Legend Power Systems Inc. (LPS) Earnings Call Transcript & Summary

I second the motion. I've been advised by the scrutineers that all resolutions have been approved by more than the requisite majority and that those nominated have been duly elected as the directors of Legend Power Systems. I declare the motions carried and the nominees for the Board elected. As there's no further formal business to be brought by the meeting, the chair would entertain a motion that the meeting be concluded.

I move that the meeting be concluded.

I second the motion. I now declare the meeting concluded. While the formal business of the meeting has been concluded, I would like to hand it over to Randy Buchamer, our President and Chief Executive Officer, to provide an update on Legend Power's business strategy and recent progress. Before we begin, I'd like to remind listeners that certain statements made during this presentation may constitute forward-looking information and forward-looking statements within the meaning of applicable securities laws. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements of the corporation and the subsidiary entities or the industry in which it operates to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risk factors are discussed in detail under the heading Risk Factors in the corporation's management discussion and analysis filed on SEDAR. These statements reflect management's current expectations regarding the future events and operating performance and speak only as the date of this presentation. New risk factors may arise from time to time and it's not possible for management to predict all those risk factors or the extent to which any factor or a combination of factors may cause actual results, performance or achievements to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Although the forward-looking statements contained in this presentation are based upon the management's belief to be reasonable assumptions, the corporation cannot assure investors that actual results will be consistent these forward-looking statements. The corporation undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise other than as required under applicable securities legislation. Okay. At this point, I want to turn it over to Randy Buchamer, our Chief Executive Officer; to give us an update on Legend Power's business strategy and recent progress. Randy, over to you.

Thanks, Cos. Appreciate that. I'm joined with Mark Petersen, our engineering guru; and Mike Cioce, our sales guru, today to update in those 2 respective areas. And thank you for everyone attending today. Looking at the last year or so, we've had a lot of anomalies and things into the marketplace that we weren't counting on. We had the COVID, we had shutdown, lockouts, difficulties in the buildings and all kinds of different things. But we have worked our way through this. What hasn't changed is this has been a year that we did plan for a transition. And the transition was from a product company to a platform solution company and the implications that it has. We changed our value proposition from a product with safe energy to a solution that manage the power environment in commercial buildings. We changed our sales process, we changed our sales team and had profound changes within our engineering. We brought additional talent in those areas to make sure we could deliver on our promise. With the last [ raise ] that we did, we made commitments to develop a new generation platform that will be a game changer. Mark will talk about that. And we also committed to expanding our solution selling team and our geographical footprint. And Mike Cioce has some good updates for you today on that. We have [ investment ] growth and not to spend money. I think that the fundamental difference is that we've invested for future growth, which we're now starting to appreciate, and the money has been well spent. We've also experienced some changing things in our marketplace that are very, very core to Legend and what we're doing. We're seeing government mandates that people must reduce emissions. They're setting targets to [ families ] and people to get to the targets by certain time frames. New York is a great example. We're seeing increased write-offs for projects, initiatives that reduce cost of energy and/or efficiency in buildings. And there's a lot of incentives for people to make purchases and change the way buildings operate. So we're seeing a very systemic change. It's not something that is just the flavor of the month or something that might go a year and then it's out of style. This is a systemic change how the world views climate, energy and sustainability. We're all seeing it. We're all experiencing it. These changes aren't going away, and all of them support what Legend is doing in the marketplace. It's begun to speed us up to be able to provide the solutions that meet requirements for our target markets goals. We're in a great space. It's getting better. We've given a great time for the organization, and we're all very excited with where we're going. With that note, I think it's best to let Mark and Mike share their respective areas and to the key drivers of the organization. So I'll start again by turning over to Mark Petersen, and he'll be followed by Mike Cioce. Mark?

Thanks, Randy. I just wanted to expand a little bit on what Randy touched on about the transition that Legend has gone through from a product to a real solution provider. The Legend Power in the past, we had a deep experience in energy savings, a great product, but inherently, it was a product sale that was focused on a technical audience and energy managers as a typical customer, and we needed to speak the language of energy savings. And we have a lot of experience and great expertise with that. Success of a project becomes heavily tied to what the return looks like on that project and other competing projects. And Legend was easy to be seen as sort of a nice to have. And if we contrast that to the Legend of today and how we built on that history and where we're going is we really wanted to [ respect ] the past and build upon it but use that to obtain a much higher level of success. We've realized through the [ forays ] into the market that we're not just selling a product, but we have the opportunity to sell a solution to a real business problem, and that's enabled by the technology we have and the technology we're bringing to the marketplace. In that, we need to speak the language of business, dollars and cents and that our target customer really is the financial decision-makers at an organization, not necessarily the energy manager. Legend Power and the technology we have is an energy management platform that has inherent energy savings but also has significant positive impacts on resiliency and sustainability within a business. And speaking business language really is the gateway to show how we're a key asset to improve the value of a building and what it means to our potential customers. And with that, it's -- Legend transitions from a nice to have to be a need to have. I also want to talk about the investment and that's a keyword. Randy touched on that. But what has our investment in technology yielded? First and foremost, we have a world-class engineering team. Every team member is contributing at the top of their game and are really focused on the common goal of bringing game-changing technology to the market. The second part of what we've done with that investment is we have a whole new platform of our technology, and we've been able to expand it. So rather than the one-dimensional product focused on energy savings that we have the ability via the new technology and topology we're bringing to the market to completely manage that key asset within the building, electricity coming in the building from the grid in real time to provide energy savings but also address reliability, uptime and the whole stream of information that comes with that to ensure that the building is operating at its best. There's whole numerous technologies we've brought together and have now already deployed around the control aspects of that, communications parts of the platform operating today, including cloud communications, the ability to remotely upgrade software packages, things like that, which allows us to continually improve the product and open the door to recurring revenue opportunities as well. When we step back and look at buildings, buildings are really for people in conducting business. In some market segments, we look at the buildings are the business, and Mike will expand on this a little bit as he speaks. But part of that, we've -- it's integral to our approach now, is the concept of Insights, where it's really a data-driven approach to our target customers where we're able to, with our insight service, document their existing connection to the grid and what that looks like in terms of dollars and cents and understand all of the opportunities of how Legend can provide value to their business and come back to them and present them with a holistic solution that would address not just their energy needs, but also what that could mean for sustainability in their business, maintenance and eventually, the valuation of their building and business as well. It's really a data-driven approach and it's fundamentally different to how we would approach buildings and customers in years past. And really, that's all been enabled by the technology we've brought to market on the connectivity side so that our systems are actively gathering data from the electrical parameters, the system itself, broadcasting that back to Legend that for -- via a cloud connection that we can provide to our customers, but also has inherent value for Legend as well that we can look at it. And we have all of this information on the electrical use that the building itself is doing, but also on the system performance. And we can use that for, again, future opportunities, things like reporting issues on energy initiatives but also using that to direct future R&D and future increases and modules that we can bring to market to help drive additional value for our customers in the future. So we're very excited about the prospects, both the engineering team, the investment in technology and where we're headed. And with that, I'll pass it over to Mike Cioce, our Vice President of Sales and Marketing, who will tell you a little bit more about his side of the business.

Yes. Thank you very much, Mark. Appreciate that, it was a great overview of a lot of the changes that are being made in Legend Power. When we look at all these changes, I'm sure the question is, how does this impact our business performance? And there's no 2 ways about it that the global pandemic has created challenges for many businesses and Legend Power has been impacted as well. Not being able to get into buildings has slowed some of our sales cycles but indeed has not stopped them. We've been working away, staying in touch with our customers, doing review and design work with them and keeping our deals moving forward. Over the past few weeks, we've seen a significant increase in activity and movement on many of our deals, much more so than in recent months. As Mark was saying, when building owners and operators install high-tech systems to ensure the safety and satisfaction of the people that depend on the building, they know that these systems rely on powered to operate optimally, air filtration systems, occupancy sensors, life and safety systems, elevators, HVAC and more. They make the building safe and give comfort to the people that are using the building and drive the building to revenue. However, they may not realize that incoming power supply might be volatile and limit these systems and inhibit their ability to protect and serve the building occupants as well as impact the revenue. This interacts with the financial performance as well, impacting revenue, expenses, asset valuations, and more and more building owners realize that suboptimal power creates suboptimal results at many levels. And that the best path to optimal performance starts with optimal power. You've heard about the many changes in our business over the past year. We've changed our sales team, we've changed our sales approach, we've moved away on our messaging away from being focused on an energy savings product to a high-value solution that enables optimal business performance by allowing buildings to use energy more efficiently. We have changed the makeup of our sales team to more experience solution sellers and changed our sales process to better align with the way our customers do business and much more such as focusing on the business side versus the technical side, as Mark had mentioned. These investments in the right solution, the right people, the right processes and messaging are starting to pay off. While -- the results for our fiscal Q3, we see significant progress returning to our Q4 deals. We're deploying Insights in a significant way with 4 major players who represent hundreds of buildings. We have higher education institutions that are moving forward with market conditions. We have some of the largest commercial real estate companies buying more of our solutions. We are at the final stages of a multisite deal within ESCO in the United States. Our ESCO partners, which are energy service companies, and they bundle energy conservation measures for various government entities, they have won deals with our solution included, that being only a matter of time before these orders materialize in terms of revenue. One of our electrical contractor partners, who is one of the largest facility operators in North America, recently reinforced to their sales team that Legend Power is a preferred partner. After looking deeply into our solution, they are convinced that we offer what the market needs to manage a diverse and ever-changing electrical supply to sophisticated, sensitive buildings. Again, it's about optimal performance through optimal power. With influential organizations like our partners and ESCO partners, we multiply our ability to tell the Legend story well beyond our internal sales team. The ESCO partners we are working with have hundreds of sellers across North America, significantly extending our reach based on our existing investments into this $15 billion a year industry. So while COVID has impacted our performance, our activity has not slowed nor has our optimism about our future. Based on our existing investments, we had firmly landed on the path to higher results, which will materialize in the coming quarters. Today, it's more important than ever for building owners and operators to find a way to get optimal performance, and that optimal performance starts with optimal power from Legend Power Systems, of course. So that's a quick update, and Randy, I turn it back to you.

Thank you, Mike. I appreciate Mark and Mike's updates. A lot of great things happening in the organization. I guess what we do now if we -- if there are any people that want to ask any questions, please feel free.

[Operator Instructions] There are currently no questions. [Operator Instructions] There are currently no questions. I'll hand the call back over to management for any closing comments.

Thank you. I appreciate everyone that has participated in the call this morning and for those who will listen to it later on. It will be recorded on our website. We hope we shared some enthusiasm with where we're going. We're very excited about where Legend is going, and we look forward to keeping you updated and appreciate your ongoing support. For everyone out there, have a great legendary day and thank you.

Thank you so much. That does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.