Pioneer Power Solutions, Inc. (NASDAQ:PPSI)

Pioneer Power Solutions Inc. (NASDAQ:PPSI) ($6.36; $63.9 M market cap) a company engaged in the manufacture, sale and service of electrical transmission, distribution and on-site power generation equipment, announced Q2 2023 results:

• Sales of $12.1 million vs. $4.9 million in the prior year

• Non-GAAP EPS of $0.05 vs. a loss of $0.19 in the prior year 

“Both our E-Bloc and e-Boost businesses continue to grow at a rapid pace, with steady margin expansion, supporting our expectations for at least 50% revenue growth and positive earnings per share for the full-year. Excluding one-time non-cash stock-based compensation, we were profitable during the second quarter, marking the third consecutive quarter of operational profitability. We are reiterating our full-year guidance and we have significant momentum as we head into 2024. This progress comes even as we invested approximately $1.4 million in our new e-Boost solutions during the first half of the year to drive further growth."

GB Pioneer Power Solutions Inc. (NASDAQ:PPSI) ($7.5; 65.4M market cap) announced a new five year contract for network transformers with a electric and gas utility company. The Company expects the contract, which became effective January 19, 2018, to generate annual revenue of approximately $2 million.  PPSI manufactures, sells and services a range of specialty electrical transmission, distribution and on-site power generation equipment for applications in the utility, industrial, commercial and backup power markets.

Nathan Mazurek, Pioneer's Chairman and Chief Executive Officer, said:

"As a provider of transformers to a number of nationally-recognized and regional utilities, we are pleased to add this major regional utility to our growing portfolio of major utilities and support the delivery of reliable power to its customers. Our ability to win this contract through a competitive bidding process validates our confidence in our solutions and our reputation for outstanding customer service. This new award reinforces our outlook for continued profitable growth in 2018 and beyond."

GB Pioneer Power Solutions Inc. (NASDAQ:PPSI) ($7.53; mc $65.6m) announced Q3 2017 results:

• Sales $29.8 million vs $29.4 million in the prior year

• Company reported non-GAAP EPS of $0.21 vs $0.17 in the prior year

2017 Outlook:

• Revenue between $120 and $127 million (believes will be at low end)

• GAAP EPS of $0.18 to $0.23

• Non GAAP EPS of $0.83 to $0.93

Quotes from management:

"We continue to expect to reach the low-end of our revenue guidance for the full-year, suggesting a record top-line for the fourth quarter due in large part to hurricane-related orders," added Mr. Mazurek. "In addition, we expect to achieve our guidance for Adjusted EBITDA, suggesting record profits in the fourth quarter. Lastly, our dry type distribution transformer operation in Canada incurred $873,000 in non-recurring charges related to the write-off of raw material inventory for finished products we are now sourcing from our partner in Asia, at much lower costs than we can achieve by producing them ourselves in North America. This charge resulted in a one-time, 293-basis point negative impact on our reported gross margin as well as a negative impact on our net income. As a result, we are adjusting our full-year outlook for net income. We fully expect our gross margins to return to their historical levels in the fourth quarter."

GB PPSI ($5.90) announced Q2 2017 results:

• Sales of $30.9 million vs $29.9 million in the prior year and ahead of analyst estimates of $29.3 million

• Geo calculated Non-GAAP EPS of $0.14 vs $0.06 in the prior year and ahead of analyst estimates of $0.13

• Company’s non-GAAP EPS $0.21 vs $0.18

• Reaffirmed 2017 guidance of sales between $120 and $127 million and non-GAAP EPS of $0.83 to $0.93

Quotes from management:

“The significant changes we have made in this business to rationalize expenses and refocus on higher margin opportunities have enabled us to reach a revenue level that should support consistent profitability, a significant change from last year."

"Finally, subsequent to the end of the quarter, we launched a new line of power generation equipment to be sold exclusively in eight states and non-exclusively in the rest of the country," concluded Mazurek. "This exciting launch significantly broadens our opportunities for generator sales and expands our margins on these products. We expect this to be a material contributor to our 2018 results."

Pioneer Power Solutions Inc. (NASDAQ:PPSI) ($6.45) announced today that it received a new 30-month contract for liquid-filled network transformers, which became effective June 26, 2017, and is expected by management to generate annualized revenues of up to $2 million through 2019.

Nathan Mazurek, Pioneer's Chairman and Chief Executive Officer, said,

"This agreement adds a new, large utility to our customer list. Pioneer continues to benefit from increasing demand for electricity, as well as increased infrastructure spending. This new customer and incremental order is an encouraging win for us, demonstrating our growing presence among major utilities and bolstering our optimism as we look into 2018 and beyond."

PPSI, a company that manufactures, sells and services a range of specialty electrical transmission, distribution and on-site power generation equipment for applications in the utility, industrial, commercial and backup power markets, is currently featured on Executive Casts.  Mr. Mazurek talks about many aspects of the business, and if you have not had a chance to view the series, please do so here.

PPSI ($6.85) reported Q1 2017 results:

• Sales of $27.3 million vs $26.6 million in the prior year; below analyst estimates of $29 million

• Non-GAAP EPS of $0.17 vs $0.17 in the prior year; ahead of analyst estimates of $0.12 (we plan to confirm how analysts calculate non-GAAP EPS)

• Reaffirmed 2017 revenue and non-gaap EPS guidance of $120 to $127 million and $0.83 to $0.93 respectively.

Quotes from management:

"I am encouraged by the progress we made in the first quarter, particularly in our switchgear business which generated a modest profit after losing money last year. We delivered $2.1 million in Adjusted EBITDA, while facing the typical seasonality which impacts our first quarter, and based on our backlog and scheduled deliveries, I am increasingly confident in our ability to achieve our full-year guidance…

...Pioneer is well-positioned for profitable growth...

...we are extending and expanding our portfolio of products manufactured in India, and expect significant orders in 2017 that will help drive further growth in 2018 and beyond."

We believe the Company will need to increase its topline growth rate in order for its valuation multiples to expand.

FORT LEE N.J., Oct. 28, 2016 /PRNewswire/ -- Pioneer Power Solutions, Inc. (Nasdaq: PPSI) ("Pioneer" or the "Company"), a company engaged in the manufacture, sale and service of electrical transmission, distribution and on-site power generation equipment, today announced that the Internal Revenue Service has granted an abatement for $1.2 million in previously accrued penalties related to the Company's delinquent federal payroll tax obligations. The abatement covers 100% of the accrued penalties from Pioneer Power Solutions (Corporate), Pioneer CEP, and Jefferson Electric, with accrued penalties for Pioneer Critical Power, Inc. still being reviewed by the IRS for potential abatement. The remaining accrued penalty represents less than $100,000.

As previously disclosed, beginning in the third quarter of 2015 and in future quarters, Pioneer recognized charges of approximately $1.8 million for estimated accrued interest and potential penalties for failure to timely file, deposit and pay employer's federal tax returns and make associated payroll tax payments, while seeking abatement with the IRS. Subsequently, the Company negotiated installment agreements to pay all taxes and interest.  The abatement notifications were received on October 24, 2016.

Mr. Thomas Klink, Pioneer's Chief Financial Officer, said, "We are glad to resolve this issue, and pleased the IRS was willing to grant this abatement. The reversal of the accrued penalties will be recognized by Pioneer during our fourth fiscal quarter, the period ending December 31, 2016."

PPSI (5.43) reported Q2 2016results:

• Sales of $29.9 million vs $26.5 million in the prior year and ahead of analyst estimates of $28.0 million

• Non-GAAP EPS of $0.08 vs a  non-GAAP loss of $0.05 in the prior year but below analyst estimates of $0.11

• Order backlog of $37.8 million compared to $32.8 million in prior year period

• Maintained full year guidance:

  • Revenue between $117 and $127 million

  • Adjusted EBITDA between $8.0 and $9.5 million

  • Non-GAAP diluted EPS between $0.55 and $0.66 based on 8.7 million shares

Quotes from management:

We achieved a double-digit increase in sales in the second quarter, and our strong backlog supports our expectations for continued growth. Our operating income and Adjusted EBITDA both improved by $2.1 million compared to the second quarter of 2015. This improvement over the past year is the direct result of specific actions to eliminate losses at two divisions, putting us back on the right path for growth and improved profitability. As a result, we continue to advance towards achieving our full-year 2016 guidance."

We ended the second quarter with a record $37.8 million backlog," continued Mr. Mazurek. "Demand for our solutions is strong, and we are encouraged by the level of sales activity that has continued into the start of the third quarter. Our primary focus is on expanding profit margins, improving overall efficiency and increasing our profitability and cash flows. We are increasingly well positioned to deliver on these goals."

On November 30, 2009 Sierra Concepts, Inc. (“Sierra”), a Nevada corporation, was merged with and into Pioneer Power Solutions, Inc., a Delaware corporation (“Pioneer Power”), for the purpose of changing its state of incorporation to Delaware from Nevada and changing its name, in each case pursuant to a Certificate of Ownership and Merger and Articles of Merger, each dated November 30, 2009 and approved by stockholders on November 30, 2009.

Demand for our electrical power and distribution transformers results primarily from spending by electric utilities for replacements, expansions and efficiency improvements. Demand is also sensitive to overall economic conditions, particularly with respect to the level of industrial production and investment in commercial and residential construction. Other market factors include voltage conversion, voltage unit upgrades, electrical equipment failures, higher energy costs and stricter environmental regulations.

Demand for our electrical power and distribution transformers results primarily from spending by electric utilities for replacements, expansions and efficiency improvements. Demand is also sensitive to overall economic conditions, particularly with respect to the level of industrial production and investment in commercial and residential construction. Other market factors include voltage conversion, voltage unit upgrades, electrical equipment failures, higher energy costs and stricter environmental regulations.

We believe that our future operating results will continue to be subject to quarterly variations based upon a wide variety of factors, including the cyclical nature of the transformer industry and the markets for our products. Our operating results could also be impacted by a weakening of the Canadian dollar, changing customer requirements and exposure to fluctuations in prices of important raw supplies, such as copper, steel and aluminum. We attempt to minimize these increases through the inclusion of escalation clauses with respect to commodities in our customer contracts. In addition to these measures, we attempt to recover other cost increases through improvements to our manufacturing efficiency and through increases in prices where competitively feasible. Lastly, other economic conditions we cannot foresee may affect customer demand. We predominately sell to customers in the utility market. Accordingly, changes in the condition of any of our customers may have a greater impact than if our sales were more evenly distributed between different end markets.