Grande West Announces First Quarter 2019 Results

VANCOUVER, BC / ACCESSWIRE / May 28, 2019 / Grande West Transportation Group Inc. (TSX-V: BUS; OTC PINK: GWTNF) (”Grande West” or the ”Company”), a Canadian manufacturer of mid-sized multi-purpose transit vehicles for sale in Canada and the United States, is pleased to announce financial results for the first quarter ending March 31, 2019.

First Quarter Highlights and Recent Developments

  1. Bus revenue of $4,580,723 for the three months ended March 31, 2019 compared to $21,482,167 for the three months ended March 31, 2018
  2. Aftermarket parts and other revenue of $1,152,311 for the three months ended March 31, 2019 compared to $958,044 for the three months ended March 31, 2018
  3. Net loss of $680,400 for the three months ended March 31, 2019 compared to a net income of $420,209 for the three months ended March 31, 2018
  4. Adjusted EBITDA loss of $151,508 for the three months ended March 31, 2019 compared to an adjusted EBITDA of $1,703,152 for the three months ended March 31, 2018 (see ”Reconciliation of Net Earnings to Adjusted EBITDA”)
  5. Deliveries of 10 Vicinity buses for the three months ended March 31, 2019 compared to 58 buses delivered for the three months ended March 31, 2018

Selected Quarterly and Periodic Information

The following table shows the financial results of the Company for the first quarters ended March 31, 2019 and March 31, 2018.

The results of operations for these periods are not necessarily indicative of the results of operations to be expected in any given comparable period.

3 months ended, March 31, 2019

3 months ended, March 31, 2018

$

$

Revenue

5,733,034

22,440,211

Gross margin

1,340,084

3,020,971

Net (loss) income

(680,400)

420,209

Basic and diluted loss per share

(0.01)

0.01

March 31, 2019

December 31, 2018

$

$

Cash and cash equivalents

247,880

2,732,437

Working capital

16,432,294

16,921,864

Total assets

39,171,081

40,445,904

Non-current financial liabilities

2,684,733

2,404,022

The Company reports Q1 2019 results of 10 Vicinity buses delivered, revenue of $5,733,034, net loss of $680,400 and gross margin of $1,340,084, which was 23% of revenue. Results for the first quarter of 2018 were 58 buses delivered, revenue of $22,440,211, net income of $420,209 and gross margin of $3,020,971, which was 13% of revenue.

Backlog: Current total firm orders are for approximately 160 buses valued at over $53 million. Deliveries will vary from quarter to quarter to account for different build specifications, customer acceptance and revenue recognition.

Business Overview
Corporate Update

Grande West has delivered over 400 buses in the Canadian and U.S. markets and continues to deliver on its backlog of orders. The Company is the market leader in the mid-size bus category in Canada where it sells its Vicinity branded buses.

Jean-Marc Landry, Grande West CEO, stated, ”We have recently announced a manufacturing agreement with Spartan Specialty Chassis and Vehicle, a business unit of Spartan Motors Inc. (“Spartan”) (NASDAQ: SPAR). We are proud to partner with Spartan, the North American leader in specialty vehicle manufacturing and assembly. Through this agreement, we now have the production capacity and partnerships in place to accelerate our U.S. and Canadian market growth initiatives. The combination of Spartan’s well-established and skilled manufacturing team along with its competitive production cost profile enables us to streamline our assembly process and leverage purchasing efficiencies. As previously stated, our main focus for 2019 and 2020 is on product line expansion and growing our backlog to over $100,000,000. We expect to achieve these goals through leveraging our strong engineering team and increased sales and marketing efforts in the U.S. and Canada. After two consecutive years of record growth and significant achievements in many areas of our business, the outlook for Grande West growth remains very positive.”

We are fast tracking both our smaller crossover bus model and our electric propulsion system for our Vicinity buses. To support this effort, the Company has hired a Senior Principle Engineer to assist with our product expansion projects. This new hire brings extensive bus industry experience, including electric bus technology expertise, to Grande West and will also assist in optimizing efficiencies and further reducing our long-term manufacturing costs.

Recent Developments

In March of 2019, Grande West announced a purchase order with BC Transit for over 30 CNG powered Vicinity buses for approximately $13,000,000.
Subsequent to March 31, 2019, the Company delivered 15 of 19 buses to Quebec public transit customers. This is an important achievement for Grande West as Quebec is the second largest market in Canada with great potential for future orders.

In May of 2019, the Company announced it had entered into a vehicle assembly agreement with Spartan Specialty Chassis and Vehicle, a business unit of Spartan Motors Inc., the North American Leader in specialty vehicle manufacturing and assembly for the commercial and retail vehicle industries, as well as for the emergency response and recreational vehicle markets.

Under the terms of the agreement, Spartan will manufacture Grande West’s Vicinity model buses for existing orders, which will continue to satisfy the Federal Transit Administration’s (FTA) Buy America requirements and reduce potential tariff exposures. The Grande West Vicinity bus achieved best-in-class results from the FTA Model Bus Testing Program in Altoona, Pennsylvania, which measures structural durability and integrity, reliability, performance, maintainability, safety, noise, and fuel economy.

Reconciliation of Net earnings to Adjusted EBITDA

Management believes that Adjusted EBITDA is an important measure in evaluating the historical operating performance of the Company. However, Adjusted EBITDA is not a recognized earnings measure under IFRS and does not have a standardized meaning prescribed by IFRS. Accordingly, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Readers of this MD&A are cautioned that Adjusted EBITDA should not be construed as an alternative to net earnings or loss determined in accordance with IFRS as indicators of the Company’s performance, or cash flows from operating activities determined in accordance with IFRS as a measure of liquidity and cash flow. The Company defines and has computed EBITDA as earnings before interest, income taxes, depreciation and amortization, foreign exchange gains or losses, non-operating income and expenses, and share based compensation.

The following table reconciles net earnings or losses to Adjusted EBITDA based on the consolidated financial statements of the Company for the periods indicated.

3 months ended March 31, 2019

3 months ended March 31, 2018

(unaudited)

$

$

Net Comprehensive loss

(680,400)

420,209

Add back

Stock based compensation

221,250

305,736

Interest and finance costs

176,031

314,891

Foreign exchange (gain) loss

(120,563)

568,203

Amortization

252,174

94,113

Adjusted EBITDA

(151,508)

1,703,152

Additional information is provided in the Management’s Discussion and Analysis at http://sedar.com/.

A conference call for analysts and interested listeners will be held on Wednesday, May 29, 2019 at 11:00 AM EST. The call-in number is (844) 369-8770 and the webcast can be accessed at https://www.investornetwork.com/event/presentation/49094. A recording will be available on the website shortly after the call at https://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.

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.

For further information please contact:

Grande West Transportation
John LaGourgue
VP Corporate Development
Ph: 1-604-607-4000
jlagourgue@grandewest.com
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.

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