- Production more than doubles sequentially with 365 vehicles
manufactured during the third quarter of 2023
- Revenue continues to grow as Company begins scaling
deliveries with $4.2 million in
revenue from 147 vehicle deliveries
- Launched OrcaTM Performance allowing Taiga to
scale manufacturing meaningfully and achieving an important
milestone of producing more than 50 vehicles a week
- Entered into a $15 million
Secured Term Loan Agreement with Export Development Canada
- Reached 1,000th vehicle production milestone in
November 2023
MONTREAL, Nov. 13,
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 third quarter ending
September 30, 2023.
Management Commentary
Taiga reported $4.2 million from
the sale of 147 vehicles during the third quarter ending
September 30, 2023, showcasing
revenue growth of 222% compared to the third quarter of 2022.
Taiga's production experienced a significant ramp up with the
introduction of the Orca Performance model which was engineered for
manufacturing efficiency, utilizing a sheet moulding composite for
high volume manufacturing and a sixth generation tractive unit with
greater part integration. As a result, Taiga has been able to
double its quarterly manufacturing capabilities and produced 365
Orca personal watercrafts during the third quarter while achieving
the 50 vehicles per week milestone.
During the quarter, Taiga continued to expand its Taiga Service
Provider ("TSP") network and as of September
30, 2023, Taiga's TSP network included 31 locations to
provide deliveries and after-sales service across Canada and the
United States. Taiga initiated deliveries in California, which results in the TSP network
now covering top key boating and EV markets in Canada and the
United States. The Company is now focusing on scaling its
TSP network and driving sales. Along with expanding the TSP
network, Taiga is also working on improving its production schedule
to better align with seasonal consumer retail timings. As such, the
NomadTM snowmobile is expected to begin its production
run imminently for the upcoming 2023/2024 winter season.
"The third quarter was another step towards establishing Taiga
as a leader in powersport electrification. We launched the Orca
Performance and with it, we were able to ramp up our production to
double the prior quarterly throughput. The Orca Performance
personal watercraft was designed for scalability in order for Taiga
to leap forward in mass-market powersport electrification and drive
mass adoption at a competitive price," said Sam Bruneau, CEO of Taiga. "The next phase for
us at Taiga is to continue to build on our production momentum and
I'm excited to announce that we produced our historic
1,000th offroad EV in November
2023. We're also working hard to improve our supply chain,
ramp up our TSP network and invest in marketing as we further grow
our brand."
On September 29, 2023, Taiga
closed a $15 million Secured Term
Loan Agreement with Export Development Canada ("EDC"). The Term
Loan provides Taiga with additional liquidity and flexibility in
managing its working capital. The Term Loan bears interest on the
drawn funds at the annual rate of the prevailing Canadian prime
rate plus 5.00%, provides for multiple advances over a nine-month
drawdown period and matures on February 10,
2028.
Third Quarter 2023 Financial Highlights (All amounts
in Canadian dollars unless indicated otherwise)
- Revenue of $4.2 million recorded
during the third quarter of 2023, compared to $1.3 million recorded in the third quarter of
2022. The 222% increase in revenue is associated with the delivery
ramp up with 147 vehicles delivered in the third quarter of 2023
compared to 40 vehicles delivered in the prior year quarter.
- Cost of Sales of $12.1 million
recorded during the third quarter of 2023, compared to $5.7 million reported in the third quarter of
2022. The increase in Cost of Sales is associated with the
increased production output and in part by an additional
$2.1 million provision to write-down
inventories to Net Realisable Value.
- Research & Development (R&D) expense (net of tax
credits) decreased to $4.1 million
from $4.4 million compared to the
third quarter of 2022.
- General & Administration (G&A) expense decreased to
$4.7 million from $5.5 million compared to the third quarter of
2022.
- Sales & Marketing (S&M) expense increased to
$1.8 million from $1.3 million compared to the third quarter of
2022.
- Net loss for the period increased to $20.2 million compared to $15.5 million in the third quarter of 2022.
- Additions to Property and Equipment increased to $5.8 million compared to $4.5 million in the third quarter of 2022.
- Cash and cash equivalents of $5.8
million as at September 30,
2023, compared to $22.8
million as at December 31,
2022. On September 29, 2023,
Taiga closed a $15 million secured
term loan agreement with Export Development Canada to provide
additional liquidity and flexibility in managing its working
capital.
- Inventory increased to $32.0
million as at September 30,
2023, compared to $20.8
million as at December 31,
2022. The increase in inventory is largely associated with
higher levels of finished goods as well as parts purchased for the
Orca Performance build.
Third Quarter Operational Updates
- Produced 365 Orca personal watercrafts during the third quarter
of 2023. The Company is expected to begin the upcoming Nomad
snowmobile production run in November
2023.
- Delivered 147 vehicles, including 112 personal watercrafts and
35 snowmobiles during the third quarter of 2023.
- Pre-ordersi at 2,754 during the third quarter
as the Company focuses on maintaining a pre-order level and sales
pipeline in line with its production plan.
- Launched the Orca Performance, which was optimized for high
volume manufacturing and represents a leap forward in mass-market
boating electrification.
- Made initial deliveries in California, United
States. Taiga vehicles are now available in the United States' top three prominent boating
and EV adoption hubs.
- Expanded the TSP network with 9 new locations, with a total of
31 locations in Canada and
the United States as of
September 30, 2023.
- Headcount at 314 full time employees at the end of the third
quarter of 2023, with approximately 40% of the workforce employed
in engineering.
2023 Priorities
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.
Outlook
While the Company was able to reach targeted throughput with its
2023 Nomad snowmobile and 2023 Orca Performance, the Company faced
a slower than expected ramp up on its Orca Carbon and Orca
Performance models largely due to parts availability. As a result
of the delayed ramp up, the Company expects to produce
approximately 1,000 vehicles in 2023. See "Forward-Looking
Statements" below and "Business Risks" sections of the accompanying
third quarter 2023 MD&A.
Conference Call
Taiga management will hold a conference call today (November 13, 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 November 20,
2023.
Toll-free replay number: +1 800-319-6413
International replay number: +1 604-638-9010
Replay ID: 0544
About Taiga
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.
Forward-Looking
Statements
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 nine-month periods ended
September 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. Further, on September 29,
2023, the Company closed a $15
million Secured Term Loan Agreement ("Term Loan") with
Export Development Canada. See "Highlights of the Three-Month
Period ended September 30, 2023 -
Update on Financing" in the accompanying third quarter 2023
MD&A for additional details.
Management is committed to secure additional sources of funds
for the Company to achieve its business objectives. 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
nine-month periods ended September
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.
______________________________________
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i
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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.
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SOURCE Taiga Motors Corporation