network and its public profile for the benefit of our genomics and its shareholders.
Good luck to say finally to our shareholders. Your interest in our business has provided us with the ability to pursue our strategy and we are both humbled and thankful for the tremendous investor support we received.
First and foremost for shareholders and I want to thank you for joining us on this journey as we enter the next phase of our business and unlock the full potential of our family of synergistic operating companies and deliver back to you the share price appreciation you joined this call.
Thank you again for joining us on today's call I will now hand, you over to Christian helpful. At genomics Chief revenue Officer.
Thank you al.
Joining IV and that makes it in the second quarter of 2021 as the Chief revenue Officer Manley I spent the majority of my time during the past 90 days meeting and working with our team developing our businesses identifying new and synergistic opportunities and executing our plan.
We acquired U S hybrid and select track towards the end of the quarter and I know both will be strong contributors to the future of IV Nymex.
We continue on the path toward leading worldwide transportation electrification and delivering on our commitment to build a company that offers outstanding solution in clean tech charging infrastructure components vehicles and financing to enable speed EV fleet adoption with the ads.
<unk> infrastructure Bill as a driver and IDEXX mobility is a beneficiary, we are very well positioned.
One of the joys of my role is that I can spend time at each of the businesses and our ecosystem.
Looking at the subsidiary level to strengthen these operating companies build their sales pipeline and deliver financial results.
For example, I recently had the opportunity to work with Doctor at Boston D. R. U S hybrid CEO and his leadership team to identify and pursue opportunities to commercialize their most popular products, which range from DC DC converters to hydrogen fuel cells.
As we look at the IV genomic mobility EV infrastructure business moving forward, we continue to expect strong growth in the U S positively propelled by favorable legislation from the by the administration.
Q2 was exceptional for weight, our wireless charging subsidiary with continued revenue improvement over Q1.
The team has been able to add much needed resources and worldwide demand for wireless charging is growing as companies recognize the benefits of installing waves charging infrastructure.
Our Salt Lake City based team has added engineering manufacturing sales and marketing resources Excel.
And at facilities and we now have a strong pipeline heading into Q3, accompanied by a growing multibillion dollar backlog.
Since joining <unk>, we have helped wave shift their strategy to open up new lines of revenue and new market.
Our goal is to have wave become the charger of choice.
It is abundantly clear that every major commercial vehicle manufacturer is committed to vehicle electrification and that plus the potential for autonomous vehicles make the wave product very attractive D.
These partners are drawn toward the safety and cleanliness from the elimination of messy cable, especially during a global pandemic.
With greater than 92% measured efficiency, coupled with the millions of vehicle miles and thousands of megawatts of power that have run through our many successful wave deployment, we expect aggressive adoption of this system across the transit port and commercial vehicle sectors with our sales pipeline today.
Exceeding $100 million.
For example, our source well win was significant as Wade is the only wireless provider and we expect this will positively impact our revenues for the next four to five years.
In Q2, IV Anomic purchased the balance of select Jack taking our ownership position from about 20% to 100%.
We have hired industry, but many ire as CEO and we are thrilled with his impact on the business.
He has spent his career in the tractor industry and his leadership has already allowed us to attract a team that is.
Mission aligned with vast and deep tractor knowledge. We currently have reservations for more than 100 tractors, which will deliver more than $3 million in revenue one fulfilled with the number growing steadily.
Launch of our new E 70, and model with wireless and there is strong demand throughout California for tractors. In this segment that are specifically designed with the narrow body and our powerful enough for commercial level farming and vineyard operation.
Select chocolate continued to marketed products directly but will benefit enormously in 2022 from work we are doing to establish a dealer and distributor network.
This aligns with how tractors are sold today.
Will help select profit achieve mainstream brand recognition, while we ramp our production capability.
We are hopeful that the current supply chain issues plaguing most of the hardware industry can be resolved quickly and that we will have a very strong finish in 2021 and rapid growth for <unk> in 2022 and beyond.
Our culture is a very large market, both domestically and globally and it's currently underserved for E. D. Our E tractor solutions are clean more powerful and offer a total cost of ownership.
A lower total cost of ownership, while protect protecting operators their employees and their surrounding some toxic greenhouse gas emission.
We intend to take full advantage of our first mover position to capture market share and build an exceptional brand, which every farmer, both large and small can rely on for zero emission performance and reliability.
The innovation engine at U S. Hybrid continues to have strong forward momentum.
In Q2, we were able to close on this acquisition and look forward to implementing a plan for commercializing many of their most popular products, while continuing to develop the EV future, including hydrogen fuel cells.
We are actively growing this team in response to anticipated market demand for their products.
As part of that growth, we are helping them to move into a facility close by which is nearly four times as large as their current headquarters location to facilitate the transformation of their business.
Already use hybrid has delivered a strong multibillion dollar backlog for the balance of 2021, and we expect our influence and investment into U S hybrid to begin bearing fruit from a commercial perspective in early 2022.
The second quarter was difficult for our two electric team in Malaysia.
That continues to ravage the country, leaving them in complete lockdown until vaccination rates increased significantly in the region.
Work continued slowly and carefully in our new showroom and on our new and in our New Assembly facility.
The tree electric management team has been using this time to identify new partners to expand and refresh our current vehicle offering.
Vaccination rates in Kuala Lumpur has surged in recent weeks, which makes US hopeful we can achieve significant delivery on our large existing contracts in Indonesia, Malaysia, and Thailand, while looking at expansion into adjacent markets like the Philippines.
That optimism is tempered by the Covid delta challenges throughout other ASEAN markets, and especially in Malaysia outside the capital.
We are targeting a strong finish to 2021 as this team returns just selling our two wheel bikes.
First 2000 vehicle units of the T 70 are arriving at our assembly facility between August and September which will allow us to move quickly towards that goal.
Our Medici Motor works Division continues to provide a significant opportunity for our team to homologate important commercial vehicles into the U S market and leverage our weight and U S hybrid technology.
We expect that we will have demo units in the market in 2022 and significant activity in 2012 to 24 months from two wheelers two yard tractors.
Our China team had a tremendously successful second quarter nearly doubling their revenues versus Q1.
As Al mentioned the deal we had previously announced with BYD and D. D. For 2000 units of the D. One vehicle is being restructured.
That said, we expect continued growth in both the E V ride hailing sector and several new initiatives that should impact the adient Omics, China revenue during the second half of the year.
Turning toward the IV gnomic capital business.
Despite a nationwide downturn in the refinancing market in Q2, which was mostly due to market uncertainty about short term interest rates and inflation was able to limit their decline during a quarter that was only slightly below the record Q1.
At the same time the organization took advantage of the emerging from Covid to launch a new revenue stream with their default division and growth in the appraisal division has been terrific moving forward I expect <unk> to continue their positive revenue trend with a focus on both new customer acquisition and existing <unk>.
Customer engagement for Q3, and Q4 as we anticipate sustained low interest rates to continue to fuel both new home sales and refinance markets.
In Q2 is our <unk> ecosystem expanded we continued to double down on our fundamentals around developing a strong pipeline delivering topline results and building backlog that focused activity will increase and continue into Q3 and beyond as we begin to look at preparation for 2022.
I also anticipate that the second half of the year, we will see our IV and Omics capital and IV and Omics mobility team working together to move metal well.
The business model for our customers from the Capex to Opex side, including vehicle as a service charging as a service and energy as a service.
We are working consistently to eliminate the barriers to entry for fleet electrification and will make available financing products that enable and promote commercial EV fleet adoption.
Recently, we have also begun looking at new programs to leverage our capital strength into our IV and Omics mobility business.
In addition to charging as a service and vehicle as a service opportunity. We are working with our partners at <unk> on a dealer floor plan program to help to expand our dealer footprint in the U S and at the same time make it easier for those dealers to finance motorcycles.
<unk> product is the best in the market and has high first mover demand, adding dealer points in the U S makes sense and we fully expect this financing model will be applicable to our select truck sector business.
As well as other pieces of our ecosystem, including three electric we expect the energy could dealer points in the U S to have strong interest in our three electric two wheel product once they are homologate it into this market.
<unk> continued to hire aggressively and align our sales business development and operations team to focus on driving cost out and achieving scale in the U S and across the markets we serve.
This effort was supported by ongoing investments in both human and working capital and we expect that trend to continue and grow during the second half of the year.
We consistently attract top talent the top talent required to help position our business for success.
With our HR and recruitment partners identifying and recruiting the best candidates, including strong leaders, who are excited to join the dynamic company that is making a difference.
Our synergistic organization is emerging from the operating companies we have brought together.
Moving forward Ivy and Omics mobility will deliver across a broad global footprint to nimbly address new markets with unique solutions.
Both products and services.
In addition to the commercial electric vehicle opportunity our organization is poised to go after.
A large portion of the worldwide charging infrastructure market, which be any up has a 190 billion in 2040.
We have already made exciting announcements in Q3, including new products like the <unk> 70, and electronics new opportunities like the multiyear source of all award it way and look to the future with the pedal with pedal Pia and our high power charging infrastructure opportunity.
All of these new products and services will take time to mature, but we expect to see strong positive movement, each quarter with more exciting announcements to come.
Finally, having successfully created an EV charging infrastructure business back in 2009, I'm very aware that one of the key to wide EV adoption is ubiquitous charging infrastructure availability that need is impacting almost all of our IV and omics mobility entities from wave two U S highbred to our.
New pedal P activity around hyper charging.
The addition of an end to end charging infrastructure company would help us to speed the adoption of many of our products and services, while better enabling our charging as a service and vehicle as a service offering. It would also provide nomex with a platform for some anticipated products around verticals, such as energy storage and software.
We are excited to move forward with the creation of this infrastructure and this initiative, which we will announce later in Q3.
In closing I expect that 2021 will be a very strong year for both IV and Omics mobility, and I dynamic capital our focus on delivery and scaling will remain and our story will continue to unfold positively and with clarity in Q3 and beyond.
I'll now hand, this over to our CFO Conor Mccarthy to detail our financial performance for Q2.2021.
Thank you Kristen.
The work done in 2020 laid the foundations for the acquisitions completed in the first six months of 2021, which give IV and Omics group, a synergistic businesses, providing commercial EV customers with end to end service to convert their fleets to EV.
During this quarter.
We had our sixth consecutive quarter of revenue growth. The revenue for this quarter was $33.2 million with a gross profit of $9.3 million.
First quarter included the revenues from U S hybrid <unk> powertrain business and from electric are attractive businesses.
Both businesses were acquired in June 'twenty, 'twenty, one and only contributed a small amount of revenue to the second quarter.
Yeah.
We ended the quarter with $396 million of cash on our balance sheet, which provides a deep pool of capital for investments in our genomics mobility.
Capital business units.
I would now like to discuss the financial performance in greater detail.
Revenue for the quarter was $33.2 million, which represents the sixth consecutive quarter of growth demonstrating the increasing strength of <unk> business.
Revenue from.
Excuse me revenue from electric vehicles was $6.1 million an increase of almost 10 times from the second quarter 2020 revenues.
$7 million.
Yeah.
Revenue from charging batteries and powertrains were $2.7 million for the second quarter.
Included a small amount of revenue from our U S. Hybrid acquisition that was completed in mid June revenue generated by <unk>, our tightened on escrow services business was $24.4 million.
Gross profit for the second quarter was $9.3 million, representing a gross margin of 28%.
This compares very favorably with the gross profit of $3 million and a margin of 55, 4% generated in the prior quarter.
Operating expense for the second quarter was $20 million as compared to $16.5 million in the prior quarter, an increase of $3.5 million.
Selling general and administrative expense was $13.1 million in the current quarter as compared to $6.7 million in the prior quarter.
<unk> expense was driven principally by the acquisition in the first quarter of this year of <unk> and ways.
And hiring in the U S corporate functions and in the China business.
Professional fees in the second quarter was $7.4 million as compared to $2.4 million for the prior period.
The growth was related to an increase in legal fees consulting services and Investor relations related expense.
Increase in legal fees was driven by advice of mergers and acquisitions.
Pumping to regulatory inquiries and advice in relation to the class action lawsuits.
The loss from operations was almost $10.7 million or <unk>.
Paired to $16.3 million in the prior period.
The loss from operations in the prior period, including impairment loss of $6.2 million.
Interest expense for the period was <unk> 6 million as compared to the prior period expense of $8.9 million.
Prior period expense included charges related to the application of U S. GAAP to the variable conversion prices have been outstanding convertible debt, which was repaid in full in 2020.
We recorded a net loss of $10.5 million as compared to a net loss of $26.4 million in the prior period.
Yeah.
To conclude the work and achievements over the past 18 months position <unk> to be a winner in the commercial EV sector.
During this quarter, we achieved a number of important milestones we have <unk>.
Ended the quarter with $396 million on our balance sheet providing.
A war chest of war chest to address the pipeline of attractive opportunities.
That exist.
Continued momentum in the business as evidenced by our sixth consecutive quarter over quarter of revenue growth and we completed U S hybrid and electric acquisitions further enhancing Ivy and Omics end to end solutions for commercial EV operators.
In summary, I believe that I do not like very well positioned to take advantage of the great opportunities ahead of us.
That concludes my remarks, I'll have to get back to you Tony.
Thank you so much calmer and that concludes management's prepared remarks, and I know that at this time. It is everybody's favorite time, our question and answer session. So operator, if you could just tell everybody how they're allowed to raise their hand that would be great. We'll give folks some time to get in the queue.
Thank you and at this time, we'll conduct a question and answer session to ask a question. Please press star one on your telephone keypad.
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Move your question Press Star followed by the number two we'll pause for a moment to poll for questions. Thank you.
Thank you. Our first question comes from Craig Irwin with Roth Capital Partners. Please state your question.
Hi, Good evening first I should say congratulations on the strong quarter really nice execution guys.
My question really.
Is about waves.
The EV charging space, such a hot space and you're the only one so visibly pushing inductive charging solution for for fleets and for municipal and commercial transit.
You guys had some big wins in the quarter.
Can you maybe frame out for us the breadth of the sales funnel that way. It was looking at these days and can you maybe clarify for US you know.
I understand it was fairly close to profitability is is this a business where youre pumping it with resources and maybe maybe.
That impacts a possible EBITDA contribution or or is this one of the one of the early.
E beam related businesses that gets to profitability for <unk>.
Thanks, Thanks, Craig for the question. It's a very good question I'll take the first part of it all on our Kristen a chief revenue officer to discuss the pipeline because she works directly with the business on a daily basis.
We are putting investment into them.
<unk> at this time, but we do anticipate it to be profitable within a really.
Relatively short timeframe.
When the business came to us it had a significant backlog and none of the balance sheet to be able to buy the components to surface that backlog. So that was the first thing we needed to do was to help get the product.
And our supply chain, bringing in the components and having enough components and stopped to fulfill that backlog.
And then start to grow the business with them, which Kristen it's been doing very.
Very aggressively.
I'll hand over to Christian now to speak more on the pipeline side of it because she touched on that within our remarks.
Thank you al.
I would say our three major focus is from a pipeline perspective are municipalities and their bus transportation, we have like usually successful deployment with the Antelope Valley Transit authority in Northern L. A county, where we have literally millions of miles and Oh thousands of megawatts.
Hours that have gone through that system and its multi year deployment.
And you know, we anticipate that system growing and that is serving as a template for the many other municipal deployments, we have and we expect that to continue to rollout, we're seeing municipal customers actually demand wave to start with which we find very exciting. We're also beginning our.
<unk> in multiple ports across the country with a you know are focused on certainly the west coast and East Coast ports.
And finally, our commercial customer activity really started a very quickly a last quarter with a number of customers coming to us.
That you know they just wanted to look at starting with wave and eliminating sort of cutting the cord. So to speak. So we expect that activity to continue and that's really helped us to build up more than 100 million sales pipeline and we expect that also to continue to grow throughout Q3 and Q4.
Sure.
Thank you for that.
My second question is about to me us. So this has been a really nice revenue contribution to the company in.
No I understand it's also pushing some cash flows which is which is always positive.
You have been quite conservative about.
The the linearity of the revenue contribution given its property related.
Business activity can you clarify for us.
Do you expect this business to maybe see a little bit of a cooling off as we see the real estate markets cooling off into the back end of the year or you know are similar levels of cash flow and EBITDA contribution probable over the next number of months.
We did see after the first quarter, Craig and its a good question we did see.
The hesitancy in the market to understand where inflation was going cause the interest rates. Despite slightly for a couple of months and of course now they're back down again in record lows, but.
A large part of them.
<unk> revenue is from the refinance business.
Five businesses, we like to call. It. So they did start to see some slowdown in that because that is a very interest rate driven business.
People are obviously looking to cut their rates and cut their payment or get cash out of their.
Home without increasing their right so.
We did see we did see some a little bit of softening there. It seems to have recovered fully in the meantime.
But that isn't interest rate driven business.
Because that's the majority of that revenue as the refi business.
Really encourage them to invest in the mortgage purchase business.
And also develop their appraisal business on the depot business as well.
Chris mentioned in our comments the depot business from the appraisal business starting to grow quite quickly.
So we anticipate bringing in those diverse revenue stream. So it's not so dependent on refi, but should allow the business to continue to grow its revenue base.
We will always keep the business profitable it has the ability to.
Contract and expand along with the economy.
So we wouldnt convincing.
And based on the situation where it wasn't profitable.
Certainly with historically low rates now.
We would expect to continue to see them to continue to develop the revenue as I said I don't know if you have any further comments Kristen.
No I I do think though that the <unk> team, which is very nimble and agile has been you know continuing to look at new market you know, they're continuing to look and see where that can expand they're also looking at you know expanding their relationship and with Covid are ending you know really agree.
<unk> pursuing some new customers so.
It is the team that works hard and smart to grow the business and you know I expect that.
Whatever the market contraction and gross.
Temenos will be at the very top of performance of that.
Thank you for that so jumping back to commercial electric vehicles for my last question if I may.
Really exciting acquisition and use high res congratulations on getting that done.
Can you maybe talk a little bit about the potential for product announcements as far as specific repeat products.
Or or technology packages that you would be looking to supply either internally or externally from this business you know how do we see the commercial development here.
Now you're building on this history.
That's pretty amazing actually use hybrid.
But it hasnt been sort of focused on commercialization.
How should we look about that transition over the next few quarters and visibility for what the revenue potential is there.
Okay.
Thank you Craig I think that that is a really good question and you're right U S. H is one of our most exciting you know acquisition.
What we've been focusing on now is USA channel a lot of products that had strong customer demand.
Which they were never able to essentially have product on the shelf ready to fulfill it and were immediately trying to change that.
The situation into one where you know buy we're hoping by Q4 or early 2022 Ah. If you show up in one of their most popular products D. C. D C converter or some of their other offerings.
You know if you order them you can get them and we're looking to put a complete commercial team in place to not only develop these products, but develop the ones that we know.
Their customer base, and they're expanding customer base are going to want and we hope to that will and cute that will quickly in Q include our fuel cells.
We see a lot of demand for our fuel cell products across the board and you know we plan to absolutely be part of that fuel cell future and offer those products in a commercial way.
Great and I would just add to that too just to echo Chris' comments in the prepared remarks Craig.
We were able to find a.
And expanded premises for hybrid in the same part of L. A where they currently buy so we kept them in the same neighborhood, but the new facility much more modern four times the size. So we're going to be able to help them grow those those production lines and other things. So as Kristin said, so we can start to.
To fulfill the order demand, but there is for the for their products and their technology.
Okay that actually that bridges to an area that I just wanted to follow up on right. You know the revenue visibility over the next few years. If you go into parts of the floor space can we expect the potential to probably be.
Our mid to upper single digit multiple on sort of where they've been.
If they knocked the cover off the ball.
Do you want to take that one Cristina Sheila.
You can go ahead.
Our children.
Yes.
If we look at if we look at acquisitions like why you can do with hybrid. These are really critical technologies for what is happening now in the U K.
So the the upside potential for these businesses is is quite dramatic in a positive way.
We believe businesses like.
Likes you as hybrid like wave, which without the public company.
System without the public companies have the balance sheet.
Mid to upper seven figure businesses, obviously, what we want to see ourselves too quickly transform them into eight figure revenue businesses, and then onto nine figure revenue businesses and potentially beyond that as well. If you look at hybrid as we said we are seeing just tremendous.
<unk> is coming in for that product.
I must be all with wave and I think theres an opportunity therefore for them.
As I mentioned in my remarks for U S hybrid to become a tier one supplier to global Oems.
And I would.
I just would add to that that the demand for wave is a worldwide demand. You know are you know from China to Europe to Latam to the U S. I mean, you know this is just a you know a product that people understand has to be part of the future of electrification. So I do not see.
I see that business growing very quickly over the years and as we are able to expand into these new markets to really be able to conquer those as well.
Excellent congratulations on the progress I'll hop back in the queue and let other people ask.
Thank you.
Our next question comes from Damon Sultan. Please go ahead with your question.
Thank you good afternoon, often Kristen how are you doing.
Good afternoon, how are you.
Alright, so thanks for taking my question and congratulations on the quarter I was wondering if you could elaborate on the sales pipeline that was mentioned could you explain how the company came up with the $100 million figure.
This doesn't include adding an IMAX China.
And could you also elaborate on Audi and Omics Charles pipeline.
<unk> mentioned in prior conference calls from 2020, specifically.
Specifically, what's the status of some of the big ticket items in that particular pipeline.
Sure I wouldn't start with you I can I could go the way of pipeline.
You know we as most companies do have a you know a very active sales team who are accumulating opportunities are both a commercial opportunities our expansion of our current municipal ports and commercial opportunities and also.
Looking are beginning to look at other markets, but the 100 million that I referred to is strictly a north American opportunities are categorized AR.
And these are the ones that we have you know highly in development. So these aren't one where people are making initial inquiries. These are ones that are have been heavily qualified.
And when you say that 100 million are these things that have been secured or are these.
Anticipated contracts.
Anticipated contracts and secured.
And as it relates to <unk>.
On to China.
I know there was.
Some information provided last year regarding that particular pipeline.
Buses mining vehicles things like that what is the status of that particular pipeline.
Yeah. Thanks, that's a really interesting conversation as you can see we continue to.
To be able to readily financed the smaller ticket items, which are the.
The taxes.
One of the challenges in the China market has been.
Putting in place the financial products in a highly regulated market, which is difficult to navigate for some of the larger orders that we have.
We've engaged some expert consultants and legal teams on the ground, but we're trying to do.
To come up with the right products that can help us on block some of those orders.
But as of this time, it's very difficult to get financing in place for the larger ticket items in China. We've been working for several years as you know China's financial landscape that you've seen for some large prominent.
Public companies for the base set of China continues to change and.
We continue to work with the fleet operators, the ports and others, who have interest in purchasing those vehicles to find the right solution for them.
Thank you.
And our next question comes from Robert Wheeler with the Corn management partners. Please state your question.
Thank you all for the presentation. My question regards the financing of the company and your relationship now with Cantor Fitzgerald I can you add a little color on how that relationship developed and what made you choose cancer to run your ATM.
Yeah.
Yeah, absolutely. Thank you it's a very good question.
The reason that.
We've been talking to several of the high Street for the Wall Street banks.
We did kind of Fitzgerald is obviously there is an interesting dynamic from what we're doing from that side.
And then our thought there was an interest to to look at companies that could help us with our exposure to institutional funds.
Traditionally had a very large retail audience, which we which we love.
It gives us tremendous liquidity in the stock, but obviously as we start to scale and grow our business.
We do need to get more institutional investors into the.
So we've we joined the Russell.
And this is again this year, that's brought some institutional and on top of what we already had but generally speaking part of within the Companys profile product starting to garner that share price appreciation that we know we can achieve with the businesses. We have now is getting a closer connection to wall Street and intend to Fitzgerald is its an excellent.
And we were able to.
Our work with them to get the ATM in place then.
That should see us bring in additional.
Institutional investors.
Thank you Bill.
Thank you our next question comes from.
Robert Key tougher. Please go ahead with your question.
I have of course concerning.
Well the truck.
Is there any possibility in the future to design manufacturer zero turn commercial lawnmowers.
At the lower end EV vehicle.
Because I did some research and Deere and parole board.
Currently produced in those products. Thank you.
So that's a really interesting question, which many io where on the cole with especially Europe.
Electric cars.
I'd Echo some of what he's represented too for.
So the management team of economics as well.
There's two reasons for wanting to move into that market.
It's a very large.
Market in terms of sales revenues.
But the second part of it is.
I don't know if anybody is aware, but typically.
The industrial loan care products for the route that the landscapers and others use.
Have no emissions regulations on that whatsoever and Europe.
Average commercial grade landscape ignore moa actually skews out way more diesel particles.
On a truck does.
So there's an environmental reason to pursue that and then there's a business reason to pursue it as well, but these are areas that many IR understands very well and and he wants to he wants to take a good look at those that area of business and see if that's something for electric cars.
Break into certainly we have the skills in terms of engineering and production capacity to make those types of vehicles. So it.
It will be managed decision along with the <unk> management team, but it's an area that you certainly expressed interest in.
Not to mention at this point in time, we're going to have electronic use hybrid way.
The gnomic mobility at the Act conference.
In Los Angeles at the end of this month.
Into early September a few days before labor day, but thats, a good opportunity to come and meet this electric team and in our other operating companies and understand their products on what they are producing both today and for the future.
Yeah.
Thank you for your response.
Thank you.
There are no further questions at this time I will turn it back to Mr. Tony Sklar for closing remarks. Thank you.
Thank you very much operator, I appreciate that and just just one I'm just going to hand, it back for Kristian for one more one more time to talk about our AG conference and our fall conference lineup to some of the exciting things that we're gonna be speaking about.
Thank you Tony as Al mentioned, we are going to be at the Act conference it'll be the debut of our.
Our multi company synergistic display, including select track you as hybrid way than others. We expect to take that act on the road later in the fall both in the U S. At a number of conferences, where we all are of course rollout the synergistic display at the move conference.
And often but also you know each of our individual operating companies will begin attending conferences with wave are going through a number of places our income, including municipal bus conferences and our U S agents electric during the same Ah I also expect our international participation.
For some of these folks are.
In both Asia, and Europe going forward in the fall. So we expect a strong finish in 2021 and lots of exposure for our companies are moving forward.
Thank you. Thank you so much and take Q2 all of our C suite your prepared remarks today and for the questions and answers. This is all the time that we have for today and this concludes the <unk> second quarter 2021 investors conference call. We encourage our community to continue to reach out to us and we can.
Answer any of your questions that you have individually you can send your questions to us at IR at <unk> Dot com, Although I know many of you have that on your speed email list, but we'd like to thank all of our listeners shareholders analysts and others, who would take the time to listen to our earnings call. We urge you to refer to our latest SEC filings for any of the information that you need.
This call will be available on our website in the investors section when we can find the link there to be alerted to news events and other information in a timely manner. We recommend you following us on social media channels sign up for our newsletter and explore our website at www Dot <unk> Dot com. Thank you everyone for participating and listening on the call today.
Thank you. This concludes today's conference all parties may disconnect have a great day.