Q3 2024 Beam Global Earnings Call
Yes.
Speaker Change: Hello, and welcome to the beam glove box first quarter 'twenty 'twenty four operating results conference call all participants will be in listen only mode.
Speaker Change: Did you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Speaker Change: After todays presentation, there will be an opportunity to ask questions.
To ask a question you May press Star then one on your telephone keypad.
Speaker Change: Dropping the queue you May press Star then yeah.
Speaker Change: As a reminder, this conference is being recorded.
Speaker Change: I would now like to hand, the call to lease up her talk Chief Financial Officer. Please go ahead.
Speaker Change: Hi, good afternoon, and thank you for participating and being global third quarter 'twenty four operating results conference call. We appreciate you joining us today to hear an update on our business.
Speaker Change: Joining me is Desmond lately, the president CEO and chairman of boom.
Speaker Change: That's been will be providing an update on recent activities had been followed by a question and answer session.
Speaker Change: But first I'd like to communicate to you that during this call management will be making forward looking statements, including statements that address beans expectations for future performance or operational results.
Speaker Change: Forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements.
Speaker Change: For more information about these risks please refer to the risk factors described in beans, Most recently filed 10-Q and other periodic.
Speaker Change: Sorry 10-K.
Speaker Change: And other Piotter periodic reports filed with the SEC.
Speaker Change: The content of this call contains time sensitive information that is accurate only as of today November 15th 2024.
Except as required by law being disclaims any obligations to publicly update or revise any information to reflect events or circumstances that occur. After this call.
Speaker Change: Next I would like to provide an overview of our financial results for being third quarter of 'twenty 'twenty four.
Speaker Change: Our third quarter revenues are 11 5 million. This is the second highest third quarter revenues in the history of the company.
47, 9% of our revenue in third quarter was derived from commercial customers. This is an increase of 80% over quarter three of 2023.
Speaker Change: For the nine months ended September 30th 24, our revenues were 41 million.
Speaker Change: We have grown our pipeline of prospective customers to over 200 million.
Speaker Change: Although we cannot be sure of when or if those prospective orders will turn into actual sales.
Our backlog is 7 million for the USA.
Speaker Change: And an additional 3.6 million for Europe for a total of $10 6 million as of November 7th.
Speaker Change: We generated GAAP gross margin of 10, 7%.
Speaker Change: Compared to one 7% in 2023, so we have an improvement of nine percentage points compared to Q3 of 'twenty three.
Speaker Change: Our gross profit non-GAAP included 800000 for noncash depreciation and intangible amortization, which negatively impacts our profit.
Speaker Change: None of these noncash items, our gross margin would've been 17, 6%.
Speaker Change: This is non-GAAP.
Speaker Change: For the nine months ended September 30th a 24 hour gross profit was 12% of sales, which included a negative impact of the $2 8 million for the noncash depreciate depreciation and intangible amortization, our nine month non-GAAP gross profit none of these noncash items was $18 three.
Speaker Change: Percent.
Speaker Change: The continued improvement in gross margin is primarily because we are able to recognize the engineering design changes to our E. D arc that resulted in cost reductions to our bill of materials and labor efficiencies. Additionally, there were reductions in material costs as a result of purchasing discounts as well as an operational improvement.
Speaker Change: And positive margin generated from the acquisition of Omega.
Speaker Change: Additionally, our engineering and operations teams continue to identify further cost reductions and efficiencies, which along with support from being Europe facilities, We believe will improve our gross margin in future quarters.
Speaker Change: Our operating expenses for Q3 of 24 was a credit of 50000 due to the reversal of the fair value of the contingent consideration for the Omega acquisition.
To be able to compare Q3 of 24 to Q3 of 'twenty three if we back out the noncash items, which is non-GAAP.
Speaker Change: We would back out the $6 1 million related to the noncash change in the fair value of the contingent consideration for the Omega acquisition.
Speaker Change: We offset this by 200000 for the noncash warrant amortization.
Speaker Change: And 200000 for the stock compensation related to the timing of the board grants.
Speaker Change: We issued those in July of 24 of this year.
Speaker Change: This results in a $1.7 million increase in operating expenses.
Speaker Change: Quarter over quarter and these are mainly related to we have one 2 million and operating expenses for being Europe.
Speaker Change: We have 300000 in customer service accommodation costs.
Speaker Change: And we have 100000 and our facility expansion cost.
Speaker Change: And then we have 100000 for consulting for government relations and engineering.
Speaker Change: Our operating expenses for the nine months ending Q3, 24 was 11 6 million.
Speaker Change: When you remove the $4 5 million noncash decrease in fair value of contingent consideration for the Omega acquisition in 'twenty four.
Speaker Change: And then in 'twenty three we had a 300000 dollar increase in the fair value of contingent consideration for the also acquisition.
Speaker Change: The net change in the fair value of the contingent consideration is $4 3 million.
This is offset by noncash increase it and warrant and warrant amortization expense of 300000.
Stock compensation of 300000.
Speaker Change: And a bad debt allowance of 400000, resulting in $3 3 million increase in operating expenses.
Speaker Change: So these increases in operating expenses up 3.3 million year over year, it's $2 1 million for being Europe.
Speaker Change: 400000 in the facility expansion cost.
Speaker Change: 300000 in commissions due due to earned at time of customer payment. So commissions are paid to our salespeople when the customer actually pays.
Speaker Change: 300000 in customer service accommodation costs, and 300000 related to acquisition costs.
The resulting net income was $1 3 million for the third quarter of 24 compared to a net loss of $3 6 million for the same period in 'twenty three.
Speaker Change: Net income included the noncash 6.1 million for contingent consideration depreciation.
Speaker Change: Intellectual of amortization and the allowance for bad debt.
Speaker Change: The net loss for the nine months ending September 24 was $6 7 million.
Speaker Change: When we back out the noncash expense items related to depreciation intellectual property amortization, the noncash compensation expense and the allowance for bad debt and the fair value of the contingent consideration.
Speaker Change: Adjusted non-GAAP net loss was $5 8 million 14, 2% of revenue compared to 2023 noncash adjusted net loss of $8 million, which is 16, 9% of revenue and almost three percentage points better.
Speaker Change: Our cash balance at Q3 of 24 was $4 9 million compared to $10 4 million at the end of Q4 of 'twenty three.
The cash decrease included a one time cash outlays for the second tranche payment for the acquisition of Mei of Omega of $2 7 million in early Q1 of 'twenty four.
Speaker Change: And our net outlay of cash for the acquisition of Telecom in Q3 of 24, which was approximately 300000.
Our net cash used for operating activities for the nine months ending September 30th 24 was $3 1 million compared to $13 8 million for the same period in 'twenty three.
Speaker Change: We continue to be debt free other than our small auto leases and we still have our 100 million line of credit readily available.
Speaker Change: After adjusting for noncash contingent consideration, which was a current liability our Q3 working capital decreased by $3 5 million, 17% from Q2 that is expected to rebound over the following quarters as our sales increase our margins continue to increase.
Speaker Change: And we continue to manage our expenses.
Speaker Change: I will now turn this over to Desmond to provide a business update.
Speaker Change: Okay.
Desmond Lately: Thanks Lisa.
Desmond Lately: Yes.
Speaker Change: Third quarter was 124 being global earnings call and business update and just before I get into my comments that there was a several mentions of warrants and unleashes commentary I just wanted to be clear I remind everybody that the warrants that we issued as part of our 2019 up listing to NASDAQ.
Speaker Change: <unk> of all either exercise.
Speaker Change: Sure.
Speaker Change: I'm speaking to United from so Tonight from Amman in Jordan, where it's heading towards one o'clock in the morning.
Speaker Change: And as part of a much more extensive trip to Europe Africa, and the middle East promoting beam global products and business I'll give you more information on this trip later in the call, but first I wanted to talk about our third quarter results and describe some of the exciting progress we're making.
Speaker Change: Okay. So a drop off this call, which is always possible when I'm in the middle east or.
Speaker Change: These are just two parts.
Speaker Change: GE amongst yourselves, although back in as quickly as I can.
Q3, our adult since he's been one of the most expensive for being globally.
Speaker Change: Alright.
Speaker Change: Sleep because of course I am speaking of expansion during a quarter when we just announced a reduction in revenues from the same period prior year.
Speaker Change: The fact is that we've grown our geographic coverage very significantly and we've released a whole suite of new products as a result of our best customers demands and.
Speaker Change: We saw gross actually in our battery business during the period.
Speaker Change: Geographic expansion and the addition of new products puts us in a position to capitalize on much larger and much more varied set of opportunities both in the United States and internationally.
Speaker Change: This is especially relevant because of that third quarter revenue, which came in at about 11.
Speaker Change: Pardon me.
Speaker Change: Primarily in the same period last year.
Speaker Change: The question is why and what does this mean for our future is that an indication of some sort of fundamental decline or is it simply a bump in the road and symptomatic of the Lumpiness in our order cadence, which I predicted in previous earnings calls.
Speaker Change: Well I'm very confident that the answer to that question is the second of those two possibilities not the first.
Speaker Change: Vacation of transportation is accelerating globally and so as the requirement for increase renewable energy to power that transition and all the other new demands that are coming like data centers AI and electrification of industry.
Speaker Change: My International travels are making it very clear.
Speaker Change: Excuse me.
Speaker Change: At the direction of travel in the U S. In the short term. There's no question that our products are becoming more relevant every day.
Speaker Change: That perhaps explains where our pipeline is over $200 million today, an all time high.
Speaker Change: Not losing interest we're simply seeing delays in the decision to issue a purchase order amongst certain costs.
Speaker Change: This I believe temporary decline in our revenues can be explained by three or four contributing factors and I'm going to describe them to you I'm also going to tell you what we're doing about it.
Speaker Change: Firstly as I've said, we've seen some slowing down of orders from our federal customers.
Speaker Change: It cannot be entirely sure about all the risk but without doubt.
The reason it makes it a great deal of uncertainty and I'm going to see that uncertainty still exists today, while we wait for the new administration.
Speaker Change: Donald Trump has made some conflicting statement about electric vehicles and sustainable energy sources, but in balance was he said has been negative and thats, having an effect on federal purchasers, who are not sure what policy will look like in 2025.
Speaker Change: Nobody's canceled orders, but they have moved them right, while they wait to see what will happen.
Speaker Change: This federal uncertainty seems to have spread to a few state and even municipal customers.
Speaker Change: When combined with the general and unfounded negativity on Evs in the press we've seen this contribute to a slowing of order cadence in the United States.
Speaker Change: The drop in our revenues year over year can be explained by this alone because decline in federal revenue from Q3 2023, it's actually more than the full quarterly decline that I just described.
Speaker Change: We believe it's only moved right, let's say no one's Pennsylvania and that will get it back in 2025.
Speaker Change: The next factor.
Speaker Change: Is it we've seen some evolution in the regulatory environment, especially in our case, where you al certification of energy storage solutions is concerned.
Speaker Change: Over the years, we produced products, which comply with whatever requirements are regulators had at the time, we produce them and we've seen those change as batteries become more commonplace.
Speaker Change: Hey.
Speaker Change: Capabilities and potential risks.
Speaker Change: During the last year, we've seen increasing certification requests and then requirements among certain of the purchasing authorities we deal with.
Speaker Change: As a result of this we are going through a recertification process with U L, which will result in us being issued with the most up to date certifications.
Speaker Change: We have some purchase orders, which are on hold waiting this latest level of certification.
Speaker Change: Two factors are worthy of note here.
Speaker Change: The first is that U L. A is inspected our products and has not ever suggested that they are in any way unsafe.
Speaker Change: U L has never actually started and the second is that because of the unique and innovative nature of our products. You will has never actually certified anything lights up with these new standards.
Our engineering teams are working directly with UL and I must say, it's a learning journey for both ours and theirs.
Speaker Change: This inevitably causes delays and so the UL certification that I thought would happen this year it looks more likely to take place.
And of the FERC here.
Speaker Change: That time, we should be able to take advantage of the pent up demand from those customers, who are unwilling or unable to issue purchase orders until we were able to provide this new UL certification.
Speaker Change: In the meantime, we continue to sell to others, who are less sensitive on this matter because it was already said the lack of certification.
Speaker Change: There's no I know.
Speaker Change: Or efficacy, we have a lot of certification in the product just not these newest ones.
Speaker Change: The good news is that once we get this latest certification should break the logjam several opportunities and will also enhance our products and make it easier to manufacture and sell those in the U S and Europe.
Speaker Change: Thirdly, we're still very susceptible to large swings in revenue as a result of order timing, our order sizing or a combination of both.
Speaker Change: During the last several years, we've seen very significant growth in <unk> sales, particularly to government customers, especially since two of it to.
Speaker Change: The <unk> team has done a magnificent job of delivering that growth and that's coming along with these orders.
Speaker Change: Our revenues were 6 million in 2000 $29 million in 2021 'twenty 2 million in 2022, and just under $70 million in 2023.
Speaker Change: We're about flat in the first half of 'twenty 'twenty four.
Speaker Change: Even with this year is relatively flat growth our five year CAGR.
Speaker Change: So fantastic.
Speaker Change: Gross.
Speaker Change: But it's almost all come from one product and with a high degree of customer concentration.
Speaker Change: Naturally with concentration comes risk from timing and other externalities and we believe that we've seen some of that over the last couple of quarters.
Speaker Change: We're still confident that just as the pendulum.
Speaker Change: Just a moment it will swing back to growth again in 2025.
Speaker Change: In spite of what may be going on at the federal level with the New administration, there's a great deal of investment in this transition, which is very unlikely to be impacted in a negative way and there will still need to be a lot of spending on infrastructure outside of U S federal budgets it to be.
Speaker Change: Be clear I think those federal budgets come back too because fleet managers know the electrification is upon them and they cannot lose four years of preparation for it.
Speaker Change: So what are we doing about these factors.
Speaker Change: We have the following strategies to grow our business and immunized against any reduction in U S federal spending.
Yes.
Our geographic.
Speaker Change: Indices, which are in no way related to U S budget cycles.
Speaker Change: Our new product offerings deliver value, which for many of them are based upon the bjarke engineered platform. They do not seek investment from the same customers or fulfill the same functions and as such they create a whole new set of opportunities for us, but without creating a whole new set of cost centers or complexity in our in our production lines.
Speaker Change: Our focus on corporate as well as government sales is paying off as evidenced by the fact that around 50% of our Q3 revenues came from nongovernment customers. So much for us being a government only shop.
Speaker Change: We've added a new VP of sales.
Speaker Change: Sales in the U.
Speaker Change: Sure.
Speaker Change: Well both of these individuals have been Karma has a solid history of engaging distributors resellers and agents. This is another crucial part of our strategy to broaden our funnel of opportunities.
Speaker Change: Historically all of our sales will be made by a small team of in house salespeople they've done a fantastic job 70 million of sales in a year, maybe by five people, that's nothing to sniff out but.
Speaker Change: But there are necessarily limited in how many prospects they can engage with their.
Speaker Change: They are efficient and we have a solid tech stack for improving the efficiency of our sales process, but the universe of interested prospects is larger than a team of that size could ever hope to reach.
Speaker Change: With that we're now working on our force multiplication strategy to get a lot more people out there describing our products and the value they bring to a far larger audience, it's already starting to work for us.
So it's early days, we already have a European distributor under contract who brought US a purchase order within the first month of being on board.
Speaker Change: I've just been in Ethiopia, with a new agency that we've contracted to address this market and other opportunities in Africa.
Speaker Change: No I mean, Amman, Jordan, where we have another well connected reseller working with us to expand our middle eastern opportunities.
Speaker Change: And in the U S. We have several new resellers under contract or in the process of working through our agreements with us.
Speaker Change: All of these new reselling or.
Speaker Change: Selling resources are paid on success only that means they do not add to our SG&A burden or add operating costs of the business. They get paid only when they bring us new customers and those new customers pay us.
Speaker Change: The point of all of these strategies, new geographies, new products and expanded sales resources and focus on broader verticals is to reduce our susceptibility to revenue shifts caused by single order timing and product and customer concentration.
Speaker Change: Lots of opportunities for growth in markets with products, which we've not had before.
Speaker Change: Okay.
Speaker Change: Our European.
Speaker Change: Late to this effort and provides an excellent example, already a distracted you work at a million dollar in <unk> sales to the British Army in Cyprus. Other P. O is deliberate in Europe, and the supporting of our efforts in Africa and the Middle East are clear examples of opportunities that we would not have had had we not moved into this market.
Speaker Change: I'm confident that we're only just getting started here and we're also benefiting from both legacy businesses from both legacy businesses, we acquired which are solid and growing.
Speaker Change: We're not just working to reduce lumpiness in our current U S business. This is much more about much more than that.
Everything we've done today is come from more or less a single.
Speaker Change: Product.
Speaker Change: Market, we're now expanding into much larger niches with multiple products and in very much larger geographies and markets. So while I talk about these strategies as a means to defend against negative revenue impacts. They are really much more about being global's continued long term dramatic growth, it's about maintaining and improving on that 70% five year CAGR.
Speaker Change: While I'm speaking of our European operations after spending a couple of minutes on the news we announced earlier this week our first sponsorship deal.
Speaker Change: This fantastic piece of news describes the first establishment of a business model, which I've been working on for many years.
Speaker Change: It's the only thing I've told everyone beam would do that.
Speaker Change: We have done until now.
Speaker Change: Through an agreement with Vinci group, one of the largest airport management companies in the World, We know information to deploy <unk> systems at Belgrade International Airport.
Speaker Change: Don't pay for this right because of the fantastic amenity, which we're providing in their premium parking facilities the ability to charge a vs for free while waiting at the airport.
We got our revenue not from charging cars, which is a mobile I don't like but from charging for branding all over the <unk>, which is a model I love.
Speaker Change: The sponsor has globus the fastest growing insurance company and the Balkans.
Speaker Change: What they get is the highest visit.
Speaker Change: Ability of most recent marketing I've ever seen when you first arrive at Belgrade, and you're walking towards baggage cleaning out the window and Youll see Globus branded D. B ox. After you get your bags as soon as you exit the main airport building, you'll see Globus branded E. Vioxx. When you go to your car right.
Speaker Change: Or pick up your right, you'll see Globus branded E. B X and if you were arriving at the airport by car you guys said, you'll see Globus branded E B ARX <unk>.
Speaker Change: Tens of millions of eyeballs, a year attached people with money and property to ensure we will be we will see globus insurance Brenda D V ox, even if they've never even thought about buying an EV.
Speaker Change: Globus is delighted and being global is delighted because we know it.
Speaker Change: They scale.
Speaker Change: New business to add to our other sources of income.
Speaker Change: Vinci airports as delighted because theyre working hard to reduce their car print print because they knew they'd have to install each already but didn't know who they were gonna get electricity to the parking spaces without huge cost some disruption.
Speaker Change: <unk> solved.
Speaker Change: For everyone.
Speaker Change: In fact, binchy Sue happy when they will repeat this across other airports for them. They operate 70 major airports globally, including some in the USA I encourage you to look at the press release, we just thought about this.
Speaker Change: I'm delighted by this evolution for our business and not just because it allows me to say that we've noted on everything we've ever claimed.
Speaker Change: We would do.
Speaker Change: The one deployment like this having proved the business model will lead to many others and not just the airports. This sponsor driving on Sunshine model can work anywhere that's highly visible and is EV adoption increases so too I believe will large corporations be inclined to sponsor it.
Speaker Change: Moving back to our results for a minute and to gross margins. They are again paradoxically. Another good news story for us in the quarter, because although we are reporting a slightly lower percentage than in Q2 that has all to do with volume.
Speaker Change: Because our volumes were down in the quarter the overhead allocations ate into our gross profits, but the unit economics are another story.
Speaker Change: Our gross profit.
Speaker Change: But for EV product level is up and in fact, we had unit economics, averaging in the 40% to 50% gross ranges massive overhead allocation of course.
Speaker Change: These unit economics have improved steadily over the year as we've made improvements to our purchasing engineering and operations and also in part due to the price increase announced last year and.
Speaker Change: In Q3, approximately 50% of <unk> sales counter the new price so that helped but much more importantly, so too did the improvements we've made in manufacturing the product.
Speaker Change: Unit economics are crucial because as we return to higher volumes, we'll see more and more of those higher product gross margins impact our GAAP growth because of the reduced.
Speaker Change: Purple.
Speaker Change: I've, often said that I'm targeting 50% gross margins and when you see that we're reaching at the unit level already you can see why I'm confident that we'll get there even with overhead burdens in the future as volumes increase.
Speaker Change: A lot of help for this has come again from our European operations, where no manufacturing certain components of B V auction, Serbia and shipping them to our facilities in San Diego for Assembly, because we save money doing that.
Speaker Change: I've mentioned before that this is because a the cost structure is better in Serbia and B, we're able to self perform so much more in our Serbian facility than we do in San Diego.
Speaker Change: The simple fact is.
We can actually our conservative and ship it to a customer in the U S cheaper than we can make it and ship it from San Diego.
Speaker Change: You might ask why we don't move entirely to that model and the answer is because we have so many government customers who require by American qualifications.
Speaker Change: It's important for us to maintain our U S manufacturing because as I've already stated, we still believe that there'll be a lot of growth from U S government purchases.
Speaker Change: Buy American requirements will if anything get tougher we may have to do even more in the U S and source components here, which costs more than those which were buying elsewhere.
Speaker Change: This will inevitably push our costs up but we intend to make this an opportunity not a liability.
Speaker Change: It's possible likelihood.
Perhaps for <unk>.
Speaker Change: Skus for made in the U S. It will cost more but the government entities. They insist upon it will understand that and it will not impact us competitively because everyone else will face the same restrictions and cost increases.
Speaker Change: Still have unique products and very good IP protection and will still be cheaper than digging trenches and doing the electric work that good tight charters require.
Speaker Change: Been here, it's going to be even more impactful in the coming months and years as a result of our acquisition of telecom apparel electronics engineering and manufacturing company.
Speaker Change: We will increasingly replace third party power electronics, and our products with their own specially designed and manufactured components.
This will make up.
Speaker Change: Cost because we won't be paying margins through others increased bar for the competition and lastly, and importantly, reduce our warranty and service costs.
Speaker Change: The great majority of problems, we experience with our products come from the failure of third party electronics, we intend to eliminate or at least greatly reduce those failures warranty and service costs impact our margin. So this will be another positive evolution for beam.
Speaker Change: The Telecom acquisition was another excellent deal for US a combination of cash and stock, which resulted in us having more cash and working capital after the transaction than we had before at <unk>.
Speaker Change: I encourage you to read the filings on this one and if you have questions you get in touch with me directly.
Speaker Change: Suffice it to say we ended up with an excellent team of talented engineers and manufacturing experts I talk to a group of new customers and another new set of opportunities for growth and we paid a very very good price for it.
Like our other transactions a win win deal and the principles that telecom are all staying on and are now working as part of our beam Europe team and also closely with our U S based engineers.
Speaker Change: I'm delighted to have them and thrilled by the contribution they're making already.
Speaker Change: Our efforts to improve gross margins or match for our efforts to control and even reduce operating costs any increasing in operating expenses, we reported or simply as a result of our acquisitions, which of course brings us.
Non interest.
Speaker Change: We've reduced corporate overhead and made our operations more efficient at the same time returning to growth in revenues as I'm sure. We will we'll really shine a light on our ability to run a very lean operation.
Speaker Change: So I want to spend a few minutes describing the incredible pace of new products. We've released over the last couple of months and why.
Speaker Change: There were less seems spot, which was formerly known as E V standard.
Speaker Change: <unk> is our streetlight replacement product, which makes charging at the curbside possible in a way that nothing else on the market can be.
Speaker Change: <unk> been showing off in Europe Africa, and the middle East and everyone loves it.
Speaker Change: Charlie on the Carb is important because contrary to popular belief most people will not be able to charge a AUM in the future and most of the world does not have a big flat parking lots like we're used to it particularly in the western United States.
Speaker Change: The only option is to charge on street, the carb wind parks, but it's very difficult to get electricity to the car you have to identify the nearest point of connection and then go through the leases easements construction and electrical work to deliberate to the car.
Speaker Change: So onerous has to be economically and practically impossible in most cases and yet it's essential.
Speaker Change: Some companies that put E b charges onto existing street lights, and that's a great idea, but a typical streetlight only has enough power to run a light bulb not fill up a car.
Speaker Change: <unk> is a streetlight.
Speaker Change: So the.
Speaker Change: So the existing street light beams fall in its place we use the streetlight circuit, but we also have some tracking solar array in a light wind generates or making more electricity all of which is combined and our proprietary onboard batteries.
Speaker Change: Because were combining three circuits, we can get much more power to the E V charter.
Speaker Change: <unk> been spot will continue to provide lighting and EV charging during a blackout something that's increasingly common and increasingly important.
We just launched <unk> a couple of months ago, and we already have our first purchase order for it I believe that this product may end up being our biggest seller and we'll get really good at making them because beam Europe is amongst other things one of Europe's.
Speaker Change: Our disputes.
Speaker Change: Beam bike the bike is the next product winners based on the VR platform. This is a grid independent electric bike charging station.
Speaker Change: So very popular when I describe it on my travels.
Speaker Change: Jake brake adoption is growing all over the world I've just spent a few days in London, Paris, and Belgrade and in all three cities the demand for EBIT E bikes in the infrastructure to charge them is growing rapidly.
Speaker Change: But actually the impetus for this product came from one of our large U S municipal customers, where there were a lot of E bikes and used largely for food delivery.
Speaker Change: People are buying these bikes and using them to earn a living and they're charging them in their apartments cheaper bikes.
Speaker Change: Cheaper about.
And there have been tragically several fatalities from these sorts of bars. So cities won't start to provide outdoor charging facilities, which will reduce those sorts of risks. The AVR platform is a perfect place to start so we developed what in my mind is the perfect solution.
Speaker Change: But we won't just deploy in those cases.
Speaker Change: Resort each times emphasis corporate facilities and even military bases are all fertile ground to there being bike solution.
Speaker Change: This is a great way for us to leverage our existing engineering IP patents in manufacturing to create a whole new set of opportunities.
Speaker Change: After beam by beam well another.
Speaker Change: It's brought up.
Speaker Change: This one really makes the arrow signs up.
Speaker Change: It's very important during my trips in the Middle East. It's designed for disaster in war zones and of course Sadly there are no shortage of those at the moment.
Speaker Change: Redevelop beam well in direct response to the requirement of Ngos and donor organizations operating in Gaza swine.
Speaker Change: It's why I'm here.
Speaker Change: They're trying to feed people and get medicine to them, but they have no electricity no water no means of delivering the food water and medications.
Speaker Change: Beam well is equipped with an integrated desalination part, which enables it to convert salt brackish or dirty water into clean water for cooking and drinking.
Speaker Change: Damian.
Speaker Change: Potentially pilot trustee for cooking refrigeration and we've integrated for benzene of zero rugged emo pets equipped with delivery packages onto the bundle.
Speaker Change: Hence beam well solved all the problems faced by the Ngos It makes water it makes electricity and it keeps medical supplies refrigerated. It provides the means to deliver the food water and medicine to people who need it all in one bundle.
Speaker Change: Like all of our AVR products, it's delivered in a 20 foot shipping container and deployed rapidly without the requirement for any onsite construction or development I'm sure you can imagine how important that is in Gaza.
Speaker Change: We just put it nice to see our ponds and let it go to work.
I'm in a month.
Speaker Change: As I say just.
Speaker Change: Just in the project planning and funding for the first of these B mall systems, we intend to make them available to the U N militaries emergency agencies.
Speaker Change: What else is in the business of dealing with wars or disasters.
A recent pressure <unk> systems, continuing to operate in eight feet of storm surge can alone gives ample proof of the ruggedness and disastrous surviving capabilities of our products. If you haven't seen that picture look it up it's unbelievable.
Speaker Change: Meanwhile, is designed to go into these sorts of regions post hurricane during or after a war and provide the essentials for life, while people wait for rebuilding I'm very proud of it and see great opportunities for sales.
Speaker Change: So sure.
Just to be blunt our accident products.
Speaker Change: And so definitely we intend to do a lot more with benzene or zero in their lineup of rugged emo pads and ebooks I'm actually meeting with them enrollment coming because they have European operations, but they're actually an Australian company and they see endless opportunities for our products, both alone and bundled with theirs in the Australia market.
Speaker Change: Supply pizza delivery and postal services already in the Outback and other remote locations charging is a real challenge and they recognize that we can solve that I look forward to getting more engaged with them in creating more force multiplying opportunities through them.
Products are also in excellent fit in Ethiopia and Africa in general.
Speaker Change: So it'll be a <unk>.
Speaker Change: Lead to significantly increase sales for both of us.
Speaker Change: Just this past Tuesday, we launched beamed patrol again based on a New York, but this time setup and bundled with four zero motorcycle law enforcement liberated electric motorcycles not to be confused with benzene is zero zero motorcycles as a U S company with a fantastic lineup of electric motorcycles I own one now another one several of them.
Speaker Change: Having great success selling to law enforcement and other responders globally.
Speaker Change: Electric more cycles of fast cheap to maintain require no gasoline and are very quiet, allowing law enforcement.
Speaker Change: To get a suspect without the noise.
Speaker Change: Good guys.
Speaker Change: They're used by police border patrol military parts service and a whole host of others internationally.
Joel will give them an opportunity to purchase the motorcycles, the charging infrastructure and all the fuel will ever need under one purchase order to being global.
Speaker Change: These agencies, often like bundles, because they don't have to integrate anything because the.
Speaker Change: I'm sorry.
Speaker Change: One P O one invoice or will financing finance I'm using our line of credit.
Speaker Change: Charging infrastructure is always a challenge and we've learned from existing customers and other prospects that are bundled product, which has the bikes and the charging infrastructure that can be deployed anywhere without the requirement for projects our integration would be of great value.
Speaker Change: Just read the quote from veteran police Chief Steve Willis and our press release to get a flavor.
Speaker Change: Any game, we leverage our existing capabilities to produce products, which are in demand by our customers and prospects.
Speaker Change: The other game, we've created a whole new SAP selling opportunities to increase our revenues and reduce our reliance on a single product or concentrated customers. In fact, we believe that matter, even our concentrated customers. They have to hold off on E. V art purchases for now might be able to buy these other products, while they wait on E B arc for charging Evs.
Speaker Change: But the real opportunity comes from all the new conversations we can have with new customer prospects that we know what we have needs, which we can.
Phil Wilcox: Well Phil Wilcox.
Phil Wilcox: Our revenue per EV alcohol increased significantly with all these bundles, which is another benefit and part of our strategy to grow the business through four smelter vacation.
Speaker Change: No I promised I'd give you a bit of color on why it was in Ethiopia.
Speaker Change: May not know very much about Ethiopia, but you should know that has distinguished itself by beacon.
Speaker Change: I mean, the FERC for.
Speaker Change: Or internal combustion engine vehicles.
Speaker Change: Prime Minister Abe I'm, Ed has made a dramatic commitment to winning Ethiopia, all fossil fuels through aggressively electrifying transportation.
Speaker Change: Currently and for all their oil and it costs them a law and is a strategic disadvantage. They also have very very poor air quality and I can tell you that having just been there for a week.
Speaker Change: They're hugely in favour of electric vehicles, and you already actually see a lot of them and I just thought about.
Speaker Change: There are resource rich nation, particularly where renewable energy is concerned because of the large hydroelectric facilities, but as is common in so many other places they lack the transmission and distribution infrastructure required to make the deployment of V V charters anything other than very burdensome and complex needless to say been global's products solve for these challenges and that's why I'm, bringing them.
Speaker Change: To that market.
Speaker Change: I've been honored to meet with the ministers of transportation the Minister of energy several key enterprises that department of streets and his excellent homage shared shaded administer a fine.
Speaker Change: I'm out in the country under probably be Amit who it is.
Speaker Change: But in the future because of the transformative influence of beam Globus products.
Speaker Change: You could say that the edr, Gamespot and our other products are the embodiment of the prime Minister's ambitions.
Speaker Change: Vision.
Certainly what I heard while I was there.
Speaker Change: We will survive.
The orders won't spend from our Serbian facilities, the Swiss surface, Cyprus, it's fantastic that we've proven we can do that.
Speaker Change: These meetings were says it was also the efforts of our new very well connected agents in this market as well as with the assistance of the United States Embassy in EDA Saba I'm grateful for their efforts and was very grateful and honored by me My meeting with the U S.
Speaker Change: So I am best just lost.
Speaker Change: It's important but it is receiving a great deal of outside investment and what it spends on importing oil we could cover the whole country and E auction beam spots not to mention our other products. It's also a gateway to Africa, which will be one of the biggest growth markets in the coming years.
Speaker Change: Africans adoptive cell phones without ever really having wired infrastructure and they'll adult T v's without ever really having internal combustion engines. They will also adopt distributed energy without ever really having a wire grid infrastructure I want us in Africa early because I believe that there's a massive opportunity for growth to match, what we're doing in Europe, and the U S Chinese aren't nearby accident.
Speaker Change: We can only.
Speaker Change: Large market the law for Western and pro American feeling, but mostly because our products are just better and we have support groups National development Finance Corporation, and others to help to pay for them.
I left Ethiopia on Friday, and traveled to Amman in Jordan.
Speaker Change: My last stop will be enrollment as I previously mentioned before returning to our offices in San Diego next week.
Speaker Change: Electric is not over yet, but it's been a fantastic opportunity for me to be the sharp tip of the spear that beam grows into these international markets, which need our products. So badly I think of the growth we've had in the U S. And then start to multiply that across these other markets I can see how being global will become very much larger without having to invest.
Speaker Change: Large amounts.
Speaker Change: Now the last point I want to briefly touch upon is that we've engaged in internal IR manager.
Speaker Change: Know that selling our products profitably is the most important thing we can do to increase shareholder value. We also know that if we don't tell anyone about our successes that no one will buy our stock.
Speaker Change: With that in mind, we've invested in some IR communications tools and a full time internal resource Luke Higgins.
Speaker Change: It looks an engineer not an I our veteran I wanted someone who understands what we do and why we're doing it to tell our story he's passionate about our industry and beams rolling it.
Speaker Change: He's learning the IR business and he's currently concentrating on doing a better job of communicating our wins and identifying anyone who's invested in businesses like ours, but not invested in beam and he's telling them why we think we're about at least for their money in the long run.
Speaker Change: You may have already heard from them and if you haven't you probably will.
Speaker Change: He's helping tell us what you want to know and how we can do a better job of being responsive and communicating with you and of course tell them, who else we should be talking to you.
Speaker Change: Okay. That's enough for note of a day jammed with meetings tomorrow and not much time left for sleep, So I'm going to hand, it back to the operator and take some questions operator.
Speaker Change: Thank you Sir we will now begin the question and answer session.
Speaker Change: A question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys.
Today's first question comes from Tate Sullivan with Maxim Group. Please go ahead.
Speaker Change: Hey, Tayo.
Speaker Change: Hey, Hey, good high it doesn't thanks.
Speaker Change: Congratulations on all the new products it sounds like all great opportunities to sell them.
Speaker Change: You said in Europe, what you've seen is there more government funding available for EV charging in structured in Europe going forward and in the U S. In your opinion.
Speaker Change: I mean look I I don't want to guess at what's going to happen in the U S. As I said in my comments I think that uncertainty is the biggest problem that we're facing right now.
Speaker Change: But.
Speaker Change: But there certainly is going to be a tremendous amount of spending in Europe, and I met with or is that the office for zero emission vehicles, while I was in London.
Speaker Change: People in Paris, and all over Europe, and there's this electrification things going up pace.
Speaker Change: As you know they bind to the sale of internal.
Speaker Change: No.
Speaker Change: And 23, five there's an awful lot of work to do there is not enough energy on the grid capacity on the grid and it takes a long time to install grid tied charging infrastructure. So the same things that made us successful in the U S are going to make us a successful if not much more so.
Speaker Change: In Europe and by the way for anybody that's questioning whether or not a visa.
Speaker Change: What happened.
Speaker Change: Believable here half the cars road today are electric vehicles already.
Speaker Change: They're starting to Bang Bang up against the same problems lack of capacity on the grid and taking too long to deploy so I think we're gonna see an awful lot government spending everywhere, but yes, Europe is the largest market in the world and probably we'll see the most money spent.
Speaker Change: And then just sit there.
Speaker Change: The certification process.
Speaker Change: Process is just with the UL in the U S are there any similar certification challenges that you've run into in Europe yet.
Speaker Change: Without a doubt I mean, this is an evolving process.
Speaker Change: <unk> stationary storage.
Speaker Change: The integration of energy storage and renewable sources, our grid sources for that matter. All of these are evolving and we are seeing inc.
Speaker Change: Increased regulations, and what we're seeing evolving certification processes and we're trying to keep up with them. As this is the biggest challenge that we're facing right now is that the certified.
Speaker Change: Bodies are done this before and so I don't want to be careful what I say, but our people are teaching that people, who were who are certifying us and in many instances.
Speaker Change: At the same thing in Europe, we see in Europe, but the good news is all the efforts that we put into U L will do this well will solve for this <unk> thing.
Speaker Change: So.
Speaker Change: You are the thing in Europe, we still have a lot of customer prospects, who are not impacted by it but but it's taken a chunk of our sales and I just wanted everybody to understand when we're looking at a reduction in some of these oh, they're moving right. If some of these purchase orders some of them are explicitly because of these new UL certification requirements, we're going to meet them and the good.
Speaker Change: News is as is always the case with being global.
Speaker Change: We use these as forcing opportunities to force us to take further steps to make the product better and much easier to make in the next sort of evolution of B E.
Speaker Change: That will meet these new certification requirements will be less expensive and faster to produce a better product a game. So it's onerous. It's time consuming it's pushed some of our purchase orders to the right, but we will come through on the other side of it without losing those opportunities with a batch of product and as I said in my comments I think we will see a bit of a logjam.
With a couple of them when we do get that UL certification, which at the moment. We are very often we'll get before the end of the first quarter, but I'm not gonna make promises that other people have to keep I've been wrong about that before but that's what that's what I'm hearing from everybody.
Devon: Thank you Devon.
Ted: Thank you Ted.
Speaker Change: The next question comes from Noel Parks with Tuohy Brothers. Please go ahead.
Speaker Change: I know how are you.
Speaker Change: Great. Thanks.
Speaker Change: Thanks for all the great information just a few things.
Speaker Change: Interested to hear what you were saying about adding resources and partnership for international marketing and I'm I guess I'm thinking in your overall resource mix right now.
Speaker Change: If you have one.
Speaker Change: Our next project or goal that you need to address whether it's hiring in a particular product or function or manufacturing capacity in a particular region.
Speaker Change: Sort of what's what.
Speaker Change: Next what's sort of your your next thing sort of tackled or kind of keep overall business momentum going.
Speaker Change: Yeah, so from a human resource point of view, it's definitely the addition of resellers distributors and agents something we've never had before I've been keen on doing it for a while.
Speaker Change: Because as I said, we you know we've all the sales that we've made today are being made by our sales team.
Speaker Change: There are a number six.
We sold just under $7 million worth of product.
Speaker Change: Just imagine what could happen if it wasn't five or six people 50, or 60 people out there telling that telling the story because as I said.
Speaker Change: No telling my sales team of three $318 million some odd people in the United States, we've only talked to a.
Speaker Change: A few thousand.
Speaker Change: Hum.
Speaker Change: Oh, it's nice it's bringing in these distributors resellers and agents. That's the thing that we're really focusing on at the moment and by the way. Some of that was also pushed by Europe Europe. It likes to think of itself like a sort of a United States, but the truth is it's a different sale in France than it is in Spain than it is in Germany et cetera, So we want to try and gauge somewhat local resources, but.
Speaker Change: But do not add overhead costs for us and that's what's great about the people that we're bringing in they work on success fees only so we don't end up with SG&A burden and we pay them when we get paid by our customers.
Speaker Change: Right right.
Speaker Change: And.
And I am thinking out of it.
Speaker Change: A couple of years.
Speaker Change: I mean do you see yourself as.
Speaker Change: In order to sort of handle maybe the next step function up working growth do you see yourself and I appoint them capital constrained in terms of just what you need to do to keep up with manufacturing capacity or or other needs.
Speaker Change: Well the good news is we still have a great deal of room for expansion both in our U S and European facilities.
Speaker Change: I mean, we are very busy as we still have room for about Forex expansion in the U S and we have much more room for expansion and you have a huge facility six acres 250000 square feet under roof.
Speaker Change: And you know.
Speaker Change: A lot of cheap land around us there. So I think we've got a lot of room for expansion.
Speaker Change: You know we will we'll invest in growth we've done a low investment and growth we've increased our Chicago facilities. This year, Lisa mentioned that there were some 100000 or something in our in our operating expenses, which was due to facilities expansion. We've expanded our Chicago facilities. This year, because we intend to finish out our beam spot products in that facility and we need more more space to do it alone.
Speaker Change: The battery business back to growth again.
Speaker Change: You know, obviously, we're going to fill up our existing.
Speaker Change: Capacity, which is as I say got lots and lots of room for growth.
Speaker Change: Then we're going to invest carefully.
Speaker Change: As we need to moving forward, if we do have to.
Speaker Change: You know used capital for expansion in the future it'll be because we're trying to keep up with tremendous growth, which is the best possible reason to use capital.
Speaker Change: Sure absolutely and.
Speaker Change: Just a.
Speaker Change: Question talking about sort of this post election period.
I'm just curious do you sort of see California's leadership role with the carbonization in Evs.
Speaker Change: Sort of keeping the bottom moving in terms of can centers.
Speaker Change: Policy.
Speaker Change: Concern or maybe help offset what might be.
Speaker Change: Period of sort of extended federal uncertainty.
Speaker Change: Yeah, I can tell you that what I've heard so far.
Is that anything that the new administration does.
Speaker Change: Two two.
Reverse the momentum with E vs at the federal level, the states or no adding it up I mean, the fact is that transportation is going to electrify anyway, and as I said in my comments, even federal customers know that they cannot afford to lose for years.
Speaker Change: In four years, we'll only have six years left before.
Speaker Change: It's basically everybody electrifies so.
Speaker Change: It's just it's it's it's if this is kind of annoying, but it's not fundamentally going to negatively impact the industry and I think you'll see the states.
Speaker Change: Pushing hard on this and you'll see cities municipalities.
Speaker Change: She's pushing them.
Speaker Change: And frankly they use.
Speaker Change: The federal customers opt to do as well you talked to anybody in the Marine Corps of the army they they're not they're not electrifying their fleets, because our tree huggers or because by then or anybody else told them to do it they're doing it because it's a strategic imperative and so they're going to push forward with it one way or another.
Speaker Change: I think.
Speaker Change: Problem that we have both from a purchasing point of view and also frankly from a share price run over here.
Speaker Change: Great. Thanks, a lot.
Phil Wilcox: Hi, Phil.
Speaker Change: At this time, we have no further questions I would now like to turn the call back to Mr. Li for closing remarks.
Mr. Li: Okay, well listen thanks, everybody again, thanks for your questions and if there are any of you that I still have questions or are they just didn't want speak up on the call feel free to get in touch with us directly get in touch with Luke's Higgins.
Mr. Li: First name Dot last name that being for all Dot Com and you can always get in touch with me.
Mr. Li: Yeah.
Mr. Li: By now you should please remember that I'm.
Mr. Li: Often in strange.
Mr. Li: Strange time zones, it's no one getting a one for 130 in the morning, where I am.
Mr. Li: But.
Mr. Li: As always.
Mr. Li: I feel very good about what we're doing I loved the new products we brought in.
Mr. Li: And it's been very exciting for me to be displayed lease.
Mr. Li: At least in in Europe, and see how much demand there is.
Mr. Li: And as I say, when I compare that to the growth that we've had in the U S think about the multiplication effect of that.
Mr. Li: It's nothing but good news for us so.
Mr. Li: I appreciate your support and appreciate you staying in touch and and we're going to keep our noses to the grindstone and keep building a great company. Thank you.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.