Envirotech Vehicles (EVTV)

Jim Reynolds President and Chief Executive Officer
Mike Menerey Chief Financial Officer
Amit Dayal H.C. Wainwright
Ed Woo Ascendiant Capital
Call transcript
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Good day, ladies and gentlemen. And welcome to ADOMANI's Third Quarter 2019 Earnings Call. All lines have been placed in a listen-only mode, and the floor will be open for your questions and comments following the presentation.

At this time, it is my pleasure to turn the floor over to Ms.

Asia Lockheed Morris [ph] from ADOMANI. Ms. yours. is floor the Morris,

Unidentified Company Representative

Executive Thank you, to me day welcome and again, the Financial Menerey, Officer. And third quarter once Chief President ADOMANI's Reynolds, With are good and XXXX Mike call Chief and Jim operator. Officer earnings on call.

to the call statements facts historical of would Section Act All considered the forward-looking statement. the and of by may Safe meaning Section XXA of like Act the I made the on exception reading of XXXX Securities Harbor within of statements of Securities this begin the call with XXE XXXX. be Exchange

Although, be basis in such of correct. ADOMANI expectations no forward-looking the ADOMANI expectations expectations, such on make can reasonable believes that current assurances the to statements prove reflected that are will

uncertainties Form forward-looking changes of economic disclosed other subject by from and technical risks with other annual operating these results ADOMANI XX-Q Exchange from statements and assumptions cause to quarterly the number considerably reports to that on XX-K, differ uncertainties, report due in and filed Commission. a factors time-to-time expectations to risks, factors Form could ADOMANI's ADOMANI's performance, current in actual and reports Securities and are other and Also, on

statements or required included except you that events this reflect not circumstances, statements forward-looking this ADOMANI call. or new call results undertake update or only are ADOMANI law. achieved. information, events as any made to will of forward-looking cannot Any in any projected supplement does the earnings subsequent as date of by obligation be assure to

ADOMANI. Officer President the and Now, proceed. Jim Executive to please Reynolds, turn Reynolds, I will Mr. of call over Chief

Jim Reynolds

we'd XXXX. third Manerey, like and an sales that, for it to welcome financials. and over Mike and on [Asia], of up and greater for for And providing would the After like for XXXX, of then I'll our additional it by to CFO, detail of outlook pass our remainder everybody. our our overview to the operations open questions. Thanks begin quarter I context

to So begin.

still pleased While up to with forward we do. But are do. the to we ADOMANI assured to and showing we're what quarter rest the task look sales have work results, marketplace the can third that

six Our third month revenues our exceeded first deliveries. quarter

over the XXX%. deliveries by increased six first months Our

addition, the ended doubled more for the nine In for revenues XX, all our XXXX period we XXXX. September month sales than of posted

us to Our the full to is revenue majority the expectations to the the analysts' for consensus backlog XXXX be existing position for deliver of to balance estimates of customers, which able meet XXXX. year would

receive Class expect new to and we currently feel We trucks time for can deliveries. vehicles to expect and addition, X in the of will have met inventory, be number vans, pull this which our of to for also In XXXX be vehicles we quarter. some orders small fourth in able see delivered customers a because be additional

always, As schedules. and delivery their will depend deliveries on commitments current meeting suppliers

XXXX was revenue million. XXXX the in million In ending for million in September XXXX for $X.X XXXX. approximately Sales was than for to coming $XX.X quarter, revenue nine more XX, third X.X double at figure Sales third the of that X.X deliveries months quarter compared million.

Our was backlog X Class vans. all-electric orders XXXX at trucks and all-electric September $X.X million, XX, including our for

the third like highlights to I'd some bring the attention Now, to of your for quarter.

hundred X Class Vehicle, vehicle outstanding for and We necessary quotes vehicles, We certification our several including vans to on and and NEV. newly trucks, introduced market customers and receive have the continue to all-electric trucks Neighborhood our Monday. we the vans Electric currently

that that comes we number and per to have that put We orders. order to and listing should will that down successful we now customer. be staff the turn be of vehicles received. to it, purchase we received to form orders. demos purchase. convert we're and they three vehicles XX,XXX intends we've many sales expect believe with enthusiastic the at a And are the able into recent many responses per experienced ride-and-drives showcasing HVIP vehicles Our these will operation at into will purchase vehicle buy of see And performance And one the turn for more indications many once customers. interest of vehicles. these These in into test for And

the and all-electric to Ride-and-Drive Education of July, system to met including multiple agencies Davis. Conference and districts, cities, municipalities, school utility continue and California, in districts vehicles vans Sustainability other annual as at the showcase We throughout as the our well California with commercial California events, Higher trucks university demonstrated and to in California,

fleet We of also vehicles. and to the business number truck introduced delivery private a operators the in

Oregon, State Oregano, -- addition, Salem, Washington, cities presented among we conducting Washington Washington, others, Seattle, Arizona, In Minnesota, school The Nevada, the and multiple districts, cities, and districts, University vehicles State all-electric Arizona of in including of demonstrations and vans NEVs and Florida the some Phoenix Tacoma, and University. trucks, in utility through and were showcased Arizona. also shown counties, Spokane Tempe, our

And we're Nevada. Student News displayed in Magazine Reno Conference the in June Transportation at

Arizona event We Sun Florida [Roundup] in EV Coalition, the at Salt also Clean Twin Utility Cities Florida the Orlando, the Project, Kick the at Cities to Utility River Clean have been Minnesota. Air and Tires the Valley of

demos being busy. you We used see have vehicles very and can half of dozen they're for

believe resolved. most can been results, have we third delivery of you issues our see As quarter from the

However, trucks, offerings the XXXX to we line not be NEVs Nevertheless, to and from delivery project, continue the related resolved. are about chassis, bus we third which excited primarily legacy diversified that the growth e-trikes. to school of vans, continue product yet delays and quarter see past potential XXXX, our extend

fruit. in has business bear Philippines begun the to e-trikes Our

to the and be soon in additional vehicles first going XX customers' will are production hands XX fourth vehicles We quarter. the in expect

release fit year, for vehicles that As we marketplace. earlier we feel with this announced best quantities the order XXX was the received initial

the vehicles turn backlog to into only side production. we a note, On order as will release

quarter being total only our will and and not XX next $XXX,XXX, for order. production, So order the X.X the entire in the backlog which XX the going fourth the included first includes first the million total the portion in of in delivered

cities, school they fleet ADOMANI to private have we've our our districts, We for communities by all-electric how benefit from will demonstrate vehicles environment opportunity received and realize we as counties, are vehicles. their encouraged emission zero the had whom from the owners various and feedback companies

We continue and in will to believe profitable presented that if business on model we that plan able capitalize are business we were effectively turn our XXXX. execute opportunities with, our to

fund We have profitability. to us adequate also feel to we cash

commercial lower emissions, total are product all-electric of of lineup, zero cost vans, reduce helps all The mission electric gas provides ownership part trucks, NEVs greenhouse customers. ADOMANI's and for

districts work and trucks from fleet offer vans services, operations and a owners, because ground required school we keeping, the range operational and departments food are meet to good We fit are committed various the mile for fleets. maintenance, very and we delivery last with the warehousing, California for believe

electric designed utilize white to customers help trucks soon fleet existing all to and these our infrastructure of vans to or vehicles. our installed the be are Additionally, charge

Board, a $XX,XXX and state to entitled new the program by The up vehicles -- purchase all all that $XX,XXX California disadvantaged. at the vans authorizing use incentive communities of to for in hybrid purchase new X the Resources process additional be available per truck the are the of $XX,XXX and Class to businesses, Districts million additional are Class X in to the receive vehicle, Air for considered of for of which the currently $XXX is and School vehicle commercial California

reduce Class In million, Class in X. lead from nation to zero for July, change, Moyer gases of designed the of trucks, climate of fossil vehicles operating District California other Air vehicles to addition, fuel and $XX funding X in your all in Area the that continues the reduce greenhouse are XX% the based Carl of Management use California. released cars, will program like Quality emission Bay projects its pay of which cost through

provide funding even harmful to These federal other level subsidies and the through other along programs keep and these various vehicles on and available reduce cost Fund or with vehicles the gases emissions. with that reducing par on greenhouse operate and diesel, all to while to acquiring the Volkswagen Mitigation gas the a available propane, funding that's of state

fuel In addition, for maintenance are cost that operational than the electric of and alternatives. of vehicles fossil fueling lower

Class for the this market through a over calls us U.S. believe represents to have unit that the And we totaled We X XXX,XXX meet supply mentioned needs. for in XXXX opportunity sales vehicles the in great past vehicles X emission high Class zero quality,

We also for estimate margin opportunity profit represents a it higher us.

February and Key China. and chain the July June to progress members up of progressive result having the electronic in to to order in that and as to to strengthen meetings develop new visited well vehicles, future and vehicles made explore the China manufacturers and We September the to ADOMANI prospective to supply follow very several team visit alliances, in feel and management suppliers. good marketplace. were and all we February vehicle with with desirable the these for Philippines electric ADOMANI meet intended meetings These access will visit a as to as relationships

investor meetings York September. presented in in ADOMANI City orientated Philadelphia and by Renmark arranged at Financial Boston, New

showing received purchasing We dealer our service to received all and network communities, retirement sales them cities, NEV vans. first sales basis. on to on to They well resorts, dealer a and vehicles set of electric began have a and soon and begun have our NEV and service network, up We been provide to established our dealer counties departments. direct be network trucks separate centers and our for

for square Downey quarter we of we're facility the received in second and number is inspection pre-delivery a foot mentioned at in XX,XXX preparation we adding outfitted customers. the The for staff being tooling, with in location to delivery vehicles

being used customer ride-and-drives. visits In site as for demos addition, staging a is facility the for and

full Turing we revenue outlook we meet would that are year I confident the full analyst to to XXXX like positioned XXXX. to year estimates. our remain reemphasize for

the the the not but that which it majority, confidence to quarter. delivered can we and by processed any for new of be sales only all expect also X.X end of not Our comes customers of current million, end if fourth will by delivered of backlog the be from year,

to Based and to on will data and available of on cash believe With XXXX, million business Turning insights. that if us, have current $X.X we late profitability. XX, opportunities cash are and we in achieve effectively believe balance points capitalize we this fund at that our we were equivalents execute profitability to XXXX. to our projections, we key sheet plan cash profit able September

this our walk to over to would I the to point, turn CFO, this through Menerey, Mike financials. like Michael. At

Mike Menerey

Good Thank afternoon, everyone. you, Jim.

shortly Pacific the Time. we probably went o'clock release, You've X seen out which earnings just after

So I'll be brief.

million were the million mentioned, Jim for approximately XX, XXXX, million $X.X compares respectively. three As $XX.X for $X.X September XXXX. months and the and to sales and nine nine and months ended three $X.X XX, September That ended million

sales the respectively, approximately of year for million quarter over months compared full ended Costs of September amount $X.X XXX% revenue, million of and were XX, three the to nine million The ended and the and $XX.X the XXXX $X.X the is third sales September $X.X equaled year-to-date XXXX for $X.X of XXX% million million of XXth, and three XXXX. months and million nine $X.X total.

administrative million $XXX,XXX, increases bad for ended $X.X months million, increase and in payroll September was compared and legal to insurance the decrease increase the XXXX. expenses. offset corresponding related period almost approximately in flat increases expenses Those and $XXX,XXX expense. in in approximately to professional The General $X.X for month primarily XXth an debt of the by three were three fees

included in expense. quarter and expenses charges, third $XXX,XXX The including approximately $XXX,XXX general non-cash in administrative compensation stock-based XXXX

month million months for compensation we've expenses during were $X.X related non-cash million of a $X.X and in decrease of $X.X which administrative disclosed For to the the period primarily that previously September XX, expense million, XXXX $X.X is million decrease nine to ended discussed. compared XXXX, approximately corresponding based nine approximately and general stock XXXX,

that payroll the have $XXX,XXX in expense same debt we legal, decrease and and did that insurance offsetting had in decreases. some the also professional was expenses bad quarter, We in increases of

increase three non-cash XXXX, in included charged consulting $XX,XXX sales and consulting in and months periods. no of the three nine and to $XXX,XXX was the month non-cash in compensation. activity September including primarily stock approximately XXXX. respectively, periods to in $XXX,XXX nine XXXX. and of based There expenses some in charges, include in $XX,XXX and increased compared nine administrative and for a Consulting marketing, ended general $XX,XXX year expense charges ended result chain in Consulting expenses expenses $XXX,XXX September as XXXX non-cash The and the corresponding to supply The XX, $XX,XXX approximately were for XX, the and were months activity consulting charges XXXX. $XXX,XXX current

primarily periods were the Development made development the decreases corresponding of attributable nine $XX,XXX $XX,XXX $XXX,XXX for to XX, activities. in certain and as September respectively for research Research and compared respectively, three and months the $XXX,XXX expenses expenditures The and XXXX. were ended to for and XXXX, timing

September million nine periods million and approximately for is $X.X full respectively. million Total months $XX.X expenses and XXXX to ago. I for the That the million of the approximately three respectively decrease XXXX, were a XXXX. operating moment of compared and the million ended discussed for $X.X million $X.X The nine net $X.X corresponding in $X.X months same XX,

respectively. XXXX relates to XXXX that -- are three approximately XXXX, a $XXX,XXX the the loss net $X.X the The loss loss months to net three ended decrease $X.X in The the previously. in was months and compared items above approximately September as of expenses XX, XX, the net I XXXX. non-cash September The $XXX,XXX included mentioned September ended and ended for million for months total three XX, million $XXX,XXX approximately were

discussed million million respectively. September the in as net expenses nine and approximately same million approximately approximately 'XX XX, were to for XX, loss September was ended net months months nine XX, a the Our of The XXXX and ended $X.X net XXXX, decrease compared the included for loss nine non-cash for of $X.X months reasons million total September ended $XXX,XXX XXXX, approximately a the loss $X for the previously. $X.X

$X.X and working we cash million million a of as September compared September and $X.X At ago. at short investments to of of XXth, year Working capital at year ago, XXXX million $X and equivalents capital cash to compared debt cash XX, million XXXX. had [$X.X] million XX, million, equivalents September a $X.X of debt cash, term $X.X was of

it That my remarks we for the questions. up for moment. open concludes can [Asia],

Unidentified Company Representative

Operator, analyst questions. for open please floor the


Dayal Please go floor H.C. with for The you. Thank questions first with And is [Operator now question. Amit comes our open ahead Instructions]. Wainwright. from your question

Amit Dayal

$XX It dropped the looks last Can but I trucks to walk in the believe just quarter? electric like has number us of relative you've the changed these to $X.X is. added end want with had at electric mix, through the it or I vehicles to what quarter. million around the start has the you million, backlog. XX backlog We to backlog previous

here? could what changed So just has through us walk you if over

Jim Reynolds

It's to third the shipments, quarter really Amit. related

Amit Dayal

with the XX would mix? added higher And it slightly be trucks to the

Jim Reynolds

we sales fairly are could well the at had those turned where very I cancellations, into We some think almost it orders Yes, be. we margin breakeven parts other a profit just just but had numbers because close.

Amit Dayal

you follow-up on XX on Okay. Class X us who And offline. the give or I could some ordered color can These trucks, who this these customer is?

Jim Reynolds

mentioned variety a of we single Solutions, before One Yes, ordered set to there's freight customers. an a customer, distribution companies. Zeem vehicles different for with several had which has the pack we earlier agreement,

need, quick that. mile they go them. we're But breadth its and DMV we can. think to We freight short as have the the on state, They've last from all companies we a we mercilessly forward them want They've beat delivery the the with few moving seen haul companies. the been the get process deliveries But various driven the things. and to to have with got as now trucks. We've they approvals that other with through

Amit Dayal

of still California, And in these all are orders? these primarily most

Jim Reynolds

That's correct.

Amit Dayal

partnerships batteries, Relative from et parts China, we how to the that import import market market, to looking we kind products looking over key out? vehicles and play we to and China, strategy are are set from discussions certain looking Are that should What expect to or of to there? or up basically around cetera? you

Jim Reynolds

may then here that our bring And about be and -- the needs California box, on is as add that are maintenance the begin down That we a to issues Once better for that that to Chinese complete care form. and of the the up. come next understand thought Well, months, get over semi it any can take that we of in new customer and into electrical few and in a discussed do of have us be assemble a country kind the on it's we'll those any we'll and to how will it where almost the step source initial knock manufacturing separate. put kit the cabin of components made together, we've will get products And and bed, learn will a stage past, way in product components control third stake then supplanting what this stage chassis vehicle. in whatever with distribution locally give U.S. the product. knocked a completely it we the down

Amit Dayal

you sort have How backlog or months? build about next few to a this will that up that Can clearance HVIP how little the support you over you are of received? expecting the talk

Jim Reynolds

the load is interested interest from ton and seen school Well, districts, whoever to haulers, I the guess buying Their we customers them. of be. it have units owning to and might in freight have that vehicle in it

all would gasoline down lease HVIP that or that like version. at normally see them the or will them would diesel it of buy them. Some cost at spend look of to But it money that and a below be for with available the

a state pay back past. about They get is, cost if differential value bring and the the electric we've And from saving the they time upfront what talked I that this by the immediately. costs because over differential gasoline the really the then this fueling of XX them. for savings than need of do of over But and in day-to-day seven on but -- paid think year win-win a for of costs really or period diesel, can down, more see to as product a start and it it because they they they their funding the or versus maintenance, that operational see will

move, to vehicles non-electric they to the incentives can to immediate with the make state of forced And the have product other buy savings. we give for. to what for them the comparable cost looking they're So they're until

So whatever of we're us it's some that there's very going to in to offset important funding. state be in kind that

Amit Dayal

listing Are to a planning And perspective? just around one or potentially the your listing should we what go we anytime last soon, to from question expect OTCQB. on senior exchange a

Mike Menerey

we requirements expect the on change in because are that currently near-term that have wouldn't we there any not. I meet it, do to

et The the cetera. first can't the the hopefully most relates to OTCQX. to because the And relates back NASDAQ. go cetera, partially likely timeframe, But stock, which value to is to of to the of I up company, step et price then it market predict

else in kind definitely you it's time I So or anybody give a frame. of our -- any can't just I plans.


next our Ed Woo go from Ascendiant comes And question with Please Capital. ahead.

Ed Woo

a My is And it's XXXX environment to sales funding are there? your about outlook. customers, in is terms vehicles by your these I companies these know question be electric terms vehicles? school able by little or freight these of buy districts, in either early governments to the overall get electrical out to willing talk to government, But of what also that

Jim Reynolds

the maintenance The impressive. the move want They had them. always districts, what question school is to school is next They with of like forward savings is, what's are The eager is operate first. They well. that's available there. They've is, The buses, had some in forward a key electric taste and that. very electric Well, particular. of funding with taste to vehicles. They've They fueling it's move vehicles. nothing. out and to

releasing places, in for looking the tremendous most country. other that and New Florida they're and though throughout with is we But So most California there's has aggressive funding funding funding. even and available today -- have York the

a key to product component getting the that's out there. So

million. listing As January which $XXX is received funding in I the Monday, we program, mentioned, the just HVIP on

Area probably for $XX Air Moyer. million. July to South another Area year, million, Coast mentioned Bay next There are San $XX have million another District the Quality Bay Air programs. million will million various $XX of $XX By I has $XX Carl million, or District $XX Joaquin Xst Management other

of is All is which the going towards gases, we're that business reducing in. greenhouse

So going forward. that's only to us help moving

for the struggling a HVIP even give was away money. while to

we're fast on expanded all was just couldn't did it This enough. they stalking the in low money their they out account they NOx, year, this So because did the program, get and now -- XXXX, past They languishing that changed. they reach. -- anything gave, could, they in the they

Now the up money is quickly. going

next low to So $XXX people benefit really vehicles, out environment, to to taking the where putting and the the and going the they but are the they're that's communities. in state the fund into real are because million fund low they're NOx they're helping not people is electric that, going of that NOx things some like to those

So this in changing. we our We it see change see benefit.

that. So we're very happy with

still we're that That's work to we on be, getting that motors, need every the vehicles closer XXXX, in it today, parity the not batteries, the but reducing systems, be happens, towards happen. yes, of BMS whatever to going day cost happen the subsidies. is might going the But But subsidies. with the And turns. without to tide when we it

that vehicles fueling same to expensive lower substantially are gas. and to much diesel the So is cost less the They're electric as operate. savings. price close And greater and

see we'll tide in the that come. years So to change

Mike Menerey

that, money out And don't been that's the Volkswagen still hasn't there, large forget in distributed. part

top got of And it's have that on $XXX mentioned. too. other of California's million all Volkswagen states many the -- other programs money Jim just those So

some see So incentives decreased will away, that point, either get don't the or go near-term. in but at happening we the

Ed Woo

the last then any environment? question. one noticed change you And competitive in Have

Jim Reynolds

spreadsheets have what price who what we are, competitors they're what I at that delivery times the think we are. offering -- and look do offering, see at at, we they're

electric product will we about vehicle, would because cost We doing build why think and up product did what like think them they issues you competitors take others a like a vehicle people universe do that divide vehicles it that you ourselves conversions vehicle. the have still raising the will converted to from forward, at existing to till last if versus take two most it's day, product. groups, competitors the first and of we eventually. lot But A those. of I day to a who deliver delivering new feel ground we And converted born have into going last a build the the you talked time the be is lot buy one talking funds that. we if group the the convert look are of

with we where to think we're of that's kind So that program. a go going


And telephonic closing back for any host session today. conclude to turn that does remarks. over for I'll the Q&A it our

Jim Reynolds

call. to I hope look say that we I a quarter. thank ADOMANI think going. to overview that for where you We good And the of gave only reporting we next forward everybody want on is being we're we and again where


And conclude thank today's you for this does teleconference. your participation. We

your You have at lines great may time. a this And disconnect day.