By Venture Recon
Posted on November 12, 2016
I hope you find this Interview helpful towards your research and efforts of staying informed with your investments.
On October 28th I toured Grande West Transportation (TSXV:BUS / OTC:GWTNF) and shared my thoughts on the company with all of you (Read it here).
This week, I reached out to William Trainer, CEO of Grande West Transportation, and we conducted a short email interview, exclusive to VentureRecon.com.
Grande West has already taken the Canadian Transit market by surprise, and I am very interested to see how things progress into the US Market. I hope you find this Interview helpful towards your research and efforts of staying informed with your investments.
Disclosure: I am a shareholder of Grande West Transportation (TSXV:BUS / OTC:GWTNF)
Will, can you tell us about your background and any previous experience you have had that relates to your role at Grand West transportation?
My background is in heavy construction machinery, custom engineered products and industrial production. I have been importing and exporting from Asia for about 30 years and I previously owned heavy machinery dealerships in Western Canada. Coming from the heavy machinery background, quality, support, and service were the keys to success and this really translates well to the transit market.
On the U.S.A. election day, it was great to see a news release where Grande West secured its first US customer. Will, can you tell us what significance this press release means for your company, and tell us about your strategy on penetrating the US market?
We are very excited to see the sales pipeline begin to ramp up in the US. Having the Atlanta International Airport as a customer, which is also operated by Standard Parking, is a major development for our company and the US strategy. We really needed the Altoona Test results and had to get a few demo buses to Alliance Bus Group (ABG), our exclusive US distributor, for them to really market the bus effectively. Now that the Altoona Test recently verified the Vicinity as best in class in many categories and ABG has demo buses, we are expecting significant growth in the US.
The US market is broken into two segments: Public, and Private sector.
- The private sector consists of customers such as the Atlanta Airport, parking operations or theme parks where the Vicinity is used as a shuttle bus. We are currently selling into the private sector and expect to continue to win new business.
- To sell to the Public sector transit, we need to be “Buy America certified” which requires three things:
- The Altoona Test
- 60% US product content
- a US manufacturing facility for assembly.
We meet the first two requirements, and we’re working diligently on the last.
We expect to have the certification soon and should be selling to transit next year.
It appears to me that in Canada, Grande West has taken a large portion of the market share. Would you agree with this statement, and can you comment on what percentage of tenders your company has been awarded?
We are very pleased with our Canadian presence and I am so proud of our team on what’s been accomplished here. We have not lost a competitive tender to date and we’re in most provinces across the country.
Your product can be considered to be up to 50% cheaper than competitors. Are there other reasons clients have chosen Grande West besides product cost savings?
It’s an interesting question, and the answer is probably more about the Vicinity’s value to operators and providing the right fit for the transit industry. Traditionally, transit operators had pretty much two options; a 40 foot heavy-duty bus, or a light duty “cutaway” bus built on a truck chassis. The Vicinity is a true heavy-duty mid-size bus that fills that gap. We are about 40% less capital cost than a 40 foot bus, and have operational savings of about 30%. The competitor’s “cutaways” have a useful life of about half of the Vicinity’s 12-year lifecycle, and the larger units can cost almost the same – So in some cases, we are considered to be half the effective price.
We have also engineered a superior product that our customers love, and we really focus on providing excellent service and support. There are many reasons why we are seeing the rapid growth and adoption of the Vicinity besides pricing.
What kind of growth predictions can investors hope to see over the next couple years?
Things are going extremely well and we expect that to continue. Based only on our backlog for 2017 deliveries, we are tracking over 500% growth, year over year. We are also just entering the US market, which is ten times the size of Canada, and we expect to do well. It’s hard to put a target number out there when the business is growing so quickly. We do report our backlog, so it’s easy to follow our growth as we announce new business.
Shareholders have been greatly rewarded as the Market-Cap has been steadily increasing. What would you say to a new investor looking into Grande West?
I am completely focused on running this business and the company will be valued on current and future business. There are some scenarios in our investor deck (see above) that can help investors understand potential growth and profitability. I also suggest reaching out to John LaGourgue, one of our board members that focuses on the Company’s capital markets strategy.
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Written by Joe Bleackley
Founder, Venture Recon
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