PIONEER POWER SOLUTIONS, INC. Q4 FY2023 earnings call

• Pioneer achieved over 50% revenue growth in 2023 and had full-year positive net income. • Backlog surged to $46 million at the end of 2023, a 36% sequential increase. • Introduced innovative products like E-Bloc solar microgrid and package substation. • e-Boost saw significant growth with 220 megawatt hours of mobile charging power delivered in 2023 and over $4 million in new orders. • Positive operating leverage due to revenue increase and stable fixed overhead.

In 2023, Pioneer Power's Electrical Infrastructure segment had revenue of $29.7 million, representing a 71% increase and contributing 71% to total revenue. The Critical Power segment had revenue of $11.1 million, a 16% increase and contributing 29% to total revenue. For the fourth quarter of 2023, Electrical Infrastructure revenue was $5 million (a 31% decrease) and Critical Power revenue was $2.7 million (a 23% increase).

• Full-year 2024 revenue guidance: $52 million to $54 million. • Full-year 2024 diluted EPS guidance: $0.31 to $0.34. • Anticipates investments in E-Bloc and e-Boost product platforms, sales, and marketing. • Notes some customer-directed deliveries originally scheduled for 2024 may move to 2025.

• Quarter-to-quarter volatility due to customer delivery accommodation requests. • Manufacturing capacity adjustments needed for E-Bloc, with efforts to address by shifting less value-added operations.

Q: Could you provide more color on the shift of revenue in the quarter and what drove it?

A: The timing of certain orders shifted from Q4 2023 to 2024 at customer request. Products were manufactured but delivery delayed, with some affecting Q4 2023 revenue and others scheduled for late 2024.

Q: How to break out contribution expected from E-Bloc and e-Boost in 2024?

A: E-Bloc is still ahead, but e-Boost will have outsized growth in 2024, especially with electric school bus programs driving demand.

Q: Can you talk about manufacturing capacity issues?

A: Facing a crunch on E-Bloc, but addressing it by moving less value-added operations, not expecting capacity issues to limit orders in 2024 or 2025