Investor Presentation - October 23, 2017 TSX-V: BUS | OTC Pink: GWTNF
Forward Looking Statements This presentation contains ''forward-looking statements'', which reflect the expectations of management regarding Grande West Transportation Group Inc.’s (the “Company”) future growth, results of operations, performance and business prospects and opportunities. The words ''believes'', ''anticipates'', ''plans'', ''expects'', ''intends'', ''projects'', ''estimates'' and similar expressions are intended to identify forward-looking statements. These forward-looking statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this presentation. Such forward-looking statements are based on a number of material factors and assumptions, including, but not limited in any manner to the availability of sufficient working capital to market the Company's products and provide after-sales maintenance and support services to the Company's customers, access to adequate services and supplies to operate the Company's business, economic conditions, commodity prices, foreign currency exchange rates, interest rates, access to capital and debt markets and associated costs of funds, availability of a qualified work force, and the ultimate ability to develop, manufacture and sell the Company's products on economically favourable terms. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under ''Risk Factors'' in the Company prospectus dated November 27, 2013 and which will be detailed from time to time in the Company’s interim and annual financial statements and management’s discussion and analysis of those statements, all of which are or will be available for review on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual performance to differ materially from that described in forward-looking statements there may be other factors that cause its performance not to be as anticipated. These forward-looking statements relate only to events or information as of the date on which the statements are made. The Company neither intends nor assumes any obligation to update these forward-looking statements or information to reflect changes in assumptions or circumstances other than required by law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those currently anticipated. Accordingly, readers should not place undue reliance on forward-looking statements. Disclaimer This presentation does not form part of any offer of securities, or constitute a solicitation of any offer to purchase or subscribe for securities. The sole purpose of this presentation, in paper or electronic form, is strictly for information. TSX-V:BUS OTC:GWTNF | www.grandewest.com 2
Executive Overview Grande West Transportation is a Canadian-based company which designs, engineers and manufactures mid- size, multi-purpose transit vehicles for sale to public and private enterprises in Canada and the US. TSX-V:BUS OTC:GWTNF | www.grandewest.com 3
Corporate Timeline • CNG and EV Option • US Customers • Buy America Compliant + US Assembly • Profitable Operations • Vicinity 30’ Option • $100M Backlog • First BC Transit Order (15) • Medium-Duty Vehicle Designed • Grande West Founded • Strategic Partners with BC Transit • Vicinity 27.5’ Born • Manufacturing Agreement w Weichai • Vicinity Marketing • Altoona Best in Class • CMVSS Certified • Large multi-year contracts • Vicinity Prototypes Delivered • Vicinity 35’ Option • VP Sales, JM Landry Hired • Growth in east coast sales • FMVSS Certified Brought a superior product to market in only 5 years, at a price that sells TSX-V:BUS OTC:GWTNF | www.grandewest.com 4
Key Points to Know • We make transit vehicles and are completely focused on ‘mid-sized’ units (35’ and under) • Our Heavy Duty Vicinity is “Best-in-Class” - FTA Altoona testing confirmed we engineered, designed and built the best bus • Lowest Cost Producer - Demonstrated in competitive bids. Best bus for the Best Value • New Trend in the market is transitioning to a ridership-based model and “Right-Sizing” - Think Southwest Air • We delivered our first fleet of 15 buses to BC Transit in 2013 , delivered 36 in 2016 and targeting 200 buses in 2017 • Backlog is over 354 buses, over $131 million CAD • Large pipeline of bids in the US and Canada, Buy America Assembly • We are Innovators - released three sizes of Vicinity with Clean Diesel, CNG and EV in two years, medium-duty designed TSX-V:BUS OTC:GWTNF | www.grandewest.com 5
Vicinity’s Position in the Bus Market Cutaway Bus Traditional 40’ bus VICINITY or modified to 30’ or 35’ • Very Costly to Operate in HD ops • Monocoque Frame • Lower Capital Costs • 33% Higher Fuel Costs • 5 year life cycle • Big Bus Technology • Right-Sizing fleets • 30-40% Higher Capital Cost • Poor Access • Compact Platform • Clean Diesel or CNG Powered • Higher Maintenance Costs • Built on a Light Duty Truck Chassis • Lower Operating Costs • Altoona Rated ‘Best-in-Class’ TSX-V:BUS OTC:GWTNF | www.grandewest.com 7
Product Line Strategy - Medium Duty We developed a monocoque body, rear engine, medium-duty multi-purpose transit vehicle positioned to compete with cutaways in the 22’-28’ space. We are finalizing design with customer input for sales and deliveries in 2018. This unique vehicle, powered by a GM gas engine and Allison transmission, will offer the same serviceability, maintainability and reliability typically found in transit vehicles with similar powertrains. We consider this action to define a new category: “Crossover” . The Crossover is a complete design option to the long unchanged, standard cutaway design. Our intention is to dominate this new category with what we believe to be a complete “game-changer” in the North American medium-duty market. Crossover Vehicle New Category Cutaway Bus VICINITY Conventional 40’ TSX-V:BUS OTC:GWTNF | www.grandewest.com 8
Bus Market in North America - Summary Canada: Approximately 18,000 public transit agency buses US: Approximately 120,000 buses - 60,000 public transit / 60,000 private transit Bus lifecycle is usually 10-12 years: ~1,800 in Canada , and ~12,000 in the US every year Public transit agencies are growing Historically the market has consisted of 40’ workhorse commuter buses and “cutaways” Competition: New Flyer (NFI.T), Rev Group (REVG), Nova (Volvo), Gillig (Private) and cutaway providers New Flyer discontinued mid-size activities, El Dorado stopped bidding the Canadian market Pursuing a market of ~14,000 buses on a yearly basis with a goal of selling 1,500 at full run TSX-V:BUS OTC:GWTNF | www.grandewest.com 9
Business Model Grande West is positioned within a changing transit bus business model. The Right-Sizing concept , successfully applied by Southwest Airlines to change the airline business model, is being adapted by bus transit for many of the same reasons. In a comparison look, Grande West is supplying mid-size buses in much the same way that SouthWest and WestJet Airlines’ model demanded mid-size planes. Grande West has a considerable fi rst mover advantage as the major bus manufacturers failed to recognize the trend. With a bus transit model that is moving towards Right-Sizing , Grande West is well positioned to satisfy demand and, with “Best-in-Class” designation, is capturing and dominating the mid-size bus market. TSX-V:BUS OTC:GWTNF | www.grandewest.com 10
Right-Sizing Trend ”Increasingly, transit systems are recognizing that the 40-foot bus is not a one-size- fi ts-all vehicle. It is excellent for high volume routes, but is big and unwieldy in residential neighbourhoods and presents a wasteful image when operating with few passengers. More and more systems are also realizing that service frequency builds ridership better than spatial coverage. In other words, more frequent service with smaller buses is far more attractive than less frequent service with larger ones. Smaller buses are perfect for this type of strategy and more and more systems are looking seriously at “Right-Sizing” their fl eet by introducing smaller buses for portions of their route network that do not warrant 40-foot buses.” - Michael Roschlau, Grande West Strategic Advisor, former CEO of Canadian Urban Transit Association “We are committed to creating more e ffi cient transportation options for our customers. That means building a more highly layered, customized service model. These new Vicinity vehicles allow our bus operators to travel safely into neighbourhoods where our standard fl eet could not easily navigate while o ff ering more space than our current Mobility bus options .” - Keith Parker, GM and CEO of Metropolitan Atlanta Rapid Transit Authority (MARTA) TSX-V:BUS OTC:GWTNF | www.grandewest.com 11
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