Vicinity Motor says new strategic partnerships with Optimal-EV and EAVX build foundation for ‘breakthrough FY 2022’

Vicinity Motor Corp. (TSX-V:VMC), a North American supplier of commercial electric vehicles, said that new strategic partnerships with Optimal-EV and EAVX build the company’s foundation for a “breakthrough FY 2022″ with projected revenues of at least $140 million.

In a statement accompanying the company’s third-quarter numbers, Vicinity Motor founder CEO William Trainer said: “The 3Q of 2021 was instrumental in our foundation building for 2022, having secured exciting new lines of business – namely EV chassis sales alongside EAVX and low-floor electric shuttle bus sales through our new partner Optimal-EV.”

“While revenues from our transit bus business are at times irregular and see some periods of lower deliveries as illustrated this quarter, per the financial guidance we’ve released, we are on a trajectory to realize over $140 million in revenue next year – marking what will be a record-breaking year for Vicinity by any measure.”

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The company said its entry into the “high demand electric truck and electric shuttle bus market” is expected to fill “in the gaps for periods of lower transit bus deliveries”.

Trainer noted that the company has made “significant moves” towards boosting its balance sheet by supplementing the firm’s $20 million line of credit with a $10.3 million debt financing and the proceeds from a $17 million underwritten public offering.

“Our near-term sales momentum is beginning to accelerate and given the inherent delay between a customer placing a purchase order today and the revenue realized from vehicle deliveries months later, I firmly believe that we are lining ourselves up for a strong 2022,” added Trainer. “This creates the potential to notably exceed our financial guidance.”

For the period ended September 30, 2021, the Vancouver, British Columbia-based company posted revenue which decreased 67% to $2.9 million, compared to $8.9 million in the same period in 2020.

“The decreased revenue was primarily driven by the delivery of six buses in the quarter, compared to 20 buses in the 3Q of 2020 – reflecting low order intake during the first nine months of the pandemic and delivery delays related to shipping delays and the global supply chain challenges,” explained the company.

Margins were negatively affected by sales of higher-than-average cost buses in inventory and the sales of fewer buses compared to the corresponding period a year earlier, said the company.

The adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortization loss for the 3Q was $3.5 million, compared to an adjusted EBITDA loss of $0.7 million in the same period a year earlier.

On the other hand, Vicinity Motor said revenue grew 128% to $49.3 million for the nine months ended September 30, 2021, compared to $21.6 million in the nine months ended September 30, 2020.

The company delivered 119 buses for the nine months ended September 30, 2021, compared to 49 buses for the nine months ended September 30, 2020, it added.

Gross profit increased to $5.7 million, or 11.6% of revenue for the nine months ended September 30, 2021, compared to gross profit of $1.2 million, or 5.3% of revenue for the corresponding period in 2020.

The company said its gross profit in the nine months ended September 30, 2021, were “positively” driven by its sales mix with 2021 deliveries generally having higher margins than those realized in 2020.

The company reported that it narrowed its adjusted EBITDA loss for the nine months to $0.5 million, compared to an adjusted EBITDA loss of $2.4 million for the corresponding period in 2020.

Significantly, Vicinity Motor provided FY 2022 guidance of revenue of at least $140 million and adjusted EBITDA of at least $10 million, citing “significant potential upside driven by strong North American sales momentum”.

The company had cash and equivalents as of September 30, 2021, totaling $5 million, fortified through the addition of $10.3 million in debt financing and the proceeds from a $17 million public offering after the quarter. Working capital as of September 30, 2021, also totaled $16.4 million.

During the quarter, Vicinity Motor forged a strategic collaboration agreement with EAVX, a business unit of North American commercial automotive leader JB Poindexter, to sell Vicinity’s electric chassis for municipal and delivery vehicles.

It also signed a 10-year licensing deal to serve as the exclusive North American and European distributor of the S1 and E1 product lines from Optimal-EV, enabling access to $30 million in firm orders for delivery in 2022 and LOIs with existing dealers for potential sales of $194 million through 2023.

In addition, it secured $15.5 million in new purchase orders for 38 Vicinity Classic Buses from leading Quebec transit operators.

Contact the author Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive

Story by ProactiveInvestors