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Greetings and welcome to the Vicinity Motor Corp. Fourth Quarter and Full Year 2022 Corporate Update Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.
Before we begin the formal presentation, I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results and industry prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's regulatory filings for a list of associated risks, and we would also refer you to the company's website for more supporting industry information.
I would now like to hand the call over to William Trainer, Founder and Chief Executive Officer of Vicinity Motor Corp. William, the floor is yours.
Thank you, operator, and good afternoon, everyone. I'm pleased to welcome you to today's fourth quarter and full year 2022 corporate update conference call. 2022 was a transformational year, expanding our capabilities beyond our strong legacy in transit buses and into a leading commercial EV manufacturer. The fourth quarter continued our pace of evolution with new orders and partners for our VMC 1200 and Vicinity Lightning product lines and continued progress on our new Ferndale, Washington production facility.
Additional sales and distribution wins for our portfolio of electric vehicles were propelled by intense customer demand for our commercial EVs, particularly in the Class 3 segment with the Vicinity VMC 1200. New government incentives for EV adoption in the pipeline are building interest and support from enterprise customers and government agencies as fleets seek to be part of our shared electric future.
To support the working capital needs of our VMC 1200 production ramp, we recently secured an expanded USD 30 million credit facility with Royal Bank and the Export Development Bank of Canada while maintaining existing financing to support bus production. We are also in the process of certifying as a Free Trade Zone to enable us to better service the entirety of the North American market. This credit facility, paired with the installation of our power solution, receipt of our Certificate of Occupancy for our Ferndale manufacturing campus and our in-process Free Trade Zone status, puts us in a position to significantly increase our production capabilities with the onset of U.S. assembly operations in the first half of 2023.
We partnered with DSMA, a premier transaction originator and adviser in the North American automotive and heavy equipment sectors, to expand our North American dealer network for the VMC 1200. By working with DSMA, we will be able to more rapidly secure high-value dealer partnerships that will maximize our ability to deliver VMC 1200 trucks to market while ensuring the highest level of customer service and satisfaction.
New orders, including a USD 100 million purchase order for 1,000 VMC 1,200 vehicles from Pioneer Auto Group helped us grow our backlog to over USD 150 million with the vast majority of which are for electric vehicles, specifically the VMC 1200, which has rapidly become our most in-demand product. Our VMC 1200 supply chain is fairly insulated from the global supply chain disruptions that have impacted our transit bus business, which pushed the delivery of many of our bus orders into 2023. Initial VMC 200 deliveries began in November. We've delivered 18 VMC 1200 vehicles as of March 30, 2023, with 100 more vehicles currently in production.
We expect these sales to gradually ramp up to meet the immense demand we're seeing for this product line. With final electric components installed and receipt of our Certificate of Occupancy at our new Ferndale, Washington facility, we now expect Ferndale to begin to supplement our Canadian assembly capabilities in the first half of 2023. Taken as a whole, we are confident in our ability to drive significant revenue growth in 2023.
Now with that, I'll turn it over to Dan to review the financial results for the quarter and year ended December 31, 2022. Dan?
Thank you, William. Good afternoon, everyone. I will keep my portion to a condensed review of our financial results. A full breakdown is available on our regulatory filings and in the press release that crossed the wire after market close today.
Revenue in 2022 totaled $18.5 million as compared to $41.7 million in 2021. Revenue in the fourth quarter of 2022 totaled $2 million compared to $2.3 million in the fourth quarter of 2021. Gross profit in 2022 totaled $0.4 million or 2% of revenue as compared to $4.2 million or 10% of revenue in 2021. Gross profit in the fourth quarter of 2022 totaled negative $0.6 million as compared to negative $0.3 million in the fourth quarter of 2021.
Gross margins were negatively affected by product mix, the low volume of vehicles delivered and a write-down of aged bus inventory and aftermarket parts. Consistent with the rest of the automotive industry, shipping difficulties and global supply chain disruptions in the availability of certain bus components have delayed a large portion of 2022 expected deliveries. Margins beyond 2022 are expected to be more in line with historical margins realized in 2018 and 2019, with the exception of some introductory pricing for new EV products.
Cash used in operating activities in 2022 totaled $9.1 million as compared to $3.6 million in 2021. Net loss in 2022 totaled $18 million or negative $0.45 per share as compared to $7.3 million or negative $0.24 per share in 2021. Net loss in the fourth quarter of 2022 totaled $3.8 million or negative $0.09 per share compared to a loss of $4.8 million or negative $0.14 per share in the fourth quarter of 2021.
Adjusted EBITDA loss in 2022 totaled $7.4 million as compared to $2.7 million in 2021. Adjusted EBITDA loss in the fourth quarter of 2022 totaled $1.4 million as compared to $2.2 million in the fourth quarter of 2021. Cash and cash equivalents as of December 31, 2022, totaled $1.6 million as compared to $4.4 million as of December 31, 2021.
During the fourth quarter, the company fortified its balance sheet through an opportunistic use of the company's at-the-market or ATM program, generating $5.3 million in net proceeds. In addition, the company raised CAD 4 million in gross proceeds from a debenture financing announced earlier this month. Supplementing this, as Will noted, the company's credit facilities were expanded by $30 million to support VMC 1200 production. We believe we are well positioned for a high level of operational execution in 2023 with the fundamentals of our operations expected to further strengthen as we ramp up deliveries throughout the year.
I'd like to now pass it back to William to offer some closing remarks, after which we'll begin our question-and-answer session.
Thank you, Dan. Looking ahead, we are incredibly well positioned for a breakout year, expanding into the vast Class 3 commercial EV truck market. These are exciting times for Vicinity. We are funded and with an incredible product suite and strong demand. I look forward to continuing to update our investors as we build the foundation for what I believe will be a record 2023, all with the goal of creating value for our investors, our customers and our communities.
Now with that, I'd like to hand it back to the operator to begin our question-and-answer session. Operator?
[Operator Instructions] Our first question is from Poe Fratt with Alliance Global Partners.
I had a couple of questions. One is when you talked about the Ferndale plant getting fully up and running and operational and it has a CO, you had talked about it on the last call that potentially it was a -- the final solution would take another, I think, $3 million of capital. Is that still the case? And when do you think the -- that additional capital would be spent?
Poe, it's Dan here. So no. Right now, the factory is running. The lights are on. Everything is in there. We may have some additional equipment to add in the future, but it's not needed right now, and we should be able to finance that equipment through equipment financing if necessary.
Okay. And then when you look at the VMC 1200, you delivered 18. It said -- was that 18 to date? Can you sort of indicate whether you delivered any in the fourth quarter that are in the fourth quarter numbers? I haven't seen the filing yet, but I assume it's in there. But -- and then secondly, you have 100 in process. Can you just talk about sort of the queuing on that 100 and maybe give us an idea of sort of as Ferndale kicks in, what we could expect in VMC 1200 deliveries per quarter?
I'll start just -- we had 11 truck sales in Q4 of last year. We have 7 this year to date. And you're correct. We have 100 that are currently in production, and I'll let Will take the rest of it.
Yes. There's 100 in production as we speak right now. Our goal is to put some of those through the Aldergrove location here and to ramp up and really start the production down in Ferndale as quickly as we can. We're in the process right now of hiring the staffing for it. We had to wait until we got that final occupancy permit because you need to get your insurance and everything in place for it. But no, we're well in place for it. I do believe that some of our senior people are even involved next week in a job fair down in Ferndale as well. The Washington state has been really, really supportive about what we're doing down there. So it's been good.
But to summarize that, 100 are in the pipeline right now, in production pipeline. And those will be tried to get delivered as quickly as we can. We have a 1,000 backlog of trucks right now. So as we ramp up and set that -- the assembly up in Ferndale, we'll put a production schedule together. And I'm not -- I can't give you the guidance right now on how many we're going to put out for that. But we do have 1,000 in hand, and we want to see as -- get as many of those out as possible.
I guess to ask another way is that you have a backlog of USD 150 million. What should we expect of that backlog to be burned off in 2023?
I think we'll have a better idea of that as we start getting the plants up and running. Obviously, we'd like to deliver as much of that as possible, but about $100 million of that is for the trucks alone. I would expect for the bus side, most of that side would get out the door. But the truck side, hopefully, we have a better idea when we report our Q1 results exactly how much of that backlog is going to go out the door in 2023.
Okay. And then just one final one, if I may. Your 2023 capital spending, could you just give us an idea of what we should expect on the capital spending front?
Yes. I'd say the capital spending is pretty minor for 2023. Our plant is brand new. It looks amazing. And I don't foresee a lot spending there. Like we discussed just a little bit earlier here, we probably will have another $1 million to $2 million that we put in down there of just equipment, but that can be financed through equipment financing.
The next question is from Robin Cornwell with Catalyst Research.
Just going back on that last comment about the delivery for the trucks in 2023, could you repeat what you said? I didn't think I quite got it all.
Sure. So for delivery for the trucks right now, as Will commented, we have 1,000 -- a backlog of 1,000 right now for the trucks -- sorry, were you looking to see how many trucks we delivered in 2022 versus 2023 already?
No. 2023. You mentioned the -- I think the quarterly flow rate that -- of the trucks. And I know you are uncertain about Ferndale later on in the year, but you had made a couple of comments as to what kind of delivery you're expecting in 2023.
Right. We actually didn't give a number there. So we said the backlog is 1,000 trucks, and that's about just over $100 million for the truck side. We will probably give some more guidance on that in our Q1 call once we get the plant up and running and we see how quickly we can ramp up to see how many of those we can get out the door in 2023.
Okay. Could I revisit the VMC-Optimal program? And what is the status of that?
So we do have some disclosure on that in our financials and MD&A. We've terminated that contract with Optimal. That's about all we can say on that right now other than what's already disclosed in our financials.
Okay. I haven't seen that. So the -- what's the prospects for the buses, for the Classic buses? I know you've got supply chain issues. Can you give us an idea of what kind of volume you might expect in 2023?
For 2023, right now, our backlog for buses is -- it's about $50 million for 2023. For -- I don't want to give you exact numbers on how many buses we're going to deliver for 2023, but we would hope to be getting all of those out the door.
And we're prepared to give stronger guidance when we get into our Q1. Once we start up the Ferndale factory, we'll be able to give a little stronger guidance.
Okay. That would be helpful. And how is the supply chain working mainly -- not for the trucks but mainly for the buses? Is it -- has it eased up? Are you getting alternate suppliers? Can you give us an idea?
Yes. Robin, it has eased up a little bit, but here we are sitting here with over 50 million of buses to get out the door. It's been challenging. I'm not going to lie about that. The supply chain has not been great on the bus. We do see it getting better, but there's still been some challenges there. Having said that, the challenges that we've mostly had have been on the diesel and the CNG side of the buses.
The electrical side, we're not seeing as much problems with it. We have had one supplier that has been probably our greatest issue, and we're actually moving to a different supplier in that category. I just don't want to say it online who it is. But most of the bus manufacturers on the OEMs have had the same sort of difficulty. But we see the future really being in the electric side of the -- even on the buses. We're seeing less and less tenders come out for diesel buses. We've got a backlog of these ones we need to get out, and we really see a path forward to, I would say -- we're to get all of those buses delivered this year.
And then we're seeing a lot more interest in electric size on it, particularly the airport shuttles. Airport industry has been extremely good for us. We've got -- this has been in our past news releases. We have buses -- electric buses we're delivering out on the Canadian side to a small Toronto regional airport there. And we've got quite a few that are going into Hawaii into the airport. And then we've got other ones that I can't speak of right now that we're working on that are all kind of airport related.
But having said that, we do expect the transit industry -- I think the transit industry is in waiting. We've got some large orders we got to deliver with one of the Alberta transit agencies. And I think once we can clear that, we'll get a clear path on the -- particularly on the Canadian transit side. And we have some large tenders that are still outstanding on the U.S. side as well. But they're all for the electric. I don't see a lot of diesel bus orders coming through right now or CNG bus orders. It's -- there is a transition in place. And I really think when you look at our small 30-foot bus, I think it makes better sense now than it ever has.
Ridership, that's been part of the challenge in the transit industry. The riderships are still not up to pre-pandemic levels. So when you look at it -- and there's less riders on a bus. It just makes better sense rather than run a 40-foot bus to run one of our smaller 30-foots. And we're seeing an awful lot of interest there. And I think that should break loose as soon as we start this delivery pattern that we have in place right now.
Okay. And my last question is on the margin. You mentioned that the margins would be moving more towards historical levels. Is that the same for the truck versus -- because the truck is new, and would the truck be producing similar margins to your historical?
Yes. Actually, when we look on the EV side, and I think this is not just us, this is all of our competitors as well, the margins are considerably better on all EV products, and particularly our small truck. We're quite pleased with that truck. We originally built that truck to supplement some of the fluctuations we had in the transit business. But it's -- as far as I'm concerned or knowledgeable, it's -- that's the first truck that's available in that class size. So it's got just a tremendous amount of interest right now.
This concludes our question-and-answer session. I'd now like to turn the call back over to Mr. William Trainer for his closing remarks.
Thank you, operator. I'd like to thank each of you for joining our earnings conference call today. We look forward to continuing to update you on ongoing progress and growth. If we were unable to answer any of your questions, please reach out to our IR firm, the MZ Group, who would be more than happy to assist you. Thank you all.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.