Grande West Announces 2017 First Quarter Financial Results

Q1 Highlights 

• Record bus and aftermarket parts revenue of $4,548,968
• Record gross profit of $952,392
• Record gross profit margin of 21 percent (6 percent at Feb 29, 2016)
• Average Vicinity bus sales price of $350,000 ($291,000 at Feb 29, 2016)
• Adjusted EBITDA loss of $540,079 (EBIDTA less stock based compensation of $271,426)
• Raised $13,680,000 in a budget deal financing, strengthening balance sheet
• Reduced long term debt by $2,945,135, reducing monthly debt service by approximately $20,000

Selected Quarterly Information  

The following table shows results for the quarter ended March 31, 2017 and February 28, 2016 stated in Canadian dollars.

During the three month periods ending February 28, 2016 and March 31, 2017, 12 Vicinity buses were delivered in each period.

Highlights and Developments in 2017

Management reports Q1 2017 results of twelve (12) Vicinity buses delivered and revenue recognized for revenues of $4,548,968, gross profit of $952,392 and gross profit margin of 21 percent.

A total of thirty-two buses were received at Company headquarters during February in Q1, twelve delivered, with the balance to be delivered to customers in Q2. Production, shipping and delivery is underway to fulfill the first BC Transit production run for fifty-five of ninety seven Vicinity buses.

Our production and delivery ramp is now tracking contracts announced in 2016.

• In January, Grande West began offering clean burning, low emission Cummins ISB G engines for delivery on 2017 orders. The ISB G Engine, powered by compressed natural gas (CNG) has the lowest North American Emissions standards. Thirteen of these buses are being delivered to the Atlanta International Airport in Q3 2017. 
  
  
• In January, BC Transit ordered thirty nine Vicinity buses totalling approximately $13 million. This is in addition to BC Transit's previous orders for fifty eight buses, bringing their total current outstanding orders up to ninety seven. 
  
  
• Also in January, the City of Edmonton ordered thirty three Vicinity buses totalling approximately $13 million. This is the third order from the City since September 2016, bringing their total firm orders for Vicinity buses to 49 units. 
  
  
• In March, Grande West closed a bought deal offering of common shares of the Company, at a price of $1.90 per Offered Share for gross proceeds to the Company of $13,680,000. A total of 7,200,000 Offered Shares were sold pursuant to the Offering, including 870,000 Offered Shares issued as a result of the full exercise of the Underwriters' over-allotment option. The Offering was conducted by a syndicate of underwriters led by Beacon Securities Limited and including Echelon Wealth Partners Inc. 
  
  
• On March 14, the Company appointed Taras Kindzersky to the position of chief operating officer to assist management with the Company's continued growth. Kindzersky has over 20 years of business experience working at a variety of large corporations, specifically Finning Canada, a division of Finning International Inc., the world's largest Caterpillar equipment dealer. He joins Grande West from one of the 20 largest credit unions in Canada where he led the business banking division as executive vice-president, Business Banking. In his first month, Taras is already making a significant impact in organizational efficiencies, banking relationships and process flows. 
  
  
• Also in March, Grande West received new customer orders for approximately $7.5 million. St. John's Transportation Commission ordered three Vicinity buses, the city of Oakville has ordered an additional eight, the city of Burlington has ordered an additional seven and the city of Welland ordered two. 
  
  
• On March 27, the Company announced its first US public transit order from the Metropolitan Atlanta Rapid Transit Authority (MARTA). Grande West's exclusive US distributor Alliance Bus Group (ABG) has delivered to MARTA ten Vicinity buses that are now in operation in their transit system. 
  
  "We are committed to creating more efficient transportation options for our customers. That means building a more highly layered, customized service model," said MARTA GM/CEO Keith Parker. ''These new Vicinity vehicles allow our bus operators to travel safely into neighbourhoods where our standard fleet could not easily navigate while offering more space than our current Mobility bus options."
  
  
• Again in March, Grande West announced it had secured a USA manufacturing facility. Alliance Bus Group, Grande West's exclusive US distributor, will produce Buy America compliant Vicinity buses for sale to US transit authorities. The ability to leverage ABG existing facilities, staff, and deep knowledge of bus technology provides Grande West with a solid foundation upon which it can quickly ramp to production. Plans are well underway and first Buy America compliant production will begin in Q3 of 2017. 
  
  
• On April 28th, the Series A and B Convertible Debentures were accelerated and converted $1,520,000 in debt. 2,235,294 common shares were issued at a price of $0.68 to settle the debentures resulting in a reduction of $120,000 per year in debt service. 
  
  
• On May 23, new orders for nine Vicinity buses was announced for a combined order total of approximately $4.5 million. Hamilton Street Railway (HSR) has ordered five compressed natural gas (CNG) Vicinity buses. This is a first time order for HSR for delivery in the first quarter of 2018. The City of Moose Jaw also ordered an additional four Vicinity buses.

Backlog: Current total firm orders for Q2 2017 through 1H 2018 delivery are for two hundred sixty five (265) buses valued at over $96 million CAD.

2017 Q1 Deliveries to date are for twelve buses.