Delivering
Innovative
Transportation
Solutions
TSX.V: BUS
November 2014
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 forwardlooking 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
2
Public Transit The Opportunity
Canadian transit agencies are
modernizing their fleets by replacing
traditional 40 foot and smaller cutaway
buses with compact, low emission,
accessible vehicles.
TSX.V: BUS
3
The Solution
TSX.V: BUS
4
The Vicinity Is Proven
Fuel Efficient
Durable Kneeling
Economical
Open Floor
Customized
Accessible Delivered Compact
Recommended
27.5 Feet Easy Handling
Non-Cutaway
Tested
Safety Certified
Proven
Ordered
Innovative
30.0 Feet Canadian
TSX.V: BUS
Available
Green
5
Market Competition
Motivation to build a competing product is low
• Already successfully building larger sized bus models
• Most companies are much larger in size with production backlogs for
40 foot buses
Production of a new bus model would take over 3 years
• Corporate constraints
• Government certification process
TSX.V: BUS
6
Vs competition
40 Foot Bus vs
The Vicinity
40 Foot buses do not address market
need for compact, cost-efficient,
easily manoeuvrable bus
Vicinity buses have:
• 33% fuel efficiency advantage
• Same product with a 12 year life cycle:
built with the same “monocoque”
chassis standard and quality
• Lower sale price: $285,000 vs $485,000
• Lower maintenance costs and noise
• “Right-sizing” provides communities with
viable transit services
• Vicinity buses are to the transit industry,
what regional jets are to the aircraft
industry
• Brings residential population efficiently
to mass transit, subways and trains
TSX.V: BUS
7
Vs competition
Cutaway Bus vs
Vicinity Bus
Cutaway buses do not address market
needs for lower emission, easily
accessible, longer lasting bus
Cutaway buses have:
• 5 year operational life vs 12 years for the
Vicinity
• Only 60% passenger capacity of the Vicinity
• Coach body affixed on frame of cutaway
truck chassis
• High floor, wheelchair lifts, ramp issues and
a low comfort passenger experience
• 10 year Life Cycle analysis results in an
extra $192,500 in total costs vs the Vicinity
• High maintenance costs and the
requirement for extra spare buses due to
excessive downtime
TSX.V: BUS
8
5 Year Achievements
$3M from
founders for
design, production
and certifications
Secured assembly
arrangement with
Weichai – Yaxing
Group
Completed all
regulatory
certifications and
testing
Aug 2013, $3.6M
BC Transit order,
15 buses
Feb 2014, $3.9M
Quebec and N.S.,
16 buses
Hired
Jean-Marc Landry,
VP, Bus. Dev. and
Eastern Canadian
Agency
Agreement
Dec 2013
oversubscribed
IPO, $8.2M public
equity raised
TSX.V: BUS
9
Market Opportunity
Public Transit
• Essential service with predictable
funding
• Budgets approved years in advance
• Replaceable product
Small Sized Buses
 2010 = 18,000 transit buses
 Avg. bus service life = 10 years
• Ability to match capacity with demand
• Higher maneuverability on narrow
streets and within communities
• Lower capital costs
• Lower maintenance costs
• Minimizes emissions harmful to the
environment
TSX.V: BUS
 Rate of replacement/year = 10%
~1,800 buses in need of replacing
each year in Canada
Target market is 700 Vicinity buses
per year in Canada (USA is 10 X)
10
Number Of Transit Buses
TSX.V: BUS
11
Quality and Cost Savings
Canadian designed
and engineered
High quality North
American components
Cost-effectively
assembled in China
Quality controls
by Grande West
Weichai – Yaxing Group
• Large-scale bus assembler in China
• Weichai Group, a $10-12 billion dollar
company
• Unlimited access to a plant with
assembly capacity of 3,000 buses per
year
• Build on-demand and no factory
standby fee
TSX.V: BUS
12
Why Assemble in China?
-
Turned away by the North American bus manufacturers as their production lines
were too busy
-
Canvassed Asian manufacturers and found Weichai - Yaxing Group who have a
highly skilled workforce who previously manufactured Mercedes Benz
buses in China
-
Do similar as what Apple proudly states on the back of their iPhones
“Designed and engineered by Grande West in Canada, assembled in
China”
-
Utilize the high quality skills in China for the labour intensive work to
build the “monocoque” frame, fit the body parts and assemble the North
American components
TSX.V: BUS
13
Affordable
Accessible
Innovative
Affordable
40% lower price of a 40 foot bus, over twice the lifespan of a
cutaway bus, and lower operating costs than both a 40 foot
bus and cutaway bus
Cleaner burning
and improved fuel
efficiencies
2 year bumper to
bumper warranty, 12
year life span
TSX.V: BUS
$280,000 compared
to $335,000+
14
Affordable
Accessible
Innovative
Accessible
Accessibility features to accommodate Canada’s aging
population and mobility challenged individuals
Full accessibility for
wheelchairs, strollers
and walkers.
Easy access,
stable ramp
TSX.V: BUS
Tiered theatre forward
facing seating and
open floor concept
15
Affordable
Accessible
Innovative
Innovative
Offers the working features of a 40 foot bus with the compact
packaging of a cutaway bus.
Extremely low
decibel rating
Tight turning, easy
handling and
maneuverability.
TSX.V: BUS
Interior
dehumidifier.
16
Sales Process
Sales Model: $280,000 paid in two installments.
25%
75%
Customer pays a 25% deposit of sales price to Grande West at date of
order – then 25% of the cost to assemble advanced to Weichai –
Yaxing Group that carries work-in-process cost
Customer pays balance of sales price 75% due on delivery acceptance
date – then Weichai - Yaxing Group paid their remaining assembly
costs. Grande West retains the difference for their margin
Opening of bid
process to delivery
acceptance is
approximately
9 to 12 months
Grande West does not use its
own capital for the cost to manufacture
and carries a
small inventory of buses
TSX.V: BUS
17
Financial Projection Scenarios
(in 000's of CDN$)
60
100
200
400
Revenues
$17,100
$28,500
$57,000
$114,000
Cost of Sales
$13,500
$22,000
$43,000
$84,000
Gross Profit
$3,600
$6,500
$14,000
$30,000
Expenses, Marketing &
Overhead
$3,600
$4,200
$5,300
$6,800
Earnings before Income
Taxes
-
$2,300
$8,700
$23,200
Income Tax Expense
-
-
$1,740
$6,960
Net Earnings
-
$2,300
$6,960
$16,240
Net Earnings Per Share
(based on 39.2 million
shares outstanding)
-
$0.06
$0.18
$0.41
Number of Vicinity Buses
Sold per Year
Cautionary Note: These forward-looking financial projection scenarios reflect management's current expectations regarding future events
and operating performance as of the date of this presentation.
TSX.V: BUS
18
Capitalization Table
Shares
% of Company
(Fully Diluted)
10,650,000
7,350,000
23.4%
16.2%
5,973,600
13.1%
12,370,900
27.3%
Private Placement
($1,429,750 at $0.50 – August / October 2014)
2,859,500
6.3%
Total Issued and Outstanding Shares
39,204,000
86.3%
969,265
2.1%
Warrants
1,529,832
3.4%
Stock Options
3,748,400
8.2%
45,451,497
100.0%
Founding Directors and Officers
Other Founders
Private Placement
($1,410,000 at $0.25 – April 2013)
IPO, concurrent PP and Loans settlement
($6,100,000 at $0.50 – December 2013)
Agents’ Options
(8% on IPO Shares, 7% on PP shares, both at $0.50)
(at $0.65 with conversion if traded at $0.95)
(priced at $0.50, vesting, five year term)
Fully Diluted
TSX.V: BUS
19
2014 Objectives
Actively market
and demonstrate
the Vicinity
Secure
purchase orders
in jurisdictions
across Canada
Increase sales,
marketing and
operational staff
Obtain safety
certifications for
the Vicinity in
the U.S.
Provide highest
level of customer
satisfaction
Improve gross
margins through
efficiencies
TSX.V: BUS
20
Summary
$7.5M in revenues
from initial orders
of 31 buses now
in operation.
Growing market
demand for
compact, fuel
efficient, easy
accessible transit
vehicles
Quality built,
Canadian product
Increasing sales
opportunities as
Vicinitys now on
the road.
Experienced,
committed and
invested
management
team
Focused on
targeted sales
across Canada
TSX.V: BUS
21
Management
William Trainer – Chief Executive Officer / President
•
•
•
•
25 years of business leadership with extensive import and export experience
Successfully pioneered and brought new products to Canada from Asia for 20 years
Owned and managed heavy construction dealerships across Western Canada
Extensive knowledge in business dealing with major manufacturers in Japan and Korea
John Sutherland – Chief Financial Officer
•
•
•
•
Held executive positions in a number of public companies including President, CEO, CFO,
Corporate Secretary and Vice President, Operations
Director of numerous public companies with over 20 years of board experience
Co-founded Tekion, Inc. and served as its Vice President and CFO
Certified General Accountant with an Engineering Diploma
John Wang – Vice President, Chief Engineer
•
•
Certified Engineer with previous positions as mechanical engineer and designer and
project manager for various companies in China and Canada
Extensive knowledge of the import and export business in the construction attachment
industry and Chinese business practices
Jean-Marc Landry – Vice President, Business Development
•
•
Senior manager with over 20 years of experience in business development, focused on
the public transit industry
Instrumental knowledge in sales, marketing and growth within transportation industry
with Nova Bus heading their sales growth from 15% market share to 50%
TSX.V: BUS
22
Board of Directors – Independent Members
Joe Miller – Director + Chairman
•
•
•
Global businessman with over 30 years in the construction field
Manages a large diverse construction company in the Greater Vancouver area with
projects across North America
Brings vast knowledge in negotiation skills and customer relationship building
Yves Devin– Director
•
•
•
Former CEO of Montreal Transit System, second largest transit system in Canada
Instrumental in improving Montreal Transit System to win the APTA award for being
the Best Transportation Company in North America
Mr. Devin serves or has served on every major transportation association in Canada
and the USA
Don Siemens– Director
•
•
•
Independent financial advisor and corporate director with over 30 years experience
Chartered Accountant and audit committee chair for six public companies and well
experienced in corporate governance matters
Expertise in corporate finance, take-overs, negotiations and strategic planning
TSX.V: BUS
23
Thank-You
Contact:
William Trainer
wtrainer@grandewest.com
604-607-4000