Investor Presentation - July 11, 2019 - TSX-V: BUS | OTC Pink: GWTNF - Grande West Transportation ...
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Investor Presentation - July 11, 2019 TSX-V: BUS | OTC Pink: GWTNF
Forward Looking Statements
This presentation contains ''forward-looking statements'', which reflect the expectations of management regarding Grande West Transportation Group Inc.’s (the “Company”) future
growth, results of operations, performance and business prospects and opportunities. The words ''believes'', ''anticipates'', ''plans'', ''expects'', ''intends'', ''projects'', ''estimates'' and similar
expressions are intended to identify forward-looking statements.
These forward-looking statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this presentation.
Such forward-looking statements are based on a number of material factors and assumptions, including, but not limited in any manner to the availability of sufficient working capital to
market the Company's products and provide after-sales maintenance and support services to the Company's customers, access to adequate services and supplies to operate the
Company's business, economic conditions, commodity prices, foreign currency exchange rates, interest rates, access to capital and debt markets and associated costs of funds,
availability of a qualified work force, and the ultimate ability to develop, manufacture and sell the Company's products on economically favourable terms. Forward-looking statements
involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the
times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking
statements, including, but not limited to, the factors discussed under ''Risk Factors'' in the Company prospectus dated November 27, 2013 and which will be detailed from time to time
in the Company’s interim and annual financial statements and management’s discussion and analysis of those statements, all of which are or will be available for review on SEDAR at
www.sedar.com.
Although the Company has attempted to identify important factors that could cause actual performance to differ materially from that described in forward-looking statements there
may be other factors that cause its performance not to be as anticipated. These forward-looking statements relate only to events or information as of the date on which the statements
are made. The Company neither intends nor assumes any obligation to update these forward-looking statements or information to reflect changes in assumptions or circumstances
other than required by law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those
currently anticipated. Accordingly, readers should not place undue reliance on forward-looking statements.
Disclaimer
This presentation does not form part of any offer of securities, or constitute a solicitation of any offer to purchase or subscribe for securities. The sole purpose of this presentation, in
paper or electronic form, is strictly for information.
TSX-V:BUS OTC:GWTNF | www.grandewest.com 2
Executive Overview
Grande West Transportation is a Canadian-based
company which designs, engineers and manufactures mid-
size, multi-purpose transit vehicles for sale to public and
private enterprises in Canada and the US.
TSX-V:BUS OTC:GWTNF | www.grandewest.com 3
Vicinity’s Positioning in the Bus Market
Traditional 40’ Bus
Cutaway Bus VICINITY or modified to 30’-35’
The Vicinity is the only purpose-built heavy duty
Smaller mid-size bus in the market Larger
• Monocoque Frame • Lower Capital Costs
• Built on a Light Duty Truck Chassis • Big Bus Technology • Lower Operating Costs • 33% Higher Fuel Costs
• No standees • Compact Platform • Clean Diesel or CNG Powered • 30-40% Higher Capital Cost
• Costly to Operate • Right-Sizing fleets • Altoona Rated ‘Best-in-Class’ • Higher Maintenance Costs
*The Vicinity LT (medium duty, 7 year bus) is now for sale, more product detail forthcoming
TSX-V:BUS OTC:GWTNF | www.grandewest.com 5
Altoona Test Results: Best-in-Class!
The US Federal Transit Authority’s (FTA)
FAILURES
MANUFACTURER MPG
CLASS 1 CLASS 2 CLASS 3 CLASS 4 Altoona test is an internationally
VICINITY 7 6.02 recognized tough testing regime, as it
Competitor A 34 15 5.54 essentially performs 12 years and 500,000
Competitor B 9 15 4.43 miles of a New York City heavy duty cycle
Competitor C 29' 20 2 4.1
upon completion of the testing. It allows
Competitor D 12 6
customers to measure performance and
Competitor E 31 13
estimate life cycle costing of the vehicle.
Competitor F 40’ 12 9
Competitor G 40’ 14 4 2.97 Vicinity Scores
Competitor H*(**) 4.8 • Best in Class: Fuel economy
Competitor I** 3 1 40 19 • Best in Class: Structural Durability
Competitor J 21 13
• B e s t i n C l a s s : F ew e s t re p a i r s
Competitor K** 32 7 4.28
required - only 7 minor Class 3 vs.
* Partial test no durablity Competitors
** 10 YEAR TEST
Full test results: Vicinity Altoona Test
TSX-V:BUS OTC:GWTNF | www.grandewest.com
6
I. Origins and Timeline • CNG Option
• US Customers
• Buy America + US Assembly
• Profitable Operations Q2, Q3
• Vicinity 27.5’ • $100M Backlog
• First BC Transit Order (15) • $20M RBC ABL • Spartan Motors US Manufacturing
• $54M annual revenue
• Grande West Founded • EV Prototype Planned
• BC Transit Strategic Partnership • Medium-Duty Prototype Planned
• Marketing in Canada • U.S. sales reorganization
• Vicinity 27.5’ Born
• Vicinity 30’ Model
• Weichai Agreement
2008 2013 2015 2017 2019
2010 2014 2016 2018
• CMVSS Certified • Altoona Best in Class
• Vicinity Prototypes Delivered • Large multi-year contracts
• VP Sales, JM Landry Hired • Vicinity 35’ Model
• FMVSS Certified • Alliance Bus Group Distribution
• Buy America Orders/Audit
• Executive/Board Changes:
• CEO, JM Landry
• CFO, Dan Buckle
• VP Sales, Rob Mowat
• Direct Sales Eastern Canada
• $70M annual revenue
TSX-V:BUS OTC:GWTNF | www.grandewest.com 7
Bus Market in North America - Summary
Canada: Approximately 18,000 public transit agency buses
U.S.: Approximately 128,000 buses - 68,000 public transit* / 60,000 private transit
Bus lifecycle is usually 10-12 years: Bus Sales of ~1,800 in Canada, and ~12,000 in the US every year
Grande West Vicinity market opportunity is over 1,200 buses per year (management’s estimates)
Competition: New Flyer (NFI.T), Rev Group (REVG), Nova Bus (Volvo), Gillig (Private) and cutaways
*Source: APTA and management estimates
TSX-V:BUS OTC:GWTNF | www.grandewest.com 8
Business Model
• Grande West’s Vicinity bus (27.5, 30 and 35 foot models) costs significantly less, is more
maneuverable, burns less fuel and emits less harmful emissions than a regular 40 foot transit bus
• Unparalleled capacity to quickly increase or decrease production to meet customer demand with
minimal overhead cost impact
• No production facility overhead cost burden
• No minimum production level commitments
• Ability to deliver new products to market very quickly
TSX-V:BUS OTC:GWTNF | www.grandewest.com 9
Right-Sizing Trend
”Increasingly, transit systems are recognizing that the 40-foot bus is not a one-size-fits-all vehicle. It is
excellent for high volume routes, but is big and unwieldy in residential neighbourhoods and presents a wasteful
image when operating with few passengers. More and more systems are also realizing that service frequency builds
ridership better than spatial coverage. In other words, more frequent service with smaller buses is far more
attractive than less frequent service with larger ones. Smaller buses are perfect for this type of strategy and
more and more systems are looking seriously at “Right-Sizing” their fleet by introducing smaller buses for
portions of their route network that do not warrant 40-foot buses.”
- Michael Roschlau, Grande West Strategic Advisor, former CEO of Canadian Urban Transit Association
“We are committed to creating more efficient transportation options for our customers. That means building a more
highly layered, customized service model. 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.”
- Keith Parker, Former GM and CEO of Metropolitan Atlanta Rapid Transit Authority (MARTA)
TSX-V:BUS OTC:GWTNF | www.grandewest.com 10Historical Results – Revenue, Backlog & Gross Margin
+ 933%
+ 750%
$70M Revenue
$54M Revenue $53M Backlog
$7.5M Revenue 180 Deliveries
$6M Revenue $61 Backlog
$100M Backlog
$1M Revenue
$6M Backlog
$18M Backlog 36 Deliveries 153 Deliveries Backlog - 160+
18 Deliveries Backlog - 175 Backlog - 300
6 Deliveries Backlog - 60 GM 12.5%
GM 17%
Backlog - 21 GM 0% GM 12%
GM 0%
2014 2015 2016 2017 2018
TSX-V:BUS OTC:GWTNF | www.grandewest.com 11
5Selected Quarterly Information Q1 (March 31, 2019)
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
TSX-V:BUS OTC:GWTNF | www.grandewest.com 12Balance Sheet Q1 (March 31, 2019)
ASSETS
Cash + Restricted Cash $600,222
Trade and other receivables 12,661,116
Inventory 18,249,865
Deposits and prepaid 845,540
Property and equipment, intangible 6,814,338
Total Assets 39,171,081
LIABILITIES
Accounts Payable and Accruals 6,042,394
Credit Facility 5,450,203
Current Deferred Revenue and Warranty 3,256,005
Short Term Loans 1,338,225
Total Current Liabilities 15,924,449
Long Term Liabilities 2,684,733
Share Capital and Equity 20,561,899
Total Liabilities and Equity 39,171,081
TSX-V:BUS OTC:GWTNF | www.grandewest.com 132018 Transition, 2019 Focus
Recent Accomplishments Important Milestones in 2018
• 2017 and 2018 record revenues and deliveries • Successfully completed a mock audit for Buy America compliance
• Strong balance sheet with $17M in working capital • Won U.S. public transit contracts (Georgia and Iowa)
• Good operating cash flow • Received firm orders for Buy America buses (Mississippi)
• Higher margins that are trending up • Went to direct sales model for Eastern Canada
• Parts sales increasing - up 300% year over year in 2018
Current and Future
• Canadian and U.S. sales focus, strengthen organization
• Vicinity LT (Crossover Vehicle) medium duty launched
• Vicinity EV (100% electric) launch shortly
TSX-V:BUS OTC:GWTNF | www.grandewest.com 14Our Partners
Spartan Motors Inc. - U.S. Manufacturing
• Specialty vehicle manufacturing and assembly
• Employs approximately 2,300 associates
• Operates facilities in Michigan, Indiana, Pennsylvania,
South Carolina, Florida, Missouri, Nebraska, South
Dakota, Mexico and Peru
• Nasdaq: SPAR
TSX-V:BUS OTC:GWTNF | www.grandewest.com 15Our Partners
Weichai - Manufacturing Partner
• Multi-Billion Dollar Company
• Over 74,000 employees internationally
• Global service, support and warranty network
• Ships over 5,000 buses/year internationally
• World’s largest HD engine manufacturer
TSX-V:BUS OTC:GWTNF | www.grandewest.com 16Our Partners
USA Distributor
• One of the largest U.S. retail bus resellers
• National distribution agreement
• Sales, parts and service
TSX-V:BUS OTC:GWTNF | www.grandewest.com 17Management and Board of Directors
Jean-Marc Landry – CEO Keith Parker – Director
• Over 20 years experience in public transit business • Public Transit seasoned leader and former CEO of MARTA
development, former head of sales for Nova Bus and other transit systems
William Trainer – (Founder) President and Director Andrew Imanse – Director
• 30+ years of business leadership with extensive overseas • Former President of Thor Industries Bus Group, grew the
import and export experience El Dorado bus business to $500M/year
John Wang – VP Chief of Engineering Joe Miller – Director & Chairman
• Accredited Mechanical Design Engineer and previously • Global businessman with over 30 years in the construction
senior mechanical, designer and project manager field
Robert Mowat – VP Sales and Marketing Christopher Strong – Director
• Over 20 years experience in public transit business • Senior executive with 30+ years experience in CEO, CFO
development, former VP Sales for Transdev, Nova Bus and board roles with startups, acquisitions, IPOs,
turnaround and sales.
Dan Buckle – CFO
• Experienced pubic company finance executive and former John LaGourgue – VP Corporate Development, Director
PwC audit manager • 20+ years in management, sales, and capital markets
TSX-V:BUS OTC:GWTNF | www.grandewest.com 18Capital Structure (as at April 25, 2019)
Symbol TSXV: BUS OTC Pink: GWTNF
Shares Issued and Outstanding 74,470,409
Stock Options/RSU/DSU 3,980,000
Notes:
Convertible Debentures 1 1,903,030 1. Unsecured $628,000, March 2020 8% coupon,
5 year, $0.33 strike
Fully Diluted 80,353,439 2. Includes management, directors and original
founding members
Insider/Founder Ownership 2 ~30%
TSX-V:BUS OTC:GWTNF | www.grandewest.com 19Contact
Head Office Investor Contact Transfer Agent
Grande West Transportation John LaGourgue Computershare
3168 262nd St. VP Corporate Development 100 University Avenue, 8th Floor
Aldergrove, BC V4W 2Z6 Toronto, ON M5J 2Y1
Phone: (604) 607-4000
Phone: (604) 607-4000 Email: jlagourgue@grandewest.com Phone: (416) 263-9200
Fax: (604) 607-4004
Email: info@grandewest.com
Corporate Counsel Auditor
Cassels Brock & Blackwell LLP PricewaterhouseCoopers LLP
Suite 2200, 885 West Georgia St. Suite 1400, 250 Howe Street
Vancouver, BC V6C 3E8 Vancouver, BC V6C 3S7
Phone: (604) 691-6106 Phone: (604) 806-7780
TSX-V:BUS OTC:GWTNF | www.grandewest.com 20You can also read
