VANCOUVER, Sept. 12, 2016 /CNW/ - Grande West Transportation Group Inc. (TSXV: BUS; OTC: GWTNF) – ("Grande West" or the "Company"), a manufacturer of heavy-duty mid-sized transit buses for sale in Canada and the United States, is pleased to provide a Corporate update for the Company's fiscal year fourth quarter ended August 31, 2016.
Audited fourth quarter and year-end financials will be released in December 2016 and will correspond with an annual corporate update. To further increase financial transparency, the Company will be changing its fiscal year to coincide with the calendar year starting January 1, 2017. This reporting change will result in additional audited fourth quarter financial statements ending December 31, 2016.
Grande West recently announced that the common shares of the Company have been made eligible for book-entry delivery and depository services of The Depository Trusty Company (the "DTC") to facilitate electronic settlement of transfers in the United States. DTC is the largest securities depository in the world and holds over thirty-five trillion dollars worth of securities on deposit. DTC accepts deposits of securities from its participants only, who are usually clearing firms. DTC eligibility increases liquidity and efficiencies in trading Grande West's shares, which will allow the Company to increase exposure to new investors in the US and internationally.
Deliveries, Order Activity and Backlog
The Company delivered and is in the final process of delivering twenty-one (21) 30-foot Vicinity buses. This is a quarterly record number of buses booked to date.
Buses have been or are currently being delivered to the following customers:
- Ten (10) to the City of Calgary, Alberta;
- Two (2) to the City of Canmore, Alberta;
- One (1) to the City of Moose Jaw, Saskatchewan;
- Three (3) to the City of Oakville, Ontario;
- Two (2) to Transdev Quebec;
- Three (3) to the Alliance Bus Group, USA
Revenue for these 21 bus deliveries is over $7,000,000 CAD.
Current firm orders for 2017 delivery are for one hundred thirty-two (132) buses, valued at over $45 million CAD. The Company's bid activity is at an all-time high and further orders are expected during calendar year 2016.
Bid activity for 2018 delivery is expected to be considerably higher than for 2017 with Federal Stimulus funding increasing bus sales all across Canada.
Grande West continues to win multi year contacts with options. 2018 options are currently at fifty (50) Vicinity buses and further orders are expected as the 2017 production schedule fills up.
2019 delivery Options are now at 40 units.
Recent Orders include the City of Edmonton awarding Grande West a long term supply contract for mid-size 30 foot Vicinity buses (see news release September 8, 2016). The contract has forecasted quantities (firm and options) for up to forty-five (45) buses, allows the City to increase the number of buses as required and extend the contract for up to 5 years. The initial 2017 delivery order is for six (6) Vicinity buses valued at approximately $2.33 million CAD. The 5-year contract value, if fully exercised, is estimated at approximately $18 million CAD.
The three (3) 30 foot Vicinity Buses delivered to the Alliance Bus Group are the first USA deliveries in the fifty (50) bus order announced on October 27, 2015. The balance of the order has been realigned into the production schedule for 2017 delivery.
As previously announced, Grande West is expanding its production schedule to manufacture a minimum of 15 buses per month throughout 2017. This new dedicated manufacturing line will equate to cost savings in numerous areas as operations are optimized for efficiencies in production, purchasing, shipping and delivery.
In the last quarter Grande West announced the completion of testing the Vicinity 30 foot model bus in the FTA's Bus Test Program at Altoona, Pennsylvania. The Vicinity was tested for the maximum allowable 12-year durability testing, where it delivered exceptional results in all categories. The full report is available at www.grandewest.com. The primary focus of the test program evaluates the structural durability and integrity, reliability, performance, maintainability, safety, noise, and fuel economy.
The validation of achieving such high results at Altoona will be the catalyst for many USA orders. The Alliance Bus Group is marketing the Vicinity across the country, resulting in very positive results with its efforts.
The USA market is split into two segments, private sales and transit sales. Transit sales require a Buy America certification. Grande West is pleased to announce it is currently preparing to meet the FTA requirements for Buy America. When completed the certification will open opportunities to bid on USA transit bus sales. Grande West's total addressable market after Buy America certification in the US is estimated with target sales of about 1,000 buses per year.
In order to accelerate its efforts to obtain Buy America certification and support increased sales and delivery activity, the Company is pleased to announce the addition of John Choo to the Grande West engineering department. John will lead the Company's Buy America initiative and work with the sales and production team on RFPs, production and deliveries. John is a Professional Engineer with over 25 years experience in project management, support, testing, mechanical design engineering, sales, and other related skills. He spent the majority of his career with Motor Coach Industries and New Flyer Industries Inc. His most recent position with New Flyer Industries was as an Engineering Technical Leader, which translates very well to his new position with the Company.
John will be granted 100,000 stock options at $0.50 per common share, which will vest in accordance with the Company's stock option plan. The options granted are exercisable until September 6, 2021, subject to exchange approval.
William Trainer, President and CEO of Grande West stated, "It has been a very busy quarter achieving record deliveries of our Vicinity buses, and this will translate into record quarterly revenue. This has also been an important time for us to analyze and streamline the Company's production and delivery processes. Our team has done a tremendous job building up our Canadian market business, and we expect to continue to win market share across the country. With our order book and backlog filling up for 2017 deliveries, Grande West has never been in a better position operationally or financially than we are today. The Company wishes to thank our Canadian investors, partners, public sector transit clients and ridership for their support to date as we ramp up to sustained production, revenues and profitability in the first quarter of 2017."
An updated investor presentation will be available on the company's website on September 14, 2016.
About Grande West Transportation Group
Grande West Transportation Group is a Canadian bus manufacturer which designs, engineers and manufactures mid-size buses for transit authorities and commercial enterprises. Grande West's Vicinity bus is available in 30 and 35 foot models designed with affordability, accessibility and global responsibility in mind. It costs significantly less than a regular 40 foot transit bus, burns less fuel and emits less harmful emissions.
The Company has been successful in supplying Canadian municipal transportation agencies and private operators with new buses and is receiving follow-on orders in most Provinces across the country. Grande West is also receiving orders in the much larger US market from private operators, while working towards a 'Buy America' certification in order to sell to federal and state transit authorities.
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 Inc.
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For further information: Grande West Transportation: John LaGourgue, Ph: 1-604-607-4000, [email protected], www.grandewest.com; Paradox Public Relations: Carl Desjardins, Ph: 1-866-460-0408, [email protected], www.paradox-pr.ca