Pioneer Power Solutions Q4 2024 Earnings Report

Pioneer Power Solutions EPS Results

• Actual EPS: N/A
• Consensus EPS: -$0.42
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Pioneer Power Solutions Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $9.80 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Pioneer Power Solutions Announcement Details

• Quarter: Q4 2024
• Date: 4/15/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, April 15, 2025
• Conference Call Time: 4:30PM ET

Pioneer Power Solutions (NASDAQ:PPSI), together with its subsidiaries, design, manufacture, integrate, refurbish, distribute, sell, and service electric power systems, distributed energy resources, power generation equipment, and mobile EV charging solutions. The company operates through Electrical Infrastructure Equipment and Critical Power Solutions segments. The Electrical Infrastructure Equipment segment provides electric power systems that help customers effectively and efficiently protect, control, transfer, monitor, and manage their electric energy requirements. It also offers e-Bloc power systems, power systems, and circuit protective equipment related products. The Critical Power Solutions segment provides power generation equipment maintenance, repairs, remote monitoring, and equipment services, and EV charging solutions. This segment offers suite generator on a truck and power generation equipment, and repair, maintenance, and support services. Pioneer Power Solutions, Inc. serves utility, industrial, and commercial markets. The company was founded in 2008 and is headquartered in Fort Lee, New Jersey.

Pioneer Power Solutions Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Greetings, and welcome to Pioneer Power's q four and full year twenty twenty four financial results conference call. This time all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I'd now like to introduce your host Brett Maas of Hayden IR.

[Operator]

Thank you. You may begin.

[Brett Maas, Managing Partner at Hayden IR]

Thank you, operator. The call today will be hosted by Nathan Masarick, Chairman and Chief Executive Officer Walter McCallick, Chief Financial Officer and Gio Marikin, President of Pioneer Power eMobility. Following this discussion, there'll be a Q and A session over to the participants on the call. We appreciate the ability sorry, we appreciate the opportunity to review the fourth quarter financial results and recent business highlights. Before we get started, let me remind you this call is being recorded and webcast.

[Brett Maas, Managing Partner at Hayden IR]

During the call, management may make forward looking statements. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary text regarding forward looking statements contained in the earnings release issued earlier today, which applies to the content of this call. I'd like to now turn the call over to Nathan Masrick, Chairman and CEO. Nathan, please go ahead.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Thank you, Brett. Good afternoon, and thank you all for joining us today. 2024 was a watershed year for our business. In the fourth quarter, we sold our Pioneer Custom Electrical Products unit, TCEP, including the eBlock Integrated Power System to Millpoint Capital for $50,000,000 in cash and equity. Sales consideration was comprised of a cash payment to Pioneer of $48,000,000 and an approximately 6% stake in MillPoint's new Volteris energy transition platform.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Concurrently, MillPoint also acquired Jefferson Electric, a storied electric transformer manufacturer from ERMCO in order to expand Volteris into a key power solutions provider. We expect strong profitable growth for Volteris and are pleased to hold equity in this platform. Subsequent to the sale, our Board declared a one time special cash dividend of $1.5 a share payable on 01/07/2025 to shareholders of record as of 12/17/2024, essentially returning $16,700,000 to our shareholders. Pioneer's remaining business is our critical power business, which is anchored by our e Boost mobile charging platform. Indeed, most of our remarks this afternoon, including the financial presentation, will be focused on this business.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Since launching our first truck mounted fast charging solution prototype In November of twenty twenty one, we have grown eBoost to a multimillion dollar business with revenue reaching $22,900,000 in 2024, more than double the $11,100,000 we delivered in 2023 and way more than the $1,000,000 of eBoost product we delivered in 2022. Through engineering enhancements and market driven innovation, we've expanded our product lineup beyond the original truck mounted unit to include eBoost Mini, a skid based DC fast charger, easily movable with a forklift, eBoost Mobile, our flagship trailer based engine powered DC fast charger towable by a truck or tractor. EBoost GOAT, a truck integrated DC fast charger modeled after AAA's roadside assistance eBoost Pod, a containerized DC fast charger including engine designed for rural extreme weather and semi permanent applications. With each solution, we have demonstrated our ability to innovate and adapt to a rapidly evolving market, customizing our units electrically and mechanically to meet diverse user needs. Today, eBoost is recognized as a leader in reliable, sustainably powered off grid mobile EV charging.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Indeed, eBoost is eponymous with mobile high capacity charging in the electric truck and the electric bus market. To date, we've delivered over 22,000 charging sessions and supplied more than 700 megawatts of sustainable off grid power. Importantly, this diverse portfolio positions eBoost as a leader in mobile and adaptable EV charging solutions. We remain committed to innovation and expansion, continuously bringing new products to market. By diversifying revenue streams, we aim to continue to drive sustained long term growth.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

For the fourth quarter, this business delivered impressive year over year revenue growth of 265106% for the full year of 2024. Importantly, the economics of our e Boost business are highly attractive. We narrowed the loss from continuing operations in 2024 by nearly 50% compared to 2023. And even more importantly, as Walter will detail in a few minutes, when we have a quarter with almost $10,000,000 in revenue, as we did in twenty twenty four's fourth quarter, how profitable the Critical Power segment becomes and how well the operating leverage continues to play for us. As of the end of twenty twenty four, our Critical Power segment, inclusive of eBoost, had a total backlog of $19,800,000 an increase of 19% compared to the end of twenty twenty three.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

This backlog provides the basis for our revenue guidance for 2025 and reinforces our confidence in achieving or surpassing our guidance for 2025. Important to note that our revenue guidance for 2025 does not include any revenue or profit from our recently announced HomeBoost product. We announced the launch of our first residential offering, HomeBoost, last year. Building on our innovative HomeBoost residential solution, we refined our design to meet evolving market needs. In response to industry feedback and consumer demand, we are indeed expanding our product line to serve both high end residential and light commercial segments, including medical centers and cafe type establishments.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Our enhanced offering will provide whole home 100% whole home backup power and advanced EV charging capabilities, essentially a virtual power plant for the home or smaller light commercial user. We're on track to launch the first units later this year, capitalizing on a growing market need for reliable, flexible power solutions. In short, the market opportunities for our eBoost solutions are massive. Robust demand is being driven by rapid expansion, rapid EV adoption, increasing demand for mobile and off grid charging, and for clean energy infrastructure. Markets we are most active in at this time are transit bus, school bus, electric truck and van fleets, large government and corporate fleets.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Submarkets to that that we concentrate on are sanitation, public works, construction equipment, and airport ground service equipment. With rising EV adoption, inability of users to secure ample power for their needs and infrastructure gaps, eBoost is well positioned to capitalize on the increasing need for flexible off grid charging solutions. Importantly, with proceeds from the sale of PSEP and zero debt, we have the capital necessary to fund our growth plans over the next several years. Following the sale of PSEP, we are a more focused business. For 2025, we are reaffirming our revenue guidance of 27,000,000 to $29,000,000 We expect the quarter by quarter cadence to be between $6,000,000 and $8,000,000 per quarter throughout 2025.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

We expect this revenue will be primarily driven by eBoost product sales and rentals, along with service and maintenance revenue. Specifically, approximately $17,000,000 from equipment sales and rentals, including approximately $2,500,000 from long term leaserental agreements, and more than $10,000,000 in 2025 from service and maintenance agreements. With that, I will turn the call over to Walter.

[Walter Michalec, Chief Financial Officer at Pioneer Power Solutions]

Thank you, Nathan, and good afternoon, everyone. As Nathan mentioned earlier, on 10/29/2024, we sold our California business, PSEP, for $50,000,000 in a cash and equity transaction, primarily cash, as we received total gross cash proceeds of $48,000,000 leaving our balance sheet in a very strong position. Our Critical Power segment, which includes Pioneer eMobility or eBoost, is the sole operating business unit that remains after the sale. Please be advised that we have included a non GAAP financial measure of operating income from continuing operations, which excludes corporate overhead expenses, research and development expenses, and non recurring professional fees. Please refer to our press release issued earlier today for further information, including a reconciliation between GAAP and non GAAP financial measures.

[Walter Michalec, Chief Financial Officer at Pioneer Power Solutions]

The press release can be found on our website at www.pioneerpowersolutions.com/investors/newsroom. Such non GAAP measures should not be used as a substitute or alternative to any measure of financial performance calculated and presented in accordance with U. S. GAAP. Instead, we believe this non GAAP measure should be used to supplement our financial measures derived in accordance with U.

[Walter Michalec, Chief Financial Officer at Pioneer Power Solutions]

S. GAAP in order to provide a more complete understanding of the trends affecting the business. Fourth quarter revenue from continuing operations was $9,800,000 compared to $2,700,000 in the year ago quarter, an increase of 265%. The increase was primarily due to the significant growth in our Pioneer e mobility business, or e Boost. Fourth quarter gross profit from continuing operations was 2,800,000.0 or a gross margin of 29% compared to gross profit of $610,000 or 23% of revenue in the fourth quarter of last year.

[Walter Michalec, Chief Financial Officer at Pioneer Power Solutions]

The increase once again was primarily due to the significant growth in our eBoost business. During the fourth quarter of twenty twenty four, our Critical Power segment incurred an operating loss from continuing operations of $1,100,000 a significant improvement from a loss of $1,900,000 in the fourth quarter of last year. The improvement was primarily due to the large increase in revenue from the sale of our e Boost solutions and the higher margins we are seeing from that business. During the fourth quarter of twenty twenty four, our Critical Power segment generated $1,600,000 of non GAAP operating income from continuing operations, which again excludes corporate overhead expenses, R and D expense and non recurring professional fees, as compared to $100,000 of non GAAP operating income from continuing operations for the same quarter in 2023, a year over year improvement of approximately 1,500,000 Net income from continuing operations for the fourth quarter of twenty twenty four was $759,000 compared to a net loss from continuing operations of 1,400,000.0 during the fourth quarter of twenty twenty three, a year over year improvement of approximately $2,100,000 Turning to our full year results. Full year 2024 revenue from continuing operations was $22,900,000 compared to $11,100,000 in 2023, an increase of 106%.

[Walter Michalec, Chief Financial Officer at Pioneer Power Solutions]

The increase was once again primarily due to the growth in our Pioneer eMobility business as we recognized a large increase in shipments and rentals of our eBoost equipment. Full year 2024 gross profit from continuing operations was $5,500,000 or a gross margin of 24% compared to gross profit of 2,200,000.0 or 20% of revenue in 2023. The increase to our gross profit and margin during 2024 was primarily due to the increase in sales of e Boost equipment from the company's pioneer e mobility business. During 2024, our Critical Power segment incurred an operating loss from continuing operations of $5,200,000 compared to $7,000,000 in 2023, a year over year improvement of $1,800,000 During 2024, our Critical Power segment generated 1,700,000 of non GAAP operating income from continuing operations, which again excludes corporate overhead expenses, R and D expense and non recurring professional fees, as compared to a non GAAP operating loss from continuing operations of $1,300,000 for the year ended 12/31/2023, a significant year over year improvement of approximately $3,000,000 Net loss from continuing operations for 2024 was $3,300,000 compared to a net loss from continuing operations of $6,300,000 in 2023. That's a year over year improvement of approximately 3,000,000 Taking a look at our balance sheet.

[Walter Michalec, Chief Financial Officer at Pioneer Power Solutions]

We had cash on hand of $41,600,000 and zero bank debt as of 12/31/2024, compared to $3,600,000 of cash on hand and zero bank debt as of 12/31/2023. The cash on hand as of 12/31/2024 represents cash per share of approximately $3.74 as of 12/31/2024. Also, as Nathan mentioned earlier, subsequent to year end, we paid a one time special cash dividend of $16,700,000 in aggregate to shareholders of record as of 12/17/2024. Today, we are reaffirming our guidance for revenue of $27,000,000 to $29,000,000 for the full year of 2025. This concludes my remarks.

[Walter Michalec, Chief Financial Officer at Pioneer Power Solutions]

I will now turn the call back over to the operator for any questions.

[Operator]

Great, thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue.

[Operator]

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please. We'll be poll for questions. First question here is from Rob Brown from Lake Street Capital Markets. Please go ahead.

[Rob Brown, Founding Partner, Senior Equity Research Analyst at Lake Street Capital Markets, LLC]

Good afternoon.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Hey, good afternoon, Rob.

[Rob Brown, Founding Partner, Senior Equity Research Analyst at Lake Street Capital Markets, LLC]

On the strong backlog and growth in eBooster or outlook, what's sort of driving that? Where are the customer segments you're seeing the activity? And how's visibility look at this point in the year in terms of new demand coming in?

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Yes, new demand is always coming in, but it's coming really the biggest bucket right now is some form government, state, county, city, town. And it's usually related to transit or school buses, sometimes fleets as well. That's the biggest segment for us now. If you look at the more recent announcements, with the city of Portland, it's going to be more government quasi government type groups, ports, transit authorities, people like that.

[Rob Brown, Founding Partner, Senior Equity Research Analyst at Lake Street Capital Markets, LLC]

Okay, great. Great. And you talked a little bit about the service equipment mix. How is that mix looking for '25? Are you seeing a fair amount of rental revenue in that 25%?

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Yes. So we kind of budgeted $2,500,000 in lease and rental type revenue for 2025. And I think that's what we'll do. We might exceed it by a little, but that's kind of the that's the thinking. We look to continue to grow that, obviously, with quality type counterparties.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

But that seems to be for a lot of the large users, that seems to be something that speaks more to them. And since they have the creditworthiness to make it worth our while, it's good for everybody. It's a more lucrative business, but we have to front it. So that's the only downside for us.

[Rob Brown, Founding Partner, Senior Equity Research Analyst at Lake Street Capital Markets, LLC]

Understand. Okay. And then on the HomeBoost product, I think you talked a little bit about a redesign effort there. Could you kind of give us some color there and maybe how the commercial, I guess, that expands into commercial?

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Yeah. I mean, HomeBoost, we put together a special team. My goal was to have the team together by the end of twenty twenty four, which we did. It was me. It's on me.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

I kind of pulled it back in February, not because the product wasn't really ready for prime time, but the product itself is beautiful, but it didn't cosmetically look as beautiful as I would have liked. It's a premium product to sort of a premium user. So we went back to make it look and feel that the person's getting, not just in functionality, but they're getting aesthetically a value for the money that they're spending. And yeah, it's targeted to the high end residential, somebody that's willing to spend, call it, 50,000, dollars 60 thousand to have full home backup. You're talking about homes that will typically be 3,000 square feet plus, probably more.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

And they want the full backup prime rated engines as opposed to just a backup engine, the ability to produce their own electricity off their gas line twenty four hours a day if they choose to, to switch back and forth between the grid as they choose to. And initially, we launched this, especially the generator dealers and distributors were really the ones that almost in unison sort of designated the product for the medical center, small business that really wants super resilience and to be able to integrate charging for really just spending a little bit more than they do on backup plan. And that gives them twenty four hour, one hundred percent resilience. That's where we're going to be headed with it.

[Rob Brown, Founding Partner, Senior Equity Research Analyst at Lake Street Capital Markets, LLC]

Okay, great. Thank you. I'll turn it over.

[Operator]

Next question here is from Samir Joshi from HC Wainwright. Please go ahead.

[Sameer Joshi, Senior Equity Research Analyst at H.C. Wainwright & Co., LLC]

Hey, good afternoon, Nathan.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Good afternoon, Sameer.

[Sameer Joshi, Senior Equity Research Analyst at H.C. Wainwright & Co., LLC]

For taking my questions. On the gross margin front, I think your fourth quarter gross margins were around 29% Nice revenues. Should we expect these levels going forward?

[Sameer Joshi, Senior Equity Research Analyst at H.C. Wainwright & Co., LLC]

Or was there something one time in this fourth quarter that resulted in these gross margins?

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Yeah, I mean, dollars 9,800,000.0, more than 50% was eBoost product, less than 50% was service. That's a really nice mix for us. The gross margins on the product are higher than we get on service, especially for customers that are in a lot of different places. So we end up subbing some of the service and adding a surcharge so we can make something that definitely compresses gross margins on the service side. When the product sales continue to grow, if leasing continues to grow, so the gross margins are gonna, the gross margin picture should be there or maybe a little bit better.

[Sameer Joshi, Senior Equity Research Analyst at H.C. Wainwright & Co., LLC]

Understood. So then, juxtaposing your fourth quarter revenues with your 2025 guidance, it seems like a run rate of 6,000,000 to $8,000,000 versus $10,000,000 which you realized in fourth quarter. Is there a reason for this? Or was there as I think you mentioned, more than 50% of revenues were from product this quarter, and you're expecting around $35,000,000 from product next year?

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Yeah, we had one. It was for the Los Angeles Department of Transportation. That's for the city of Los Angeles is transit buses, the buses, the inner city buses that move humans. It was one particular project of a little bit over $5,000,000 that needed to be delivered in November. That was their window.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

The team did an amazing job to do it. At first, maybe they weren't so happy, but I'm talking about our own people, not the Department of Transportation. But we did it in a very short period of time and successfully, met the internal markers and really came in at the gross margin that we expected. So, that was a nice thing to complete all in one. We have a large project that split between the first quarter and the second quarter of twenty twenty five, But we have any one the size of DOT yet.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

But the year for us, neglected to kind of, or I think maybe Rob had asked, and I didn't answer this part of his question. We're projecting almost an even 6,000,000 to $8,000,000 per quarter, depending on a few jobs moving here and there, but more or less 6,000,000 to $8,000,000 Our year is, I'd say, 80% baked in already, and the strength of the pipeline and orders that we hope to be announcing soon will support really not so much a little bit to finish 2025, but essentially my head is already in 2026. Most of the efforts now are building the first half of '20 '20 '6.

[Sameer Joshi, Senior Equity Research Analyst at H.C. Wainwright & Co., LLC]

Yeah, understood. Thanks, sir. Because I was going to ask that confidence in 2025 top line, given already strong backlog. Thanks for answering that.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

You're very welcome.

[Sameer Joshi, Senior Equity Research Analyst at H.C. Wainwright & Co., LLC]

I think now you have around 25,000,000 or just like 41.7 minuteus 16.6, or something like that. Yeah, something like that, you know. Would you be looking for some strategic opportunities, or would you rather do some organic in house product?

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Yeah. So we're open to all of it really. We're seeing off me personally, I'm a serial acquirer. Prices are better now than they were a year ago or even six months ago. There's a reason for that as well.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Mean, one thing that we're not going to do is I can't go backwards financially. I can't take on a bleeder. Unfortunately, a lot of the businesses or enterprises that would maybe make a good fit on the charging side come with risks and built in losses that were not. Even in an egomaniacal day, I don't think we could turn around in time and would not be in the best interest of the shareholders. So we're kind of looking for ancillary, a little bit more in power, a little bit more in special forms of power, whether mobile or permanent, in distributed generation.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Appetite for power is endless. We were able to come up with something clever where we married the charging and unitized it within a certain package and made it mobile. The essence of what we do is deliver on-site power. So that would really be the way we would go.

[Sameer Joshi, Senior Equity Research Analyst at H.C. Wainwright & Co., LLC]

Understood. And then just one last one, like stepping back at the macro level. I do understand your backlog and engagement with the pipeline customers seem very strong, but do you think any macroeconomical events or tariffs or any other uncertainties could have an impact on your outlook for 2025?

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

Yeah, I mean, it's baked into the outlook. I mean, so the change in administration was not a positive for charging, frankly. Most of the customers and clients we're dealing with, again, these are city states, whatever you want to call them, quasi governmental agencies. They made certain decisions, and they've crossed that Rubicon already. They're going electric, they're making massive investments, or have already, they're already deeply pregnant.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

That you can't, there's not a turning back, and that's where we're spending most of our time. From a tariff, I guess chaos or uncertainty, even at worst, it wasn't going to have a major effect on us. The effect would be anybody's macro effect. Any receding of GDP or any slowdown in the economy is not good for anybody. So we're not immune to that.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

But nothing specifically, or nothing of real important, nothing of note from an increase that we would see.

[Sameer Joshi, Senior Equity Research Analyst at H.C. Wainwright & Co., LLC]

Makes sense. Thanks for that. Thanks, Anshul again.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

You're welcome, Samir.

[Operator]

This concludes the question and answer session. I'd like to turn the floor back to management for any closing comments.

[Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions]

All right. Thank you all for your time and support. We look forward to updating you again on our next call, which will hopefully be right after the time to file the Q. Thank you.

[Operator]

This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.

Participants

Executives

• Walter Michalec, Chief Financial Officer

Analysts

• Brett Maas, Managing Partner at Hayden IR
• Nathan Mazurek, President, CEO & Chairman at Pioneer Power Solutions
• Rob Brown, Founding Partner, Senior Equity Research Analyst at Lake Street Capital Markets, LLC
• Sameer Joshi, Senior Equity Research Analyst at H.C. Wainwright & Co., LLC