Q3 2021 Pioneer Power Solutions Inc Earnings Call

Good day and welcome to the Pioneer Power Solutions, Inc. Third quarter 2021 earnings results call. Today's conference is being recorded at this time I would like to turn the conference over to Brett Maas from Me then IR. Please go ahead Sir.

Thank you and welcome everyone.

Today will be hosted by Nathan Maverick, Chairman and Chief Executive Officer, and Walter <unk>.

<unk> Chief Financial Officer also on the call today are Joe bracket.

The company recently launched Pinar Palomar Beverly business unit.

So all of this discussion will be a Q&A session open to participants on the call. We appreciate the opportunity to review the third quarter results and discuss recent business highlights before we get started in your minds. This call's being recorded and webcast. The text of marriages prepared remarks will be made available later on the company's website. During this call will make forward looking statements. These statements are based on our current expectations and assumptions and are subject to risks and uncertainties.

They could cause actual results to differ materially.

Or to the cautionary text regarding forward looking statements contained in the earnings release issued earlier today and in the posted version prepared remarks, both of which apply to the content to call them.

Now I'd like to turn the call over Nathan Maverick, Chairman and CEO Nathan. Please go ahead.

Thank you Brad good afternoon. Good evening I am pleased to update you on the progress of our strategic shift to concentrate on products and services that directly respond to the rapidly growing distributed generation and electric vehicle charging markets. We are successfully leveraging decades of power solution experience.

By applying it to the design and manufacture of unique and innovative products for the aforementioned markets earlier. This year, we introduced E block a compact integrated outdoor system that allows end users to add and control multiple sources of electrical energy.

Most recent quarter, we successfully delivered in excess of $1.8 million of E block product and related equipment. The current backlog for E. Black products is strong and growing with the majority of shipments scheduled for the first half of 2022.

Last week, we introduced E boost our portfolio of low carbon mobile charging solutions and is initially comprised of three products E boost.

The goat G O H T generate around a truck is a truck mounted option that brings on demand high capacity charging to EV truck and car owners at any convenient location.

It boosts mobile is a trailer mounted solution that provides multiple options for towing and can be available at specific businesses large sports and cultural events and relocated with minimal effort on short notice. He boost pod is a stationary EV charging solution with customize them.

We'll hire capacity that can also service other power it needs, especially in emergency situations, such as a power outage, serving as a backup power source with convenient power connectors and outlets available on board.

The timely launch and introduction of these products have rewarded pioneer with significant sales and overwhelming interest from the various vertical markets.

We believe our early entry and the uniqueness of these products will allow us to capture a significant share of these new and fast growing addressable markets with that let me turn the call over to Walter to discuss our most recent quarters financial results.

Thank you Nathan and good afternoon, everyone.

Revenues were $5 7 million for the third quarter of 2021.

Up 40% year over year comparisons and $4 1 million in the third quarter of 2020.

The increase was primarily driven by an increase in sales of our switchgear equipment.

Revenue from our switchgear product lines increased by $1 5 million were approximately a 100% compared to the same period last year. As a result of increased sales of our automatic transfer switches and our medium voltage switchgear equipment.

Gross profit for the third quarter of 2021 with 713000.

Or roughly 13% of revenues compared to 739000.

Or approximately 18% of revenues in a year ago quarters.

The decline in gross profit and gross margin was primarily due to a higher cost of goods.

As a result of global supply chain challenges, a tighter labor market and inflationary pressures.

Our operating loss for the third quarter of 2021 was 518000, an increase of roughly 15% when compared to an operating loss of 451000 in the third.

Third quarter of 2020.

Net loss for the third quarter of 2021 was 434000.

We're negative 5% I'm, sorry, our negative five cents per basic and diluted share.

<unk> to net income of $1 3 million or 15 cents per basic and diluted share in the year ago quarter.

Now turning to the nine month financial results for the period ended September 32021.

Revenues for the nine months were $14 8 million compared to $14 $1 million in the comparable period of 2020, an increase of approximately 5%.

This increase is largely the result of an increase in sales of our switchgear equipment.

For the nine months ended September 30th 2021, our gross profit was $1 4 million.

We're 9% of revenues, an increase of 120% when compared to a gross profit of 618000.

Or four 4% of revenues in the year ago period.

Operating loss for the first nine months of 2021.

Improved by $1 million to a loss of <unk>.

Compared to a loss of $2 4 million.

To an operating loss of $3 4 million in a year ago period.

Net loss was 769000.

Were negative nine per basic and diluted share.

Compared to a net loss of $2 2 million or negative <unk> 26 cents per basic and diluted share in the year ago period.

Turning to the consolidated balance sheets and statements of cash flows.

We had cash including restricted cash was $5 1 million and no bank debt at September 30th 2021.

Compared to cash of $7 6 million and debt of $1 4 million at December 31, 2020.

Subsequent to the end of the third quarter, we strengthened our balance sheet with $8 7 million in net proceeds from the sales of common stock at an average price of approximately $10.13 per share under the ATM program.

We intend to use the net proceeds from this recent sale of its common stock for general corporate purposes, which may include among other things working capital and our capital expenditures.

We may also use the proceeds to fund acquisitions of businesses technologies or product lines that complement our current business.

This concludes our prepared remarks before I turn the call back to the operator I will note for the questions and answer period that we do have on the line with US Mr. G. M. Merrick in who is the president and leader of the pioneer power mobility business, which is the home for the recently launched IPU.

Suite of products.

Operator.

Back to you for questions.

Thank you, ladies and gentlemen, if you'd like to ask a question. Please signal by pressing star one of them is telephone keypad.

If you're using a speaker phone. Please make sure. Your mute function is turned off probably you can retire equipment again press star one to ask a question, we'll pause for just a moment to allow everyone an opportunity to signal for questions.

Once again, ladies and gentlemen, if you'd like to ask a question. Please press the star followed by the one and if you're using a speaker phone. Please make sure. Your mute function is turned off play your signal to reach our equipment.

That doesn't appear to be any questions on the phones at this time. Please continue.

Okay. Thank you Ron.

Thank you all for your time and support and we look forward to updating you again on our next call.

Ladies and gentlemen, this concludes today's call. Thank you for your participation and you may now disconnect your lines.

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