VANCOUVER, BC / ACCESSWIRE / April 28, 2020 / Grande West Transportation Group Inc. (TSXV:BUS)(OTC PINK:GWTNF) ("Grande West" or the "Company"), a Canadian manufacturer of mid-sized multi-purpose transit vehicles for sale in Canada and the United States, announced today, financial results for the fourth quarter and the year ended December 31, 2019.
Fourth Quarter and Yearly 2019 Highlights
Bus, aftermarket parts and other revenue for the three months ended December 31, 2019 of $5,430,520 compared to $8,511,617 for the three months ended December 31, 2018
Net loss for the three months ended December 31, 2019 of $1,759,313 compared to net loss of $1,154,588 for the three months ended December 31, 2018
Adjusted EBITDA loss for the three months ended December 31, 2019 of $828,146 compared to an adjusted EBITDA of $26,927 for the three months ended December 31, 2018 (see "Non-GAAP Measures")
Deliveries of 10 Vicinity buses for the three months ended December 31, 2019 compared to 19 for the three months ended December 31, 2018
Bus, aftermarket parts and other revenue of $24,648,170 for the year ended December 31, 2019 compared to $70,076,720 for the year ended December 31, 2018
Adjusted EBITDA loss of $2,400,268 for the year ended December 31, 2019 compared to an adjusted EBITDA of $5,224,549 for the year ended December 31, 2018 (see "Non-GAAP Measures")
Net loss of $4,985,409 for the year ended December 31, 2019 compared to a net income of $948,951 for the year ended December 31, 2018
Deliveries of 45 Vicinity buses for the year ended December 31, 2019 compared to 180 buses delivered for the year ended December 31, 2018
Business Overview
Corporate Update
Grande West has delivered over 450 buses in the Canadian and U.S. markets. The Company is the market leader in the mid-size bus category in Canada where it sells its Vicinity branded buses.
William Trainer, Grande West President and CEO, stated, "As previously reported, our focus for 2019 and 2020 is on product line expansion and growing our backlog. With the existing and forecasted orders for 2020, Grande West is expecting improved results for the 2020 fiscal year. Even after taking into consideration the negative effects of the current COVID-19 pandemic on our delivery schedule, the Company is still planning on delivering over 150 buses during 2020. The results for 2019 reflect the overall temporary softening of the market being realized in Canada for our industry but are well below our expectations. Although certain deliveries that were scheduled for 2019 have been delayed, they are still within expected timelines for delivery. Moving production of Buy America compliant buses to the U.S. has also taken longer than anticipated but we are pleased with the progress and quality on our first Buy America compliant buses. We are clearly disappointed with the 2019 results but are starting to see an improved sales pipeline and increased orderbook for 2020 as a result of a change in management and renewed focus on sales efforts. We are also fast tracking both our smaller crossover bus model and our electric propulsion system for our Vicinity buses. We are excited for our first crossover bus, the Vicinity LT, to be available for delivery in 2020. The Company is gaining significant momentum and the outlook for Grande West growth remains very positive."
Recent Developments
In February of 2020, the Company announced that it received a new contract from its exclusive US distributor, Atlanta-based Alliance Bus Group ("ABG") for new bus orders with a value of approximately $40M CAD. Grande West expects to record revenue and deliver the Purpose-Built Vicinity Buses within the 2020 calendar year. The new buses will replace an old fleet currently operating throughout multiple locations in the USA with a world-class business and bus operator.
COVID-19 Update
In response to the COVID-19 pandemic and global market volatility, the Company has activated robust business continuity plans to minimize disruptions to business and to adapt to evolving market conditions. The Company's top priority is the health and safety of its staff, customers, and the communities in which it operates. Grande West has taken appropriate precautions in this regard and has continued to deliver parts and services to meet its customers' needs. The Company is following the advice of health authorities in each jurisdiction where it operates. Grande West has implemented social distancing, team separation, and extensive work-from-home initiatives, as well as eliminated all non-essential travel.
Management is monitoring the situation very closely and is evaluating the impact the virus will have on the Company's delivery schedule, but at this time Grande West is still on track to deliver a minimum of 150 buses in 2020. Some expected 2020 sales to private operators have been delayed as a result of the pandemic. The Company's manufacturing partner overseas is still operating and currently producing to meet the Company's needs. Our U.S. manufacturing partner has currently temporarily idled operations. This will slow down Buy America production deliveries until the facility is back online. Although deliveries out of the U.S. may be delayed, the purchase orders are firm and are still expected to be delivered in 2020.
Our supply chain is currently able to provide us with the necessary components for production and aftermarket part sales but there is a risk of potential disruptions. Our aftermarket parts division will continue operating and servicing all our customers.
Grande West has built and delivered five Buy America Vicinity buses in the U.S. and has another 13 Vicinity buses currently scheduled for 2020 deliveries.
The Company remains well-positioned to serve its customers. As conditions evolve, Grande West will adjust plans to align with business continuity protocols and ensure employee, customer, and community health and safety are the highest priority. Credit lines remain active, allowing the Company access to capital, however Grande West recognizes that the effects of the COVID-19 pandemic and government or customer reactions could ultimately be materially disruptive.
Grande West is taking significant actions to control where it can, particularly surrounding costs and capital investments. The Company has started reductions with senior management, where salaries were reduced effective April 01, 2020. The Company has also implemented strict cost containment measures throughout the organization, including freezing recruiting activities and minimizing all discretionary costs. Grande West is taking proactive measures to actively control working capital and retain cash throughout the COVID-19 crisis.
William Trainer, President and CEO of Grande West stated, "We continue to monitor the COVID-19 situation closely and we are responding swiftly and effectively to protect the interests of our stakeholders. I am confident that our skilled and loyal workforce, the diversification and strength of our business model, and our strong partner relationship will position us well to navigate the current environment."
Outlook
Management expects to maintain its strong market segment leadership position in Canada and continue to make progress in the U.S. with private operators and public transit agencies. The external pressures to "right size" vehicles for its application and ridership levels along with the availability of funding in Canada and the U.S. create an ideal environment for Grande West to prosper. Once we are through the current COVID-19 pandemic, the outlook for Grande West, including significant growth in the U.S., remains very positive.
During 2017 and 2018, the Company achieved record revenues. We experienced a decline in the backlog during 2018 mainly due to lower order intake, which has impacted 2019 results. Bid activity during 2019 has been higher than in 2018, which will translate into higher 2020 sales. We are maintaining our strong leadership position in our market segment in Canada and we continue to make progress in the U.S. market. Subsequent to year end we have completed and delivered five of our first Buy America orders and others are just completing production. We have received further Buy America orders for deliveries starting in 2020.
Funding for transit in the U.S. and Canada is high and it is expected to remain high.
In the U.S. the Consolidated Appropriations Act was recently passed and continues historic funding levels with more than $16 billion for public transportation and intercity passenger rail. This legislation includes $13.4 billion for public transportation and $2.6 billion for intercity passenger rail grants and is $1.2 billion more than the previous FY 2019 FAST Act authorization levels.
In Canada in 2017, the federal government allocated $21.1 billion over 11 years to transit construction, expansion and rehabilitation. With the re-elected Liberal government, we are now seeing funding being released.
Part of our strategic plan is to expand our product line by adding a 100% zero emission electric propulsion system to our existing Vicinity bus models and adding the Vicinity LT bus model to our product lineup. The Vicinity electric bus will place Grande West in an excellent position to capture market share as the demand for zero emissions buses grows. Our smaller LT bus model will provide Grande West access to the high-end cutaway bus market segment. Municipalities of all sizes across Canada and the U.S. along with private operators in multiple sectors are looking for a more robust low floor accessible bus to replace their cutaways.
Aftermarket parts sales are expected to continue to increase as Vicinity bus fleets get older and new vehicles are placed into service.
Appointment of Officers
The Company is pleased to announce the appointment of Jonathan Leskewich as Chief Operating Officer of the Company. Mr. Leskewich has been with the Company since 2019 as Senior Principal Engineer. Mr. Leskewich has his Bachelor of Applied Science (B.A.Sc) from the University of British Columbia with a focus in Mechanical Engineering.
The Company also is pleased to announce that John LaGourgue, a director of the Company, has resumed his role as VP of Corporate Development. Mr. LaGourgue has over 20 years of management, sales and investment experience in public and private companies.
Lastly, the Company is pleased to announce the appointment of Marion McGrath as Corporate Secretary. Ms. McGrath has been actively engaged in the securities industry for over 30 years specializing in corporate governance and compliance of publicly traded issuers listed on the TSX Venture Exchange and the Canadian Securities Exchange. Ms. McGrath is the owner of iO Corporate Services Ltd., which company provides corporate and accounting services to various publicly-traded Canadian companies. Prior to organizing iO Corporate, Ms. McGrath was a senior paralegal with a Vancouver-based securities law firm.
Stock Options
The Company also announces that it has granted 150,000 incentive stock options to certain officers at an exercise price $0.40 for a period of five years. The options will vest in 50% tranches over the first year.
Financial Statements and Management's Discussion and Analysis can be accessed at sedar.com
Conference Call
A conference call for analysts and interested listeners will be held on Wednesday, April 29 at 11:00 AM EST. The call-in number is (877) 407-0782 or (201) 689-8567, the webcast can be accessed at https://www.webcaster4.com/Webcast/Page/2233/34361. A replay of the call will be available for 30 days at the webcast link or by calling (877) 481-4010 and entering PIN# 34361.
About Grande West Transportation Group
Grande West Transportation is a Canadian company that designs and engineers mid-size multi-purpose transit vehicles for public and commercial enterprises. Grande West utilizes world class manufacturing partners to produce the Purpose-Built Vicinity bus available in clean diesel, gas and CNG drive systems. An electric propulsion drive system is currently under development.
The Company has been successful in supplying Canadian municipal transportation agencies and private operators with new buses. Grande West is compliant to Buy America certification, and along with Alliance Bus Group, its exclusive US distributor, they are actively pursuing opportunities in public and private transit fleet operations that would benefit from Grande West's vehicles.
For further information please contact:
Grande West Transportation
Mr. William Trainer
CEO & President
Ph: 604-288-8043
IR@grandewest.com
www.grandewest.com
Neither the TSX-V nor its Regulation Service Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain "forward-looking information" and "forward-looking statements" (collectively "forward-looking statements") within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding the use of proceeds from the Private Placement, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible", and similar expressions, or statements that events, conditions, or results "will", "may", "could", or "should" occur or be achieved. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ materially from Grande West's expectations include uncertainties relating to the receipt of final approval from the TSX-V; and other risk and uncertainties disclosed in Grande West's reports and documents filed with applicable securities regulatory authorities from time to time. Grande West's forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made. Grande West assumes no obligation to update the forward-looking statements or beliefs, opinions, projections, or other factors, should they change, except as required by law.
SOURCE: Grande West Transportation Group
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