Investor Presentation - June 11, 2018 TSX-V: BUS | OTC Pink: GWTNF
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 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 or electronic form, is strictly for information. TSX-V:BUS OTC:GWTNF | www.grandewest.com 2
Executive Overview Grande West Transportation is a Canadian-based company which designs, engineers and manufactures mid- size, multi-purpose transit vehicles for sale to public and private enterprises in Canada and the US. TSX-V:BUS OTC:GWTNF | www.grandewest.com 3
Vicinity’s Position in the Bus Market Cutaway Bus Traditional 40’ bus VICINITY or modified to 30’ or 35’ • Very Costly to Operate in HD ops • Monocoque Frame • Lower Capital Costs • 33% Higher Fuel Costs • 5 year life cycle • Big Bus Technology • Right-Sizing fleets • 30-40% Higher Capital Cost • Poor Access • Compact Platform • Clean Diesel or CNG Powered • Higher Maintenance Costs • Built on a Light Duty Truck Chassis • Lower Operating Costs • Altoona Rated ‘Best-in-Class’ TSX-V:BUS OTC:GWTNF | www.grandewest.com 5
Bus Market in North America - Summary Canada: Approximately 18,000 public transit agency buses U.S.: Approximately 120,000 buses - 60,000 public transit / 60,000 private transit Bus lifecycle is usually 10-12 years: ~1,800 in Canada , and ~12,000 in the US every year Public transit agencies are growing Competition: New Flyer (NFI.T), Rev Group (REVG), Nova Bus (Volvo), Gillig (Private) and cutaways TSX-V:BUS OTC:GWTNF | www.grandewest.com 6
Business Model Grande West is positioned within a changing transit bus business model. The Right-Sizing concept , successfully applied by Southwest Airlines to change the airline business model, is being adapted by bus transit for many of the same reasons. In a comparison look, Grande West is supplying mid-size buses in much the same way that SouthWest and WestJet Airlines’ model demanded mid-size planes. Grande West has a considerable fi rst mover advantage as the major bus manufacturers failed to recognize the trend. With a bus transit model that is moving towards Right-Sizing , Grande West is well positioned to satisfy demand and, with “Best-in-Class” designation, is capturing and dominating the mid-size bus market. TSX-V:BUS OTC:GWTNF | www.grandewest.com 7
Right-Sizing Trend ”Increasingly, transit systems are recognizing that the 40-foot bus is not a one-size- fi ts-all vehicle. It is excellent for high volume routes, but is big and unwieldy in residential neighbourhoods and presents a wasteful image when operating with few passengers. More and more systems are also realizing that service frequency builds ridership better than spatial coverage. In other words, more frequent service with smaller buses is far more attractive than less frequent service with larger ones. Smaller buses are perfect for this type of strategy and more and more systems are looking seriously at “Right-Sizing” their fl eet by introducing smaller buses for portions of their route network that do not warrant 40-foot buses.” - Michael Roschlau, Grande West Strategic Advisor, former CEO of Canadian Urban Transit Association “We are committed to creating more e ffi cient transportation options for our customers. That means building a more highly layered, customized service model. These new Vicinity vehicles allow our bus operators to travel safely into neighbourhoods where our standard fl eet could not easily navigate while o ff ering more space than our current Mobility bus options .” - Keith Parker, Former GM and CEO of Metropolitan Atlanta Rapid Transit Authority (MARTA) TSX-V:BUS OTC:GWTNF | www.grandewest.com 8
Deliveries and Backlog $22.4M Revenue $54M Revenue $85M Backlog $7.5M Revenue $100M Backlog 58 Deliveries $61 Backlog 153 Deliveries $18M Backlog Backlog - 240+ 36 Deliveries Backlog - 300 18 Deliveries Backlog - 175 $6M Backlog Backlog - 60 6 Deliveries Backlog - 21 Q1 2018 2014 2015 2016 2017 � 9 TSX-V:BUS OTC:GWTNF | www.grandewest.com
Our Partners Weichai - Manufacturing Partner USA - Alliance Bus Group • Multi-Billion Dollar Company • Exclusive distribution agreement • Over 74,000 employees internationally • Buy America assembly in Atlanta (HQ) • Global service, support and warranty network in place • One of the largest US retail bus sellers • Ships over 5,000 buses/year internationally • National coverage, with 8 mega-dealers • World’s largest HD engine manufacturer • MARTA and Atlanta Airport first Customers TSX-V:BUS OTC:GWTNF | www.grandewest.com 10
Altoona Test Results: Best-in-Class! The US Federal Transit Authority’s (FTA) FAILURES MANUFACTURER MPG Altoona test is an internationally CLASS 1 CLASS 2 CLASS 3 CLASS 4 recognized tough testing regime, as it 7 6.02 VICINITY 34 15 5.54 essentially performs 12 years and 500,000 Competitor A 9 15 4.43 Competitor B miles of a New York City heavy duty cycle 20 2 4.1 Competitor C 29' upon completion of the testing. It allows 12 6 Competitor D customers to measure performance and 31 13 Competitor E estimate life cycle costing of the vehicle. 12 9 Competitor F 40’ Vicinity Scores 14 4 2.97 Competitor G 40’ • Best in Class: Fuel economy 4.8 Competitor H*(**) 3 1 40 19 • Best in Class: Structural Durability Competitor I** 21 13 Competitor J • Best in Class: Fewest repairs 32 7 4.28 Competitor K** required - only 7 minor Class 3 vs. * Partial test no durablity Competitors ** 10 YEAR TEST Full test results: Vicinity Altoona Test � 11 TSX-V:BUS OTC:GWTNF | www.grandewest.com
Canadian Market Canadian Government is strongly committed to a $20B long-term infrastructure plan to develop transformative and modern transit projects over the next 10 years Vicinity is in 8 of 10 provinces’ systems Coast to Coast • Customers are already receiving additional funding, increasing demand • Up to 50% Government funding for eligible project costs • Bus Transit is a critical element in Canadian transit plans - Vicinity is • providing the solution Grande West has developed or is working on relationships with most transit authorities across the country. New and repeat orders are expected. TSX-V:BUS OTC:GWTNF | www.grandewest.com 12
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