Phoenix Motor Q1 2024 Earnings Report

Phoenix Motor EPS Results

• Actual EPS: $0.54
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Phoenix Motor Revenue Results

• Actual Revenue: $9.42 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Phoenix Motor Announcement Details

• Quarter: Q1 2024
• Date: 10/3/2024
• Time: N/A
• Conference Call Date: Thursday, October 3, 2024
• Conference Call Time: 4:30PM ET

Phoenix Motor (NASDAQ:PEV) designs, develops, manufactures, assembles, and integrates electric drive systems, and light and medium duty electric vehicles in the United States and internationally. It provides chargers, electric forklifts, shuttle buses, Type A school buses, utility and service trucks, flatbed and cargo trucks, and walk-in vans. The company offers its products under the Phoenix Motorcars and EdisonFuture brand names. It also engages in the sale and leasing dealership of material handling products including electric lithium-ion forklifts and pallet jacks. It serves medium-duty fleet customers, including utilities, cities, municipalities, transit agencies, airports, hotels, seaports, school districts, parking companies, universities, and corporate campuses. The company was founded in 2003 and is headquartered in Anaheim, California.

Phoenix Motor Q1 2024 Earnings Call Transcript

[Operator]

Good afternoon, and welcome to the Phoenix Motors First Quarter 2024 Conference Call. As a reminder, this call is being recorded and all participants are in a listen only mode. The call will be open for questions and answers following the presentation. On today's call are Phoenix Motors' CEO, Denton Peng CFO, Michael Young COO, Louis Liu and CCO, Qiu Paul. Before we begin, the company would like to remind everyone that various remarks about future expectations, plans and prospects constitute forward looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

[Operator]

Phoenix Motor cautions that these forward looking statements are subject to risks and uncertainties that may cause their actual results to differ materially from those indicated, including risks described in the company's filings with the SEC. Any forward looking statements made on this conference call speak only as of today's date, Thursday, October 3, 2024, and the company does not intend to update any of these forward looking statements to reflect the events or circumstances that occur after today. I will now pass the call over to Phoenix Motors' CEO, Denton Peng. Mr. Peng?

[Speaker 1]

Thank you. And thank you to everyone for joining us on the call today. I'm excited to finalize share the remarkable progress Phoenix Motor made in the Q1 of 2024. Our acquisition of 1 of the largest zero emission plasma manufacturers in the U. S.

[Speaker 1]

Significantly enhanced our capabilities, positioning us as a leader in the electric transient bus market with over 1,000 buses delivered and a 40% market share in North America. We are extremely pleased to report record financial results for the Q1 of 2024. Our net revenues increased significantly to $9,400,000 and our net income reached a record $14,800,000 or $0.49 per share, a remarkable turnaround for net loss we experienced in the same period last year. Our total assets increased to $78,700,000 up to $11,600,000 at the end of 2023, which helps to bring our net assets back into compliance with the key Nasdaq listing standards. We believe our financial results are a clear indicator that our strategy initiatives are driving significant value and are petition us there for sustained growth.

[Speaker 1]

Looking ahead, with Ity's $200,000,000 backlog, We expect our 0 mission trends in BusyGenis to contribute significantly to our revenue and strengthening our market position. The combined strength of our brands, our expanded product offerings and our increased production capability position us well to capitalize on a growing demand for sustainable transportation solutions. I will now hand over hand the call over to Josh Power, our Chief Commercial Officer, who will give more detail about the Protected acquisition and our sales and marketing initiatives. Jose?

[Speaker 2]

Thank you, Jantin, and good afternoon, everyone. Acquiring the largest transit bus manufacturer in North America brought with it over 20 years of experience and a significant market share, having delivered over 1,000 buses and holding 40% of the market. This acquisition was highly complementary to our existing business, enhancing our capabilities and expanding our product offering to include heavy duty transit buses alongside our existing medium duty trucks, shuttle and school buses. The integration process has been smooth, and we are seeing the benefits of the strategic move in our operational and financial results. 1 of the immediate successes following this acquisition was the order of 6 zero emission electric buses by Raleigh Durham International Airport in March.

[Speaker 2]

This marked our first formal order post acquisition and signifies the strong demand and confidence in our enhanced product line. We have a strong order backlog with over 2 50 units supported by firm contracts and letters of intent, representing a total of $200,000,000 in potential revenue. We expect our backlog to grow further as we ramp up deliveries to customers and gain further market share. Phoenix Motor now operates in 3 distinct market segments: Zero Mission Transit and Shuttle buses for passenger transport, medium duty electric trucks and work trucks for last and middle mile goods and vocational transportation and electric type A school buses. Combined, these three segments offer a multi $1,000,000,000 market opportunity backed by strong regulatory mandates.

[Speaker 2]

The Transit Bus segment is rapidly transitioning to zero emission powertrains to meet the Federal Transit Administration goal of reducing greenhouse gas emissions by 50% by 2,030. Various states, including California, have managed to switch to 0 emission transit and airport shuttle operations. Transit agencies are supported with consistent federal funding through the FDA with over $1,000,000,000 allocated annually towards low and zero emission transportation. Electrification is also gaining momentum in medium duty trucks driven by regulatory requirements, substantial funding and incentives available for fleets to purchase electric vehicles. The inherent cost and operational efficiencies of electric vehicles further support this transition.

[Speaker 2]

The school bus market also offers favorable conditions with various school districts across the nation committing to deploying over 5,600 electric buses. This is further supported by state and federal level funding, including over $5,000,000,000 allocation from the EPA. Turning to our sales and marketing efforts. As just noted, we are focused on markets that offer substantial growth opportunities, supported by advancements in EV technology and driven by regulatory mandates and incentives. We will continue to grow in these segments as we offer best in class products and unparalleled value to our customers.

[Speaker 2]

Phoenix TV transit buses are now available on various state and federal contracts, allowing transit agencies to acquire the buses through a simplified purchasing process. Our medium duty vehicles are also available on various purchasing contracts. Importantly, our commitment to customer satisfaction extends beyond the initial sale. We are also focusing on improving our after sales support. We have strengthened our team with a dedicated VP of Service, who will work directly with customers to support their fleet with adequate service and aftermarket parts.

[Speaker 2]

We're negotiating with suppliers to ensure timely availability of aftermarket parts and expect significant improvements in service response time, parts availability and revenue growth from our aftersales operation. In summary, our strategic focus on high growth market segments, combined with our robust backlog and enhanced aftersales support, positions Phoenix Motor for continued success in the rapidly evolving electric vehicle landscape. Thank you for your attention. I'll now pass the call over to our Chief Operating Officer, Louis Liu for additional remarks.

[Speaker 3]

Thank you, Josh, and good afternoon, everyone. I'm excited to share more insights into some of our recent operational achievements. Obviously, one of the most significant milestone in the Q1 was the integration of the transit bus operations into Phoenix. We're now better equipped to serve a broader range of customers, of course, with our expanded portfolio that includes heavy duty transit buses alongside with our medium duty weight tracks, the shuttle and school buses. The acquisition added our operational capabilities not only supporting manufacturing electric medium duty commercial vehicles, but also heavy duty transit buses.

[Speaker 3]

Expanded supply base, meaning better leverage suppliers' capability for improved cost performance enhanced talents, system and tools for product development, Production quality management and also process improvements provided potential operation platform to continue to improve our operation efficiencies, increasing flexibilities and reduce the variabilities to support overall business strategies and performance expectations. Not only boost our revenue potential, but also align perfectly with our vision to lead in the electrification of the commercial transportation industry. In terms of specific operational results, we have started to deliver electric transit buses, meaning reactivated supply base for transit operations. We began production of our next generation Gen 4 shuttle buses and trucks. This new drivetrain features a 6 50 volts architecture, improved charging speeds and enhanced safety with battery packs located within the chassis frame rail.

[Speaker 3]

The first units has already been delivered to customers in New Jersey, making a significant step forward in our product evolution for medium duty vehicles. Looking ahead, we are looking at further leveraging our transit facility in Greenville, South Carolina, integrate talents, supply base, and system to expand our operations and manufacturing capabilities to support our growth trajectory. We are ramping up our production, general production at our Anaheim facility and planning to expand our operation to additional locations on the East Coast. This expansion will leverage percentages with our transit bus production facility in Greenville, South Carolina, enabling us to scale our medium duty weight EV's production significantly. Another exciting development is the deployment of the wireless charging capable shuttle buses.

[Speaker 3]

Thanks to our partners with the Intact EV, we expect to deploy the first of these shuttle bus later this year, offering a versatile and efficiency charging solution for our customers. Overall, our operational achievements and strategic initiatives in the Q1 of 2024 and beyond have set a solid foundation for the future growth. We are committed, of course, to delivering high quality, sustainable transportation solutions and continue to push forward the boundary of what is possible in electric vehicle industry. Now, I hand it over to our CFO, Michael Yun, who will provide a detailed overview of our financial performance for the Q1. Michael?

[Speaker 4]

Thank you, Louis. Good afternoon, everyone. I am pleased to provide a detailed overview of our financial performance for the Q1 2024. As Edmond mentioned earlier, we achieved record net revenue of $9,400,000 a significant increase from the $1,800,000 in the prior year period. This growth was primarily driven by successful acquisition of Proterra Transit Business, which contributed $9,000,000 in revenue.

[Speaker 4]

Our cash flow constraint impact the number of delivery completed in Q1. Our overall revenue performance highlight the strategic importance of this acquisition. Our gross profit for the quarter increased to $2,500,000 up for $200,000 in the same period last year, resulting a gross margin of 26.6% compared to 9.7% previously. This improvement is largely due to higher margin associated with the newly acquired Transit Bus business. The net income for Q1 was reported $14,800,000 or $0.49 per share, primarily influenced by the significantly bargain inventory purchase gain of $32,900,000 Our total asset increased to $78,700,000 while our net asset rose to 23,700,000 dollars The result demonstrate the transformative impact of our strategy action and set a strong foundation for continued growth.

[Speaker 4]

In terms of our capital structure, we have made significant strides enhancing our financial flexibility. We successfully negotiated a waiver agreement with 1 of our principal investor eliminating potential issuing of $12,000,000 convertible promissory note. This will prevent dilution of our existing shareholder and underscore the confidence our investor have in our strategy and financial health. This agreement combined with recent capital raise activity, which resulted in $11,100,000 in new capital and an average share of $1.15 have provided us with solid foundation to accelerate our growth initiative and strategically allocate resources towards innovation and market expansion. Looking ahead, we are extremely optimistic about our continued financial performance.

[Speaker 4]

We currently expect to report $12,000,000 revenue for Q2, up more than 20% sequentially. In addition to our transit segment, our focus on new product launch, like 4th generation drivetrain for Class 4 vehicle and partnership such as Indiegv for wireless charge solutions are expected to further boost our revenue and market presence in the quarter ahead. We are confident that those strategy move will drive substantial growth and position Pfenex Motor as a leader in a rapid evolving electric motors sector. Thank you for your continued support and joining our call joining us today. We are now ready to take your questions.

[Speaker 4]

Operator?

[Operator]

Thank you. We will now be conducting a question and answer session. Okay. If there are no questions at this time, thank you. This does conclude today's teleconference.

[Operator]

We thank you for your participation.