Good afternoon and welcome to the Pioneer Power Q1 2023 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference to Brett Maas with Hayden IR. Please go ahead. Thank you and welcome. The call today will be hosted by Nathan Mazurek, Chairman and Chief Executive Officer, Walter Michalec, Chief Financial Officer, and Geo Murickan, President of Pioneer Mobility. Following this discussion, there'll be a Q&A session open to participants on the call. We appreciate the opportunity to review the Q1 financial results as well as discuss recent business highlights. Before we get started, let me remind you, this call is being recorded in webcast. During this call, management will 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 the call. I'd like to now turn the call over to Nathan Mazurek, Chairman and CEO. Nathan, please go ahead. Thank you Brett and good afternoon and thank you all for joining us today. We carried the strong momentum from last year's Q4 into the Q1 of 2023 and this year is shaping up to be a record year for us both in terms of revenue and profit. Demand for our unique solutions continues to grow at an outsized pace. We are adding new dynamic customers. Existing customers are providing us with new purchase orders and opportunities and we continue to evolve our solutions to better serve the needs of our customers and expand the vertical markets for our solutions. After growing revenue nearly 50% in 2022 we anticipate 2023 to be another year of 50% growth. We also expect to be profitable for the full year. This marks a significant turnaround in our business following our reset and the sale of our transformer business in August of 2019. Indeed, this was our second consecutive quarter with positive GAAP net income. We have essentially reached the point where our projected annual volume enables us to achieve improved operating leverage and sustainable EPS. While we continue to experience some quarter-to-quarter volatility in our results, we are projecting between $42 million and $45 million in annual revenue for 2023 representing a growth rate of at least 50% similar to 2022. We also expect continued margin expansion and positive net income with much of our income sheltered from taxes due to our net operating loss carryforwards. As I noted on earlier earnings calls, our E-Bloc and e-Boost solutions directly address two durable secular catalysts with both drivers inextricably linked to the generational energy transition our nation is experiencing. Our E-Bloc suite of solutions is an integrated, compact, and outdoor automatic transfer switch scheme, circuit protection, and power control system, specifically designed for users of more than one source of electrical power. E-Bloc allows facilities to add additional energy sources like solar battery storage, fuel cells, or natural gas engines without doing any internal upgrades to their existing electrical system. E-Bloc allows the user to effectively manage, control, and protect all these inputs, facilitating peak shaving, peak skimming, and general resilience. As noted earlier, E-Bloc presents all these benefits in a compact outdoor competitive skid-mounted package. Our primary markets for E-Bloc are large multi-location businesses with a large physical footprint such as retailers and supermarkets as well as Critical Power-sensitive facilities like data centers, water utilities, hospitals, senior living centers, prisons, to name just a few. The distributed generation initiative is growing rapidly as end users want to better control their energy inputs, including solar and wind, reducing their carbon footprint, lowering their costs, and ensuring steady, reliable supply. Large users of primary power like EV charging businesses are also understandably concerned about their ability for the current grid to continue to supply them with their ever-increasing power requirements today and in the future. Simply put, the market for E-Bloc is very strong and only getting stronger. Turning to our e-Boost mobile charging platform, we continue to see increasing orders and ever-expanding use cases for our unique anytime, anywhere mobile EV charging solution. Our e-Boost system is a sustainably powered propane-fueled high-speed charging system providing the ultimate in mobility and portability. As a reminder, the e-Boost portfolio is comprised of several e-Boost platforms. e-Boost Mini is a skid-mounted version that provides high-capacity EV charging in the smallest footprint. It brings on-demand charging of EV vehicles to any location within a facility with just a forklift and anywhere else on board with a trailer. This gives an easy and convenient way for dealerships and electrical depots to charge their EVs. e-Boost GOAT generator on a truck is a truck-mounted option that brings quintessential mobility and high-capacity EV charging. It enables on-demand charging of EV vehicles at any convenient location providing EV truck and car owners the convenience of dispatchable charging services and thereby eliminating any range anxiety. e-Boost Mobile is specifically a trailer-mounted solution that balances the need for mobility and higher capacity of EV charging with minimal effort and on short-term notice. e-Boost Mobile provides multiple options for towing and can be available at specific businesses large sports and cultural events, or other gatherings to fulfill the elevated demand for high-speed charging. e-Boost Pod, finally is the mostly stationary EV charging solution with customizable higher capacity and can be moved if necessary. The Pod can provide high-speed DC fast charging to four or more vehicles simultaneously. Like all e-Boost solutions, it can also service other power needs, especially in emergency situations such as a power outage, serving as a backup power source, and convenient power connectors and outlets are available on board. To date, target customers have included electric truck and bus manufacturers, their associated dealers, fleet management companies, package delivery providers, school bus operators, and the like. We recently provided additional units to a large manufacturer, a large domestic manufacturer of electric trucks and buses, new units to one of the country's largest fleet management operators, and new units to a transportation authority controlling some of the nation's largest airports. Other active e-Boost markets include the electric vertical takeoff and landing aircraft or VTOL market, which are the future of air taxis, eSports and e-Off Road market for equipment including things like e-Boats, e-Jet Skis, electric snowmobiles, off-highway equipment, construction equipment, anything that encompasses farming equipment, e-Tractors, e-Sprayers, and so forth, all along the lines of charging infrastructure for these particular pieces of equipment. The National Electric Vehicle Infrastructure or NEVI program is also providing incentives and federal grant funding to U.S. companies that manufacture EV charging stations or their components domestically in order to have a national charging network along our interstate highways. We expect the NEVI program to be a significant catalyst for us in 2024 and 2025 as state governments and authorities begin the funding and implementation of the NEVI program. Our e-Boost solution is an especially appealing solution in rural and underserved parts of our nation's highways where permanent infrastructure solutions are just uneconomical. Unquestionably, sales of EV trucks, buses, and cars have significantly outpaced the charging infrastructure. This is particularly true in the industrial and commercial sector where companies with fleets of EVs, trucks, buses, warehouse equipment need to augment their charging infrastructure. Many organizations are moving quickly to add charging solutions for customers, employees, and company fleets. We have sold solutions directly to large EV car manufacturers to recharge vehicles as they arrive in the United States, reflecting yet another use case for e-Boost. As fleets are electrified, mobile and on-demand charging will become increasingly important, and e-Boost fills this unique niche. As a result, we expect e-Boost to drive significant growth and profit generation for us in 2023 and beyond. With that, let me turn the call over to Walter, our CFO, to discuss our financial results of the Q1. Thank you Nathan. Good afternoon everyone. As Nathan mentioned, Pioneer carried a strong momentum from the Q4 of last year into the Q1 of 2023 and this year is shaping up to be a record year for us, both in terms of revenue and profit. Pioneer's Q1 revenues were $8.5 million up $2.1 million or 34% year-over-year. Revenue from our T&D Solutions segment which manufactures our E-Bloc solution increased 55% to $5.8 million when compared to $3.7 million during the same period last year. Our Critical Power segment which integrates e-Boost, was up 4% to $2.7 million. Gross profit for the Q1 was $2.2 million or a 26% gross margin compared to a gross profit of $923,000 or a 14.5% gross margin during the Q1 of last year. The significant increase to our gross profit and margin was primarily due to increased sales of our E-Bloc power systems, a favorable sales mix, and improved productivity from our manufacturing facility. Selling, general, and administrative expenses of $2.2 million were 25% of revenues for the Q1 of 2023 an increase of 24% when compared to $1.7 million of selling general and administrative expenses in the year-ago quarter. Approximately $150,000 of the quarterly SG&A was related to stock-based compensation. SG&A also includes approximately $600,000 in incremental investments in sales, marketing, personnel, and prototypes for our e-Boost solutions. This is intentional and targeted spending designed to drive demand for this new solution. We expect these investments to continue through 2023 as we build out this new ever-growing business line. Operating income for the Q1 of 2023 was $55,000, a positive swing of approximately $880,000 when compared to an operating loss of $823,000 during the Q1 of last year. Net income for the Q1 of 2023 was $122,000 or $0.01 per basic and diluted share compared to a net loss of $740,000 or -$0.08 per basic and diluted share during the Q1 of 2022. Turning to the balance sheet. We had $11.6 million of cash on hand and zero bank debt on March 31st, 2023 compared to $10.3 million of cash on hand at December 31st, 2022. This represents cash per share of approximately $1.18 on March 31st, 2023. Accordingly, we are confident that we are sufficiently capitalized to address our near-term investments and cash needs. As Nathan said, we expect to deliver continued growth in 2023 with margin expansion and positive net income. Based primarily on our backlog as well as the significant and accelerating demand for our new solutions, we believe we can grow revenue by at least 50% in 2023 when compared to 2022. We also expect to generate positive full-year net income and earnings per share. This concludes my remarks. I now turn the call back to the operator for any questions. We will now begin the question and answer session. To ask a question, press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star and two. At this time, we'll pause momentarily to assemble our roster. Our first question will come from Amit Dayal with H.C. Wainwright. You may now go ahead. Thank you guys. Good afternoon. Congrats on the quarter, you know, with respect to the guidance, Nathan, can we now expect sequentially stronger quarters through the rest of 2023? That's the expectation. Correct. Both in terms of revenue and in terms of EPS. Understood. Thank you Nathan. Could you give us maybe some granularity on what's in the backlog right now? Most of it about most of the backlog itself is comprised of the E-Bloc products. Several large, I mean, you know, we don't, we don't detail the customers and so forth but I'd say, you know, the large project there's won is a large EV campus slash manufacturing facility for one of the large car manufacturers in the South of the United States, to our water utilities one in California and one elsewhere. Some of these things we've detailed out separately. One is for a large project for an aircraft manufacturer. The, you know, the projects I guess the trend is that they're getting larger and larger as opposed to sort of one-off. That's, that's the, that's what the backlog's about this year. Understood. Thank you. You know, as you get to these, you know, $45 million, $50 million level revenues, are we close to getting at full capacity now? You know, how do we sort of grow from these levels in terms of capacity availability? Right. You know, that's been kind of what we've been dealing with the last month in earnest because from our point of view 2023 is done. You know, the facility in Los Angeles especially is booked at statistical 100. The issue is, you know, how do we do more out of the same facility next year? You know, the only way we're gonna do it is, you know, some of it's gonna be product mix which helps. Some of it is gonna be by maybe us not doing everything that we do today. You know, the value for us is mostly the engineering, the wiring, testing, and, you know, the assembly itself. Maybe taking out, subcontracting out some less critical operations that, you know, from a legacy point of view we still do today. We think that could probably and we're actively engaged in getting that done. That can add probably about 30%, 40% capacity still on one shift. That's the first order of business. How do we increase the volume and the profits in 2024 out of that facility without, you know, making, you know, sort of cross the Rubicon type capital expenditures. Okay. Just last one from me. The supply chain side, are you comfortable with, you know, how everything is set up for you to deliver against this outlook? I would say that, you know, we're relatively comfortable on the E-Bloc side. You know, it's not as great as it used to be. It's not terrible anymore, you know, and we're kind of all living with it. You know, we're not into the crazy price increases anymore. It's very stable from that point of view. The lead times are manageable, obviously, you know, unless you're ordering exotic types of components of which you still have that. On the e-Boost side. You know, engines are still a problem. You know, if they say 40 weeks, that means, you know, 52. Most engines are a year out. We've been getting ahead of that by really ordering and holding inventory that we think we're going to use, you know, as the e-Boost product continues to take root. Frankly, that without the inventory that we invested in already last year, we would, we wouldn't be able to deliver anything this year. We've been constantly, you know, re-upping, you know, ahead a little bit. We have the cash, and we were able to use it. You know, obviously, we don't wanna, you know, just keep inventory that doesn't do us any good either. We try to be judicious about it. With all that and with all the spending that we're doing, you know, below the line for primarily e-Boost, you know, I think the greatest testimonial to us that the cash went up in the Q1 from the Q4. Something's going right. Thank you Nathan. That's all I have. Congrats again on. Thank you Amit. Thank you Amit. Again, if you have a question, please press star then one. Our next question will come from Shawn Boyd with Next Mark Capital. You may now go ahead. Good afternoon. Can you hear me okay? We can, Shawn. Great. Just wanted to kinda go back to that comment regarding the capacity expansion. If I heard you correctly, the optimization and the potential outsourcing of certain processes would add 30%-50%. That's increasing the revenue capacity. Take your guidance from $42 million-$45 million and then add 30%-50% beyond that. Is that the way we should interpret that? Right. The first part of your statement's correct. The second part's a little inaccurate because that business doesn't represent 100% of our revenues. You know, it represents, you know, I don't know, 65% of our revenues. However, you know, that's an increase of that. On the e-Boost side, the Minneapolis-based business, we're not really facing a capacity constraint right now. You know, we hope that we do. That would be great to deal with that challenge on the e-Boost side. Right now we're able to service and, you know, for the balance of 2023 we're confident we can get out all the units that we need to get out this year. Got it. Okay. Great point there. This is on just the T&D Solutions side, that 30%-50%. Correct. Correct. Correct. Okay. On the, hear you on the e-Boost, and that, just to be clear that was $2 million last year and is hopefully $3 million-$4 million this year? Correct. Okay. Correct. That clarifies things. Now if I could, let's move to that gross margin. 26% is substantial. And I know that they give a little bit of clarity in the script but can you elaborate a little bit more on the biggest drivers to keeping that gross margin at that level? Yeah. I mean, it's product mix. I mean, that's what it is. You know, I don't wanna get too detailed on it but, you know, the more, I don't know, the more classic, you know, E-Bloc product that we do the better the margin is. Sometimes that's lumped together with kind of other pieces of equipment, other things that we need to furnish, and that slows down the margin expansion. We just can't get enough. We're not adding enough value to get the margin that we're shooting for. Yeah, it's, it's almost 100% mix. Okay. All right. Then also on. I'd be remiss to not go ahead and throw this out. If you can keep. How does that backlog? You've got $37 million backlog. You've made the comment that 2023 is largely booked, so you've pretty much got the schedule as to how you can get it out the door. Is most of the rest of that business at this kind of margin? Can we hold that 26%, you know, in the forward. Yeah. That's. Quarters most probably, basically increasing? That's. Yeah. I mean, that's, you know, we would love to shoot for that. It's, you know, and it never works out exactly the way we want. I mean, those are the gross margins that we gone for. You know, we were able to, given with the right mix, we achieve it. You know, given the right scale, we achieve it. You know, the higher volumes help in every respect, you know, from a productivity point of view, from a purchase price point of view. That's, that's what we're doing to, you know, that's what we're expecting to do going forward. Got it. Okay. Just last thing from me for now is the order cadence. This is probably just my inexperience with the company but if I'm looking at this correctly, kind of implied orders were $8 -$9 million in the quarter, down after a great big quarter in Q4. Can you just talk about is that typically the way it works? You kinda ramp throughout the year, and then we drop off in a margin then it starts ramping again? Just anything you can give me on the general order cadence for your business. Yeah. The, the cadence is, you know, the projects and the jobs are getting bigger and bigger. From a timing point of view and, you know, we've also stopped, maybe it's, maybe it's good and maybe it's bad we sort of stopped like in this Q2, we don't announce, you know, large orders that have come in. You kinda have to wait till the end of the Q2, and then, you know, you'll see did the backlog go up or down and, you know, what was the book-to-bill and what were the revenues. I would say that the dynamic is, you know, unbelievably active. Given their size, so you know, if something comes in on April 15th, so that dramatically kind of changes. The cadence of the orders is still very strong. Okay. Great. Thank you so much. Pleasure. Our next question will come from Jonathan Gruber, a Private Investor. You may now go ahead. Good afternoon. My question has to do with the SG&A expenses from the Q1, 2022 to 2023 Q1. What were the factors or what contributed to the increase from the $1.7 million to the $2.2 million quarter-over-quarter? Sure. I can take that one, Jonathan. Thank you. Thanks, Walter. Great question there. I'm sorry? Yes. Okay. Thanks, Walter. The $2.2 million increase majority of that really was our continued investment, incremental investments in our e-Boost and E-Bloc initiatives. Roughly $600,000 or so in the quarter was attributable to that. If you were to remove those investments which are, you know, gonna continue throughout 2023 but as we scale and ramp up, you know, they are gonna kinda normalize there. Without those in the Q1, SG&A would actually be down. You also said in your remarks earlier that in 2022 you had employee stock-based compensation that was expensed in 2022. Do we see that kind of expense is going to take place in 2023? Is that part of the Q1 SG&A number? Yes. I'm sorry. My comment was that about $150,000 of the current quarter SG&A is related to stock-based compensation. Both quarters did have roughly Q1 of 2023 had about $150,000 and Q1 of 2022 had roughly $60,000. Do we see the SG&A expenses going forward into 2023 to be comparable to the quarters in 2022? for the most part, you know, I would say, yes, but our goal is to take control over SG&A. Mm-hmm. D o more of a scrub and see where we can save on costs, as well. Relatively speaking, we don't expect any significant swings up or down. Thank you very much. That is great news and great quarter and thank you for taking my questions. You're welcome Jonathan. Our next question will come from Chris Bukowski with a Private Investor. You may now go ahead. Hello, and congratulations of a great quarter and continued growth. My question is about the fact that your Los Angeles factory that makes the E-Bloc is fully booked for the year and your E-Bloc sales seem to be the fastest-growing. Is there, after you go through the plans you have to kind of outsource some of the simpler tasks are you planning to increase production or to build another factory? Do you have those plans yet or is it the case that you'll just take only the orders you can build in Los Angeles? Yeah. That's we struggle with this every day, Chris. You know, that's really. It's a great challenge to have. The first goal is how do we meet growth, you know, continued growth in 2024? It's not just the manufacturing, but, you know, we have to be able to engineer it. We have to be able to shepherd these through complicated, you know, project management, you know, stories that these kinds of customers demand on any of these jobs. It's more than just the facility, it's the right personnel to continue to go forward. You know, if we don't continue to deliver an excellent solution on every level we're not gonna achieve a lot of growth. You know, we don't get a lot of second chances in this, in this market. That's the first. The first step is how do we continue to have a reasonable and exciting growth in 2024? You're right. The situation becomes, you know, do we expand? Is it assembly only? Is it more? You know, of course, we wanna do the best solution. Off the cuff, you know, we think at the terms that we look at it, so that hope this informs your view, is that, you know, the big value that we have is engineering. The big value that we have is custom bus duct work. The big value that we have is the very complicated wiring and testing that goes into a lot of these units. Those are things that, you know, if we're not doing them, we're kind of, you know. I'm not sure what we're doing exactly for the, for the customer. Other functions are less critical, are more vanilla type functions. You know, do we continue to make back pans? Do we have to make wall, you know, end walls? Do we have to make corner posts all the time? We do them all right now. That, that would be, you know, any kind of expansion would focus again on a facility that does the value-added parts of our, of our process that we think that we need to have in order to move forward. It doesn't necessarily. E-Bloc. It, I'm sorry, just one. That expansion doesn't necessarily have to be in Los Angeles as well. I'm sorry, I cut you off, Chris. No, no worries. Is E-Bloc custom engineered for each piece? I mean, that's a longer answer. I mean, you know, every use case is different every customer is different. You know, if you're, let's use a, if you're a, I don't know, if you're a supermarket chain, you know, many of yours will be similar but even there, you're gonna have variations based on the size of the store and what kind of service they're receiving and, you know, what kind of additional points of power they want. Does it lend themselves more to solar? Do they have a gas line? You know, the short answer is that, you know, sort of every job is custom engineered but clearly, you know, there are things that are very, very similar, you know, especially among the same customer. You know, every water utility is gonna be different. Every hospital is gonna be different. Every senior living center is gonna be different. In that respect, there's very little to glom off. Okay. Well, good to see you have some kind of technological moat there. Well, congratulations again. That's it for me. Thanks. Thank you Chris. Our next question will come from David Kreinberg with Globis Capital. You may now go ahead. Congratulations on the quarter and the continued progress. My question is about the large retailer that you announced a while back. Can you talk about what the potential is with them following the initial orders that they placed with you? Yeah. Thank you David. Yeah, they placed an, you know, the initial order, as we announced, was for 63 stores all of which we've delivered at this point. They internally, at least what they revealed to me, is that they've designated about 1,000 stores for this program. 400 or so or close to 500 sort of in a more immediate way. Our backlog right now reflects zero additional stores. They haven't come out with any yet. We expect as they, you know, they've received all the units, but as they monitor the data and as they get comfortable, you know, this was a big move for them 63, we hope, you know, we don't hear from them, which is great. It means everything's working perfectly. We only hear, you know, normally, we only hear complaints. We definitely expect more units to be released. You know, there are rumors and whispers among, you know, them and their engineers and so forth. There are certain things. None of that's in 2023. Even if they release something tomorrow with all expectations and given their internal submittal process, all of that would be in 2024. A 1,000 stores, if I take the average that you sold on the initial order was just about $200,000 per unit so per store. A 1,000 stores, you're talking about a $200 million opportunity? Correct. Obviously those prices would be higher over time, you know, as things tend to go up. I mean, you know, they don't typically go down but that's correct. A realistic timeframe is, you know, they laid out internally that they were gonna do this in five years. If, you know, the first part of the order is any indication, you know, five really means, you know, it's gonna be spread out over 10 years. That's terrific. Congratulations. Yeah. Thank you David. Our last question will come from Ray Fosse, a Private Investor. You may now go ahead. Yes. Nathan, thank you for the good quarter. My congratulations on that. Thank you, Ray. I heard that you mentioned some things about the supply of engines, the propane engines that you need to for generation. Is there an interaction between E-Bloc and e-Boost with respect to the engines? Any further comments on the availability thereof. Thanks again for a good quarter and congratulations. Yeah. Thank you Ray. I'll thank you know, on the call here, I'll thank you separately for always sending me, you know, interesting information and, you know, making me stay on my technological toes, as far as, you know, what other technologies and processes might be out there that might help Pioneer. Thank you for that, Ray. Yeah, there's not a lot of interaction. I always expect there to be more. There's not a lot of interaction between or cross-selling or cross-technological pollination between E-Bloc and e-Boost. On the E-Bloc side, you know, we don't furnish the engines on the particular job. We're kind of agnostic as to what the user wants to use. You know, they're using engines, they're using one, they're using three, they're using 10. I don't care. It only, you know, determines the size of the project for us. You know, on e-Boost, of course, we are using an engine, you know, we're adding an alternator and a controller and, you know, the charger and the tanks and mechanically, you know, doing it in a way, fitting it in a way that, for the customer's application. The engines do affect us there. You know, that's the heart of what's going on. Everything else is frankly passive or dumb on the e-Boost. The engine is the one generating the power. Thanks. Again, congratulations. Much appreciated, Nathan. Thank you Ray. This concludes our question and answer session. I would like to turn the conference back over to Nathan Mazurek for any closing remarks. All right. Thank you all for your time and support. We look forward to updating you again on our next call.