Q3 2023 GreenPower Motor Company Inc Earnings Call
Speaker 1: The.
Speaker 1: The.
Speaker 1: The.
Speaker 2: Good morning and welcome to the Green Power Motor Company third quarter earnings conference call. All participants will be in listen only mode.
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Speaker 2: Please note this event is being recorded.
Speaker 2: I would now like to turn the conference over to Michael Seaford, Chief Financial Officer. Please go ahead.
Speaker 3: Thank you. This is Michael Seifert, the Chief Financial Officer of Green Power Motor Company. I would like to welcome everyone to our call to discuss Green Power's financial results for the period ended December 31, 2022. And here today with our Chief Executive Officer Fraser Atkinson and our President Brendan Riley.
Speaker 3: During today's call, we mainly make comments or statements about future expectations, plans and prospects, which may constitute forward-looking statements for the purposes of the SAEPARBARB provision under the Private Security's litigation reform act of 1995 and applicable Canadian securities laws.
Speaker 3: Actual results made different materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in a quarterly interim results at MDNA, files on Cedar and Dometra.
Speaker 3: In addition, these forward-looking statements relate to the date homeworks they're made. We anticipate that subsequent events and developments may cause the companies to use to change.
Speaker 3: Green Power disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Speaker 3: Also, during the course of today's call, we may refer to certain non-IFRS financial measures. Reconciliation of these non-IFRS measures can be found in our NDNA file once Cedar and Dometger and is also located on our website at www.treampowermotor.com.
Speaker 3: I'll now pass the call over to main power CEO Fraser Atkinson.
Speaker 4: Thank you Michael.
Speaker 3: This was a record setting quarter for Green Power. We generated record revenues of $12.8 million in the third quarter, a year-over-year increase of 140% over the revenue of $5.3 million for the third quarter in the previous year.
Speaker 4: We delivered 101 green power vehicles in the third quarter.
Speaker 4: With our extensive inventory, the deliveries this quarter are on track to exceed the third quarter.
Speaker 4: We reported deferred revenue of $12.5 million at the end of the third quarter, an increase of more than 92% from the beginning of the fiscal year.
Speaker 4: The majority of this we expect to recognize over the next 12 months, further accelerating our revenue growth.
Speaker 4: One of Green Power's strengths and competitive advantage is that we have our own cabin chassis and we manage our supply chain.
Speaker 4: We refer to the EV Star Cabin Chassis or CC as our EV Star platform, which has allowed us to build a range of models for the passenger and cargo markets, as well as sell our CC to other manufacturers.
Speaker 4: Our commercial vehicle group at the EV Star Cargo, EV Star Cargo Plus and CC.
Speaker 4: EV star and EV star passengers are further shuttle and transit sector. These represented the majority of the sales this quarter.
Speaker 4: Another model utilizes the EV StarPap armist green power's nano-beast type A all-electric purpose-filled school bus with an all-luminum body that is stronger than any other body used for the type A school bus is on the market today.
Speaker 4: In September , Green Powers NanoBeast won the Innovation Award for Best Green Bus Technology from School Transportation News.
Speaker 4: this market for all of the Type A school buses.
Speaker 4: is 8,000 to 9,000 per annum.
Speaker 4: We are well positioned to help operators electrify their school bus leads with our beast and nano beast and are presently working on more than 30 school bus deals in eight states where our first deliveries will utilize our current inventory.
Speaker 4: During the quarter, the EPA announced the selectees for the school bus program with almost $1 billion of funding.
Speaker 4: Green Power worked with dealers and school districts across a number of states who were selected to acquire the type D for $375,000 or type A school bus for $285,000.
Speaker 4: These deliveries must be completed by October 31, 2024.
Speaker 4: Green Power also has a significant number of opportunities for our all electric school buses in California utilizing the standard HVIP vouchers, which has $250 million of new funding this year. School bus set aside funding with $135 million.
Speaker 4: as well as the CEC, Air Quality Management District, and BW Trust Funding for the purchase of all electric school buses.
Speaker 4: These school bus sales will help further accelerate our growth with deliveries commencing over the next couple of quarters. I'll now hand it over to Brennan Riley, Green Pires President for discussion on our operations.
Speaker 4: Thank you, Frazier, and good morning, everyone, on the call.
Speaker 4: At green power, we continue to demonstrate our winning strategy that focuses on our core business.
Speaker 4: A purpose-built class IVs.
Speaker 4: leveraging our best in market EV star family of vehicles and our best in classical devices.
Speaker 4: We delivered 84 EV Star Cabin Chatsys to workhorse during the third quarter.
Speaker 4: as we continue to optimize the run rate of deliveries to them.
Speaker 4: We are currently in the process of delivering an additional tranche of EV Star CCs to Workhorse.
Speaker 4: Our dealer network has been growing nationally during the quarter for both commercial vehicles and school buses.
Speaker 4: This reflects the tireless work of our School Bus VP, Michael Perez.
Speaker 4: And that we've added recently, Cloucestrit, to head our commercial vehicle group product and sales efforts.
Speaker 4: Class has many years of experience in deploying proven sales strategies and building winning sales teams for the light and medium duty commercial vehicle sector.
Speaker 4: The class is also completing the full integration of selling the Lyentruck body components and bodies nationally.
Speaker 4: through our dealer and direct sales network.
Speaker 4: Our new refrigerated EV Star cargo plus has been completed.
Speaker 4: And this is the first of its kind vehicle to run the refrigeration system directly from the high voltage battery.
Speaker 4: This creates a more efficient vehicle which saves cost and weight while improving reliability.
Speaker 4: This newest member of the Green Power Plot of Climb is also eligible.
Speaker 4: For the $40,000 IRS tax credit as our all-of-green power EV products.
Speaker 4: With this new deduction that is part of the Biden Administration Inflation Reduction Act.
Speaker 4: Many of our zero-mission vehicles can now be bought across the country at price parity with legacy polluting internal combustion vehicles.
Speaker 4: Our West Virginia facility in top Charleston, West Virginia.
Speaker 4: is almost ready to produce our beast.
Speaker 4: That is our battery electric Type D school bus.
Speaker 4: Over the next months, we expect to manufacture the first built in West Virginia buses, ready to bring children to school safely and without polluting the environment.
Speaker 4: In September , Green Power began a pilot project with a state of West Virginia to demonstrate our KITD school buses.
Speaker 4: to districts across the state and test the buses in a wide range of conditions.
Speaker 4: West Virginia purchased three beasts.
Speaker 4: Those are the type D school buses in the second quarter. In November , the pilot project started the second round with a slate of new districts along with a nano-B type A school bus that was purchased in the third quarter.
Speaker 4: school buses in the second quarter. In November , the pilot project started the second round with a slate of new districts, along with a man-o-be, type A school bus that was purchased in the third quarter. In January , we launched...
Speaker 4: The third round bringing in the total coverage to 25% of all of the schools, this tricks and the stakes.
Speaker 4: We have demonstrated that our buses can work throughout the state in different regions, different temperatures.
Speaker 4: This pilot project has also given us valuable data on where we can improve our vehicles for a myriad of customers and applications.
Speaker 4: Now I'd like to turn it back over to Michael C. for Green Power CFL who will cover the quarterly financial highlights.
Speaker 3: Thank you, Brendan. Green Power achieved its highest ever quarterly revenue of $12.8 million, which is an increase of 140% over the revenue of $5.3 million from the third quarter of last year. The revenue is generated from the sale of one nano beast.
Speaker 3: 10 EV Star 22 foot cargo, 5 EV Stars, and 85 EV Star cabin chassis. It was also from recognition of revenue under finance and operating leases, and from our truck body manufacturing business, Lion Truck Body.
Speaker 3: Cost of revenues in the quarter was 9.9 million, which generated a gross profit of 2.9 million, or 22.5 percent of revenue compared to a gross profit of 27.8 in the prior year. Gross profit for the quarter was lower than our historical range of 30 percent, primarily due to deliveries under high-volume contract.
Speaker 3: from sales of our EV Star 22-foot cargo which are both at lower margins.
Speaker 3: We expect that our growth profit margin will be at similar levels in the coming quarters due to our expected sales next.
Speaker 3: We have seen a continued improvement in our quarterly adjusted EBITThud since the beginning of this calendar year, improvement by these higher sales.
Speaker 3: We saw an increase in our quarterly cash expenses to $4.8 million during the quarter, which was an increase of approximately $1.2 million compared to the prior quarter.
Speaker 3: Approximately 50% of this increase was attributable to higher transportation costs related to a significant increase in vehicle shipments to customers across the United States during the quarter.
Speaker 3: In addition, we saw a step cost increase in our general administrative costs as we continued to expand our business in different regions and into new product lines through our acquisition of line truck body, as well as higher professional fees and product development as we expanded into new markets and developed new products.
Speaker 3: We finished the quarter with $25.6 million in working capital and approximately $0.6 million available with liquidity.
Speaker 3: Working capital included $7.9 million in AR, the majority of which was current at quarter-end, and $46.2 million in inventory, which was comprised of over $34.6 million of finished goods inventory, primarily representing EV Star Cabin Chassis, EV Stars, EV Star Cargo, and both Beast and Nano Beast school buses.
Speaker 3: Since the quarter end, we've collected a significant portion of the AR that was outstanding at the end of the year, and we've raised approximately 3.5 million in equity to our ATM program.
Speaker 3: We've used the proceeds from these sources to continue to invest in our business platform, in working capital investments for our upcoming deliveries, and our current available liquidity remains well above the level that it was at quarter end after these investments.
Speaker 3: Finally, we finish the quarter with preferred revenue of $12.5 million, the majority of which we expect to recognize within the next 12 months.
Speaker 3: I'll turn it back to Parade's or final word before the Q&A.
Speaker 4: Yes, thank you, Michael. To conclude with...
Speaker 4: generated the significant sales in our past quarter with our commercial vehicles.
Speaker 4: And we expect that with our passenger, as well as the school bus cells, kicking in over the next several quarters to help further accelerate that along with the organic growth within the commercial vehicle group.
Speaker 4: Consequently, we are expecting a very solid growth over the next several quarters. With that, operator, please open up the call for questions.
Speaker 2: We will now begin the question and answer session. To ask a question, please press star then one on your telephone keypad.
Speaker 2: If you are using a speakerphone, please pick up your handset before pressing the keys.
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Speaker 2: At this time we will pause momentarily to assemble our roster.
Speaker 2: And our first question comes from Craig Irwin of Roth Capital. Please go ahead.
Speaker 5: Good morning and thank you for taking my questions.
Speaker 5: So, Frazier, one of the most exciting things going on right now in the macro is the opportunity for your customers to take vehicles at parity and cost parity versus conventional vehicles with the Inflation Reduction Act.
Speaker 5: and President Biden's commitment to the electrification of medium-duty trucks and heavy-duty trucks.
Speaker 5: Can you maybe talk us through some of the mechanics?
Speaker 5: of how customers would apply for those available grants and subsidies. And do you expect sales of any of your vehicles this year to qualify? And is there anything else you would share to help us understand the near and longer term impact?
Speaker 4: Well, I think a lot of our activity that we were describing is based on programs that have been in place and are
Speaker 4: better known and better understood in terms of the whole process, whether it's on the commercial vehicle side with various incentive programs.
Speaker 4: So our plan, our plans don't count or expect that that will have a significant impact in the first couple of quarters for our business.
Speaker 4: And we're just being cautiously optimistic that it'll take a few quarters to really to really promulgate in the marketplace and have an impact in terms of the sales.
Speaker 4: So, but as far as the.
Speaker 4: The process goes, we've certainly seen significant uptick in inquiries and interest now that the funding is available in the current year.
Speaker 5: So shifting gears a little bit, the gross margin of this quarter were again very healthy. You know, everybody expects that your large customer today is getting an attractive price given that they give you very healthy upfront payment.
Speaker 5: and you have a strong collaboration there. But your margins are coming through slightly stronger than what we thought. Can you talk about the opportunity for leverage? Is this really part of what's coming through? Do we maybe see leverage over the next number of quarters?
Speaker 5: as we see diversification in the buying groups. How should we think about sort of short and longer term implications for gross margins as revenue ramps?
Speaker 4: Well, short term will be the greatest impact will be on product mix.
Speaker 4: So, thank goodness for all of the rest of our product sales and the ones and the twos. We benefit from higher cost profit margin, which helps offset the higher volume lower margin type sales that you're referring to. So, that's...
Speaker 4: short-term it'll be product mix getting our school bus sales dialed in to the ongoing revenue stream as well as a few of our passenger vehicles increasing the sales of those.
Speaker 4: That will be the combination in the short term. Longer term is that what we are seeing in the marketplace is with some of our peer group members that have been reporting gross profit losses.
Speaker 4: cost of goods sold actually exceeds revenue is that they're looking at price increases. We see that as the more likely scenario as opposed to trying to wring out additional cost savings. We see that as the more likely scenario as opposed to trying to wring out additional
Speaker 4: through the supply chain. But in the long term, that's where certainly scale and repeatable contracts and repeatable invoices is going to benefit us from savings in that regard.
Speaker 5: Okay, excellent. And then, you know, you mentioned the progress that your West Virginia facility for producing the beast. You know, congratulations there. I know there's been a tremendous amount of effort into getting that up and running. Can you help us understand sort of the approximate timeline for initial deliveries out of that facility?
Speaker 5: You know, what should we look for in the first weeks and months? And what do you see as a theoretical or potential deliveries number out of that facility if you could possibly share that?
Speaker 4: Well, that the, initially we were looking at doing our NANLBES type A school bus in terms of the
Speaker 4: the longer term production plan. Right now the longer term production plan as Brendan said in his remarks it was to focus on the type D school bus. That is you know the product that we are most engaged with the market today and certainly
Speaker 4: can benefit from an East Coast presence with that product. That takes a little longer to build than the NanoBeasts. We're looking at the first of those being later in the year in terms of production out of the West Virginia facility.
Speaker 4: As far as the numbers, as we've said in the past, our, you know, this facility does give us capability of a run rate, you know, upwards of 50 to 60 per month.
Speaker 4: which would be a capacity that would likely exceed the short-term, the short-term market requirements of the short-term market needs.
Speaker 5: Okay, and then would you expect many or most of those vehicles to be supported by vouchers from the infrastructure bill, the, you know, the billion dollars in funding that was, that was handed out in vouchers several months back? You know, is this something that's tracking well?
Speaker 5: for the beast and your sales expectations out of the West Virginia facility.
Speaker 4: Certainly a part of it over the next couple years would be a key driver, but not the only one. One of the wildcards that the industry as a whole is dealing with is the state of New York contract that we had...
Speaker 4: completed our process last summer, is still working through final details before we're able to actively pursue transactions on the
Speaker 4: on this particular activity.
Speaker 4: So what we're looking at is really taking advantage of each of the opportunities that on a state-by-state basis, but not spreading ourselves tooth-in by trying to go after all 50 states.
Speaker 4: So what I mean by that is that there's a number of states that have state contracts that have Almost like buying groups whereas others like California are
Speaker 4: You know, they're just a whole slate of different funding programs for school buses. If you're not able to get EPA funding, you know, their CEC or air quality management district funding of a similar amount. And so we're able to pursue those programs as they become available.
Speaker 4: new funding hits a particular year.
Speaker 5: Excellent, excellent. Well, congratulations on the strong execution this quarter. And we're looking forward to an exciting growth trajectory. Thank you, Frazier.
Speaker 4: Thank you Craig.
Speaker 2: The next question comes from Greg Lewis of BTIG. Please go ahead.
Speaker 4: Yeah, hey, thank you and good morning everybody and thanks, thanks for taking my question. Um, you know, Fraser or Mike, I was hoping you could maybe give a little bit of um...
Speaker 6: color or guidance and how you're thinking about you know the realization of inventory. I know you kind of mentioned that you know you expect it you know to really be realized over the next year. Is there you know is there any way in terms of thinking about timing where you know maybe it could be a little bit more.
Speaker 6: chunkier in any specific quarters. Well that is
Speaker 4: I won't say $64,000 question because it's a lot more than that, but that is one of the most impactful questions financially for a green power because...
Speaker 4: We have segments of our inventory fully paid for and acceptance say for the final completion PDI testing and delivery. We're ready to go and monetize. And a really good example is within the school bus space, we had this quarter was a
Speaker 4: was a single school bus sale, and yet we have this very substantial Neurion sales pipeline.
Speaker 4: And so the early deliveries, those will all be out of inventory.
Speaker 4: for our school buses.
Speaker 4: And if, you know, not to set an excuse or anything, but in the school bus space, it's a little bit of a unique proposition that it unlike the commercial. There are more parties that need to be engaged in terms of getting infrastructure in place.
Speaker 4: getting contracts completed and signed and approved. And so there's a multitude of decision makers in the school bus space. Whereas in the commercial, you know, generally speaking, we're dealing with one or two decision makers that are involved in the process from start to the delivery.
Speaker 4: and so on. So, you know, we're dealing with a number of properties where, you know, they've decided that they're going with our platform, who the charging company they're going to utilize, and the utility engagement is being completed in terms of the infrastructure.
Speaker 4: but they still have other contractual arrangements to sort out with their board of trustees or their board as the case might be. And so it just takes a little longer to get those completed. But the funding also has deadlines, which helps us.
Speaker 4: and that these organizations have to get busy and get their deals completed so we can get our vehicles delivered to them. So that is a good example of a significant part of our inventory. It's ready to go. We have deals in many cases, earmarked to specific orders.
Speaker 4: and as those kick in, the initial deliveries are going to be all out of our current inventory.
Speaker 6: Yeah, that's good to hear thanks for the color phaser and then I did want to follow up on that you know as you have these
Speaker 6: As you're working with your customers to get these vehicles and you mentioned that it could be that any eyes crossing the T's at customer level. How much of the potential slow down or earn the ball?
Speaker 6: the delaying of those deliveries, do you kind of get the sense for? Is it infrastructure, i.e. lack of charging related? Or is it more just really at the decision level to get the government?
Speaker 6: entities, you know, approving or is a really just an infrastructure issue that, you know, is probably being worked on as we speak.
Speaker 4: Well, I think it's a combination, but infrastructure is certainly one of...
Speaker 4: In this, you know, it's less of an issue on the commercial side for in that, you know, it's a simpler approach in some cases compared to a school buses where the infrastructure, you know, they're looking at everything and anything that, you know, we're
Speaker 4: well into the particular vehicle that is going to meet their duty cycle requirements and the combination of payload and what they want to achieve. But then when you start looking at the infrastructure, it's not practical to be charging.
Speaker 4: between the morning and the afternoon run because they're on peak rates. So they're now looking in that instance at, okay, we need...
Speaker 4: We need load management, we need scheduling, we need this, this, and this, and that isn't all dialed in at the front end.
You don't want to be making changes on the fly and that's a big part within school buses is managing all of that and we're in the past year we become intimately involved with the charging and we're not.
you know, today we don't have a charger as a solution, but you know, we need to be involved with that in order to reduce the amount of time that is spent on sorting out the infrastructure issues. So that's number one.
the biggest. And then the second is just getting the platform nailed down and committed to without scope creep where they decide, oh, let's have a look at V to G.
And that's something that you don't want to be adding on or making a decision at the back end in terms of integrating your vehicle on a B2G solution. That needs to be part of the initial dialogue in scoping out the platform. So, yeah, that does enter into...
into the process with that particular sector and does cause some additional delays. But I think the key is that the programs all have, they all have requirements, the EPA funding and the selectees that have been awarded funding under that program.
that some properties were awarded, you don't deliver 25 in a month. That's spread out over several quarters. All of that means that we believe that the whole process will be compressed over the next 6-9 months in terms of what we have seen.
Well, that's great to hear. Okay, hey, thank you very much for taking my questions and have a great time.
Thanks, Greg.
Next question comes from Chris Souther of B.Reilly. Please go ahead. Please start your inexpensive
Hey guys, thanks for taking my question here.
Maybe on the Class D school bus side it looked like just the one delivery of school buses was a nano. It sounded like the pipeline is certainly picking up on the school bus side. I just wanted to see if you could give any color on.
How many wins you think you're going to have on the EPA program side? Do you have any firm orders yet through that program? And then just wanted to get a sense of like the inventory strategy for the school bus side is flat with 35 and kind of finish goods.
with the the our most recent quarter the
you know, the selectees for the EPA program were literally announced during our most recent quarter that we've just announced.
given that you have to get your contract signed and deliveries. I don't think anybody was in a position to be, you know, that they delivered product by December 31st, 2022 under that EPA program. And it was an interesting anomaly in that people that had submitted or were eligible for other forms of funding.
the EPA program plus 20,000 for our chargers. So we saw that a lot in the fall of last year. Now we're at a point where everybody has got their best shot, and they do have their mandate. So.
We're now in a position we're able to move forward on those. In terms of what our success rate is or what our expectations, we will be announcing the deals as we go. There's...
There's a number that we fully expect to get announced and be delivering over the next couple quarters as they say out of current inventory. So both for the type D as well as the type A dental beast, which will certainly be incremental to the cell...
How many kind of EPA customers are in that mix of pipeline customers you called out?
It's pretty, you know, the over 30 deals that we referenced, they're spread out. California has a big chunk of those. EPA is significant as well as other state programs.
Maybe just a cadence of the workhorse deliveries, you know, it sounded like some of the logistic challenges are improving here, and their commentary has sort of suggested they'll take as many as they can get. So I think your MD&As had hundreds that were in process and delivery, and another hundred that...
have been completed by contract manufacturer in Asia. Should we think about quarterly run rate as approaching 100 and staying around there? Or are you saying, hey, we might be able to do 200 or 1, over the next March, kind of the next quarter after that?
Well I think we'll be sticking to a quarter by quarter communication and not getting ahead of ourselves and that's in part because of supply chain and shipping and logistical issues and moving larger volumes.
That's been on us, not Workhorse in terms of getting the numbers up. Going from 10 to 100 is a whole different proposition as an organization.
And so that's, you know, we're building our systems and our processes and our team in order to accommodate and to be able to do that and then repeat that on, you know, not just quarterly but monthly and in terms of the regular delivery. So...
No, we're not in a position to be laying out on a quarter-by-quarter basis what those anticipated or expected deliveries are, but I would agree with their commentary that this is on green power in terms of ramping that up to meet the demand.
Got it. Okay, that all makes sense. Maybe just my last one. It's great seeing the revenue start to ramp here. I wanted to see if you could just talk a little bit about the margin front. You know, it makes sense to kind of mix is going to be the key driver for gross margins.
But can you give us any sense of what EBITDABRA even looks like, given it seems like you guys are beefing up some of the OptX lines to help with the growth here. Should we expect kind of flatish growth margins?
You know, as workforce continues to be kind of a big chunk and then we get, you know, where do we get kind of more leverage to hit positive EBITDA? Is that kind of calendar year 2023?
While it started the high level, then I'll turn it over to Michael for...
has a more granularity on your question. At a high level, it's important to note that, you know, the expenses that were reported in our December 31st, 2022 quarter, you know, they include, you know, some of the initial start-up for our West Virginia facility, which, you know, we're not even...
you know, into the manufacturing, let alone delivery and revenue recognition out of that. We also have a, you know, with Michael Perez and his group with the school bus team, you know, that we've been incurring costs to get our dealer network in place, to get our team.
out and engaged with the extent of our sales pipeline, as well as the delivery team for the Neurion sales that we're pushing at the front end of that sales pipeline. So all of that we've incurred without any of the requisite revenue that...
will flow from that activity. And likewise with close stepping in with the commercial group or the commercial vehicle group, is that he has undertaken a number of initiatives as well as building out a dealer network. And so some of those early expenses aren't represented by...
any cells now, but we'll be realized down the road. So at a high level, we are continuing to invest in the capacity and the capability of a company that is a whole lot bigger than 100 vehicles in a quarter.
And so that's represented in what we most recently reported. But on that I'll turn it over to Michael for any additional comments.
Thanks Fraser. You know, I think Fraser described this very well, that we are investing in our business, we're building out a platform and as we do that, you're going to have quarters like we've just experienced where you have an increase in those step costs and you don't yet have the, we'll call it operating leverage from the gross profit margin sort of
trickling down through those cash expenses. However, that being said, we're certainly happy with the trajectory. I mean, this is our highest revenue quarter ever. At this run rate, we're approaching on a quarterly basis, annualized $50 million of revenue, which I think is a big step for us. And as we absorb some of these new...
investments and build out the business across the country. I think we're really potentially just getting started here. So we're optimistic about reaching those higher sales levels that will allow us to generate positive EBITDA, but at this point we're not in a position to talk about when that may be, although it's
We're certainly happy with how this is progressing. Okay, maybe just the last follow up here and then I'll hop in the queue. Just the unabsorbed investments we're making today, how much more of that do you think we need over the next?
you know, call it, you know, six months year, you know, two years in order to, you know, be able to hit the growth, you know, plans that you guys are hoping.
would be a good way to think about? Well.
can a way to think about. Well, you know, the...
The commercial sales which represented the predominant activity for our most recent quarter didn't have, you know, essentially didn't have any scope of sales. We also have opportunities with our passenger vehicles, both the EV star, the EV star plus...
and our EV250. So those also would be incremental. So that's all of what I think in Michael's comments. Yeah, I'm trying to get to that. I can get to that. That's the cost. I'm going to get to that. Sorry, I'm trying to get to that.
Yeah, I was trying to get to the cost side. Like, you know, you made some of these additional investments. There's probably still some more ramp up in West Virginia. I just wanted to get a sense of.
With the plans like how much more optics do we think we need to invest on a quarterly basis to read some of these plans? Are there expectations that there will be additional kind of step function changes in optics? What I was trying to get at, sorry, oh I'm sorry, yes that's...
the December 31st quarter represents probably the bulk of that step up. So going forward, there'll be some tweaking. We have probably a couple positions that we'd like to fill, but otherwise the majority being
75-80% in our numbers and represented in our business model.
Perfect, now I'll hug the mic here. Thanks so much for the call.
Thanks so much for the call. Thank you.
Once again, if you would like to ask a question, please press star, then one.
And our next question will come from Kate Sullivan of Maxim Group. Please go ahead.
Thank you. Good morning. On the picture, you mentioned 30 school bus deals in eight states. Are those deals that you are currently in the process of bidding on or have been awarded or where are you in that process with those 30 deals?
They all represent deals that we can see a path to getting a bunch of sign contract but deliveries. And so the bulk of them are where we are the primary or sole platform in terms of the OEM provider.
And, yeah, that sort of is the representation. And it's, as we said, it's more than the 30.
And then you mentioned some price points or maybe I've misheard or this is with is it the rebate through the EPA program of 375,000 for the type debuts for that roughly the sales price.
for average sales price for those vehicles? Well, the EPA program provides for the Type C or D. We of course just have the Type D, but the Type C or D All Electric is $375,000. That is what they provide.
to be priced at anything other than that to be priced higher, you know, creates a very different dynamic in the marketplace. So it is somewhat a level set the field on that product. On the NanoBee's Type A, we're looking at EPA funding of 200.
60 to 270 type ballpark and 265 tended to be a number where some of the other type A electric school bus manufacturers were had also priced their products.
So that's why we've seen a bit of an uptick as a result of the funding from the EPA program.
Again, shifting gears to the deferred revenue, and it was the first time it was flat on a quarter to quarter basis and three quarters. Does this, and maybe Michael, is this going to stay flat or their scheduled additional upfront deposits or this account for the near term amount of deferred revenue if you can address that? Yeah.
Deferred revenue isn't a metric that we try to predict. I think where the way we look at this though is that it's something that does represent future sales. And so I think what we communicated with that, over $12 million of that represents current deferred revenue, which is effectively what we anticipate will be.
converted into, or sorry, over 119 is what we anticipate will be converted into sales over the coming year now. That number will certainly be replenished throughout the year, but it's a difficult one for us to forecast.
But it's important to note that it's unlike some of the accounts payable or represent live-dilities or obligations to pay and directly affect our cash flow. In the case of deferred revenue, it has obviously a different impact in terms of our liquidity.
So it's worth highlighting in the context that if one tracks this separate it apart from our working capital that one can see less of an impact on our cash requirements from the balance of our working capital requirements.
Thank you. And last for me, you mentioned, I believe that you collected a bulk of accounts receivable already this quarter. I mean, does it bring it back down to a three or four million level, or can you comment on that?
Again, it's not something that we want to comment on mid-quarter. I mean, we're certainly anticipating a good solid sales number again this quarter. Of course, as you're collecting AR, you're creating more AR, which is not a bad thing. So we're comfortable with our current liquidity. I think that that's the...
the key message that we've collected a number of those receivables that we're standing at quarter end. We're actively pursuing other business and generating sales and so we have a healthy liquidity given what our current needs are.
Okay, thank you all. Thank you.
As concludes our question and answer session, I would like to turn the conference back over to Frank Atkins, Frazier Atkinson for any closing remarks.
Thank you. Thanks for everyone being on the call. For those that dial in for our pre-recorded version of our earnings call, we appreciate your support and appreciate your patience with our company as we build our business.
We've been consistently reporting a gross profit in the 20s along with operating expenses that are a fraction of our pairs. As Michael noted, since the end of the quarter, we've raised over 3.5 million off of our ATM on a very opportunistic basis and as well as the
finish goods inventory where we are expecting to complete deliveries over the next several quarters is going to help accelerate the growth and the record revenues that we reported in the most recent quarter as we dial in the school bus and expand our commercial vehicle group as well as opportunities with shuttle and
passenger vehicles. So with that we thank you for your support and look forward to chatting to you in the near future.
The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.