Full Year 2024 GreenPower Motor Company Inc Earnings Call

Good morning and welcome to the GreenPower Motor Company year-end earnings call.

Operator: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Michael Sieffert, CFO. Please go ahead.

All participants will be in listen-only mode.

Speaker Change: Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad.

Speaker Change: After today's presentation, there will be an opportunity to ask questions.

Speaker Change: To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Michael Sieffert, CFO . Please go ahead.

Michael Sieffert: Thank you. This is Michael Sieffert, the Chief Financial Officer of GreenPower Motor Company. I would like to welcome everyone to our call to discuss GreenPower's financial results for the fiscal year ended March 31, 2024. I'm here today with our CEO, Fraser Atkinson, and Brendan Riley, our President.

Speaker Change: Thank you. This is Michael Sieffert, the Chief Financial Officer of GreenPower Motor Company. I would like to welcome everyone to our call to discuss GreenPower's financial results for the fiscal year ended March 31st, 2024.

Speaker Change: I'm here today with our CEO , Fraser Atkinson, and Brendan Riley, our president. During today's call, we may make comments or statements about our future expectations, plans, and prospects.

Michael Sieffert: During today's call, we may make comments or statements about our future expectations, plans, and prospects, which may constitute forward-looking statements for the purposes of the Safe Harbor Provision under the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our quarterly interim results and MD&A files on CDAR and on Medicare.

Michael Sieffert: In addition, these forward-looking statements relate to the date on which they're made, and we anticipate that subsequent events and developments may cause the company's views to change. GreenPower disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. 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 MD&A.

Michael Sieffert: For additional information on the results of operations for the year ended March 31st, 2024, you can access the audited financial statements and MD&A posted on GreenPower's website, as well as on CDAR or filed on Edgar. I'll now pass the call over to GreenPower's CEO, Fraser Atkinson.

Speaker Change: which may constitute forward-looking statements for the purposes of the Safe Harbor Provision under the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws.

Speaker Change: Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our quarterly interim results and MD&A filed on CDAR and on EDGAR.

Speaker Change: In addition, these forward-looking statements relate to the date on which they are made. We anticipate that subsequent events and developments may cause the company's views to change. GreenPower 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 Change: 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 NDMA.

Speaker Change: For additional information on the results of operations for the year ended March 31st, 2024, you can access the audited financial statements and MD&A posted on GreenPower's website, as well as on CDARD or filed on Edgar. I'll now pass the call over to GreenPower's CEO , Fraser Atkinson.

Fraser Atkinson: GreenPower has accomplished a great deal in the past year, and I'm proud to be working with the team at GreenPower as we set a new path for our business. Today, GreenPower has two fully operational production facilities, one on the West Coast in Porterville, California, and one on the East Coast in South Charleston, West Virginia.

Fraser Atkinson: Thank you, Michael. GreenPower has accomplished a great deal in the past year, and I'm proud to be working with the team at GreenPower as we've set a new path for our business.

Fraser Atkinson: Today, GreenPower has two fully operational production facilities.

Fraser Atkinson: One on the West Coast in Porterville, California, and one on the East Coast in South Charleston, West Virginia. This positions GreenPower as a national company with production, sales, and service from coast to coast.

Fraser Atkinson: This positions GreenPower as a national company with production, sales, and service from coast to coast, with a full line of commercial vehicles and the only EV school bus OEM to manufacture both a Class 4 Type A and the larger Type D all-electric purpose-built school bus. GreenPower is positioned to be a core supplier of electric vehicles in the medium and heavy duty space. Let there be no doubt, over the past year, the EV sector has encountered significant headwinds. Despite these headwinds, GreenPower has made significant progress with our roadmap to transition to a production plan driven by customer order.

Fraser Atkinson: With a full line of commercial vehicles and the only EV school bus OEM to manufacture both a Class 4 Type A and the larger Type D all-electric purpose-built school bus.

Fraser Atkinson: GreenPower is positioned to be a core supplier of electric vehicles in the medium and heavy-duty space.

Fraser Atkinson: Let there be no doubt over the past year the EV sector has encountered significant headwinds.

Fraser Atkinson: Despite these headwinds, GreenPower has made significant progress with our road map to transition to a production plan driven by customer orders.

Fraser Atkinson: In the past, we'd manufacture to inventory so that we're able to complete sales when we receive the customer order. Now that we are receiving large orders, including some with deposits, we must be able to produce pursuant to those customer orders. As well, as Michael will discuss in his remarks, this provides for more efficiencies and fewer touch points, which should improve our gross profit over time. In order to make this transition, GreenPower needed to expand its manufacturing capabilities, both in California and West Virginia, make investments in GP truck bodies to provide a complete range of commercial vehicles, and secure Production Finance.

Fraser Atkinson: In the past, we'd manufacture to inventory so that we were able to complete sales when we received the customer order. Now that we are receiving larger orders, including some with deposits,

Fraser Atkinson: We must be able to produce pursuant to those customer orders. As Michael will discuss in his remarks, this provides for more efficiencies and fewer touchpoints, which should improve our gross profit over time.

Fraser Atkinson: In order to make this transition, GreenPower needed to expand its manufacturing capabilities both in California and West Virginia, make investments in GP truck body to provide a complete range of commercial vehicles, and obtain production financing.

Fraser Atkinson: Brendan will discuss the transition with our manufacturing and micro capital structure in order to achieve this plan, hand in hand with the production plan as a sales strategy that focuses on long-term prospects with mandates and money.

Speaker Change: Brendan will discuss the transition with our manufacturing and micro capital structure in order to achieve this plan.

Speaker Change: hand-in-hand with the production plan as a sales strategy that focuses on long-term prospects with mandates and money.

Fraser Atkinson: To provide some context on mandates, when a customer is interested in a Tesla Model 3, a Rivian pickup truck, or a Lucid Air automobile, they're not required to buy any of them. Because mandates do not exist for light-duty vehicles, growth in the market for these vehicles can at times stagnate. However, mandates do now exist for medium and heavy-duty vehicles like the Class 4 commercial vehicles and school buses manufactured by GreenPower. That is why GreenPower has chosen to focus on these two markets.

Speaker Change: To provide some context on mandates, when a customer is interested in a Tesla Model 3, a Rivian pickup truck, or a Lucid Air automobile, they are not required to buy any of these.

Speaker Change: Because mandates do not exist for light-duty vehicles, growth in the market for these vehicles can at times stagnate.

Speaker Change: However, mandates do now exist for medium and heavy-duty vehicles like the Class 4 commercial vehicles and school buses manufactured by GreenPower. That is why GreenPower has chosen to focus on these two markets.

Fraser Atkinson: Many states have requirements for school districts to purchase all-electric school buses by a certain date. In states like New York and California, this has to happen within the next 10 years. Those two states alone operate 80,000 school buses, representing a market opportunity of approximately $25 billion. In the Class 4 commercial space, California has recently introduced legislation requiring roughly 10% of new purchases by fleet operators to be zero-emission vehicles, creating demand for GreenPower's EV Star commercial vehicles.

Speaker Change: Many states have requirements for school districts to purchase all electric school buses by certain dates.

Speaker Change: In states like New York and California, this has to happen over the next 10 years.

Speaker Change: Those two states alone operate 80,000 school buses, representing a market opportunity of approximately $25 billion.

Speaker Change: For the Class 4 commercial space, California has recently introduced legislation requiring roughly 10% of new purchases by fleet operators to be zero-emission vehicles, creating demand for GreenPower's EV Star commercial vehicles.

Fraser Atkinson: This requirement will increase to 75% over the next 10 years, amounting to a multi-billion dollar annual market opportunity in that state alone. Several other states are copying the California initiative, further expanding this market opportunity. While these mandates represent strong growth drivers, they are only as effective as the funding available to support the initiatives. In the case of California, the HBIT Voucher Program recently introduced the Small Fleets Plus Up, which doubles the amount of the vouchers available to purchase our eVSTAR product.

Speaker Change: This requirement will increase to 75% over the next 10 years, amounting to a multi-billion dollar annual market opportunity in that state alone.

Speaker Change: Several other states are copying the California initiative, further expanding this market opportunity.

Speaker Change: While these mandates represent strong growth drivers, they are only as effective as the funding available to support the initiatives.

Speaker Change: In the case of California, the HBIT Voucher Program has recently introduced the Small Fleets Plus Up, which doubles the amount of the vouchers available to purchase our EVstar products.

Fraser Atkinson: These plus ups amount help small fleet operators get into green power commercial vehicles for nearly no cost when combined with the federal IRA tax credit. Additionally, HVIP introduced the Zero Emission School Bus Initiative with $500 million, which is in addition to existing funding programs from Air Quality Management Districts and the School Bus Set-Aside Fund. Furthermore, the EPA has been slow in getting out contracts for awards, but we expect to see that activity in the current fiscal year.

Speaker Change: These plus-ups amount help small fleet operators get into GreenPower commercial vehicles for nearly no cost when combined with the federal IRA tax credits.

Speaker Change: Additionally, HVIP introduced the Zero Emission School Bus Initiative with $500 million, which is in addition to existing funding programs from Air Quality Management Districts and the School Bus Set-Aside Fund.

Speaker Change: Further, the EPA has been slow in getting out contracts for awards, but we expect to see that activity in the current fiscal year.

Fraser Atkinson: The combined GreenPower production and sales strategy designed to meet customer needs in the most cost-efficient manner possible, while focusing on the incentive money available, where the mandates required adaptation will continue to provide for the best growth trajectory for our company. I'll now hand it over to Brendan for discussion on our operation.

Speaker Change: The combined GreenPower production and sales strategy designed to meet the customer needs in the most cost-efficient manner possible.

Speaker Change: while focusing on the incentive money is available.

Speaker Change: where the mandates required adaptation will continue to provide for the best growth trajectory for our company. I'll now hand it over to Brendan for discussion on our operations.

Brendan Riley: During the year, GreenPower completed the build-out of the company's South Charleston, West Virginia manufacturing facility and delivered the first all-electric school buses produced at the facility, with the first delivery of our four NanoBeasts and NanoBeast Access Type A school buses in December of 2023. We also commenced manufacturing of our BEAST Type D all-electric purpose-built zero-emission school buses, and subsequent to the year-end, we delivered the first Type D manufactured in our West Virginia manufacturing plant to the Kanawha County School District in West Virginia. These production milestones should not be taken lightly.

Brendan Riley: Thank you, Fraser, and good morning to all those on the call.

Brendan Riley: During the year, GreenPower completed the build-out of the company's South Charleston, West Virginia manufacturing facility and delivered the first all-electric school buses produced at the facility.

Brendan Riley: with the first delivery of our four NanoBeasts and NanoBeast Access Type A school buses in December of 2023.

Brendan Riley: We also commenced manufacturing of our BEAST Type D all-electric, purpose-built, zero-emission school buses.

Brendan Riley: and subsequent to the year end we delivered the first Type D manufactured in West Virginia manufacturing plant to the Kanawha County School District that's in West Virginia.

Brendan Riley: It was also no small feat to set up a U.S.-based, ground-up, purpose-built EV manufacturing facility in a region not accustomed to that type of skilled manufacturing required to produce these innovative vehicles. Training the workforce was a major undertaking.

Brendan Riley: These production milestones should not be taken lightly.

Brendan Riley: It is also no small feat to set up a U.S.-based, ground-up, purpose-built EV manufacturing facility in a region not accustomed to that type of skilled manufacturing required to produce these innovative vehicles.

Brendan Riley: Moreover, the production line verification and validation, It's necessary to ensure that the products coming off the line meet the highest standards of quality and safety, especially in school bus production. These startup challenges were timely met and have set the stage for continued ramp-up of production at the facility.

Brendan Riley: Training of the Workforce was a major undertaking complemented by our partners at Bridge Valley Community and Technical College and the state of West Virginia.

Brendan Riley: Moreover, the production line verification and validation

Brendan Riley: It's necessary to ensure that the products coming off the line meet the highest standards of quality and safety, especially in school bus production.

Brendan Riley: These startup challenges were timely met and have set the stage for continued ramp-up of production at the facility.

Brendan Riley: Equally as significant as the first products rolling off of our West Virginia plant is the increase in sales and deliveries of GreenPower's all-electric, purpose-built, zero-emission school bus. Specifically, GreenPower enjoyed a four-fold increase in the number of GreenPower school buses sold in the 2024 fiscal year. Those sales were in markets where GreenPower school buses have been delivered in the past, as well as new states where we deployed the first GreenPower school bus.

Brendan Riley: Equally as significant as the first products rolling off of our West Virginia plant is the increase in sales and deliveries of GreenPower's all-electric, purpose-built, zero-emission school buses.

Brendan Riley: Specifically, GreenPower enjoyed a four-fold increase in the number of GreenPower school buses.

Brendan Riley: Sold in the 2024 fiscal year.

Brendan Riley: Those sales were in markets, where GreenPower school buses have been delivered in the past, as well as new states, where we deployed the first GreenPower school buses.

Brendan Riley: We anticipate...

Brendan Riley: that the school bus delivers will continue to grow.

Brendan Riley: We anticipate that school bus deliveries will continue to grow during the current fiscal year, as we have live orders for more than 100 GreenPower all-electric school buses, including an additional 37 being manufactured in West Virginia. And we have a qualified lead pipeline of more than 160 GreenPower school buses. This represents a potential for 100 million dollars in revenue.

Brendan Riley: In the current fiscal year, as we have live orders for more than 100 GreenPower all electric school buses, including an additional 37 being manufactured in West Virginia.

Brendan Riley: And we have a qualified lead pipeline of more than 160 GreenPower school buses.

Speaker Change: This represents a potential for $100 million.

Speaker Change: dollars in revenue.

Brendan Riley: Lastly, in the 2024 fiscal year, GreenPower continued to push innovation forward in the school bus sector by introducing the MegaBeast. The MegaBeast is a 40-foot, Type D, all-electric, purpose-built, zero-emission school bus that delivers a class-leading range of up to 300 miles on a single charge. So yeah, a 387 kilowatt hour battery.

Speaker Change: Lastly...

Speaker Change: In the 2024 fiscal year, GreenPower continued to push innovation forward in the school bus sector by introducing the MegaBeast. The MegaBeast is a 40-foot

Brendan Riley: It provides the longest range, has the biggest battery in the school bus market, and provides more uphill climbing power, and has the most desirable V-to-G capability for a more stable electric grid and community sustainability in areas where it is deployed. Turning to the production line, GreenPower has made significant investment in its in-house body division, GP Truck Body. The focus has been to improve delivery time of upfitting our EVstar cabin chassis with truck bodies for customers, providing a seamless one-stop shop opportunity through GP truck body, sorry, through GP Truck Body.

Speaker Change: Type D all-electric, purpose-built, zero-emission school bus that delivers class-leading range of up to 300 miles on a single charge.

Speaker Change: So yeah, 387 kilowatt hour battery pack.

Speaker Change: It provides the longest range, has the biggest battery in the school bus market, and provides more uphill climbing power, and has the most desirable V2G capability for a more stable electric grid and community sustainability in areas where it is deployed.

Speaker Change: Turning to the production line, GreenPower has made significant investment with our in-house body division GP truck body.

Speaker Change: The focus has been to improve delivery time of upfitting our EVstar cabin chassis.

Speaker Change: with truck bodies for customers, providing a seamless one-stop shop opportunity.

Speaker Change: though GP truck body, excuse me, through a GP truck body.

Brendan Riley: GreenPower has been able to develop a comprehensive suite of products with new truck body designs, including our all-aluminum stake bed, our landscape bed, our dump truck, our utility truck, Service Body, and the new state-of-the-art refrigerated box truck, which we've branded the EVstar Reefer X. The Reefer X has the X-factor in that it weighs less, performs better, is built stronger, and is more affordable and has a longer warranty than typical competitive products.

Speaker Change: GreenPower has been able to develop a comprehensive suite of products with new truck body designs, including our all-aluminum stake bed, our landscape bed, our dump trucks, our utility trucks.

Speaker Change: Service Body, and the new state-of-the-art refrigerated box trucks.

Speaker Change: which we've branded the EVstar Reefer X.

Speaker Change: The Reefer X has the X-factor in that it weighs less, performs better, is built stronger and is more affordable and has a longer warranty than typical competitive products.

Brendan Riley: These new designs open exciting new markets for GreenPower and demonstrate the flexibility of the EVstar platform. As a result of these efforts, the commercial truck sales team has increased sales of upfitted commercial EVstar lines by nearly 50% during the fiscal year from 79 to 117 vehicles. GreenPower also won the 2023 Green Car Product of Excellence award for the EV Star Cab Chest. Green Car Journal said that the award honors commercial vehicles that feature greater environmental performance through higher efficiency.

Speaker Change: These new designs open exciting new markets for GreenPower and demonstrate the flexibility of the eVSTAR platform.

Speaker Change: as a result of these efforts.

Speaker Change: By commercial truck sales team, GreenPower has increased sales of upfitted commercial EV star line by nearly 50% during the fiscal year from 79 to 117 vehicle deliveries.

Speaker Change: GreenPower also won the 2023 Green Car Product of Excellence for the EVstar cab chassis. Green Car Journal said the award honors commercial vehicles that feature greater environmental performance through higher efficiency.

Brendan Riley: The integration of advanced technology and electronics and innovative powertrains that achieve decarbonization goals with low or no carbon emissions. All in all, the fiscal year was a success for GreenPower, the first school buses manufactured in West Virginia, the launch of its commercial and school bus product, and the increase in sales in both the company's school bus products and upfitted EV, SARS trucks and vans. Next, I'll turn it over to Michael Sieffert, GreenPower's CFO, who will cover the financial highlights.

Speaker Change: The integration of advanced technology and electronics and innovative powertrains that achieve decarbonization goals with low or no carbon emissions.

Speaker Change: All in all, the fiscal year was a success for GreenPower.

Speaker Change: But the first school bus is manufactured in West Virginia, the launch of its commercial and school bus products.

Speaker Change: and the increase in sales in both the company's school bus products and upfitted EB, SARS trucks and vans.

Speaker Change: Next, I'll turn it over to Michael Sieffert, GreenPower CFO , who will cover the financial highlights.

Speaker Change: Thank you, Brendan.

Michael Sieffert: For the year ending March 31st, 2024, GreenPower generated revenues of $39.3 million with cost of sales of $33.9 million, yielding a gross profit of $5.4 million. GreenPower continues to be one of the few EV OEMs that consistently posts a gross profit. However, this past year, our gross profit margin declined due to inventory write-downs as we began production in West Virginia and delivered our first vehicles produced at the factory. We believe that transitioning production pursuant to customer orders will help alleviate the adjustments, and an increased throughput in West Virginia should reduce the fixed overhead allocation per unit, which over time should help improve our overall gross profit.

Michael Sieffert: The year ended March 31st, 2024. GreenPower generated revenues of $39.3 million with cost of sales of $33.9 million, yielding a gross profit of $5.4 million.

Michael Sieffert: GreenPower continues to be one of the few EV OEMs that consistently post a gross profit. This past year our gross profit margin declined due to inventory write downs and as we began production in West Virginia and delivered our first vehicles produced at the factory.

Michael Sieffert: We believe that transitioning production pursuant to customer orders will help alleviate the adjustments and an increased throughput in West Virginia should reduce the fixed overhead allocation per unit, which over time should help improve our overall gross profit.

Michael Sieffert: In the 2024 fiscal year, we will deliver 222 GreenPower purpose-built zero-emission vehicles, consisting of 122 EVstar cabin chassis, 18 EVstar cargo, 6 EVstar cargo plus, 33 EVstar passenger vans, 31 Type-T beast school buses, 10 Type-A nano-beast and nano-beast access school buses, as well as 2 EV2 fit. This past year has been a transition. It will bring deliveries to a broader group of dealers and customers, as well as extending our geographic reach, excluding the deliveries of cabs and chassis to other OEMs. We enjoyed a 50% increase from 79 vehicles in the previous year to 117 in the current 2024 fiscal year.

Michael Sieffert: For the 2024 fiscal year, we deliver 222 GreenPower

Michael Sieffert: Purpose-built, zero-emission vehicles consisting of 122 EV-STAR cab and chassis.

Michael Sieffert: 18 EVstar Cargo, 6 EVstar Cargo Plus

Michael Sieffert: 33 EVstar Passenger Vans, 31 Type T Beast School Buses, 10 Type A Nano Beast, and Nano Beast Access School Buses, as well as 2 EV250s.

Michael Sieffert: This past year has been a transition. It's deliveries to a broader group of dealers and customers as well as extending our geographic reach.

Michael Sieffert: Excluding the deliveries of cab and chassis to other OEMs, we enjoyed a 50% increase from 79 vehicles in the previous year to 117 in the current 2024 fiscal year.

Operator: Fraser and Brendan talked about the transition with our production, and this transition has been facilitated by changes to our capital structure. During the year, we entered into a revolving $5 million Terminal and Facility facility, as well as obtaining guarantees for letters of credit for a further $5 million with Export Development Canada, or EDC. Both the facility and the letter of credit guarantees are used to finance the production of GreenPower all-electric vehicles pursuant to existing customer orders, and they've therefore been instrumental in our transition.

Michael Sieffert: Fraser and Brendan talked about the transition with our production and this transition has been facilitated by changes to our capital structure.

Michael Sieffert: During the year, we entered into a revolving $5 million.

Michael Sieffert: Term Loan Facility, as well as obtaining guarantees for letters of credit for a further $5 million with Export Development Canada.

Michael Sieffert: or EDC. Both the facility and the letter of credit guarantees are used to finance the production of GreenPower all-electric vehicles pursuant to existing customer orders, and they've therefore been instrumental in our transition.

Operator: EDC has supported GreenPower's production of zero emission vehicles and has been a great partner for GreenPower. During the fiscal year, GreenPower commenced monthly lease payments on a lease purchase agreement with the state of West Virginia for a production facility located in South Charleston, more than six acres and an 80,000 square foot building. The lease payments total $600,000 for the year, and these will be applied in full to the purchase of the property.

Michael Sieffert: EDC has supported GreenPower's production of zero-emission vehicles and has been a great partner for GreenPower.

Michael Sieffert: During the fiscal year, GreenPower commenced monthly lease payments on a lease purchase agreement with the state of West Virginia for a production facility located in South Charleston.

Michael Sieffert: with more than six acres and an 80,000 square foot building.

Michael Sieffert: Lease payments total $600,000 for the year, and these will be applied in full to the purchase of the property. The state will also provide up to $3.5 million in employment incentive payments to GreenPower for jobs created in the state.

Michael Sieffert: as well as for as production increases over time.

Michael Sieffert: Titles of the property will be transferred to GreenPower once total lease and incentive payments reach $6.7 million.

Operator: The state will also provide up to $3.5 million in employment incentive payments to GreenPower for jobs created in the state, as well as for as production increases over time. Title to the property will be transferred to GreenPower once total lease and incentive payments reach $6.7 million. With that, Operator, please open the call up for questions.

Speaker Change: With that, Operator, please open the call up for questions.

Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Tyler DiMatteo with BTIG; please go ahead.

Speaker Change: We will now begin the question and answer session.

Speaker Change: To ask a question, you may press star then 1 on your telephone keypad.

Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Speaker Change: The first question comes from Tyler DiMatteo with BTIG. Please go ahead.

Tyler DiMatteo: Hi, everyone, and good morning. Thanks for taking the questions here. I wanted to start on the shift in the production plan and how you're thinking about managing that more towards orders. I know you highlighted some color on the inventory side of things. I'm just curious about any other tangible steps you can kind of point to here in terms of how you're thinking about exactly doing that.

Tyler DiMatteo: Hi everyone and good morning. Thanks for taking the questions here. I wanted to start on the the shift in the production plan and how you're thinking about managing that more towards orders. I know you highlighted some color on the inventory side of things. I'm just curious about any other tangible steps.

Tyler DiMatteo: You can kind of point to here in terms of how you're thinking about exactly doing that, any other color there. Thanks.

Tyler DiMatteo: Any other color you want there? Thanks.

Fraser Atkinson: Well, I'll start, and Brendan and Michael can weigh in. But for example, with West Virginia, this your production is what is known in the industry as CKD. So it's component knockdown. And that requires costs that we've incurred this past year in getting that facility ramped up to handle that kind of production as well as the processes to facilitate that. And then on the financing side, is that you know, getting a line of credit where it's supported by, you know, finished goods and accounts receivable.

Speaker Change: Well, I'll start and Brendan and Michael can weigh in, but for example, with West Virginia,

Speaker Change: Our production is what is known in the industry as CKD, so it's component knockdown, and that requires...

Speaker Change: Managing our supply chain in a fashion that we can manufacture the product through West Virginia as opposed to

Speaker Change: leveraging contract manufacturers less than we have in the past. So that's a pretty big shift on the production side and while

Speaker Change: It doesn't require a big capex, there was a significant cost that we've incurred this past year in getting that facility ramped up to handle that kind of production as well as the processes to facilitate that.

Speaker Change: and then on the financing side.

Speaker Change: is that, you know, getting a line of credit where it's supported by, you know, finished goods, accounts receivable, in other words, the traditional

Fraser Atkinson: In other words, the traditional metrics are very, very different than in our case, where we're looking at arranging financing for the actual production, which isn't covered by finished goods or any other form of inventory that would support a line. So EDC is a great partner for us, and yet they have a facility that is very much geared towards the kind of production financing that we needed for this shift or this transition.

Speaker Change: Metrics is very, very different than in our case where we're looking at arranging financing for the actual production, which isn't covered by finished goods or any other form of inventory that would support a line of credit.

Speaker Change: So, EDC is a great partner for us and yet they have a facility that is very much geared towards the kind of production financing that we needed for this shift or this transition.

Tyler DiMatteo: Okay, great. Thanks, Fraser.

Speaker Change: Okay, great. Thanks, Fraser. Really appreciate that. And then my follow-up here, I wanted to talk a little bit about the order book. I think you pointed to more than 100 in the order book units, pipeline, you know, 160 plus, call it. You also have that nice order with the West Virginia for the incremental 88 units.

Tyler DiMatteo: I really appreciate that. And then, for my follow up here, I wanted to talk a little bit about the order book. I think you pointed to more than 100 in the order book units pipeline, you know, 160 plus, call it that. You also have that nice order with West Virginia for the incremental 88 units for school buses. I guess, can we talk about that a little bit, maybe how you're thinking about the timing of those deliveries and just a general update on maybe that contract?

Speaker Change: for school buses. I guess can we talk about that a little bit, maybe how you're thinking about that, timing of those deliveries, and just general update on maybe that contract?

Fraser Atkinson: Well, the 37 is well in the process of the 88 that you referenced, and I believe Brendan commented on that earlier this morning.

Speaker Change: Well, the 37 is well in process of the 88 that you referenced, and I believe Brendan commented on that earlier this morning.

Fraser Atkinson: And so, you know, our objective is to build and get those delivered within the current fiscal year. So you'll see delivery later this year and continue through with delivery for all 37 of those. The big difference, just taking a step back, the big difference between live orders and qualified leads is that the vast majority of the qualified leads are represented by orders or customer orders where funding has been either specifically secured or identified, working through contracts.

Speaker Change: And so that, you know, our objective is to build and get those delivered within the current fiscal year. So you'll see deliveries.

Speaker Change: later this year and continuing through with the delivery for all 37 of those.

Speaker Change: The big difference, just taking a step back, the big difference between live orders and the qualified leads is that

Speaker Change: The vast majority of the qualified leads are represented by orders or customer orders where funding has been either specifically secured or identified, we're working through contracts.

Fraser Atkinson: The EPA has been particularly slow in getting their contracts out, but we don't have a delivery date. In the case of live orders, we're by and large working with production that has delivery dates or expectations on when the vehicles will be delivered to the end customers or dealers versus the qualified leads where we don't have delivery dates. I should add that it's not just the contracts. In some cases, it's customers or dealers that want the end-user to have their infrastructure in place or charging stations installed.

Speaker Change: The EPA is being particularly slow in getting their contracts out.

Speaker Change: But we don't have a delivery date. So in the case of live orders, we're by and large working with

Speaker Change: production that has delivery dates or expectations on when when the vehicles will be delivered to the end customers or dealers.

Speaker Change: versus the qualified leads where we don't have a delivery date and I should add that it's not just the contracts in some cases it's

Speaker Change: customers or dealers that want the end user to have their infrastructure in place or charging stations installed and the like.

Tyler DiMatteo: Okay, great. And just one last one here, I want to squeeze in: what's the, I think that 88 was an incremental increase, I mean, what does that bring the total contract to? Is it around 100 now?

Speaker Change: Okay, great. And just one last one here I want to squeeze in. What's the, I think that 88 was an incremental, I mean what does that bring the total contract to? Is it around a hundred now?

Fraser Atkinson: It's over a hundred.

Tyler DiMatteo: Okay, great. Thank you guys. I really appreciate the time. I'll turn it back to the queue.

Speaker Change: It's over a hundred.

Speaker Change: Okay, great. Thank you guys, really appreciate the time. I'll turn it back to the queue.

Operator: The next question comes from Craig Irwin with Roth Capital Partners. Please go ahead.

Speaker Change: The next question comes from Craig Irwin with Roth Capital Partners. Please go ahead.

Craig Edward Irwin: Good morning. Thanks for taking my questions. Fraser, you know, we all completely understand the repositioning of the company towards, you know, new manufacturing and the school bus markets, which look really exciting right here, you know, with billions of dollars being allocated by our president to that opportunity to give our kids clean air, right? Clean air while they go to school and come home. Um, can you maybe, um... Talk a little bit about the challenges in the medium term and the short term as far as delivery on those is concerned.

Craig Edward Irwin: Good morning, thanks for taking my questions.

Craig Edward Irwin: Fraser, you know, we all completely understand the repositioning of the company.

Craig Edward Irwin: New Manufacturing and the School Bus Markets, which look really exciting right here with billions of dollars being allocated by our President to that opportunity to give our kids clean air while they go to school and come home.

Speaker Change: Can you maybe...

Speaker Change: Talk a little bit about the challenges in the medium-term, short-term, as far as the delivery on those.

Speaker Change: Those contracts, you know, you have the orders.

Speaker Change: But many of these school districts have faced issues around charging infrastructure, and there were some early issues around capital access.

Speaker Change: I believe some of this has been handled, maybe a lot of it. Can you just talk about what you're hearing from the different districts as you work with them? And, you know, can you maybe shape it for us how we should expect momentum to come together for GreenPower in this market?

Fraser Atkinson: That's a great question. The, you know, I guess one of the big challenges is that, you know, these initiatives and, to some extent, mandates that are driving these at the federal level, you know, they've been very quick at getting, you know, some of the awards out there and the announcements and press releases. But in the trenches here, as an OEM, I mean, we're waiting for contracts, and, you know, so there's been a delay on that side. Our past year didn't have a dollar of revenue from EPA-funded deals, even though they've been very substantial out there. So there's been that disconnect.

Speaker Change: That's a great question. I guess one of the big challenges is that these initiatives and to some extent mandates that are

Speaker Change: that are driving these at the federal level. They've been very quick at getting some of the awards out there and the announcements and press releases.

Speaker Change: But in the trenches here, as an OEM, I mean, we're waiting for contracts.

Speaker Change: You know, so there's been a delay on that side our past year.

Speaker Change: didn't have a dollar of revenue from EPA funded deals even though they've been very substantial out there so there's there's been that disconnect.

Fraser Atkinson: Going back to your question on charging, that is probably one of the biggest impediments that we continue to encounter, especially in an area where we perhaps aren't dealing with as sophisticated a purchaser as we would with a large fleet operator who would have a whole group dedicated to ensuring that charging infrastructure is properly scoped out and installed and works properly, whereas with many school districts and operators of school buses for school districts, they have a mindset sometimes that, And so there really isn't necessarily a practical outlook in terms of how they're going to deploy the electric school buses.

Speaker Change: Going back to your question on charging, that is...

Speaker Change: probably one of the biggest impediments that we continue to encounter.

Speaker Change: especially in an area where we perhaps aren't dealing with as sophisticated a purchaser as we would with a large fleet operator who would have a whole group dedicated to ensuring that

Speaker Change: Charging infrastructure is properly scoped out and installed and works properly.

Speaker Change: whereas with many school districts and operators of school buses for school districts.

Speaker Change: They have a

Speaker Change: mindset sometimes that, well, let's get the best, you know, level three charging stations that are possible or available out there, without realizing that they don't have enough power into their facility to accommodate their wish list.

Speaker Change: And so there really isn't necessarily a practical outlook in terms of, you know, how they're going to deploy the electric school buses.

Fraser Atkinson: So still a lot of education required, still a lot of hand-holding, and going back to our order book, that has impacted how we're able to roll out the qualified leads into the live order portion of our order book.

Speaker Change: So, still a lot of education required, still a lot of hand-holding, and going back to our order book, that has impacted how we're able to roll out the qualified leads into the live order portion of our order book.

Craig Edward Irwin: Okay, excellent. So, is it correct that the power needs of the MiniBeast are materially less than the Beast? So, the charging infrastructure is easier to install, easier to site. So, we could see sort of more near-term strength in that area of the market, maybe that, you know, the Type C school bus alternative, right, the clean alternative to Type C. And, you know, can you maybe talk a little bit about your capacity to serve demand there? I mean, is there a capability to scale up to, you know, tens or tens of thousands of units a month or more? You know, how should we think about that?

Speaker Change: Okay, excellent. So, is it correct that the power needs of the mini-beast are materially less than the beast?

Speaker Change: So, the charging infrastructure is easier to install, easier to site, so we could see sort of more near-term strength in that area of the market, maybe that, you know.

Speaker Change: The Type C school bus alternative, right, the clean alternative to Type C.

Speaker Change: And, you know, can you maybe talk a little bit about your capacity to serve demand there? I mean, is there a capability to scale up to, you know, tens or tens of units a month or more? You know, how should we think about that?

Fraser Atkinson: Our Type A school bus is the only purpose-built Class 4 school bus on the market. In California, we compete with three other companies that use a Ford E450 heavy-duty cabin chassis that they acquire from Ford. So we're in a very different category, literally a category of our own, where if someone wants to buy a purpose-built Type A school bus, then ours is the choice. We, you know, and that platform is, I mean, we love that platform because it's built on our EV star cabin chassis.

Speaker Change: Well, our Type A school bus is...

Speaker Change: The only purpose-built Class 4 school bus on the market in California. We compete with three other companies that use a Ford E450 heavy-duty cabin chassis that they acquire from Ford.

Speaker Change: So, we're in a very different category, literally a category of our own, where someone wants to buy a purpose-built school bus, a Type A school bus, then ours is the choice.

Speaker Change: And that platform is, I mean, we love that platform because it's built on our EV star cabin chassis. So that is a proven platform that we use for, within our commercial vehicle group and that we sell to other OEMs.

Fraser Atkinson: So that is a proven platform that we use within our commercial vehicle group and that we sell to other OEMs. And so that gives us the ability to either have a level two charger or a DC fast charge. And given the battery capacity on that vehicle, in many cases, a user can fully charge the vehicle between the morning run and the afternoon run on that vehicle using a 19.2 kW level two charger, which is not expensive, easy to install, much easier to install than a DC fast charge, and doesn't have the same power requirements. So there are distinct advantages with that class of vehicle. And we see that that could be our lead product within the school bus sector, where we are seen as the leader in the space.

Speaker Change: And so that gives us the ability to either have a level 2 charger or a DC fast charge.

Speaker Change: And given the battery capacity on that vehicle.

Speaker Change: In many cases, a user can fully charge the vehicle between the morning run and the afternoon run on that vehicle.

Speaker Change: using a 19.2 kW level 2 charger, which is not expensive, much easier to install than a DC fast charge, and doesn't have the same power requirements.

Speaker Change: So, there's distinct advantages with that class of vehicle and we see that that could be our, you know, that could be our lead product within the school bus sector where, you know, we are seen as the leader in the space.

Craig Edward Irwin: Excellent. So, my last question, if I may, your balance sheet, right? You've done a very good job managing working capital. I guess working capital is down almost $10 million over the year ago period. You know, while for the fiscal year, your revenue was very similar. Can you talk about the ability to maybe liquidate inventory that's there? What should we think about working capital to serve the ramping school bus opportunity?

Speaker Change: Excellent. So my last question, if I may, your balance sheet, right? You've done a very good job managing working capital.

Speaker Change: You know, I guess working capital down almost 10 million over the year ago period.

Speaker Change: You know, while for the fiscal year your revenue was very similar, can you talk about the ability to maybe liquidate inventory that's there? What should we think about working capital to serve the ramping school bus opportunity?

Fraser Atkinson: Well, we see the, I mean, there will be work in the process represented by the, you know, production in West Virginia and Porterville pursuant to customer orders. But we see a continued reduction in our finished goods portion, or a, you know, the proportion of finished goods being lower than the work in process, and we see a continued lower percentage in our accounts receivable than our sales as a result of the mix on the sell side.

Speaker Change: Well, we see the, I mean, there will be work in process represented by the, you know, the production in West Virginia and Porterville pursuant to customer orders.

Speaker Change: But we see a continued reduction in our finished goods portion, or the proportion of finished goods being lower than the work in process.

Speaker Change: We see a continued lower percentage in our accounts receivable than our sales as a result of the mix on the sales side.

Craig Edward Irwin: I just, well, congratulations on the success of repositioning the company. We're hoping the spring is let loose, and we get to see the real potential as the school bus deliveries materialize this year.

Speaker Change: Well, congratulations on the success repositioning the company. We're hoping the spring is let loose and we get to see the real potential as these school bus deliveries materialize this year.

Operator: Again, if you have a question, please press star, then 1. The next question comes from Tate Sullivan with Maxim Group. Please go ahead.

Speaker Change: Thanks, Craig

Speaker Change: Again, if you have a question, please press star, then 1. The next question comes from Tate Sullivan with Maxim Group. Please go ahead.

Tate H. Sullivan: All right, thank you. Good morning.

Tate H. Sullivan: All right, thank you. Good morning. Back in April , along with guiding to the school bus deliveries, 88 of them in fiscal year 25, you gave some detail on the EPA grant.

Tate H. Sullivan: Back in April, along with guiding the school bus deliveries, 88 of them in fiscal year 25, you gave some detail on the EPA grant, for $18.6 million. How will you get that grant money upon delivery or perhaps ahead of delivery? Well, we're still waiting for the contract. Until we have it, we're able to get that completed, and obviously, we'll announce in a very timely fashion. That is holding us up in terms of providing the specific final delivery dates pursuant to that particular award. It's waiting for the contract, pardon, from the EPA itself or from the school district customer in West Virginia. From the EPA.

Speaker Change: for $18.6 million. How will you get that grant money upon delivery or perhaps ahead of delivery? Can you talk about that a bit, Fraser, please?

Speaker Change: while we're still waiting for the contract.

Fraser Atkinson: So, that, you know, until we have the, you know, we're able to get that completed and obviously we'll announce in a very timely fashion, you know, the, we're, we're, you know, that, that is.

Fraser Atkinson: Holding us up in terms of providing the specific final delivery dates pursuant to that particular award.

Fraser Atkinson: And it's a waiting for the contract, pardon, from the EPA itself or from the school district customer in West Virginia? From the EPA.

Fraser Atkinson: And then the April comment about delivering 88 school buses in West Virginia in fiscal year 25, is that still an issue? Timelines. Well, we still, you know, we're, I mean, we are working right now on, you know, the 37 on the front end of that, as well as, we recently, and just that was just a week ago, we delivered the first beast school bus out of the West Virginia facility, which shows our ability or capability of producing both types of A school buses as we delivered four of those in December of 2023.

Fraser Atkinson: Okay.

Speaker Change: Perfect. And then the April comment about delivering 88 school buses in West Virginia in fiscal year 25, is that still intact, that type of timeline there?

Speaker Change: Well, we still, you know, we're, I mean, we are working right now on, you know, the 37 on the front end of that.

Speaker Change: as well as, you know, we recently, and that was just a week ago.

Speaker Change: We delivered the first BEAST school bus out of the West Virginia facility, which

Fraser Atkinson: And so now, you know, we've delivered our first beast school bus in the past week. So now that that's, you know, that milestone's being achieved, you know, we're continuing to work on the 37B school bus order where, you know, those will be deliveries that occur this fall and winter and through before the end of the current fiscal year. And then Brendan, you call it, and then we'll get on the qualified lead pipeline.

Speaker Change: you know, shows our ability or capability of producing both the

Speaker Change: type A school buses as we delivered four of those in December of 2023 and so now you know we've delivered our first B school bus in the past week.

Tate H. Sullivan: 160 more. So that's above and beyond the live orders for more than 100, if I heard that correctly. And then you said 100 million in revenue. Is that based on the grant money they pay for? Is that, you know, that implies a pretty penny.

Speaker Change: So now that that's, you know, that milestone is being achieved.

Brendan Riley: That's just the estimate,

Speaker Change: We're continuing to work on the 37B school bus order, where those will be deliveries that occur this fall and winter and through before the end of the current fiscal year.

Speaker Change: Okay, thank you. Great. And then Brendan, you call it and then we'll get on the Qualified Lead Pipeline.

Operator: So that's above and beyond the live orders for more than 100, if I heard that correctly.

Speaker Change: 160 more so that's above and beyond the live orders for more than a hundred if I heard that correctly and then you said a hundred million of revenue is that based on what grant money they pay for is that I mean that implies a pretty good price tag

Operator: And then you, if you set 100 million of revenue, is that based on what grant money may pay for? Is that, I mean, that implies a pretty good price tag. How do you get that number too?

Fraser Atkinson: That's just the estimate of revenue.

Speaker Change: get that number too.

Brendan Riley: revenue. So that's what we have as far as our qualified leads go. You extrapolate the value of those orders. That's the revenue.

Speaker Change: That's just the estimate of...

Fraser Atkinson: So that's what we have as far as our qualified lead to, you extrapolate the value of those orders. That's the, the value.

Speaker Change: revenue. So that's what we have as far as our qualified leads, if you extrapolate the value of those orders.

Operator: Great, great.

Tate H. Sullivan: Thank you all.

Speaker Change: That's the value.

Operator: Thank you all.

Speaker Change: Thank you all.

Operator: This concludes our question and answer session.

Fraser Atkinson: This concludes our question and answer session. I would like to turn the conference back over to Fraser Atkinson, CEO, for any closing remarks.

Fraser Atkinson: I would like to turn the conference back over to Fraser Atkinson, CEO, for closing remarks. Thank you. We expect to be very busy this summer in securing contracts for our school bosses and generating orders from new markets for commercial vehicles. This will be a start of the realization of our strategy focusing on the school boss sector and class for commercial vehicles where there are mandates and money. We look forward to providing you with timely updates on our progress. In the meantime, if you have any questions, feel free to reach out to Brendan Michael or myself.

Speaker Change: This concludes our question and answer session. I would like to turn the conference back over to Fraser Atkinson, CEO , for any closing remarks.

Fraser Atkinson: Thank you. We expect to be very busy this summer securing contracts for our school buses and generating orders from new markets for commercial vehicles. This will be the start of the realization of our strategy focusing on the scuba sector and class four commercial vehicles where there are mandates. We look forward to providing you with timely updates on our progress. In the meantime, if you have any questions, feel free to reach out to Brendan, Michael, or myself. Thank you for your continued support, and this concludes our call.

Fraser Atkinson: Thank you. We expect to be very busy this summer in securing contracts for our school buses and generating orders from new markets for commercial vehicles.

Fraser Atkinson: This will be the start of the realization of our strategy focusing on the school bus sector and class 4 commercial vehicles where there are mandates and money.

Fraser Atkinson: We look forward to providing you with timely updates on our progress.

Fraser Atkinson: In the meantime, if you have any questions, feel free to reach out to Brendan, Michael, or myself. Thank you for your continued support, and this concludes our call.

Fraser Atkinson: Thank you for your continued support, and this concludes our call.

Operator: The conference has now concluded. Thank you for attending today's presentation.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: You may now disconnect.