Revenue more than doubles in the second quarter compared to preceding quarter as the Company reports $4.1 million in revenue from 145 vehicle deliveries
Production materially ramps up with 178 vehicles manufactured during the second quarter of 2023
Successfully closed the convertible bond issuance of $46.8 million under the previously announced private placement
Launched OrcaTM Performance following the close of the second quarter on August 9, 2023
MONTREAL, Aug. 14, 2023 /CNW/ - Taiga Motors Corporation (TSX: TAIG) ("Taiga" or the "Company"), a leading electric off-road vehicle manufacturer, today reported its financial and operating results for the second quarter ending June 30, 2023.
Taiga reported $4.1 million from the sale of 145 vehicles during the second quarter ending June 30, 2023, showcasing revenue growth of 137% compared to the preceding first quarter of 2023. Taiga's production has seen a strong ramp-up with its 2023 NomadTM snowmobile, which was re-engineered for greater manufacturability, and in total, Taiga produced 178 snowmobiles and personal watercrafts during the second quarter of 2023. During the quarter, Taiga continued to expand its Taiga Service Provider ("TSP") network and as of June 30, 2023, Taiga's TSP network included 20 locations to provide deliveries and after-sales service across Canada and the United States. Taiga's TSP network now covers top key markets in Canada and the United States and the Company expects to continue to scale its TSP network in line with its vehicle delivery schedule in the coming months.
"The second quarter served as proof of our snowmobile platform's scalability. The 2023 Nomad was re-engineered for improved manufacturability, and we saw that yield strong throughput results in tandem with our on-going supply chain improvements." said Sam Bruneau, CEO of Taiga. "We're now on our path to resume our high throughput production with the Orca Performance in the third quarter as we get through the limited-edition Orca Carbon. We are laser-focused on building our momentum as we ramp up rapidly."
On April 27, 2023, Taiga announced that in connection with its private placement of $40.15 million aggregate principal amount of 10% secured convertible debentures due March 31, 2028, that closed on March 24, 2023, it has raised an additional $6.6 million in gross proceeds by issuing additional convertible debentures to Northern Private Capital and Investissement Québec, with each of the Investors having subscribed for $3.3 million of the additional convertible debentures. Other than the amount of the initial interest payment, the additional convertible debentures carry the same terms as the convertible debentures issued on March 24, 2023.
Second Quarter 2023 Financial Highlights (All amounts in Canadian dollars unless indicated otherwise)
Revenue of $4.1 million recorded during the second quarter of 2023, compared to $399,525 recorded in the second quarter of 2022. The 924% increase in revenue is associated with the delivery ramp up with 145 vehicles delivered in the second quarter of 2023 compared to 21 vehicles delivered in the prior year quarter.
Cost of Sales of $9.5 million recorded during the second quarter of 2023, compared to $4.2 million reported in the second quarter of 2022. The increase in Cost of Sales is associated with the increased production output.
Research & Development (R&D) expense (net of tax credits) increased to $4.3 million from $1.6 million compared to the second quarter of 2022.
General & Administration (G&A) expense increased to $5.0 million from $4.6 million compared to the second quarter of 2022.
Sales & Marketing (S&M) expense maintained at $1.2 million from $1.1 million compared to the second quarter of 2022.
Net loss before other expenses for the period increased to $15.9 million compared to $11.1 million in the second quarter of 2022.
Additions to Property and Equipment decreased to $1.5 million compared to $1.6 million in the second quarter of 2022.
Cash and cash equivalents of $26.4 million as at June 30, 2023, compared to $22.8 million as at December 31, 2022. The increase in cash and cash equivalents is due to the private placement of $40.2 million of convertible debentures closed on March 24, 2023, and an additional $6.6 million raised in connection with the aforementioned private placement which closed on April 27, 2023.
Inventory increased to $24.9 million as at June 30, 2023, compared to $20.8 million as at December 31, 2022. The increase in inventory is largely associated with parts purchased for the upcoming Orca Performance as well as higher levels of finished goods.
Second Quarter 2023 Operational Updates
Delivered 145 vehicles, including 43 personal watercrafts and 102 snowmobiles during the second quarter of 2023.
Produced 178 vehicles, including 55 personal watercrafts and 123 snowmobiles during the second quarter of 2023.
Pre-orders remained stable at 2,981 pre-ordersi during the second quarter as the company focuses on maintaining a pre-order level and sales pipeline in line with its production plan.
Initiated beta testing program with select owners to try out new features and updates, including DC Fast Charging and the Taiga mobile app.
Conducted customer demos for the Orca Carbon in Ontario, Quebec and Florida.
Expanded the TSP network with a total of 16 TSPs across 20 locations in Canada and the United States as of June 30, 2023.
Headcount at 311 full time employees at the end of the second quarter of 2023, with approximately 40% of the workforce employed in engineering.
i Pre-orders for new Taiga vehicles are cancelable and the deposit fully refundable, and there can be no assurance that such pre-orders will be converted into sales.
For 2023, Taiga is focused on three key areas of the business, which include ramping up production, establishing a world-class customer experience, and furthering our technology advantage in off-road electrification. The future of off-road is electric, and Taiga is committed to strategically investing in and manufacturing the next generation of off-road vehicles to accelerate no-compromise access to the outdoors.
While the company was able to reach targeted throughput with its 2023 Nomad snowmobile, the Orca Carbon personal watercraft continued to present unique supply issues related to a single supplier. Therefore, management is now advising its production to be at the lower end of the previous guidance of 1,700-1,900 vehicles delivered in 2023. Production continues to be weighed to the second half of 2023. See "Forward-Looking Statements" below and "Business Risks" sections of the accompanying second quarter 2023 MD&A.
Taiga management will hold a conference call today (August 14, 2023) at 9:00 a.m. Eastern time (6:00 a.m. Pacific time) to discuss these results.
Toll-Free Dial-In: +1 855-658-2585
International Dial-In: +1 514-375-0364
The conference call will be broadcast live and available for replay here and via the Investor Relations section of Taiga's website.
A telephonic replay of the conference call will be available after 12:00 p.m. Eastern time on the same day through August 21, 2023.
Toll-free replay number: +1 800-319-6413
International replay number: +1 604-638-9010
Replay ID: 0338
Taiga (TSX: TAIG) is a Canadian company reinventing the powersports landscape with breakthrough electric off-road vehicles. Through a clean-sheet engineering approach, Taiga has pushed the frontiers of electric technology to achieve extreme power-to-weight ratios and thermal specifications required to outperform comparable high-performance combustion powersports vehicles. The first models released include a lineup of electric snowmobiles and personal watercraft to deliver on a rapidly growing demand from recreational and commercial customers who are seeking better ways to explore the great outdoors without compromise. For more information, visit www.taigamotors.com.
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Such forward-looking information includes, but is not limited to, information with respect to our objectives and the strategies to achieve these objectives, the expected operations, financial results and condition of the Company, expectations regarding market trends, the Company's growth rates, the Company's future objectives and strategies to achieve those objectives, expected timelines for achieving mass production capabilities, the ramp-up of its current facility, expected deliveries, the ability to advance the Taiga Service Providers program in a measured manner and the associated manufacturing benefits in respect thereof, including increased capacity as well as information with respect to our beliefs, plans, expectations, anticipations, estimates and intentions.
This forward-looking information is identified by the use of terms and phrases such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe", and "continue", as well as the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. Forward-looking information is provided for the purposes of assisting the reader in understanding the Company and its business, operations, prospects and risks at a point in time in the context of historical and possible future developments and therefore the reader is cautioned that such information may not be appropriate for other purposes.
We draw your attention to the "Key Factors Affecting Taiga's Performance" section of the Company's management's discussion and analysis for the three and six-month periods ended June 30, 2023, and to note 2 of our consolidated financial statements which indicate the existence of material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. The Company's ability to continue as a going concern for the next twelve months involves significant judgment and is dependent on, among other things, its ability to obtain necessary financing, either through a combination of public or private equity or debt financing or other sources. On March 24, 2023, the Company successfully closed a private placement of $40.15 million aggregate principal amount of 10% convertible debentures due March 31, 2028 (the "Debentures"). An option for additional convertible debenture with the same terms was exercised and resulted in an additional $6.6 million, totalling $46.8 million in capital raised through the private placement. The entirety of the Debentures was subscribed for by two institutional investors see "Highlights of the Three-Month Period ended June 30, 2023 - Update on Financing" in the accompanying second quarter 2023 MD&A for additional details.
Management is committed to secure additional sources of funds for the Company working capital needs. While the Company has been successful in securing financing in the past and believes it will be able to obtain sufficient funds in the future and ultimately achieve profitability and positive cash flows from operations, raising additional funds is dependent on a number of factors outside the Company's control, as such there is no assurance that it will be able to do so in the future.
Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in, or implied by, such forward-looking information. These risks and uncertainties include, but are not limited to, the effective further supply chain disruptions, and the impact of such disruptions on ability to fulfil orders, pre-orders for the Company's vehicles being cancelled and those described in the Company's management's discussion and analysis for the three and six-month periods ended June 30, 2023, and under the "Risk Factors" section of the Company's annual information form filed on March 30, 2023 on the Company's SEDAR profile at sedar.com. Forward-looking statements reflect management's current beliefs, expectations and assumptions and are based on information currently available to management. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve known and unknown risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated by such statements.
All of the forward-looking information contained in this press release is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and we do not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.
SOURCE Taiga Motors Corporation
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