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GreenPower Motors' Revenue Doubled as Electric School Bus Deliveries Began

By John Rosevear – Updated Nov 15, 2021 at 5:55PM

Key Points

  • GreenPower delivered 44 of its electric buses and vans in the quarter.
  • The company's new EV school bus has been approved for sale in California, and deliveries began in September.
  • GreenPower has filed a $200 million shelf registration, in case of future need.

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But the company's quarterly loss was wider than Wall Street had expected.

Canadian electric bus maker GreenPower Motor (GP) said on Nov. 12 that its revenue jumped 57% in the quarter that ended on Sept. 30, to $4.44 million, as it began deliveries of its new electric school bus in California.

For that quarter, which was the second quarter of GreenPower's 2022 fiscal year, the company posted a net loss of $2.74 million, or $0.12 per share. That was wider than expected: GreenPower isn't well covered on Wall Street, but the four analysts who answered Thomson Reuters' poll had expected a loss of $0.08 per share, on average. 

Highlights of GreenPower's quarterly report

GreenPower is a small-scale manufacturer of electric buses and vans, ranging from small airport shuttles and commercial vans to full-size urban buses. Over the last year, the company has shifted from a strict build-to-order business model to a system in which it maintains an inventory of vehicles that can be finished to a customer's requirements, which reduces order-to-delivery time. 

Here are the highlights of its fiscal second-quarter report: 

  • Delivered a total of 44 vehicles, of which 34 were sold and 10 were leased. 
  • Launched a new full-size battery-electric school bus, called BEAST (for "battery electric automotive school transportation"), in August, and delivered the first two examples in California. 
  • Delivered the first 10 units of its new EV Star chassis-cab vehicles. (These were the 10 leased vehicles.) 
  • Filed a $200 million "shelf prospectus," allowing it to do a secondary offering to raise additional cash if and when needed in the future. 
A GreenPower BEAST, an electric school bus, shown in the traditional yellow.

GreenPower has begun deliveries of its BEAST, an electric school bus. The BEAST was recently approved for sale in California. Image source: GreenPower Motor.

GreenPower had over 70 vehicles in inventory at the end of the quarter, and "nearly 260 [additional] units in various stages of production," per company president Brendan Riley. The company's gross profit margin fell to 21.5% in the quarter from 30.1% in the previous fiscal year, on the costs of new-model launches and the sale of several vehicles that had previously been leased.

As of Sept. 30, GreenPower had about $7.9 million in cash, as well as an additional $8 million in undrawn credit lines. That's down from $15.1 million in cash at the end of March.

What GreenPower's CEO had to say

During GreenPower's earnings call, CEO Fraser Atkinson explained the thinking behind the $200 million shelf registration:

This is not for any short-term needs, as we are well funded, as illustrated by the increase in our working capital over the last six months. This is to address long-term opportunities. For example, Ryne [VP of sales Ryne Shetterly] and the sales team may land a transformative order. The shelf allows us to access capital quickly to fund any working capital requirements.

GreenPower's working capital was $31,327,058 at the end of the quarter, up from $30,808,375 on March 31.

Looking ahead: GreenPower's outlook

GreenPower didn't provide electric vehicle investors with any specific financial guidance, aside from saying that it continues to target a 30% gross profit margin. The company did say it's working to increase production of the BEAST buses and EV Star variants, and that it expects to complete and deliver all of the remaining vehicles in its inventory.

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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