Pioneer Power Solutions (PPSI) 1 Apr 242023 Q4 Earnings call transcript

Good afternoon, everyone. Welcome to today's Pioneer Power 2023 Fourth Quarter and Year-End Financial Results Conference Call. [operator instructions]. Also today's call is being recorded, and I will be standing by if anyone should need any assistance.

Now at this time, I'll turn things over to Mr. of Relations. Partner Managing Maas, Hayden Investor Brett Mr. Maas, ahead. please go

Financial welcome. call you, Executive be sorry. Murickan Chief Power hosted of Thank and Officer; and will CEO President Michalec, Chief by The Mobility, and today and Pioneer Geo Chairman Nathan Walter Officer; Mazurek,

on review results discussion, this highlights. the recent and year financial participants fourth well be We as appreciate business session open a quarter Following call. Q&A the as discuss will to there the opportunity to full

remind me and let this call started, recorded get we you is being webcast. Before

During this call, management may make forward-looking statements.

which the are call. over Nathan, of based applies to could expectations statements differ the in are the and Mazurek, These and results regarding subject contained the I'd actual the call to today, the now risks on materially. to that current turn Nathan uncertainties go ahead. CEO. text Chairman and to refer statements earnings cautionary release please and assumptions Please to earlier like to content forward-looking cause issued

Brett. Thank us Good for joining you today. all you, and thank afternoon,

year Before please full be today revenue on results net XXXX. income. growth earlier forefront is reported discussed results. than energy begin, will the delivered in North and preliminary XX% evidenced the positive transition as by that of our be unaudited we this and that during the financial Pioneer America We call aware are I banner of more

impressive increasing organic More importantly, and we positioned are growth well of income. year another net for

of the over quarter. of Our the to backlog XXXX, a as surged XX% sequential increase million end $XX of prior

our going remaining close increase continuing to operating to net And XXXX. leverage we constant environment revenues to in secular has income we in sustain an calendar believe the will continue tailwinds traction our Indeed, XXXX point favorable was marketplace and hold. highly products business, of new able positive through solutions demand. taken and fixed in innovative gain with supercharged Our be forward, are creating an inflection Positive and increase to overhead

and EPS full $XX are between diluted and fully $X.XX revenue For XXXX, $XX of of providing between guidance of we year million million and $X.XX.

increase conservative in in e-BOOST this Importantly, investments innovation ahead well is as and as guidance marketing anticipates stay be product we curve of guidance probably anticipates e-BLOC into customer-directed a brand product believe for full will sales awareness. This that to our XXXX. the and deliveries number measured also platforms and of currently or year and to certain originally XXXX scheduled investments moving

income. approximately XXXX, to end million In available addition, had in we of shelter taxable as the net $XX.X carryforwards of operating loss net

often or this still While quarter-to-quarter volatility, our requests Pioneer's ability driven not we may is deliver accommodation to volatility from experience solutions. manufacture customers most by our delivery and

expensive, of from of for less set course continue ever accelerating we Demand indicate more market a use increasingly diverse this trends of AI is will both existing becoming cases power advanced before available electric e-BLOC for and from increased consumption for require and a the and utility notable new vehicles, orders XXXX, more foreseeable The solutions technology computing markets. power purchase and the had e-BOOST and growing power adoption electric vertical of is Over proliferation list power and rapidly than unreliable. future.

energy get new to to existing and maximum output resources from online. infrastructure power needed brought are efficiencies the distributed be Greater need

these efforts. products accelerate specifically and harden support, Our

to skid-mounted energy transfer compact users in existing all sources solar, and for switch storage, system electrical power systems, e-BLOC. scheme, internal integrated, add power. package. like additional Customers battery to designed of electrical circuit source an doing control specifically protection cells, integrated natural any e-BLOC of outdoor engines a more fuel can one than gas first Turning without is outdoor compact upgrades

open that extend new its have and designed line Since market and for several larger and ago, years e-BLOC several the e-BLOc variations success opportunities initial launch additional we product Pioneer. of the

microgrid in orders. in was version economical the product small at from of it to XXXX, be of of solar original. the immediate demand A driver in the several e-BLOC requests is We met specifically initial and for big market was shipped version with microgrid and we developed solar that end this more developers, growth Our response a expansion portion and purchase and smaller indeed national to expect a XXXX us of solar microgrid XXXX.

original Another e-BLOC is design port series. e-BLOC the extension new of charge our

protect protection the that of weeks to of in electrical a will new a equipment compact we than out related integrates outdoor a high-voltage users believe protection I provide of to in indeed opportunity we stations. this unitized has and system and through orders integrity market beginning It second more ago year and of EV transformer This chargers customer-specific $X charging dry-type low a being product and support rollout which with packaged immediate EV the of the a half purchase XXXX was Finally, to opened our additional several include and units liquid indoor borne resulted help substation need voltage the substation. introduced XXXX. million up platform, or and or system,

opportunity more more components to opening for installing Pioneer. individual and is again, vendors, expeditious from new, and a of disparate large compared growing Installation a economical number market

Turning platform. e-BOOST to our mobile charging

of electric EV have version in a charging. a several truck-mounted the of charging a provides anytime any times, high-capacity mobility e-BOOST many and charging footprint anywhere brings GOAT bringing including that is vehicles on option skid-mounted available e-BOOST platforms, to EV high-capacity ultimate e-BOOST truck, EV location. on-demand Mini, reiterated we've generator comprised smallest As that charging provides we with

can stationary charging need solution E-BOOST EV with solution capacity that Pod capacity and mostly trailer-mounted if for EV moved higher mobility e-BOOST customizable can be than Mobile, be a finally, charging and and higher the necessary. balances a

We months March truck-mounted hours conceived In approximately delivered November of time in our stations, few shipped The unit, first sessions. power a product of first X.X XXX the first prototype a full trailer-mounted in XXXX, megawatt unit XXXX over XXXX. of and in was e-BOOST a unveiled XXXX. e-BOOST just short ago June charging unit later of of a our year

sessions. In XXXX, charging we XXX X,XXX of approximately charging over hours delivered megawatt mobile power

truck $X in from our booked million municipalities, dealership mobile and margin. make North we than we major orders first operating well a contribution a as will e-BOOST across the more XXXX, which markets as many several number EV truck which in new solutions of plan automaker, off-grade and XXXX, -- We fleets, others. the major deliver In utility, enterprises significant American addition, expect operating record a a transportation to bus revenue a ranging agency, end charging we will in to

awareness aggressively have orders e-BOOST to continue of education similarly increases, surged. market We and EPS and as

backdrop other of pursuit increasing alternatives continued districts to trying green to quickly add for sustainability provide the strong market tailwind related to this vehicles customers, their charging solutions business. of municipalities Similar move and for Enterprises are adoption and electric employees the e-BLOC and growth school in a and organizations to of our by more the and portion fleets.

and e-BOOST become meets As important of really demand. on-demand and charging will things the that electrification mobile increasingly continues,

to I for discussion to our with the over of like detailed this. turn call results, Officer, Before I'd Walter, financial Chief you a our leave Financial more

turn solutions excited at in prospects we highly Everyone is a our results, XXXX and Pioneer wins. brought Pioneer market about of year for the terms successful the was pivotal financial customer and to over company their and to best Walter. to call in year opportunities are that, of the I'll With deliver ahead and for another XXXX. the that us look doing to record forward

was Power due quarter to approximately about Nathan, Revenue manufactures the primarily everyone. have our into eBLOC and million. Infrastructure from these revenue not you, fourth revenue to we XX%. and million. compared segment, decrease fourth our ago for $X.X QX manufacturers in decrease delays, XXXX was year generation of decreased good XXXX afternoon, $XX $X.X that equipment solution, was per of to been And to revenue calendar request. orders year segment, which Pioneer's the up The million. quarter customer's our which power our Had XXXX e-BOOST of it estimate from Thank from sells XX% million million a XX% Electrical $X.X timing certain $X would Critical been the quarter, shifting

expenses XX% $X.X resulted quarter primarily XX% a in to million which XXXX, of $X.X million in timing year profit. administrative the third XXXX and certain to modestly in quarter million from last or gross Selling, the XXXX. orders the of in fourth of or to from was increased fourth the from year. $X.X for margin reductions $X profit million and due are significantly decrease, revenue the general sequential quarter XX% to profit gross revenue Gross million shift of of The for compared basis and gross of last on again, $X.X a of was nearly down in quarter fourth

was related of $XXX,XXX SG&A Approximately expense to compensation. the stock-based quarterly

at albeit and our a our we moderate in scale and products lines. investments business continue expect to level solutions XXXX, in as build more We

certain continue quarter great related to a grow, in again we delivery of of fourth the line of to our We from drive the margin there's XXXX was once operations solutions. our and in the $XXX,XXX our quarter The last R&D will also as business operating bottom gross increase a for in profitability. model, and we the amount to leverage our greater of to Loss believe GAAP an portion fall delays income related customers of of primarily orders expense in $X.X was compared the million operating fourth expect of EBIT request to at year. decline meaning

and fourth or diluted of XXXX. during $XXX,XXX $XXX,XXX compared fourth was quarter the Net of quarter per basic share loss the to net and XXXX $X.XX of per or basic $X.XX diluted share income for

in shipments XXXX taxable which of on As sheltering million -- to while Nathan mentioned, from it we fourth customer had future Power portion estimate $XX.X our would $XX.X as are taking $XX XXXX year and have Infrastructure valuation NOL approximately request December XX% been a $XX.X tax Electrical significant carryforwards a We increased segment the Had been federal from taxes federal of our of deferred assets not full of segment from for we the increased revenue to full XX, XX% income allowance, million million, revenue during million. our delay XXXX. year to for quarter million. $XX.X Critical the

gross over revenue the or of a share. an improved $X our $XXX,XXX due per or $X.X XXXX. a was to as was compared XXXX. well in than and during Gross profit This income This solutions share was We products during XX% productivity improvement margin net from profit sales compared of loss $XX.X of negative is gross of gross loss per XX.X% from operations tremendous compares XXXX million or or Net to Loss manufacturing million in $X.X operating to of million. of $X.X increase margin XXXX. $X.XX million expanded as million facility. our more a of our in $XXX,XXX $X.XX to significant

XXXX. XX, cash sheet. and December compared bank $X.X had of $XX.X to at balance We XXXX, million at X XX, the December to Turning million debt

per XX, approximately December cash near-term confident that capitalized cash sufficiently we of represents $X.XX address share We This are and needs. at to remain our XXXX. investments

As EPS to we with any full $XX call operator million to Nathan $XX my back and year. now XXXX $X.XX questions and for expect over revenue to I $X.XX from the between investors. growth mentioned, per the remarks. concludes continued deliver share This million of turn positive for in the

Thank Rob you afternoon Brown go Street of Lake [operator to this much. very instructions] We'll first Markets. Capital

little color or get quarter. of that? delay Just you the you're timing sort sort deliveries of was And the manufactured revenue guess? and I the a drove I a more there, of Did sort want -- pushed what shipments. in But happened customer the of in have shift out saying they what guess product on requested a to

was Yes. that quarter. One actually manufactured. the both went left product quarter much into first the this just that In cases, pretty

And is of have was late even we piece scheduled on. for The couple one, somewhere right affected, the towards to it in X end on the These been small whatever now. accept ready particular the a We for it's are just but has are an a where the of capture basis, that only -- We're we for typically the other -- these contracted complicated deep, of projects. into going they 'XX large months are of other reasons pushed they delivery whether out date, were cases, it not other XXXX. revenue it course, annual vendors. what's

it. Got

order Okay. point terms activity I guess, And on market active verticals. environment e-BLOC sort and at Great. specifically business, areas the how really are the this then what are of seeing the in demand there of overall, you

portion we're I Yes. where the the at that's driving is orders seeing lot solar and of or us, big most purchase -- charging. e-BLOC. a of most mean That's and a and for it active least of microgrid

this get project they evolved some very of big project, past of strip -- kind it's long as original being battery. time mean, in charging. that lot It take a are we year, I come now larger lot a shopping solar very those I they make minus of is and yes, to think the solar 'XX that project. does really business it's -- shipping like battery e-BLOC centers 'XX other are large plus together. going also solar to a of And as water as delivered see e-bloc the -- into go a has more We plus automotive long of the plus a difference or

developers. developed So it's in -- a we in. are apparently Jersey like we e- Mike's, from is hit that, -- places big these and solar names specifically in microgrid that on the everybody with solar putting POs out the Chick-fil-A, burger And are that that the solution these then

introduction. the demand And what's there the see you launching opportunity question is the, guess, that you And that are How or I Or product? Great. customers? Okay. environment? do you who announcement Home targeting Boost that product see for last in on

Yes.

of doing distributors So bringing we of up. revenue can parallel -- the somebody is in targeting We their and converting that bit in or -- grid all. in the we're rapidly through into the really guidance thank where rollout run don't ultimately, vehicle the that and natural -- if is at have that you we're or they soft owner/developer, XXX% go they we're going time, wholesalers slowly to that's contractor. a power. kind And that stronger, large them if dealers, by at home the island able charge the to electric of wants a any want, budgeted off same unit integrate our that that little home their really higher-end to not gas And they're XXXX, vehicles that's product for feel a time. so engine that in customer for using generator a were an home their that they electrical prime-rated regions vehicles, and for

it's homeowner. So larger, more the expensive

H.C. We go Dayal at you. Wainright. Thank next Amit to

Yes, sort e-boost. e-Bloc outlook expected from Nathan break for for revenue how the you and out would contribution of XXXX,

not year. or e-BLOC Boost and to roughly between much do XX-XX said going You home is spread? so But e-Boost, different next probably spread

mean, growth, the have continues to more delivery I for 'XX. I still particular, of exponential the we growing in Yes. and e-Boost that finally will especially is but programs be electric 'XX even school that's always -- for surge And buses many to a little actually e-Bloc electric bit looking -- finally, XXXX, kind taking 'XX. mean, so the and for e-Bloc for a and outsized growth big going and in is driver ahead, we're in us with of school are buses big grow

Understood.

closer or levels. $XX sort And low million would in with to. expected or revenue hitting gross think margins, levels XXXX like the Gross come in of do where you mid-XX% in to the still margins XX%

We target least XX%. at

team of -- we're Also, higher. always be tend is are we between amazing But projects, view. side, an we and being point always to there said, something we being a XX% doing thing. job doing same smaller from margins migrate to little the e-Bloc a the productivity bit the is targeting that we're On -- XX% what as better. The

that's it So what is.

proposition, to Or product, offering? a Okay. Nathan? is it competitor a value boost This is Home make different a generac it

Right.

it Generac. rated which So is they They to have selling with one, differentiators: don't engine. market a expensive. array, we're X bit it's a this engine, somebody pretend What to be these have they allows but different product share, a value a little a prime are and compete proposition. doing with We wide backup tremendous like less a

you're they a limited the the different of So paying of is backup are in a efficiency different maximum rules rules, it ours engine. or generator groups local in have whatever whatever prime, unlimited hours different look it's that by say, but localities, let's not year is, you're XXX for to whatever,

customer's installation. it's low well. home connection that vehicle super they super, charger, That's a unit. we're electric not high have the on integrating a are in that And gas additional completely even don't the generator if their one we're that produce choice the electric new emissions natural backup they an no and customer's save they one they a get choice. -- so using depending into installation additional charger it's natural can or doesn't or want somebody to the If charger running opposed can all or their for Typically, the with money, from there's power off utility capacity because gas as themselves it it not. And have to as

a in lot up product home starting at Again, differentiated this to for we'll specific us of probably talking a -- going a XX%, it's about a large running -- very power. is be very This XX kilowatts. it's So you're to niche. it's go

with part have folks then these with [indiscernible]. this product order deployments deployment, thing. for their subsidy with as respect of combine a deployment, type that part a seen as it Nathan, generic So the offering when whole includes subsidiaries, homes respect get you you the qualify solar which to Will the to of solar plus like package a on when

the I solar not We're not offering -- to this. we're Yes. mean integrating

to that. not So there are avail are integrating and help? We're that. course, and they this the to that's helps, the doing Of be user it. themselves we're just to really it going subsidies Is to and up contractor But to that going for going then simple.

charger they anything it we're that may The storage them for giving subsidies a integrated, unit. charger like very So the a whether add may vehicle for or adding energy not it's home, be the subsidies or charger your there fact there be with the we're other less encouraging states or home of to special not view, solar. We're doing much an you available, more electric available that. in but from to point federal be they're where

Okay. Understood.

the a at from it's your could this side contractor customer, coming point. with not that So work but with

Correct.

Correct.

Okay. Understood. Understood.

Okay.

You marketing $X How sales indicated and -- your terms of of XXXX? investment you than $X plans may in be amount and it higher million dollars, to in terms CapEx in million needs. much other sort investing of for or is that

Yes.

do the the rundown a in all the expected almost 'XX critical So maybe and Walter, boosting is 'XX. on you just availability investment side, of in and to related what give to spend want awareness most power of what and e-Boost spend -- we we to quick

Sure, yes.

the million business, the business invested So the we E-Mobility division on specifically e-BOOST there, for about XXXX. $X in

again, XXXX, a on we as for Nathan's target point, focusing decrease again, Now well. we try more and other and as the more don't as modest we work sum there, to expect areas. additionally, And same out products units personnel build additional to investments R&D

[operator Horizon Kinetics. to instructions]. next Parker Andrew go of We'll now

Walter, question. just one

the I talk my speak about think sense just sense, to that but bit call, you a that? little issues addressed guys facing. you this, are didn't you so capacity my this during is one of really you is far our the manufacturing Can but that

to the on I'll here. capacity much as... over knows turn better Chief it the He

I -- don't it probably growing, equipment. the of need new we that. in in addressing business. vertically Angeles. the without we're my another is spending. facing facility it. we're our too book side out anybody little we what been I need integrated of. value-added mean facility, move e-BLOC I middle I And last say, this. need I mean a could know, okay, middle Los year, really I trying blah, I to more Yes. We're a order go and less started on need to I need some a blah, We've bit since of near We're do. that -- in the do that's the the guess, of program operations of I the crunch

that it. making addressing for So concentrate and really really of which that be a to we're for, more -- being not and wiring issue. judicious. we're unique engineering don't we're is complicated We're have That's not compensated we're going how trying components capacity wiring unique and on think to do we're and and a trying controls what like We door. complicated to XX-inch things to paid getting design able

Although year. shifting this we're

So not don't it's little down -- little of a us, to anything we're -- this next we hatewire, consolidation for little don't a year expect any anticipate have turning a year or any capacity either. a but issues bit because of bit we

[operator instructions]We questions have no further this afternoon.

the a day. Quarter conclusion good Pioneer to today's the us to Results Fourth and evening. bring all Call. of great a for everyone joining Have thank Power We'd will that wish call. We like So Goodbye. Conference Year-end XXXX Financial you

you. Thank

Thank you, Bob.