Investor Presentation October 2019 GrandeWest.com | VicinityBus.com - - PowerPoint PPT Presentation

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Investor Presentation October 2019 GrandeWest.com | VicinityBus.com - - PowerPoint PPT Presentation

Investor Presentation October 2019 GrandeWest.com | VicinityBus.com TSX-V: BUS | OTC Pink: GWTNF Forward Looking Statements This presentation contains ''forward-looking statements'', which reflect the expectations of management regarding


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TSX-V: BUS | OTC Pink: GWTNF

Investor Presentation

October 2019

GrandeWest.com | VicinityBus.com

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

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

  • ther 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

  • r electronic form, is strictly for information.

Forward Looking Statements

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Grande West Transportation is a Canadian company that designs and engineers mid-size multi-purpose transit vehicles for public and commercial enterprises. Grande West utilizes world class manufacturing partners to produce the Best-in-Class heavy-duty Vicinity bus.

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

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Company Highlights

Pure Play Business with Focused Market Niche

  • Cleansheet design approach has resulted in lower total cost of ownership vs. competitive offerings
  • Vicinity bus right-sized for key service niche to optimize operational performance
  • Outright leader in purpose-built heavy duty mid-sized bus offering in the market

Demonstrated Market Acceptance

  • Has achieved ~90% market share in core product market in Canada with growing pipeline in the U.S.
  • Established relationships with transit authorities
  • Best-in-class U.S. Federal Transit Agency (“FTA”) Altoona test results

Substantial Upside from U.S. Market Opportunity

  • Manufacturing and distribution partnerships now in place to support aggressive growth agenda
  • Buy America compliance has been achieved
  • Provides long runway for growth representing large pipeline of opportunity

Unrivaled Flexible and Scalable Operating Platform

  • Unparalleled capacity to increase or decrease production with minimal overhead cost impact
  • No minimum production level commitments
  • World class manufacturing relationships
  • Low breakeven threshold

We’re a Contract Manufacturer

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

North American Bus Industry Snapshot

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(1) NFI Group

§ Vicinity HD (Heavy Duty 12 years)

  • Direct addressable market of 1,275

units/year

  • ‘Right-Sizing’ Opportunity in HD market
  • f 6,300 – with fleet diversification

§ Vicinity LT (Medium Duty 7 years)

  • Game changing product in very large

Medium Cutaway market of over 5,000 units/year

  • Monocoque purpose built medium duty

low floor bus in the market

  • Most buses in this category are replaced

every 5 years

  • Conservative 10% market share of

medium cutaway is 500 LT buses / year Annual Demand Grande West Opportunity § North American total annual demand ~24,800 units per year(1)

BUS MARKET

Light and Meduim Duty Heavy Duty Motor Coach

Motor Coach 10 % Light and Medium Duty 65 % Heavy Duty 25 %

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

North American Bus Industry Snapshot

6 Available: Planned : Model Category Gasoline Diesel CNG Electric Vicinity 8.4m HD Vicinity 9.14m HD Vicinity 10.06m HD Vicinity 10.67m HD Vicinity LT Medium Duty 40 Ft Model 12m HD Motor Coach 10.67m Tour Bus Near-term

  • pportunity

§ Adding electrification to current product mix is underway § Last stages of design for low floor Vicinity LT product

The 12m transit bus model is the next significant product introduction

LT 10.06m Electric 12m Transit 2019 2020 2021

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Vicinity’s Market Positioning

Larger Smaller “Cutaway” Bus

  • Built on a Light Duty Truck Chassis
  • No standees
  • Costly to Operate
  • 33% Higher Fuel Costs
  • 30-40% Higher Capital Cost
  • Higher Maintenance Costs

Traditional 40’ Bus

  • r modified to 30’-35’
  • Monocoque Frame
  • Big Bus Technology
  • Compact Platform
  • Right-Sizing fleets
  • Lower Capital Costs
  • Lower Operating Costs
  • Clean Diesel or CNG Powered
  • Altoona Rated ‘Best-in-Class’

The Vicinity is the only purpose-built heavy duty mid-size bus in the market *The Vicinity LT (medium duty, 7 year bus) is now for sale, more product detail forthcoming

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Tested for Service in North America

MANUFACTURER FAILURES MPG CLASS 1 CLASS 2 CLASS 3 CLASS 4 VICINITY

7 6.02

Competitor A

34 15 5.54

Competitor B

9 15 4.43

Competitor C 29'

20 2 4.1

Competitor D

12 6

Competitor E

31 13

Competitor F 40’

12 9

Competitor G 40’

14 4 2.97

Competitor H*(**)

4.8

Competitor I**

3 1 40 19

Competitor J

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Competitor K**

32 7 4.28

* Partial test no durablity ** 10 YEAR TEST

Vicinity Scores

  • Best in Class: Fuel economy
  • Best in Class: Structural Durability
  • Best in Class: Fewest repairs required
  • only 7 minor Class 3 vs. Competitors

The US Federal Transit Authority’s (FTA) Altoona test is an internationally recognized tough testing regime, as it essentially performs 12 years and 500,000 miles of a New York City heavy duty cycle upon completion of the testing. It allows customers to measure performance and estimate life cycle costing of the vehicle.

Full test results: Vicinity Altoona Test 8

Altoona Test Results: Best-in-Class

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Business Model

  • Grande West’s Vicinity bus costs significantly less, is more maneuverable, burns less fuel and emits less

harmful emissions than a regular 40 foot transit bus

  • Unparalleled capacity to quickly increase or decrease production to meet customer demand with

minimal overhead cost impact

  • No production facility overhead cost burden
  • No minimum production level commitments
  • Ability to deliver new products to market very quickly

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Vicinity Bus Deployment - Canada

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

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§ U.S. is the growth market opportunity for Grande West § U.S. transit is ~5x larger than Canada § Marketing is under way

NY 13 units MS 7 units CO 1 unit GA 23 units MA 11 units FL 3 units Grande West Units per Region Marketing is Under Way

Vicinity Bus Deployment - USA

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Corporate Timeline

  • Grande West Founded
  • BC Transit Strategic Partnership
  • Vicinity 27.5’ Born
  • Weichai Agreement
  • CMVSS Certified
  • Vicinity Prototypes Delivered
  • Vicinity 27.5’
  • First BC Transit Order (15)
  • FMVSS Certified
  • Marketing in Canada
  • Vicinity 30’ Model
  • Altoona Best in Class
  • Large multi-year contracts
  • Vicinity 35’ Model
  • Alliance Bus Group Distribution
  • CNG Option
  • US Customers
  • Buy America + US Assembly
  • Profitable Operations Q2, Q3
  • $100M Backlog
  • $20M RBC ABL
  • $54M annual revenue

2018

  • Buy America Orders/Audit
  • Executive/Board Changes:
  • CFO, Dan Buckle
  • Direct Sales Eastern Canada
  • $70M annual revenue

2008 2016 2015 2013 2014 2019 2010 2017

  • Spartan Motors US Manufacturing
  • EV Prototype Planned
  • Medium-Duty Prototype Planned
  • U.S. sales reorganization
  • Vicinity EV Announced

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Selected Quarterly Information Q2 (June 30, 2019)

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Transition & Focus

Recent Accomplishments

  • 2017 and 2018 record revenues and deliveries
  • Strong balance sheet with $17M in working capital
  • Good operating cash flow
  • Higher margins that are trending up
  • Parts sales increasing - up 300% year over year in 2018

Important Milestones

  • Successfully completed a mock audit for Buy America compliance
  • Won U.S. public transit contracts (Georgia and Iowa)
  • Received firm orders for Buy America buses (Mississippi)
  • Went to direct sales model for Eastern Canada

Current and Future

  • Canadian and U.S. sales focus, strengthen organization
  • Vicinity LT (Crossover Vehicle) medium duty launched
  • Vicinity EV (100% electric) under development
  • Established world class manufacturing partners

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Our Partners

Spartan Motors Inc. - U.S. Manufacturing

  • Specialty vehicle manufacturing and assembly
  • Employs approximately 2,300 associates
  • Operates facilities in Michigan, Indiana,

Pennsylvania, South Carolina, Florida, Missouri, Nebraska, South Dakota, Mexico and Peru

  • Nasdaq: SPAR

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Weichai - Manufacturing Partner

  • Multi-Billion Dollar Company
  • Over 74,000 employees internationally
  • Global service, support and warranty network
  • Ships over 5,000 buses/year internationally
  • World’s largest HD engine manufacturer

Our Partners

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

USA Distributor

  • One of the largest U.S. retail bus resellers
  • National distribution agreement
  • Sales, parts and service

Our Partners

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Management and Board of Directors

William Trainer – (Founder) CEO, President and Director 30+ years of business leadership with extensive overseas import and export experience John Wang – VP Chief of Engineering Accredited Mechanical Design Engineer and previously senior mechanical, designer and project manager Dan Buckle – CFO Experienced pubic company finance executive and former PwC audit manager James White - Director

  • Mr. White has extensive experience as a corporate director for

public companies and is currently serving as Managing Partner with Baynes & White, a Toronto, Ontario based benefits and pension actuarial consulting firm. Andrew Imanse – Director Former President of Thor Industries Bus Group, grew the El Dorado bus business to $500M/year Joe Miller – Director & Chairman Global businessman with over 30 years in the construction field Christopher Strong – Director Senior executive with 30+ years experience in CEO, CFO and board roles with startups, acquisitions, IPOs, turnaround and sales. John LaGourgue – VP Corporate Development, Director 20+ years in management, sales, and capital markets

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Capital Structure (as at April 25, 2019)

Symbol TSXV: BUS / OTC Pink: GWTNF Shares Issued and Outstanding 74,470,409 Stock Options/RSU/DSU 3,980,000 Convertible Debentures 1 1,903,030 Fully Diluted 80,353,439 Insider/Founder Ownership 2 ~30%

Notes:


  • 1. Unsecured $628,000, March 2020 8% coupon, 5

year, $0.33 strike

  • 2. Includes management, directors and original

founding members

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TSX-V:BUS OTC:GWTNF

www.grandewest.com | www.vicinitybus.com

Contact

Head Office

Grande West Transportation 3168 262nd St. Aldergrove, BC V4W 2Z6 Phone: (604) 607-4000 Fax: (604) 607-4004
 Email: info@grandewest.com

Investor Contact

John LaGourgue
 VP Corporate Development Phone: (604) 607-4000 Email: IR@grandewest.com

Transfer Agent

Computershare 
 100 University Avenue, 8th Floor Toronto, ON M5J 2Y1 Phone: (416) 263-9200

Corporate Counsel

Cassels Brock & Blackwell LLP Suite 2200, 885 West Georgia St. Vancouver, BC V6C 3E8 Phone: (604) 691-6106

Auditor

PricewaterhouseCoopers LLP Suite 1400, 250 Howe Street Vancouver, BC V6C 3S7 Phone: (604) 806-7780

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