VANCOUVER, BC / ACCESSWIRE / November 28, 2019 / Grande West Transportation Group Inc. (TSXV:BUS)(OTCPINK:GWTNF) - November 28th, 2019: ("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 third quarter ending September 30, 2019.
Third Quarter Highlights and Recent Developments
- New purchase orders for 11 Buy America buses for new and existing customers in the U.S. for delivery in 2020
- Bus, aftermarket parts and other revenue of $1,605,755 for the three months ended September 30, 2019 compared to $13,830,598 for the three months ended September 30, 2018
- Net loss of $2,111,189 for the three months ended September 30, 2019 compared to a net loss of $308,120 for the three months ended September 30, 2018
- Adjusted EBITDA loss of $1,768,084 for the three months ended September 30, 2019 compared to an adjusted EBITDA of $615,376 for the three months ended September 30, 2018
Business Overview
Corporate Update
Grande West has over 450 buses in the Canadian and U.S. markets. The Company is the market leader in the mid-size bus category in Canada where it sells its Vicinity branded buses.
William Trainer, Grande West President and CEO, stated, "As previously reported, our focus for 2019 and 2020 is on product line expansion and growing our backlog. We have received new orders for 11 Buy America compliant Vicinity buses during the third quarter with new and existing customers for deliveries in 2020 and expect to close on significant orders in the U.S. and Canada shortly. With the existing and forecasted orders for 2020, Grande West is expecting improved results for the 2020 fiscal year. The results for 2019 reflect the overall temporary softening of the market being realized in Canada for our industry but are well below our expectations. Although certain deliveries that were scheduled for the third quarter of 2019 have been delayed, they are still within our customers expected timelines for delivery. Moving production of Buy America compliant buses to the U.S. has also taken longer than anticipated but we are very pleased with the progress and quality on our first Buy America compliant buses. We are clearly disappointed with the 2019 results but are starting to see an improved sales pipeline and increased orderbook for 2020 as a result of a change in management and renewed focus on sales efforts. We are also fast tracking both our smaller crossover bus model and our electric propulsion system for our Vicinity buses. We are excited for our first crossover bus, the Vicinity LT, to be available for delivery in 2020. The Company is gaining significant momentum and the outlook for Grande West growth remains very positive."
Outlook
Management expects to maintain its strong market segment leadership position in Canada and continues to make progress in the U.S. with private operators and public transit agencies. The external pressures to "right size" vehicles for its application and ridership levels along with the availability of funding and healthy economic conditions in Canada and the U.S. create an ideal environment for Grande West to prosper. Market conditions are right and the outlook for Grande West growth in the U.S. remains very positive.
In the last two years the Company achieved record revenues. We experienced a decline in the backlog during 2018 mainly due to lower order intake, which has impacted 2019 results. Bid activity during the last half of 2019 has been higher than the same period in 2018. We expect to see bid opportunities continue to increase throughout the year which should turn into revenue in 2020 and beyond. We are maintaining our strong leadership position in our market segment in Canada and we continue to make progress in the U.S. market. Our first Buy America orders are just completing production. We have received further Buy America orders for deliveries starting in early 2020.
Funding for transit in the U.S. and Canada is high and it is expected to remain high.
In the U.S. the Consolidated Appropriations Act was recently passed and continues historic funding levels with more than $16 billion for public transportation and intercity passenger rail. This legislation includes $13.4 billion for public transportation and $2.6 billion for intercity passenger rail grants and is $1.2 billion more than the previous FY 2019 FAST Act authorization levels.
In Canada in 2017, the federal government allocated $21.1 billion over 11 years to transit construction, expansion and rehabilitation. With the re-elected Liberal government, we are now seeing funding being released.
Part of our strategic plan is to expand our product line by adding a 100% zero emission electric propulsion system to our existing Vicinity bus models and adding the Vicinity LT bus model to our product lineup. The Vicinity electric bus will place Grande West in an excellent position to capture market share as the demand for zero emissions buses grows. Our smaller LT bus model will provide Grande West access to the high-end cutaway bus market segment. Municipalities of all sizes across Canada and the U.S. along with private operators in multiple sectors are looking for a more robust low floor accessible bus to replace their cutaways.
Aftermarket Parts sales are expected to continue to increase as Vicinity bus fleets get older and new vehicles are placed into service.
Tariffs and Surtaxes
Management continues to closely monitor negotiations and ongoing global trade discussions which may influence the Company. We are implementing purchasing, shipping and assembly modifications to best adapt to the current trade environment and strengthening our US-based operations and component sourcing.
Management currently expects an immaterial impact for 2019 for any market increases for our current deliverables. Any future component cost increases should be substantially recoverable through new RFPs or through producer price index (PPI) mechanisms in multiyear contracts.
Financial Statements and Management's Discussion and Analysis can be accessed at sedar.com
Conference Call
A conference call for analysts and interested listeners will be held on Friday, November 29 at 11:00 AM EST. The call-in number is 877-407-0782 or 201-689-8567, the webcast can be accessed at https://www.investornetwork.com/event/presentation/56834.
Options Issuance
The Company also announces that in accordance with the Stock Compensation Plan, 150,000 incentive stock options have been issued to members on the Board of Directors as part of their annual compensation. The options are exercisable for a period of 5 years at a price of $0.52 per share.
About Grande West Transportation Group
Grande West Transportation is a Canadian company that designs and engineers mid-size multi-purpose transit vehicles for public and commercial enterprises. Grande West utilizes world class manufacturing partners to produce the Purpose-Built Vicinity bus available in clean diesel, gas and CNG drive systems. An electric propulsion drive system is currently under development.
The Company has been successful in supplying Canadian municipal transportation agencies and private operators with new buses. Grande West is compliant to Buy America certification, and along with Alliance Bus Group, its exclusive US distributor, they are actively pursuing opportunities in public and private transit fleet operations that would benefit from Grande West's vehicles.
For further information please contact:
Grande West Transportation
Mr. William Trainer
CEO & President
Ph: 604-288-8043
[email protected]
www.grandewest.com
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.