Grande West Announces Fourth Quarter and Fiscal Year 2017 Results

VANCOUVER, April 5, 2018 /PRNewswire/ - Grande West Transportation Group Inc. (TSXV: BUS; OTC PINK: GWTNF) – April 5, 2018: ("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 financials for the fourth quarter and the year ending December 31, 2017.

Highlights in 2017 and Recent Developments

• Record bus and aftermarket parts revenue of $54,701,931
• Record 2017 Adjusted EBITDA of $1,084,845 - see reconciliation of Net Earnings to Adjusted EBITDA in next section
• Working capital of $14,886,254
• Total assets of $46,962,090
• Record deliveries of one hundred fifty two (152) Vicinity buses

Selected Yearly and Periodic Information  

The following table shows the audited results of the Company for the year ended December 31, 2017, 4 month period ended December 31, 2016 and the year ended August 31, 2016 and is stated in Canadian dollars.

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

During the year ended December 31, 2017, the Company sold 152 Vicinity buses compared to the four month period ended December 31, 2016 when the Company sold 8 Vicinity buses, and the year ended August 31, 2016 when the Company sold 16 Vicinity buses.

Management reports 2017 year end financial results of one hundred fifty two (152) Vicinity buses delivered, revenue of $54,701,931, net loss of $416,693 and gross profit margin of 12%. During the year the Company continued to invest for continued growth and operational efficiencies in its facilities, operations, world-class systems and innovative new product offerings.

Management reports Q4 2017 results of thirty three (33) Vicinity buses delivered, revenue of $12,508,075, net loss of $641,714 and gross profit margin of 12%.

Management expected to deliver approximately two hundred (200) Vicinity buses during fiscal year 2017. Third quarter 2017 saw record deliveries of seventy-five (75) buses and management thought a follow-up quarter of the same number to be feasible. 217 Vicinity were manufactured during 2017 which would have allowed two hundred to be delivered. Many of these made it to the facility in Aldergrove late in the quarter, combined with additional challenging local equipment installation pushed into year-end holidays which impacted customer acceptance. All of the remaining buses produced and not delivered in 2017 will be delivered in 2018.

Backlog: Current total firm orders for 2018 production are for approximately three hundred (300) buses valued at over $107 million CAD. Deliveries will vary from quarter to quarter to account for different build specifications, customer acceptance and revenue recognition. Based on customer delivery requests, and slower than anticipated U.S. Sales backlog growth, Management is confident that a minimum of two hundred forty (240) Vicinity will be delivered in 2018.

Over 50 Vicinity buses were delivered in the first quarter of 2018.

Jean-Marc Landry, Grande West CEO stated, "I accepted my position as CEO almost two months ago and in that time I have assessed and identified Grande West's key 2018 strategies. Priorities include focusing on our U.S. sales, continuing build out of Canadian sales, Buy America assembly, and optimizing management processes as Grande West continues to mature. I have also asked engineering and production to continuously review all processes and make improvements as necessary in advance of ramp up."

Reconciliation of Net earnings to Adjusted EBITDA

Management believes that EBITDA is an important measure in evaluating the historical operating performance of the Company. However, EBITDA is not a recognized earnings measure under IFRS and does not have a standardized meaning prescribed by IFRS. Accordingly, EBITDA may not be comparable to similar measures presented by other issuers. Readers of this MD&A are cautioned that 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 are to earnings before interest, income taxes, depreciation and amortization.

The following tables reconcile net earnings or losses and cash flow from operations to EBITDA based on the historical consolidated financial statements of the Company for the periods indicated.

Corporate Update

General Overview

Grande West is maturing. We are transitioning from an entrepreneurial start-up company to a more structured and organized operation. In anticipation of continued growth, the Company has improved its balance sheet and working capital balances significantly during 2017. We have progressed from start-up status to heavy-duty mid-size transit bus leader in Canada, and now we have the opportunity to make a significant move into the U.S. and achieve similar status with successful execution.

Much has transpired with the Company in 2017 and early 2018 including management, operational and financial structural changes. In recognizing our need to evolve corporately, Grande West has strategically shifted the organization from what was a product oriented company to one that is now more sales driven. To support this strategy, Grande West has made a number of changes, most notably in the management team.

On February 13, Jean-Marc Landry was appointed to the position of CEO. Jean-Marc has been with Grande West since 2014 working as VP, Business Development and has grown the Company's revenues from very limited sales to over $50 million in 2017 and anticipate being close to $90 million in 2018. His unique experience working with Nova Bus through their turnaround in 2004 through 2012 translates very well as Grande West makes a strong push to gain market share in the U.S. in 2018. Jean-Marc's increased responsibilities for Grande West's strategic direction will continue to result in strong growth in sales and market share.

The Company recently announced the hiring of Rob Mowat, VP Sales and Marketing as Jean-Marc's replacement to focus sales efforts in the U.S. Rob most recently lead Transdev's business development team in the US and Canada managing contract transportation for government agencies. Rob has worked with numerous transit authorities and this key role is very strategic for Grande West's U.S. growth plan.

The Company was also very pleased to add Keith Parker as one of its independent board members in 2018, a very experienced public transit executive with decades of operations roles. Keith T. Parker is currently president and CEO of Goodwill of North Georgia. Prior to transitioning into his leadership role at Goodwill, Mr. Parker served as Chief Executive Officer and General Manager of Metropolitan Atlanta Rapid Transit Authority until September 2017. In his tenure at MARTA, he and his team balanced the budget, improved efficiencies, increased bus and rail service, enhanced the customer experience, and restored pride among MARTA employees and staff. During his transit career prior to MARTA, he served as Chief Executive Officer and President of VIA Metropolitan Transit and Chief Executive Officer at the Charlotte Area Transit System. Keith brings a unique perspective from transit and significantly strengthens Grande West's Board.

Additional information about current operations, production and Buy America Vicinity can be located in the Management's Discussion and Analysis under Recent Highlights and Developments at http://sedar.com/.

A conference call to discuss these results will be held today at 8:00 AM PST / 11:00 AM EST. The call-in number is (866) 215-5508 or (514) 841-2157 and can be accessed by entering passcode 46657134. A recording of the call will be available on the website shortly at http://www.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. Grande West will soon be offering a new product which will be the first Crossover Vehicle in the transit space - a medium-duty, monocoque-designed rear engine vehicle.

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
[email protected]
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.

Related Links

http://www.grandewest.com/