GreenPower Motor Company Inc. (NASDAQ:GP) Q2 2023 Earnings Call Transcript

GreenPower Motor Company Inc. (NASDAQ:GP) Q2 2023 Earnings Call Transcript November 15, 2022

GreenPower Motor Company Inc. beats earnings expectations. Reported EPS is $-0.15, expectations were $-0.16.

Michael Sieffert: Thank you. This is Michael Sieffert, the Chief Financial Officer of GreenPower Motor Company. I would like to welcome everyone to our call to discuss GreenPower’s financial results for the period ended September 30, 2022. I am here today with our Chief Executive Officer, Fraser Atkinson; and our President, Brendan Riley. During today’s call, we may make comments or statements about our future expectations, plans and prospects, which may constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our quarterly interim results and MD&A filed on SEDAR and on EDGAR.

In addition, these forward-looking statements relate to the date on which they are made. We anticipate that subsequent events and developments may cause the company’s views to change. GreenPower disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Also, during the course of today’s call, we may refer to certain non-IFRS financial measures. Reconciliation of these non-IFRS measures can be found in our MD&A filed on SEDAR and on EDGAR and is also located on our website at www.greenpowermotor.com. I will now pass the call over to GreenPower, CEO, Fraser Atkinson.

Fraser Atkinson: Thank you, Michael. I am going to discuss our activities in the quarter with our manufacturing facility, school bus pilot project, and recent vouchers and incentive activity. In August, GreenPower took possession of the 80,000 square foot manufacturing facility in South Charleston, West Virginia, and began the process of onboarding its first employees and Redding, the facility for production. This facility will be GreenPower’s primary North American school bus manufacturing center servicing the Eastern States and beyond. GreenPower entered into a lease purchase agreement last quarter with the State of West Virginia where the terms of the lease require no cash up front and monthly lease payments beginning in May, 2023, all lease payments will be applied in full to the purchase price of the property.

The state will also provide up to $3.5 million in employee incentive payments to GreenPower for jobs created in the state as production increases over time. Title to the property will be transferred to GreenPower once total lease and incentive payments to reach $6.7 million. This arrangement allows us to focus our resources in the short term production while having the ability to retain ownership of this facility long term. In September, GreenPower began a pilot project with the State of West Virginia to demonstrate its Type-D BEAST and Type-A Nano BEAST school buses to school districts across the state and test buses in a range of real world conditions. The Type-D bus has operated well with this pilot and provided valuable insight into vehicle cooperation that it be can be used in the transition of the state school bus fleet from diesel to zero emission.

GreenPower sold three Type-D school buses in West Virginia during the quarter that have been used in the pilot project and subsequent to quarter end delivered its first Type-A Nano BEAST school bus in the state. In September GreenPower’s Nano BEAST Type-A all electric purpose-built school bus won the Innovation Award for Best Green Bus Technology from School Transportation News. The Nano BEAST was launched in June and has been out on demonstrations in numerous states and received rave reviews which positions GreenPower well for the 8,000 to 9,000 Type A school buses that are sold every year. Now turning to vouchers and incentives, stakeholders often ask us what happens when the incentives run up? That’s not going to happen anytime soon. The federal government introduced two new programs with the EPA school bus program starting this year and the $40,000 tax credit for medium duty vehicles starting January 01, 2023.

In California the Cap-and-Trade program continues to grow exponentially being a double-digit growth annually, creating additional funding over and above exist — the existing funding for programs through the California Air Resource Board, as well as several new programs that were introduced this year. In September, GreenPower secured another 85 vouchers under the innovative small E-Fleet set aside funds with the California HVIP program for 75 foot of our 22 foot cargos, eight box trucks, and two of our 25 foot cargo vans. In October, the EPA announced the selectees for the school bus program with almost $1 billion of funding. GreenPower worked with dealers and school districts across numerous states who were selected to acquire GreenPower’s Type D Bus for up to 375,000 or our Type A Nano BEAST for up to $285,000.

The next step is to negotiate the contracts and the deliveries must be completed by October 31, 2024. In November, GreenPower vehicles were listed as eligible for grants under the San Joaquin Valley air pollution controlled district, VW Trust fund for up to 180,000 for transit buses, 400,000 for school buses, and 160,000 for our shuttle buses. GreenPower continues to work on opportunities in California from the standard HVIP vouchers, which presently has $38 million available school bus set side funding, which will also have recurring funding available next year in the year following, CEC and Air Quality Management District funding. I’ll now hand it over to Brendan Riley, President of GreenPower for discussion on the operations.

Brendan Riley: Thank you, Fraser. In late July, GreenPower completed deliveries of the first EV Star CCs under the 1500 unit purchase and sale contract with Workhorse Group. At the end of the quarter, GreenPower had completed 100 EV Star CCs awaiting delivery, and another 200 EV Stars in various stages of production. Deliveries of EV Stars have been slower than anticipated due to difficulties in securing shipping, delays imports, and delays from importation and other logistics matters. Management has been actively managing, shipping and logistics issues in order to facilitate a faster and more predictable delivery cadence. In July, GreenPower completed the acquisition of Lion Truck Body, a manufacturer of truck bodies for all types of trucks.

Lion Truck Body manufactures and installed a complete line of bodies including dry freight aluminum, refrigerated box, aluminum beds, steak bed, flatbed, service and utility bodies. This acquisition allows GreenPower to vertically integrate an important component of its supply chain and ensure that these bodies are optimized for EVs. To make this more relatable, this optimization concept, I like to think of it as the same concept of making homes and buildings more efficient, kind of like leads for EV trucks. GreenPower continues to focus on the post-closing integration of this business and intend to leverage the business’s capabilities to capture new lines of business, improve and expand its product offerings, and even grow the existing legacy business.

During the quarter, GreenPower continued to successfully deliver its popular 22-foot EV Star cargo vehicles and the New Jersey and surrounding areas. With over 20 deliveries, this battery electric van is ideally suited and configured for commercial use in urban markets and mid mile delivery. The EV Star cargo is the only battery electric vehicle currently available with this payload and range in this, excuse me, with a massive diverse addressable market. With the addition of a $40,000 federal tax credit available in 2023, we expect to have strong sales and order backlogs for this model. We have also made great progress positioning GreenPower for future growth. Despite some minor headwinds from Omnicon last year and early 2022, we continue to accelerate deliveries while building our sales reach, both internally and externally.

These recent expansions provide GreenPower with tremendously greater reach on a national level. In closing, GreenPower has demonstrated that we have the products that the market demands and are now working tirelessly to solidify the strategic relationships necessary to catapult our growth to the next level. We are optimistic that this fiscal year will provide to be a transformative year, and I look forward to providing additional details on our progress when prudent. Now I’d like to turn it over to Michael Sieffert, GreenPower, CEO, who will cover the quarterly financial highlights. Thank you.

Michael Sieffert: Thank you, Brendan. GreenPower achieve record revenues in the quarter of $7.726 million, which is an increase of 67% over the revenue of $4.629 million for the second quarter in the previous fiscal year. Revenue was generated from the sale of three EV type D, all electric school buses, one Nano BEAST Type-A all electric school bus, 21 EV Star-22-foot-cargoes, three EV Stars, and 29 EV Star cabin chassis. We also recognized revenue for finance and operating leases and from Lion Truck Body since the acquisition on July 07. Cost of revenues in the quarter were $5.971 million, generating a gross profit of $1.755 million or 22.7% of revenues compared a gross profit of 20.6% for the second quarter in the previous fiscal year.

Gross profit for the quarter was lower than the historical range of 30%, primarily due to the deliveries of the EV Star cabin chassis under the Workhorse contract and sales of our EV Star 22 foot cargo, which are at lower margins. We have seen a steady improvement in the company’s quarterly adjusted EBITDA since the beginning of this calendar year, as we have benefited from a higher sales and gross profit. GreenPower generated record revenue for the six months ended September 30, 2022 of $11.6 million, which was an increase of 52% over the revenue of $7.6 million for the same period in the previous year. We saw an increase in our quarterly cash expenses compared to the prior quarter, which was attributable to continued investments in our business, including sales activities, expanding our team of production and operations professionals and in professional fees and product development as we expanded into new markets and develop new products.

Finished the quarter with $26.7 million in working capital and approximately $2 million in available liquidity. Working capital included $4.2 million in AR, the majority of which was current at quarter end and $44 million in inventory, which was comprised of over $27.5 million in finished goods inventory, which is primarily comprised of EV Star Transit plus, EV Star cabin chassis, EV Stars, EV Star Cargo, and both BEAST and Nano BEAST school buses as well, we had $16.5 million in working process. We have completed working process inventory since quarter end and have over a 100 EV Stars cross model types and 30-B school buses that we expect to be driving near term sales growth. I’ll turn it back to Fraser for a final word before the Q&A.

Fraser Atkinson: Thanks Michael. We want to address our cash requirements. Unlike the majority of medium and heavy duty EV OEMs that have reported gross profit losses this year, that’s where cost of goods sold exceeds their revenues. We’ve been consistently reporting a gross profit in the 20s, along with operating expenses that are a fraction of our peers. We have access to additional liquidity and continue to review traditional sources of capital that are beneficial to us. We have a financial model where increased sales leads to profitable operation. Our finished good inventory translates into almost $40 million of sales, so our primary focus today is to deliver these to customers. While deliveries may be lumpy the next few months, the record revenues this past quarter demonstrate our path to a profitable business in this EV sector. With that operator, please open up the call for questions. We

Q&A Session

Operator: We’ll now begin the question-and-answer session. The first question is from Greg Lewis of BTIG. Please go ahead.

Greg Lewis: Hey, thank you and good morning, everybody and thanks for taking my questions.

Fraser Atkinson: Hey, Greg. Good morning. How are you?

Greg Lewis: Oh, okay, good. I wasn’t sure if I wasn’t muted or something. So, I just — my first question is around cadence of deliveries. It looks like you delivered 29 units as part of the workhorse agreement and I guess congratulations on like a great quarter of deliveries. I guess one of my questions is could you confirm the 29 to Workhorse and then really just thinking about, I know there’s seasonality and deliveries of the business, but as we think about that now that we have this agreement with the Workhorse, should we expect more of a smoothing of deliveries as maybe that can kind of offset some of the seasonality and the delivery of buses for schools.

Brendan Riley: Greg, that’s a really great question. This is Brendan, by the way, and good morning. Yes, the workhorse cadence will be — should be predictably regular month over month and fairly stable. And oddly enough, now that we’ve got all this government money for school buses, we don’t expect the school buses deliveries to be seasonal as they were. As the money’s dolled out, it does appear to be a regular delivery schedule month-over-month for the foreseeable future with the EPA funds for these school buses. So we expect that to actually be fairly smooth. The seasonality could relate to folks getting vehicles ready for delivery, like last mile delivery, which doesn’t really affect GreenPower that much. We don’t play much in that space.

We’re more mid mile. So we’re not so seasonally affected. I expect you’ll see our delivery rate go up mostly due to us working — our facilities are expanding, our transportation network is expanding, we’ve got big deliveries on the horizon and that will drive our deliveries right now. We’re not production limited. We’re just getting into the swing of getting these deliveries happening to end users such as Workhorse.

Greg Lewis: Okay. Great. Thank you for that. My other question was around margins and maybe Mike, I don’t know if this question’s best suited for you. You’ve clearly called out the integration of Lion Truck Body and West Virginia, the ramp there was going to weigh on margins here in this quarter. And it looks like we probably have another quarter of, let’s call it suboptimal margins. Any kind of color you can give us, how you think we should be thinking about margins sequentially over the next couple quarters and kind of realizing the count, maybe if we think about it on the fiscal year basis, I guess some point in the middle of next year, you think we kind of can chew through, the drag from West Virginia and line truck body where we kind of start approaching those, kind of normalized margins you’ve guided to and the call it 30% range is that kind of a fair way to think about it?

Fraser Atkinson: Yeah, I think we’ve said in the past, Greg, the margins is really a function of our product mix, and I would say, right now as we move into higher volume sales, that’s likely going to be at a slightly lower margin and depending on certain sales of as an example, EV Stars and certain of our school buses, those could be at higher margins. And so I think, where we see it right now, it’s probably a little lower than what we anticipate for the remainder of the year, but, there could be some lumpiness in this depending on that product mix. And I would say, if you’re looking at a 25% to 30% range, that’s probably about right on average over time. Now, that may be lumpy from quarter-to-quarter, but over a period of time that should be about right from what we can see today.

Greg Lewis: Okay. And just as we think about the upcoming quarter that we’re in right now, just thinking about, I guess we’re still on track to get buses out from West Virginia sooner rather than later. But I imagine that we should see a still a little bit of a drag around margins in this quarter that we’re in. It sounds like the Lion Truck body integration is behind us.

Fraser Atkinson: Yeah, I wouldn’t say there would be a massive swing upwards, but I would say it could be sort of in that range that I’ve just provided you.

Greg Lewis: Okay. But it does sound like the — it sounds like we just made it through the bottom in margins,

Fraser Atkinson: As I said, I think it would be based on our product mix over time.

Greg Lewis: Got you. Okay. Understood. Understood. Okay. Hey, super helpful, everybody have a great rest of the day.

Operator: The next question is from Craig Irwin of ROTH Capital Partners. Please go ahead.

Craig Irwin: Hey, good morning, and thanks for taking my questions. I’d like to ask about the EPA vouchers that were recently awarded to different districts for purchase of clean school buses. Can you maybe update us on where you are in the conversations out there with different districts? Have you successfully booked awards from any customers at this point? How should we gauge the potential for GreenPower this more than 2300 buses that got funded and don’t need too many of those to get you guys to profitability. Any color would be useful.

Fraser Atkinson: So thanks for the question, Craig. We’ve got — some manufacturers went direct in that they were the selectee or were directly awarded through the program. Our approach was to work with our dealers and to work with school districts and in some cases, educational departments that represented the state interest. And so with all of those across, the states where we have dealerships from West Coast to East Coast, we’ve got both the Type D BEAST as well as some of the Type A Nano BEAST that we’re currently engaged in terms of moving forward on the contractual basis. So our approach is when we have the contract in hand and we have a set delivery date, which is also equally important then we’ll be providing regular updates on where we are with that process.

Craig Irwin: Okay, Excellent. Excellent. Then can we maybe switch back,

Fraser Atkinson: And I should point out as well, that we’re in for — we have some in California, just sticking with that state for a second. The initial vouchers that came out in March it’s $198,000 for our Type D school bus, but if it’s a public school district, they can get up to another 65%. So it’s still not quite as much as the 375 for the feds. So there was some initial interest in California, but people took the approach of, well, I’m going to wait and see what goes on with the EPA program. Well, now that the EPA program is through, we’re dealing with a number of candidates that that have come back, if you will, and reengaged because they were not a selectee or didn’t qualify for the APA. So they’re looking back at this program.

There was also the set aside funding that closed in the summer. The California Resource Board is behind on that program in terms of getting all of the contracts out to the successful applicants. But that’s another $120 million as well as another two years of this close to $130 million. And then as we said in today’s remarks, the San Joaquin Valley has come out with a program for $400,000 per school bus. So what all these programs have done is created some delays in terms of people waiting for the next program that may be better than the current ones. And I’d say that now that all of these are out there people are now solidly moving forward to get contracts in place and to get delivery set.

Craig Irwin: Understood, understood. So I wanted to switch to the cabin chassis products. So now that we have Workhorse taking rising volumes, it gives you a lot more credibility in the market, gives you a presence. There’s vehicles people can see on the road. Can you maybe update us on the sales funnel there? Your level of engagement with different partners how this works with your line chassis acquisition and what you think are fair expectations for this business as far as milestones, It doesn’t have to be units, but commercial milestones over the next number of quarters.

Fraser Atkinson: Brendan, did you wanna start off?

Brendan Riley: Yeah, I could start off Craig. So, part of this the cab chassis strategy was of course, land a big commercial partner or customer that’s going to start driving volumes. That was Workhorse. The next really dovetailing portion of the strategy is incorporating our sales team to go after that business that’s not only commercial, but also vocational and other, either wholesale or retail for the cab chassis, either people that do just pass through, they put on their body, they do whatever they want with it, or we put the body on either through Lion Truck body or one of our other body producing partners, which we have many of. So you’re going to see actually the dealership network start getting more mature and expanded with these $40,000 commercial tax credits for the medium duty vehicles that the EV Star is eligible for.

That’s really changed our whole kind of strategy. So you’re going to see a lot more of what you discussed. I know we’re not giving guidance now, but the next milestone I think you’ll see is some changes in our sales strategy additional dealers announced and some additional partnerships.

Craig Irwin: Okay. Excellent, excellent. Your breakeven. So, Fraser, I really like your prepared remarks. You guys have consistently been one of the most reliably healthy margin companies in the sector. But how should we think about the breakeven for the company as, as a revenue run rate? Do, do you have some updated assumptions or updated revenue levels that you think that we should we should be using as, as external observers?

Fraser Atkinson: Well, I think there that’s impacted on couple fronts. Number one, certainly we’ve invested, have a much higher investment rate with additional personnel that we brought on board that have really to support the, higher level of deliveries and the anticipated level of delivery. So, the current level of investment is as much for where we expect to be over the next several quarters, and that’s overall is higher than where we were a year, year and a half ago, which changes, that breakeven dynamic. But going back to the gross profit, if the next quarter is at or slightly above the current level, then that would require a higher revenue number than if we kind of get back to a higher GP level that we certainly expect in a couple of quarters time.

Craig Irwin: Okay. But then the, we’re still talking about a pretty low number compared to most of the other truck producers out there in the market. That’s correct.

Fraser Atkinson: Well most of the other medium and heavy duty that we look at have a red gross profit loss as opposed to a positive gross profit. So I think that’s almost an infinite amount of sales required to, I guess, lose an infinite amount of gross profit dollars. But so it’s — I don’t think there’s a comparable there. And we are certainly focused on what is going to get us there with our with business. But yeah, we are positioned in a very different set of metrics in terms of having a very low operating expense in relation to our revenues and the order book that we’re working on.

Craig Irwin: Excellent. Well, congratulations.

Brendan Riley: This is Brendan. I just, wanted to add one thing also, as we start driving volumes you’re going to — then we have the opportunity to really start doing the cost down measures that also help lower cost and drive more business. So we do expect that automotive growth that you get when you start driving the volumes that really enable you to start going after the cost down measures.

Craig Irwin: Understood. Well, hey, congratulations on the progress here, guys. I’ll go hop back in the queue. Thanks.

Operator: The next question is from Tate Sullivan of Maxim Group. Please go ahead.

Tate Sullivan: Thank you. Brendan, you mentioned, I believe the cargo vans, the cargo opportunity have strong sales and order backlog in that business. Can you talk about, has it mostly been cargo vans to New Jersey based on that voucher program, or is it turned to other states in terms of where the demand is for cargo vans, please?

Brendan Riley: Good morning, Tate and thank you. We haven’t yet really started marketing the cargo van outside of California and New Jersey. So New Jersey’s been the launch of that program was concurrent with our release of this product. So that’s where we’ve made most of deliveries, and we’ve had a very strong demand for those there. We have an additional demand in California for 80 plus units that we will be building too. So we’re seeing demand everywhere, and that does not include our approach with new dealers and a modified sales strategy to really take advantage of the opportunities coast-to-coast. So I’d have to say that that 22-foot cargo is a home run of a product for us. I expect that product, to be honest for that vehicle to outstrip — the demand outstrip our capacity in the next little while, which is not something, I like to say, but it’s going to be a reality that the demand for that product is really exceptional for us.

Fraser Atkinson: Well, the two things to add is that the California program that we referenced in our earlier remarks in September, we are able to secure 75 vouchers for the 22-foot cargo. And we haven’t talked about the Canadian program, but in the Canadian federal program, all of our various CV Star models are eligible for 75,000. That’s Canadian dollars of the vouchers and they allow for stacking with other programs. So in the province of British Columbia, which also has its own voucher in senate program the combined can get you three quarters of the purchase price of that product, which net of incentives makes it considerably cheaper than the Ford Class II BE Transit, which has about approximately half the battery capacity and maybe a third to half of the payload. So, that the product is really timely in terms of being positioned for those commercial operators that are looking for range and payload with a cargo van.

Tate Sullivan: Thank you. Right. And then on the carego, Michael, I think you mentioned that cargo right now, is that lower margins, Is that because of the body work and could the margin improve after, with adding into Great Lion Truck potties more there, are there other considerations for the lower margins for the cargo vans? If I heard that?

Michael Sieffert: No, I would say, well, The cargo van is more of an up-fitting process, and so whereas the cabin chassis is where we have the opportunity for to have different bodies that give you different models. So for example, we’re working with Lion Truck Body on the 16-foot or a 14-foot box with rolling door and anywhere up to a 2,500 pound lift gate. And that positions us with the 2, 2.5 metric ton box truck market, which is considerable as well, it accommodates a service truck, can accommodate a refrigerated unit with that box configuration and so all of these defined products that are addressed fairly significant or substantial markets. In the case of the cargo, what we’ve found is that some buyers are looking for as is, whereas with a bear interior, others are looking for where they want it with a finished interior with the lighting and everything else, all done, ready to go.

So there’s what we’ve learned with the early deliveries which as a result have driven a lower gross profit margin, is that we can commoditize this by having several specific packages as opposed to trying to just appease to each and every customer at their own custom van. And I think that’s our path to where we can have those repeatable packages that the end user finds will meet their requirements, but don’t require us to custom build out their van for them.

Operator: The next question is from John Jay from Quiet Investor. Please go ahead.

UnidentifiedAnalyst: Good morning, guys. It’s really nice to see the progress you’ve been making. I had a couple of questions partly unwinded, I think. Number one with all the grants and subsidies and so on that are being handed up by various bodies, does the element of our price against somebody else feed into those orders or those vouchers? And if so, what is our structure of cost versus maybe the big bus people like Bluebird or Forest View or whatever it is?

Brendan Riley: John, thanks for question.

UnidentifiedAnalyst: Go ahead, Brandon.

Brendan Riley: Thanks for that question. We don’t see, that it’s necessarily price driven the demand for the vouchers, even though, we’re just in early days, especially with this federal program that’s just being rolled out now, John. So most of those aren’t even under contract yet. But I think GreenPower’s price point is highly competitive across all levels. So we expect and are planning to maintain competitive pricing and some cases a price advantage and other places, competitive pricing, but maybe a small adder in any place that I do have a higher price product available, we would sell to the, the benefits of it, saying it’s a superior product for the price. But any way we look at it, John, our position is that our products are not only competitively priced, they’re really a great value, and we believe we offer, not only a better product, but better support, better services than anybody else out there in the sectors we play in.

UnidentifiedAnalyst: That’s really good to know especially as you build out your sales program throughout the country, as these deliveries to Workhorse and others begin to flow through on a more regular basis, that will be relieving some of the need for cash, which you’ll apply for with the ATM program a couple of months back, has that ATM program filled in the need so far. Can you tell us how much of that was, I think 20 million you were looking for?

Michael Sieffert: So, John, we showed or disclosed in our subsequent event note, so it wouldn’t have been anywhere in our press release now that I think about it, But we did disclose in our subsequent event note that we have raised a total of just over $800,000. So not a lot of shares, but there were a few days where there was decent liquidity with our stock. So we just took advantage of that. And the price of the average prices are around where we were trading yesterday.

UnidentifiedAnalyst: As we go forward with the deliveries, I expect that there ought to be an emergence of interest in the stock because you should be having higher prices presumed in the future. I would think that would bring about an interest in securing the current level of the stock. Are the Roth people empowered to bring their clients to the table, or is that totally a random thing of people go by the window?

Michael Sieffert: Well, it certainly opens up that opportunity where if, without it a party especially an institutional holder that is interested in acquiring a position, they’re at the whim of the marketplace, whereas now they have a tool or a mechanism and where they can work on that. So yes, it does open up those opportunities and as we’ve said for years, we’re always keen on getting strategies involved with us because then they can help you in a whole lot more than just the capital infusion.

UnidentifiedAnalyst: Well, I would, I would think that with the deliveries you’re about to be making that your cash squeeze should be alleviated pretty well. Is that right?

Michael Sieffert: Well, with deliveries that we have available to us that is our primary release, no question, but yes, with just the overall increase and specific delivery dates for those because that’s part of getting, it’s one thing to have the order, it’s another thing to ensure they have the infrastructure in place, the chargings ready to go, the funding check can be cut, all those things have, are part of when we talk about delivery. So having more of those and having more definitive delivery dates is only going to ease our — ease the cash flow.

UnidentifiedAnalyst: Okay. Are in view of the problems stated worldwide about the difficulty of getting supplies, are the prices fixed on the needs for your various parts? Are you subject to the whims of the market in that regard?

Michael Sieffert: John, I think we’re all subject to market conditions every industry and every sector. So yes, we are, but we really expected the prices to stabilize and even come back, which is what we are seeing right now, is that there is less pricing pressure on many and even shipping costs and all kinds of different things. So, we keep our eyes on it and we do want to make sure that we do have — that we do maintain our gross profit margin our target gross profit margin. But right now, we don’t see any reason to drastically raise prices or change our strategy in the short term as we’re seeing things starting to stabilize again.

UnidentifiedAnalyst: Very good. Well, though the roadmap is available, all we have to do is get in the vehicle. Good, good going.

Michael Sieffert: Well put, well put. Thank you, John.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Fraser Atkinson for closing remarks.

Fraser Atkinson: We appreciate your support. We have an outstanding team at GreenPower, a great suite of products, and we’re focused on high growth market sectors. We’ve been very encouraged to see increased engagement with investors and reengagement with past investors recently who really like what we are doing. Thanks for taking the time today to listen to our earnings call, and as always, Michael, Brennan and I are available post earnings call if you have any additional questions or if you would like any additional information on what GreenPower is doing. Thanks for your time and all the best

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.