Greetings and welcome to the Pioneer’s 2023 Third Quarter Financial Results. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Brett Maas from Hayden IR. Thank you Mr. Maas. You may begin.

Thank you and welcome. The call today is being hosted by Nathan Mazurek, Chairman and Chief Executive Officer, and Walter Michalec, Chief Financial Officer. Following this discussion, there will be a formal Q&A session over the participants on the call. We appreciate the opportunity to review the third quarter financial results and discuss recent business highlights. Before we get started, let me remind you this call is being recorded and webcast. During the call, management may make forward-looking statements. These statements will be 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 morning and thank you all for joining us today. We also have Geo Murickan, President of Pioneer's eMobility business, essentially our eBoost business, on the call as well. The quarter's financial results included a doubling of revenue and strong profitability, demonstrating the value of Pioneer's products and services, as well as a reflection of the underlying strength of our target markets. Revenue of $12.4 million for the third quarter is a record, since divesting our Transformer business in 2019. Higher sales, lower input costs, and a favorable product mix drove net earnings to $0.10 a share, up from a loss of $0.13 a share a year ago in the third quarter of 2022. We expect to achieve our full-year revenue guidance as well as positive net income for the full year 2023. We also expect to enter 2024 with accelerating momentum and a record backlog and plan to announce more formal guidance for 2024 early in the New Year. Our outdoor compact E-Bloc power solution for the distributed generation market and our e-Boost high-speed mobile electric charging suite of products continue to penetrate new markets and gain additional traction in currently served markets. First, E-Bloc continues to benefit from the rapid growth of the distributed generation market. Raw demand for electricity continues to grow, and the grid's ability to satisfy this growth continues to decline. The result is accelerating power usage, higher power costs, and reduced reliability and supply of power. The E-Bloc product platform at its core integrates an automatic transfer switch, circuit protection scheme, and programmable controls into a compact outdoor unit. This allows the user to protect and control two or more sources of power concurrently, potentially even in parallel, located in one unitized piece of equipment. This limits the user's installation cost, avoids expensive and disruptive indoor upgrades, and directs them to one point of responsibility for the seamless flow of power. To date, Pioneer has provided E-Bloc solutions to a multitude of Fortune 500 companies across verticals such as retail, data centers, electric vehicle charging stations, automotive, and aerospace. In addition, Pioneer has provided dozens of E-Bloc units to electric and water utilities as they supplement their operations with alternative sources of power. These long-term trends will continue to support our growth for the next three to five years with clear annual visibility. Next, our second major product growth driver is e-Boost, which provides mobile high-speed electric charging. We deliver this mobility by truck, skid, trailer, or pod-type physical platform. To date, we have provided units ranging from 30 kilowatts to 400 kilowatts with up to four power dispensers per unit. We believe our recent commercial successes, for example, the City of Fairfield, California, to support their municipal fleet of electric buses, or a Big Three automaker to support the rollout of their autonomous taxi business, foreshadows a massive energy transition market intended to be implemented over a long period of time. Customers who ordered single units early on in our commercialization have already placed follow-on orders. Additionally, the market for e-Boost keeps expanding. Municipalities are electrifying street sweepers, garbage trucks, police, and fire vehicles. Airlines are going electric, transitioning their ground service equipment to all-electric, and mining and construction companies are demanding electric options for the equipment they use as well. All these users require mobile, powerful, rapid, non-grid connected charging solutions, and e-Boost is perfectly positioned to support these electric transitions. Year-to-date, e-Boost has charged over 12,000 vehicles and provided more than 200 megawatts of charging to electric vehicles. Additionally, at a major East Coast airport authority, they have been charging an average of three electric buses/cars a day for the last nine months. As the revenue and backlog for e-Boost continues to grow, it is clear that e-Boost has come a long way from the truck-mounted prototype we unveiled exactly 24 months ago. E-Boost is no longer a concept, but rather a proven solution for a growing need. All this positive momentum will carry us into 2024, and more specifically, we fully expect to quadruple e-Boost revenue in 2024. With that, let me turn the call over to Walter, our CFO, to discuss our financial results.

Thank you, Nathan, and good morning everyone. Pioneer's revenue during the third quarter was a record since divesting its transformer business in August of 2019. Third quarter revenues were $12.4 million, up $6.2 million or 99% when compared to the same period of last year. Revenue from the T&D solution segment, which manufactures our E-Bloc power systems and related equipment, increased 156% to $9.7 million. And revenue from the critical power segment, which manufactures our mobile high-speed electric charging solution, e-Boost, was up nearly 13% to $2.8 million in the comparable period. Gross profit for the third quarter was $3.7 million or nearly 30% of revenues compared to a gross profit of $861,000 or approximately 14% of revenues during the third quarter of last year. This significant improvement to gross profit was primarily due to the increase in sales of our E-Bloc power systems and related equipment, lower input costs, and improved productivity. Total operating expenses or SG&A overhead was $2.7 million or 22% of revenues during the third quarter of this year, an increase of 20% when compared to $2.3 million in the year-ago quarter. It's important to note that SG&A expense includes approximately $600,000 in incremental investments in sales, marketing, product development, and personnel expense for our e-Boost solution, a drag of about $0.06 per share on EPS. This is intentional and targeted spending designed to drive demand for this new solution. We expect these investments to continue through the remainder of the year as we build and scale this new business line. Finally, higher wage costs including salaries, benefits, and stock-based compensation caused SG&A expense to increase during the third quarter of this year when compared to the same period of last year. Operating income for the third quarter of this year was $953,000, a positive swing of nearly $2.4 million when compared to an operating loss of $1.4 million during the third quarter of last year. Our T&D solution segment, which manufactures E-Bloc, is delivering consistent positive operating income to the tune of $2.7 million during the third quarter of this year, an increase of $2.5 million when compared to the third quarter of last year. Net income for the third quarter of 2023 was over $1 million or $0.10 per basic and diluted share compared to a net loss of $1.3 million or negative $0.13 per basic and diluted share during the third quarter of 2022, a $2.3 million increase to the bottom line or $0.23 per basic and diluted share in comparable periods. Excluding non-cash stock-based compensation expense of approximately $285,000, net income for basic and diluted share during the third quarter of this year was $0.13. Looking briefly at the year-to-date results, total revenue during the first nine months of the year was $33.1 million, an increase of approximately $15.6 million or 89% when compared to $17.5 million during the first nine months of last year. Revenue from the T&D solution segment increased approximately 145% and revenue from the critical power segment increased approximately 14% in the comparable periods. Gross profit for the first nine months of the year was $8.6 million or 26% of revenues compared to a gross profit of $1.8 million or 15.5% of revenues during the first nine months of last year. We generated net income of $827,000 during the first nine months of 2023. That's a positive swing of $5.4 million or $0.54 for basic and diluted share when compared to a net loss of $4.6 million during the first nine months of 2022. Again, excluding non-cash stock-based compensation expense of $1.2 million during the first nine months of the year, Pioneer generated net income of $0.20 per basic and diluted share. Including stock-based compensation, our net income per basic and diluted share for the first nine months of the year was $0.08. This is compared to a net loss per basic and diluted share of $0.47 for the first nine months of 2022. Turning to the balance sheet, we had cash of $7.6 million and zero bank debt as of September 30, 2023, compared to $10.3 million of cash as of December 31, 2022. Our cash balance at the end of the third quarter represents cash per share of approximately $0.76. Accordingly, we are confident that we are sufficiently capitalized to address our near-term investments and cash needs. This concludes my remarks. I would like to now turn the call back over to Nathan.

Thank you, Walter. Our addressable markets are massive and almost every day, new use cases from current and potential customers emerge. The energy transition era is real and Pioneer is at the forefront of it, offering proven and competitive solutions. With that, I will now turn the call over to the operator for any questions from investors.

Thank you. The first question comes from Amit Dayal with H.C. Wainwright. Please go ahead.

Thank you. Good morning, everyone. Thank you for taking my questions.

Good morning, Amit.

The available capacity, congratulations on a strong quarter. We achieved $12.1 million last quarter and $12.4 million this quarter. Does this suggest that you might be able to sustain these revenue levels?

You know the guidance we provided for the remainder of the year. I think it will fall in the $9 to $12 million range. It really depends on various factors since we are not far enough into the quarter yet. It depends on which customers are making orders and some adjustments we are constantly making, especially with electrical utilities. However, that's a reasonable estimate. We have not released guidance for 2024 yet. I believe by then our fourth quarter will be completed, and we'll also be looking ahead to the entire year in early 2024, giving us a clearer perspective. Since we are still a small company, one or two contracts over $2 million can significantly impact our results, whether they slip or accelerate. In short, I wouldn’t place too much emphasis on this. We always strive to provide our best estimate on an annual basis, but the quarterly results may still show some variability.

Understood. I appreciate that. And on the e-Boost side, Nathan, you said you potentially could quadruple revenues for this segment. Will that potentially come at the sacrifice of any E-Bloc capacity or revenues? Or is this basically on a standalone basis you could quadruple from these levels on the e-Boost side?

Yes, good question. The e-Boost is produced in our Minneapolis facility, and it can be done without needing additional space or capital investment, which should take us to our maximum capacity for calendar 2024. As we move through 2024, we are exploring our options for the period following that. However, this does not impact the E-Bloc business. By the end of this year, the E-Bloc business, including its related products from our Los Angeles facility, is expected to ship around $35 million, nearly reaching full capacity. We often receive inquiries about our plans for 2024, and we are actively subcontracting some of our lower-value processes, such as basic sheet metal work, to optimize the use of our facility and personnel for engineering, wiring, assembly, and testing of E-Bloc products.

Understood. Okay. Thank you. And there's this last one, again, on maybe the e-Boost side. These customers and folks who are coming back to you for repeat orders, is there a larger runway within these existing customers before you even need to maybe find new buyers for these products?

Yes. I mean, again, we're going to do more formal guidance at the beginning of 2024. But on the e-Boost side, it's really from three big buckets. It's customers that are repeating. And those are typically truck and electric bus manufacturers. They have a long way to go. Their runways are very large. You're talking about with most of the ones that we deal with, they'll have anywhere upwards 100 to 250 dealers around the United States and Canada. So there's a long way to go with units just with them. It's coming from new use cases that we really don't anticipate. That's the other bucket, whether it be an electrical utility that's got the rural remote issues and they're being tasked with charging or in the case that we've announced earlier, VinFast that's bringing in thousands and thousands of vehicles from Vietnam and need mobile charging at the various ports that they bring them in. We started with them in the port of San Francisco. It's moved to the port of Los Angeles. They expect to be bringing in material into the port of Jacksonville and other ports as well and continue to love and need the solution. And then it really comes from fleets, fleet management companies to a large extent. And they made orders of initial sizes and so forth of what they thought. And that's getting traction among the fleets that they are managing or hoping to manage. So that's also a long runway for follow on orders.

Thank you, Nathan. That's all I have. I'll get back in queue.

Okay. Pleasure, Amit.

Thank you. The next question comes from Manish. Please go ahead.

Hey, I'm sorry I jumped on a little late. Maybe you already addressed it, but back to the guidance for the rest of the year. I think you touched on the revenue side, but I believe the way the guidance is given, EPS could still be a loss for Q4. Is that what you're expecting or do we expect to be positive on the EPS side?

Right. So the short answer is we expect it to be positive. How positive? I really don't know until the revenue and the mix plays itself out. And of course you are technically correct. We guided toward positive EPS for the year. So theoretically at this point we could lose $0.07 and still be positive for the year, which is a great position to be in. But thank you for bringing this up and teasing this out. We don't have any intention of being negative in the fourth quarter.

Okay. All right. Thank you. And with your 2024 guidance that you talked about, will you be giving EPS guidance when you guys give out?

That's the plan, yes.

Okay. All right. Thank you very much.

You're very welcome.

Thank you. The next question comes from Scott Louis with Semple Capital. Please go ahead.

Thanks for taking the call. Great quarter.

Sure Scott. Thank you Scott.

I have a question on the gross margins. 29% was terrific. And I think it’s the best you've ever done. Is that number sustainable going forward?

That's a great question, Scott. It's definitely something, once we've tasted it, we don't want to move backwards. We shoot for 25. That's how we base a lot of the analysis and guidance going forward for 2025. But we definitely see that we have the ability to stretch in certain cases. It's really going to depend on the continued spend, on the e-Boost and when e-Boost stops being a drag on earnings and breaks even and then hopefully, be a contributor. So that's the long-winded answer to your question.

Okay. Well, that's a good segue into my next question. At what point do you expect e-Boost to stop being a drag and start to contribute? Can you give us some color on the timeline?

Yes. So I think it should stop being a drag is what's a drag. But I think it should mitigate a lot of the loss and the spend somewhere in the second quarter of 2024 and start contributing in the second half of the year. I think the first quarter will be some advance in that area, not enough to say that it's close to breakeven until a little bit later.

And then my last question is, after the Q2 call, you called out water utilities and data centers as highlights of your end markets. And can you comment on your end market growth that you saw in the Q3 and how those two end markets specifically did, and then any surprises to the upside or the negative side?

Yes, I mean, it's only to the positive side. They continue to, I probably didn't do a good job in the comments I made earlier, but at this point, we're across so many verticals. When we call them out, then everybody's thinking, okay, what about this one, that one, and so forth. It's everywhere. Data continues to be strong. EV charging stations are super strong. Water utility that is the heart. The water utility and the large automotive project that we did were the heart of the third quarter. And we fully expect it, especially on the water side, we expect that to continue. That's a large, large untapped market with a customer that is ready to spend and is not sort of bound by, they have different spend considerations than a more commercial customer.

Great. Thank you very much.

You're very welcome, Scott. Can't wait to see you again soon.

Thank you. Next question comes from the line of Albert Jones with Jones Capital Management. Please go ahead.

Thanks. Very nice quarter. Quickly on the gross profit of 29.8% of revenue, I imagine that was a lot of it was going by sales mix. Can you tell me if the sales mix for the fourth quarter is trending different than the third quarter?

It's trending sort of the same. Part of it, as far as the type of product, every day we live in a dynamic human world. So how well did we execute? Did we hit the hours? Did we make a mistake on some components from a material point of view? So I don't have all that data. The product mix is still beneficial, is a good product mix, something I would hope overall continues through 2024 as far as product mix. But I don't have a more drilled down view on the profitability of the jobs yet. And the fourth quarter is not over.

Yes. Okay. Thanks. One more quick one as far as the revenues were quite good. Did all orders get shipped out or did any possibly move into a slight delay to being shipped fourth quarter or first quarter that you could talk about?

Yes. I mean, that's every quarter for us. So if you ask me every quarter, did things get shipped out? Did things get pushed out? Some things get accepted and pulled in. Happens all the time. So I'm not sure where you want to go with it. That's the nature of the business. The quarter customers, especially the larger one, not interested, that September 30th is the end of our quarter or whatever that means. So I'm not sure what you're trying to uncover.

Just, well, the talk on the macro side of some of the U.S. car companies are making delays to their orders on the EV side because of the slow uptake supposedly. You hear this every day on the business news. So my question was kind of related to that, as far as a macro thing, on that side.

I understand your question better now. We're not seeing any slowdown in our space or in the markets we're targeting. That doesn't mean it won't happen or that we're immune to current events. Even with orders from the autonomous vehicle division of a certain automaker, despite reports of challenges in that sector, they have reached out to confirm that we are moving forward without hesitation. They have invested significantly in these businesses and are committed to maximizing their efforts over the next several years.

Hey thanks for clearing that up for me. I appreciate it. One quick one in prepared remarks you mentioned some larger solutions I know you had a huge install in Las Vegas that you've talked about in the past as far as that goes. Are we talking even larger or something on that size scale? What are the newer customers talking about as far as larger solutions from you?

I'm not certain about the specifics in Las Vegas; I don't recall anything particular. We have shipped a couple of jobs there, but I can't pinpoint exactly what you mean. The order mix has been improving, particularly on the E-Bloc side, with ticket sizes and projects becoming progressively larger. We previously announced a significant order of $9 million from a major automotive client, which is the largest we've secured since selling the transformer business, and likely even before that. This year has been solidified by some substantial orders like that, along with many others in the $200,000 range and everything in between. I hope that clarifies things, but if you have a more specific question, feel free to ask. We anticipate similar trends in 2024, with a focus on significant projects as well as numerous smaller or repeat orders from retailers or others with multiple locations.

All right. That’s all I got. Thanks guys.

Thank you. The next question comes from Bruce Callaway with Callaway Capital. Please go ahead.

Hey congratulations on a good quarter. I'm just trying to delve into the numbers a little more. It looks like e-Boost is probably going to do about $8-ish million this year, $8 million to $10 million, and you said a quadrupling next year. So does that imply about $30 million to $40 million. And also on your capacity issues for E-Bloc. Looks like maybe $35 million to $40 million is full capacity. And how much more can you squeeze out from that plant? And I guess the demand is way more than that for next year, what do you think you could increase those sales by like 30%, 40%? And also my second question is the share count went by like 400,000, 500,000. Is that mostly compensation for the executives?

I will address the first two questions, and then I'll let Walter handle the third. You are correct about stock-based compensation and some other awards we granted to employees. To clarify on capacity, we previously mentioned that we expect to generate approximately $35 million this year from the Los Angeles facility. We are in the process of subcontracting certain lower-value processes such as metal and copper bending, which we have traditionally handled in-house. This is expected to increase capacity by more than 50%, although the exact increase is uncertain. If everything goes exceptionally well, it could be closer to 100%, but if it doesn't go as planned, it might fall slightly below 50%. We'll see how it develops in 2024, as we are just starting this transition. Regarding e-Boost, it's important to note that some sales in Critical Power are not directly related to e-Boost and include service work. We should have included e-Boost sales in our earlier remarks. This year, we expect e-Boost sales to exceed $1 million, which accounts for rental income as well. When we mention quadrupling sales, that would equate to $4 million. Although we haven't provided formal guidance, we are projecting an additional $10 million in sales next year related to e-Boost, which may clarify things for you.

All right. That’s good.

Okay, thank you Bruce.

Thank you. There are no further questions at this time. I would now like to turn the floor over to Nathan Mazurek for closing comments.

All right. Thank you all for your time and support. We look forward to updating you as we win additional projects and more formally update you on our next earnings call.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.