Q3 2023 Twin Vee Powercats Co Earnings Call

Welcome to the twin V power Cats company third quarter 2023, Investor call. As a reminder, this call's being recorded and all participants are in a listen only mode.

Your speakers for today's program are Joseph the Scottrade, President and CEO of Twin V Power Cats company, and Carrie Gunnerson CFO of twin the power cuts company.

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 and 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 intend should plan expect predict potential or the negative of these terms or other 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 our financial condition results of operation business strategy and financial needs.

These forward looking statements are subject to a number of risks uncertainties and assumptions described including those set forth in our filings with the Securities and Exchange Commission, which are available on our website at www Dot twin V Dot com.

You should not rely upon forward looking statements as predictions of future events, we cannot assure you that the events and circumstances reflected in the forward looking statements will be achieved or a car.

Finally, this conference call is being webcast.

Webcast will be available in the Investor relations sections of our website at IR Dot twin V Dot com for at least 90 days.

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Experienced unsatisfactory audio quality, please use the telephone dial in option.

A question and answer session will follow the formal presentation. Please note that only those that have dialed in via telephone may ask a question.

Those listening via webcast, we will be unable to submit questions I must call. It instead, if you'd like to ask a question you may signal by pressing star one on your telephone keypad I will now turn the call over to your host Joseph Biscotti.

Good morning, everyone. My name is Joseph Escon T I'm, the president and CEO of twin the power Cats I'm joined on the call with Carrie Gunnerson our CFO.

Thank you for joining our third quarter 'twenty twenty-three investor call as.

As many of you know twin V designs manufactures and sells a range of catamaran sport boats here from our Fort Pierce, Florida factory.

For nearly 30 years twin D has been synonymous with offshore catamaran boats and considered by many to be one of the best righting boats on the water.

The general economic landscape, including interest rising interest rates continues to directly affect.

Consumer purchasing on many recreational products why are we see entry level buyers are affected by higher interest rates. We are also seeing cash buyers, which slightly better demand for larger boats.

The kick off for boat show season of Florida was two weeks ago, when one of the largest and most respected boat shows named lens or the international Fort Lauderdale boat show was held.

Two weeks ago in Lauderdale, and twin V and one water our partner dealer, we had a fantastic display and the brand New Fort Lauderdale Convention Center, we had every twin the model, except our 400 being showcased in a large well positioned location and this show and we had a deal.

Some amount of traffic.

And after the dust settles, we feel confident that we will have sold between five and seven units at that show, including two 340 G F axes.

And so you know based on current market conditions I would call. This a strong single or a double in terms of sales many brands at the show did not fare as well there's no doubt that we are seeing the industry paper and face continued headwinds.

This is a time, where leadership smart planning and what I call right sizing that business is now the priority. We will continue to monitor market conditions dealing a dealer inventory levels.

Direct and indirect costs with the goal of not burning cash from operations as we push forward what does pushing forward look like.

Well for our twin V team smartly pushing forward is focusing on product development and laying the groundwork with new models across all brands. So when the market turns and it well.

We will be ready for the next upswing. It also means being operationally lean is our priority one focus let's talk about some of the opportunities last year, we designed and produced four 400 G. F. Axes. This was our largest boat ever designed and produced in house we.

It's actually sold the initial four boats that two of our dealers in Florida and Texas. The Gen. One 400 G. FX was well received three of the four units successfully retailed from the dealers to the customers and one of our 400 G. FX tax taxes customers want a big fishing tournament as you.

You might've seen on social media.

Based on some of the feedback from our dealers we chose to make some modifications to this now called Gen. Two 400 G. F X. The new version is faster we've reached speeds of 75 miles an hour.

And attack a couple of weeks ago, the new 400 has more storage more seating and more attack and all around it's a next level fishing machine, we've completed and shipped hull number one of this gen. Two 402, our partner one water Marine and we are currently finishing the <unk>.

Number two boat, which will be delivered to one water the end of this month.

As we move to larger production boats. This will help us reduce the number of total units, we have to produce and also meet or exceed our revenue targets.

We have our we also have our upcoming 280 G F X console or dual console.

That has officially entered production.

And our number one to 80 should be delivered to our dealer network in January we actually have a healthy number of orders for this new to 80 D C or dual console now I try not to mention our competitors, but world cat as a competitor and.

We use what's called the Ssi data, which is tracking of all boat registrations in the United States and according to Ssi data the number one selling world Cat vote is there 28 foot dual console. They are they sell over 75 units annual leave this one particular model.

No.

So we are super excited to help world cat fulfill some of those orders.

And new products open new markets, new products expand our reach to customers seeking various lengths and styles of our boats.

Our mission to open new markets and expand our reach led us to acquire the well known awkward for brand. The monohull boating market is one of the largest boat buying markets snacks, the pontoons and we believe that our investment in the Aqua Sport brand will allow our company to increase market share and grow.

Our top line revenue in the long run.

When we acquired the Aqua sport brand located in White block, Tennessee. The plan was to initially produce their existing legacy line of Aqua sport mono How's that were being produced in that facility and if you remember from previous calls or press releases. We also were producing.

Some awkward forwards and our factory here in Fort Pierce, The 22 center console in the 'twenty two dual console.

While there was some interest in the legacy models from White Bluffs, Tennessee, we did not see enough demand to maintain a second over 100000 square foot factory four states away.

We decided to consolidate all of Aqua sport manufacturing into our Florida facility and Sunset The Tennessee facility.

We feel confident that this decision will reduce all.

Overall cost and enhance the quality and speed of our boat production here in our Fort Pierce facility.

The company remains dedicated to the Acrospore brand and we will continue designing and producing.

New wells, including a new 24 Aqua for 24 center console that should be in production within 30 days.

And we've also begun designing a brand New August 428 Center Council, which will be available over the next four to five months.

Turning to some updates on items, we've discussed in previous quarterly call calls a twin vs. Four Peirce factory is currently expanding its floor space. We've been working on this 30000 square foot.

Addition for quite some time, we finally did receive building approval.

And we're in the final throes of negotiations with our G. C. And we are going forward with that addition that will result in 100000 square feet of production space here in for peers as.

As we continue to grow that will allow us to ramp up to over 700 units annually here and have you know management control and all of the controls that you could imagine under one roof.

This will allow us to build those twin these in Aqua square, both simultaneously without workflow disruptions and paves the way for both brands to continue their growth and scaling efforts.

Before we open up the call for questions I'd like to report that despite the headwinds we saw an 8% increase in net revenue for the nine months ended September 30th 2023.

$25 million, approximately $25 million compared to approximately $23 million in the same period of 2022, we.

We did have a net loss of $1.6 million for a gas powered segment for the nine months of 2023. This 1.6 is broken out to $500000 for an operational loss on twin V and a 1.1 million.

Our loss for Aqua sport, which a majority of the 1.1 was really opening the factory stock inventory hiring ramping up and bringing that facility online.

The greater loss was dedicated to for us in which we are not revenue positive yet which is a $4 5 million for the nine months ended September 32023.

So again that's it.

It does.

The the Forza loss is a direct reflection of twin vs majority ownership and for us to ask one.

Which we still own 44% of the company and we're required to consolidate that financial state statement in accordance with GAAP accounting.

So twin these.

Net cash.

And restricted.

Restricted cash and marketable securities was approximately eight 5 million as of September.

30, I will say that our inventory levels grew over the past two quarters to over $8 million.

So we are going to work diligently over the next Q to reduce that inventory I mean, we were dealing with all types of supply chain issues.

But as of today I would say, 95% of all materials and goods are on a just in time delivery. Most all distributors and vendors have caught up and you know with the slowing of the recreational market, we can buy as much or as <unk>.

Many products and components that we need so our focus now is to reduce down that that that inventory number we have and move that into the cash column.

So the goal is that the next quarter, we will see that eight five and current cash.

The increase while markets are choppy and we are remaining prudent with our balance sheet and continuing to grow our business as the market allows as we push forward with new and exciting products.

Products and delivering value to our shareholders is our goal. So at this time I'd like to open it up for questions.

Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

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Press Star two if you'd like to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad one moment, please while we poll for questions.

There are no questions at this time I'd like to turn the call back over to Joseph to Scotty for closing comments.

I just want to thank everybody. Thank our employees for continuing to work hard and thank our investors for the confidence that they have in us and everybody have a great day and we'll talk to you soon thank you.

This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.

Yeah.