Q2 2023 Ayro Inc Earnings Call
Speaker 1: Oh.
Speaker 2: Ladies and gentlemen, thank you for standing by. Good morning and welcome to the ARO, Inc. Second quarter 2023 financial results and corporate update conference call.
Speaker 2: At this time, all participants are in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then on your telephone keypad. To withdraw your question, please press star then 2.
Speaker 2: Participants at this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes.
Speaker 2: A webcast replay of the call will be available approximately 1 hour after the end of the call through November 15, 2023.
Speaker 2: I would now like to turn the call over to Joey De La Houssey of Core IR, the company's investor relations firm. Please go ahead, sir.
Speaker 3: Thank you, Anthony. Good morning and thank you for participating in today's conference call. Joining me from ARO's leadership team are Tom Wittenschlager, Chief Executive Officer, and Dave Hollingsworth, Chief Financial Officer.
Speaker 3: During this call, management will be making forward-looking statements, including statements that address ARO's expectations for future performance or operational results.
Speaker 3: We're working to make Aeros synonymous with quality, innovation, safety, and performance. We believe our production ramp is now more streamlined as we addressed a number of supply chain and sourcing constraints in the quarter. Our focus has now turned to building out inventory. I'm delighted to report that we're close to finishing the build of our 12th VANISH first article unit. Aeros models have been used in our homologation testing, while others have gone to our marketing efforts for demonstration to distributors, strategic partners, upfitters, and potential customers. We expect we will continue into full-fledged L-RIP in the coming quarter with the intention of beginning the ramp to production quantities of the VANISH.
Speaker 3: We plan to build approximately 60 vanished units during LRIP with the intention of selling and placing these early units with vehicle operators, distributors, strategic partners, and key end customers that we believe will offer the greatest sales leverage entering 2024. Of course, there'll be a learning curve for our manufacturing team during LRIP as we scale the manufacturing floor and gain further assembly and product flow experience. Following LRIP and the vanished launch, we will target moving to full scale production, which we currently expect to commence in early 2024. For context, we currently anticipate producing nine vehicles per day with our first full shift underway, which would translate to over 2,000 vehicles per year of capacity under the guidelines mentioned above. Assuming a ramp in demand, we're in a position to add a second shift here in our Round Rock Factory as well as utilizing an established automotive OEM partner.
Speaker 3: market for the VANISH and our follow-on products.
Speaker 3: the people mover we call the valet, and what we believe is the world's most stylized golf cart, the vapor. We believe we're on track with establishing our DTC capability and expect to launch within a week. On the intellectual property front, we're strengthening our IP portfolio, consisting of both design patents as well as utility patents. We continue to believe the combination of our anticipated future sales and sales growth, together with our growing IP portfolio, has the potential to create sustainable shareholder value.
Speaker 3: and provide numerous differentiators in this segment that otherwise hasn't evolved with prevailing technologies nor market opportunities in several decades. Moving on to our financials, sales in the second quarter work in line with our expectations of the sunsetting of our legacy club car current vehicle and slightly higher than sales in the first quarter. As I've mentioned before, our principal focus has been on the development of the vanish and our inventory of remaining club car current vehicles is now quite notable. We've begun increasing inventory during the second quarter to prepare for LREP and beyond. As an EV company building a disruptive product in markets with very strong demand, we aim to sell large distributors, strategic partners and customers with large appetites so our need to ramp inventory according to our forecast is significant. We believe our efforts to create a plurality of vehicles on our new platform are exciting and significant and will offer flexibility and leverage for additional vehicles beyond the vanish. To this end, we recently raised $22 million in cash from existing stockholders. This additional capital allows us to continue building our business and execute our strategic plan without a market clause for capital and offers additional runway and strategic options to ramp up inventory to grow the platform account along our path to profitability. Quite simply, we're now better positioned financially. That concludes my opening remarks. Now I'd like to turn the call over to Dave Hansworth who will review our financial results in more detail. Dave.
Speaker 3: It appears we have no questions. I would like to turn the conference back over to Tom Wittenschlager for any closing remarks. Thank you, Anthony. I'd like to thank all of you for participating on today's call and for your interest in Arrow. We look forward to sharing our progress on our next quarterly conference call when we report our third.
Speaker 1: disconnect.