Q2 2023 Twin Vee Powercats Co Earnings Call
Speaker 1: Welcome to the TwinV Powercats Company second quarter 2023 investor call. As a reminder, this call is being recorded and all participants are in a listen only mode. Your speaker for today's program is Joseph Visconti, President and CEO of TwinV Powercats Company.
Speaker 1: Before I turn the call over to Joseph, please remember that certain statements made during this investor call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements on this call, other than statements of historical facts, including statements regarding the company's future operations, financial position, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as believes, may, estimates, continue, anticipates, intends...
Speaker 1: should, plan, expects, predicts, potential, or the negative of these terms or similar expressions. The company has based these forward-looking statements largely on our current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations.
Speaker 1: including those set forth in our filings with the Securities and Exchange Commission, which are available on our website at www.twinvee.com.
Speaker 1: You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that these events or circumstances reflected in the forward-looking statements will be achieved or occur. Finally, this conference is being webcast. The webcast will be available in the investor relations section of our website.
Speaker 1: at ir.twinvee.com for at least 90 days. Audio cast quality is subject to your equipment, available bandwidth, and internet traffic. If you experience unsatisfactory audio quality, please use the telephone dial-in option. A question and answer session will follow the formal presentation.
Speaker 1: Please note that only those that have dialed in via telephone may ask a question. Those listening via webcast will be unable to submit questions and must call in instead.
Speaker 1: If you would like to ask a question, you may signal by pressing star 1 on your telephone keypad. I will now turn the call over to Joseph Visconti.
Speaker 2: Hello everyone, my name is Joseph Escanti, I'm the President and CEO of Twinbee Powercats. I'm joined on the call with Kerry Gunnarsson, Twinbee's CFO , and Jim LeFou, the President and CEO of Forza X1, our electric boat company.
Speaker 2: Jim is on the call due to his leadership role specifically for the opening and ramping of our aqua sport plan in Tennessee.
Speaker 2: Good morning and thank you for joining our second quarter 2023 investor call. Twin V designs, manufactures and sells a range of catamaran sport boats from our factory located in Fort Pierce, Florida. For nearly 30 years, the Twin V brand has been synonymous with offshore catamaran boats.
Speaker 2: and is considered by many to be one of the best riding boats on the water.
Speaker 2: We are pleased to report an 18% increase in top line revenue to $17 million for the six months ended June 30, 2023. And compared to $14,400,000 in the same period, we are seeing a decrease in top line revenue
Speaker 2: in the same period of 2022. If you break out our main production in our facility in Fort Pierce, Florida, where we manufacture 100% of all twin V boats and our two new model of our Aquasport, our 22-footer.
Speaker 2: We had a net loss of $234,000 for the six months in 2023. This $234,000 loss is compared to a net loss of $554,000 for the same period in 2022.
Speaker 2: TwinD Neta Forza X1 had cash and cash equivalents, restricted cash and marketable securities of approximately $11,434,000 as of June 30, 2023.
Speaker 2: The reportable larger loss of the 2.5 million for the six months ended June 30th, 2023 is a direct reflection of TwinD's majority ownership in Forza X1, the electric boat company, which we own 44% of.
Speaker 2: And it's our TwinV's requirement, according to GAAP accounting, that we have to consolidate the financial savings. So if you take the $2.3 million loss on Forza, plus the $234,000 loss on TwinV, that's where you get the bigger loss, the reportable loss of the $2.5 million for the six months.
Speaker 2: So, the general economic landscape, including rising interest rates, continues to have a direct effect on consumer purchasing, boats, and recreational vehicles. While we have seen entry-level buyers affected by higher interest rates, we are also seeing cash buyers and boat clubs maintaining a healthy demand for our boats.
Speaker 2: offerings including our new 400GFX and our upcoming 280GFX dual console. New products open new markets and expand our reach to consumers seeking various lengths and styles of our boats.
Speaker 2: Our acquisition of the iconic Monohull brand Aquasport is off to a good start. While requiring cash outlays and start-up expenses, the acquisition of Aquasport has allowed us to partner with over 10 new dealers in over 30 locations.
We feel confident that our aqua sport monohull boat brand will continue our ability to scale our overall Business and grow our brands while appealing to a broader market the monohull market is extremely competitive
As we know, highly competitive markets put downward pressure on gross margins, which we saw in the second quarter. The Monohull Boating Market is one of the largest boat buying markets besides pontoons, and we believe that entering the Monohull market with a superior brand like Aquasport will allow Twinbee the company.
to increase market share and grow our top line revenue.
As we continue to watch market conditions, dealer inventory levels, and economic indicators that might affect our business.
We are being vigilant with managing inventory levels, labor and production costs, and of course not to burn our cash.
To the point of managing the balance between dealer inventory levels and production of our Twinbee boats, we have strategically chosen to slow Twinbee's production.
The boats down to 2.5 units of twin V's per week
While we have increased the production of our new Aquasport 22-footer in the Fort Pierce facility to four to five units per week due to the brisk, upbeat demand for our new 22-foot center console and dual console. And this production is taking place again in our Fort Pierce facility.
Our revenues in Fort Pierce are made up of 70% of twin V boats and 30% of our 22 foot
So this revenue is only with this one 22-foot Aquasport model, which is why we're excited about ramping up our Tennessee facility with seven additional Aquasport legacy models.
So some of the highlights for our six months ended 2023 and some other takeaways is our net loss from operations again, our core business was only $234,000 for the six months ended June 30, 2023.
And TwinVee's metaphors had cash and cash equivalents of $11,437,000 as of June 30, 2023. Some additional items that we've discussed in the previous quarter call, we received site plan approval for our expansion, the extension of our building here, $30,000.
front building which will give us a total of a hundred thousand square feet of manufacturing facility here in Fort Pierce which at that point will be a true linear production with two lines.
We transitioned our lamination department 100% to the infusion process for hulls and decks. Infusion, as we discussed, is a state-of-the-art lamination process that increases quality of our boat builds while refining the costs and controls.
Our largest dealer, One Water Marines, who currently represents seven of our dealers, mostly in Florida, has placed a 100-boat order with model year 2024. This is two boats a week and is only for the One Water locations. We still have another 20 locations outside of the One Water locations. We've opened 10 new aqua sport dealers. These dealers have 30 locations and again this is in addition to our Twin V dealers. Aqua sport forecasted orders are approximately 150 units over the next 12 months.
for a Tennessee plant in Q3.
While markets are a bit choppy, our continued business objective is not to burn cash, remain prudent with our balance sheet and continue to grow our business and of course deliver value to our shareholders. At this time, I'd like to open it up for questions.
Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue.
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Our first question comes from the line of Joshua Horowitz with Palm Ventures. Please proceed with your question.
Hi Joseph, good morning.
Good morning. Good morning. Good morning.
Great job on everything you said with scaling back and keeping an eye on the inventory and stuff. My question is, I guess, could you use a little bit more color on how the reopening and ramping of the aqua sport production facility is coming?
Thank you. So Jim LeFou, our present CEO of Forza, is spending a couple days a week over in Tennessee. I'd like to bring Jim on to talk specifically about the opening and ramping of that facility.
Yeah, thanks Joseph and thanks for the question, Josh. Quick update on our Aquasport facility. As many of you know, we have taken over the operations of the former ebb-tied holdings in White Bluff, Tennessee. It's a 150,000 square foot facility, including the molds and the trademarks for the Aquasport brand.
To date, we have hired approximately 35 people since June 1st. In June , we started the cleanup and rehabilitation of the factory and began actual production in July . We expect to be able to ship the factory to the factory in July .
One of the biggest initiatives we have will be to develop a full line of boats, including bay boats, offshore, center, and dual consoles, and possibly even flats boats. We have a really aggressive new product plan that will be implemented over the next five years. But so far, so good with the startup. We're excited about it. And we should ship our first set of units here shortly in the month of August . Hope that answers your question. Yes, very good. Thank you so much.
Josh, I'd like to add, you know, we set out, we did the aqua sport deal and then we had our dealer meeting in West Palm and we, it was just absolutely amazing kind of.
you know, the positive feedback we got. I mean, we've signed these dealers. I mean, this is in the face of a pretty tough market.
And, you know, I mean, we're feeling it a little bit on the twin V side, but Aquasport, there's a lot of dealers out there that are looking for new opportunity. There's other larger boat brands that got caught up delivering very expensive, you know, premium boats and nobody was really kind of catering the value based.
owners did a fairly decent job with tooling. We've talked about it in previous calls. There were seven legacy models ready to go. Nothing's easy, but Jim Lafue's background at Maverick Bow Group, he was the head of olive production for that facility for over 25 years, building 17.
Some of the old opera sport employees have come back, leaders, managers, workers. So it's just a really great opportunity for us to build a monohull brand and also as a public company continue to have increased revenues.
and deliver margins. And so, again, thank you for the question.
deliver margins. So again, thank you for the question. Thank you guys.
Thank you. As a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. And pause a moment to allow for any other questions.
Thank you. Our next question comes from the line of Raj Mashwari with Charleston Capital. Please proceed with your question.
Hello, good morning, Joseph. Good morning, Jun. Thank you for taking my question. I just wondered as you look out to 24, is there any way to gauge what 24 looks like? Are things starting to bottom out?
Aqua Sport and Twinbee companies.
Thank you.
I can tell you that we currently are...
hitting numbers out of our Fort Pierce facility. That's with our twin, our Leggus. Can you hear me okay?
Now I can.
I can.
In our Fort Pierce facility, with our legacy twin V-Bodes, plus our two additional aqua sport model, the 22 center console and dual console, we are hitting last year's revenue numbers which are about 35.
million dollars on an annual run rate. And so as we kind of bring on Aqua Sports, with Jim's numbers like two boats a week, I think that kind of adds to where, so.
$35 million plus this additional aqua sport revenue, I think is where we will finish out the year.
Which is good, it's higher than it was last year.
And that's in face of some pretty tough headwinds, higher interest rates, some of the buyers were veryyeah, stupid NEO made us hate people player
The plumber, the electrician that were buying a $100,000 boat and the payment was $500, that same payment is $1,000, $1,100 now. And that buyer, we're seeing him move to the boat clubs or coming up with an alternative summer strategy.
with their family. Yeah, and if I can add a little bit to that for Raj, I think one of the questions was how do we view the macro and do we see any signs of bottoming. This is mostly anecdotal information, but we are getting feedback from some of our dealers that there's increased traffic on the showroom floors and people are starting to buy again.
hearing from our dealers and looking at the SSI data that one of the best performing segments in marine right now is the saltwater fishing boat segment so some of the other segments of the market are down much more but it seems like we're in a pocket of strength in saltwater fishing so
That's a good thing for us. Obviously, there's no way of knowing for sure, but some of the preliminary signs, I don't want to call them green shoots, look like they're getting a little bit better.
So, have you started to plan for the 23, for the 24 calendar year budget yet or is it still too early? Let's see here, we need to switch and move.
Well, we've got our forecast. I went through... So we have a forecast number of 150 Aquasport boats that's been forecasted from our...