VANCOUVER, Aug. 29. 2018 /CNW/ - Grande West Transportation Group Inc. (TSXV: BUS; OTC PINK: GWTNF) – August 29, 2018: ("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 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%
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 (61) Vicinity buses for the three months ended June 30, 2018 compared to thirty two (32) 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 (6) 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%. 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
Net income (loss)
Basic and diluted income (loss) per share
June 30, 2018
December 31, 2017
Cash and cash equivalents
Non-current financial liabilities
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."
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.
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.
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.
A conference call for analysts and interested listeners will be today at 11:00 AM EST. The call-in number is (866) 215-5508 or (514) 841-2157 and can be accessed by entering passcode 47374790. A replay will be available on the Company's website shortly after the call at http://grandewest.com/index.php/investors/media.
About Grande West Transportation Group
Grande West is a Canadian company that designs, engineers and manufactures mid-size multi-purpose transit vehicles for public and commercial enterprises. Grande West's Best-in-Class heavy-duty Vicinity bus is available in 27.5, 30 and 35 foot models powered by clean diesel or CNG designed with affordability, accessibility and global responsibility in mind. It costs significantly less than a regular 40 foot transit bus, is more maneuverable, burns less fuel and emits less harmful emissions. Grande West will soon be offering a new product which will be the first Crossover Vehicle in the transit space - a medium-duty, monocoque-designed rear engine vehicle.
The Company has been successful in supplying Canadian municipal transportation agencies and private operators with new buses and is receiving follow-on orders in many Canadian transit agencies. Grande West is compliant to Buy America certification, and along with Alliance Bus Group ("ABG"), its exclusive US distributor, is actively pursuing opportunities in public and private transit fleet operations that would benefit from Grande West's vehicles.
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 Inc.
For further information: Grande West Transportation, John LaGourgue, VP Corporate Development, Ph: 1-604-607-4000, [email protected], www.grandewest.com