Q4 2021, Q1 and Q2 2022 Ideanomics Inc Earnings Call
Okay.
Yes.
Was it all back together welcome to the <unk>.
No. It makes an Investor earnings conference call at this time, all participants are in a listen only mode.
<unk> remarks, and introductions I would like to turn the call over to Tony Sklar, Senior Vice President of Investor Relations.
Please go ahead Sir.
Thank you very much and thank you everyone for many different time zones for joining us to stay on the IV and on this conference call. Joining me today as well I am pleased to have Mr off what the Chief Executive Officer, Mr. Bob Nokia the President of I D and Alex mobility, Mr. Conor Mccarthy, Chief Financial Officer, and we've got some special guests for you.
On today's call Mr. Bob Yourself E. L E Motors and of course, the great mixing cipollini linear to the many of the C E O.
Okay.
A webcast of today's call will be archived and available on the events and presentations section of the corporate website for a minimum of 30 days as a reminder, this conference call is being recorded during the call. We will make forward looking statements such as dialogue regarding our revenue expectations or forecast for the remaining quarters and the full fiscal year for 2022 and 2023.
These statements are based off of 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 as a result of various risk factors that have been described in our periodic filings. Yes, you see as a result, we caution you against placing undue reliance on these statements we assume no obligation for Nick.
Any update to the forward looking statement as a result of any new information or future events, except as required by law. In addition to other risks are more fully described in the <unk> public filings with the U S Securities and Exchange Commission, which can be found at www Dot S. E C Dot Gov.
September nine 2022, the company has filed with the SEC form 10, Qs for Q1, and Q2 2022, which was a follow on from the company's filing its Form 10-K reporting its Q4 and full year 2021 resolved on September 2nd 2022 Afterwards, the company issued press releases announcing the financial results. So.
Participants on this call with me not already done so may wish to Whit, we wish to look at those documents as we provide a summary of those results on this call.
The format for today's call will be as follows Mr. Alf poor, we'll begin our comments today and speak to the Companys progress and strategic development. Mr. Baber Mackie will speak to the company's operating activities in mobility and the progress made since our last earnings calls, including remarks from our special guest today today on the call with me some linear cipollini allergic tie in of course.
Mr. BOP yourself E L F via Motors Mr.
Mr. Conor Mccarthy will speak to the company's operating and financial results for 2021, and the first two quarters of 2022, and then once again, Mr. Al what will make management's closing remarks, which will be followed by our Q&A.
It is now my pleasure to hand over the floor to Mr. Alf poor Ivy and Alex C E O.
Thank you Tony.
Good morning, everyone and thank you for joining our earnings call.
Been a long time since we're able to properly address our investor community.
Like to thank all of our shareholders for their patience this year.
We will put in an unfortunate position, but we had to take decisive measures to appoint a new audit firm in July of this year.
We did this to ensure we could conclude I rolled it in the timeframe that protected the company and its shareholders.
Thanks for Grassi and thanks to our other accounting advisers and our finance team.
Their support and dedication in what was an enormous effort for all involved.
Having not just the working week, but also have many nights and weekends to help us restore our ability to make timely filings going forward.
Putting that behind us I am delighted to welcome you all because it's very important results presentation.
I didn't know immix is at the forefront of VEB with mature products technologies and the talent to stand out in a crowded industry.
In the coming weeks, we're going to be asking our shareholders to support us in completing the be emotive transaction that will expand the ideal mix family further.
This deal brings full OEM capabilities throughout group new vehicle classes.
Partnering with the via management opens up the market further Friday mom expenditure holders.
Over the last two years, we have moved aggressively to transform our business.
And as a result, we have maturing onshore revenues to reflect the successful changes we made through both organic and acquisition led growth.
Our story today and into the future continues to be one of growth.
In terms of products with strong market growth.
In terms of revenues and growth in terms of order pipeline across their businesses.
We have reached this point thanks to the efforts of the entire Autonomics team.
And I, thank them for that I.
I would particularly like to mention at this time our team members in Ukraine. They.
They have been under an immense amount of duress over these past few months and we are grateful for all that they do Friday omics.
As you'll hear from Robyn Mackie shortly.
Some of our key brands, such as electric and the magic that are already experiencing growth.
Currently every vehicle that they can produce is already solved.
So we're seeing strong demand for our products.
Via Motors is finalizing its plans for selecting a home for its production facilities with class leading vehicles that are going to be in high demand and the fast growing local delivery sector.
Our energy and charging products are seeing demand across the board.
<unk> began investing in the infrastructure the need to keep their vehicles on the road.
And I genomics is supporting the financing of our vehicle and charging products with a range of leasing a pioneering as the service programs through our genomics capital.
On the accounting side, you'll see a number of impairments in our 10-K numbers, which kannan will take you through shortly these.
These are a reflection of the general pullback in the <unk> sector, and the resulting valuation adjustments, we've taken primarily against goodwill and intangible assets.
I want to emphasize that these are non cash GAAP accounting adjustments that management considered appropriate given EV valuations in the public markets.
Despite those valuation adjustments, which we consider part of the ebb and flow of economic cycles, we continue to invest in our businesses and the underlying technologies that we consider differentiate our products and deliver value to our customer audience.
Ultimately I Didnt know VIX futures based on its customers want for me.
We have frequent customer validation from the benefit of bringing vehicles charging and financing solutions under one roof.
We are excited to work with us because we are the only one stop partner to reduce the complexity they have to navigate around the commercial adoption of electric vehicles.
Thanks for that customer centric business model I expect the only growth as our operations mature and the industry expands from the inflation reduction Act an infrastructure Bill.
Andrew over to Robin now for further remarks on the progress we're seeing within our <unk> businesses.
Thank you well I want to begin my remarks by saying its a privilege to work with all of the amazing companies that way.
And the idea of nomex firmly the people the technology the products. We deliver are all understanding on the last 12 months I'm sorry officially joined the company have been and continue to be very exciting.
This year, our key objective of mine has been execution.
I didn't know next delivers value to its shareholders.
As part of this focus we have been encouraging collaboration across the organization.
Improving planning forecasting and implementing cost controls, ensuring our investors capital just being applied where it can be most effective in generating long term value.
As a result of this focus we've been consistently growing our E&P related revenue, which includes charging batteries and related services.
You'll see in our filings that in 2020, we reported just under $20 million at ADP revenue.
In 2021.
Really doubled to $39 $9 million.
And just the first two quarters of this year, we've already surpassed our 2021 figure with just over $40 million of EV related revenue and we're expecting further growth in 2023.
As Al mentioned, we have continued to evolve our organization based on our customer needs.
So we know a market our EV products through three primary channels.
And I'll make some mobility.
Capital and energy.
How do you know what makes mobility is a whole mix of our commercial vehicle products and technologies.
The core market segments, we target for off highway.
On highway on two wheelers.
In the off highway segment, we're seeing tremendous progress from Selectric, our electric tractor company.
Expanded their dealer networks and important agricultural markets, including California.
Southeast the Midwest and the Pacific Northwest and this work is paying off.
And just quarter, one and quarter two of this year selectric nearly doubled its full year 2021 revenue.
And barring major supply chain challenges through the end of this year 2022 is on track for even greater revenue growth versus 2021 with consistent revenue expected in quarter three quarter four.
Further the company plans to offer models with the first being introduced by quarter. Three 2023, we anticipate some electronics business continuing to grow as it requires new equipment to increase its throughput and with an ex protection of doubling its revenues in 2023.
Okay.
In our on highway of last mile delivery segment, we anticipate via playing a major role once the transaction is completed bolt Purcell will speak in more detail about the progress with you in a few minutes.
U S hybrid how to change the management earlier this year and under the stewardship of its new interim CEO Lacy. The shoddy is gaining further traction in the specialist vehicle market with increasing sales to GGP and existing customer that provides street sweeper technologies and interest from markets and cargo handling such as ports on Earth.
Of course on the launch of its parallel hybrid natural gas powertrain for trades and long haul trucks.
Additionally, U S hybrids fuel cell division is seeing an increased interest in the hydrogen fuel cell engine technology for a range extender applications.
We anticipate this interest to represent increased quarter over quarter revenue growth for U S hybrid in the latter half of this year.
For the revenue to more than double in 2023.
Given this expanded presence in our specialist vehicle market and shifts and geopolitical landscape favoring made in the U S vehicles, we have decided to incorporate mcgeachy into U S lipid specialist vehicles division.
Our two Wheeler segment has been enjoying some excellent growth as well.
You'll be hearing from Bolivia Civil OE. Shortly <unk> has been expanding its theater network and its product line.
It is also expanding its production facilities to produce more but smaller bikes to meet market demand.
This is resulting in strong revenue growth.
Portray electric we anticipate large orders in Indonesia.
Figure to experience delays we.
We are meeting with representatives from the Indonesian government in New York later this month to discuss this on other opportunities.
With their help and with the <unk> technology, we're looking to update three electrics offering and finally on law and order interest and the ASEAN market.
As far as our company has transitioned from being early stage of a project orientated to being product focus we have begun to invest in series production facilities on the supply chain to support increased volume.
The associated management disciplines.
Placed us in a position to better predict future production levels in revenues as evidenced by both electric and allergic as anticipated future growth.
Next I'd like to discuss that economics capital.
Acquiring electric vehicles, and installing charging infrastructure is capital intensive.
Most customers prefer not to employ capital to support the transition to a REIT I would prefer to see the costs as part of an operating expense.
I Didnt Omics capital will make this possible.
Our capital team is focused on helping customers to navigate the complex process of financing both equipment and vehicles by moving the expense from Capex to Opex. So they can electrify today.
By using as a service models, we plan to secure predictable recurring revenues with long term subscriptions.
We've begun seeing increased interest in these kinds of service models, which I will speak more about in a few minutes.
And finally, how do you know what makes energy we began development of a variety of Omics energy earlier this year and it is on plan with several subscription based projects already secured with several more in the pipeline for 2023.
We're seeing strong interest from commercial vehicle dealerships hotel and hospitality venues and fleet operators looking for support and planning installation and financing of their charging of energy equivalent.
We anticipate agronomics energy signing a number of new as a service deals that require some upfront planning and installation effort and costs, but will represent predictable recurring revenue in 2023 and beyond.
How do you know what makes energy offers turnkey charging storage and generation solutions from our in House technologies and third part third Party partners.
These solutions include high power wireless charging from wave and bold new concepts like containerized DC fast charging from our P. A investment.
A recent example of this early progress it's a nice partnership with coast turnkey Peterbilt.
A group of Peterbilt truck dealerships with California.
I didn't know it makes energy will provide energy generation storage of D. C fast charging to several of their locations financed by I don't know it makes capital.
I'd like to expand a little on waves progress to date wave continues its transition from being a project based technology development business underpinned by federal funding to a business working directly with customers on commercial deployments.
The primary market focus away from being transit tour operators, and it's now expanding into logistics industry showcasing its perpetual operations advantage over cable based charging.
It is expected that the passing of the infection reduction Act will accelerate these customer adoption of this groundbreaking technology.
Wave is typically seen at 12 to 18 months sales cycle for new customers. So based on our efforts over the last year, we're expecting to see an increase in wafer revenue in the later quarters of this year and anticipate wave revenue to more than double in 2023.
One example of this progress is a proof of concept project way with secure with a well known E Commerce company.
We're planning the timing to showcase the project with an announcement in conjunction with the customer in the future.
But I'm pleased to inform you the deal is signed.
The option to scale the project.
Two additional facilities and represents proof of the applicability of our as a service model.
It will involve the customer using wave in a local way as part of a distribution center operations underpinned by an as a service business model.
Waves charging operators and vehicles for car Oems and vehicle classes outside of our offering will be provided to the customer underwritten by ideas all makes capital on a subscription basis for a fixed monthly fee per vehicle.
This is the future direction of vehicle financing and flexible fleet management operations with a fleet operator, providing only the energy of the driver.
Mix is at the forefront of this TV innovation.
By organizing our business into three verticals mobility capital and energy and leveraging technology and Knowhow from our individual companies. We are beginning to see the collaboration of all between organizations unlocking the full potential of <unk>.
<unk> vision for ideas all mix.
I'd like to share a few examples.
First selectric identified the critical business need to increased tractor visibility on showroom floors. It partnered with ideal image capital to create an attractive dealer floor plan financing program result is enhanced electric visibility, which as I mentioned earlier, that's resulted in significantly increased sales.
Next like our peers in the industry, we've been affected by select supply chain shortages I didn't know what makes uses our experienced and purchasing power to help our operating companies better navigate the supply chain.
Having an experienced centralized supply chain team will continue to do to help our operating companies to navigate these challenging times in a cost effective way.
Finally, while the first two examples where more short term tactical in nature, but nevertheless important I wanted to provide a glimpse into a longer term strategic initiatives.
Part of our objective in acquiring them their checkout was to leverage the proprietary technologies and experience as a new line of business in.
We alert you get engineering team has already begun to work with select trying to develop its next generation of tractors.
<unk> proprietary motor in furniture vehicle control control units on battery systems will be a unique advantage just electric's new tractor development programs.
So that track and a nurse working together on this project in conjunction with ergonomics, new invoice automotive and industrial design team.
The images you see on the screen are just a glimpse into the work the teams have been developing together.
These are the first of several collaborative initiatives across the already enormous foundry I'm excited to be able to speak more about these in the coming quarters.
These are the first of several collaborative initiatives Yeah, you know what makes family.
I am excited to be able to speak more about this in the coming quarters before I end my remarks, I've already mentioned some of the externalities like supply chain that will continue to affect our business and the entire industry for the foreseeable future.
As part of managing these externalities and ensuring we are being good stewards of our investors' capital we've been engaging in a rigorous cost control exercise across the company ensuring that our capital is being used will be most effective in generating value and return on investment.
Even as we see the supply chain and begin to recover we need to be careful not to overcommit and ensure we continue to be good stewards of capital.
With that I'd like to introduce Livia said Maloney CEO for nerve chicken.
Olivia once support supposed to join US live for this call, but unfortunately tested positive for Covid and silver recorded this update for us in advance I wish you, a swift and complete recovery.
Olivia.
Thank you Robyn.
Joining me today to speak about.
Some of the progress we've made.
And then in Q1.
Over the last few months, we havent greatly expand.
In the U S.
And then on the one one.
And then.
Yes.
Yes.
Uh huh.
First half.
We have nearly doubled our revenue.
For the first half of 'twenty.
Got it.
That's fine.
We are beginning to work with.
Oh boy.
And we are developing Joanne.
Yes.
Got it.
And they've got one here with Mike.
Yeah, I agree to that that like Hawaii.
Of my those offers.
And faster.
Yeah.
On the market.
The long term.
Yes.
It is sitting right here.
Motorcycle crash.
And then there's the matter.
Mike We have let me see.
Of these model alone.
So what are the expansion of our production capacity to support the demand.
Like the rest of it.
And that's been a challenge.
The company has only be available in limited quantities, while we continue to wisely.
Again, Alex team, that's what you're asking.
These challenges as they arise.
And then Robin nation, our plasma products that this is the first project.
And it's a business that is taking our wireless technologies and applying them to other msas.
So I think we didn't add.
Perfect.
I'm excited to see our technology applies to the new taxes.
Yeah.
We have seen strong interest from several other markets, including either space in that arena.
Motorcycle noncompete.
No competing pad, that's looking to apply an antitrust technology today and I. Thank you for your kitchen project.
In closing.
What our team has accomplished to date.
And looking for what you are baking you more about our progress in the kind of what that.
Thank you for your time today, I hand, the conversation back to Bobby.
Thanks, Olivia I would now like to introduce both per cell C E O via motors.
Thank you Robyn.
Well since our last Investor update call in June we've continued to work towards building, our preproduction prototype vehicles and have begun preparation to move forward towards manufacturing, both our modular skateboard and our vehicles.
I wanted to share a few specific updates with you on that process.
We have further strengthened the executive leadership team by appointing Martin Hornack.
Chief operating officer.
Martin has decades of experience in automotive operations, including manufacturing supply chain and logistics.
To joining via he was the head of North American purchasing and supply chain for still Lantus <unk>.
Martin has experienced is already proving extremely helpful.
We execute final development and initial production of our products.
We have also recently opened our new via headquarters and technical center in the Detroit area.
Center Consolidates, our Detroit based team was sufficient space to support system and vehicle level development.
Also hiring the right experience talent is always key and we want to maintain a strong engineering presence in the heart of the U S automotive industry.
Sure we continued hire the best people.
And finally, we're continuing the process of selecting an appropriate manufacturing site.
One of our vehicles.
We have now Shortlisted three sites for final consideration.
Similar to what alpine Robin said earlier about IGN homage shaping its business around customer needs close collaboration with customers has been central to how via has designed this platform in vehicles with direct voice of the customer input shaping our portfolio.
Over the past few months, we've continued to engage in active discussion with targeted customers.
These customers fall into two primary categories fleet operators, who are looking to electrify their fleets and would purchase via vehicles to do so.
Strategic partners, who are interested in our modular skateboard and platform as a way to accelerate their product evolution toward evs.
With the passing of the inflation reduction Act, we are seeing an increased interest and demand from these customers. We believe we are at a crucial pivot point and the shift toward commercial evs.
In closing I'd like you to please think of via motors as more than just another truck company.
We are a solution provider for a sustainable future.
The livers functional reliable durable electric work trucks that are preferred by drivers and have an attractive total cost of ownership.
Shareholder approval of the IGN Omics acquisition of via is a key next step to enable us to create a true leadership position in the commercial electric vehicle sector.
I look forward to being part of the idea anomic synergistic portfolio that Robin described a few minutes ago.
Thank you for your time and now back to you Robin.
Thanks, Bob for that insightful unexciting update.
We're all really really happy to close the transaction and formally welcomed via until you add you know makes family.
Hand, the conversation back to Tony Thank you.
Thank you very much Robin and thank you Lydia glean, either CEO or a need to cut and Mr. Bob for salvage feel at the EM motor. It's fantastic to have you on today's call now it's my pleasure to hand, the floor over to Conor Mccarthy CFO , who will take us through the financials in more detail and then followed by our poor who will give us far more closing remarks.
<unk>.
Thank you Tony a good morning.
Revenue for the year was 100, $114 1 million, an increase of $87 3 million or more than 300% compared to 2020.
Revenue for the first quarter of 2022 were $25 five 4 million a decrease of $4 five 5 million or 15, 2% from the first quarter of 2021.
Revenues for the second quarter of 2022 were $34 2 million, an increase of $4 1 million or 13, 5% from the second quarter of 2021.
Revenue from the U S increased from $1 6 billion in 2020 to $84 3 million in 2021.
Revenue from the U S decreased from $26 9 million in the first quarter of 'twenty, one 2021 to $11 8 million in the first quarter of 2022. The decrease was principally due to lower revenues from <unk>, our title and escrow agency business.
From the U S decreased from 25.
$75 million in the second quarter of 2021 to $14 4 million in the second quarter of 2022 again decrease was principally due to lower revenues from <unk>, our title and escrow agency business.
Our gross profit for 2021 was $23 2 million, which represented a gross margin of 24% gross profit for 2020 was $2 1 million for.
For the first quarter up 90.
Two gross profit was 0.0 2 million as compared to $10 8 million in the first quarter of 2021.
The gross margin for the first quarter of 2021 was 0.8%.
For the second quarter of 2022 gross profit was $1 5 million as compared to $9 million in the second quarter of 2021.
The gross margins in second quarter of 2022 was four 4%.
Operating expenses.
2021.
$282 8 million as compared to $97 7 million in 2020, an increase of $185 1 million.
2021 operating expense.
Non cash expenses of 101 million for goodwill impairments and 71 million for asset impairments.
Loss from operations in 2021 was $259 million as compared to $95 6 million in 2020.
The increase is almost entirely due to goodwill and intangible intangible asset impairments, which Alex has already discussed for.
For the second quarter of 2022 operating expenses were $39 3 million as compared to $23 7 million in the first quarter of 2021.
Greece was principally as a result of the increased SG&A charges of $37 $1 million.
Loss from operations for the first quarter of 2022 was $39 3 million. We ended the first quarter of 2022 with $171 million of cash on the balance sheet.
For the second quarter of 2022 operating expenses were $42 3 million as compared to $19 1 million in the second quarter of 2021.
The increase was principally as a result of increased SG&A charges $38 $8 million.
Loss from operations for the first quarter of 2022 was $48 million.
We ended the second quarter of 2022 with $85 5 million.
Cash on the balance sheet.
This year has been one of continued development as we build out a world leading fully integrated easy business.
With that I'll turn it back over to al.
Thank you Tama.
I'd like to spend the next couple of minutes before the Q&A discussing the value of being an investor and how management interests are fully aligned with those of our investors.
I didn't know because some of the most exciting technology and products in the EV sector.
From high power wireless charging to an exit superbike and soon to be a skateboard ice vehicles.
We have what the industry needs.
For both the customer and a strategic partner perspective.
Currently that increased value in that business is not reflected in the share price and does not reflect the value of these businesses to the industry.
Can say this with confidence since after announcing the VA deal and after completing the deal to bring a magic or off the Atlantic exchange, both of which were huge wins for VIP nomex family and its shareholders.
Surplus didn't move up maybe even went down.
Today, the company has almost zero debt.
<unk> revenues on a clear growth trajectory and products that are receiving industry and media at claim.
Our net took a box of recent Hollywood movies.
And so electronics track there will be similarly, making and the parents in an upcoming TV series.
Why are they show why this.
Production companies showcasing our products.
Simple because movies in CEB, often the future and they need to show relevant products for their storyline.
They choose our products because they are the future.
There are available now.
Revenue growth.
No debt ratios media recognition.
These are some of the fundamental indicators investors should be looking for in a growth sector like E D.
The large fleet customers have been eager to test and validate but we're waiting for the government to step up the subsidies and grants promise to help pay for the move over to zero emission transportation.
It's not a coincidence that wife's acuity at the surface deal Robin mentioned earlier.
We have to be inflation reduction act was passed.
This is a deal that the wife team began working on prior to our acquisition in late 2020.
Why now it's simple the fleets now understand what government support label, Steve where they didn't before now.
Now that team is fine we expect that the deals in our pipeline to follow.
The time is finally here, we've made the acquisitions and investments in the people companies and products that will see us capture our share of the market.
Our businesses are gelling and working effectively together, so we can reach profitability more efficiently than others in the sector.
We've got our bases covered for batteries to Drivetrains charging systems and the maturity of that tech to minimize warranty exposure.
These are the elements you need to succeed in EV and succeed we will.
Whether via Motors, Magicka way electronic or the other exciting companies within the <unk>.
Emily.
All of our products are built on proficient technology.
They have been developed with leading customers.
<unk> been tried field tested and built to the highest standards.
And we've done all of this put a fraction of the cost of most of the industry.
Most of the industry took a leap of faith and too expensive facilities before the market demands with Mitchell and the current the high cost of manufacturing facilities without firm orders as a result.
For all the reasons I've described I didn't know if there's an amazing opportunity for investors to enter the <unk> space a high growth sector that is rising to meet legislative deadlines.
Our stock offers a diversified investment in EV and will put discipline in place to ensure we maximize every dollar spent on behalf of investors as Robin mentioned.
Our customers working with our genomics as a simplified journey.
Keith there electrification vision right.
Shareholders will be able to deliver the value placed on our involvement across the entire electrification value chain.
This requires moving at pace and both targeted growth.
And we anticipate it will give us three.
Big competitive advantages.
To be the first with an integrated end to end service offering.
<unk> unique and differentiated customer value proposition.
To unlock the full value from commercial electrification fresh hours.
The win big in this space I genomics needs to continue to evolve.
Automotive requires significant upfront investment.
Many of the new the marketing companies in the sector will continue to have a tough time as they are not sufficiently differentiated from the competition.
I think that mix will need to continue to raise money, particularly after closing the deal with BMO.
We have a mature approach to doing so and we use a mixture of debt and equity to minimize the dilution to our shareholders.
Money, we raise as an investment your investment into the ICU vision, which is to build a sustainable world class company that delivers products that customers can rely on while generating shareholder value.
Thank you again to everyone joining our call today and back to you Tony.
Thank you very much al and thank you.
Very much to all of the types of participated on this call. So this concludes management's prepared remarks, and we will now go to our Q&A session I'm going to hand, it back to the operator for folks on the call to be able to give the instructions for those who want to get into the queue and as well we will be reading the questions that we mentioned.
For pulling in our se platform. So we have those classrooms and they will be intermixing notes go ahead operator.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Press Star two if you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the starkey.
Please while we poll for your questions.
Our first questions come from the line of Andres Sheppard with Cantor Fitzgerald. Please proceed with your questions.
Hi, Good morning, guys, it's great to hear your voice congrats on the quarter and congrats on getting caught.
Caught up with your financials I know, it's a big moment.
Maybe for my first question was wondering if you could maybe give us a sort of outlook on what to expect for the second half of the year either in terms of revenues or gross.
Gross margins and any or maybe even any seasonality that we can account for I'm. Just wondering how we should think about the second half of the year.
Hi, just on the good hearing from you my friend and thanks for the question. It's a good one.
If we take a look at our businesses. We've got businesses like why is that traditionally had lumpy revenues and are now moving into an as a service subscription model.
It just happens that some of that Lumpiness is going to come in Q3, and Q4, where it didn't come in Q1 and Q2.
Going into next year, we'll start to see that revenue.
Bump smoothes out the suite as we transition to this as a service model.
Similar with you as hybrid with hybrid it has a lot of orders it's unlocking.
In the second half of the year, so you'll see performance for most of it.
Probably more the interesting part from from your perspective is the companies like select track and and.
The magical.
At the moment <unk> got very predictable revenues and as you probably understand that that's a mix of the supply chain the backlog of the order book and our production capacity that we're in a new facility. So.
So I think we did something in the region of three and a half and $4 million in Q2.
Electric alone.
You can expect that to be consistent for Q3, Q4, and maybe similar but with a slight bump in Q1 of next year as well as we bring additional automation equipment into select track.
In Q2 of next year.
That will increase our production we can address more of the backlog.
And youll start to see that revenue lift, but we're starting to get consistency in the revenues now and as you know.
Apply China production.
Production capacity equal to the amount of B could you could turn out. So that's why it's electric is going to be very consistent.
Likewise with them with a magic and magic rats on order backlog and it's been able to expand its footprint and I will expand its footprint similar so its revenues are going to grow aggressively throughout the year as it starts to address that backlog and then it's going to start servicing those new orders on the new Xperia bike.
Olivia mentioned in her comments, so they'll grow probably more aggressively than selectric, because they've got already a much larger footprint to expand into whereas select tracks expansion.
In the middle of this year into its new facility. Obviously sold the Q2 Q3 Q4 revenues were jumping largely be in the three and a half to 4 million range per quarter.
But theyre going to need to get automation equipment semi automation equipment and to be able to produce the higher production numbers. So those two are very very interesting.
One of the things that I think it's important to understand as well is as we move through this as a service model. What we're really doing is we're taking the value of a contract with <unk>.
Creasing, the margin significantly, but with stretching if I'm, making a subscription model.
Although we've got a really strong order pipeline I need our investors to understand that I suppose that the service contracts get deployed in those revenues come in we're going to be earning that revenue over a number of years, rather than taking them upfront revenue as we typically have in the past.
Without operations like U S hybrid.
So.
The.
Investors and analysts when you think about it now if you look at our businesses.
A company like a magical with electric.
You can go to them directly through their website or you can go to one of the dealers within the distributor network.
You can place an order today and get a.
An estimate of when the delivery will be in the coming weeks and months.
A much shorter much simpler style.
Can't do that with the way even with the U S. Hybrid you can't just show up and say, Hey, I want to buy some charging systems because theyre in ground charging system. So you need electrical permit.
The construction permit you need the utility permit ideally planning to make sure that all those pieces come together. So I just wanted to set the expectations that the different types of businesses.
And that's why you're seeing the immediate revenue jumps in select tracking the magic because they sell more on a one to one basis, whereas when you're working with the wife, where you're working with the U S. Hybrid for instance.
Both sales and more kind of project lots of scope in the ways that they are implemented.
I hope that answers your question I'm happy to.
Yeah.
Yeah.
That's very helpful. I appreciate it very insightful maybe to follow up could you.
You give us an update.
<unk> on your capital needs, just wondering where things stand there. Thanks.
Yeah, obviously as you as you know we've spoke about this.
Every company within the sector.
It's growth sector is going to need regular access to capital.
I do not mix hasnt been able to raise any capital since late last year because of the fact that the filings were not current so.
We're talking to our partners, both debt and equity as I mentioned in my remarks.
And as I also mentioned in our remarks, where we're a very attractive company for the private debt or equity investments, we have low debt, we have tremendous assets, we have revenues growing.
We have patents across the group and there is no shortage of people wanting to put money into at the moment. So the fact that we haven't been in the market raising money for close to 12 months. It means that we will need to do so but I would expect it to be that in the short term. So that we are until the share price starts to recover and the market understand the value of kind of the and that's because the.
The waves of the motives when we closed that transaction as I made in my remarks.
Got it Okay. That's also very helpful.
What's the latest with the dynamics capital the financing arm I know in the past you had mentioned.
You had mentioned the interest in potentially divesting.
Most of that side of the business. So I'm just wondering whether that strategy has changed this is still the same or any updates you can give us there.
No it's still the same and as you know it.
It's easy to say, we're going to divest these businesses, but alpha.
Outside parties can take a long time to go through diligence and other things what I can tell you is we're still committed to divesting those noncore assets.
And there is interest in those assets.
But we're in discussions about at this time, there's also some other options, we can potentially do with them.
But they're.
We're not going to be part of the genomics family going forward capital will migrate over time into the financing activities.
Activities.
Right and maybe my last question if I could.
So can you just give us an update on where the via acquisition currently stands. Thanks.
Yeah absolutely.
As you will know.
Getting <unk> approved which is the.
The the way that you approach shareholders approval in the capital market.
That required our other filings to be current in our disclosures to be common.
Note that the genomics investors and the inbound V or investors understood the position of the company at the point that we're taking the boat. So now that we've got those the.
<unk> caught up.
We're now in a position the legal team were actually meeting yesterday.
Without sight council polishing and finalizing the S. Four and we expect that the piece of resubmitted very shortly.
Excellent. Thank you for answering all my questions. Congrats again on the on the quarters and getting caught up and they'll all I'll pass it on thanks again.
Thank you.
Thank you. Our next question is coming from the line of Jim Mitchell. Please proceed with your questions.
Hey, guys. Congratulations on the results the team has put in the quarter over quarter and year over year results demonstrate pretty impressive EV related revenues and growth.
Being said clothing and via Motors acquisition seems to be the critical ingredient for putting <unk> on the map and generating significant revenue.
Would you also alluded to in his closing remarks.
Just yesterday Ford committed 2 billion through a manufacturing plant for their new Eaton Vance.
I'd like you to talk more in detail about how you plan to capitalize the company.
The tool new production facility and more or even most importantly protect shareholder interests, along the way, especially considering what appears to be an underpriced share prices compared to the revenue and market cap. Some of your peers, such as <unk>, who has no revenues.
Over a $700 million market cap or even workhorse, who at $12000 of revenue and little over $500 million of market cap.
Could you speak to that a little bit.
Yeah, I'll I'll start off with with answering the.
The market dynamic.
The ability to raise the cash and I don't think bumps on the phone, but certainly if not the heme Robyn can address the how we're going to scale the manufacturing because there's some unique ways to be a approaches the market.
Both us to do the same.
On a cost basis of some of the others.
Very good point, you make Jim first of all I don't want to dwell on it too much but our peers are not generating any revenue at this time or very little.
Ribbon is reporting any numbers as they start to deliver <unk> 2000 fans of quarter. Two two Amazon is obviously, a strategic investor of it. So that's kind of been in the family deal.
But it's very important people understand why.
Until this inflation reduction act and this infrastructure Bill passed recently the fleet buyers were not purchasing.
They were not purchasing because they didn't know as I mentioned in my remarks, what level of health systems that we're going to get from the government for what is basically a legislative.
They've been told they can't drive.
Fossil fuel vehicles. After 2000, 30000 40050, depending on the part of the country.
It is natural for for industry private and public the turnaround so that the government. Okay. Big change how are we going to pay for it and what are you going to do support it.
I only just seeing the government typically find with that are proof of the inflation reduction act on how to do that and as Bob mentioned that now that's happened many of the fleets are coming forward because they know what the spending curve may look like.
So that's why you haven't seen a lot of activity.
Within the industry.
In terms of capitalizing the company, we have a number of ways. We can do this we.
We have a lot of debt partners that are interested in financing and manufacturing facility.
We would take on that that would obviously be serviced through onboarding of revenues.
Obviously believes it has the right products in the right interest.
But to be able to unlock revenues.
Within the coming years.
We have a green bond designation, which is a really interesting product.
Where we can go out to the market for those types of companies, who are looking to invest purely in the companies that are focused on carbon neutrality zero emission.
So you do get caveat with the Green bond, which is you can only deploy it.
For the reasons, it's ray so if we raise the money could be it would be exclusively for beer is not for general corporate purposes.
But the company has no shortage of options.
It's very attractive to the capital markets its a highly liquid stock.
It's very attractive to the debt markets as well Jim.
But I'm going to stop talking now because I'll keep talking about Vegas I'm very excited about my business, but I'll hand, it over to Robyn and pulp see if they have any remarks, they want to make about exactly how we're going to put the manufacturing process in place.
Yeah Robin would you like me to start.
Yeah. Paul Please go ahead, and I'll fill in where appropriate.
Okay, well first of all you need to understand the product strategy before we get into the you know the manufacturing.
During capability.
Where we believe we really have a differential advantage with deer, and this may sound simple, but it's it's creating and selling the products that the customer actually wants and as I said in my remarks, we spend a lot of time with each customer understanding their requirements and then being able to tailor our vehicle offering too.
What they really need to accomplish their business objectives, and that's accomplished with a vehicle design that is somewhat unique in that it's a modular skateboard system that allows for us to put different body configurations on a common vehicle architecture, so that preserves capital and it makes our.
<unk> operations.
Much more.
Focus on low capital in order to accomplish a broad portfolio of offerings.
In the marketplace and then the other advantage that I believe we have is the synergy with IGN Omics, we're gonna be able to offer a complete package for the fleet.
That would include vehicles that don't include charging it'll include financing that will differentiate us from some of the other competitors who are simply trying to sell trucks, okay. What we sell as a total.
Package, our ecosystem as an IMAX likes to refer to it so that it makes it easy for our fleet to make the move to electric drive.
In terms of how do we capacities effectively.
Again, we're looking at a very lean type of a manufacturing operation that can go into a very focused footprint in terms of square footage very low capital intensity in terms of the way our design comes together in the India Assembly operation and we started out looking at facilities.
Across the United States, a number of different locations as I said, we've now narrowed it down to three sites that we believe have the right kind of.
Features in terms of the facility's location and so on and we're hopeful we'll be able to make a clearer decision on that with.
Our partners that idea and Omics here very shortly.
We're gonna start our capacity lane.
And scale it as required so that we don't over invest upfront and and again with the design being the way it is a modular platform.
To be able to do that I believe very cost effectively.
Robin did you thanks Paul.
I think that was a very comprehensive answer the only comment that I would make is that the.
V. A team led by Notley Fitzpatrick has considered the manufacturing strategy from the very onset of the design of the platform.
Not only the modularity, but the approach to manufacturing and we're leveraging very traditional manufacturing technology, which improves our time to market.
Bob stated reduces the capital requirement. So it's been a it's been something that's been paradigm with a great deal of four side of the early design stage not only understanding the customer needs, but also understanding the scalable production need.
<unk>.
Great. Thank you very much everyone. So we are coming up here on just about an hour and I want them to.
I wanted to get out the chance to get some final remarks, which also happened to have been a lot of the questions that were submitted to a safe platform. We had three of them in total and from.
Because of a lack of time here, we're just going to read the topline often and it goes to address those questions a little bit what's your what are the growth plans here for for 'twenty three.
What is our most exciting.
So we'd like to leave our investors there.
If we still have up on the line.
Sorry, Tony I was on mute.
Put it put put putting via to one side, because obviously that's going to be in front of our shareholders. Shortly and we just spoke about that our plans for growth really center around ramping up our production for <unk> electronics, while positioning us hybrid away from being a project based revenue stream as I mentioned on the call the more broad application to support that growth and the anticipated.
Market demand with the so it's really about moving it we've already made the foundational investments into a magical and electric and that's why you're seeing that revenues bounce and grow consistently now we're not doing the same with you with some hybrid and why they are a project based government funded type of projects I will now move them into a commercialization.
With Robin's help.
And you'll start to see the benefit of that so.
And then we're gonna stop as Robin mentioned on the call to make sure that we spend money in house as well and as you can supply in select tracks.
Technology.
And Thats disciplined three electric technology, obviously Big company bought Motors and battery management systems and things from other people and that product will start to bring that in house that pushes revenues.
That's usually going out the door is going to be staying within the family.
There's a lot we can do it with the passing of the inflation reduction Act. We've now gone from people, saying evaluate evaluate evaluate two when can we get the product and I think that's what's really interesting. So that's the way it robbins, helping manage those.
Those cost controls to make sure that we get $5 of value for every dollar we spend right now, but where the growth's going to come in it's going to come quickly.
Can I just build on that as well just a little bit and make a comment that both selectric an allergic huh.
Not only industry.
Having the seeing the months on quarter quarter growth, but they're also planned new introductions, new product introductions for Selectric during 2023, unless they havent becomes an exciting incremental growth opportunity for the latter part of the year and as we stated earlier nerd chicken have developed this subdivision.
Subdivision that nurture inside which is also now turning into a revenue stream over the next year.
Yeah.
Well. Thank you very much robin out the entire executive team finance team with of course, the entire community of investors interested parties analysts supporters and especially much art scene at IGN Omics all around the globe in many of our offices. This is all the time that we have for today and this concludes the Aegean Omics investor.
Earnings Conference call, we encourage our community continue to reach out to us and we can continue to answer your questions that you had individually P singer emails into IR at <unk> Dot com like to thank all of our listeners shareholders analysts and others, who have taken the time to listen to the conference call. We urge you to refer to our latest SEC filings for any information that you need.
This call is available on our website in the investors section you can find the link there.
Turning to our news events and other timely information we recommend you following us on social media channels and 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.
Okay.
This does conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation.
Joe Your weekend.