Good afternoon, everyone. Welcome to today's Pioneer Power 2023 Fourth Quarter and Year-End Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions. [Operator Instructions] Also, today's call is being recorded and I will be standing by if anyone should need any assistance. Now at this time, I'll turn things over to Mr. Brett Maas, Managing Partner of Hayden Investor Relations. Mr. Maas, please go ahead.

Thank you and welcome. The call today will be hosted by Nathan Mazurek, Chairman and Chief Executive Officer; Walter Michalec, Chief Financial Officer; and Geo Murickan, President and CEO of Pioneer Power eMobility. Following this discussion, there'll be a Q&A session open to participants on the call. We appreciate the opportunity to review the fourth quarter and full-year financial results as well as discuss recent business highlights. Before we get started, let me remind you this call is being recorded and webcast. During this call, management may make forward-looking statements. These statements are based on the current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary text regarding forward-looking statements contained in the earnings release issued earlier today, which applies to the content of the call. I would like to now turn the call over to Nathan Mazurek, Chairman and CEO. Nathan, please go ahead.

Thank you, Brett. Good afternoon, and thank you all for joining us today. Before I begin, please be aware that the financial results that we reported earlier today and will be discussed during this call are unaudited preliminary results. Pioneer is on the forefront of the energy transition in North America as evidenced by our Banner 2023. We delivered revenue growth of more than 50% and full-year positive net income. More importantly, we are well positioned for another year of impressive organic growth and increasing net income. Our backlog surged to $46 million as of the end of 2023, a sequential increase of 36% over the prior quarter. Our innovative new products and solutions continued to gain traction in the marketplace, and highly favorable secular tailwinds are creating an environment of supercharged demand. Indeed, 2023 was an inflection point in our business. With revenues continuing to increase and fixed overhead remaining close to constant, positive operating leverage has taken hold and going forward, we believe we will be able to sustain and increase our positive net income through calendar 2024. For 2024, we are providing guidance of full-year revenue of between $52 million and $54 million and fully diluted EPS of between $0.31 and $0.34. Importantly, we believe this guidance is conservative and anticipates measured investments in our E-Bloc and e-Boost product platforms to stay ahead of the innovation curve as well as investments in sales and marketing to increase brand and product awareness. This full-year guidance also anticipates a certain number of customer directed deliveries originally or currently scheduled for 2024 that will probably be moving into 2025. In addition, as of the end of 2023, we had approximately $14.6 million in net operating loss carry-forwards available to shelter taxable net income. While we may still experience quarter-to-quarter volatility, this volatility is most often driven by delivery accommodation requests from our customers and not Pioneer's ability to manufacture or deliver our solutions. Over the course of 2023, we had a notable list of new use cases and purchase orders for both E-Bloc and e-Boost from a diverse set of vertical markets. Demand for electric power is growing rapidly and market trends indicate this will continue for the foreseeable future. The accelerating adoption of electric vehicles, increased computing power consumption from AI proliferation and advanced technology solutions require more power than ever before, and existing utility power is becoming more expensive, less available and increasingly unreliable. Greater efficiencies are needed to get maximum power output from existing infrastructure and new distributed energy resources need to be brought online. Our products specifically support, harden and accelerate these efforts. Turning first to E-Bloc. E-Bloc is an integrated compact outdoor transfer switch scheme, circuit protection and power control system integrated, specifically designed for users of more than one source of electrical power. Customers can add additional energy sources like solar battery storage, fuel cells, natural gas engines without doing any internal upgrades to existing electrical systems, all in a compact outdoor skid mounted package. Since the initial launch of E-Bloc and its success several years ago, we have designed several additional variations that extend the E-Bloc product line and open new and larger market opportunities for Pioneer. Our solar microgrid version of E-Bloc is a smaller and more economical version of the original. We developed it specifically in response to requests from several national solar microgrid developers, and this product expansion was met with immediate purchase orders. A small portion of that initial demand was shipped at the end of 2023, and we expect the solar microgrid market to be a big growth driver for us in 2024 and indeed in 2025. –: Finally, we introduced our package substation platform, which integrates a high voltage protection system, liquid or dry type transformer and a low voltage protection system to provide users with a compact unitized indoor or outdoor substation. Installation is more economical and more expeditious compared to installing individual components from a number of disparate vendors, again, opening a new, large and growing market opportunity for Pioneer. Turning to our e-Boost mobile charging platform. As we've reiterated many times, e-Boost provides anytime anywhere EV charging and is comprised of several platforms including e-Boost Mini, a skid mounted version that provides high capacity EV charging in the smallest footprint we have available, bringing on-demand charging of electric vehicles to any location. e-Boost GOAT G.O.A.T. Generator on a Truck, a truck-mounted option that brings ultimate mobility with high capacity EV charging. e-Boost mobile, a trailer-mounted solution that balances the need for mobility and higher capacity EV charging, and finally, e-Boost POD, and mostly stationary EV charging solution with customizable higher capacity and can be moved if necessary. The first e-Boost product was conceived just a short time ago in June of 2021. We unveiled our first prototype, a truck-mounted unit a few months later in November of 2021, and shipped our first unit, a trailer-mounted unit in March of 2022. In the full-year of 2022, e-Boost delivered 7.5 megawatt hours of power over approximately 350 charging stations – sessions. In 2023, we delivered 220 megawatt hours of mobile charging power over approximately 7,500 charging sessions. In addition, in 2023, we booked more than $4 million in new e-Boost orders across diverse end markets, ranging from a major transportation agency, a major automaker, municipalities, several enterprises operating bus and truck fleets, and North American utility, a truck dealership as well as many others. We plan to deliver a record number of mobile off-grid EV charging solutions in 2024, which we expect will make a significant contribution to our revenue and operating margin. We continue to aggressively market e-Boost, and as education and awareness of e-Boost increases, orders have similarly surged. Similar to the market backdrop related to E-Bloc, the pursuit of more green alternatives and sustainability and the increasing adoption of electric vehicles by school districts and municipalities and other organizations provide a strong tailwind for continued growth in this portion of our business. Enterprises are trying to move quickly to add charging solutions for their customers, employees and fleets. As the electrification of things continues, mobile and on-demand charging will become increasingly important, and e-Boost rarely meets that demand. Before I turn the call over to Walter, our Chief Financial Officer for a more detailed discussion of our financial results, I'd like to leave you with this. 2023 was a highly successful and pivotal year for Pioneer in terms of our financial results. The solutions we brought to market and customer wins. Everyone at Pioneer is excited about the prospects and opportunities that are ahead of us and looks forward to doing their best to deliver another record year for the company in 2024. With that, I'll turn the call over to Walter.

Thank you, Nathan, and good afternoon, everyone. Pioneer's fourth quarter revenue was $7.7 million compared to $9.5 million in the year ago quarter, a decrease of about 19%. The decrease was primarily due to the timing of certain orders shifting from the fourth quarter of 2023 into calendar year 2024 per customer's requests. Had it not been for these delays, we estimate that our Q4 2023 revenue would have been approximately $12 million. Revenue from our Electrical Infrastructure segment, which manufactures our E-Bloc solution, decreased 31% to $5 million. And revenue from our Critical Power segment, which sells power generation equipment and manufactures e-Boost was up 23% to $2.7 million. Gross profit for the fourth quarter was $1.8 million or a gross margin of nearly 23% compared to gross profit of $2.8 million or 29% of revenue in the fourth quarter last year. The decrease, again, was primarily due to the shift in timing of certain orders from 2023 to 2024, which resulted in reductions to revenue and gross profit. Selling, general and administrative expenses of $2.1 million increased modestly from $2 million in the fourth quarter of last year, and are down significantly or 23% on a sequential basis from $2.8 million in the third quarter of 2023. Approximately $225,000 of the quarterly SG&A expense was related to stock-based compensation. We expect investments in our products and solutions to continue in 2024, albeit at a more moderate levels as we build and scale our business lines. We also believe there's a great amount of operating leverage in our business model, meaning, as we continue to grow, we expect a greater portion of our gross margin will fall to the bottom line and drive an increase in GAAP profitability. Loss from operations for the fourth quarter of 2023 was $1.2 million compared to operating income of $760,000 in the fourth quarter of last year. The decline, once again, was primarily related to delays in the delivery of certain orders at the request of our customers and R&D expense related to our e-Boost solutions. Net loss for the fourth quarter of 2023 was $689,000 or $0.07 per basic and diluted share compared to net income of $948,000 or $0.10 per basic and diluted share during the fourth quarter of 2022. As Nathan mentioned, we had $14.6 million in federal NOL carry-forwards as of December 31, 2023 and $11.3 million of deferred tax assets on which we are taking a full valuation allowance, sheltering a significant portion of future taxable income from federal taxes. Turning to the full-year results. For 2023 revenue was $40.8 million, up over 51% from $27 million in 2022, exceeding our guidance of at least 50% growth for the full-year. Revenue from our Electrical Infrastructure segment increased 71% for the year to $29.7 million, while revenue from our Critical Power segment increased 16% to $11.1 million. Had it not been for the customer request to delay shipments during the fourth quarter of 2023, we estimate our full-year 2023 revenue would have been approximately $45 million. Gross profit was $10.4 million or a gross margin of 25.5% compared to gross profit of $4.6 million or 17% of revenue during 2022. We expanded our gross margin due to the significant increase in sales of our products and solutions as well as improved productivity from our manufacturing facility. Loss from operations was $617,000 in 2023 compared to an operating loss of over $4 million during 2022. This is a tremendous improvement of more than $3.4 million. Net income was $138,000 or $0.01 per share. This compares to a net loss of $3.6 million or negative $0.37 per share in 2022. Turning to the balance sheet. We had cash of $7.5 million and zero bank debt at December 31, 2023, compared to $10.3 million at December 31, 2022. This represents cash per share of approximately $0.75 at December 31, 2023. We remain confident that we are sufficiently capitalized to address our near-term investments and cash needs. As Nathan mentioned, we expect to deliver continued growth in 2024 with revenue of $52 million to $54 million and positive EPS between $0.31 and $0.34 per share for the full-year. This concludes my remarks. I now turn the call back over to the operator for any questions from investors.

Thank you very much. [Operator Instructions] We'll go first this afternoon to Rob Brown of Lake Street Capital Markets.

Good afternoon.

Hey. Good afternoon, Rob.

Just want to get a little more color on the shift of revenue in the quarter. Did you have a customer – I guess you're sort of saying the requested a timing delay in shipments. But what sort of drove that? And was the product sort of manufactured and they pushed out deliveries or what happened there, I guess?

Yes. In both cases, the product was pretty much manufactured. One that just went into the first quarter that actually left this quarter. The other has been pushed out into – towards the end of 2024. Whatever the reasons are they were not ready to accept it for the contracted delivery date, whether it's other vendors. These are typically – in these two particular cases, they are complicated large projects. We're only a small piece of what's going on. And for one, it was just a couple of months that affected, of course, where we capture revenue on an annual basis, the other is somewhere deep, but we have it scheduled for late 2024 right now.

Got it. Okay. Great. And then on the demand environment overall, I guess, specifically the E-Bloc business, how are you seeing the order activity there and really what sort of areas are active at this point in terms of market verticals?

Yes. I mean the most active for us, and that's where we're seeing most of the purchase orders and – or at least a big portion of it is, is solar microgrid and a lot of charging. That's driving E-Bloc. I think that some of the other E-Bloc is also – the original E-Bloc has evolved into a very big project kind of business like we delivered this past year, large automotive project, larger EV – large water project. We see more of those shipping in 2025 and 2026 as they take a very long time now to get to come together. And yes, I mean, it's a lot of solar – it's a lot of the strip shopping centers that are being – are going solar plus battery plus or minus charging. It does make a difference really as long as they go solar plus battery. So it's everybody from Chick-fil-A, Jersey Mike's. These are the names on the POs in and out burger in places like that, that are putting that in. And then we – specifically the E-Bloc solar microgrid solution that we developed is apparently a big hit with these solar developers.

Okay. Great. And last question is on the HOMe-Boost product announcement or introduction. How do you see that demand environment? Or who are you targeting there for customers? And what's the, I guess, the opportunity that you see in launching that product?

Yes. So thank you for bringing that up. We don't have any revenue budgeted for that for 2024, so that's not in our guidance at all. And we're slowly – we're doing kind of a soft rollout of that in regions that we feel that we're a little bit stronger, that's going to go through electrical wholesalers/distributors and engine generator dealers, ultimately, their customer is the contractor. And that product is really targeting the higher-end home owner/developer, somebody that really wants a prime-rated unit that they can run their home, in a large home 100% of the time off the grid if they want, if they were an island or in parallel and at the same time, integrate to them where they're able to charge their vehicle or vehicles, electric vehicles rapidly and by using – converting the natural gas into power. So it's the larger, more expensive homeowner.

Okay. Great. Thank you.

Thank you, Rob.

Thank you. We go next to Amit Dayal at H.C. Wainwright.

Thank you. Good afternoon, everyone.

Hey. Good afternoon, Amit.

Yes. Thank you, Nathan. For the revenue outlook for 2024, how would you sort of break out contribution expected from E-Bloc and e-Boost. You said HOMe-Boost is probably not going to do so much next year. But between E-Bloc and e-Boost, 50-50 split roughly or different split?

Yes. I mean, E-Bloc is still going to be a little bit ahead. But the big surge in 2024, the outsized growth, the e-Boost will always – I mean, E-Bloc is growing and continues to grow, and we actually have – we're looking for even more kind of exponential growth in 2025. For this year, the big boost is going to come from the e-Boost product. The backlog is super strong there. And finally, especially with the programs for electric school buses in particular, and so many are finally taking delivery of electric school buses that that's a big driver for us for 2024 and 2025.

Understood. And with revenue sort of hitting the low $50 million levels in 2024 or expected to. Gross margins, where do you think gross margins would come in like closer to 30% or still in the mid-20% levels.

We target at least 25%. On the E-Bloc side, we are always being – we're always doing better. The team there is doing an amazing job from a productivity point of view. Also, as we migrate to smaller projects, the margins tend to be a little bit higher. But that being said, something between 25% and 30% is what we – we are targeting the same thing. So that's what it is.

Okay. Thank you. This HOMe-Boost product, is it a competitor to make a [Generac] offering? Or is it a different value proposition, Nathan?

Right. So it's a different value proposition. We don't pretend to compete with somebody like Generac. They have a wide product array, and they have a tremendous market share, but they are selling a backup engine, which allows it to be a little bit less expensive. What we're doing with these two differentiators. One, this is a prime-rated engine. So you're not limited by the backup generator rules of whatever they are in different localities, look different local groups have different rules, but whatever, let's say, it's a maximum of 200 hours a year or whatever it is, ours is unlimited to prime, you're paying for that efficiency in the engine. Typically, the emissions are super, super low because we're using natural gas as well. And we're integrating a high capacity or not depending on the customer's choice into it so that there's no additional installation. If it's a new home or it's somebody that doesn't have a backup generator and they don't have an electric charger – electric vehicle charger, they can get all that with one installation in one unit. And if they want to save additional money, they can even produce the power for their charger themselves from the natural gas as opposed to running it off their utility connection or not. That's completely the customer's choice. So it's a differentiated product in a very specific niche. Again, it's going to be – this is starting for us it's at 30%, we'll probably go up to 60 kilowatts. You're talking about a very large home running a lot of power.

So Nathan, then with respect to solar deployments have seen like when folks order these for their homes with respect to the subsidiaries, when you combine it with the Generac type offering as a part of that deployment, you get subsidy on the whole thing. Will this product qualify as a part of a package deployment, which includes solar plus the HOMe-Boost.

Yes. We're not offering – I mean we're not integrating the solar to this. So that's really going to be up to the contractor and the user and are they going to avail themselves to that. Is that going to help? Of course, it helps, and then there are subsidies for that. But we're just doing this simple. We're not integrating it. So we're not doing energy storage with it for the home or for anything like that. We're giving them a special unit. The fact that it's a charger integrated, there may be subsidies more or less available, whether they be federal or in other states where they're encouraging you very much to add an electric vehicle charger to your home, there may be subsidies available from the charger point of view, but we're not adding the solar.

Okay. Understood. So a contractor could work with that with the customer, but it's not coming from your side at this point.

Correct.

Okay. Understood. Okay. You indicated you may be investing in sales and marketing and other sort of CapEx needs. How much in terms of dollars, is it $3 million to $5 million or higher than that amount in terms of your investment plans for 2024?

Yes. So most of the investment is on the critical power side, almost all related to boosting the awareness and availability of e-Boost and Walter, maybe you want to just give a quick rundown what do we spend in 2023 and what we expected to spend in 2024.

Sure, yes. So on the e-Boost business, specifically the E-Mobility division there, we invested about $3 million in the business for 2023. Now for 2024, again, we don't expect the same sum there, a modest decrease to Nathan's point, again, additional investments and more personnel as we try to target other areas. And additionally, as we build out more products and units focusing on R&D work as well.

Very good. That's all I have. Thank you so much.

Thank you, Amit.

[Operator Instructions] We'll go next now to Andrew Parker of Horizon Kinetics.

Walter, just one question. I think you just addressed this, but my sense, you didn't really speak to this so far during the call, but my sense is that manufacturing capacity is one of the issues that you guys are facing. Can you talk a little bit about that?

I'll turn it over to the Chief here. He knows much better on the capacity issues.

Yes. I mean we're facing a little bit of a crunch on the E-Bloc side of the business. We've been addressing it. I guess, since I don't know, in the middle of last year, started the program to really move out some of the less value-added operations that we do. We're probably too vertically integrated in our facility near Los Angeles. And that's what we're in the middle of. We're trying to do it without spending. I mean anybody could go and say, okay, I need a new – my order book is growing, blah, blah, I need another facility, I need more equipment. I need this. I need that. So we're trying to be more judicious. We're trying to concentrate on what we're getting paid for, which is unique engineering and unique design and complicated wiring being able to do complicated wiring of controls and components and things like that and not really – we're not really compensated for making a 90-inch door. That's how we're addressing it. We don't think that we're going to have a capacity issue. Although we're shifting this year. So it's a little bit of a consolidation for us, a little bit – a little hatewire, but we don't expect to have any – we're not turning down anything because of capacity this year or we don't anticipate any issues next year either.

All right. Thank you, Nathan.

You're welcome, Andrew.

[Operator Instructions] And gentlemen, it appears we have no further questions this afternoon. So that will bring us to the conclusion of today's call. We'd like to thank everyone for joining the Pioneer Power 2023 fourth quarter and year-end financial results conference call. We wish you all a great evening. Have a good day. Goodbye.

Thank you.

Thank you, Bob.