Grande West Transportation Group Inc. has announced financial results for the second quarter ending June 30, 2018.
Second Quarter Highlights
- Bus, aftermarket parts and other revenue for the three months ended June 30, 2018 of $25,294,294 compared to $11,780,851 for the three months ended June 30, 2017, an increase of 115 percent
- Net income for the three months ended June 30, 2018 of $1,991,450 compared to $221,883 for the three months ended June 30, 2017
- Adjusted EBITDA for the three months ended June 30, 2018 of $2,879,094 compared to of $81,789 for the three months ended June 30, 2017 (see note and table in MD&A)
- Deliveries of sixty one Vicinity buses for the three months ended June 30, 2018 compared to thirty two for the three months ended June 30, 2017
- Repaid $2,000,000 in short term, high interest debt during the second quarter
- Reduced the Company's credit facility by $5,618,552 during the second quarter (see note 5 in the Financial Statements)
- Lease of six new Vicinity buses to a Canadian customer
Management reports 2018 second quarter financial results of sixty one (61) Vicinity buses delivered, revenue of $25,294,294, net income of $1,991,450 and gross profit margin of 19 percent. During the quarter the Company continued to focus on U.S. market growth, operational efficiencies and implementation of systems to support continued profitable expansion.
Selected Quarterly Information
The following table shows the unaudited results of the Company for the three months ended June 30, 2018 compared to the three months ended June 30, 2017 with selected balance sheet items as at June 30, 2018 and June 30, 2017. All amounts are stated in Canadian dollars.
|
3 months ended June 30, 2018 |
3 months ended June 30, 2017 |
|
|
$ |
(restated) $ |
|
|
Revenue |
25,294,294 |
11,780,851 |
|
Gross margin |
4,856,009 |
1,661,226 |
|
Net income (loss) |
1,991,450 |
221,883 |
|
Basic and diluted income (loss) per share |
0.03 |
.00 |
|
June 30, 2018 |
December 31, 2017 |
|
|
Cash and cash equivalents |
7,051,768 |
4,223,350 |
|
Working capital |
17,167,211 |
14,886,254 |
|
Total assets |
46,596,320 |
46,962,090 |
|
Non-current financial liabilities |
2,827,158 |
2,643,913 |
Backlog: Current total firm orders are for approximately one hundred eighty (180) buses valued at over $61 million CAD. Deliveries will vary from quarter to quarter to account for different build specifications, customer acceptance and revenue recognition.
Jean-Marc Landry, Grande West CEO, stated, "The Grande West team continues to focus on high priority areas which most importantly includes U.S. sales and Buy America assembly. We went live with our ERP system during the quarter and continue to work on optimizing and expanding the system. Our new executive team members Dan Buckle and Robert Mowat are key additions and we are seeing strong traction in their areas of expertise. 2018 continues to be an important year in setting the stage for the future of Grande West."
Business Overview
Grande West has delivered over 350 buses into the Canadian and U.S. markets and continues to deliver on its backlog of orders. The Company has maintained approximately 90% Canadian market share in the mid-size bus category where it sells its Vicinity branded buses. The Company's vehicles incorporate drive systems available in clean diesel and compressed natural gas ("CNG"). The Company expects continued growth in the after-market parts business.
The Company's operating plan for the remainder of 2018 is focused on delivering its backlog of buses and growing its order book. Management estimates it will deliver approximately 200 buses in 2018 and expects to continue to grow its market position in the mid-sized Vicinity category. Previous estimate was for approximately 240 deliveries. The reduction in deliveries during 2018 are due to longer U.S. sales cycles and a Canadian order of nineteen (19) Vicinity shifting to the first quarter of 2019.
Orders
In the first half of 2018, the number of RFPs in our market space was lower than the previous year. Estimates for active RFPs, particularly in the U.S. are increasing for the second half of 2018 and early 2019.
Corporate Update
General Overview
Management is pleased to have delivered its most profitable quarter to date, but is focusing on the opportunity to increase operational efficiencies and cost savings to bring more to the bottom line. Our new VP of Sales and Marketing, Rob Mowat, is fully focused on growing our sales pipeline in the U.S. market and is collaborating with Grande West's U.S. distributor Alliance Bus Group.
Grande West is announcing that, as of September 30, 2018, it will sell Vicinity buses directly to customers across eastern Canada as well as providing parts and service support for these buses. This structure is often referred to as OEM (original equipment manufacturer) direct. Grande West made this decision in an effort to be closer to customers and optimize all aspects of the relationship throughout the life of the bus.
Grande West and City View will work together between now and September 30, 2018 to ensure a smooth transition for all customers.
US Buy America Assembly
The College Park facility located near the Atlanta Airport in Georgia is our U.S. final assembly facility. As previously noted, Grande West is proceeding carefully in the initial stages of final assembly ramp up in Atlanta. The first bus has been completed and several non-Buy America Vicinity have been through the line for other assembly requirements. The Company will ramp up the line progressively as we receive new orders from U.S. transit customers.
